Human Resources and Relevant Laws

National Labor Relations Act

The National Labor Relations Act establishes the right of most private-sector workers to form unions, bargain with management and strike.

Learning Objectives

Explain the development of the National Labor Relations Act (NLRA)

Key Takeaways

Key Points

  • The key principles of the National Labor Relations Act include: encouraging the practice and procedure of collective bargaining and protecting the exercise by workers of full freedom of association.
  • The law defined and prohibited five unfair practices which include: interfering with, restraining or coercing employees in their rights; and dominating or interfering with the formation or administration of any labor organization.
  • The act was controversial as it was viewed as a threat to freedom and the NLRB was accused of a pro-union and anti-employer bias.
  • While opponents have introduced several hundred bills to amend or repeal the lay only the Taft-Hartley amendment was passed in 1947.

Key Terms

  • National Labor Relations Act: An act to diminish the causes of labor disputes burdening or obstructing interstate and foreign commerce, to create a National Labor Relations Board, and for other purposes.

Introduction

The end of wartime economic controls saw the revelation of previously pent-up demands by American workers for better wages. This led to a series of major labor strikes that polarized American attitudes toward unions, as occurred in the 1890s. In 1935, the Democratic-controlled Congress enacted the National Labor Relations Act, establishing the right of most private-sector workers to form unions, bargain with management over wages and working conditions, and hold strikes to obtain their demands. The National Labor Relations Board, a federal agency, was established to oversee union elections and address unfair labor complaints.

President Roosevelt signed this legislation into law on July 5, 1935. A key principle of the NLRA is embodied in the concluding paragraph of section 1: “Encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection. ”

NLRA key principles also include:

  • Protecting a wide range of activities, whether a union is involved or not, in order to promote organization and collective bargaining
  • Protecting employees as a class and expressly not on the basis of a relationship with an employer
  • Allowance of one exclusive bargaining representative for a unit of employees
  • Promotion of the practice and procedure of collective bargaining
  • Employers’ duty to bargain with the representative of its employees

Unfair Practices

The law defined and prohibited five unfair labor practices. These prohibitions still exist, while others have been added under subsequent legislation. The original employer unfair labor practices consisted of:

  • Interfering with, restraining or coercing employees in their rights under Section 7*
  • “Dominating” or interfering with the formation or administration of any labor organization
  • Discriminating against employees to encourage or discourage acts of support for a labor organization
  • Discriminating against employees who file charges or testify
  • Refusing to bargain collectively with the representative of the employer’s employees

*Section 7 rights include: freedom of association; mutual aid or protection; self-organization; to form, join, or assist labor organizations; to bargain collectively for wages and working conditions through representatives of their own choosing; and to engage in other protected concerted activities with or without a union.

Amendments

In the decade following its passage, opponents of the Wagner Act introduced several hundred bills to amend and/or repeal the law. These bills either failed or were vetoed, until the passage of the Taft-Hartley amendments in 1947. More recent failed amendments included attempts in 1978 to permit triple backpay awards and union collective bargaining certification based on signed union authorization cards—a provision similar to a proposed amendment in the Employee Free Choice Act. Under the NLRA, unions can become the representative based on signed union authorization cards only if the employer voluntarily recognizes the union. If the employer refuses to recognize the union, the union can then be certified through a secret-ballot election conducted by the NLRB.

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Labor: The National Labor Relations Act is to establish the right of most private-sector workers to form unions, bargain with management.

Labor-Management Relations Act

The Labor-Management Relations Act (or the Taft-Hartley Act) is a U.S. federal law that monitors the activities and power of labor unions.

Learning Objectives

Explain the purpose of the Labor-Management Relations Act

Key Takeaways

Key Points

  • The Taft–Hartley Act amended the National Labor Relations Act (informally the Wagner Act), which Congress passed in 1935. The principal author of the Taft–Hartley Act was J. Mack Swigert of the Cincinnati law firm Taft, Stettinius & Hollister.
  • The Taft–Hartley Act added a list of unfair labor practices on the part of unions to the National Labor Relations Act. It was seen, by some, as a means of demobilizing the labor movement by imposing limits on labor’s ability to strike and by prohibiting radicals from their leadership.
  • Despite President Truman arguing that it would “conflict with important principles of our democratic society” and his attempted veto, he would subsequently use it 12 times during his presidency.

Key Terms

  • Taft-Hartley Act: The Taft-Hartley Act is a United States federal law that monitors the activities and power of labor unions.
  • Labor Management Relations Act: The official name of the Taft-Hartley Act.

