FEDERAL LABOR LAW DIGEST
Age Discrimination in Employment Act (ADEA) of 1967
Americans with Disabilities Act (ADA) of 1990
Black Lung Benefits Act (BLBA)
Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986
Copeland Act of 1934
Consumer Credit Protection Act (CCPA) of 1968
Contract Work Hours and Safety Standards Act (CWHSSA)
Davis Bacon Act of 1931
Drug-Free Workplace Act of 1988
Employee Polygraph Protection Act (EPPA) of 1988
Employee Retirement Income Security Act (ERISA) of 1974
Energy Employees Occupational Illness Compensation Program Act
(EEOICPA)
Equal Pay Act (EPA) of 1963
Executive Order 11246 of 1965
Executive Order 13201
Fair and Accurate Credit Transactions Act of 2003 (FACT)
Fair Credit Reporting Act (FCRA) of 1969
Fair Labor Standards Act (FLSA) of 1938
Family and Medical Leave Act (FMLA) of 1993
Federal Employees' Compensation Act (FECA)
Federal Insurance Contributions Act (FICA) of 1935
Federal Mine Safety and Health Act (Mine Act)
Health Insurance Portability and Accountability Act (HIPAA) of 1996
Immigration Reform and Control Act of 1986 (IRCA)
Immigration and Nationality Act (INA)
Labor-Management Reporting and Disclosure Act (LMRDA)
Longshore and Harbor Workers' Compensation Act (LHWCA)
Mental Health Parity Act (MHPA) of 1996
Migrant and Seasonal Agricultural Worker Protection Act (MSPA)
National Labor Relations Act (NLRA) of 1947
Newborns' and Mothers' Health Protection Act of 1996
Occupational Safety and Health Act (OSHA) of 1970
Rehabilitation Act of 1973, Section 503
Sarbanes-Oxley Act (SOX) of 2002
Title VII of the Civil Rights Act of 1964
Uniform Guidelines on Employee Selection Procedures of 1978
Uniformed Services Employment and Reemployment Rights Act
(USERRA) of 1994
Vietnam-Era Veterans Readjustment Act (VEVRA) of 1974
Walsh-Healy Act of 1936
Worker Adjustment and Retraining Notification Act (WARN) of 1988
Additional Resources: (the items below would be links to PDF
files containing additional Federal regs./guidance materials
and would appear at the end of the list)
Benefit Plan Annual Reporting
Benefit Plan Disclosure Requirements
Compliance Calendar
Federal Labor Laws by Number of Employees
Federal Reporting Requirements
2008 IRS Dollar Limits and Social Security Factors
Reporting and Disclosure Guide for Employee Benefits
Age Discrimination in Employment Act of 1967
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. 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.
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 labormanagement 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.
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:
1. Be in writing and be understandable.
2. Specifically refer to ADEA rights or claims.
3. Not waive rights or claims that may arise in the future.
4. Be in exchange for valuable consideration.
5. Advise the individual in writing to consult an attorney before signing the
waiver.
6. Provide the individual at least 21 days to consider the agreement and at
least seven days to revoke the agreement after signing it.
If an employer requests an ADEA waiver in connection with an exit incentive
program or other employment termination program, the minimum requirements
for a valid waiver are more extensive.
Click here to download the full text of the Act.
Americans with Disabilities Act of 1990
Title I of the Americans with Disabilities Act (ADA) of 1990 prohibits private
employers, state and local governments, employment agencies and labor unions from
discriminating against qualified individuals with disabilities in job application
procedures, hiring, firing, advancement, compensation, job training and other terms,
conditions and privileges of employment. The ADA covers employers with 15 or more
employees, including state and local governments. It also applies to employment agencies
and to labor organizations. The ADA's nondiscrimination standards also apply to federal
employees under Section 501 of the Rehabilitation Act, as amended, and its
implementing rule(s);
An individual with a disability is a person who:
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Has a physical or mental impairment that substantially limits one or more major
life activities.
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Has a record of such impairment.
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Is regarded as having such impairment.
A qualified employee or applicant with a disability is an individual who, with or without
reasonable accommodation, can perform the essential functions of the job in question.
Reasonable accommodation may include but is not limited to:
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Making existing facilities used by employees readily accessible to and usable by
persons with disabilities.
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Job restructuring, modifying work schedules, reassignment to a vacant position.
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Acquiring or modifying equipment or devices; adjusting or modifying
examinations, training materials or policies; and providing qualified readers or
interpreters.
An employer is required to make a reasonable accommodation to the known disability of
a qualified applicant or employee if it would not impose an "undue hardship" on the
operation of the employer's business. Undue hardship is defined as an action requiring
significant difficulty or expense when considered in light of factors such as an employer's
size, financial resources and the nature and structure of its operation.
An employer is not required to lower quality or production standards to make an
accommodation, nor is an employer obligated to provide personal use items such as
glasses or hearing aids.
Title I of the ADA also covers:
Medical Examinations and Inquiries
Employers may not ask job applicants about the existence, nature or severity of a
disability. Applicants may be asked about their ability to perform specific job
functions. A job offer may be contingent upon the results of a medical
examination, but only if the examination is required for all entering employees in
similar jobs. Medical examinations of employees must be job-related and
consistent with the employer's business needs.
Drug and Alcohol Abuse
Employees and applicants currently engaging in the illegal use of drugs are not
covered by the ADA when an employer acts on the basis of such use. Tests for
illegal drugs are not subject to the ADA's restrictions on medical examinations.
Employers may hold illegal drug users and alcoholics to the same performance
standards as other employees.
It is also unlawful to retaliate against an individual for opposing employment practices
that discriminate based on disability or for filing a discrimination charge, testifying or
participating in any way in an investigation, proceeding or litigation under the ADA.
Click here to download the full text of the Act.
Black Lung Benefits Act (BLBA)
The Black Lung Benefits Act (BLBA) provides for monthly payments and medical
treatment for coal miners totally disabled from pneumoconiosis (black lung disease)
arising from employment in or around the nation's coal mines. The BLBA also provides
for augmented payments to miners based on the number of his or her dependents and to
certain survivors of miners who died due to or while totally disabled from
pneumoconiosis.
Each coal mine operator is required to pay an excise tax, based on the operator's tonnage
and price of coal sold, to support payment of benefits to miners under the Act and the
cost of administering the Act. In addition, operators must provide for the payment of
benefits to miners, either directly or through insurance, when they are the responsible
employer of the miners.
For purposes of determining responsibility for paying benefits, a coal mine operator
includes: (1) any owner, lessee or other person who operates, controls or supervises a
coal mine or preparation plant; (2) any independent contractor performing services or
construction at a mine; or (3) companies transporting coal from mines to preparation
plants.
Basic Provisions/Requirements
Current and former coal miners (including certain coal transportation and coal mine
construction workers who were exposed to coal mine dust) and their surviving
dependents, including surviving spouses, orphaned children and totally dependent
parents, brothers and sisters, may file claims for black lung benefits.
Basic monthly benefits for a totally disabled miner or his or her surviving spouse, as well
as for claimants with qualified dependents, can be found at the Department of Labor's
Black Lung Home Page. Benefit payments are reduced by the amounts received for
pneumoconiosis under state workers' compensation awards and by excess earnings in
some cases. Benefit rates are adjusted periodically according to the percentage increase
of federal pay rates.
Medical payments are limited to the treatment of conditions directly related to black lung
disease, and only totally disabled former miners can qualify for this benefit. The Act
covers certain medical, surgical and other expenses, such as hospital and nursing care,
rehabilitation services, and drug and equipment charges.
The Black Lung Disability Trust Fund pays the cost of black lung claims: (1) where the
miner's last coal mine employment was before January 1, 1970; (2) where no responsible
coal mine operator has been identified in claims where the miner's last coal employment
was before December 31, 1969; or (3) where the responsible coal mine operator has
defaulted on the payment of such benefits.
Coal mine operators identified as responsible for claims based on employment after 1970
must provide for the required benefits either directly or through insurance. A tax paid by
coal mine operators on each ton sold supports the Trust Fund. The current rate is $1.10
per ton for underground-mined coal and $.55 for surface-mined coal, subject to a cap of
4.4 percent of the sales price.
Coal mine operators may secure payment of benefits for which they are liable either by
qualifying as a self-insurer or by obtaining insurance through a commercial insurance
carrier or a state agency. Operators must obtain approval from the Department of Labor
to become self-insurers. To qualify, they must have been in the business of coal mining
for at least three years, demonstrate the ability to service black lung claims and agree to
service claims in a timely manner, meet minimum asset requirements, and obtain an
indemnity bond or post other security to guarantee payment of benefits, among other
things. Operators may appeal a denial to self-insure to the Department of Labor. When
operators obtain commercial insurance, their obligations with regard to payment of
benefits and provision of medical treatment are binding on the insurance carriers.
Coal mine operators are required to begin paying benefits within 30 days of a final
determination of their liability for the benefits. Where payment is made from the Trust
Fund pending appeal of a claim and final determination, operators must reimburse the
Trust Fund.
Employee Rights
If an employee, his or her survivor, or an employer disagrees with a claim determination
by the Division of Coal Mine Workers' Compensation, that party may request a formal
hearing before an administrative law judge. The administrative law judge’s decision may
be appealed to the Benefits Review Board, and the Benefits Review Board's decision may
be appealed to the U.S. Court of Appeals and finally to the U.S. Supreme Court.
Penalties/Sanctions
The Department of Labor may suspend or revoke the authority to self-insure due to an
operator's failure to comply with the Act and its regulations, the insolvency of its surety
on an indemnity bond or impairment of the operator's financial responsibility.
Revocation of the authority to self-insure or the failure to obtain insurance does not
relieve operators of liability for payment of benefits and provision of medical treatment.
Operators who fail to secure insurance may be subject to a civil penalty of $1,000 for
each day that insurance is not in effect.
A lien may be placed against the property of operators who fail to pay benefits for which
they have been determined liable or to reimburse the Trust Fund. The Department of
Labor may also seek an injunction in U.S. District Court to ensure that such obligations
are met and to prevent future noncompliance. Operators are also subject to payment of
interest on the benefit payments or Trust Fund reimbursements owed, and they may be
assessed an additional 20 percent of the amount due, which is payable to the claimant.
Operators who knowingly conceal or dispose of any property to avoid the payment of
benefits under the Act may be guilty of a misdemeanor and, if convicted, subject to a fine
of $1,000, imprisonment for up to one year or both.
Relation to State, Local and Other Federal Laws
Federal black lung benefits are offset by state workers' compensation benefits for the
same disease. If state black lung benefits are less than federal black lung benefits, then
the federal black lung program covers the difference. Social Security disability benefits
are also reduced by the amount of black lung benefits received.
Click here to download the full text of the Act.
Consolidated Omnibus Budget Reconciliation Act (COBRA) of
1986
Throughout their careers, workers will face multiple life events, job changes or even job
losses. A law enacted in 1986 helps workers and their families keep their group health
coverage during times of voluntary or involuntary job loss, reduction in hours worked,
transition between jobs and in certain other cases.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a law that gives
workers who lose their health benefits the option to continue group health benefits
provided by the plan under certain circumstances.
COBRA generally requires that group health plans sponsored by employers with 20 or
more employees in the prior year offer employees and their families the opportunity for a
temporary extension of health coverage (called continuation coverage) in certain
instances where coverage under the plan would otherwise end.
The law generally covers group health plans maintained by employers with 20 or more
employees in the prior year. It applies to plans in the private sector and those sponsored
by state and local governments. Provisions of COBRA covering state and local
government plans are administered by the Department of Health and Human Services.
Several events that can cause workers and their family members to lose group health
coverage may result in the right to COBRA coverage. These include:
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Voluntary or involuntary termination of the covered employee’s employment for
reasons other than gross misconduct.
Reduced hours of work for the covered employee.
Covered employee becoming entitled to Medicare.
Divorce or legal separation of a covered employee.
Death of a covered employee.
Loss of status as a dependent child under plan rules.
Under COBRA, the employee or family member may qualify to keep their group health
plan benefits for a set period of time, depending on the reason for losing the health
coverage. The following represents some basic information on periods of continuation
coverage:
Qualified Beneficiary
Qualifying Event
Period of Coverage
Employee
Spouse
Termination
Reduced hours
18 months
Dependent child
Spouse
Dependent child
Entitled to Medicare
36 months
Divorce or legal separation
Death of covered employee
Dependent child
Loss of dependent child
status
36 months
* This 18-month period may be extended for all qualified beneficiaries if certain
conditions are met in cases where a qualified beneficiary is determined to be disabled
for purposes of COBRA. However, COBRA also provides that continuation coverage
may be cut short in certain cases.
Notification Requirements
An initial notice must be furnished to covered employees and their spouses at the time
coverage under the plan commences, informing them of their rights under COBRA and
describing provisions of the law. COBRA information also is required to be contained in
the plan’s summary plan description (SPD).
When the plan administrator is notified that a qualifying event has happened, the
administrator must in turn notify each qualified beneficiary of their right to choose
continuation coverage.
COBRA allows at least 60 days from the date the election notice is provided to inform the
plan administrator that the qualified beneficiary wants to elect continuation coverage.
Under COBRA, the covered employee or a family member has the responsibility to
inform the plan administrator of a divorce, legal separation, disability or a child losing
dependent status under the plan.
Employers have a responsibility to notify the plan administrator of the employee’s death,
termination of employment or reduction in hours, or Medicare entitlement.
If covered individuals change their martial status or their spouses change addresses, they
should notify the plan administrator.
Premium Payments
Qualified individuals may be required to pay the entire premium for coverage up to 102%
of the cost to the plan. Premiums may be higher for persons exercising the disability
provisions of COBRA. Failure to make timely payments may result in loss of coverage.
Premiums may be increased by the plan; however, premiums generally must be set in
advance of each 12-month premium cycle.
Individuals subject to COBRA coverage may be responsible for paying all costs related to
deductibles and may be subject to catastrophic and other benefit limits.
Click here to download the full text of the Act.
Copeland Act of 1934
The "Anti-Kickback" section of the Copeland Act applies to all contractors and
subcontractors performing on any federally funded or assisted contract for the
construction, prosecution, completion or repair of any public building or public work,
except contracts for which the only federal assistance is a loan guarantee. This provision
applies even where no labor standards statute covers the contract.
The regulations pertaining to Copeland Act payroll deductions and submittal of the
weekly statement of compliance apply only to contractors and subcontractors performing
on federally funded contracts in excess of $2,000 and federally assisted contracts in
excess of $2,000 that are subject to federal wage standards.
Basic Provisions/Requirements
The "Anti-Kickback" section of the Act precludes a contractor or subcontractor from
inducing an employee, in any way, to give up any part of the compensation to which he
or she is entitled under his or her contract of employment. The Act and implementing
regulations require a contractor and subcontractor to submit a weekly statement of the
wages paid to each employee performing on covered work during the preceding payroll
period. The regulations also list payroll deductions that are permissible without the
approval of the Secretary of Labor and those deductions that require consent of the
Secretary of Labor.
Employee Rights
The "Anti-Kickback" provisions of the Copeland Act give covered workers on federal
contracts the right to receive the full pay to which they are entitled for the work they
perform. The Act also gives such workers the right to receive pay on a weekly basis. The
Wage and Hour Division of the Department of Labor’s Employment Standards
Administration accepts complaints of alleged Copeland Act wage violations.
Penalties/Sanctions
Any contractor or subcontractor who induces an employee working on a covered contract
to give up any part of the compensation to which he or she is entitled is subject to a
$5,000 fine, imprisonment for up to five years, or both. Willful falsification of the
statement of compliance may subject the employer to civil or criminal prosecution and
may be cause for contract termination or debarment. Contractors may challenge
determinations on debarment before an Administrative Law Judge. Decisions of
Administrative Law Judges may be appealed to the Administrative Review Board. Final
determinations on debarment may be appealed to and are enforceable through the federal
courts. Civil and criminal sanctions are pursued through the federal courts.
Relation to State, Local and Other Federal Laws
The "Anti-Kickback" provisions apply to any contract assisted in whole or in part by
loans or grants from the federal government, except those contracts where the only
federal assistance is a loan guarantee. The provisions of the Act and the regulation
pertaining to the weekly statement of wages and payroll deductions apply to federally
assisted contracts that are subject to federal wage standards.
Click here to download the full text of the Act.
Consumer Credit Protection Act of 1968
Title III of the Consumer Credit Protection Act (CCPA) protects employees from
discharge by their employers because their wages have been garnished for any one debt,
and it limits the amount of an employee's earnings that may be garnished in any one
week. Title III applies to all employers and individuals who receive earnings for personal
services (including wages, salaries, commissions, bonuses and income from a pension or
retirement program, but ordinarily not including tips).
Basic Provisions/Requirements
Wage garnishment occurs when an employer withholds the earnings of an individual for
the payment of a debt as the result of a court order or other equitable procedure. Title III
prohibits an employer from discharging an employee because his or her earnings have
been subject to garnishment for any one debt, regardless of the number of levies made or
proceedings brought to collect it. Title III does not, however, protect an employee from
discharge if the employee's earnings have been subject to garnishment for a second or
subsequent debt.
Title III also protects employees by limiting the amount of earnings that may be
garnished in any workweek or pay period to the lesser of 25 percent of disposable
earnings or the amount by which disposable earnings are greater than 30 times the federal
minimum hourly wage prescribed by Section 6(a)(1) of the Fair Labor Standards Act of
1938. This limit applies regardless of how many garnishment orders an employer
receives. The federal minimum wage is $5.85 per hour effective July 24, 2007; $6.55 per
hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009.
In court orders for child support or alimony, Title III allows up to 50 percent of an
employee's disposable earnings to be garnished if the employee is supporting a current
spouse or child and up to 60 percent if the employee is not doing so. An additional 5
percent may be garnished for support payments over 12 weeks in arrears. The restrictions
noted in the preceding paragraph do not apply to such garnishments.
"Disposable earnings" is the amount of earnings left after legally required deductions
(e.g., federal, state and local taxes, Social Security, unemployment insurance and state
employee retirement systems) have been made. Deductions not required by law (e.g.,
union dues, health and life insurance and charitable contributions) are not subtracted from
gross earnings when the amount of disposable earnings for garnishment purposes is
calculated.
Title III specifies that garnishment restrictions do not apply to bankruptcy court orders
and debts due for federal and state taxes, nor do they affect voluntary wage assignments,
i.e., situations where workers voluntarily agree that their employers may turn over a
specified amount of their earnings to a creditor or creditors.
Employee Rights
In most cases, Title III gives wage earners the right to receive at least partial
compensation for the personal services they provide despite wage garnishment. This law
also prohibits an employer from discharging an employee because of garnishment of
wages for any one debt. The Wage and Hour Division of the Employment Standards
Administration accepts complaints of alleged Title III violations.
Penalties/Sanctions
Violations of Title III may result in reinstatement of a discharged employee, payment of
back wages and restoration of improperly garnished amounts. Where violations cannot be
resolved through informal means, the Department of Labor may initiate legal action to
restrain violators and remedy violations. Employers who willfully violate the discharge
provisions of the law may be prosecuted criminally, and fined up to $1,000 or imprisoned
for not more than one year, or both.
Relation to State, Local and Other Federal Laws
If a state wage garnishment law differs from Title III, the employer must observe the law
resulting in the smaller garnishment or prohibiting the discharge of an employee because
his or her earnings have been subject to garnishment for more than one debt.
Click here to download the full text of the Act.
Contract Work Hours and Safety Standards Act (CWHSSA)
The McNamara-O'Hara Service Contract Act (SCA) covers contracts entered into by
federal and District of Columbia agencies where the principal purpose of the contract is
to furnish services in the United States through the use of service employees. “Service
employee” includes any employee engaged in performing services on a covered contract
other than a bona fide executive, administrative or professional employee who meets the
exemption criteria set forth in 29 CFR Part 541.
The Act does not apply to certain types of contractual services. These statutory
exemptions include:
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Contracts for construction, alteration and/or repair of public buildings or public
works, including painting and decorating (those covered by the Davis-Bacon Act).
Work required in accordance with the provisions of the Walsh-Healey Public
Contracts Act.
Contracts for transporting freight or personnel where published tariff rates are in
effect.
Contracts for furnishing services by radio, telephone, telegraph. or cable
companies subject to the Communications Act of 1934.
Contracts for public utility services.
Employment contracts providing for direct services to a federal agency by an
individual or individuals.
Contracts for operating postal contract stations for the U.S. Postal Service.
Services performed outside the United States (except in territories administered by
the United States, as defined in the Act).
Contracts administratively exempted by the Secretary of Labor in special
circumstances because of the public interest or to avoid serious impairment of
government business.
Basic Provisions/Requirements
The Act requires contractors and subcontractors performing services on prime contracts
in excess of $2,500 to pay service employees in various classes no less than the wage
rates and fringe benefits found prevailing in the locality, or the rates (including
prospective increases) contained in a predecessor contractor's collective bargaining
agreement. The Department of Labor issues wage determinations on a contract-bycontract basis in response to specific requests from contracting agencies. These
determinations are incorporated into the contract.
For contracts equal to or less than $2,500, contractors are required to pay the federal
minimum wage of $5.85 per hour effective July 24, 2007; $6.55 per hour effective July
24, 2008; and $7.25 per hour effective July 24, 2009 (as provided in Section 6(a)(1) of
the Fair Labor Standards Act). Contractors must also, under the provisions of the
Contract Work Hours and Safety Standards Act and the Fair Labor Standards Act, pay
employees at least one and one-half times their regular rate of pay for all hours worked
over 40 in a workweek.
Finally, employers must notify employees working in connection with the contract of the
compensation due them under the wage and fringe benefits provisions of the contract.
Employee Rights
The SCA provides covered service workers on federal service contracts the right to
receive at least the locally prevailing wage rate and fringe benefits, as determined by the
Department of Labor, for the type of work performed. The Wage and Hour Division of
the Employment Standards Administration accepts complaints of alleged SCA wage
violations.
Penalties/Sanctions
Violations of the SCA may result in contract terminations and liability for any resulting
costs to the government, withholding of contract payments in sufficient amounts to cover
wage and fringe benefit underpayments, legal action to recover the underpayments, and
debarment from future contracts for up to three years.
Contractors and subcontractors may challenge determinations of violations and
debarment before an Administrative Law Judge. Contractors and subcontractors may
appeal decisions of Administrative Law Judges to the Administrative Review Board.
Final Board determinations on violations and debarment may be appealed to and are
enforceable through the federal courts.
Relation to State, Local and Other Federal Laws
This Act applies only to contracts awarded by the federal or District of Columbia
governments. As noted above, contractors are required to compensate employees working
in connection with covered contracts for overtime work in accordance with the overtime
pay standards of the Fair Labor Standards Act and the Contract Work Hours and Safety
Standards Act.
Click here to download the full text of the Act.
Davis-Bacon Act of 1931
The Davis-Bacon and related Acts apply to contractors and subcontractors performing on
federally funded or assisted contracts in excess of $2,000 for the construction, alteration
or repair (including painting and decorating) of public buildings or public works.
Basic Provisions/Requirements
The Act requires that all contractors and subcontractors performing on federal contracts
(and contractors or subcontractors performing on federally assisted contracts under the
related Acts) in excess of $2,000 pay their laborers and mechanics not less than the
prevailing wage rates and fringe benefits, as determined by the Secretary of Labor, for
corresponding classes of laborers and mechanics employed on similar projects in the
area.
Apprentices and trainees may be employed at less than predetermined rates. Apprentices
must be employed pursuant to an apprenticeship program registered with the Department
of Labor or with a state apprenticeship agency recognized by the Department. Trainees
must be employed pursuant to a training program certified by the Department.
Contractors and subcontractors on prime contracts in excess of $100,000 are also
required, pursuant to the Contract Work Hours and Safety Standards Act, to pay
employees one and one-half times their basic rate of pay for all hours over 40 worked on
covered contract work in a workweek.
Covered contractors and subcontractors are also required to pay employees weekly and to
submit weekly certified payroll records to the contracting agency.
Employee Rights
The Davis-Bacon and related Acts provide laborers and mechanics on covered federally
financed or assisted construction contracts the right to receive at least the locally
prevailing wage rate and fringe benefits, as determined by the Department of Labor, for
the type of work performed. The Wage and Hour Division of the Department’s
Employment Standards Administration and respective federal contracting agencies accept
complaints of alleged Davis-Bacon violations.
Penalties/Sanctions
Contractors or subcontractors found to have disregarded their obligations to employees or
to have committed aggravated or willful violations while performing work on DavisBacon covered projects may be subject to contract termination and debarment from future
contracts for up to three years. In addition, contract payments may be withheld in
sufficient amounts to satisfy liabilities for unpaid wages and liquidated damages that
result from overtime violations of the Contract Work Hours and Safety Standards Act.
Contractors and subcontractors may challenge determinations of violations and
debarment before an Administrative Law Judge (ALJ). Contractors and subcontractors
may appeal decisions by ALJs with the Department's Administrative Review Board.
Final Board determinations on violations may be appealed to and are enforceable through
the federal courts.
Falsification of certified payroll records or the solicited kickback of wages may subject a
contractor or subcontractor to civil or criminal prosecution, the penalty for which may be
fines and/or imprisonment.
