In preparing an Employment Law Overview course for the SBDC, I put together a list of laws by company size. I am just going to list the laws here, without any in-depth information on each law.
From 1 to 14 Employees:
- Fair Labor Standards Act (FLSA)
- Immigration Reform & Control Act (IRCA)
- Employee Polygraph Protection Act
- Uniformed Services Employment & Re-employment Rights Act (USERRA)
- Equal Pay Act
- Consumer Credit Protection Act
- National Labor Relations Act (NLRA)/Wagner Act
- Labor-Management Relations Act (Taft-Hartley)
- Employee Retirement Income Security Act (ERISA) - if you offer benefits
- Uniform Guidelines of Employee Selection Procedures
- Federal Insurance Contributions Act (FICA)
- Occupational Health and Safety Act
From 15 - 19 Employees, add the following laws:
- Title VII of the Civil Rights Act
- Title I, Americans with Disabilities Act (ADA) as amended by the ADAAA
- Pregnancy Discrimination Act
- Fair Credit Reporting Act (FCRA)
- Fair and Accurate Credit Transactions Act (FACTA)
From 20 - 49 Employees, add the following laws:
- Age Discrimination in Employment Act (ADEA)
- Consolidated Omnibus Budget Reconciliation Act (COBRA)
From 49 to 99 Employees, add the following laws:
- Family and Medical Leave Act (FMLA)
For 100 or more Employees, add the following laws:
- Worker Adjustment & Retraining Notification Act (WARN)
- EEO-1 Report must be filed annually
And for those who are federal contractors:
- EEO-1 Report filed annually with 50+ employees and a federal contract for more than $50,000
- Executive Orders 11246, 11375, 11478
- Vocational Rehabilitation Act
- Drug Free Workplace
- Vietnam-Era Veterans Adjustment Act
- Davis Bacon Act
- Copeland Act
- McNamara-O'Hara Service Contract Act
- Walsh-Healy Act
The Take Away:
Employers have to abide by many regulations, and ignorance does not create a safe harbor. It is important to be aware of and to abide by the requirements of these laws. The cost of violation will prove exorbitant when compared to the cost of compliance.
By way of a brief example, I audited a company's I-9 files (IRCA compliance). On four forms, I found 14 errors. This equates to about $1,400 in liability.
Thursday, July 21, 2011
Wednesday, July 20, 2011
Vicarious Liability for Harassment and Discrimination
I was preparing a training on employment law (future blog post) and started thinking about the concept of vicarious liability as it relates to harassment. The result is this post.
What is Vicarious Liability?
To put it in simple terms that relate to business, vicarious liability is the idea that a company can be held liable for the actions, or lack of action, of employees and managers.
An easy example: an employee driving on company business gets in a wreck and kills someone. The company may become vicariously liable for the incident and thus be sued. Note: It is worth getting a driving record on any individual who will be driving for your company before allowing him or to drive, even if just to pick up lunch for the office.
Perhaps less dramatic than a car wreck, vicarious liability can also be asserted when a manager violates employment law by discriminating against workers or creating a hostile work environment. While less dramatic, this scenario is more likely and creates significant liability. The manager is given actual authority by the company and utilizes that authority in his or her daily actions. As the company gives the manager authority, the manager is an agent of the company.
Basis for Vicarious Liability:
As a general rule, a principal (the company) is liable for the actions of its agents (the managers). Worse, some individuals in the company may have apparent authority. Even if their positions are not expressly given authority, if it appears they are agents of the company, liability may exist.
For now, let's focus on what companies can do to reduce or prevent liability as it relates to harassment and discrimination.
The Supreme Court ruled (Burlington Industries, Inc. v. Ellerth and Faragher v. City of Boca Raton) that employers are subject to vicarious liability for unlawful harassment by supervisors. The standard derived from these decisions is based on two principles:
1. An employer is responsible for the acts of its supervisors.
2. Employers should be encouraged to prevent harassment, and employees should be encouraged to avoid or limit the harm from harassment.
Avoiding or Limiting Liability:
Of course, there is no way a business owner can be expected to prevent all harassment and discrimination. The mere fact that a business owner has managers and supervisors indicates an inability to be in all places at the same time. In recognition of this fact, the Supreme Court has indicated that so long as the harassment and/or discrimination does not result in a tangible employment action (termination for example), then the employer may avoid liability or at least limit the amount of liability if the following is true:
1. The company exercised reasonable care in trying to prevent harassment (training, reporting mechanisms for employees) and promptly corrects any harassing behavior of which it is aware.
2. The employee unreasonably failed to take advantage of any opportunities provided by the employer to prevent or avoid harm, such as using reporting mechanisms.
If the harassment/discrimination results in a tangible employment action, or the tangible employment action appears to be caused by the harassment/discrimination, then the company will always face liability. The only solution for this is a review of all employment actions to ensure proper documentation of the reason for the action and to ensure that the action is consistent with other actions taken by the manager. This will not always prevent liability, but it will provide a defense when accusations of harassment are baseless.