History of the Labor- Management Relations Act

Enacted June 23, 1947, the Labor-Management Relations Act (informally the Taft-Hartley Act) is a United States federal law that monitors the activities and power of labor unions. The act, still effective, was sponsored by Senator Robert Taft and Representative Fred A. Hartley, Jr. and became law by overriding U.S. President Harry S. Truman’s veto on June 23, 1947; labor leaders called it the “slave-labor bill,” while President Truman argued that it was a “dangerous intrusion on free speech,” and that it would “conflict with important principles of our democratic society. ” Nevertheless, Truman would subsequently use it 12 times during his presidency. The Taft–Hartley Act amended the National Labor Relations Act (informally, the Wagner Act), which Congress passed in 1935. The principal author of the Taft–Hartley Act was J. Mack Swigert of the Cincinnati law firm Taft, Stettinius & Hollister.

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President Harry S. Truman: A portrait of former U.S. President Harry S. Truman who failed in his attempted veto of the 1947 Labor-Management Relations Act.

Taft–Hartley was one of more than 250 union-related bills pending in both houses of Congress in 1947. As a response to the rising union movement and Cold War hostilities, the bill could be seen as a response by business to the post-World War II labor upsurge of 1946. During the year after D-Day, more than five million American workers were involved in strikes, which lasted on average four times longer than those during the war. The Taft–Hartley Act was seen as a means of demobilizing the labor movement by imposing limits on labor’s ability to strike and by prohibiting radicals from their leadership.

Purpose of the Labor-Management Relations Act

The National Labor Relations Act was enacted for a number of reasons, including to promote the full flow of commerce, prescribe the legitimate rights of both employees and employers in their relations affecting commerce, provide orderly and peaceful procedures for preventing the interference by either with the legitimate rights of the other, protect the rights of individual employees in their relations with labor organizations whose activities affect commerce, define and proscribe practices on the part of labor and management which affect commerce and are inimical to the general welfare, and to protect the rights of the public in connection with labor disputes affecting commerce.

The amendments enacted in the Labor Management Relations Act (Taft-Hartley) added a list of prohibited actions, or unfair labor practices, on the part of unions to the NLRA, which had previously only prohibited unfair labor practices committed by employers. The Taft–Hartley Act prohibited jurisdictional strikes, wildcat strikes, solidarity or political strikes, secondary boycotts, secondary and mass picketing, closed shops, and monetary donations by unions to federal political campaigns. It also required union officers to sign non-communist affidavits with the government. Union shops were heavily restricted, and states were allowed to pass right-to-work laws that outlawed closed union shops. Furthermore, the executive branch of the Federal government could obtain legal strikebreaking injunctions if an impending or current strike imperiled the national health or safety, a test that has been interpreted broadly by the courts.

Fair Labor Standards Act

The Fair Labor Standards Act of 1938 established a national minimum wage, forbade “oppressive” child labor, and provided for overtime pay in designated occupations.

Learning Objectives

Explain the specifications of the Fair Labor Standards Act of 1938 (FLSA)

Key Takeaways

Key Points

  • While the Fair Labor Standards act of 1938 declared a goal of assuring “a minimum standard of living necessary for the health, efficiency, and general well-being of workers,” it also allowed employers to replace striking workers.
  • The standards apply to employees in the private sector as well as those in Federal, State, and local governments.
  • Not all jobs are covered under the FLSA overtime rules. This is because they either are specifically excluded from the statue or because they are governed by another federal act.
  • Employees whose jobs are covered by the FLSA are classified as being either ” exempt ” or ” nonexempt. ” Nonexempt employees are entitled to overtime pay while exempt employees are not.

Key Terms

  • exempt: Not entitled to overtime pay when working overtime.
  • Fair Labor Standards Act: The FLSA established a national minimum wage, guaranteed “time-and-a-half” for overtime in certain jobs, and prohibited most employment of minors in “oppressive child labor,” a term that is defined in the statute. It applies to employees engaged in interstate commerce or employed by an enterprise engaged in commerce or in the production of goods for commerce, unless the employer can claim an exemption from coverage.
  • nonexempt: Nonexempt employees are entitled to overtime pay.

Introduction

The Fair Labor Standards Act of 1938 established a national minimum wage, forbade “oppressive” child labor, and provided for overtime pay in designated occupations. It declared the goal of assuring “a minimum standard of living necessary for the health, efficiency, and general well-being of workers.” But it also allowed employers to replace striking workers.

Specifications

The standards apply to employees in the private sector and in Federal, State, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Many states also have minimum wage laws, at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.