Relation to State, Local and Other Federal Laws
Since 1931, Congress has extended the Davis-Bacon prevailing wage requirements to
some 60 related Acts that provide federal assistance for construction through loans,
grants, loan guarantees and insurance. These Acts include by reference the requirements
for payment of the prevailing wages in accordance with the Davis-Bacon Act. Examples
of the related Acts are the Federal-Aid Highway Act, the Housing and Community
Development Act of 1974 and the Federal Water Pollution Control Act.
Click here to download the full text of the Act.
Drug-Free Workplace Act of 1988
The Drug-Free Workplace Act of 1988 requires some federal contractors and all federal
grantees to agree that they will provide drug-free workplaces as a condition of receiving a
contract or grant from a federal agency. The Act does not apply to those that do not have,
nor intend to apply for, contracts/grants from the federal government. The Act also does
not apply to subcontractors or subgrantees.
Because the Act applies to each contract or grant on a case-by-case basis, you will need
to determine coverage for each federal contract or grant you have, or for which you are
applying. If your company has a grant that is covered under the Act and a contract that is
not, the Act does not cover the entire company—only employees working on the covered
grant must comply. Although you may not be required to provide a drug-free workplace
for all your employees, you may find it cost-effective to do so—and a good way to
protect your workers and your business profits.
Although all individuals with federal contracts or grants are covered, requirements vary
depending on whether the contractor or grantee is an individual or an organization.
It is recommended that you go through the Advisor to determine coverage and
requirements for each of your federal contracts or grants.
Although all covered contractors and grantees must maintain a drug-free workplace, the
specific components necessary to meet the requirements of the Act vary based on
whether the contractor or grantee is an individual or an organization. The requirements
for organizations are more extensive because organizations have to take comprehensive,
programmatic steps to achieve a workplace free of drugs.
A contractor or grantee that fails to carry out the requirements of the Drug-Free
Workplace Act of 1988 can be penalized in one or more of the following ways:
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Payments for contract or grant activities may be suspended.
Contract or grant may be suspended or terminated.
Contractor or grantee may be prohibited from receiving or participating in any
future contracts or grants awarded by any federal agency for a specified period,
not to exceed five years.
Compliance with the Act’s requirements is reviewed as part of normal federal contract
and grant administration and auditing procedures.
The federal agency head is responsible for deciding whether a violation has occurred. If
the contract or grant officer determines—in writing—that cause exists, an appropriate
action shall be initiated and conducted in accordance with the Federal Acquisition
Regulation and applicable agency procedures. For further information about compliance
monitoring procedures, please contact the contract or grant officer in the agency from
which the contract/grant was awarded.
Click here to download the full text of the Act.
Employee Polygraph Protection Act of 1988
The Department of Labor administers and enforces the Employee Polygraph Protection
Act of 1988 (the Act) through the Wage and Hour Division of the Employment Standards
Administration. The Act generally prevents employers engaged in interstate commerce
from using lie detector tests either for pre-employment screening or during the course of
employment, with certain exemptions. The Act, signed by the President on June 27, 1988,
became effective on December 27, 1988.
Under the Act, the Secretary of Labor is directed to distribute a notice of the Act's
protections, to issue rules and regulations and to enforce the provisions of the Act. The
Act empowers the Secretary of Labor to bring injunctive actions in U.S. district courts to
restrain violations and to assess civil money penalties up to $10,000 against employers
that violate any provision of the Act. Employers are required to post notices summarizing
the protections of the Act in their places of work.
Definitions
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A lie detector includes a polygraph, deceptograph, voice stress analyzer,
psychological stress evaluator or similar device (whether mechanical or electrical)
used to render a diagnostic opinion as to the honesty or dishonesty of an
individual.
A polygraph means an instrument that records continuously, visually, permanently
and simultaneously changes in cardiovascular, respiratory and electrodermal
patterns as minimum instrumentation standards and is used to render a diagnostic
opinion as to the honesty or dishonesty of an individual.
Prohibitions
An employer shall not:
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Require, request, suggest or cause an employee or prospective employee to take or
submit to any lie detector test.
Use, accept, refer to or inquire about the results of any lie detector test of an
employee or prospective employee.
Discharge, discipline, discriminate against, deny employment or promotion, or
threaten to take any such action against an employee or prospective employee for
refusal to take a test, on the basis of the results of a test, for filing a complaint, for
testifying in any proceeding or for exercising any rights afforded by the Act.
Exemptions
Federal, state and local governments are excluded. In addition, lie detector tests
administered by the federal government to employees of federal contractors engaged in
national security intelligence or counterintelligence functions are exempt. The Act also
includes limited exemptions where polygraph tests (but no other lie detector tests) may
be administered in the private sector, subject to certain restrictions:
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To employees who are reasonably suspected of involvement in a workplace
incident that results in economic loss to the employer and who had access to the
property that is the subject of an investigation.
To prospective employees of armored car, security alarm and security guard firms
who protect facilities, materials or operations affecting health or safety, national
security, or currency and other like instruments.
To prospective employees of pharmaceutical and other firms authorized to
manufacture, distribute or dispense controlled substances who will have direct
access to such controlled substances, as well as current employees who have
access to persons or property that are the subject of an ongoing investigation.
Qualifications of Examiners
An examiner is required to have a valid and current license, if required by a state in
which the test is to be conducted, and must maintain a minimum of $50,000 bond or
professional liability coverage.
Employee/Prospective Employee Rights
An employee or prospective employee must be given a written notice explaining the
employee's or prospective employee's rights and the limitations imposed, such as
prohibited areas of questioning and restriction on the use of test results. Among other
rights, an employee or prospective employee may refuse to take a test, terminate a test at
any time or decline to take a test if he or she suffers from a medical condition. The results
of a test alone cannot be disclosed to anyone other than the employer or
employee/prospective employee without their consent or, pursuant to court order, to a
court, government agency, arbitrator or mediator.
Under the exemption for ongoing investigations of workplace incidents involving
economic loss, a written or verbal statement must be provided to the employee prior to
the polygraph test. The statement must explain the specific incident or activity being
investigated and the basis for the employer's reasonable suspicion that the employee was
involved in such incident or activity.
Where polygraph examinations are permitted under the Act, they are subject to strict
standards concerning the conduct of the test, including the pre-test, testing and post-test
phases of the examination.
Civil actions may be brought by an employee or prospective employee in federal or state
court against employers who violate the Act for legal or equitable relief, such as
employment reinstatement, promotion and payment of lost wages and benefits. The
action must be brought within three years of the date of the alleged violation.
Click here to download the full text of the Act.
Employee Retirement Income Security Act (ERISA) of 1974
The provisions of Title I of the Employee Retirement Income Security Act (ERISA)
cover most private-sector employee benefit plans. Such plans are voluntarily established
and maintained by an employer, an employee organization or jointly by one or more such
employers and an employee organization.
Pension plans—a type of employee benefit plan—are established and maintained to
provide retirement income or to defer income until termination of covered employment or
beyond. Other employee benefit plans, called welfare plans, are established and
maintained to provide health benefits, disability benefits, death benefits, prepaid legal
services, vacation benefits, day care centers, scholarship funds, apprenticeship and
training benefits or other similar benefits.
In general, ERISA does not cover plans established or maintained by government entities
or churches for their employees or plans that are maintained solely to comply with
workers’ compensation, unemployment or disability laws. ERISA also does not cover
plans maintained outside of the United States primarily for the benefit of nonresident
aliens or unfunded excess benefit plans.
Basic Provisions/Requirements
ERISA sets uniform minimum standards to ensure that employee benefit plans are
established and maintained in a fair and financially sound manner. In addition, employers
have an obligation to provide promised benefits and satisfy ERISA's requirements for
managing and administering private pension and welfare plans.
The Department of Labor's Employee Benefits Security Administration (EBSA), together
with the Internal Revenue Service (IRS), has the statutory and regulatory authority to
ensure that workers receive the promised benefits. The Department has principal
jurisdiction over Title I of ERISA, which requires persons and entities that manage and
control plan funds to:
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Manage plans for the exclusive benefit of participants and beneficiaries.
Carry out their duties in a prudent manner and refrain from conflict-of-interest
transactions expressly prohibited by law.
Comply with limitations on certain plans' investments in employer securities and
properties.
Fund benefits in accordance with the law and with plan rules.
Report and disclose information on the operations and financial condition of plans
to the government and participants.
Provide documents required in the conduct of investigations to ensure compliance
with the law.
The Department also has jurisdiction over the prohibited transaction provisions of Title II
of ERISA. However, the IRS generally administers the rest of Title II of ERISA, as well
as the standards of Title I of ERISA that address vesting, participation, nondiscrimination
and funding.
Reporting and Disclosure. Any individual or organization affected by ERISA may
request an advisory opinion or information letter about the interpretation or application of
the statutory provisions (or the implementing regulations, interpretive bulletins or
exemptions) within the Department's jurisdiction. ERISA Procedure 76-1, 41 Federal
Register 36281 (August 27, 1976) sets forth the procedures governing the advisory
opinion process.
Part 1 of Title I requires the administrator of an employee benefit plan to furnish
participants and beneficiaries with a summary plan description (SPD), clearly describing
their rights, benefits and responsibilities under the plan. Plan administrators must also
furnish participants with a summary of any material changes to the plan or changes to the
information contained in the SPD. Copies of these documents need not be automatically
filed with the Department, but they must be furnished to the Department on request.
In addition, the administrator generally must file an annual report (Form 5500 Series)
containing financial and other information about the operation of the plan. Plan
administrators filing annual reports must furnish participants and beneficiaries with a
summary of the information in the annual report (the Summary Annual Report).
Certain pension and welfare benefit plans may be exempt from the requirement to file an
annual report. For example, welfare benefit plans with fewer than 100 participants that
are fully insured or unfunded within the meaning of the Department's regulation at 29
CFR 2520.104 to 20 are not required to file an annual report.
The Department's regulations governing these reporting and disclosure requirements are
set forth beginning at 29 CFR 2520.101-1.
Fiduciary Standards. Part 4 of Title I sets forth standards and rules for the conduct of
plan fiduciaries. In general, persons who exercise discretionary authority or control over
management of a plan or disposition of its assets are "fiduciaries" for purposes of Title I
of ERISA. Fiduciaries are required, among other things, to discharge their duties solely in
the interest of plan participants and beneficiaries and for the exclusive purpose of
providing benefits and defraying reasonable expenses of administering the plan. In
discharging their duties, fiduciaries must act prudently and in accordance with documents
governing the plan, to the extent such documents are consistent with ERISA.
ERISA prohibits certain transactions between an employee benefit plan and "parties in
interest," which include the employer and others who may be in a position to exercise
improper influence over the plan, and such transactions may trigger civil monetary
penalties under Title I of ERISA. The Internal Revenue Code ("Code") also prohibits
most of these transactions, and it imposes an excise tax on "disqualified persons" (whose
definition generally parallels that of “parties in interest”) who participate in such
transactions.
Exemptions. Both ERISA and the Code contain various statutory exemptions from the
prohibited transaction rules and give the Departments of Labor and Treasury,
respectively, authority to grant administrative exemptions and establish exemption
procedures. Reorganization Plan No. 4 of 1978 transferred the Treasury Department's
authority over prohibited transaction exemptions to the Labor Department, with certain
exceptions.
The statutory exemptions generally include loans to participants, the provision of services
needed to operate a plan for reasonable compensation, loans to employee stock
ownership plans and investment with certain financial institutions regulated by other state
or federal agencies. (See ERISA Section 408 for the conditions of the exemptions.) The
Department of Labor may grant administrative exemptions on a class or individual basis
for a wide variety of proposed transactions with a plan. Applications for individual
exemptions must include, among other information:
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A detailed description of the exemption transaction and the parties for whom an
exemption is requested.
The reasons a plan would have for entering into the transaction.
The percentage of assets involved in the exemption transaction.
The names of persons with investment discretion.
The extent of plan assets already invested in loans to, property leased by and
securities issued by parties in interest involved in the transaction.
Copies of all contracts, agreements, instruments and relevant portions of plan
documents and trust agreements bearing on the exemption transaction.
Information about plan participation in pooled funds when the exemption
transaction involves such funds.
A declaration by the applicant, under penalty of perjury, attesting to the truth of
representations made in such exemption submissions.
Statement of consent by third-party experts acknowledging that their statement is
being submitted to the Department as part of an exemption application.
The Department's exemption procedures are set forth at 29 CFR 2570.30 through
2570.51.
Continuation of Health Coverage. The Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA) included provisions for continuing health care coverage. These
provisions, which are codified in Part 6 of Title I of ERISA, apply to group health plans
of employers with 20 or more employees on a typical working day in the previous
calendar year.
COBRA gives "qualified beneficiaries" (a covered employee's spouse and dependent
children) the right to maintain, at their own expense, coverage under their health plan that
would be lost due to a "qualifying event," such as termination of employment, at a cost
comparable to what it would be if they were still members of the employer's group.
Plans must give covered individuals an initial general notice informing them of their
rights under COBRA and describing the law. The law also obliges plan administrators,
employers and qualified beneficiaries to provide notice of certain "qualifying events." In
most instances of employee death, termination, reduced hours of employment,
entitlement to Medicare or bankruptcy, the employer must provide a specific notice to the
plan administrator. The plan administrator must then advise the qualified beneficiaries of
the opportunity to elect continuation coverage.
The Department's regulatory and interpretive jurisdiction over the COBRA provisions is
limited to the COBRA notification and disclosure provisions.
Jurisdiction of the Internal Revenue Service. The IRS has regulatory and interpretive
responsibility for all provisions of COBRA not under the Department's jurisdiction. In
addition, the IRS generally administers and interprets the ERISA provisions relating to
participation, vesting, funding and benefit accrual, contained in parts 2 and 3 of Title I.
Health Insurance Portability and Accountability Act of 1996. The Health Insurance
Portability and Accountability Act of 1996 (HIPAA), Pub. L. 104-191, was enacted on
August 21, 1996. HIPAA amended ERISA to provide for improved portability and
continuity of health insurance coverage connected with employment, among other things.
The HIPAA portability provisions relating to group health plans and health insurance
coverage offered in connection with group health plans are set forth under a new Part 7 of
Subtitle B of Title I of ERISA. These provisions include rules relating to exclusions of
preexisting conditions, special enrollment rights and prohibition of discrimination against
individuals based on health status–related factors.
The Newborns' and Mothers' Health Protection Act of 1996, signed into law on
September 26, 1996, requires plans that offer maternity coverage to pay for at least a 48hour hospital stay following childbirth (a 96-hour stay when a cesarean section is
performed).
The Women's Health and Cancer Rights Act, signed into law on October 21, 1998,
contains protection for patients who elect breast reconstruction in connection with a
mastectomy. For plan participants and beneficiaries receiving benefits in connection with
a mastectomy, plans offering coverage for a mastectomy must also cover reconstructive
surgery and other benefits related to a mastectomy.
Employee Rights
The Act grants employees several important rights. Among them are the right to receive
important information about their pension or health benefit plans, to participate in timely
and fair processes for benefit claims, to elect to temporarily continue group health
coverage after losing coverage, to receive certificates verifying health coverage under a
plan, and to recover benefits due under the plan.
Penalties/Sanctions
ERISA confers substantial law enforcement responsibilities on the Department. Part 5 of
Title I of ERISA gives the Department authority to bring a civil action to correct
violations of the law, provides investigative authority to determine whether any person
has violated Title I, and imposes criminal penalties on any person who willfully violates
any provision of Part 1 of Title I.
EBSA has authority under ERISA Section 502(c)(2) to assess civil penalties for reporting
violations. A penalty of up to $1,000 per day may be assessed against plan administrators
who fail or refuse to comply with annual reporting requirements. Section 502(i) gives the
agency authority to assess civil penalties against parties in interest who engage in
prohibited transactions with welfare and nonqualified pension plans. The penalty can
range from 5 percent to 100 percent of the amount involved in a transaction.
A parallel provision of the Code directly imposes an excise tax against disqualified
persons, including employee benefit plan sponsors and service providers, who engage in
prohibited transactions with tax-qualified pension and profit-sharing plans.
Finally, Section 502(l) requires the Department to assess mandatory civil penalties equal
to 20 percent of any amount recovered with respect to fiduciary breaches resulting from
either a settlement agreement with the Department or a court order as the result of a
lawsuit by the Department.
Relation to State, Local and Other Federal Laws
Part 5 of Title I states that the provisions of ERISA Titles I and IV supersede state and
local laws that "relate to" an employee benefit plan. ERISA, however, does not preempt
certain state and local laws, including state insurance regulation of multiple employer
welfare arrangements (MEWAs). MEWAs generally constitute employee welfare benefit
plans or other arrangements providing welfare benefits to employees of more than one
employer, not pursuant to a collective bargaining agreement.
In addition, ERISA's general prohibitions against assignment or alienation of pension
benefits do not apply to qualified domestic relations orders. Plan administrators must
comply with the terms of qualifying orders made pursuant to state domestic relations law
that award all or part of a participant's benefit in the form of child support, alimony or
marital property rights to an alternative payee (spouse, former spouse, child or other
dependent). Finally, group health plans covered by ERISA must provide benefits in
accordance with the requirements of qualified medical child support orders issued under
state domestic relations laws.
Click here to download the full text of the Act.
Energy Employees Occupational Illness Compensation
Program Act (EEOICPA)
The Energy Employees Occupational Illness Compensation Program provides benefits
authorized by the Energy Employees Occupational Illness Compensation Program Act
(EEOICPA or Act). Part B of the Program went into effect on July 31, 2001, and Part E
of the Program went into effect on October 29, 2004. The Department of Labor’s Office
of Workers’ Compensation Programs is responsible for adjudicating and administering
claims filed by employees or former employees or certain qualified survivors of the Act.
Part B
Compensation of $150,000 and payment of medical expenses from the date a claim is
filed is available to:
Employees of the Department of Energy (DOE), its contractors or subcontractors, and
atomic weapons employers with radiation-induced cancer if:
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The employee developed cancer after working at a covered facility of the
Department of Energy, its contractors and subcontractors; and
The employee’s cancer is determined at least as likely as not related to that
employment in accordance with guidelines issued by the Department of
Health and Human Services, or
The employee is determined to be a member of the Special Exposure
Cohort (employees who worked at least 250 days before February 1, 1992,
for the Department of Energy or its contractors or subcontractors at one or
more of the three Gaseous Diffusion Plants located at Oak Ridge, TN,
Paducah, KY, or Portsmouth, OH, or who were exposed to radiation
related to certain underground nuclear tests at Amchitka, AK) and
developed one of certain listed cancers.
Employees of the Department of Energy, its contractors and subcontractors
and designated beryllium vendors who worked at covered facilities where
they were exposed to beryllium produced or processed for the Department
of Energy and who developed Chronic Beryllium Disease; and
Employees of the Department of Energy or its contractors and
subcontractors who worked at least 250 days during the mining of tunnels
at underground nuclear weapons tests sites in Nevada or Alaska and who
developed chronic silicosis.
If the employee is no longer living, the compensation is payable to eligible survivors.
Compensation of $50,000 and payment of medical expenses from the date a claim is filed
is available for:
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Uranium workers (or their survivors) previously awarded benefits by the
Department of Justice under Section 5 of the Radiation Exposure
Compensation Act.
Employees of the Department of Energy, its contractors and subcontractors who were
exposed to beryllium on the job and now have beryllium sensitivity will receive medical
monitoring to check for Chronic Beryllium Disease.
Part E
Compensation and payment of medical expenses is available to employees of DOE
contractors and subcontractors, or their survivors, who develop an illness due to exposure
to toxic substances at certain DOE facilities. Uranium miners, millers and ore transporters
are also eligible for benefits if they develop an illness as a result of toxic exposure and
worked at a facility covered under Section 5 of the Radiation Exposure Compensation
Act (RECA). Under Part E, a toxic substance is not limited to radiation but includes such
things as chemicals, solvents, acids and metals.
Variable compensation up to $250,000 is determined based on wage loss, impairment and
survivorship.
Wage loss is based on the number of years that the employee was unable to work or
sustained a reduction in earnings as a result of the illness. Wage loss compensation is
payable for years of lost wages that are prior to regular Social Security retirement age
(usually age 65). Wage loss compensation is calculated at:
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$10,000 for each year in which wages were 25-50 percent less than the Average
Annual Wage (AAW). The AAW is the average earnings for the 12 quarters (36
months) prior to the first quarter of wage loss.
$15,000 for each year in which wages were less than 50 percent of the AAW.
Impairment is a decrease in the functioning of a body part or organ as it affects the whole
body, as a result of the illness. An impairment rating is determined once the claimant has
reached Maximum Medical Improvement (i.e., the condition is stabilized and is unlikely
to improve with additional medical treatment). Impairment compensation is calculated at:
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$2,500 for each 1 percent of whole body impairment.
Survivor benefits include compensation of at least $125,000.
If the employee sustained wage loss as a result of the covered illness and that
wage loss was prior to Social Security retirement age (usually age 65),
additional compensation may be awarded as follows:
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$0 if the employee had fewer than 10 years of wage loss.
$25,000 if the employee had between 10 and 19 years of wage loss.
$50,000 if the employee had 20 or more years of wage loss.
Total survivor compensation not to exceed $175,000.
Eligible survivors may receive compensation if the employee’s death was caused,
contributed to or aggravated by the covered illness. Eligible survivors include:
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A spouse who was married to the employee for at least one year prior to his or her
death.
If there is no surviving spouse, then compensation may be awarded to a covered child if,
at the time of the employee’s death, the child was:
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Under the age of 18.
Under the age of 23 and a full-time student continuously enrolled in an educational
institution.
Incapable of self support.
Medical expenses are not included in the $250,000 cap.
Click here to download the full text of the Act.
Equal Pay Act of 1963
The right of employees to be free from discrimination in their compensation is protected
under several federal laws, including the following enforced by the U.S. Equal
Employment Opportunity Commission (EEOC): the Equal Pay Act of 1963, Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 and
Title I of the Americans with Disabilities Act of 1990.
The Equal Pay Act requires that men and women be given equal pay for equal work in
the same establishment. The jobs need not be identical, but they must be substantially
equal. It is job content, not job titles, that determines whether jobs are substantially equal.
Specifically, the EPA provides:
Employers may not pay unequal wages to men and women who perform jobs that require
substantially equal skill, effort and responsibility, and that are performed under similar
working conditions within the same establishment. Each of these factors is summarized
below:
Skill: Measured by factors such as the experience, ability, education and training
required to perform the job. The key issue is what skills are required for the job,
not what skills the individual employees may have. For example, two
bookkeeping jobs could be considered equal under the EPA even if one of the job
holders has a master's degree in physics, since that degree would not be required
for the job.
Effort: The amount of physical or mental exertion needed to perform the job. For
example, suppose that men and women work side by side on a line assembling
machine parts. The person at the end of the line must also lift the assembled
product as he or she completes the work and place it on a board. That job requires
more effort than the other assembly line jobs if the extra effort of lifting the
assembled product off the line is substantial and is a regular part of the job. As a
result, it would not be a violation to pay that person more, regardless of whether
the job is held by a man or a woman.
Responsibility: The degree of accountability required in performing the job. For
example, a salesperson who is delegated the duty of determining whether to
accept customers' personal checks has more responsibility than other salespeople.
On the other hand, a minor difference in responsibility, such as turning out the
lights at the end of the day, would not justify a pay differential.
Working Conditions: This encompasses two factors: (1) physical surroundings,
such as temperature, fumes and ventilation; and (2) hazards.
Establishment: The prohibition against compensation discrimination under the
EPA applies only to jobs within an establishment. An establishment is a distinct
physical place of business rather than an entire business or enterprise consisting of
several places of business. However, in some circumstances, physically separate
places of business should be treated as one establishment. For example, if a
central administrative unit hires employees, sets their compensation and assigns
them to work locations, the separate work sites can be considered part of one
establishment.
Pay differentials are permitted when they are based on seniority, merit, quantity or
quality of production, or a factor other than sex. These are known as "affirmative
defenses," and it is the employer's burden to prove that they apply.
In correcting a pay differential, no employee's pay may be reduced. Instead, the pay of
the lower-paid employee(s) must be increased.
Title VII, the ADEA and the ADA prohibit compensation discrimination on the basis of
race, color, religion, sex, national origin, age or disability. Unlike the EPA, there is no
requirement under Title VII, the ADEA or the ADA that the claimant's job be
substantially equal to that of a higher-paid person outside the claimant's protected class,
nor do these statutes require the claimant to work in the same establishment as a
comparator.
Compensation discrimination under Title VII, the ADEA or the ADA can occur in a
variety of forms. For example:
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An employer pays an employee with a disability less than similarly situated
employees without disabilities, and the employer's explanation (if any) does
not satisfactorily account for the differential.
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A discriminatory compensation system has been discontinued but still has
lingering discriminatory effects on present salaries. For example, if an
employer has a compensation policy or practice that pays Hispanics lower
salaries than other employees, the employer must not only adopt a new
nondiscriminatory compensation policy, it also must affirmatively eradicate
salary disparities that began prior to the adoption of the new policy and make
the victims whole.
