Employment Law

Overview

Federal Reserve Economic Data shows that employed Americans work on average 1,700 hours per year. While this figure has fluctuated over time, it has been relatively stable since the 1980s. In terms of the 40 hour work week, 85.8 percent of males exceed 40 hour of work per week and 66.5 percent of females work more than 40 hours per week. With Americans spending so much time at work, our quality of life can be substantially affected by our employment status and the laws that govern the workplace.

Employment law covers all aspects of the employer-employee relationship and workplace activity. Federal, state, and local laws often differ, with any federal restrictions taking precedence over state or local regulations. Employment law issues include:

Employment laws in certain areas such as wage and hour laws, anti-discrimination, reasonable accommodations, employee misclassification, and retaliation were enacted for the benefit of workers. However, such employment laws governing employee behavior, such as employee drug testing laws and those addressing social media use were designed to ensure that employers retain a certain amount of freedom in deciding how they manage their companies. Many federal laws apply only to companies that are a certain size and exclude independent contractors, a growing component of the American workforce.

Employment Discrimination

One of the most contentious areas of employment law involves employment discrimination. Several federal laws protect employees from illegal employment discrimination. Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race, color, religion, sex and national origin, applies to both private employers and government agencies. For employees with disabilities, the Americans with Disabilities Act protects them from discrimination on the basis of their disabilities, including developmental and mental health disabilities. Other statutes target employment discrimination based on citizenship status, pregnancy, genetic information, and age (if the employee is at least 40 years old). Each statute defines the employees that will be protected, which can vary depending on whether the employer is a private or public employer and the number of workers employed by the employer. Additionally, some states, such as New York and California, protect workers from discrimination based on their sexual orientation, status as domestic violence victim, and political activities.

Employers covered by federal anti-discrimination laws are prohibited from taking adverse actions such as not recruiting, not hiring, terminating employment, failing to train, or failing to promote an employee on the basis of any federally protected characteristic. The Equal Employment Opportunity Commission (EEOC) is the federal agency that regulates workplace discrimination.

Wage and Hour Law

Federal law establishes basic protections for certain types of workers. This includes granting employees certain rights to ensure they get paid fairly for the amount of time they work. The Wage and Hour Division administers the Fair Labor Standards Act (FLSA), which applies to both full-time and part-time workers in the private and public sectors.

The FLSA establishes standards for minimum wages, overtime pay, child labor and employer recordkeeping. FLSA does not limit an employee’s work hours, but it does require covered workers who work more than 40 hours in a week to be paid at least 1 1/2 times the regular rate of pay for hours worked in excess of 40 hours.

As with anti-discrimination laws, certain states mandate levels of overtime compensation that exceed the federal standard. For example, some states measure overtime not by the week, but by the day. Workers who work more than 8 hours in a day in those states are entitled to overtime. Almost all employees are entitled to overtime pay, but federal laws exempt farm workers, professional workers, lower-level supervisors under certain circumstances, and some employees in local businesses.

Certain sections of the FLSA address workers in particular sectors, such as retail and service. For example, employee discounts provided by the employer do not count towards the minimum wage requirement.

Employment Contracts

Both employers and employees have rights and obligations under employment contracts that may not exist under federal or state law. Employers owe employees with whom they have an employment contract a duty of good faith and fair dealing.

Written employment contracts spell out the terms of the employer-employee relationship including how long the job will last, information about an employee’s job duties, an employee’s benefits, grounds for termination, limits on an employee’s ability to compete with an employer’s business or share information (such as trade secrets) after leaving the employment relationship, and a method for resolving disputes. The only way to change the terms of a written employment contract once it is signed is to renegotiate the terms.

While employers are given considerable leeway in requiring an employee to sign an employment agreement, it is difficult for an employee to waive certain rights set forth under federal statutes, such as Title VII, the Americans with Disabilities Act and the Equal Pay Act. A valid employment agreement or severance agreement must meet three requirements: (1) it must offer consideration such as a lump-sum payment of a percentage of the employee’s salary for the employee’s waiver of the right to sue for discrimination, (2) it may not require the employee to waive rights that will arise in the future, and (3) it must comply with state and federal laws. A waiver in a severance agreement signed when an employee leaves will be found valid if an employee knowingly and voluntarily consented to the waiver.

Many employees today are employed at will, that is, without an employment contract. At-will employees may quit or be fired at any time for any reason (except in violation of discrimination laws) or for no reason at all.