Covered nonexempt employees must receive for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods) at a rate not less than one and one-half times the regular rate of pay. There is no limit on the number of hours employees 16 years or older may work in any workweek. The FLSA does not require [[#|overtime pay]] for work on weekends, holidays, or regular days of rest, unless overtime is worked on such days. Particular jobs may be completely excluded from coverage under the FLSA overtime rules. There are two general types of exclusion. Some jobs are specifically excluded in the statute itself. For example, employees of movie theaters and many agricultural workers are not governed by the FLSA overtime rules. Another type of exclusion is for jobs which are governed by some other specific federal. As a general rule, if a job is governed by some other federal, the FLSA does not apply. For example, most railroad workers are governed by the Railway Labor Act, and many are governed by the Motor Carriers Act, and not the FLSA.

Exempt or Nonexempt

Employees whose jobs are governed by the FLSA are either “exempt” or “nonexempt. ” Nonexempt employees are entitled to overtime pay. Exempt employees are not. Most employees covered by the FLSA are nonexempt.

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History of the Minimum Wage: This graph of the minimum wage in the United States shows the fluctuation in government guarantees for minimum standards of labor.

Equal Pay Act

The Equal Pay Act of 1963 is a U.S. Federal law amending the Fair Labor Standards Act aimed at abolishing wage disparity based on sex.

Learning Objectives

Explain the reasons and results of the Equal Pay Act of 1963

Key Takeaways

Key Points

  • Congress denounced sex discrimination due to its effect on wages and living standards, resource utilization, and commerce.
  • While women’s salaries when compared to men’s have seen a dramatic increase since the Equal Pay Act was implemented, the act’s goal of equal pay for equal work still has not been completely achieved.
  • The act was signed into law on June 10, 1963 by John F. Kennedy as part of his New Frontier Program.

Key Terms

  • merit: Something worthy of a high rating.
  • seniority: A measure of the amount of time a person has been a member of an organization, as compared to other members, and with an eye towards awarding privileges to those who have been members longer.

The Equal Pay Act

The Equal Pay Act of 1963 is a United States federal law amending the Fair Labor Standards Act, aimed at abolishing wage disparity based on sex. It was signed into law on June 10, 1963 by John F. Kennedy as part of his New Frontier Program.

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John F. Kennedy: Former President John F. Kennedy signed the Equal Pay Act into law in 1963.

Reasons for the Act

In passing the bill, Congress denounces sex discrimination for the following reasons:

  • It depresses wages and living standards for employees necessary for their health and efficiency.
  • It prevents the maximum utilization of the available labor resources.
  • It tends to cause labor disputes, thereby burdening, affecting, and obstructing commerce.
  • It burdens commerce and the free flow of goods in commerce.
  • It constitutes an unfair method of competition.

The law states:

“No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs, the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii)a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex. ”

Results

According to the Bureau of Labor Statistics, women’s salaries vis-à-vis men’s have risen dramatically since the EPA’s enactment, from 62% of men’s earnings in 1970 to 80% in 2004. Nonetheless, the EPA’s equal pay for equal work goals have not been completely achieved, as demonstrated by the BLS data and Congressional findings within the text of the proposed Paycheck Fairness Act.

Civil Rights Act

The Civil Rights Act of 1964 outlawed major forms of discrimination against African Americans and women, including racial segregation.

Learning Objectives

Outline the stipulations in the Civil Rights Act of 1964

Key Takeaways

Key Points

  • The Civil Right Acts ended racial segregation in public venues like schools, the workplace, and public accommodations ( facilities that served the general public).
  • John F. Kennedy called for the bill in his civil rights speech on June 11, 1963 after a series of protests from the African-American community, but it was Lyndon B. Johnson who signed the Act into law in July, 1964.
  • The Civil Rights Act has 11 titles which deal with voting and discrimination issues. Powers given to enforce the act were initially weak, but were supplemented during later years.

Key Terms

  • segregation: Passing of laws to separate people geographically, residentially, racially, religiously or by gender.
  • discrimination: (sometimes discrimination against) distinct treatment of an individual or group to their disadvantage; treatment or consideration based on class or category rather than individual merit; partiality; prejudice; bigotry.

The Civil Rights Act of 1964 was a landmark piece of legislation in the United States that outlawed major forms of discrimination against African Americans and women. It ended unequal application of voter registration requirements and racial segregation in schools, at the workplace and by facilities that served the general public (“public accommodations”).

Powers given to enforce the act were initially weak, but were supplemented during later years. Congress asserted its authority to legislate under several different parts of the United States Constitution, principally its power to regulate interstate commerce under Article One, its duty to guarantee all citizens equal protection of the laws under the Fourteenth Amendment and its duty to protect voting rights under the Fifteenth Amendment. The Act was signed into law by President Lyndon B. Johnson, who would later sign the landmark Voting Rights Act into law.