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An employer sets the compensation for jobs predominately held by, for
example, women or African-Americans below the compensation level
suggested by the employer's job evaluation study, while the pay for jobs
predominately held by men or whites is consistent with the level suggested by
the job evaluation study.
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An employer maintains a neutral compensation policy or practice that has an
adverse impact on employees in a protected class and cannot be justified as
job-related and consistent with business necessity. For example, if an
employer provides extra compensation to employees who are the "head of
household," i.e., married with dependents and the primary financial
contributor to the household, the practice may have an unlawful disparate
impact on women.
It is also unlawful to retaliate against an individual for opposing employment practices
that discriminate based on compensation or for filing a discrimination charge, testifying
or participating in any way in an investigation, proceeding or litigation under Title VII,
ADEA, ADA or the Equal Pay Act.
Click here to download the full text of the Act.
Executive Order 11246 of 1965
The Department of Labor's Employment Standards Administration's Office of Federal
Contract Compliance Programs (OFCCP) enforces the Executive Order 11246, as
amended; Section 503 of the Rehabilitation Act of 1973, as amended; and the affirmative
action provisions (Section 4212) of the Vietnam Era Veterans' Readjustment Assistance
Act, as amended. Taken together, these laws ban discrimination and require federal
contractors and subcontractors to take affirmative action to ensure that all individuals
have an equal opportunity for employment, without regard to race, color, religion, sex,
national origin, disability or status as a Vietnam era or special disabled veteran.
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OFCCP’s jurisdiction covers approximately 26 million or nearly 22% of the total
civilian workforce (92,500 non-construction establishments and 100,000
construction establishments). The Federal Government awarded more than $179
billion taxpayer dollars in prime contracts in Fiscal Year 1995.
OFCCP requires a contractor, as a condition of having a federal contract, to
engage in a self-analysis for the purpose of discovering any barriers to equal
employment opportunity. No other government agency conducts comparable
systemic reviews of employers’ employment practices to ferret out discrimination.
OFCCP also investigates complaints of discrimination. In Fiscal Year 1999,
OFCCP conducted 3,833 compliance reviews. Moreover, OFCCP programs
prevent discrimination. Further information about the OFCCP programs may be
obtained from the Internet.
B. Operation of the Executive Order Program – The EEO Clause
Each contracting agency in the Executive Branch of government must include the equal
opportunity clause in each of its nonexempt government contracts. The equal opportunity
clause requires that the contractor will take affirmative action to ensure that applicants
are employed, and that employees are treated during employment, without regard to their
race, color, religion, sex or national origin. American Indian or Alaskan Native, Asian or
Pacific Islander, Black, and Hispanic individuals are considered minorities for purposes
of the Executive Order. This clause makes equal employment opportunity and affirmative
action integral elements of a contractor’s agreement with the government. Failure to
comply with the nondiscrimination or affirmative action provisions is a violation of the
contract.
A contractor in violation of E.O. 11246 may have its contracts canceled, terminated, or
suspended in whole or in part, and the contractor may be debarred, i.e., declared
ineligible for future government contracts. However, a contractor cannot be debarred
without being afforded the opportunity for a full evidentiary hearing. Debarments may be
for an indefinite term or for a fixed term. When an indefinite-term debarment is imposed,
the contractor may be reinstated as soon as it has demonstrated that the violations have
been remedied. A fixed-term debarment establishes a trial period during which a
contractor can demonstrate its commitment and ability to establish personnel practices
that are in compliance with the Executive Order.
If a matter is not resolved through conciliation, OFCCP may refer the matter to the Office
of the Solicitor of Labor, which is authorized to institute administrative enforcement
proceedings. After a full evidentiary hearing, a Department of Labor Administrative Law
Judge issues recommended findings of fact, conclusions of law, and a recommended
order. On the basis of the entire record, the Secretary of Labor issues a final
Administrative Order. Cases also may be referred to the Department of Justice for
judicial enforcement of E.O. 11246, primarily when use of the sanctions authorized by
the Order is impracticable, such as a case involving a sole-source supplier.
The regulations implementing the Executive Order establish different affirmative action
provisions for non-construction (i.e., service and supply) contractors and for construction
contractors.
C. Executive Order Affirmative Action Requirements
i. For Supply and Service Contractors
Non-construction (service and supply) contractors with 50 or more employees and
government contracts of $50,000 or more are required, under Executive Order 11246, to
develop and implement a written affirmative action program (AAP) for each
establishment. The regulations define an AAP as a set of specific and result-oriented
procedures to which a contractor commits itself to apply every good-faith effort. The
AAP is developed by the contractor (with technical assistance from OFCCP if requested)
to assist the contractor in a self-audit of its workforce. The AAP is kept on file and
carried out by the contractor; it is submitted to OFCCP only if the agency requests it for
the purpose of conducting a compliance review.
The AAP identifies those areas, if any, in the contractor’s workforce that reflect
utilization of women and minorities. The regulations at 41 CFR 60-2.11 (b) define underutilization as having fewer minorities or women in a particular job group than would
reasonably be expected by their availability. When determining availability of women
and minorities, contractors consider, among other factors, the presence of minorities and
women having requisite skills in an area in which the contractor can reasonably recruit.
Based on the utilization analyses under Executive Order 11246 and the availability of
qualified individuals, the contractors establish goals to reduce or overcome the underutilization. Good-faith efforts may include expanded efforts in outreach, recruitment,
training and other activities to increase the pool of qualified minorities and females. The
actual selection decision is to be made on a nondiscriminatory basis.
ii. For Construction Contractors
OFCCP has established a distinct approach to affirmative action for the construction
industry due to the fluid and temporary nature of the construction workforce. In contrast
to the service and supply affirmative action program, OFCCP, rather than the contractor,
establishes goals and specifies affirmative action which must be undertaken by federal
and federally assisted construction contractors. OFCCP issued specific national goals for
women: The female goal of 6.9 percent was extended indefinitely in 1980 and remains in
effect today. Construction contractors are not required to develop written affirmative
action programs. The regulations enumerate the good-faith steps construction contractors
must take in order to increase the utilization of minorities and women in the skilled
trades.
D. Goals, Timetables, and Good Faith Efforts
The numerical goals are established based on the availability of qualified applicants in
the job market or qualified candidates in the employer’s workforce. Executive Order
numerical goals do not create set-asides for specific groups, nor are they designed to
achieve proportional representation or equal results. Rather, the goal-setting process in
affirmative action planning is used to target and measure the effectiveness of affirmative
action efforts to eradicate and prevent discrimination. The Executive Order and its
supporting regulations do not authorize OFCCP to penalize contractors for not meeting
goals. The regulations at 41 CFR 60-2.12(e), 60-2.30 and 60-2.15 specifically prohibit
quota and preferential hiring and promotions under the guise of affirmative action
numerical goals. In other words, discrimination in the selection decision is prohibited.
Click here to download the full text of the Act.
Executive Order 13201
Executive Order 13201 (E.O. 13201) covers government contractors and subcontractors
with a contract equal to or above the Simplified Acquisition Threshold of $100,000,
which was entered into on or after April 28, 2004, and resulted from solicitations issued
on or after April 18, 2001.
Basic Provisions/Requirements
E.O. 13201 requires government contractors to post a notice (the Beck Poster) informing
their employees that they have certain rights related to union membership and use of
union dues and fees under federal law. These contractors must include an employee
notice clause in subcontracts or purchase orders entered into in connection with a covered
contract. The employee notice clause requires subcontractors to also post the notice, and
to include the requirement in further subcontracts.
The posting requirement does not apply to contractor establishments or construction work
sites in jurisdiction where state law forbids enforcement of union-security agreements.
The posting requirement also does not apply to contractor establishments or construction
worksites where no union has been formally recognized by the contractor or certified as
the exclusive bargaining representative.
The posting requirement does not apply to contractor establishments or construction
worksites that involve a prime contractor and one or more subcontractors at a single site
where the prime contractor, i.e., the person holding the contract with the government
contracting agency, has not formally recognized a union and where no union has been
certified as the exclusive bargaining representative of the prime contractor’s employees.
The E.O. 13201 poster informs employees of their rights under the decisions of the
Supreme Court in Communications Workers of America v. Beck, 487 U.S. 735 (1988),
and related cases. Under federal law, employees cannot be required to join a union or
maintain membership in a union in order to retain their jobs. Under certain conditions, the
law permits a union and an employer to enter into a union-security agreement requiring
employees to pay uniform periodic dues and initiation fees. However, employees who are
not union members can object to the use of their payments for certain purposes and can
be required to pay only their share of union costs relating to collective bargaining,
contract administration, and grievance adjustment.
If employees do not want to pay that portion of dues or fees used to support activities not
related to collective bargaining, contract administration, or grievance adjustment, they are
entitled to an appropriate reduction in their payment. If an employee believes that he/she
has been required to pay dues or fees used in part to support activities not related to
collective bargaining, contract administration, or grievance adjustment, that employee
may be entitled to a refund and to an appropriate reduction in future payments. Further
information concerning these rights is available from the National Labor Relations Board
(NLRB).
Penalties/Sanctions
If, after administrative enforcement proceedings, the Assistant Secretary for Employment
Standards finds that a contractor has violated the Executive Order, the Assistant Secretary
may:


Direct a contracting agency to cancel, terminate, suspend, or cause to be canceled,
terminated, or suspended, any contract or any portions thereof, for failure of the
contractor to comply with its contractual provisions as required by Section 2 of
E.O. 13201 and the implementing regulations. Contracts may be canceled,
terminated, or suspended absolutely, or continuance of contracts may be
conditioned upon compliance.
Issue an order of debarment under Section 6(b) of the order providing that one or
more contracting agencies must refrain from entering into further contracts, or
extensions or other modification of existing contracts, with any non-complying
contractor.
Relation to State, Local, and Other Federal Laws
The employee rights described in the E.O. 13201 poster are based on Supreme Court
decisions involving the Labor Management Relations Act, 1947, and the Railway Labor
Act. The posting requirement does not apply to contractor establishments or construction
worksites in jurisdictions where state law forbids enforcement of union-security
agreements.
Click here to download the full text of the Act.
Fair and Accurate Credit Transactions Act of 2003 (FACT)
The Fair and Accurate Credit Transactions Act of 2003 (FACT Act), which amended the
Fair Credit Reporting Act (FCRA), became law on December 4, 2003. By Informational
Memorandum dated September 2, 2004, the Farm Credit Administration (FCA) explained
that Farm Credit System (FCS) institutions are subject to certain provisions of the FACT
Act and that the Federal Trade Commission (FTC) regulates and enforces the FACT Act
with respect to FCS institutions. We also suggested that you consult legal counsel to
determine the responsibilities of your institution.
The purpose of this Informational Memorandum is to provide you with new information
regarding FTC regulations that may apply to the FCS.
Disposal of Consumer Information
The FTC published final regulations regarding disposal of consumer information on
November 24, 2004, at 69 FR 68690. These regulations implement Section 216 of the
FACT Act, which added Section 628 (15 U.S.C. § 1681w) to the FCRA. The rule
requires that any persons who maintain or otherwise possess consumer information
derived from consumer reports for a business purpose properly dispose of such
information by taking "reasonable measures" to protect against unauthorized access to or
use of the information in connection with its disposal. The rule includes several examples
of what the FTC believes constitute "reasonable measures." The rule will become
effective on June 1, 2005.
Prescreen Notices
The FTC published final regulations to improve required notices in prescreened offers for
credit or insurance on January 31, 2005, at 70 FR 5021. These regulations implement
Section 213 of the FACT Act, which amended Section 615(d) (15 U.S.C. § 1681m(d)) of
the FCRA.
Under the FCRA, as amended, "prescreened" solicitations sent to consumers are required
to contain a simple and easy-to-understand notice providing information about the offer
and instructions on how consumers can opt out of receiving future offers by calling a tollfree telephone number or writing to a specified address. The rule requires a "layered"
notice (a short statement on the first page of the solicitation and a longer statement
providing additional information about prescreening), establishes baseline requirements
for the format, type size, and manner of the notice, and provides "model" notices in
English and Spanish. The rule will become effective on August 1, 2005.
Effective Date of Certain FACT Act Provisions
Attached is a letter from the FTC (as well as other federal agencies responsible for
regulation and enforcement with respect to non-FCS entities) providing guidance on the
how the FTC and other agencies expect to apply certain provisions of the FACT Act in
light of their effective dates. You may also wish to review the FTC's joint Federal
Register notice dated February 11, 2004, at 69 FR 6526, for further information regarding
FACT Act effective dates.
While the FCA has no enforcement authority under the FACT Act, the FCA will examine
for compliance under its general authority to protect the safety and soundness of System
institutions, and to assist the FTC, if material noncompliance is evident.
Click here to download the full text of the Act.
Fair Credit Reporting Act of 1969
The Fair Credit Report Act (FCRA) (15 USC 1681) became effective on April 25, 1971.
The FCRA is designed to regulate the consumer reporting industry; to place disclosure
obligations on users of consumer reports; and to ensure fair, timely, and accurate
reporting of credit information. It also restricts the use of reports on consumers and, in
certain situations, requires the deletion of obsolete information. Banks may be subject to
the FCRA as:
• Credit grantors.
• Purchasers of dealer paper.
• Issuers of credits cards.
• Employers.
Generally, the FCRA does not apply to commercial transactions, including
those involving agricultural credit.
It does not give any federal agency authority to issue rules or regulations having the force
and effect of law. The Federal Trade Commission (FTC) has issued a commentary on the
FCRA (16 CFR 600.1-600.8). That commentary provides guidance to consumer reporting
agencies, customers, and consumers on the FTC interpretation of the act.
The consumer report may be a written or oral communication that bears on a consumer’s
credit standing, credit capacity, character, general reputation, personal characteristics, or
mode of living. Furthermore, it must have been used, expected to be used, or collected in
whole or in part for the purposes listed in 15 USC 1681a(d). A report containing
information only about transactions and experiences between the consumer and the
institution making the report is not a consumer report.
Employers often rely on information contained in consumer credit reports to decide
whether to hire, promote or retain applicants and employees.
The Credit Reporting Act of 1970 (FCRA) governs the use of consumer reports in all
employment decisions.
Under the FCRA, an employer may obtain an applicant's or employee's consumer report
for employment related purposes if it (1) gives the applicant or employee a clear and
conspicuous written disclosure (in a document consisting solely of the disclosure)
notifying him or her that a consumer report may be obtained and (2) obtains written
authorization from the applicant or employee.
An employer may not obtain an investigative consumer report under the FCRA unless it
(1) provides a written disclosure that an investigative consumer report may be made,
including a statement to the effect that the consumer may request additional disclosures
regarding the nature and scope of the investigation, as well as a written summary of his or
her rights under the statute, and (2) certifies to the consumer reporting agency that it has
made the above disclosures and that it will comply with any requests for additional
disclosures.
Employers who do utilize investigative consumer reports, must supplement their
disclosure to comply with additional requirements, as follows:
Sample Investigative Report Disclosure Statement
"By this document, [the employer] discloses to you that a consumer report, including an
investigative consumer report containing information as to your character, general
reputation, personal characteristics, and mode of living, may be obtained for employment
purposes as part of the pre-employment background investigation and at any time during
your employment. Should an investigative consumer report be requested, you will have
the right to demand a complete and accurate disclosure of the nature and scope of the
investigation requested and a written summary of your rights under the Fair Credit
Reporting Act. Please sign below to signify receipt of the foregoing disclosure."
Under the FCRA, as soon as an employer intends to take adverse action against an
applicant or employee based wholly or partly on the information contained in a consumer
report, the employer must first provide the applicant or employee with a copy of the
report, along with a written description of his or her rights under the statute (including the
right to request disclosure of the nature, sources and recipients of any credit report).
According to the FCRA, "adverse action" includes the "denial of employment or any
other decision for employment purposes that adversely affects any current or prospective
employee."
Whenever any adverse action is taken against an applicant or employee, either partly or
wholly because of information contained in a consumer report, the employer must
provide him or her with oral, written or electronic notice of the adverse action as well as
the name, address and phone number of the consumer reporting agency that furnished the
report and a statement that the consumer reporting agency did not make the decision to
take the adverse action and is unable to explain the specific reasons behind the decision.
Id. at § 1681m(a). The applicant or employee must also be notified of his or her right to
dispute the accuracy of the report.
Pursuant to the FCRA a consumer reporting agency will be able to furnish a consumer
report for employment purposes only if (1) the employer certifies that it will comply with
the FCRA’s disclosure and adverse action requirements (see above) and that the
information will not be used in violation of any applicable Federal or State equal
opportunity law or regulation, and (2) the consumer reporting agency provides a written
summary of the consumer's rights under this statute along with the report. The FCRA also
prohibits a consumer reporting agency from furnishing a consumer report that contains
medical information without first getting consent from the consumer.
The FCRA, as amended, specifies damages for both willful and negligent noncompliance
with the Act. Any employer that willfully fails to comply with the requirements set forth
in the FCRA will be liable to the applicant or employee for actual damages, punitive
damages, costs and attorney's fees (although the Act limits actual damages in this
situation to an amount not less than $100 and not more than $1,000). Should an employer
willfully obtain a consumer report under false pretenses or without a permissible purpose,
the employer will be liable to both the consumer reporting agency and to the applicant or
employee for their actual damages sustained or $1,000, whichever is greater. If an
unsuccessful motion, pleading or other paper is willfully filed "in bad faith or for
purposes of harassment," the FCRA will award reasonable attorney's fees to the
prevailing party.
An employer who negligently fails to comply with the FCRA (e.g., neglects to put the
disclosure in a separate document or to provide a copy of the report before taking adverse
action), the employer shall be liable to the applicant or employee for actual damages,
costs and reasonable attorney's fees.
Click here to download the full text of the Act.
Fair Labor Standards Act of 1938
The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay,
recordkeeping, and youth employment standards affecting full-time and part-time
workers in the private sector and in Federal, State, and local governments.
The Wage and Hour Division (Wage-Hour) administers and enforces FLSA with respect
to private employment, State and local government employment, and Federal employees
of the Library of Congress, U.S. Postal Service, Postal Rate Commission, and the
Tennessee Valley Authority. The FLSA is enforced by the U.S. Office of Personnel
Management for employees of other Executive Branch agencies, and by the U.S.
Congress for covered employees of the Legislative Branch.
Special rules apply to State and local government employment involving fire protection
and law enforcement activities, volunteer services, and compensatory time off instead of
cash overtime pay.
Basic Wage Standards
Covered, nonexempt workers are entitled to a minimum wage of not less than $5.85 per
hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour
effective July 24, 2009. Special provisions apply to workers in American Samoa and the
Commonwealth of the Northern Mariana Islands. Nonexempt workers must be paid
overtime pay at a rate of not less than one and one-half times their regular rates of pay
after 40 hours of work in a workweek.
Wages required by FLSA are due on the regular payday for the pay period covered.
Deductions made from wages for such items as cash or merchandise shortages, employerrequired uniforms, and tools of the trade, are not legal to the extent that they reduce the
wages of employees below the minimum rate required by FLSA or reduce the amount of
overtime pay due under FLSA.
The FLSA contains some exemptions from these basic standards. Some apply to specific
types of businesses; others apply to specific kinds of work.
While FLSA does set basic minimum wage and overtime pay standards and regulates the
employment of minors, there are a number of employment practices which FLSA does
not regulate. For example, FLSA does not require:
1.
2.
3.
4.
vacation, holiday, severance, or sick pay;
meal or rest periods, holidays off, or vacations;
premium pay for weekend or holiday work;
pay raises or fringe benefits; or
5. a discharge notice, reason for discharge, or immediate payment of final wages to
terminated employees.
The FLSA does not provide wage payment or collection procedures for an employee's
usual or promised wages or commissions in excess of those required by the FLSA.
However, some States do have laws under which such claims (sometimes including
fringe benefits) may be filed.
Also, FLSA does not limit the number of hours in a day or days in a week an employee
may be required or scheduled to work, including overtime hours, if the employee is at
least 16 years old.
The above matters are for agreement between the employer and the employees or their
authorized representatives.
Who is Covered?
All employees of certain enterprises having workers engaged in interstate commerce,
producing goods for interstate commerce, or handling, selling, or otherwise working on
goods or materials that have been moved in or produced for such commerce by any
person, are covered by FLSA.
A covered enterprise is the related activities performed through unified operation or
common control by any person or persons for a common business purpose and –
1. whose annual gross volume of sales made or business done is not less than
$500,000 (exclusive of excise taxes at the retail level that are separately stated); or
2. is engaged in the operation of a hospital, an institution primarily engaged in the
care of the sick, the aged, or the mentally ill who reside on the premises; a school
for mentally or physically disabled or gifted children; a preschool, an elementary
or secondary school, or an institution of higher education (whether operated for
profit or not for profit); or
3. is an activity of a public agency.
Any enterprise that was covered by FLSA on March 31, 1990, and that ceased to be
covered because of the revised $500,000 test, continues to be subject to the overtime pay,
child labor and recordkeeping provisions of FLSA.
Employees of firms that are not covered enterprises under FLSA still may be subject to
its minimum wage, overtime pay, recordkeeping, and child labor provisions if they are
individually engaged in interstate commerce or in the production of goods for interstate
commerce, or in any closely related process or occupation directly essential to such
production. Such employees include those who work in communications or
transportation; regularly use the mails, telephones, or telegraph for interstate
communication, or keep records of interstate transactions; handle, ship, or receive goods
moving in interstate commerce; regularly cross State lines in the course of employment;
or work for independent employers who contract to do clerical, custodial, maintenance,
or other work for firms engaged in interstate commerce or in the production of goods for
interstate commerce.
Domestic service workers such as day workers, housekeepers, chauffeurs, cooks, or fulltime babysitters are covered if:
1. their cash wages from one employer in calendar year 2007 are at least $1,500 (this
calendar year threshold is adjusted by the Social Security Administration each
year); or
2. they work a total of more than 8 hours a week for one or more employers.
Tipped Employees
Tipped employees are individuals engaged in occupations in which they customarily and
regularly receive more than $30 a month in tips. The employer may consider tips as part
of wages, but the employer must pay at least $2.13 an hour in direct wages.
The employer who elects to use the tip credit provision must inform the employee in
advance and must be able to show that the employee receives at least the applicable
minimum wage (see above) when direct wages and the tip credit allowance are combined.
If an employee's tips combined with the employer's direct wages of at least $2.13 an hour
do not equal the minimum hourly wage, the employer must make up the difference. Also,
employees must retain all of their tips, except to the extent that they participate in a valid
tip pooling or sharing arrangement.
Employer-Furnished Facilities
The reasonable cost or fair value of board, lodging, or other facilities customarily
furnished by the employer for the employee's benefit may be considered part of wages.
Industrial Homework
The performance of certain types of work in an employee's home is prohibited under the
law unless the employer has obtained prior certification from the Department of Labor.
Restrictions apply in the manufacture of knitted outerwear, gloves and mittens, buttons
and buckles, handkerchiefs, embroideries, and jewelry (where safety and health hazards
are not involved). The manufacture of women's apparel (and jewelry under hazardous
conditions) is generally prohibited. If you have questions on whether a certain type of
work is restricted, or who is eligible for a homework certificate, or how to obtain a
certificate, you may contact the local Wage-Hour office.
Subminimum Wage Provisions
The FLSA provides for the employment of certain individuals at wage rates below the
statutory minimum. Such individuals include student-learners (vocational education
students), as well as full-time students in retail or service establishments, agriculture, or
institutions of higher education. Also included are individuals whose earning or
productive capacity is impaired by a physical or mental disability, including those related
to age or injury, for the work to be performed. Employment at less than the minimum
wage is authorized to prevent curtailment of opportunities for employment. Such
employment is permitted only under certificates issued by Wage-Hour.
Youth Minimum Wage
A minimum wage of not less than $4.25 an hour is permitted for employees under 20
years of age during their first 90 consecutive calendar days of employment with an
employer. Employers are prohibited from taking any action to displace employees in
order to hire employees at the youth minimum wage. Also prohibited are partial
displacements such as reducing employees' hours, wages, or employment benefits.
Exemptions
Some employees are exempt from the overtime pay provisions or both the minimum
wage and overtime pay provisions.
Because exemptions are generally narrowly defined under FLSA, an employer should
carefully check the exact terms and conditions for each. Detailed information is available
from local Wage-Hour offices.
Following are examples of exemptions which are illustrative, but not all-inclusive. These
examples do not define the conditions for each exemption.
Exemptions from Both Minimum Wage and Overtime Pay
1. Executive, administrative, and professional employees (including teachers and
academic administrative personnel in elementary and secondary schools), outside
sales employees, and employees in certain computer-related occupations (as
defined in Department of Labor regulations);
2. Employees of certain seasonal amusement or recreational establishments,
employees of certain small newspapers, seamen employed on foreign vessels,
employees engaged in fishing operations, and employees engaged in newspaper
delivery;
3. Farmworkers employed by anyone who used no more than 500 "man-days" of
farm labor in any calendar quarter of the preceding calendar year;
4. Casual babysitters and persons employed as companions to the elderly or infirm.
Exemptions from Overtime Pay Only
1. Certain commissioned employees of retail or service establishments; auto, truck,
trailer, farm implement, boat, or aircraft sales-workers; or parts-clerks and
mechanics servicing autos, trucks, or farm implements, who are employed by
2.
