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Chapter 2 Employment

by: Rachel Sutherland

Chapter 2 Employment 422

Rachel Sutherland

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These notes are from sept. 12 and 14 and cover pages 20-37.
Commercial Law
Joshua Sheffer
Class Notes
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This 5 page Class Notes was uploaded by Rachel Sutherland on Monday September 19, 2016. The Class Notes belongs to 422 at Grand Valley State University taught by Joshua Sheffer in Fall 2016. Since its upload, it has received 4 views. For similar materials see Commercial Law in Legal Studies at Grand Valley State University.


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Date Created: 09/19/16
Chapter 2 Employment 2.1 Formation of employer-employee relationship 1. Remember: a. With employment, employer typically controls employee’s work performance and must pay employee 2. Can be used for: a. Full time b. Part time c. Independent contractors (technically not an employee) d. Intern (may not be paid) 3. Misclassification 1. When an employer misclassifies someone as an independent contractor, the employer pay have to pay: a. Fines b. Back taxes  Social security  Medicare  Income taxes  Unemployment 2.2Employer’s Duties 1. Employer owes employee: a. Compensation b. Reimbursement c. Indemnification d. Cooperation 2. All duties of a principal to an agent plus: a. Minimum wage b. Overtime c. Pension d. FMLA (Family Medical Leave Act) e. Workers’ Compensation f. OSHA (Occupational Safety and Health Administration) 3. Respondeat Superior (pg 21) a. Employer often responsible for torts committed by an employee during the course and scope of their employment 2.3FLSA (Fair Labor Standards Act) 1. Regulates wages and child labor 2. Applies to private employers more than public 3. Covers employers who: a. Operate in interstate commerce b. Make goods for interstate commerce c. Are in certain businesses 4. Exempt vs. Non-exempt employers a. Who is exempt? i. Those who make more than $455/week b. What does that mean? i. You don’t get overtime c. Who is non-exempt? i. Those making minimum wage ii. They get overtime (time and a half) iii. Servers make 2.13/hour plus tips  If 2.13 plus tips does not equal to minimum wage, employer is supposed to cover the difference 5. Extreme Child Labor a. Usually must be 16, unless working on a farm b. Under the age of 18, cannot work at a hazardous work environment c. Ages 14-15 may work 3 hours a day after school hours, more hours on weekends 2.4Benefit Plans 1. Defined benefit vs. defined contribution a. Specific monetary amount employee would like per month in retirement 2. Qualified plans a. Taxed on withdrawal 3. Qualified pension plan a. No withdrawal required until requirement 4. ERISA (Employment Retirement Income Security Act) a. Employee has to be fully vested at 5 years i. Vest – means that a person has an absolute right to some present or future interest in something of value ii. When a right has vested, the person is legally entitled to what has been promised and may seek relief in court if the benefit is not given b. Vest gradually through 7 years c. No more than 10% investment in company’s own securities 5. State Wage Statutes a. Limit the amount of wages that can be garnished i. Can also get bank account garnished b. May raise minimum wage 6. National Labor Relations Act a. Protects employees’ right to form a union b. Protects employees’ right to be free from unfair labor practices imposed by employer 2.5FMLA 1. Eligible employees who work for covered employers get up to 12 weeks unpaid leave during 12-month period a. Leave b. Continue health care coverage c. Return policy i. Same job or substantially similar d. Cannot take intermittent leave unless established i. Taking nonconsecutive leave 2. Covered employers a. Having 50+ employees working for 20 weeks 3. Qualifying events: a. Birth of a child b. Adoption c. Care of a very sick family member d. Employee’s own serious health problems 4. Exceptions to FMLA a. Key employees i. Making top 10% pay rate b. Employees working for less than a year c. Not working 25 hours/week 2.6Employment At Will 1. Unless there is a contract, employer can fire without cause a. Exceptions: i. Participating in union events ii. Legal duties 2.7Employment Discrimination 1. Equal Pay Act of 1963 a. Prohibits sex discrimination 2. Title VII of Civil Rights Act of 1964  Prohibits intentional discrimination and acts with discriminatory impact i. Race, color, gender ii. Hiring, firing, promotion  If requirement necessary for the job, it does not violate statute  Prohibits sexual harassment i. Quid pro quo  Ex: If you want to continue working here, you need to wear more revealing clothes ii. Hostile work environment  Ex: Dirty jokes, cubicle decorations, inappropriate treatment of usually women, suggestive remarks  Employer must institute and enforce sexual harassment policy  Discrimination is permitted if religion, sex, or national origin is BFOQ (bona fide occupational qualification)  Affirmative action plan – allowed in private companies  ADEA (Age Discrimination Employment Act)  Employers with over 20 employees  BFOQ exception applies  ADA (Americans with Disabilities Act)  No discrimination for otherwise qualified individual  Employer must provide accommodation unless causes “unique hardship”  Factors: cost, one-time or continuing expense, how many would help, employer’s income 3. Employee Privacy a. Not allowed to use polygraph tests to screen applicants b. Private employers can use drug tests th c. Government employees are protected by the 4 Amendment  Reasonable basis for believe  Public safety d. Employers can monitor email use and internet use at work 4. Employee Agreements a. Often used when employees are around proprietary information 5. Workers’ Compensation a. No fault (doesn’t have to prove it was employee’s fault) b. Less money c. Provides medical treatment and fixed level of income d. Exclusive remedy 6. Injuries Covered by Workers’ Comp a. Injury must occur within employment relationship b. Course and scope of employment c. Contract required d. Employer controlled how work was accomplished 7. Workers’ Comp Exclusions a. Injuries caused by employee’s intoxication b. Intentionally caused injuries c. Going and coming rule (traveling) d. Frolic and detour 8. Employees vs. Independent Contractors a. Independent contractors’ methods not controlled b. Control (or right of control) is number one factor c. Determining whether someone is an employee or an independent contractor is important, because employers are typically held liable for the negligent acts of their employees, but not for the same acts of their independent contractors d. Two exceptions: i. Inherently dangerous activities ii. The hirer was negligent in selecting the independent contractor iii. If the hirer was negligent, then he can be held liable if the independent contractor injures someone while performing tasks for him 9. Independent Contract Factors a. Own business b. Office provided c. Tools d. Length of employment (longer the length of employment, the more likely the person is an employee) e. Employer billed 2.8Health and Safety in the Work Place 1. OSHA a. Under OSHA, employees have to meet certain health and safety standards 2. Almost all private employers are covered by OSHA 2.9Immigration Laws Related to Employment 1. A document that allows foreign nationals to legally work in the US is a H-1B Foreign Guest Workers Visa 2. This visa is for nonimmigrants who are skilled in occupations like engineering, math, computer science, physical science, or medicine 3. Those areas are considered more professional than those required by an H-2B Visa, which is normally for a shorter time period 4. Hard to get the H-1B Visa because there is a set limit each year (good for three years and can be renewed once) 5. A foreign guest worker is allowed to bring his immediate family into the US, but the family is not eligible to work in the US


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