The bill was called for by President John F. Kennedy in his civil rights speech of June 11, 1963, in which he asked for legislation “giving all Americans the right to be served in facilities which are open to the public—hotels, restaurants, theaters, retail stores, and similar establishments,” as well as “greater protection for the right to vote. ” Kennedy delivered this speech following a series of protests from the African-American community, the most concurrent being the Birmingham campaign which concluded in May 1963.

Titles under the Civil Rights Act

Title I

  • Barred unequal application of voter registration requirements.

Title II

  • Outlawed discrimination based on race, color, religion or national origin in hotels, motels, restaurants, theaters, and all other public accommodations engaged in interstate commerce; exempted private clubs without defining the term “private. “

Title III

  • Prohibited state and municipal governments from denying access to public facilities on grounds of race, color, religion or national origin.

Title IV

  • Encouraged the desegregation of public schools and authorized the U.S. Attorney General to file suits to enforce said act.

Title V

  • Expanded the Civil Rights Commission established by the earlier Civil Rights Act of 1957 with additional powers, rules and procedures.

Title VI

  • Prevented discrimination by government agencies that receive federal funds. If an agency is found in violation of Title VI, that agency may lose its federal funding.

Title VII

  • Prohibited discrimination by covered employers on the basis of race, color, religion, sex or national origin. Title VII also prohibited discrimination against an individual because of his or her association with another individual of a particular race, color, religion, sex, or national origin. An employer cannot discriminate against a person because of his interracial association with another, such as by an interracial marriage.

Title VIII

  • Required compilation of voter-registration and voting data in geographic areas specified by the Commission on Civil Rights.

Title IX

  • Made it easier to move civil rights cases from state courts with segregationist judges and all-white juries to federal court. This was of crucial importance to civil rights activists who could not get a fair trial in state courts.

Title X

  • Established the Community Relations Service, tasked with assisting in community disputes involving claims of discrimination.

Title XI

  • Gives the jury rights to put any proceeding for criminal contempt arising under title II, III, IV, V, VI, or VII of the Civil Rights Act, on trial, and if convicted, can be fined no more than $1,000 or imprisoned for more than six months.

Age Discrimination and Health Act

Under this act both employees and applicants who are 40 years old or over are protected from employment discrimination based on their age.

Learning Objectives

Explain how the Age Discrimination in Employment Act of 1967 (ADEA) protects individuals

Key Takeaways

Key Points

  • Not only does the ADEA make it unlawful to discriminate against employees and job applicants based on their age (40 or over), but the act also allows employers to favor older workers even if it is at the expense of younger workers.
  • The ADEA applies to organizations with 20 or more employees and also include state and local governments, employment agencies, labor organizations, and the federal government.
  • Eligibility for apprenticeship programs, job noticies and advertisements, pre-employment inquiries about age, and the provision of benefits, are all covered under the act.

Key Terms

  • apprenticeship: The system by which a person learning a craft or trade is instructed by a master for a set time under set conditions.
  • discrimination: (sometimes discrimination against) distinct treatment of an individual or group to their disadvantage; treatment or consideration based on class or category rather than individual merit; partiality; prejudice; bigotry.

Introduction

The Age Discrimination in Employment Act of 1967 (ADEA) protects individuals who are 40 years of age or older from employment discrimination based on age. It was signed into law by former U.S. President Lyndon B. Johnson.

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Lyndon B. Johnson, in the Oval Office.: Former U.S. President Lyndon B. Johnson.

The ADEA’s protections apply to both employees and job applicants. Under the ADEA, it is unlawful to discriminate against a person because of his/her age with respect to any term, condition, or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments, and training. The ADEA permits employers to favor older workers based on age even when doing so adversely affects a younger worker who is 40 or older.

It is also unlawful to retaliate against an individual for opposing employment practices that discriminate based on age or for filing an age discrimination charge, testifying, or participating in any way in an investigation, proceeding, or litigation under the ADEA.