3.
4.
5.
6.
non-manufacturing establishments primarily engaged in selling these items to
ultimate purchasers;
Employees of railroads and air carriers, taxi drivers, certain employees of motor
carriers, seamen on American vessels, and local delivery employees paid on
approved trip rate plans;
Announcers, news editors, and chief engineers of certain non-metropolitan
broadcasting stations;
Domestic service workers living in the employer's residence;
Employees of motion picture theaters; and
Farmworkers.
Partial Exemptions from Overtime Pay
1. Partial overtime pay exemptions apply to employees engaged in certain operations
on agricultural commodities and to employees of certain bulk petroleum
distributors.
2. Hospitals and residential care establishments may adopt, by agreement with their
employees, a 14-day work period instead of the usual 7-day workweek if the
employees are paid at least time and one-half their regular rates for hours worked
over 8 in a day or 80 in a 14-day work period, whichever is the greater number of
overtime hours.
3. Employees who lack a high school diploma, or who have not attained the
educational level of the 8th grade, can be required to spend up to 10 hours in a
workweek engaged in remedial reading or training in other basic skills without
receiving time and one-half overtime pay for these hours. However, the
employees must receive their normal wages for hours spent in such training and
the training must not be job specific.
4. Public agency fire departments and police departments may establish a work
period ranging from 7 to 28 days in which overtime need only be paid after a
specified number of hours in each work period.
Youth Employment (Child Labor) Provisions
The FLSA youth employment provisions are designed to protect the educational
opportunities of minors and prohibit their employment in jobs and under conditions
detrimental to their health or well-being. The provisions include restrictions on hours of
work for minors under 16 and lists of hazardous occupations orders for both farm and
non-farm jobs declared by the Secretary of Labor to be too dangerous for minors to
perform.
Nonagricultural Jobs (Youth Employment)
Regulations governing youth employment in non-farm jobs differ somewhat from those
pertaining to agricultural employment. In non-farm work, the permissible jobs and hours
of work, by age, are as follows:
1. Youths 18 years or older may perform any job, whether hazardous or not, for
unlimited hours;
2. Youths 16 and 17 years old may perform any nonhazardous job, for unlimited
hours; and
3. Youths 14 and 15 years old may work outside school hours in various
nonmanufacturing, nonmining, nonhazardous jobs under the following conditions:
no more than 3 hours on a school day, 18 hours in a school week, 8 hours on a
non-school day, or 40 hours in a non-school week. Also, work may not begin
before 7 a.m., nor end after 7 p.m., except from June 1 through Labor Day, when
evening hours are extended to 9 p.m. Under a special provision, youths 14 and 15
years old enrolled in an approved Work Experience and Career Exploration
Program (WECEP) may be employed for up to 23 hours in school weeks and 3
hours on school days (including during school hours).
Fourteen is the minimum age for most non-farm work. However, at any age, youths may
deliver newspapers; perform in radio, television, movie, or theatrical productions; work
for parents in their solely-owned non-farm business (except in manufacturing or on
hazardous jobs); or gather evergreens and make evergreen wreaths.
Farm Jobs (Youth Employment)
In farm work, permissible jobs and hours of work, by age, are as follows:
1. Youths 16 years and older may perform any job, whether hazardous or not, for
unlimited hours;
2. Youths 14 and 15 years old may perform any nonhazardous farm job outside of
school hours;
3. Youths 12 and 13 years old may work outside of school hours in nonhazardous
jobs, either with a parent's written consent or on the same farm as the parent(s);
4. Youths under 12 years old may perform jobs on farms owned or operated by
parent(s), or with a parent's written consent, outside of school hours in
nonhazardous jobs on farms not covered by minimum wage requirements.
Minors of any age may be employed by their parents at any time in any occupation on a
farm owned or operated by their parents.
Recordkeeping
The FLSA requires employers to keep records on wages, hours, and other items, as
specified in Department of Labor recordkeeping regulations. Most of the information is
of the kind generally maintained by employers in ordinary business practice and in
compliance with other laws and regulations. The records do not have to be kept in any
particular form and time clocks need not be used. With respect to an employee subject to
the minimum wage provisions or both the minimum wage and overtime pay provisions,
the following records must be kept:
1. personal information, including employee's name, home address, occupation, sex,
and birth date if under 19 years of age;
2. hour and day when workweek begins;
3. total hours worked each workday and each workweek;
4. total daily or weekly straight-time earnings;
5. regular hourly pay rate for any week when overtime is worked;
6. total overtime pay for the workweek;
7. deductions from or additions to wages;
8. total wages paid each pay period; and
9. date of payment and pay period covered.
Records required for exempt employees differ from those for nonexempt workers.
Special information is required for homeworkers, for employees working under
uncommon pay arrangements, for employees to whom lodging or other facilities are
furnished, and for employees receiving remedial education.
Computing Overtime Pay
Overtime must be paid at a rate of at least one and one-half times the employee's regular
rate of pay for each hour worked in a workweek in excess of the maximum allowable in a
given type of employment. Generally, the regular rate includes all payments made by the
employer to or on behalf of the employee (except for certain statutory exclusions). The
following examples are based on a maximum 40-hour workweek applicable to most
covered nonexempt employees.
1. Hourly rate (regular pay rate for an employee paid by the hour) - If more than 40
hours are worked, at least one and one-half times the regular rate for each hour
over 40 is due.
Example: An employee paid $8.00 an hour works 44 hours in a workweek. The
employee is entitled to at least one and one-half times $8.00, or $12.00, for each
hour over 40. Pay for the week would be $320 for the first 40 hours, plus $48.00
for the four hours of overtime – a total of $368.00.
2. Piece rate - The regular rate of pay for an employee paid on a piecework basis is
obtained by dividing the total weekly earnings by the total number of hours
worked in that week. The employee is entitled to an additional one-half times this
regular rate for each hour over 40, plus the full piecework earnings.
Example: An employee paid on a piecework basis works 45 hours in a week and
earns $405. The regular rate of pay for that week is $405 divided by 45, or $9.00
an hour. In addition to the straight-time pay, the employee is also entitled to $4.50
(half the regular rate) for each hour over 40 - an additional $22.50 for the 5
overtime hours – for a total of $427.50.
Another way to compensate pieceworkers for overtime, if agreed to before the
work is performed, is to pay one and one-half times the piece rate for each piece
produced during the overtime hours. The piece rate must be the one actually paid
during straight-time hours and must be enough to yield at least the minimum
wage per hour.
3. Salary - The regular rate for an employee paid a salary for a regular or specified
number of hours a week is obtained by dividing the salary by the number of hours
for which the salary is intended to compensate. The employee is entitled to an
additional one-half times this regular rate for each hour over 40, plus the salary.
If, under the employment agreement, a salary sufficient to meet the minimum wage
requirement in every workweek is paid as straight time for whatever number of hours are
worked in a workweek, the regular rate is obtained by dividing the salary by the number
of hours worked each week. To illustrate, suppose an employee's hours of work vary each
week and the agreement with the employer is that the employee will be paid $480 a week
for whatever number of hours of work are required. Under this agreement, the regular
rate will vary in overtime weeks. If the employee works 50 hours, the regular rate is
$9.60 ($480 divided by 50 hours). In addition to the salary, half the regular rate, or $4.80,
is due for each of the 10 overtime hours, for a total of $528 for the week. If the employee
works 60 hours, the regular rate is $8.00 ($480 divided by 60 hours). In that case, an
additional $4.00 is due for each of the 20 overtime hours for a total of $560 for the week.
In no case may the regular rate be less than the minimum wage required by FLSA.
If a salary is paid on other than a weekly basis, the weekly pay must be determined in
order to compute the regular rate and overtime pay. If the salary is for a half month, it
must be multiplied by 24 and the product divided by 52 weeks to get the weekly
equivalent. A monthly salary should be multiplied by 12 and the product divided by 52.
Click here to download the full text of the Act.
Family and Medical Leave Act of 1993
The U.S. Department of Labor's Employment Standards Administration, Wage and Hour
Division, administers and enforces the Family and Medical Leave Act (FMLA) for all
private, state and local government employees, and some federal employees. Most
Federal and certain congressional employees are also covered by the law and are subject
to the jurisdiction of the U.S. Office of Personnel Management or the Congress.
FMLA became effective on August 5, 1993, for most employers. If a collective
bargaining agreement (CBA) was in effect on that date, FMLA became effective on the
expiration date of the CBA or February 5, 1994, whichever was earlier. FMLA entitles
eligible employees to take up to 12 weeks of unpaid, job-protected leave in a 12-month
period for specified family and medical reasons. The employer may elect to use the
calendar year, a fixed 12-month leave or fiscal year, or a 12-month period prior to or after
the commencement of leave as the 12-month period.
The law contains provisions on employer coverage; employee eligibility for the law's
benefits; entitlement to leave, maintenance of health benefits during leave, and job
restoration after leave; notice and certification of the need for FMLA leave; and,
protection for employees who request or take FMLA leave. The law also requires
employers to keep certain records.
EMPLOYER COVERAGE
FMLA applies to all:
1. public agencies, including state, local and federal employers, local education
agencies (schools), and
2. private-sector employers who employed 50 or more employees in 20 or more
workweeks in the current or preceding calendar year and who are engaged in
commerce or in any industry or activity affecting commerce — including joint
employers and successors of covered employers.
EMPLOYEE ELIGIBILITY
To be eligible for FMLA benefits, an employee must:
1.
2.
3.
4.
work for a covered employer;
have worked for the employer for a total of 12 months*;
have worked at least 1,250 hours over the previous 12 months*; and
work at a location in the United States or in any territory or possession of the
United States where at least 50 employees are employed by the employer within
75 miles.
LEAVE ENTITLEMENT
A covered employer must grant an eligible employee up to a total of 12 workweeks of
unpaid leave during any 12-month period for one or more of the following reasons:
1. for the birth and care of the newborn child of the employee;
2. for placement with the employee of a son or daughter for adoption or foster care;
3. to care for an immediate family member (spouse, child, or parent) with a serious
health condition; or
4. to take medical leave when the employee is unable to work because of a serious
health condition.
Spouses employed by the same employer are jointly entitled to a combined total of 12
workweeks of family leave for the birth and care of the newborn child, for placement of a
child for adoption or foster care, and to care for a parent who has a serious health
condition.
Leave for birth and care, or placement for adoption or foster care, must conclude within
12 months of the birth or placement.
Under some circumstances, employees may take FMLA leave intermittently — which
means taking leave in blocks of time, or by reducing their normal weekly or daily work
schedule.
If FMLA leave is for birth and care or placement for adoption or foster care, use of
intermittent leave is subject to the employer's approval.
FMLA leave may be taken intermittently whenever medically necessary to care for a
seriously ill family member, or because the employee is seriously ill and unable to work.
Also, subject to certain conditions, employees or employers may choose to use accrued
paid leave (such as sick or vacation leave) to cover some or all of the FMLA leave.
The employer is responsible for designating if an employee's use of paid leave counts as
FMLA leave, based on information from the employee.
"Serious health condition" means an illness, injury, impairment, or physical or mental
condition that involves either (1) any period of incapacity or treatment connected with
inpatient care (i.e., an overnight stay) in a hospital, hospice, or residential medical-care
facility, and any period of incapacity or subsequent treatment in connection with such
inpatient care; or (2) continuing treatment by a health care provider which includes any
period of incapacity (i.e., inability to work, attend school or perform other regular daily
activities) due to:
(1) A health condition (including treatment therefor, or recovery therefrom)
lasting more than three consecutive days, and any subsequent treatment or
period of incapacity relating to the same condition, that also includes:
treatment two or more times by or under the supervision of a health care
provider; or one treatment by a health care provider with a continuing
regimen of treatment; or (2) Pregnancy or prenatal care. A visit to the
health care provider is not necessary for each absence; or (3) A chronic
serious health condition which continues over an extended period of time,
requires periodic visits to a health care provider, and may involve
occasional episodes of incapacity (e.g., asthma, diabetes). A visit to a
health care provider is not necessary for each absence; or (4) A permanent
or long-term condition for which treatment may not be effective (e.g.,
Alzheimer's, a severe stroke, terminal cancer). Only supervision by a
health care provider is required, rather than active treatment; or (5) Any
absences to receive multiple treatments for restorative surgery or for a
condition which would likely result in a period of incapacity of more than
three days if not treated (e.g., chemotherapy
(2) or radiation treatments for cancer).
"Health care provider" means:





doctors of medicine or osteopathy authorized to practice medicine or surgery
by the state in which the doctors practice;
or podiatrists, dentists, clinical psychologists, optometrists and chiropractors
(limited to manual manipulation of the spine to correct a subluxation as
demonstrated by X-ray to exist) authorized to practice, and performing within
the scope of their practice, under state law;
or nurse practitioners, nurse-midwives and clinical social workers authorized
to practice, and performing within the scope of their practice, as defined under
state law;
or Christian Science practitioners listed with the First Church of Christ,
Scientist in Boston, Massachusetts;
or Any health care provider recognized by the employer or the employer's
group health plan benefits manager.
MAINTENANCE OF HEALTH BENEFITS
A covered employer is required to maintain group health insurance coverage for an
employee on FMLA leave whenever such insurance was provided before the leave was
taken and on the same terms as if the employee had continued to work. If applicable,
arrangements will need to be made for employees to pay their share of health insurance
premiums while on leave.
In some instances, the employer may recover premiums it paid to maintain health
coverage for an employee who fails to return to work from FMLA leave.
JOB RESTORATION
Upon return from FMLA leave, an employee must be restored to the employee's original
job, or to an equivalent job with equivalent pay, benefits, and other terms and conditions
of employment.
In addition, an employee's use of FMLA leave cannot result in the loss of any
employment benefit that the employee earned or was entitled to before using FMLA
leave, nor be counted against the employee under a "no fault" attendance policy.
Under specified and limited circumstances where restoration to employment will cause
substantial and grievous economic injury to its operations, an employer may refuse to
reinstate certain highly-paid "key" employees after using FMLA leave during which
health coverage was maintained. In order to do so, the employer must:




notify the employee of his/her status as a "key" employee in response to the
employee's notice of intent to take FMLA leave;
notify the employee as soon as the employer decides it will deny job
restoration, and explain the reasons for this decision;
offer the employee a reasonable opportunity to return to work from FMLA
leave after giving this notice; and
make a final determination as to whether reinstatement will be denied at the
end of the leave period if the employee then requests restoration.
A "key" employee is a salaried "eligible" employee who is among the highest paid 10
percent of employees within 75 miles of the work site.
NOTICE AND CERTIFICATION
Employees seeking to use FMLA leave are required to provide 30-day advance notice of
the need to take FMLA leave when the need is foreseeable and such notice is practicable.
Employers may also require employees to provide:



medical certification supporting the need for leave due to a serious health
condition affecting the employee or an immediate family member;
second or third medical opinions (at the employer's expense) and periodic
recertification; and
periodic reports during FMLA leave regarding the employee's status and intent to
return to work.
When intermittent leave is needed to care for an immediate family member or the
employee's own illness, and is for planned medical treatment, the employee must try to
schedule treatment so as not to unduly disrupt the employer's operation.
Covered employers must post a notice approved by the Secretary of Labor explaining
rights and responsibilities under FMLA. An employer that willfully violates this posting
requirement may be subject to a fine of up to $100 for each separate offense.
Also, covered employers must inform employees of their rights and responsibilities under
FMLA, including giving specific written information on what is required of the employee
and what might happen in certain circumstances, such as if the employee fails to return to
work after FMLA leave.
UNLAWFUL ACTS
It is unlawful for any employer to interfere with, restrain, or deny the exercise of any
right provided by FMLA. It is also unlawful for an employer to discharge or discriminate
against any individual for opposing any practice, or because of involvement in any
proceeding, related to FMLA.
The FMLA does not affect any other federal or state law which prohibits discrimination,
nor supersede any state or local law which provides greater family or medical leave
protection. Nor does it affect an employer's obligation to provide greater leave rights
under a collective bargaining agreement or employment benefit plan. The FMLA also
encourages employers to provide more generous leave rights.
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Federal Employees' Compensation Act (FECA)
The Federal Employees' Compensation Act (FECA) provides compensation benefits to
civilian employees of the United States for disability due to personal injury sustained
while in the performance of duty. The Act also provides for compensation for
employment-related disease.
Benefits available to injured employees include rehabilitation, medical, surgical and
necessary expenses. FECA provides compensation to dependents if the injury or disease
causes the employee's death.
FECA is administered by the Office of Workers' Compensation Programs (OWCP), U.S.
Department of Labor, located in 12 district offices throughout the United States.
Temporary Disability
FECA provides compensation benefits to federal employees for temporary disability due
to employment-related injury or disease.
The injured employee is entitled to continuation of pay (COP) from the employing
agency for up to 45 days of disability. If the disability continues for more than 45 days,
compensation for lost wages is payable after a three-day waiting period in a non-paid
status. No waiting period is required, however, if the disability causing the wage loss
lasts longer than 14 days from the time compensation begins. The injured employee also
has the option of using sick leave if it is to his or her benefit.
COP does not apply to occupational disease or illness cases; compensation for lost wages
is payable after an initial three-day waiting period in non-paid status. If the disability
exceeds 14 days from the time compensation begins, no waiting period is required.
Permanent Disability
FECA provides compensation benefits based on loss of earnings capacity and schedule
awards for the loss or loss of use of specified members, organs, and functions of the body
when there are permanent effects of a job-related injury.
Disability Compensation Payout
If the employee has no dependents, compensation is generally payable at the rate of twothirds of pre-disability gross wages tax-free; if the employee has one or more dependents,
compensation is payable at the rate of three-fourths of pre-disability gross wages, taxfree.
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Federal Insurance Contributions Act (FICA) of 1935
The Federal Insurance Contributions Act (FICA) provides for a federal system of oldage, survivors, disability, and hospital insurance. The old-age, survivors, and disability
insurance part is financed by the social security tax. The hospital insurance part is
financed by the Medicare tax. Each of these taxes is reported separately.
Generally, you are required to withhold social security and Medicare taxes from your
employees' wages and you must also pay a matching amount of these taxes. Certain types
of wages and compensation are not subject to social security and Medicare taxes. See
sections 5 and 15 for details. Generally, employee wages are subject to social security
and Medicare taxes regardless of the employee's age or whether he or she is receiving
social security benefits. If the employee reported tips, see section 6.
Tax rates and the social security wage base limit. Social security and Medicare taxes
have different rates and only the social security tax has a wage base limit. The wage base
limit is the maximum wage that is subject to the tax for the year. Determine the amount
of withholding for social security and Medicare taxes by multiplying each payment by
the employee tax rate. There are no withholding allowances for social security and
Medicare taxes.
The employee tax rate for social security is 6.2% (amount withheld). The employer tax
rate for social security is also 6.2% (12.4% total). The 2006 wage base limit was $94,200.
For 2007, the wage base limit is $97,500.
The employee tax rate for Medicare is 1.45% (amount withheld). The employer tax rate
for Medicare tax is also 1.45% (2.9% total). There is no wage base limit for Medicare
tax; all covered wages are subject to Medicare tax.
Successor employer. If you received all or most of the property used in the trade or
business of another employer, or a unit of that employer's trade or business, you may
include the wages that the other employer paid to your acquired employees before the
transfer of property when you figure the annual wage base limit for social security. You
should determine whether or not you should file Schedule D (Form 941), Report of
Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, by
reviewing the Instructions for Schedule D (Form 941). See Regulations Section
31.3121(a)(1)-1(b) for more information. Also see Rev. Proc. 2004-53 for more
information. You can find Rev. Proc. 2004-53 on page 320 of Internal Revenue Bulletin
2004-34 at www.irs.gov/pub/irs-irbs/irb04-34.pdf.
Withholding of social security and Medicare taxes on nonresident aliens. In general,
if you pay wages to nonresident alien employees, you must withhold federal social
security and Medicare taxes as you would for a U.S. citizen. However, see Publication
515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for exceptions to
this general rule.
International social security agreements. The United States has social security
agreements with many countries that eliminate dual taxation and dual coverage.
Compensation subject to social security and Medicare taxes may be exempt under one of
these agreements. You can get more information and a list of agreement countries from
SSA at www.socialsecurity.gov/international or see section 7 of Publication 15-A,
Employer's Supplemental Tax Guide.
Religious exemption. An exemption from social security and Medicare taxes is available
to members of a recognized religious sect opposed to insurance. This exemption is
available only if both the employee and the employer are members of the sect.
Part-Time Workers
For federal income tax withholding and social security, Medicare, and federal
unemployment (FUTA) tax purposes, there are no differences among full-time
employees, part-time employees, and employees hired for short periods. It does not
matter whether the worker has another job or has the maximum amount of social security
tax withheld by another employer. Income tax withholding may be figured the same way
as for full-time workers. Or it may be figured by the part-year employment method
explained in section 9 of Publication 15-A.
10. Advance Earned Income Credit (EIC) Payment
An employee who expects to be eligible for the earned income credit (EIC) and expects
to have a qualifying child is entitled to receive EIC payments with his or her pay during
the year. To get these payments, the employee must provide to you a properly completed
Form W-5 (or Forma W-5(SP), its Spanish translation), Earned Income Credit Advance
Payment Certificate, using either the paper form or an approved electronic format. You
are required to make advance EIC payments to employees who give you a completed and
signed Form W-5. You may establish a system to electronically receive Forms W-5 from
your employees. See Announcement 99-3 for information on electronic requirements for
Form W-5. You can find Announcement 99-3 on page 15 of Internal Revenue Bulletin
1999-3 at www.irs.gov/pub/irs-irbs/irb99-03.pdf.
Certain employees who do not have a qualifying child may be able to claim the EIC on
their tax return. However, they cannot get advance EIC payments.
Form W-5. Form W-5 explains the eligibility requirements for receiving advance EIC
payments. On Form W-5, an employee states that he or she expects to be eligible to claim
the EIC and shows whether he or she has another Form W-5 in effect with any other
current employer. The employee also shows the following:


Whether he or she expects to have a qualifying child.
Whether he or she will file a joint return.

If the employee is married, whether his or her spouse has a Form W-5 in effect
with any employer.
An employee may have only one certificate in effect with a current employer at one
time. If an employee is married and his or her spouse also works, each spouse should file
a separate Form W-5.
Length of effective period. Form W-5 is effective for the first payroll period ending on or
after the date the employee gives you the form (or the first wage payment made without
regard to a payroll period). It remains in effect until the end of the calendar year unless
the employee revokes it or files another one. Eligible employees must file a new Form
W-5 each year.
Change of status. If an employee gives you a signed Form W-5 and later becomes
ineligible for advance EIC payments, he or she must revoke Form W-5 within 10 days
after learning about the change of circumstances. The employee must give you a new
Form W-5 stating that he or she is no longer eligible for or no longer wants advance EIC
payments.
If an employee's situation changes because his or her spouse files a Form W-5, the
employee must file a new Form W-5 showing that his or her spouse has a Form W-5 in
effect with an employer. This will reduce the maximum amount of advance payments that
you can make to that employee.
If an employee's spouse has filed a Form W-5 that is no longer in effect, the employee
may file a new Form W-5 with you, but is not required to do so. A new form will certify
that the spouse does not have a Form W-5 in effect and will increase the maximum
amount of advance payments you can make to that employee.
Invalid Form W-5. The Form W-5 is invalid if it is incomplete, unsigned, or has an
alteration or unauthorized addition. The form has been altered if any of the language has
been deleted. Any writing added to the form other than the requested entries is an
unauthorized addition.
You should consider a Form W-5 invalid if an employee has made an oral or written
statement that clearly shows the Form W-5 to be false. If you receive an invalid form, tell
the employee that it is invalid as of the date that he or she made the oral or written
statement. For advance EIC payment purposes, the invalid Form W-5 is considered void.
You are not required to determine if a completed and signed Form W-5 is correct.
However, you should contact the IRS if you have reason to believe that it contains an
incorrect statement.
How to figure the advance EIC payment. To figure the amount of the advance EIC
payment to include with the employee's pay, you must consider:



Wages, including reported tips, for the same period. Generally, figure advance
EIC payments using the amount of wages subject to income tax withholding. If an
employee's wages are not subject to income tax withholding, use the amount of
wages subject to withholding for social security and Medicare taxes.
Whether the employee is married or single.
Whether a married employee's spouse has a Form W-5 in effect with an employer.
Do not consider combat zone pay received by the employee and excluded from income as
earned income when figuring the advance EIC payment.
Figure the amount of advance EIC to include in the employee's pay by using the tables
that begin on page 59. There are separate tables for employees whose spouses have a
Form W-5 in effect. See page 35 for instructions on using the advance EIC payment
tables.
The amount of advance EIC paid to an employee during 2007 cannot exceed $1,712. If
during the year you have paid an employee total wages of at least $33,241 ($35,241 if
married filing jointly), you must also stop making advance EIC payments to that
employee for the rest of the year.