The Take Away:
The first step in reducing the amount of liability the company has is to draft an anti-harassment and anti-discrimination policy. "EEOC Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors," advises that an anti-harassment/anti-discrimination policy should include the following:
• A clear explanation of prohibited conduct;
• Assurance that employees who make complaints of harassment or provide information related to such complaints will be protected against retaliation;
• A clearly described complaint process that provides accessible avenues of complaint;
• Assurance that the employer will protect the confidentiality of harassment complaints to the extent possible;
• A complaint process that provides a prompt, thorough, and impartial investigation; and
• Assurance that the employer will take immediate and appropriate corrective action when it determines that harassment has occurred.
(http://www.eeoc.gov/policy/docs/harassment.html)
Beyond the policy, orientation, training, re-training (annually), and most importantly taking measures to correct issues (investigations and follow-ups) are necessary to help reduce the company's liability.
Of course, this is short treatment on a big subject. Employers with more than 14 employees are subject to Title VII (race, color, religion, national origin, gender), ADA (disability), and the Pregnancy Discrimination Act. Employers with 20 or more employees can add ADEA (age).
HR Consult Team can help reduce your company's liability by completing an audit of your current practices, creating or revising your handbook, and providing training for your managers, supervisors, and employees.
Works Cited:
http://www.eeoc.gov/policy/docs/harassment.html
What is Vicarious Liability?
To put it in simple terms that relate to business, vicarious liability is the idea that a company can be held liable for the actions, or lack of action, of employees and managers.
An easy example: an employee driving on company business gets in a wreck and kills someone. The company may become vicariously liable for the incident and thus be sued. Note: It is worth getting a driving record on any individual who will be driving for your company before allowing him or to drive, even if just to pick up lunch for the office.
Perhaps less dramatic than a car wreck, vicarious liability can also be asserted when a manager violates employment law by discriminating against workers or creating a hostile work environment. While less dramatic, this scenario is more likely and creates significant liability. The manager is given actual authority by the company and utilizes that authority in his or her daily actions. As the company gives the manager authority, the manager is an agent of the company.
Basis for Vicarious Liability:
As a general rule, a principal (the company) is liable for the actions of its agents (the managers). Worse, some individuals in the company may have apparent authority. Even if their positions are not expressly given authority, if it appears they are agents of the company, liability may exist.
For now, let's focus on what companies can do to reduce or prevent liability as it relates to harassment and discrimination.
The Supreme Court ruled (Burlington Industries, Inc. v. Ellerth and Faragher v. City of Boca Raton) that employers are subject to vicarious liability for unlawful harassment by supervisors. The standard derived from these decisions is based on two principles:
1. An employer is responsible for the acts of its supervisors.
2. Employers should be encouraged to prevent harassment, and employees should be encouraged to avoid or limit the harm from harassment.
Avoiding or Limiting Liability:
Of course, there is no way a business owner can be expected to prevent all harassment and discrimination. The mere fact that a business owner has managers and supervisors indicates an inability to be in all places at the same time. In recognition of this fact, the Supreme Court has indicated that so long as the harassment and/or discrimination does not result in a tangible employment action (termination for example), then the employer may avoid liability or at least limit the amount of liability if the following is true:
1. The company exercised reasonable care in trying to prevent harassment (training, reporting mechanisms for employees) and promptly corrects any harassing behavior of which it is aware.
2. The employee unreasonably failed to take advantage of any opportunities provided by the employer to prevent or avoid harm, such as using reporting mechanisms.
If the harassment/discrimination results in a tangible employment action, or the tangible employment action appears to be caused by the harassment/discrimination, then the company will always face liability. The only solution for this is a review of all employment actions to ensure proper documentation of the reason for the action and to ensure that the action is consistent with other actions taken by the manager. This will not always prevent liability, but it will provide a defense when accusations of harassment are baseless.
The Take Away:
The first step in reducing the amount of liability the company has is to draft an anti-harassment and anti-discrimination policy. "EEOC Enforcement Guidance: Vicarious Employer Liability for Unlawful Harassment by Supervisors," advises that an anti-harassment/anti-discrimination policy should include the following:
• A clear explanation of prohibited conduct;
• Assurance that employees who make complaints of harassment or provide information related to such complaints will be protected against retaliation;
• A clearly described complaint process that provides accessible avenues of complaint;
• Assurance that the employer will protect the confidentiality of harassment complaints to the extent possible;
• A complaint process that provides a prompt, thorough, and impartial investigation; and
• Assurance that the employer will take immediate and appropriate corrective action when it determines that harassment has occurred.
(http://www.eeoc.gov/policy/docs/harassment.html)
Beyond the policy, orientation, training, re-training (annually), and most importantly taking measures to correct issues (investigations and follow-ups) are necessary to help reduce the company's liability.
Of course, this is short treatment on a big subject. Employers with more than 14 employees are subject to Title VII (race, color, religion, national origin, gender), ADA (disability), and the Pregnancy Discrimination Act. Employers with 20 or more employees can add ADEA (age).
HR Consult Team can help reduce your company's liability by completing an audit of your current practices, creating or revising your handbook, and providing training for your managers, supervisors, and employees.
Works Cited:
http://www.eeoc.gov/policy/docs/harassment.html
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