The ADEA applies to employers with 20 or more employees, including state and local governments. It also applies to employment agencies and labor organizations, as well as to the federal government. ADEA protections include:

  • Apprenticeship Programs It is generally unlawful for apprenticeship programs, including joint labor-management apprenticeship programs, to discriminate on the basis of an individual’s age. Age limitations in apprenticeship programs are valid only if they fall within certain specific exceptions under the ADEA or if the EEOC grants a specific exemption.
  • Job Notices and Advertisements The ADEA generally makes it unlawful to include age preferences, limitations, or specifications in job notices or advertisements. A job notice or advertisement may specify an age limit only in the rare circumstances where age is shown to be a “bona fide occupational qualification” (BFOQ) reasonably necessary to the normal operation of the business.
  • Pre-Employment Inquiries The ADEA does not specifically prohibit an employer from asking an applicant’s age or date of birth. However, because such inquiries may deter older workers from applying for employment or may otherwise indicate possible intent to discriminate based on age, requests for age information will be closely scrutinized to make sure that the inquiry was made for a lawful purpose, rather than for a purpose prohibited by the ADEA.
  • Benefits The Older Workers Benefit Protection Act of 1990 (OWBPA) amended the ADEA to specifically prohibit employers from denying benefits to older employees. Congress recognized that the cost of providing certain benefits to older workers is greater than the cost of providing those same benefits to younger workers, and that those greater costs would create a disincentive to hire older workers. Therefore, in limited circumstances, an employer may be permitted to reduce benefits based on age, as long as the cost of providing the reduced benefits to older workers is the same as the cost of providing benefits to younger workers. Employers are permitted to coordinate retiree health benefit plans with eligibility for Medicare or a comparable state-sponsored health benefit.
  • Waivers of ADEA Rights An employer may ask an employee to waive his/her rights or claims under the ADEA either in the settlement of an ADEA administrative or court claim or in connection with an exit incentive program or other employment termination program. However, the ADEA, as amended by OWBPA, sets out specific minimum standards that must be met in order for a waiver to be considered knowing and voluntary and, therefore, valid. Among other requirements, a valid ADEA waiver must: be in writing and be understandable; specifically refer to ADEA rights or claims; not waive rights or claims that may arise in the future; be in exchange for valuable consideration; advise the individual in writing to consult an attorney before signing the waiver; and provide the individual at least 21 days to consider the agreement and at least seven days to revoke the agreement after signing it.

Occupational Safety and Health Act

The goal of the OSHA Act is to make sure employers provide employees a place to work that is free from recognized hazards.

Learning Objectives

Explain the Occupational Safety and Health Act (OSHA)

Key Takeaways

Key Points

  • The act came about due to an increased awareness of the impact chemicals had on the environment.
  • The Occupational Safety and Health Administration was created to enforce workplace health and safety standards.
  • The act applies to many diverse employers but does not include the United States or any state of political sub division of a state.

Key Terms

  • toxic: Having a chemical nature that is harmful to health or lethal if consumed or otherwise entering into the body in sufficient quantities.

The Occupational Safety and Health Act is the primary federal law which governs occupational health and safety in the private sector and federal government in the United States. It was enacted by Congress in 1970 and was signed by President Richard Nixon on December 29, 1970. Its main goal is to ensure that employers provide employees with an environment free from recognized hazards, such as exposure to toxic chemicals, excessive noise levels, mechanical dangers, heat or cold stress, or unsanitary conditions.

Origin

In the mid-1960s, growing awareness of the environmental impact of many chemicals had led to a politically powerful environmental movement. Some labor leaders seized on the public’s growing unease over chemicals in the environment, arguing that the effect of these compounds on worker health was even worse than the low-level exposure plants and animals received in the wild. On January 23, 1968, President Lyndon B. Johnson submitted a comprehensive occupational health and safety bill to Congress. Led by the United States Chamber of Commerce and the National Association of Manufacturers, the legislation was widely opposed by business. Many labor leaders, including the leadership of the AFL-CIO, did not fight for the legislation, claiming workers had little interest in the bill.

In passing the Act, Congress declared its intent “to assure so far as possible every working man and woman in the Nation safe and healthful working conditions and to preserve our human resources. ”

Purposes of the Act

  • OSHA was given the authority both to set and enforce workplace health and safety standards. The act also created the independent Occupational Safety and Health Review Commission to review enforcement priorities, actions, and cases.
  • Established the National Institute of Occupational Safety and Health (NIOSH), an independent research institute in the then-Centers for Disease Control.
  • Defines an employer to be any “person engaged in a business affecting commerce who has employees, but does not include the United States or any state or political subdivision of a State. ” The act applies to employers as diverse as manufacturers, construction companies, law firms, hospitals, charities, labor unions, and private schools.
  • The “general duty clause” requires employers to 1) maintain conditions or adopt practices reasonably necessary and appropriate to protect workers on the job; 2) be familiar with and comply with standards applicable to their establishments; and 3) ensure that employees have and use personal protective equipment when required for safety and health.
  • All employers must report to OSHA within eight hours if an employee dies from a work-related incident, or three or more employees are hospitalized as a result of a work-related incident. Additionally, all fatal on-the-job heart attacks must also be reported.
  • OSHA inspectors are permited to enter, inspect, and investigate, during regular working hours, any workplace covered by the Act.
  • Employers must also communicate with employees about hazards in the workplace. By regulation, OSHA requires that employers keep a record of every non-consumer chemical product used in the workplace.
  • The act prohibits any employer from discharging, retaliating, or discriminating against any employee because the worker has exercised rights under the act. These rights include complaining to OSHA and seeking an OSHA inspection, participating in an OSHA inspection, and participating or testifying in any proceeding related to an OSHA inspection.
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OSHA Symbol: Employers must communicate to their employees their rights under OSHA.