Paying the advance EIC to employees. An advance EIC payment is not subject to
withholding of income, social security, or Medicare taxes. An advance EIC payment does
not change the amount of income, social security, or Medicare taxes that you withhold
from the employee's wages. You add the EIC payment to the employee's net pay for the
pay period. At the end of the year, you show the total advance EIC payments in box 9 on
Form W-2. Do not include this amount as wages in box 1.
Employer's returns. Show the total payments that you made to employees on the advance
EIC payments line (line 9) of your Form 941 (line 8 of Form 944). Subtract this amount
from your total taxes on line 8 (line 7 of Form 944). See the separate Instructions for
Form 941 (or the separate Instructions for Form 944). Reduce the amounts reported on
line 15 of Form 941 or on appropriate lines of Schedule B (Form 941), Report of Tax
Liability for Semiweekly Schedule Depositors, by any advance EIC paid to your
employees.
Generally, employers will make the advance EIC payment from withheld income tax
and employee and employer social security and Medicare taxes. These taxes are normally
required to be paid over to the IRS either through federal tax deposits or with
employment tax returns. For purposes of deposit due dates, advance EIC payments are
treated as deposits of these taxes on the day that you pay wages (including the advance
EIC payment) to your employees. The payments are treated as deposits of these taxes in
the following order: (1) income tax withholding, (2) withheld employee social security
and Medicare taxes, and (3) the employer's share of social security and Medicare taxes.
U.S. possessions. If you are in American Samoa, the Commonwealth of the Northern
Mariana Islands, Guam, or the U.S. Virgin Islands, consult your local tax office for
information on the EIC. You cannot take advance EIC payments into account on Form
941-SS or Form 944-SS.
Required Notice to Employees
You must notify employees who have no federal income tax withheld that they may be
able to claim a tax refund because of the EIC. Although you do not have to notify
employees who claim exemption from withholding on Form W-4, Employee's
Withholding Allowance Certificate, about the EIC, you are encouraged to notify any
employees whose wages for 2006 were less than $36,348 ($38,348 if married filing
jointly) that they may be eligible to claim the credit for 2006. This is because eligible
employees may get a refund of the amount of EIC that is more than the tax that they owe.
You will meet this notification requirement if you issue the employee Form W-2 with the
EIC notice on the back of Copy B, or a substitute Form W-2 with the same statement.
You will also meet the requirement by providing Notice 797, Possible Federal Tax
Refund Due to the Earned Income Credit (EIC), or your own statement that contains the
same wording.
If a substitute for Form W-2 is given to the employee on time but does not have the
required statement, you must notify the employee within 1 week of the date that the
substitute for Form W-2 is given. If Form W-2 is required but is not given on time, you
must give the employee Notice 797 or your written statement by the date that Form W-2
is required to be given. If Form W-2 is not required, you must notify the employee by
February 7, 2007.
11. Depositing Taxes
In general, you must deposit federal income tax withheld and both the employer and
employee social security and Medicare taxes plus or minus any prior period adjustments
to your tax liability (minus any advance EIC payments). You must deposit by using the
Electronic Federal Tax Payment System (EFTPS) or by mailing or delivering a check,
money order, or cash with Form 8109, Federal Tax Deposit Coupon, to a financial
institution that is an authorized depositary for federal taxes. Some taxpayers are required
to deposit using EFTPS. See How To Deposit on page 21 for information on electronic
deposit requirements for 2007.
Payment with return. You may make a payment with Form 941 or Form 944 instead of
depositing if one of the following applies.
1. You report less than a $2,500 tax liability for the quarter on line 10 of Form 941
(or for the year on line 9 of Form 944), and you pay in full with a timely filed
return. (However, if you are unsure that you will report less than $2,500, deposit
under the appropriate rules so that you will not be subject to failure-to-deposit
penalties.)
2. You are a monthly schedule depositor (defined below) and make a payment in
accordance with the Accuracy of Deposits Rule discussed on page 21. This
payment may be $2,500 or more.
Employers who have been notified to file Form 944 can pay their fourth quarter tax
liability with a timely filed return if the fourth quarter tax liability is less than $2,500.
Employers must have deposited any tax liability due for the first, second, and third
quarters according to the deposit rules to avoid failure-to-deposit penalties for deposits
during those quarters.
Separate deposit requirements for nonpayroll (Form 945) tax liabilities. Separate
deposits are required for nonpayroll and payroll income tax withholding. Do not combine
deposits for Forms 941 (or Form 944) and 945 tax liabilities. Generally, the deposit rules
for nonpayroll liabilities are the same as discussed below, except that the rules apply to
an annual rather than a quarterly return period. Thus, the $2,500 threshold for the deposit
requirement discussed above applies to Form 945 on an annual basis. See the separate
Instructions for Form 945 for more information.
When To Deposit
There are two deposit schedules—monthly or semiweekly—for determining when you
deposit social security, Medicare, and withheld income taxes. These schedules tell you
when a deposit is due after a tax liability arises (for example, when you have a payday).
Before the beginning of each calendar year, you must determine which of the two deposit
schedules that you are required to use. The deposit schedule that you must use is based on
the total tax liability that you reported on Form 941 during a lookback period discussed
below. Your deposit schedule is not determined by how often you pay your employees or
make deposits. See special rules for Forms 944 and 945 below. See Application of
Monthly and Semiweekly Schedules on page 20.
These rules do not apply to federal unemployment (FUTA) tax. See section 14 for information on depositing
FUTA tax.
Lookback period. If you are a Form 941 filer, your deposit schedule for a calendar year
is determined from the total taxes (that is, not reduced by any advance EIC payments)
reported on line 8 of your Forms 941 in a four-quarter lookback period. The lookback
period begins July 1 and ends June 30 as shown in Table 1 below. If you reported
$50,000 or less of taxes for the lookback period, you are a monthly schedule depositor; if
you reported more than $50,000, you are a semiweekly schedule depositor.
Accuracy of Deposits Rule
You are required to deposit 100% of your tax liability on or before the deposit due date.
However, penalties will not be applied for depositing less than 100% if both of the
following conditions are met.

Any deposit shortfall does not exceed the greater of $100 or
2% of the amount of taxes otherwise required to be deposited
and

The deposit shortfall is paid or deposited by the shortfall
makeup date as described below.
Makeup Date for Deposit Shortfall:
Monthly schedule depositor. Deposit the shortfall or pay it
with your return by the due date of your return for the return
period in which the shortfall occurred. You may pay the
shortfall with your return even if the amount is $2,500 or more.
 Semiweekly schedule depositor. Deposit by the earlier of:
o The first Wednesday or Friday (whichever comes first) that falls on or
after the 15th of the month following the month in which the shortfall
occurred or
o The due date of your return (for the return period of the tax liability).

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Federal Mine Safety and Health Act (Mine Act)
The Federal Mine Safety and Health Act (Mine Act) covers all mine operators and miners
throughout the U.S., including the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, American Samoa, Guam, and the Trust Territory of the Pacific
Islands. Under the Mine Act, a mine "operator" is defined as: "any owner, lessee, or other
person who operates, controls, or supervises a coal or other mine or any independent
contractor performing service or construction at such mine." A "miner" is any individual
working in a coal or other mine. At this time, the Mine Act covers approximately 300,000
miners and almost 14,000 mines.
Basic Provisions/Requirements
The Mine Act requires that the Mine Safety and Health Administration (MSHA) inspect
all mines each year. All underground mines are to receive at least four inspections
annually; all surface operations are to be inspected at least twice annually. MSHA is
specifically prohibited from giving advance notice of an inspection, and it is specifically
authorized to enter mine property without a warrant.
The Mine Act requires or authorizes additional inspections and investigations to ensure
safe and healthy work environments for miners. For example, mines that release large
amounts of methane gas are to receive more frequent inspections; mines determined to be
exceptionally hazardous may receive more frequent inspections. Additionally, MSHA
must investigate all fatal accidents and miners' complaints of discrimination based upon
the exercise of their rights under the Mine Act.
To promote compliance with the provisions of the Act and its safety and health standards,
all violations found during inspections and investigations must be cited. All violations are
subject to civil penalties, and all violations must be corrected within the time frames
established by MSHA.
The Mine Act permits representatives of the operator and the miners to accompany
MSHA during inspections and participate in pre- and post-inspection conferences. If
violations are cited, the circumstances surrounding the violations are discussed during
post-inspection conferences.
If these discussions do not result in resolution, the mine operator may appeal the citation
and the penalty to the Federal Mine Safety and Health Review Commission, an
independent body, with further appeal to the U.S. Courts of Appeals.
In addition to setting safety and health standards for preventing hazardous and unhealthy
conditions, MSHA's regulations establish requirements for immediate notification of
accidents, injuries, and illnesses; for training programs that meet the statutory
requirements of the Mine Act; and for obtaining approval for certain equipment used in
gassy underground mines.
Mine operators must notify MSHA when they open or close a mine, and they may request
the modification of an existing safety standard on a site-by-site basis. Under the Mine
Act, MSHA may approve modifications only if it determines that the alternate method
proposed will guarantee no less than the same measure of protection afforded by the
existing standards, or that the application of MSHA's standard at the mine will result in a
diminution of safety for miners.
Employee Rights
A good safety and health program depends on the active participation and interest of
everyone at a worksite. Because Congress wants to encourage an active, responsible role
for all parties in matters of mine safety and health, the Federal Mine Safety and Health
Act of 1977 gives individual miners, their representatives, and job applicants many
rights. Deaths, injuries, and illnesses in the workplace can be decreased if all parties take
advantage of these rights.
The Act gives miners the rights to:
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Designate a representative to accompany federal inspectors during inspections at a
mine;
Obtain an inspection of the mine where reasonable grounds exist to believe that an
imminent danger, or a violation of the Act or of a safety or health standard exists;
Receive health and safety training;
Be paid during certain periods of time when a mine or part of a mine has been
closed because of a withdrawal order;
Be protected against discrimination based on the exercise of rights under the Act;
and
Be informed of, and participate in, enforcement and legal proceedings under the
Act.
Miners' representatives also have specific rights under the Act in addition to those rights
given to individual miners. Moreover, applicants for mine work have the right not to be
discriminated against in hiring because they have previously exercised rights provided
under the Act.
If a miner, representative of miners, or job applicant, has general or specific questions
about rights under the Act, he or she should contact the nearest MSHA office.
Penalties/Sanctions
The Mine Act established a maximum penalty of $10,000 per violation against mine
operators for violations found and cited. As a result of the Omnibus Budget
Reconciliation Act of 1990, the maximum was increased to $55,000.
Non-serious violations (violations that are not designated "significant and substantial")
that are promptly corrected normally receive a "single penalty" assessment of $55. More
serious violations and non-serious violations that are not promptly corrected are usually
assessed using a formula that incorporates six criteria specified for determining penalty
amounts by the Mine Act.
Some violations are of such a nature or seriousness that use of the formula would not
result in an appropriate penalty. In these cases — most often involving fatalities, serious
injuries, and unwarranted failure to comply with standards — MSHA may waive the
formula and propose a "special assessment." In developing such an amount, the facts are
independently reviewed to determine a penalty amount that will have the deterrent effect
contemplated by the Statute. Title 30, Part 100 of the Code of Federal Regulations
contains the regulations governing the civil penalty process.
The Mine Act also provides for either civil penalties against individuals for "knowing"
violations, or criminal sanctions against mine operators who "willfully" violate safety and
health standards. MSHA reviews particular citations and orders for possible knowing or
willful violations. In general, the violations reviewed include those involving imminently
dangerous situations and a high degree of negligence or reckless disregard. MSHA
initiates and conducts investigations of possible knowing or willful violations. If evidence
of willful violations is found, the case is referred to the Department of Justice.
Relation to State, Local, and Other Federal Laws
The Mine Act does not give MSHA the authority to cede its responsibilities to states or
any other political subdivisions. The Mine Act does not preempt state mine safety and
health laws, except insofar as they may conflict with the Mine Act or MSHA's
regulations. States may have more stringent health and safety standards.
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Health Insurance Portability and Accountability Act (HIPAA) of 1996
The Health Insurance Portability and Accountability Act (HIPAA) offers protections for
millions of American workers that improve portability and continuity of health insurance
coverage.
HIPAA Protects Workers And Their Families By
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Limiting exclusions for preexisting medical conditions (known as preexisting
conditions)
Providing credit against maximum preexisting condition exclusion periods for
prior health coverage and a process for providing certificates showing periods of
prior coverage to a new group health plan or health insurance issuer
Providing new rights that allow individuals to enroll for health coverage when
they lose other health coverage, get married or add a new dependent
Prohibiting discrimination in enrollment and in premiums charged to employees
and their dependents based on health status-related factors
Guaranteeing availability of health insurance coverage for small employers and
renewability of health insurance coverage for both small and large employers
Preserving the states’ role in regulating health insurance, including the states’
authority to provide greater protections than those available under federal law
Preexisting Condition Exclusions
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The law defines a preexisting condition as one for which medical advice,
diagnosis, care, or treatment was recommended or received during the 6-month
period prior to an individual’s enrollment date (which is the earlier of the first day
of health coverage or the first day of any waiting period for coverage)
Group health plans and issuers may not exclude an individual’s preexisting
medical condition from coverage for more than 12 months (18 months for late
enrollees) after an individual’s enrollment date
Under HIPAA, a new employer’s plan must give individuals credit for the length
of time they had prior continuous health coverage, without a break in coverage of
63 days or more, thereby reducing or eliminating the 12-month exclusion period
(18 months for late enrollees)
Creditable Coverage
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Includes prior coverage under another group health plan, an individual health
insurance policy, COBRA, Medicaid, Medicare, CHAMPUS, the Indian Health
Service, a state health benefits risk pool, FEHBP, the Peace Corps Act, or a public
health plan
Certificates Of Creditable Coverage
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Certificates of creditable coverage must be provided automatically and free of
charge by the plan or issuer when an individual loses coverage under the plan,
becomes entitled to elect COBRA continuation coverage or exhausts COBRA
continuation coverage. A certificate must also be provided free of charge upon
request while you have health coverage or anytime within 24 months after your
coverage ends
Certificates of creditable coverage should contain information about the length of
time you or your dependents had coverage as well as the length of any waiting
period for coverage that applied to you or your dependents
For plan years beginning on or after July 1, 2005, certificates of creditable
coverage should also include an educational statement that describes individuals'
HIPAA portability rights. A new model cerfiticate is available on EBSAs Web
site.
If a certificate is not received, or the information on the certificate is wrong, you
should contact your prior plan or issuer. You have a right to show prior creditable
coverage with other evidence — like pay stubs, explanation of benefits, letters
from a doctor — if you cannot get a certificate
Special Enrollment Rights
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Are provided for individuals who lose their coverage in certain situations,
including on separation, divorce, death, termination of employment and reduction
in hours. Special enrollment rights also are provided if employer contributions
toward the other coverage terminates
Are provided for employees, their spouses and new dependents upon marriage,
birth, adoption or placement for adoption
Discrimination Prohibitions
Ensure that individuals are not excluded from coverage, denied benefits, or charged more
for coverage offered by a plan or issuer, based on health status-related factors
The Medical Privacy Rule at a Glance
The medical privacy rule implements certain privacy protections required by the Health
Insurance Portability and Accountability Act of 1996. The standards appear at 45 CFR
parts 160 and 164.
Covered entities. Public and private sector entities including health plans, health care
clearinghouses, and health care providers who conduct administrative or financial
transactions electronically are subject to the rules. Certain business associates who serve
the health care industry are also affected.
Information protected. Covered information includes medical records or other data that
contain individually identifiable health information that may be used or disclosed in any
form such as electronically, on paper, or orally.
New patient rights. Patients must be given a clear written explanation of how health
information will be used or disclosed, with such use or disclosure generally occurring
only upon the patients’ written consent. Prior consents which provide equal or better
protection may be relied upon. In addition, patients will generally have a right of access
to their own medical information and may request an amendment to records and
restrictions in use. A complaint procedure must be provided to resolve privacy violations.
Limits on use and release. Disclosures of health information should be limited to the
minimum amount necessary for specified purposes, and nonmedical disclosures are
permitted only upon a patient’s written authorization. Disclosures for public health or law
enforcement purposes are permitted when required or permitted by law.
Organizational responsibilities. Covered organizations must adopt written privacy
policies, designate a privacy officer, and conduct training for employees on the privacy
policies.
Enforcement. The privacy rule is enforced by the Office of Civil Rights of the U.S.
Health and Human Services Department. Civil and criminal penalties may be used when
violations are found. Criminal penalties can go as high as $250,000.00 and 10 years in
prison.
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Immigration Reform and Control Act of 1986 (IRCA)
Under the Immigration Reform and Control Act (IRCA), when hiring, discharging, or
recruiting or referring for a fee, employers with four or more employees may not:
• Discriminate because of national origin against U.S. citizens, U.S. nationals,
and authorized aliens. (Employers of 15 or more employees should note that
the ban on national origin discrimination against any individual under Title
VII of the Civil Rights Act of 1964 continues to apply.)
• Discriminate because of citizenship status against U.S. citizens, U.S. nationals,
and the following classes of aliens with work authorization: permanent
residents, temporary residents (that is, individuals who have gone through the
legalization program), refugees, and asylees.
Employers can demonstrate compliance with the law by following the verification (I-9
Form) requirements and treating all new hires the same. This includes the following
steps:
• Establish a policy of hiring only individuals who are authorized to work. A
“U.S. citizens only” policy in hiring is illegal. An employer may require U.S.
citizenship for a particular job only if it is required by federal, state, or local law,
or by government contract.
• Complete the I-9 Form for all new hires. This form gives employers a way to
establish that the individuals they hire are authorized to work in the United
States.
• Permit employees to present any document or combination of documents
acceptable by law. Employers cannot prefer one document over others for
purposes of completing the I-9 Form. Authorized aliens do not carry the same
documents. For example, not all aliens who are authorized to work are issued
"green cards." As long as the documents are allowed by law and appear to be
genuine on their face and to relate to the person, they should be accepted. Not
to do so is illegal. Acceptable documents are listed on the reverse side.
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Immigration and Nationality Act (INA)
The Immigration and Nationality Act (INA) includes provisions addressing employment
eligibility, employment verification, and nondiscrimination. These provisions apply to all
employers.
Basic Provisions/Requirements
Under the INA, employers may hire only persons who may legally work in the United
States (i.e., citizens and nationals of the U.S.) and aliens authorized to work in the U.S.
The employer must verify the identity and employment eligibility of anyone to be hired,
which includes completing the Employment Eligibility Verification Form (I-9).
Employers must keep each I-9 on file for at least three years, or one year after
employment ends, whichever is longer.
Employee Rights
The INA protects U.S. citizens and aliens authorized to accept employment in the U.S.
from discrimination in hiring or discharge on the basis of national origin and citizenship
status.
Penalties/Sanctions
Employers who fail to complete and/or retain the I-9 forms are subject to penalties. The
Department of Homeland Security (DHS) enforces the INA requirements on verification
of employment eligibility. The Department of Justice’s (DOJ) Office of Special Counsel
for Immigration Related Unfair Employment Practices enforces the anti-discrimination
provisions. As part of their ongoing enforcement efforts, the ESA's Wage and Hour
Division and Office of Federal Contract Compliance Programs conduct inspections of the
I-9 forms. They report their findings to DHS and to the DOJ where disparate treatment or
unauthorized employment is apparent.
Relation to State, Local, and Other Federal Laws
Not applicable.
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Labor-Management Reporting and Disclosure Act (LMRDA)
The Labor-Management Reporting and Disclosure Act of 1959, as amended (LMRDA),
directly affects millions of people throughout the United States. The LMRDA covers
unions, officers and employees of unions, union members, employees who work under
collective bargaining agreements (even if they are not union members), employers, labor
relations consultants, surety companies, trusts in which a union is interested, and other
"persons" as defined in the LMRDA who may be covered by particular provisions of the
Act.
LMRDA also covers unions representing U.S. Postal Service employees by virtue of the
Postal Reorganization Act of 1970. Section 7120 of the Civil Service Reform Act, and its
implementing regulations, apply many LMRDA standards to unions representing
employees in most agencies of the executive branch of the federal government. LMRDA
does not cover unions composed solely of state and local government employees.
Basic Provisions/Requirements
The LMRDA consists of seven titles:
Title I, the "Bill of Rights," sets forth certain basic rights that Congress believed federal
law should guarantee to union members. Members may enforce these rights through
private suit in federal district court. Section 104 of the LMRDA, which establishes the
right to receive or examine collective bargaining agreements, applies not only to union
members but also to all nonunion employees whose rights are directly affected by a
collective bargaining agreement.
The Secretary of Labor also has enforcement responsibilities with regard to Section 104.
The Office of Labor-Management Standards (OLMS) of the Department's Employment
Standards Administration handles these responsibilities.
Title II requires unions to file an information report (Form LM-1), copies of their
constitution and bylaws, and annual financial reports (Form LM-2, LM-3, or LM-4) with
OLMS. The reports and documents filed with OLMS are public information, and any
person may examine them or obtain copies at OLMS offices.
Officers and employees of unions must file a Form LM-30 with OLMS if they have any
loans or benefits from, or certain financial interests in, employers whose employees their
union represents and businesses that deal with their union.
Labor relations consultants who enter into an agreement with an employer to persuade
employees about their union activities, or to supply certain information to the employer,
must file a Form LM-20, Agreement and Activities Report, and a Form LM-21, Receipts
and Disbursements Report.
Employers who enter into such an agreement or engage in certain specified financial
dealings with their employees, unions, union officers, or labor relations consultants must
file a Form LM-10.
Finally, surety companies that issue bonds required by the LMRDA or the Employee
Retirement Income Security Act of 1974 (ERISA) must file a Form S-1 to report data
such as premiums received, total claims paid, and amounts recovered. The Secretary of
Labor has authority to enforce the reporting requirements of the Act.
Title III concerns the imposition of trusteeships over subordinate unions. A parent union
may impose a trusteeship only for a purpose specified in the LMRDA, and it must
establish and administer the trusteeship in accordance with its own constitution and
bylaws. A parent union that places a subordinate union in trusteeship must file initial,
semiannual, and terminal trusteeship reports (Forms LM-15, LM-15A, and LM-16).
Under the LMRDA, the parent union may not engage in certain specified acts involving
the funds and delegate votes from a union under trusteeship. The Secretary of Labor has
the authority to investigate and enforce alleged violations of Title III, and a union member
or subordinate union may also enforce the provisions of this title, except for the reporting
requirements, through private suit in federal district court.
Title IV establishes standards for elections of union officers. Local unions must elect their
officers by secret ballot; national and international unions and intermediate bodies must
elect their officers either by secret ballot of the members or by delegates chosen by secret
ballot. Title IV requires elections to be held by national and international unions at least
every five years, intermediate bodies at least every four years, and local unions at least
every three years.
Unions and employers may not use their funds to promote the candidacy of any candidate,
although union funds may be used to conduct an election. A union member in good
standing has the right to nominate candidates, be a candidate subject to reasonable
qualifications uniformly imposed, hold office, and support and vote for the candidates of
the member's choice. Unions must mail a notice of election to every member at the
member's last-known home address at least 15 days before the election.
A union member who has exhausted internal election remedies, or invoked such remedies
without obtaining a final decision within three calendar months, may file a complaint with
the Secretary within one calendar month thereafter, alleging a violation of Title IV of the
LMRDA. The Secretary of Labor has authority to file suit in a federal district court to set
aside an invalid union election and to request a new election under the supervision of the
Secretary.
Title V provides a number of safeguards for unions. Union officers have a duty to manage
the funds and property of the union solely for the benefit of the union in accordance with
its constitution and bylaws. A union may not have outstanding loans to any one officer or
employee that exceed $2,000. Union officials who handle union funds or property must be
bonded to provide protection against losses.
A union officer or employee who embezzles or otherwise misappropriates union funds or
other assets commits a federal crime punishable by a fine and/or imprisonment. Persons
convicted of certain crimes, including a violation of Title II or III of the LMRDA, may
not hold union office or employment for up to 13 years after conviction or the end of
imprisonment.
Title VI includes the authority to investigate (see "Penalties/Sanctions" below); a
prohibition on a union fining, suspending, expelling, or otherwise disciplining members
for exercising their rights under the LMRDA; and a prohibition on the use or threat of
force or violence to interfere with a union member in the exercise of LMRDA rights.
Title VII amends the Labor Management Relations Act (LMRA), otherwise known as the
Taft-Hartley Act, concerning strikes, boycotts, and picketing. The National Labor
Relations Board (NLRB), an independent federal agency, administers the LMRA.
Employee Rights
Title I of the LMRDA guarantees certain rights to all union members. These include the
right to nominate candidates, to vote in elections or referendums, to attend membership
meetings and to participate in the deliberations and vote upon the business of such
meetings, subject to reasonable rules and regulations in the organization's constitution
and bylaws.
They also include the right to meet and assemble freely with other members, to express
any views, arguments, or opinions, and to express views at meetings about candidates in
an election of the labor organization or about any business properly before the meeting,
subject to the organization's established and reasonable rules pertaining to the conduct of
meetings. Additional rights outlined in Title I address dues, initiation fees and
assessments, protection of the right to sue, and safeguards against improper disciplinary
action.
