1

Employment Law • Is defined as the large area of law covering

all aspects of the employer and employee relationship

• Is important to know from both sides: as an employee and as a company

• Consists of thousands of laws

2

Employment Law • Includes countless laws enacted to

protect workers• Includes laws which affect every

American, such as taxes collected to finance unemployment compensation

3

Employment Law Areas

collective

bargainingemployment

discriminationunemployment compensation

pensionsworker’s

compensation

4

Collective Bargaining • Is when employers and employees negotiate

their salary and work requirements• Involves the employees being represented

by a union, a group formed by employees to negotiate with the employer

• Is governed by the National Labor Relations Act

5

Collective Bargaining • Can sometimes lead to strikes and

layoffs to force demands• With union representation is less

popular now than in the past

6

Collective Bargaining • Is common in the sports industry• Many of the top professional leagues

have players unions– for example, a strike lead to a 191 day

lockout of the 1998 NBA season– the NBA owners, teams and league lost

nearly one billion dollars

7

The National Labor Relations Act (NLRA)

• Is a federal law passed in 1935• Allows employees to join unions and

collectively bargain• Prevents employers from seeing which

employees are in a union• Created the National Labor Relations Board

to oversee and enforce the NLRA

8

Employment Discrimination Law

• Aims to prevent employment discrimination based on race, sex, age, religion or physical disability– the Equal Pay Act states employers cannot

discriminate wages based on gender– the Americans with Disabilities Act of 1990

makes it unlawful to discriminate employees based on a disability

9

Equal Employment Opportunity Commission (EEOC)

• Is a federal organization overseeing most employment discrimination laws including the Equal Pay Act and the Americans with Disabilities Act of 1990

• Requires employers to display posters with employment discrimination law topics

• Handles employment discrimination complaints

• http://www.eeoc.gov

10

EEOC Poster

• http://www.dol.gov/esa/regs/compliance/posters/pdf/disabc.pdf 11

Unemployment Compensation

• Provides funds for workers that are unemployed due to layoffs

• Allows time for workers to find another job• Prevents workers from taking a job for which

they would be overqualified • Was established by the federal Social

Security Act in 1935• Is funded by taxpayers

12

Pensions • Are payments made to employees after

retirement, similar to a retirement plan• Are regulated by the Employee Retirement

Income Security Act (ERISA)• ERISA requires employees and the Labor

Department receive a detailed list of what each employee will receive when it is time to collect their pension– this prevents fraud and allows the

employees to see they are receiving adequate funding

13

Workplace Safety • Is an important area of employment law for

employees’ well being• Is regulated by laws regarding employee

injury and illness occurring on the job• Is mainly controlled by the Occupational

Safety and Health Administration (OSHA)– regulates and investigates workplace

incidents involving injury and illness for most U.S. workers

14

OSHA Example • In Brooklyn, N.Y., an OSHA compliance

safety and health officer requested that construction employees be removed from a 22-foot deep excavation due to the hazardous 10-ton concrete protrusion hanging above them. Fifteen minutes later, the overhang collapsed and fell, landing in the exact spot where the employees had been working.

15

Workers Compensation Laws

• Are designed to provide payment and assistance to employees who are hurt or disabled on the job

• Provide fixed monetary awards to such individuals

• Protect employers by limiting the maximum amount an employee can recover if hurt or disabled

16

Workers Compensation Laws

• Provide monetary payments to families if a family member is killed on the job

• Fund payments through the Federal Employment Compensation Act

17

Contract Law vs. Employment Law

• Contract law and employment law are interrelated

• Many employment laws, such as pension plans and labor unions use contract law to enact and enforce their employment laws

18

Contract Law

EmploymentLaw

Contract Law vs. Employment Law

• For example, labor unions such as the United Auto Workers operate under employment law

• They work to gain favorable labor contracts for their workers. The labor contracts would be considered an area of contract law

• In this way, employment law can be thought of as a part of contract law

19

Contract Law vs. Employment Law

• However, contract law and employment law are different in the fact that employment law changes much more frequently than contract law– most of contract law was enacted after years of

law and thus does not change often – employment law affects more current events

such as pension plans and worker’s compensation

20

Contract Law

EmploymentLaw

Impact of Contract and Employment Law on Business

• U.S. businesses spent about $11 trillion last year complying with these laws

• Most of those transactions fall under contract law

• Dues for labor unions are covered under employment law– these laws affect the lives of millions of

workers– for example, the union of United Auto

Workers at Honda in Toronto requires dues of two hours pay per month 21

Employment and Labor Law

• Is concerned with worker’s rights• Includes the right to organize and/or join a

union• Includes the right to strike• Prevents an employee from being fired or

demoted because of union activity (such as joining a union or discussing union activities)

22

“At Will” Employment• Is the most common type of

employment in the United States• States that the employee can leave the

job at any time, without reason• Also means that the employer can

terminate the employee at any time, without reason

23

Unions• Are organized to protect the rights of

employees• Negotiate contracts containing clauses

protecting against “at will” termination• Require membership to be covered by

contract negotiations

24

Unions in Action • In 2003 the employees of major grocers in St. Louis

went on strike– the ability to strike is granted by the National

Labor Relations Act– 10,000 grocery workers went on strike

• After six months of negotiation the grocers and union of the grocer’s employees came to an agreement

• Grocers agreed to new healthcare rules and a raise for employees

• Grocers lost millions of dollars in sales due to the strike

25

The Future of Unions • According to the Bureau of Labor Statistics 12%

of U.S. employees were unionized in 2006– in 1983, 20% of U.S. employees were

unionized– the percentage of unionized workers

continues to fall • Is likely suffering due to the downturn in U.S.

manufacturing, an industry that was historically highly unionized

26