Employee Retirement Income Security Act

Businesses who voluntarily set up pension and health plans in private industry must adhere to rules ERISA rules that protect employees.

Learning Objectives

Explain the Employee Retirement Income Security Act (ERISA) of 1974

Key Takeaways

Key Points

  • ERISA protects the interests of benefit plan participants and their beneficiaries by requiring the disclosure of financial and other information concerning the plan; establishing standards of conduct for plan fiduciaries; providing appropriate remedies and access to federal courts.
  • ERISA’s rules protect participants by making sure they are informed about the plan’s features and funding; their grievances are heard; they are able to collect their money.
  • ERISA was created in part due to the 1963 Studebaker plant closure in which thousands of employees were left pension -less due to poor funding. Legislation proposed in 1967 addressing the funding, vesting, reporting, and disclosure issues, was opposed by business group and labor unions.

Key Terms

  • pension: A regularly paid gratuity paid regularly as benefit due to a person in consideration of past services; notably to one retired from service, on account of retirement age, disability or similar cause; especially, a regular stipend paid by a government to retired public officers, disabled soldiers; sometimes passed on to the heirs, or even specifically for them, as to the families of soldiers killed in service.
  • fiduciary: Related to trusts and trustees.

The Employee Retirement Income Security Act of 1974 (ERISA) was enacted on September 2, 1974. ERISA is a federal law that establishes minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans. ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries by:

  • Requiring the disclosure of financial and other information concerning the plan to beneficiaries.
  • Establishing standards of conduct for plan fiduciaries.
  • Providing for appropriate remedies and access to the federal courts.

In general, ERISA does not cover retirement plans established or maintained by governmental entities, churches for their employees, or plans which are maintained solely to comply with applicable workers compensation, unemployment or disability laws. ERISA also does not cover plans maintained outside the United States primarily for the benefit of nonresident aliens or unfunded excess benefit plans

ERISA Rules

  • Requires plans to provide participants with plan information including important information about plan features and funding.
  • Sets minimum standards for participation, vesting, benefit accrual, and funding. provides fiduciary responsibilities for those who manage and control plan assets.
  • Requires plans to establish a grievance and appeals process for participants to get benefits from their plans.
  • Gives participants the right to sue for benefits and breaches of fiduciary duty
  • If a defined benefit plan is terminated, guarantees payment of certain benefits through a federally chartered corporation, known as the Pension Benefit Guaranty Corporation (PBGC).

History

In 1961, U.S. President John F. Kennedy created the President’s Committee on Corporate Pension Plans. The movement for pension reform gained some momentum when the Studebaker, an automobile manufacturer, closed its plant in 1963. Studebaker’s pension plan was so poorly funded that only 3,600 workers who were of retirement age received full pension benefits, 4,000 workers aged 40–59 who had ten years with Studebaker received lump sum payments valued at roughly 15% of the actuarial value of their pension benefits, and the remaining 2,900 workers received no pensions.

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Studebaker Avanti 1963: The Avanti was one of the last cars created by Studebaker before their plant was closed. At the time of closure, more than 2500 employees didn’t receive owed benefits and compensation due to poor plan funding.

In 1967, Senator Jacob K. Javits proposed legislation that would address the funding, vesting, reporting, and disclosure issues identified by the presidential committee. His bill was opposed by business groups and labor unions, that sought to retain the flexibility they enjoyed under pre-ERISA law.

ERISA was enacted in 1974 and signed into law by President Gerald Ford on September 2, 1974, Labor Day. In the years since 1974, ERISA has been amended repeatedly.

Pension & Health Benefit Plans

ERISA does not require employers to establish pension plans. Likewise, as a general rule, it does not require that plans provide a minimum level of benefits. Instead, it regulates the operation of a pension plan once it has been established. Under ERISA, pension plans must provide for vesting of employees’ pension benefits after a specified minimum number of years. ERISA requires that the employers who sponsor plans satisfy certain minimum funding requirements.