Penalties/Sanctions
The LMRDA authorizes the Secretary of Labor to investigate "in order to determine
whether any person has violated or is about to violate" any provisions of the Act (except
the Bill of Rights of Union Members and amendments made by the LMRDA to other
laws), and to "enter such places and inspect such records and accounts and question such
persons" as may be necessary to determine whether a violation has occurred. The
Secretary may issue subpoenas to compel testimony or to obtain records and other
materials needed to complete an investigation.
The Secretary may file civil actions in federal district court to restrain or correct
violations and to bring about compliance with the LMRDA. The embezzlement of union
funds is subject to a fine of up to $250,000 and/or imprisonment up to five years.
Criminal penalties also apply to other Title V provisions as well as to certain reporting
violations under Titles II and III.
Relation to State, Local, and Other Federal Laws
Federal laws related to the LMRDA include the National Labor Relations Act of 1935;
the Taft-Hartley Act of 1947; the Racketeer-Influenced and Corrupt Organizations
(RICO) Act; the Service Contract Act; and the Civil Service Reform Act of 1978.
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Longshore and Harbor Workers' Compensation Act (LHWCA)
The Longshore and Harbor Workers' Compensation Act (LHWCA) provides for
compensation and medical care to employees disabled from injuries that occur on the
navigable waters of the United States, or in adjoining areas used in loading, unloading,
repairing, or building a vessel. The Act also offers benefits to dependents if the injury
causes the employee's death. The term "injury" includes occupational disease arising out
of employment.
The Act covers workers employed in maritime occupations, including longshore workers
or other persons in longshore operations, and any harbor workers, including ship
repairers, shipbuilders, and shipbreakers. The Act excludes the following individuals if
they are covered by a state workers' compensation law: office employees, certain retail
and service employees, small vessel workers and individuals engaged in repairing certain
recreational vessels, and masters or members of a crew of any vessel.
Employers of covered employees are responsible for insuring the payment of
compensation and medical benefits to injured employees. Private insurance carriers or
employers who are authorized by the Department of Labor (DOL) to become self-insured
provide this insurance. While a Special Fund administered by the Department of Labor
may pay benefits in certain circumstances, authorized insurance carriers, and self-insured
employers fund most benefits under the LHWCA. The Department’s Employment
Standards Administration’s (ESA) Office of Workers' Compensation Programs (OWCP)
administers the Act.
In addition to longshore and other maritime workers, the LHWCA covers a variety of
other employees through several extensions to the Act. The District of Columbia
Workmen's Compensation Act (enacted in 1928 and repealed effective July 26, 1982)
provides benefits for employees in private employment in the District of Columbia who
sustained injuries or illnesses as a result of employment prior to July 26, 1982. (Workers
injured after this date are provided for under a workers' compensation act administered by
the District of Columbia Government.)
Also, the Defense Base Act (1941) covers employees of U.S. contractors outside the
continental United States, Alaska and Hawaii, while the Nonappropriated Fund
Instrumentalities Act (1952) provides for benefits for civilian employees of post
exchanges, service clubs, etc. of the Armed Forces. The Outer Continental Shelf Lands
Act (1953) provides coverage to employees of private industry conducting certain
operations on the Outer Continental Shelf of the United States.
Basic Provisions/Requirements
An injured employee is eligible to receive compensation for disability at the rate of 66
2/3 percent of the employee's average weekly wage, subject to the specified maximum in
effect at the time of injury, for as long as the effects of the injury continue. Compensation
is also available for permanent impairment of specified limbs and organs and to replace
loss of earning capacity.
Benefits are paid to a widow or widower, or other eligible survivors, at the rate of 50
percent of the national average weekly wage as determined by Secretary of Labor,
applicable at the time of injury, or the employee's full wage, if less.
The maximum compensation rate is 200 percent of the current national average weekly
wage as determined by Secretary of Labor, applicable at the time of injury, or the
employee's full average weekly wage, whichever is less. Current benefit levels are found
at www.dol.gov/esa/owcp/dlhwc/nawwinfo.htm.
Within 10 days from the date of an employee's injury or death, or 10 days from the date
an employer has knowledge of an employee's injury or death, including any disease or
death proximately caused by the employment, the employer must furnish a report to the
district director for the compensation district in which the injury or death occurred, and
thereafter furnish additional or supplemental reports as the district director may request.
No report is to be filed unless the injury causes the employee to lose one or more shifts
from work. However, the employer must keep records containing the following
information: (1) the name, address, and occupation of the employer; (2) the name,
address, and occupation of the employee; (3) the cause, nature, and other relevant
circumstances of the injury or death; (4) the year, month, day, and hour when, and the
particular locality where, the injury or death occurred; and (5) such other information as
OWCP may require.
Every employer shall maintain adequate records of injuries sustained by employees,
including information on the disease, other impairments or disabilities, or death relating
to the injury. Employers must make such records available for inspection by OWCP or by
any state authority, and they should retain records for three years after the date of injury.
Employers must secure insurance for workers' compensation coverage under the Act,
either through an authorized insurance carrier or by obtaining approval to self-insure
from OWCP. To self-insure, the employer must furnish OWCP with proof of his or her
ability to pay compensation directly and deposit security in the form of an indemnity
bond or negotiable securities.
Once insurance has been obtained, the employer may request a certificate from the
district director in the compensation district where he or she has operations, showing that
payment of compensation has been secured. Only one certificate will be issued to an
employer in a compensation district, and it will be valid only during the period for which
the employer has secured such payment.
When an employer obtains insurance through a private insurance carrier, the employer's
obligation to pay monetary benefits and provide medical benefits is binding on the
insurance carrier.
The employer or insurance carrier must pay compensation payments periodically,
promptly and directly to the person entitled to benefits under the Act.
An employer may apply to OWCP for an exemption to coverage by certifying a particular
facility as one engaging in building, repairing, or dismantling of small vessels exclusively
and not receiving a federal maritime subsidy. (Small vessels are defined as commercial
barges that are under 900 lightship displacement tons (long) or a commercial tugboat,
towboat, crewboat, supply boat, fishing vessel, or other work vessel that is under 1,600
tons gross.)
Once a facility is certified, injuries sustained there would not be covered under the Act
except for injuries which occur over the navigable waters of the United States, including
any adjoining pier, wharf, dock, or facility over the land for launching vessels. A facility
otherwise covered under the Act remains covered until certification of exemption is
issued. This exemption from coverage is not intended for use by employers whose
facilities are used exclusively to work on small vessels.
The Special Fund was established so that, under certain circumstances, the employer’s
liability is limited if an employee has a pre-existing permanent partial disability. In these
cases, benefits are paid from the Special Fund after 104 weeks. For OWCP to make this
determination, the employer must request limitation of its liability and file a fully
documented application with OWCP as soon as the claimant's condition becomes known
or is an issue in dispute.
An employer may not discharge or in any manner discriminate against an employee
because he or she has claimed or attempted to claim compensation, or has participated in
a proceeding under this Act. This prohibition does not prevent discharge of or refusal to
employ a person who has been found to have filed a fraudulent claim for compensation or
who has otherwise made a false statement or misrepresentation.
Employee Rights
If an employee or his or her survivor(s), or an employer or insurance carrier, disagrees
with a recommendation of OWCP, a formal hearing may be requested before an
administrative law judge. The administrative law judge's decision may in turn be
appealed to the Benefits Review Board. Appeal from the Benefits Review Board's
decision may be taken to the U.S. Court of Appeals and finally to the U.S. Supreme
Court.
Penalties/Sanctions
If any installment of compensation payable without an award is not paid within 14 days
after it becomes due, an additional 10 percent will be added to the unpaid installment.
OWCP can waive the additional 10 percent payment if the employer contacts OWCP and
explains why the installment payment was late. The employer must also contact OWCP
whenever it begins or suspends payments.
OWCP may suspend or revoke the authorization of any self-insurer. Failure by a selfinsurer to comply with any provision or requirement of law or regulations, failure or
insolvency of the surety on his or her indemnity bond, or impairment of financial
responsibility are deemed good causes for suspension or revocation.
Any employer who fails to secure coverage by authorized insurance carriers or by
becoming an authorized self-insurer is subject, upon conviction, to a fine of not more
than $10,000, or by imprisonment for not more than one year, or both.
Any employer who discriminates against an employee may be subject to a penalty of not
less than $1,000 or more than $5,000, and may be required to restore that employee to his
or her employment along with all wages lost due to the discrimination unless that
employee is no longer qualified to perform the duties of the employment.
Relation to State, Local, and Other Federal Laws
Compensation benefits received under other state or federal compensation laws for the
same injury are offset against benefits paid under the Act.
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Mental Health Parity Act of 1996
The Mental Health Parity Act (MHPA), signed into law on September 26, 1996, requires
that annual or lifetime dollar limits on mental health benefits be no lower than any such
dollar limits for medical and surgical benefits offered by a group health plan or health
insurance issuer offering coverage in connection with a group health plan.
MHPA applies to group health plans for plan years beginning on or after January 1, 1998.
The original sunset provision (providing that the parity requirements would not apply to
benefits for services furnished on or after September 30, 2001) has been extended six
times. The current extension runs through December 31, 2007.
The law:
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Generally requires parity of mental health benefits with medical/surgical benefits
with respect to the application of aggregate lifetime and annual dollar limits under
a group health plan
Provides that employers retain discretion regarding the extent and scope of mental
health benefits offered to workers and their families (including cost sharing, limits
on numbers of visits or days of coverage, and requirements relating to medical
necessity)
The law, however, does not apply to benefits for substance abuse or chemical
dependency.
The law also contains the following two exemptions:
Small employer exemption. MHPA does not apply to any group health plan or coverage
of any employer who employed an average of between 2 and 50 employees on business
days during the preceding calendar year, and who employs at least 2 employees on the
first day of the plan year
Increased cost exemption. MHPA does not apply to a group health plan or group health
insurance coverage if the application of the parity provisions results in an increase in the
cost under the plan or coverage of at least 1 percent
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Migrant and Seasonal Agricultural Worker Protection Act
(MSPA)
The Migrant and Seasonal Agricultural Worker Protection Act (MSPA) safeguards most
migrant and seasonal agricultural workers in their interactions with farm labor
contractors, agricultural employers, agricultural associations, and providers of migrant
housing. However, some farm labor contractors, agricultural employers, agricultural
associations, and providers of migrant housing are exempt from MSPA under limited
circumstances.
Basic Provisions/Requirements
The MSPA requires farm labor contractors, agricultural employers, and agricultural
associations who recruit, solicit, hire, employ, furnish, transport, or house agricultural
workers, as well as providers of migrant housing, to meet certain minimum requirements
in their dealings with migrant and seasonal agricultural workers. These requirements
include:
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Farm labor contractor registration: Farm labor contractors (and any employee
who performs farm labor contracting functions) must register with the Department
of Labor before recruiting, soliciting, hiring, employing, furnishing, or
transporting any migrant or seasonal agricultural worker. Agricultural employers
and associations (and their employees) need not register as farm labor contractors.
An agricultural employer or association using the services of a farm labor contractor
must first verify the registration status of the farm labor contractor. This process
includes determining that the contractor is properly authorized for all activities he or
she will undertake. To verify registration status call 1-866-4USWAGE.
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Employment relationship: Under certain circumstances, the Department of Labor
may determine that an agricultural employer or association that uses the services
of a farm labor contractor is a joint employer of the agricultural workers furnished
by the farm labor contractor. In joint employment situations, the agricultural
employer or association is equally responsible with the farm labor contractor for
compliance with employment-related MSPA obligations, such as the proper
payment of wages.
Disclosure: Each migrant and seasonal day-haul worker must receive a written
disclosure at the time of recruitment that describes the terms and conditions of his
or her employment. When offering employment, the employer must provide such
disclosure to all seasonal workers upon request. The disclosure must be written in
the worker's language. The employer must also post in a conspicuous place at the
job site a poster setting forth the rights and protections that MSPA affords
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workers. A housing provider must post or present to each worker a statement of
the terms and conditions of occupancy.
Information and Recordkeeping: Each farm labor contractor, agricultural
employer, or association that employs any agricultural worker must maintain
payroll records for each worker showing the basis on which wages were paid, the
number of piecework units earned, the number of hours worked, the total pay for
each pay period, the amounts and reasons for any deductions, and the net pay.
The employer must provide all workers with these itemized statements and must
preserve these records for three years. If a farm labor contractor is performing the
payroll function, the contractor must provide a copy of the pay records to the person to
whom the workers are furnished (e.g., agricultural employer or association), and that
person must keep the records for three years. No farm labor contractor, agricultural
employer, or association may knowingly provide false or misleading information to a
worker about employment or the terms and conditions of employment.
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Wages, Supplies, and Working Arrangements: Each person employing
agricultural workers must pay all wages owed when due. Farm labor contractors,
agricultural employers, and associations are prohibited from requiring workers to
purchase goods or services solely from such contractor, employer, or association,
or any person acting as an agent for such a person. In addition, no farm labor
contractor, agricultural employer, or association may violate the terms of the
working arrangement without adequate justification.
Safety and Health of Housing: Each person who owns or controls housing
provided to migrant agricultural workers must ensure that the facility complies
with the federal and state safety and health standards covering that housing.
Migrant housing may not be occupied until it has been inspected and certified to
meet these safety and health standards. The certification of occupancy must be
posted at the site.
Transportation Safety: Each vehicle used to transport migrant or seasonal
agricultural workers must be properly insured and operated by a properly licensed
driver. Each such vehicle must also meet federal and state safety standards.
Employer Protections: Farm labor contractors must comply with the terms of any
written agreement they make with an agricultural employer or association.
Enforcement: The Wage and Hour Division of the Employment Standards
Administration enforces MSPA. During a MSPA investigation, Wage and Hour
investigators may enter and inspect premises (including vehicles and housing),
review and transcribe payroll and other records, and interview employers and
employees.
Employee Rights
The MSPA provides migrant agricultural workers and day-haul seasonal agricultural
workers the right to receive written notice of the terms and conditions of their
employment when recruited; it provides seasonal workers the right to receive such
notification upon the worker's request. The MSPA also requires employers of migrants
and seasonal agricultural workers to adhere to the disclosed terms and conditions of
employment. Certain exemptions and exclusions apply to these provisions.
The MSPA also gives migrant and seasonal agricultural workers the right to file a
complaint with the Wage and Hour Division, file a private lawsuit under the Act (or
cause a complaint or lawsuit to be filed), or testify or cooperate with an investigation or
lawsuit in other ways without being intimidated, threatened, restrained, coerced,
blacklisted, discharged, or discriminated against in any manner.
Penalties/Sanctions
Violations of MSPA may result in civil money penalties, back wage assessments, and
revocations of certificates of registration. Violations may also result in civil or criminal
actions instituted by the Department of Labor against any person found in violation of the
Act. Civil money penalties up to $1,000 may be assessed for each violation. Criminal
conviction for first-time violators may result in one year in prison and a $1,000 fine;
repeat convictions can result in up to three years in prison and $10,000 in fines. In
addition, individuals whose MSPA rights have been violated may seek civil damages in
federal court.
Relation to State, Local, and Other Federal Laws
MSPA supplements any state or local law. Compliance with MSPA does not excuse
violation of applicable state laws or regulations.
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National Labor Relations Act of 1947
The National Labor Relations Act extends rights to many private-sector employees
including the right to organize and bargain with their employer collectively. Employees
covered by the act are protected from certain types of employer and union misconduct
and have the right to attempt to form a union where none currently exists.
Examples of Rights As An Employee Under the NLRA Are:
 Forming, or attempting to form, a union among the employees of your employer.
 Joining a union whether the union is recognized by your employer or not.
 Assisting a union in organizing your fellow employees.
 Engaging in protected concerted activities. Generally, "protected concerted
activity" is group activity which seeks to modify wages or working conditions.
 Refusing to do any or all of these things. However, the union and employer, in a
State where such agreements are permitted, may enter into a lawful union-security
clause requiring employees to pay union dues and fees.
The NLRA forbids employers from interfering with, restraining, or coercing employees
in the exercise of rights relating to organizing, forming, joining or assisting a labor
organization for collective bargaining purposes, or engaging in protected concerted
activities, or refraining from any such activity. Similarly, labor organizations may not
restrain or coerce employees in the exercise of these rights.
Examples of Employer Conduct That Violates the NLRA:
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Threatening employees with loss of jobs or benefits if they join or vote for a
union or engage in protected concerted activity.
Threatening to close the plant if employees select a union to represent them.
Questioning employees about their union sympathies or activities in
circumstances that tend to interfere with, restrain or coerce employees in the
exercise of their rights under the Act.
Promising benefits to employees to discourage their union support.
Transferring, laying off, terminating, assigning employees more difficult work
tasks, or otherwise punishing employees because they engaged in union or
protected concerted activity.
Transferring, laying off, terminating, assigning employees more difficult work
tasks, or otherwise punishing employees because they filed unfair labor practice
charges or participated in an investigation conducted by NLRB.
Examples of Labor Organization Conduct That Violates the NLRA:
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Threats to employees that they will lose their jobs unless they support the union.
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Seeking the suspension, discharge or other punishment of an employee for not
being a union member even if the employee has paid or offered to pay a lawful
initiation fee and periodic fees thereafter.
Refusing to process a grievance because an employee has criticized union
officials or because an employee is not a member of the union in states where
union security clauses are not permitted.
Fining employees who have validly resigned from the union for engaging in
protected concerted activities following their resignation or for crossing an
unlawful picket line.
Engaging in picket line misconduct, such as threatening, assaulting, or barring
non-strikers from the employer's premises.
Striking over issues unrelated to employment terms and conditions or coercively
enmeshing neutrals into a labor dispute.
The National Labor Relations Act (NLRA) protects non-union and union employees
against discrimination based on union-related activity or group action ("protected
concerted activity"). However, employers generally can make unilateral decisions about
most personnel actions, including discharge -- unless employees are protected by an
employment contract or collective bargaining agreement, and absent discrimination in
violation of civil rights laws.
Workers Excluded from NLRB Coverage
The NLRA does not include coverage for all workers. The Act specifically excludes from
its coverage individuals who are:
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employed as agricultural laborers
employed in the domestic service of any person or family in a home
employed by a parent or spouse
employed as an independent contractor
employed as a supervisor (supervisors who have been discriminated against for
refusing to violate the NLRA may be covered)
employed by an employer subject to the Railway Labor Act, such as railroads and
airlines
employed by Federal, state, or local government
employed by any other person who is not an employer as defined in the NLRA
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Newborns' and Mothers' Health Protection Act of 1996
The Newborns’ and Mothers’ Health Protection Act of 1996 (the Newborns’ Act), signed
into law on September 26, 1996, requires plans that offer maternity coverage to pay for at
least a 48-hour hospital stay following childbirth (96-hour stay in the case of a cesarean
section).
This law was effective for group health plans for plan years beginning on or after January
1, 1998.
On October 27, 1998, the Department of Labor, in conjunction with the Departments of
the Treasury and Health and Human Services, published interim regulations clarifying
issues arising under the Newborns’ Act. The changes made by the regulations are
effective for group health plans for plan years beginning on or after January 1, 1999.
The Newborns’ Act and its regulations provide that health plans and insurance issuers
may not restrict a mother’s or newborn’s benefits for a hospital length of stay that is
connected to childbirth to less than 48 hours following a vaginal delivery or 96 hours
following a delivery by cesarean section. However, the attending provider (who may be a
physician or nurse midwife) may decide, after consulting with the mother, to discharge
the mother or newborn child earlier.
The Newborns’ Act, and its regulations, prohibit incentives (either positive or negative)
that could encourage less than the minimum protections under the Act as described
above.
A mother cannot be encouraged to accept less than the minimum protections available to
her under the Newborns’ Act and an attending provider cannot be induced to discharge a
mother or newborn earlier than 48 or 96 hours after delivery.
The type of coverage provided by the plan (insured or self-insured) and state law will
determine whether the Newborns’ Act applies to a mother’s or newborn’s coverage.
The Newborns’ Act provisions always apply to coverage that is self-insured.
For coverage that is insured, if your state has a law that meets certain criteria, state law
applies to your coverage rather than the Newborns’ Act. A list of states in which the
federal Newborns’ Act requirements apply as of July 1, 1998 can be found in the booklet
Questions and Answers: Recent Changes in Health Care Law.
All group health plans that provide maternity or newborn infant coverage must include a
statement in their summary plan description (SPD) advising individuals of the Newborns’
Act requirements.
Click here to download full text of the act
Occupational Safety and Health Act of 1970
In general, the Occupational Safety and Health Act of 1970 (OSH ACT) covers all
employers and their employees in the 50 states, the District of Columbia, Puerto Rico,
and other U.S. territories. Coverage is provided either directly by the federal
Occupational Safety and Health Administration (OSHA) or by an OSHA-approved state
job safety and health plan. Employees of the U.S. Postal Service also are covered.
The Act defines an employer as 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." Therefore, the Act applies to employers and employees in such
varied fields as manufacturing, construction, longshoring, agriculture, law and medicine,
charity and disaster relief, organized labor, and private education. The Act establishes a
separate program for federal government employees and extends coverage to state and
local government employees only through the states with OSHA-approved plans.
The Act does not cover:
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Self-employed persons;
Farms which employ only immediate members of the farmer's family;
Working conditions for which other federal agencies, operating under the authority
of other federal laws, regulate worker safety. This category includes most working
conditions in mining, nuclear energy and nuclear weapons manufacture, and many
aspects of the transportation industries; and
Employees of state and local governments, unless they are in one of the states
operating an OSHA-approved state plan.
Basic Provisions/Requirements
The Act assigns OSHA two regulatory functions: setting standards and conducting
inspections to ensure that employers are providing safe and healthful workplaces. OSHA
standards may require that employers adopt certain practices, means, methods, or
processes reasonably necessary and appropriate to protect workers on the job. Employers
must become familiar with the standards applicable to their establishments and eliminate
hazards.
Compliance with standards may include ensuring that employees have been provided
with, have been effectively trained on, and use personal protective equipment when
required for safety or health. Employees must comply with all rules and regulations that
apply to their own actions and conduct.
Even in areas where OSHA has not set forth a standard addressing a specific hazard,
employers are responsible for complying with the OSH Act's "general duty" clause. The
general duty clause [Section 5(a)(1)] states that each employer "shall furnish . . . a place
of employment which is free from recognized hazards that are causing or are likely to
cause death or serious physical harm to his employees."
The Act encourages states to develop and operate their own job safety and health
programs. OSHA approves and monitors these “state plans,” which operate under the
authority of state law. There are currently 22 states and jurisdictions operating complete
state plans (covering both the private sector and state and local government employees)
and four (Connecticut, New Jersey, New York, and the Virgin Islands) that cover state
and local government employees only. States with OSHA-approved job safety and health
plans must set standards that are at least as effective as the equivalent federal standard.
Most, but not all of the state plan states, adopt standards identical to the federal ones.
Federal OSHA Standards. Standards are grouped into four major categories: general
industry (29 CFR 1910); construction (29 CFR 1926); maritime (shipyards, marine
terminals, longshoring--29 CFR 1915-19); and agriculture (29 CFR 1928). While some
standards are specific to just one category, others apply across industries. Among the
standards with similar requirements for all sectors of industry are those that address
access to medical and exposure records, personal protective equipment, and hazard
communication.
Access to Medical and Exposure Records: This regulation provides a right of access to
employees, their designated representatives, and OSHA to relevant medical records,
including records related to that employee’s exposure to toxic substances.
Personal Protective Equipment: This standard, which is defined separately for each
segment of industry except agriculture, requires employers to provide employees with
personal equipment designed to protect them against certain hazards and to ensure that
employees have been effectively trained on the use of the equipment. This equipment can
range from protective helmets to prevent head injuries in construction and cargo handling
work, to eye protection, hearing protection, hard-toed shoes, special goggles for welders,
and gauntlets for iron workers.
Hazard Communication: This standard requires manufacturers and importers of
hazardous materials to conduct hazard evaluations of the products they manufacture or
import. If a product is found to be hazardous under the terms of the standard, the
manufacturer or importer must so indicate on containers of the material, and the first
shipment of the material to a new customer must include a material safety data sheet
(MSDS). Employers must use these MSDSs to train their employees to recognize and
avoid the hazards presented by the materials.
OSHA regulations cover such items as recordkeeping, reporting, and posting.
Recordkeeping: Every employer covered by OSHA who has more than 10 employees,
except for employers in certain low-hazard industries in the retail, finance, insurance, real
estate, and service sectors, must maintain three types of OSHA-specified records of jobrelated injuries and illnesses.
The OSHA Form 300 is an injury/illness log, with a separate line entry for each
recordable injury or illness. Such events include work-related deaths, injuries, and
illnesses other than minor injuries that require only first aid treatment and that do not
involve medical treatment, loss of consciousness, restriction of work, or transfer to
another job. Each year, the employer must conspicuously post in the workplace a Form
300A, which includes a summary of the previous year’s work-related injuries and
illnesses. The Form 300A must be posted by February 1 and kept in place until at least
April 30.
OSHA Form 301 is an individual incident report that provides added detail about each
specific recordable injury or illness. An alternative form, such as an insurance or
workers’ compensation form that provides the same details may be substituted for OSHA
Form 301.
Employers with 10 or fewer employees and employers in statistically low-hazard
industries (listed in 29 CFR 1904, Subpart B) are exempt from maintaining these records.
Industries currently designated as low-hazard include: automobile dealers; apparel and
accessory stores; eating and drinking places; most finance, insurance, and real estate
industries; and certain service industries, such as personal and business services, medical
and dental offices, and legal, educational, and membership organizations.
However, such employers must keep these records if they receive an annual illness and
injury survey form either from the Bureau of Labor Statistics (BLS) or from OSHA.
Employers selected for these surveys, even those usually exempt from illness and injury
recording requirements, will be notified before the end of the prior year to begin keeping
records during the year covered by the survey.
Reporting: Each employer, regardless of industry category or the number of its
employees, must advise the nearest OSHA office of any accident that results in one or
more fatalities or the hospitalization of three or more employees. The employer must so
notify OSHA within eight hours of the occurrence of the accident. OSHA often
investigates such accidents to determine whether violations of standards contributed to
the event.
Cooperative Programs: OSHA offers a number of opportunities for employers,
employees, and organizations to work cooperatively with the Agency. OSHA’s major
cooperative programs are the Voluntary Protections Program (VPP), the Safety and
Health Achievement Recognition Program (SHARP), the Alliance Program, and the
OSHA Strategic Partnership Program (OSPP). For further information on OSHA’s
cooperative programs, visit the Cooperative Programs section of OSHA’s Web site.
Voluntary Protection Programs. The Voluntary Protection Programs (VPP) are an
OSHA initiative aimed at extending worker protection beyond the minimum required by
OSHA standards. The VPP is designed to:
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Recognize the outstanding achievements of those who have successfully
incorporated comprehensive safety and health programs into their total
management systems;
Motivate others to achieve excellent safety and health results in the same
outstanding way; and
Establish a relationship between employers, employees, and OSHA that is
based on cooperation rather than coercion.
An employer may apply for VPP at the nearest OSHA regional office. OSHA reviews an
employer's VPP application and visits the worksite to verify that the safety and health
program described is in effect at the site. All participants must send their injury
information annually to their OSHA regional offices. Sites participating in the VPP are
not scheduled for programmed inspections. However, OSHA handles any employee
complaints, serious accidents/catastrophes, or fatalities according to routine procedures.
The VPP is available in states under federal jurisdiction. Some states operating OSHAapproved state plans have similar programs. Additionally, all OSHA-approved state plans
that cover private-sector employees in the state operate similar programs. Interested
companies in these states should contact the appropriate state agency for more
information.
Safety and Health Achievement Recognition Program (SHARP). This program
recognizes small employers who operate an exemplary safety and health management
system. Employers who are accepted into SHARP are recognized as models for worksite
safety and health. Upon receiving SHARP recognition, the worksite will be exempt from
programmed inspections during the period that the SHARP certification is valid. To
participate in SHARP, an employer must contact its state’s Consultation Program and
request a free consultation visit that involves a complete hazard identification survey.
Alliance Program. Through the Alliance Program, OSHA works with businesses, trade
and professional organizations, unions, educational institutions, and other government
agencies. Alliance Program participants work with OSHA to leverage resources and
expertise to help develop compliance assistance tools, training opportunities, and other
information to help employers and employees prevent on-the-job injuries, illnesses and
fatalities. OSHA’s alliances with organizations in industries such as meat, plastics, health
care, maritime, printing, chemical, construction, paper and telecommunications
industries, among others, are working to address safety and health hazards with at-risk
audiences, such as youth, immigrant workers, and small business.
Strategic Partnership Program. In this program, OSHA enters into an extended,
voluntary, cooperative relationship with employers, associations, unions, and/or councils.
Partnerships often cover multiple worksites, and in some instances, affect entire
industries. Partner worksites may be very large, but most often they are small businesses
averaging 50 or fewer employees. Strategic Partnerships are designed to encourage,
assist, and recognize efforts to eliminate serious hazards and achieve a high level of
worker safety and health. All Partnerships emphasize sustained efforts and continuing
results beyond the typical three-year duration of the agreement.
Employee Rights
The Act grants employees several important rights. Among them are the right to
complain to OSHA about safety and health conditions in their workplaces and, to the
extent permitted by law, have their identities kept confidential from employers, contest
the amount of time OSHA allows for correcting violations of standards, and participate in
OSHA workplace inspections.
Private sector employees who exercise their rights under OSHA can be protected against
employer reprisal, as described in Section 11(c) of the OSH Act. Employees must notify
OSHA within 30 days of the time they learned of the alleged discriminatory action.
OSHA will then investigate, and if it agrees that discrimination has occurred, OSHA will
ask the employer to restore any lost benefits to the affected employee. If necessary,
OSHA can initiate legal action against the employer. In such cases, the worker pays no
legal fees. The OSHA-approved state plans have parallel employee rights provisions,
including protections against employer reprisal.
Penalties/Sanctions
Every establishment covered by the Act is subject to inspection by OSHA compliance
safety and health officers (CSHOs). These individuals, who are chosen for their
knowledge and experience in occupational safety and health, are thoroughly trained in
OSHA standards and in the recognition of occupational safety and health hazards. In
states with their own OSHA-approved state plan, pursuant to state law, state officials
conduct inspections, issue citations for violations, and propose penalties in a manner that
is at least as effective as the federal program.
OSHA conducts two general types of inspections – programmed and unprogrammed.
Establishments with high injury rates receive programmed inspections, while
unprogrammed inspections are used in response to fatalities, catastrophes, and complaints
(which are further addressed by OSHA’s complaint policies and procedures). Various
OSHA publications and documents detail OSHA’s policies and procedures for
inspections.
Types of violations that may be cited and the penalties that may be proposed:
The OSH Act authorizes OSHA to treat certain violations, which have no direct or
immediate relationship to safety and health, as de minimus, requiring no penalty or
abatement. OSHA does not issue citations for de minimus violations.
Other Than Serious Violation: A violation that has a direct relationship to job safety
and health, but probably would not cause death or serious physical harm. A proposed
penalty of up to $7,000 for each violation is discretionary.
Serious Violation: A violation where a substantial probability that death or serious
physical harm could result and where the employer knew, or should have known, of the
hazard. A penalty of up to $7,000 for each violation must be proposed.
Willful Violation: A violation that the employer intentionally and knowingly commits.
The employer either knows that what he or she is doing constitutes a violation, or is
aware that a condition creates a hazard and has made no reasonable effort to eliminate it.
The Act provides that an employer who willfully violates the Act may be assessed a civil
penalty of not more than $70,000 but not less than $5,000 for each violation. Proposed
penalties for other-than-serious and serious violations may be adjusted downward
depending on the employer’s good faith (demonstrated efforts to comply with the Act
through the implementation of an effective health and safety program), history of
violations, and size of business. Proposed penalties for willful violations may be adjusted
downward depending on the size of the business. Usually no credit is given for good
faith.
If an employer is convicted of a willful violation of a standard that has resulted in the
death of an employee, the offense is punishable by a court imposed fine or by
imprisonment for up to six months, or both. A fine of up to $250,000 for an individual, or
$500,000 for an organization [authorized under the Omnibus Crime Control Act of 1984
(1984 OCCA), not the OSH Act], may be imposed for a criminal conviction.
Repeated Violation: A violation of any standard, regulation, rule, or order where, upon
reinspection, a substantially similar violation is found. Repeated violations can bring
fines of up to $70,000 for each such violation. To serve as the basis for a repeat citation,
the original citation must be final; a citation under contest may not serve as the basis for a
subsequent repeat citation.
Failure to Correct Prior Violation: Failure to correct a prior violation may bring a civil
penalty of up to $7,000 for each day the violation continues beyond the prescribed
abatement date.
Citation and penalty procedures may differ somewhat in states with their own OSH
programs.
Appeals process:
Appeals by Employees: If a complaint from an employee prompted the inspection, the
employee or authorized employee representative may request an informal review of any
decision not to issue a citation.
Employees may not contest citations, amendments to citations, penalties, or lack of
penalties. They may contest the time allowed in the citation for abatement of a hazardous
condition. They also may contest an employer's Petition for Modification of Abatement
(PMA), which requests an extension of the abatement period. Employees who wish to
contest the PMA must do so within 10 working days of its posting or within 10 working
days after an authorized employee representative has received a copy.
Within 15 working days of the employer's receipt of the citation, the employee may
submit a written objection to OSHA regarding the abatement date. The OSHA area
director forwards the objection to the Occupational Safety and Health Review
Commission, which operates independently of OSHA.
Employees may request an informal conference with OSHA to discuss any issues raised
by an inspection, citation, notice of proposed penalty, or the employer's notice of
intention to contest.
Appeals by Employers: When issued a citation or notice of a proposed penalty, an
employer may request an informal meeting with OSHA's area director to discuss the case.
Employee representatives may be invited to attend the meeting. To avoid prolonged legal
disputes, the area director is authorized to enter into settlement agreements that may
revise citations and penalties.
Notice of Contest: If the employer decides to contest the citation, the time set for
abatement or the proposed penalty, he or she has 15 working days from the time the
citation and proposed penalty are received in which to notify the OSHA area director in
writing. An orally expressed disagreement will not suffice. This written notification is
called a "Notice of Contest."
There is no specific format for the Notice of Contest. However, it must clearly identify
the employer's basis for contesting the citation, notice of proposed penalty, abatement
period, or notification of failure to correct violations. To better identify the scope of the
contest, it also should identify the inspection number and citation number(s) being
contested.
A copy of the Notice of Contest must be given to the employees' authorized
representative. If any affected employees are unrepresented by a recognized bargaining
agent, a copy of the notice must be posted in a prominent location in the workplace, or
else served personally upon each unrepresented employee.
Appeal Review Procedure: If the written Notice of Contest has been filed within 15
working days, the OSHA area director forwards the case to the Occupational Safety and
Health Review Commission (OSHRC). The Commission is an independent agency not
associated with OSHA or the Department of Labor. The Commission assigns the case to
an Administrative Law Judge (ALJ).
The ALJ may disallow the contest if it is found to be legally invalid, or a hearing may be
scheduled for a public place near the employer's workplace. The employer and the
employees have the right to participate in the hearing; the OSHRC does not require that
they be represented by attorneys.
Once the ALJ has ruled, any party to the case may request a further review by OSHRC.
Also, any of the three OSHRC commissioners may individually move to bring a case
before the Commission for review. Commission rulings may be appealed to the U.S.
Courts of Appeals.
Appeals In State-Plan States: States with their own occupational safety and health
programs have their own systems for review and appeal of citations, penalties, and
abatement periods. The procedures are generally similar to federal OSHA's, but a state
review board or equivalent authority hears cases.
Relation to State, Local, and Other Federal Laws
The OSH Act covers all private sector working conditions that are not addressed by
safety and health regulations of another federal agency under other legislation. OSHA
also has the authority to monitor the safety and health of federal employees. The OSHAapproved state-plan states extend their coverage to state and local government employees.
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Rehabilitation Act of 1973, Section 503
Section 503 of the Rehabilitation Act of 1973, as amended, requires employers with
federal contracts or subcontracts that exceed $10,000, and contracts or subcontracts for
indefinite quantities (unless the purchaser has reason to believe that the cost in any one
year will not exceed $10,000), to take affirmative steps to hire, retain, and promote
qualified individuals with disabilities. The regulations implementing Section 503 make
clear that this obligation to take affirmative steps includes the duty to refrain from
discrimination in employment against qualified individuals with disabilities.
The following types of contracts and subcontracts are exempt from Section 503:
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Those not exceeding $10,000;
Those for work that is performed outside the U.S.; and
Those with state or local governments, except for the specific government entity
that participates in work on or under the contract.
The Deputy Assistant Secretary may grant a waiver from the requirements of Section 503
in the following circumstances:
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For specific contracts, subcontracts, or purchase orders, if special circumstances in
the national interest require such an exemption;
For facilities not connected to performance of the federal contract, upon the
written request of the contractor, if certain conditions listed in the regulations are
met. This type of waiver will terminate, at the very latest, two years after the date
on which the waiver is granted, and earlier under certain specific circumstances;
and
Contracts and subcontracts involving national security, if the head of the
contracting agency determines both that (1) the contract is essential to national
security, and (2) noncompliance with a particular requirement of the Executive
Order or the regulations with respect to the process of awarding the contract is
essential to national security.
Under Section 503 and its implementing regulations, an "individual with a disability"
means a person who (1) has a physical or mental impairment that substantially limits one
or more major life activities, (2) has a record of such impairment, or (3) is regarded as
having such an impairment.
A “qualified individual with a disability” means a person with a disability who satisfies
the job-related requirements of the employment position he or she holds or is applying
for, and who, with or without reasonable accommodation, can perform the essential job
functions of that position.
Additional information on the definitions of “individual with a disability" and “qualified
individual with a disability" can be found in several of the Enforcement Guidances
published by the Equal Employment Opportunity Commission (EEOC). These Guidances
may be found at EEOC’s Enforcement Guidances and Related Documents Web page.
Basic Provisions/Requirements
Under Section 503 and its implementing regulations, covered employers with federal
contracts or subcontracts must take affirmative steps to employ qualified individuals with
disabilities. This obligation covers the full range of employment and personnel practices,
such as recruitment, hiring, rates of pay, upgrading, and selection for training. All
covered contractors and subcontractors must also include a specific equal opportunity
clause in each of their nonexempt contacts and subcontracts. The regulations provide the
required language for this clause.
In addition, Section 503 and its regulations require covered federal contractors and
subcontractors to make reasonable accommodations for the known physical or mental
limitations of qualified individuals with disabilities, unless providing an accommodation
would create an undue hardship. Furthermore, covered contractors and subcontractors are
required to take all necessary actions to ensure that no one attempts to intimidate or
discriminate against any individual for filing a complaint or participating in a proceeding
under Section 503.
Under Section 503, each employer that has both (1) a federal contract or subcontract of
$50,000 or more, and (2) 50 or more employees, must prepare, implement, and maintain
a written affirmative action program covering each of its establishments. The employer
must review and update the program annually and must make it available for inspection
by any employee or applicant for employment, as well as by the Office of Federal
Contract Compliance Programs (OFCCP) within the Department of Labor’s Employment
Standards Administration. The program may be integrated with, or kept separate from,
any other affirmative action program the employer is required to prepare.
Employee Rights
Employees of and applicants for employment with a covered contractor or subcontractor
have the right to file a complaint with OFCCP if they believe that a federal contractor or
subcontractor has discriminated against them on the basis of a disability. Anyone may
call OFCCP with a question about interpreting the regulations, filing a complaint, or any
other related matter. The main telephone numbers for OFCCP's national offices are 202693-0101 and 202-693-1308 (TTY). Additional telephone numbers are located on
OFCCP’s Office Contact Web page.
Penalties/Sanctions
OFCCP investigates for violations of Section 503 either through compliance evaluations
or in response to complaints. If a violation is found, OFCCP may ask the federal
contractor or subcontractor to enter into conciliation negotiations. If conciliation efforts
fail, OFCCP may initiate an administrative enforcement proceeding by issuing an
administrative complaint against the contractor or subcontractor.
If OFCCP files an administrative complaint, the contractor or subcontractor has 20 days
to request a review by an Administrative Law Judge (ALJ), who hears the case and
recommends a decision. If the contractor or subcontractor is dissatisfied with the ALJ's
decision, it may appeal the decision to the Department of Labor's Administrative Review
Board. The Board issues the final decision, whether or not there is an appeal.
If the Board finds that a violation of Section 503 has occurred, it may order the contractor
or subcontractor to provide appropriate relief, which may include back pay and benefits,
and restoration of employment status, for the victim(s) of discrimination. Depending on
the circumstances, violations also may result in cancellation, suspension, or termination
of contracts, withholding of progress payments, and debarment.
If the contractor or subcontractor is dissatisfied with the Board's decision, it may appeal
that decision to the federal courts.
Relation to State, Local, and Other Federal Laws
Section 503 and its implementing regulations apply only to the specific state or local
government entities that participate in work on or under a federal contract or subcontract.
This coverage is narrower than that which applies to employers in the private sector.
Section 107(b) of the Americans With Disabilities Act of 1990 (ADA) required agencies
with enforcement responsibilities under the Rehabilitation Act of 1973 (e.g., OFCCP) and
under Title I of the ADA (i.e., the Equal Employment Opportunity Commission) to
develop procedural regulations to ensure that complaints filed under these laws are
addressed in a manner that avoids duplication of effort and prevents application of
inconsistent or conflicting standards for the same requirements under the two laws. These
regulations are found at 41 CFR Part 60-742.
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Sarbanes-Oxley Act of 2002
Employees who work for publicly traded companies or companies that are required to file
certain reports with the Securities and Exchange Commission (SEC) are protected from
retaliation for reporting alleged violations of mail, wire, bank, or securities fraud;
violations of rules or regulations of the SEC; or federal laws relating to fraud against
shareholders.
Covered Companies
A company is covered by Section 806 of the Sarbanes-Oxley Act of 2002 (the Act) if it
has a class of securities registered under Section 12 of the Securities Exchange Act, or is
required to file reports under Section 15(d) of that Act. Its contractors, subcontractors, or
agents may also be covered.
Protected Activity
If an employer is covered under the Act, it may not discharge or in any manner retaliate
against an employee because he or she:
• provided information
• caused information to be provided, or
• assisted in an investigation by
_ a federal regulatory or law enforcement agency
_ a member or committee of Congress, or
_ an internal investigation by the company relating to an alleged violation of mail fraud,
wire fraud, bank fraud, securities fraud, or violating SEC rules or regulations or federal
laws relating to fraud against shareholders.
In addition, an employer may not discharge or in any manner retaliate against an
employee because he or she filed, caused to be filed, participated in or assisted in a
proceeding under one of these laws or regulations.
.
Unfavorable Employment Actions
An employer may be found to have violated the Act if an employee’s protected activity
was a contributing factor in the employer’s decision to take unfavorable employment
action against the employee. Such actions may include:
• Discharge or layoff
• Blacklisting
• Demoting
• Denial of overtime or promotion
• Disciplining
• Denial of benefits
• Failure to hire or rehire
• Intimidation
• Reassignment affecting prospects for promotion
• Reduction in pay or hours
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Title VII of the Civil Rights Act of 1964
Title VII of the Civil Rights Act of 1964 protects individuals against employment
discrimination on the bases of race and color, as well as national origin, sex, and religion.
Title VII applies to employers with 15 or more employees, including state and local
governments. It also applies to employment agencies and to labor organizations, as well
as to the federal government.
Equal employment opportunity cannot be denied any person because of his/her racial
group or perceived racial group, his/her race-linked characteristics (e.g., hair texture,
color, facial features), or because of his/her marriage to or association with someone of a
particular race or color. Title VII also prohibits employment decisions based on
stereotypes and assumptions about abilities, traits, or the performance of individuals of
certain racial groups. Title VII's prohibitions apply regardless of whether the
discrimination is directed at Whites, Blacks, Asians, Latinos, Arabs, Native Americans,
Native Hawaiians and Pacific Islanders, multi-racial individuals, or persons of any other
race, color, or ethnicity.
It is unlawful to discriminate against any individual in regard to recruiting, hiring and
promotion, transfer, work assignments, performance measurements, the work
environment, job training, discipline and discharge, wages and benefits, or any other
term, condition, or privilege of employment. Title VII prohibits not only intentional
discrimination, but also neutral job policies that disproportionately affect persons of a
certain race or color and that are not related to the job and the needs of the business.
Employers should adopt "best practices" to reduce the likelihood of discrimination and to
address impediments to equal employment opportunity.
Title VII's protections include:
Recruiting, Hiring, and Advancement
Job requirements must be uniformly and consistently applied to persons of all races and
colors. Even if a job requirement is applied consistently, if it is not important for job
performance or business needs, the requirement may be found unlawful if it excludes
persons of a certain racial group or color significantly more than others. Examples of
potentially unlawful practices include: (1) soliciting applications only from sources in
which all or most potential workers are of the same race or color; (2) requiring applicants
to have a certain educational background that is not important for job performance or
business needs; (3) testing applicants for knowledge, skills or abilities that are not
important for job performance or business needs.
Employers may legitimately need information about their employees or applicants race
for affirmative action purposes and/or to track applicant flow. One way to obtain racial
information and simultaneously guard against discriminatory selection is for employers to
use separate forms or otherwise keep the information about an applicant's race separate
from the application. In that way, the employer can capture the information it needs but
ensure that it is not used in the selection decision.
Unless the information is for such a legitimate purpose, pre-employment questions about
race can suggest that race will be used as a basis for making selection decisions. If the
information is used in the selection decision and members of particular racial groups are
excluded from employment, the inquiries can constitute evidence of discrimination.
Harassment/Hostile Work Environment
Title VII prohibits offensive conduct, such as racial or ethnic slurs, racial "jokes,"
derogatory comments, or other verbal or physical conduct based on an individual's
race/color. The conduct has to be unwelcome and offensive, and has to be severe or
pervasive. Employers are required to take appropriate steps to prevent and correct
unlawful harassment. Likewise, employees are responsible for reporting harassment at an
early stage to prevent its escalation.
Compensation and Other Employment Terms, Conditions, and Privileges
Title VII prohibits discrimination in compensation and other terms, conditions, and
privileges of employment. Thus, race or color discrimination may not be the basis for
differences in pay or benefits, work assignments, performance evaluations, training,
discipline or discharge, or any other area of employment.
Segregation and Classification of Employees
Title VII is violated where employees who belong to a protected group are segregated by
physically isolating them from other employees or from customer contact. In addition,
employers may not assign employees according to race or color. For example, Title VII
prohibits assigning primarily African-Americans to predominantly African-American
establishments or geographic areas. It is also illegal to exclude members of one group
from particular positions or to group or categorize employees or jobs so that certain jobs
are generally held by members of a certain protected group. Coding applications/resumes
to designate an applicant's race, by either an employer or employment agency, constitutes
evidence of discrimination where people of a certain race or color are excluded from
employment or from certain positions.
Retaliation
Employees have a right to be free from retaliation for their opposition to discrimination
or their participation in an EEOC proceeding by filing a charge, testifying, assisting, or
otherwise participating in an agency proceeding.
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Uniform Guidelines on Employee Selection Procedures of 1978
The Civil Rights Act of 1964 established that employment decisions based on race, color,
religion, sex, or national origin are discriminatory and illegal. In 1978, the Civil Service
Commission, the Department of Labor, the Department of Justice, and the Equal
Opportunity Commission jointly adopted the Uniform Guidelines on Employee Selection
Procedures to establish uniform standards for employers for the use of selection
procedures and to address adverse impact, validation, and record-keeping requirements.
The Uniform Guidelines document a uniform federal position in the area of prohibiting
discrimination in employment practices on the basis of race, color, religion, sex, or
national origin. The Uniform Guidelines outline the requirements necessary for
employers to legally defend employment decisions based upon overall selection
processes and specific selection procedures.
The Uniform Guidelines are not in and of themselves legislation or law; however,
through their reference in a number of judicial decisions, they have been identified by the
courts as a source of technical information and have been given deference in litigation
concerning employment issues.
In addition to the Uniform Guidelines themselves, a separate document entitled Questions
and Answers on the Uniform Guidelines on Employee Selection Procedures was released
in 1979 to provide further clarification and a common interpretation of the Uniform
Guidelines.
Provisions of the Uniform Guidelines on Employee Selection Procedures
1. What do the Uniform Guidelines cover?
The Uniform Guidelines provide standards for the proper use of employment testing,
including the definition of discrimination in testing, appropriate means of validating
selection procedures which may be discriminatory, acceptable methods of establishing
and implementing cutoff scores (or pass points) on selection procedures, and the
documentation of validity for selection procedures. The Uniform Guidelines pertain to
any and all selection procedures which are used as the basis for any employment
decision, including hiring, promotion, demotion, referral, retention, licensing and
certification, training, and transfer.
Further, the Uniform Guidelines define selection procedures to include the following: any
measure, combination of measures, or procedure used as a basis for any employment
decision. Selection procedures as defined by the Uniform Guidelines include the full
range of assessment techniques, including written exams, performance tests, training
programs, probationary periods, interviews, reviews of experience or education, work
samples, and physical requirements.
2. According to the Uniform Guidelines, what is discrimination in employment
decisions?
Employer policies or practices which have an adverse impact on employment
opportunities of any race, sex, or ethnic group are said to be discriminatory and are illegal
unless justified by business necessity. If adverse impact exists for a specific selection
procedure or an overall selection process, according to the Uniform Guidelines, the
selection procedure must be validated in terms of establishing and documenting the
relationship between the procedure and successful performance on the job.
3. How is discrimination or adverse impact defined by the Uniform Guidelines?
The Uniform Guidelines have adopted a practical means of determining adverse impact in
a selection procedure. This “rule of thumb” established by the Uniform Guidelines is
known as the “4/5ths” or “80 percent” rule. To determine whether a selection procedure
violates the “4/5ths” or “80 percent” rule, the selection rate (or passing rate, where
applicable) for the group with the highest selection rate is compared to the selection rates
of the other groups. If any of the comparison groups do not have a passing rate equal to
or greater than 80 percent of the passing rate of the highest group, then it generally is held
that evidence of adverse impact exists for the particular selection procedure.