ERISA does not require that an employer provide health insurance to its employees or retirees, but it regulates the operation of a health benefit plan if an employer chooses to establish one. There have been several significant amendments to ERISA concerning health benefit plans two of which are the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Pension Vesting

Before ERISA, some defined benefit pension plans required decades of service before an employee’s benefit became vested. It was not unusual for a plan to provide no benefit at all to an employee who left employment before the specified retirement age (e.g. 65), regardless of the length of the employee’s service.

Under the Pension Protection Act of 2006 (PPA), employer contributions made after 2006 to a defined contribution plan must become vested at 100% after three years or under a second sixth year gradual-vesting schedule Employee contributions are always 100% vested. Accrued benefits under a defined benefit plan must become vested at 100% after five years or under a third seventh year gradual vesting schedule.

Pension Funding

Under ERISA, minimum funding requirements were established for defined benefit plans. By their nature, defined contribution plans are always fully funded, even if the employee has not yet become vested in the employer contributions.

The funding requirement under PPA is simply that a plan must stay fully funded (that is, its assets must equal or exceed its liabilities ). If a plan is fully funded, the minimum required contribution is the cost of benefits earned during the year. If a plan is not fully funded, the contribution also includes the amount necessary to amortize over seven years the difference between its liabilities and its assets. Stricter rules apply to severely underfunded plans (called “at-risk status”).

Affirmative Action

Affirmative action prevents discrimination against employees on the basis of race, religion, gender, or nationality.

Learning Objectives

Assess the role of affirmative action in the US

Key Takeaways

Key Points

  • Federal contractors and subcontractors are legally required to adopt affirmative action measures. Government contractors undergo compliance reviews conducted by the OFCCP.
  • Affirmative action measures are meant to remedy the disadvantages that were associated with blatant historical discrimination.
  • Some affirmative action policies have been criticized for bringing on reverse discrimination.
  • Government contractors undergo compliance reviews conducted by the OFCCP.

Key Terms

  • quota: a restriction on the import of something to a specific quantity.
  • affirmative action: a policy or program providing advantages for people of a minority group who are seen to have traditionally been discriminated against, with the aim of creating a more egalitarian society through preferential access to education, employment, health care, social welfare, etc.

In the United States, affirmative action refers to equal opportunity employment measures that Federal contractors and subcontractors are legally required to adopt. These measures are intended to prevent discrimination against employees or applicants for employment, on the basis of race, religion, gender, or nationality.

Examples of affirmative action offered by the United States Department of Labor include outreach campaigns, targeted recruitment, employee and management development, and employee support programs.The impetus towards affirmative action is to redress the disadvantages associated with overt historical discrimination. Further impetus is a desire to ensure public institutions, such as universities, hospitals, and police forces, are more representative of the populations they serve. Affirmative action began as a tool to address the persisting inequalities for African Americans in the 1960s and the specific term was first used to describe U.S. government policy in 1961.

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Slaves Waiting for Sale: Richmond, Virginia. Painted upon the sketch of 1853: Slaves were forced to work on plantations often under brutal conditions.

Controversy

Affirmative action is a large subject of controversy. Some policies adopted as affirmative action, such as racial quotas or gender quotas for collegiate admission, have been criticized as a form of reverse discrimination, and such implementation of affirmative action has been ruled unconstitutional by the majority opinion in the case of Gratz v. Bollinger. Affirmative action as a practice was upheld by the court’s decision in Grutter v. Bollinger.

Requirements

  • Each government contractor with 50 or more employees and $50,000 or more in government contracts is required to develop a written affirmative action program (AAP) for each of its establishments.
  • A written affirmative action program helps the contractor identify and analyze potential problems in the participation and utilization of women and minorities in the contractor’s workforce.
  • If there are problems, the contractor will specify in its AAP the specific procedures it will follow and the good faith efforts it will make to provide equal employment opportunity.
  • Expanded efforts in outreach, recruitment, training and other areas are some of the affirmative steps contractors can take to help members of the protected groups compete for jobs on equal footing with other applicants and employees.

Enforcement and Compliance

OFCCP conducts compliance reviews to investigate the employment practices of government contractors. During a compliance review, a compliance officer examines the contractor’s affirmative action program, checks personnel, payroll, and other employment records, interviews employees and company officials, and investigates virtually all aspects of employment in the company. The investigator also checks to see whether the contractor is making special efforts to achieve equal opportunity through affirmative action. If problems are discovered, OFCCP will recommend corrective action and suggest ways to achieve equal employment opportunity.

Americans with Disabilities Act

The ADA makes it illegal to discriminate against people with disabilities in employment, public transportation, and communications.

Learning Objectives

Analyze the effect of the Americans with Disabilities Act (ADA) on various parties involved

Key Takeaways

Key Points

  • The Americans with Disabilities Act covers the entire range of employment practices and was signed into law in 1990 by President George H. W. Bush.
  • The Americans with Disabilities Act applies to private employers, state and local governments, employment agencies, and labor unions.
  • The Americans with Disabilities Act is enforced by four federal agencies: (1) the Equal Employment Opportunity Commission (EEOC); (2) the Department of Transportation; (3) the Federal Communications Commission (FCC); (4) the Department of Justice.
  • The Department of Labor ‘s Office of Disability Employment Policy (ODEP) only provides publications and technical assistance regarding the ADA’s basic requirements.

Key Terms

  • disability: State of being disabled; deprivation or want of ability; absence of competent physical, intellectual, or moral power, means, fitness, and the like.
  • discrimination: (sometimes discrimination against) distinct treatment of an individual or group to their disadvantage; treatment or consideration based on class or category rather than individual merit; partiality; prejudice; bigotry.

The Americans with Disabilities Act (ADA) prohibits discrimination against people with disabilities in employment, transportation, public accommodation, communications, and governmental activities. It covers all employment practices, including application procedures, hiring, firing, advancement, compensation, training, and other terms, conditions, and privileges of employment. It applies to recruitment, advertising, tenure, layoff, leave, fringe benefits, and all other employment-related activities.

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Signing of the ADA Act of 1990: President George H. W. Bush signs the Americans with Disabilities Act of 1990 into law. Pictured (left to right): Evan Kemp, Rev Harold Wilke, Pres. Bush, Sandra Parrino, Justin Dart

Specifications of ADA

The ADA applies to private employers, state and local governments, employment agencies, and labor unions. Employers with 25 or more employees were covered as of July 26, 1992. Employers with 15 or more employees were covered two years later, beginning July 26, 1994.

Employment discrimination is prohibited against “qualified individuals with disabilities. ” This includes applicants for employment and current employees. An individual is considered to have a “disability” if he or she has a physical or mental impairment that substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment. Persons discriminated against because they have a known association or relationship with an individual with a disability also are protected.

Compliance and Enforcement

The Department of Labor’s Office of Disability Employment Policy (ODEP) provides publications and other technical assistance on the basic requirements of the ADA. It does not enforce any part of the law.

There are four federal agencies that enforce the ADA:

  • The Equal Employment Opportunity Commission (EEOC) enforces regulations covering employment.
  • The Department of Transportation enforces regulations governing transit.
  • The Federal Communications Commission (FCC) enforces regulations covering telecommunication services.
  • The Department of Justice enforces regulations governing public accommodations and state and local government services.

Opposition to the Act

Employers: The ADA has been a frequent target of criticism by employers who claim that individuals who are diagnosed with one of the so-called “lesser disabilities” are being “accommodated” when they should not be. On the other hand, court decisions have made necessary “an individualized assessment to prove that an impairment is protected under the ADA. Therefore, the plaintiff must offer evidence that the extent of the limitation caused by the impairment is substantial in terms of his or her own experience. ” A medical diagnosis or physician’s declaration of disability is no longer enough. Even those who support the intent of the law worry that it might have unintended consequences. Among other arguments, supporters hypothesize that the Americans with Disabilities Act creates additional legal risks for employers who then quietly avoid hiring people with disabilities to avoid this risk.

Religious Groups: The debate over the Americans with Disabilities Act led some religious groups to take opposite positions. Groups, such as the Association of Christian Schools International, opposed the ADA in its original form. ACSI opposed the Act primarily because the ADA labeled religious institutions public accommodations, and thus would have required churches to make costly structural changes to ensure access for all. The cost argument advanced by ACSI and others prevailed in keeping religious institutions from being labeled as public accommodations, and thus churches were permitted to remain inaccessible if they chose. In addition to opposing the ADA on grounds of cost, church groups like the National Association of Evangelicals testified against the ADA’s Title I (employment) provisions on grounds of religious liberty. The NAE felt that the regulation of the internal employment of churches was “… an improper intrusion [of] the federal government. ”

Business Interests: Many members of the business community opposed the passage of the Americans with Disabilities Act. The U.S. Chamber of Commerce argued that the costs of the ADA would be “enormous” and have “a disastrous impact on many small businesses struggling to survive. ” The National Federation of Independent Businesses, an organization that lobbies for small businesses, called the ADA “a disaster for small business. ” Pro-business conservative commentators joined in opposition, writing that the Americans with Disabilities Act was “an expensive headache to millions” that would not necessarily improve the lives of people with disabilities.