Further, under the Uniform Guidelines, evidence of adverse impact, absent intent to
discriminate by the employer, is the same as explicit discrimination. Thus, an employer
who administers selection procedures which inadvertently result in adverse impact is still
held to the provisions and requirements of the Uniform Guidelines.
4. What must an employer do if it determines that the use of a selection procedure
results in adverse impact?
If the use of a particular selection procedure results in adverse impact, the employer can
eliminate the use of the procedure, thus eliminating the adverse impact. Or, if the
employer wishes to continue to use the procedure, it must then demonstrate the “business
necessity” of the selection procedure– that is, demonstrate a clear relationship between
the selection procedure and performance of the job. This process is known as validation.
5. What is validation and how is it demonstrated?
Validation as used in personnel psychology is the establishment of a clear relationship
between a selection procedure and the requirements of successful job performance. The
Uniform Guidelines recognize three aspects of validity: content validity, criterion
validity, and construct validity. The Uniform Guidelines outline technical standards and
documentation requirements to justify each of these three aspects of validity.
6. What is content validity?
As defined by the Uniform Guidelines, content validity involves justifying a selection
procedure “…by showing that it representatively samples significant parts of the job…”
Evidence of content validity for a selection procedure should consist of data showing that
the content of the selection procedure is representative of important aspects of
performance on the job.
Section 14C of the Uniform Guidelines outlines the technical standards for content
validity studies, and Section 15C outlines the corresponding documentation requirements.
7. What is criterion validity?
As defined by the Uniform Guidelines, criterion validity involves justifying a selection
procedure “…by a statistical relationship between scores on the test [or selection
procedure]…and measures of job performance.” Evidence of criterion validity should
consist of empirical data demonstrating that the selection procedure is predictive of or
significantly correlated with important elements of job performance. (Section 5B)
Section 14B of the Uniform Guidelines outlines the technical standards for criterion
validity studies, and Section 15B outlines the corresponding documentation requirements.
8. What is construct validity?
As defined by the Uniform Guidelines, “construct validity involves identifying the
psychological trait (the construct) which underlies successful performance on the job and
then devising a selection procedure to measure the presence and degree of the construct.”
Evidence of construct validity should consist of data showing that the selection procedure
measures the degree to which candidates possess identifiable characteristics which have
been determined to be important in successful job performance. (Section 5B)
Section 14D of the Uniform Guidelines outlines the technical standards for construct
validity studies, and Section 15D outlines the corresponding documentation
requirements.
9. Job Analysis
Any validation study should include a job analysis. The job analysis methodology needs
to provide the specific job information required for the validation strategy used.
10. Consideration of Suitable Alternative Selection Procedures
When two or more selection procedures are available for use and those procedures are
“…substantially equally valid for a given purpose…,” the procedure which has been
demonstrated to have less adverse impact should be used.
11. Method of Use of Selection Procedures (i.e., using selection procedures for
ranking vs. pass/fail decisions)
According to the Uniform Guidelines, if a selection procedure is used on a ranking basis,
“…and that method of use has a greater adverse impact than use on an appropriate
pass/fail basis,” sufficient evidence of validity and utility to support the use on a ranking
basis should be demonstrated.
12. How should cutoff scores (or pass points) be established?
When cutoff scores (or pass points) are established for selection procedures, they should
be set at a level consistent with expectations of acceptable job performance.
Further, the Uniform Guidelines allow for cutoff scores (or pass points) to be set higher
than minimal levels of proficiency in cases where candidates scoring below the higher cut
point would have little or no chance of being selected.
13. Disparate Treatment
“A selection procedure – even though validated against job performance in accordance
with [the Uniform Guidelines] – can not be imposed upon members of a race, sex, or
ethnic group where other employees, applicants, or members have not been subjected to
that standard.”
14. Equal Employment Opportunity
The use of selection procedures which have been validated pursuant to these guidelines
does not relieve employers of the obligation to ensure equal employment opportunities
for all candidates.
Technical Standards for Content Validity Studies
1. Appropriateness of Content Validity
Content validity is appropriate for selection procedures which are a representative sample
of the content of the job. Content validity may also be used to validate selection
procedures which measure knowledges, skills, and abilities (KSAs) required for
successful job performance provided that those KSAs are operationally defined and are
necessary prerequisites to successful job performance.
2. Job Analysis for Content Validity
To support a strategy of content validity, the job analysis should include:
§ an analysis of the essential tasks required for successful job performance
§ the relative importance of the essential tasks
§ the identification of the critical KSAs required for successful performance of the
essential job tasks, including the complexity and the difficulty level of the KSAs
§ a linkage of the critical tasks of the job and the KSAs required to successfully
perform those tasks
3. Standards for Demonstrating Content Validity
To demonstrate the content validity of a selection procedure, the following must be
shown:
§ the behavior demonstrated in the selection procedure is representative of the behavior
of the job, or the selection procedure provides a representative sample of the work
product of the job
§ the KSAs being measured by the selection procedure are operationally defined in
terms of observable work behaviors/work products to ensure that they are requisite
requirements for successful performance of essential job tasks
§ the selection procedure should closely approximate an observable work behavior
§ the level and complexity of the selection procedure should closely approximate actual
job requirements
4. Ranking on the Basis of Content-Valid Selection Procedures
If it can be demonstrated through a job analysis or another source that a higher score on a
content-valid selection procedure is likely to result in better job performance, then such
scores can be used to rank candidates for selection.
Documentation Requirements for Content Validity Studies
The following information should be documented to support content validation:
§ a job analysis, detailing the content of the job
§ a description of the selection procedure
§ the relationship between the selection procedure and the job
§ the uses and applications of the selection procedure
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Uniformed Services Employment and Reemployment Rights
Act of 1994
The Uniformed Services Employment and Reemployment Rights Act (USERRA) was
signed on October 13, 1994. The Act applies to persons who perform duty, voluntarily or
involuntarily, in the "uniformed services," which include the Army, Navy, Marine Corps,
Air Force, Coast Guard, and Public Health Service commissioned corps, as well as the
reserve components of each of these services. Federal training or service in the Army
National Guard and Air National Guard also gives rise to rights under USERRA. In
addition, under the Public Health Security and Bioterrorism Response Act of 2002,
certain disaster response work (and authorized training for such work) is considered
"service in the uniformed services."
Uniformed service includes active duty, active duty for training, inactive duty training
(such as drills), initial active duty training, and funeral honors duty performed by
National Guard and reserve members, as well as the period for which a person is absent
from a position of employment for the purpose of an examination to determine fitness to
perform any such duty.
USERRA covers nearly all employees, including part-time and probationary employees.
USERRA applies to virtually all U.S. employers, regardless of size.
Basic Provisions/Requirements
The pre-service employer must reemploy service members returning from a period of
service in the uniformed services if those service members meet five criteria:
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The person must have held a civilian job;
The person must have given notice to the employer that he or she was leaving
the job for service in the uniformed services, unless giving notice was
precluded by military necessity or otherwise impossible or unreasonable;
The cumulative period of service must not have exceeded five years;
The person must not have been released from service under dishonorable or
other punitive conditions; and
The person must have reported back to the civilian job in a timely manner or
have submitted a timely application for reemployment.
USERRA establishes a five-year cumulative total on military service with a single
employer, with certain exceptions allowed for situations such as call-ups during
emergencies, reserve drills, and annually scheduled active duty for training.
Employers are required to provide to persons entitled to the rights and benefits under
USERRA a notice of the rights, benefits, and obligations of such persons and such
employers under USERRA.
USERRA also allows an employee to complete an initial period of active duty that
exceeds five years (e.g., enlistees in the Navy's nuclear power program are required to
serve six years).
Employee Rights
Under USERRA, restoration rights are based on the duration of military service rather
than the type of military duty performed (e.g., active duty for training or inactive duty),
except for fitness-for-service examinations. The time limits for returning to work are as
follows:
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Less than 31 days service: By the beginning of the first regularly scheduled work
period after the end of the calendar day of duty, plus time required to return home
safely and an eight hour rest period. If this is impossible or unreasonable, then as
soon as possible;
31 to 180 days: The employee must apply for reemployment no later than 14 days
after completion of military service. If this is impossible or unreasonable through
no fault of the employee, then as soon as possible;
181 days or more: The employee must apply for reemployment no later than 90
days after completion of military service;
Service-connected injury or illness: Reporting or application deadlines are
extended for up to two years for persons who are hospitalized or convalescing.
USERRA guarantees pension plan benefits that accrued during military service,
regardless of whether the plan is a defined benefit plan or a defined contribution plan.
USERRA provides that service members activated for duty on or after December 10,
2004 may elect to extend their employer-sponsored health coverage for up to 24 months.
Service members activated prior to 12/10/04 could elect to extend coverage for up to 18
months. Employers may require these individuals to pay up to 102% of total premiums
for that elective coverage. In addition, USERRA prohibits employment discrimination
against a person on the basis of past military service, current military obligations, or an
intent to serve.
Penalties/Sanctions
A court may order an employer to compensate a prevailing claimant for lost wages or
benefits. USERRA allows for liquidated damages for "willful" violations.
Relation to State, Local, and Other Federal Laws
USERRA does not preempt state laws providing greater or additional rights, but it does
preempt state laws providing lesser rights or imposing additional eligibility criteria.
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Vietnam-Era Veterans Readjustment Act of 1974
Title 38 of the U.S. Code, Section 4212 generally covers employers with federal contracts
or subcontracts that meet the threshold amount specified in the statute. The date on which
the employer entered its federal contract is a key factor in determining whether or not the
contract is covered under Section 4212. In the case of federal contracts and subcontracts
entered into before December 1, 2003, the employer is covered under Section 4212 if the
amount of the federal contract or subcontract is $25,000 or more. In the case of federal
contracts or subcontracts entered into on or after December 1, 2003, the employer is
covered under Section 4212 if the federal contract or subcontract is in the amount of
$100,000 or more. Contracts covered by Section 4212 and its implementing regulations
may be for the purchase, sale or use of personal property, nonpersonal services, or both.
In this context, the term "nonpersonal services" includes services such as construction.
Agreements in which the parties stand in the relationship of employer and employee are
not covered.
The following types of contracts and subcontracts, entered into before December 1, 2003,
are not covered under Section 4212:
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Those for less than $25,000;
Those for indefinite quantities, unless the purchaser has reason to believe that the
cost in any one year will be $25,000 or more;
Those for work that is performed outside the U.S.; and
Those with state or local governments, except for the specific government entity
that participates in work on or under the contract.
The following types of contracts and subcontracts, entered into on or after December 1,
2003, are not covered under Section 4212:
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Those for less than $100,000;
Those for indefinite quantities, unless the purchaser has reason to believe that the
cost in any one year will be $100,000 or more;
Those for work that is performed outside the U.S.; and
Those with state or local governments, except for the specific government entity
that participates in work on or under the contract.
The Deputy Assistant Secretary may grant a waiver from the requirements of Section
4212 in the following circumstances:

For specific contracts, subcontracts, or purchase orders, if special circumstances in
the national interest require such an exemption;
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For facilities not related to performance of the contract, as determined by the
Deputy Assistant Secretary upon written request by the contractor; and
Contracts and subcontracts involving national security, if the head of the
contracting agency determines both that (1) the contract is essential to national
security, and (2) noncompliance with a particular requirement of Section 4212 or
the regulations with respect to the process of awarding the contract is essential to
national security.
Until Congress passed the Veterans Employment Opportunities Act of 1998 (VEOA),
Section 4212 applied to contractors and subcontractors with contracts of more than
$10,000. In addition, only "special disabled veterans" and "veterans of the Vietnam era"
were protected under the Section.
In the VEOA, Congress raised the minimum contract amount to $25,000 and expanded
the application of Section 4212 to include other protected veterans. In the Veterans
Benefits and Health Care Improvement Act (VBHCIA), Congress added recently
separated veterans to those groups of veterans protected under VEVRAA. In the Jobs for
Veterans Act (JVA), Congress raised the minimum contract amount to $100,000 and
changed the categories of veterans that are covered under Section 4212. In addition, the
JVA changed the manner in which federal contractors are to comply with the requirement
to list job openings with the state employment security agency.
The JVA amendments to VEVRAA apply only to federal contracts and subcontracts
entered on or after December 1, 2003. The regulations implementing Section 4212, found
at 41 CFR Part 60-250, will be updated to reflect these changes. The changes in the
contract coverage thresholds and the categories of covered veterans were made by
statutory amendments, however, and are in effect even though the regulations have not
yet been amended. As discussed below, the changes to the mandatory job-listing
requirement will take effect when the Department of Labor (DOL) issues final
regulations implementing the JVA amendments.
Definitions
Under Section 4212, a “veteran of the Vietnam era” means a veteran of the U.S. military,
ground, naval, or air service, any part of whose service was during the period August 5,
1964 through May 7, 1975, who (1) served on active duty for a period of more than 180
days and was discharged or released with other than a dishonorable discharge, or (2) was
discharged or released from active duty because of a service-connected disability.
“Vietnam era veteran” also includes any veteran of the U.S. military, ground, naval, or air
service who served in the Republic of Vietnam between February 28, 1961 and May 7,
1975.
NOTE: JVA eliminated Vietnam era veterans as a protected category under VEVRAA.
However, most Vietnam era veterans will continue to be protected under other categories.
A “special disabled veteran” means a veteran who served on active duty in the U.S.
military ground, naval, or air service and (1) who was discharged or released from active
duty because of a service-connected disability, or (2) who is entitled to compensation (or
who but for the receipt of military retired pay would be entitled to compensation) for
certain disabilities under laws administered by the Department of Veterans Affairs (i.e.,
disabilities rated at 30 percent or more, or at 10 or 20 percent if the veteran has been
determined to have a serious employment handicap).
A “disabled veteran” means a veteran who served on active duty in the U.S. military
ground, naval, or air service: (1) is entitled to disability compensation (or who but for the
receipt of military retired pay would be entitled to disability compensation) under laws
administered by the Secretary of Veterans Affairs, or (2) was discharged or released from
active duty because of a service-connected disability.
A “recently separated veteran,” with respect to federal contracts and subcontracts entered
into before December 1, 2003, means any veteran who served on active duty in the U.S.
military ground, naval, or air service during the one-year period beginning on the date of
such veteran’s discharge or release from active duty. With respect to federal contracts and
subcontracts entered into on or after December 1, 2003, “recently separated veterans”
means any veteran who served on active duty during the three-year period beginning on
the date of such veteran’s discharge or release from active duty.
An “other protected veteran” means any other veteran who served on active duty in the
U.S. military ground, naval, or air service during a war or in a campaign or expedition for
which a campaign badge has been authorized, other than a special disabled veteran,
veteran of the Vietnam era, or recently separated veteran.
An “Armed Forces service medal veteran” means a veteran who, while serving on active
duty in the U.S. military ground, naval, or air service, participated in a United States
military operation for which an Armed Forces service medal was awarded pursuant to
Executive Order 12985 (61 Fed. Reg. 1209).
Basic Provisions/Requirements
For contracts entered into before December 1, 2003:
Section 4212 requires covered contractors and subcontractors to take affirmative steps to
employ qualified Vietnam era veterans, special disabled veterans, recently separated
veterans (1 year), and other protected veterans. This obligation covers the full range
of employment and personnel practices, such as recruitment, hiring, rates of pay,
upgrading, and selection for training. As part of this obligation, contractors with a federal
contract or subcontract of $25,000 or more that was entered into before December 1,
2003, must list most job openings with the local office of the State Employment Service,
a one-stop career center, other appropriate service delivery points, or their local
employment service office. The State Employment Service must give veterans' priority
when making referrals for job openings.
In addition to raising the contract coverage threshold, the JVA amended Section 4212 by
changing the categories of veterans covered under the law, and the manner in which the
mandatory job-listing requirement is to be implemented.
For contracts entered into on or after December 1, 2003:
Section 4212 requires covered contractors and subcontractors to take affirmative steps to
employ qualified disabled veterans, recently separated veterans (3 years), Armed
Forces Service Medal veterans, and other protected veterans. Under the JVA,
contractors with a federal contract or subcontract of $100,000 or more that was entered
into on or after December 1, 2003, are required to list their job openings with an
appropriate employment service delivery system. In addition to listing their employment
openings with an appropriate employment service delivery system, the JVA provides that
contractors may list their employment openings with a one-stop career center or other
appropriate service delivery points. New regulations are needed to implement the changes
in the mandatory job-listing requirement, and are currently under development.
Contractors who have contracts that were entered into both before, and on or after
December 1, 2003, are covered by both sets of requirements.
For all covered contractors:
The regulations implementing Section 4212 include the obligation to refrain from
discrimination in employment against protected veterans. The regulations also require all
covered contractors and subcontractors to include a specific equal opportunity clause in
each of their nonexempt contracts and subcontracts. The regulations provide the required
language for this clause at 41 CFR 60-250.5; to view the regulations visit 41 CFR 60250.5.
Covered contractors and subcontractors are also required to make reasonable
accommodations for the known physical or mental limitations of qualified individuals
with disabilities, unless providing an accommodation would create an undue hardship. In
addition, covered contractors and subcontractors are required to take all necessary actions
to ensure that no one attempts to intimidate or discriminate against any individual for
filing a complaint or participating in a proceeding under Section 4212.
For contracts entered into before December 1, 2003, under Section 4212, each employer
that has both (1) a federal contract or subcontract of $50,000 or more and (2) 50 or more
employees must prepare, implement, and maintain a written affirmative action program
(AAP) covering each of its establishments. The employer must review and update the
program annually, and it must be available for inspection by any employee or applicant
for employment, as well as by the Office of Federal Contract Compliance Programs
(OFCCP) within the Department of Labor’s Employment Standards Administration. The
program may be integrated with, or kept separate from, any other affirmative action
program the employer is required to prepare.
As a result of the JVA amendments, for contracts entered on or after December 1, 2003,
the threshold for AAP coverage is a contract of $100,000 or more.
Therefore, under Section 4212, each employer that has both (1) a federal contract or
subcontract of $100,000 or more and (2) 50 or more employees must prepare, implement,
and maintain a written AAP covering each of its establishments.
Employee Rights
Employees and applicants for employment with a covered contractor or subcontractor
have the right to file a complaint with OFCCP if they believe that the contractor or
subcontractor has discriminated against them on the basis of veteran's status. Such
complaints may be filed online at OFCCP’s How to File a Compliant Web page.
Anyone may call OFCCP with a question about interpreting the regulations, filing a
complaint, or any other related matter. The main telephone numbers for OFCCP's
national offices are 202-693-0101 and 202-693-1337 (TTY). Additional telephone
numbers may be found at on OFCCP’s Office Contact Web page.
Penalties
OFCCP investigates for violations of the Act either through compliance evaluations or in
response to complaints. If a violation is found, OFCCP may ask the federal contractor or
subcontractor to enter into conciliation negotiations. If conciliation efforts fail, OFCCP
may initiate an administrative enforcement proceeding by filing an administrative
complaint against the contractor or subcontractor.
If OFCCP files an administrative complaint, the contractor or subcontractor has 20 days
to request a review by an Administrative Law Judge (ALJ), who hears the case and
recommends a decision. DOL's Administrative Review Board issues final decisions. If
the contractor or subcontractor is dissatisfied with the ALJ's decision, it may appeal the
decision to the Board.
If the Board finds that the contractor or subcontractor has violated Section 4212, it may
order the contractor or subcontractor to provide appropriate relief, which may include
restoration of back pay and employment status and benefits for the victim(s) of
discrimination. Depending upon the circumstances, violations also may result in
cancellation, suspension, or termination of contracts, withholding of progress payments,
and debarment.
Relation to State, Local, and Other Federal Laws
Section 4212 and its implementing regulations apply only to the specific state or local
government entities that participate in work on or under a federal contract or subcontract.
The coverage is narrower than that which applies to employers in the private sector.
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Walsh-Healy Act of 1936
The Walsh-Healey Public Contracts Act (PCA) applies to contractors with contracts in
excess of $10,000 for the manufacturing or furnishing of materials, supplies, articles, or
equipment to the U.S. government or the District of Columbia. The Act covers employees
who produce, assemble, handle, or ship goods under these contracts.
The Act does not apply to executive, administrative, and professional employees, or to
outside salespersons exempt from the minimum wage and overtime provisions of the Fair
Labor Standards Act. Nor does it apply to certain office and custodial workers.
Certain contracts are not covered by this Act. They include:
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Purchases of materials, supplies, articles, or equipment as may usually be bought
in the "open market";
Purchases of perishables;
Purchases of agricultural products from the original producers;
Contracts made by the Secretary of Agriculture for the purchase of agricultural
commodities or products;
Contracts for public utility services and certain transportation and communication
services; and
Supplies manufactured or furnished outside the U.S. (including Puerto Rico) or the
Virgin Islands; and
Contracts administratively exempted by the Secretary of Labor in special
circumstances because of the public interest or to avoid serious impairment of
government business.
Basic Provisions/Requirements
Covered contractors must pay employees on the contracts the federal minimum wage of
$5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25
per hour effective July 24, 2009. The employers may pay special lower rates to
apprentices, students in vocational education programs, and disabled workers if they
obtain special certificates from the Department of Labor. Employees must also be paid
one and one-half times their regular rate of pay for all hours worked over 40 in a
workweek.
The Act prohibits the employment of youths less than 16 years of age and convicts,
except under certain conditions. Not included in convict labor are persons paroled,
pardoned, or discharged from prison, or prisoners participating in a work-release
program.
Employee Rights
The PCA provides employees on covered federal contracts the right to be paid at least the
minimum wage for all hours worked and time and one half their regular rate of pay for
overtime hours. The Wage and Hour Division of the Department of Labor’s Employment
Standards Administration accepts complaints of alleged PCA violations.
Penalties/Sanctions
Contractors and subcontractors who violate the Act may be subject to a variety of
penalties. The underpayment of wages and overtime pay may result in the withholding of
contract payments in amounts sufficient to reimburse the underpayment. The penalty for
employing underage minors or convicts is $10 per day per person, for which contract
payments may also be withheld. The Department may also bring legal action to collect
wage underpayment and fines for illegally employing minors and convicts. Willful
violations may subject the employer to cancellation of the current contract and debarment
from future federal contracts for a three-year period.
After an investigator has served a formal complaint to the contractor, a hearing is held
before an Administrative Law Judge. If the respondent has violated the Act, he or she can
appeal the decision by filing a petition for review with the Administrative Review Board.
Final determinations on violations and debarment may be appealed to and are enforceable
through the federal courts.
Relation to State, Local, and Other Federal Laws
State and local laws regulating wages and hours of work may also apply to employment
subject to this Act. When this happens, the employer must observe the law setting the
stricter standard. Compliance with the regulation's safety and health standards will not
relieve anyone of any obligation to comply with stricter standards from another source.
The Walsh-Healey Public Contracts Act and the Fair Labor Standards Act may apply
simultaneously to the same employer.
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Worker Adjustment and Retraining Notification Act of 1988
The Worker Adjustment and Retraining Notification Act (WARN) generally covers
employers with 100 or more employees, not counting those who have worked less than
six months in the last 12 months and those who work an average of less than 20 hours a
week. Regular federal, state, and local government entities that provide public services
are not covered. Employees entitled to notice under WARN include managers and
supervisors as well as hourly and salaried workers.
Basic Provisions/Requirements
WARN protects workers, their families, and communities by requiring employers to
provide notification 60 calendar days in advance of plant closings and mass layoffs.
Advance notice gives workers and their families some transition time to adjust to the
prospective loss of employment, to seek and obtain other jobs and, if necessary, to enter
skill training or retraining that will allow these workers to compete successfully in the job
market. WARN also provides for notice to state dislocated worker units so that they can
promptly offer dislocated worker assistance.
A covered plant closing occurs when a facility or operating unit is shut down for more
than six months, or when 50 or more employees lose their jobs during any 30-day period
at a single site of employment. A covered mass layoff occurs when a layoff of six months
or longer affects either 500 or more workers or at least 33 percent of the employer's
workforce when the layoff affects between 50 and 499 workers. The number of affected
workers is the total number laid off during a 30-day (or in some cases 90-day) period.
WARN does not apply to closure of temporary facilities, or the completion of an activity
when the workers were hired only for the duration of that activity. WARN also provides
for less than 60 days notice when the layoffs resulted from closure of a faltering
company, unforeseeable business circumstances, or a natural disaster.
Employee Rights
Workers or their representatives, and units of local government may bring individual or
class action suits. U.S. district courts enforce WARN requirements. The Court may allow
reasonable attorney's fees as part of any final judgment.
Penalties/Sanctions
An employer who violates the WARN provisions is liable to each employee for an
amount equal to back pay and benefits for the period of the violation, up to 60 days. This
may be reduced by the period of any notice that was given, and any voluntary payments
that the employer made to the employee.
An employer who fails to provide the required notice to the unit of local government is
subject to a civil penalty not to exceed $500 for each day of violation. The employer may
avoid this penalty by satisfying the liability to each employee within three weeks after the
closing or layoff.
Relation to State, Local, and Other Federal Laws
WARN does not preempt any other federal, state, or local law, or any employer/employee
agreement that requires other notification or benefit. Rather, the rights provided by
WARN supplement those provided by other federal, state, or local laws.
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