Realties about the Regulation of Employment
generally you do not have a right to your job
once hired, employer may choose to fire you as long as termination isn't in violation of a contract as an employer, you may fire someone for any reason that's not illegal make sure termination is not a basis of discrimination
legal protections granted to employees seek to make the power relationshi p btwn employer + employee one that's fair and equitable Is Regulation Necessary?
Title 7 of Civil Rights Act of 1964 → prohibits discrimination based on race, gender, sex, national origin rationalindiv. interested in profit maximization wont hesitate to hire the most qualified applicant, regardless of race employers faced w/ 2 equally qualified applicants for position → prejudice Who is subject to regulation? Who is an Employer & Who is not? you are not an employee simply because you are paid to work
Choosing how to perform your job is not a clear indicator of IC (ind. cont.) status Just because you hire a worker doesn't mean you're liable for anything the employee does in the course of his/her employment If you're an employee(r) under one statute, you are not always considered an employee(r) under all employment-related statutes. IC is not always > than employee
a mistake in the categorization of a bus’s workers can be catastrophic to that business from a financial and other perspectives common elements of employment landscape = temp help, leased workers, ICs, vendors, outsourcing, staffing firms Origins in Agency Law
employment relationship based on tradition law master and servant in agency, actor = AGENT (employee), person for whom the agent acts and from whom that agent derives authority to act = PRINCIPAL (employer) if agent goes beyond her authority or places the property of the principal at risk w/o authority, the principal is now responsible to the 3rd party for all loss/damage Why it's important to determine whether a worker is an Employee? Independent contractor = a person who contracts w/ a principal to perform a task according to his own methods, and who isnt under the principal’s control regarding the physical details of the work Employee Retirement Income Security Act (ERISA) → defines employee as any individual employed by an employer (DOESNT MAKE SENSE) the distinction is significant for tax law compliance and categorization for benefit plans, cost reduction plans, discrimination claims. (Title 7 covers employees, not ICs) **EMPLOYER PAYROLL DEDUCTIONS**
employer who maintains employees has responsibility to pay Social Security-Fed Insurance Contri. Act (FICA), the FICA excise tax, Railroad Retirement Tax Act (RRTA) w/holding amts, federal unemployment compensation (FUTA_, IRS federal income tax w/holdings, Medicare, and State taxes employers responsibility to w/hold a certain % of employee’s wages for fed income tax IC pays all these taxes ibgusiwb = benefit for employer b/c avoids tax expenses and bookkeeping costs **BENEFITS**
used to attract and retain superior personnel (dental, medical, pension, profit-sharing plans) Fair Labor Standards Act of 1938 (FLSA) enacted to establish standards for minimum wages, OT pay, employer record keeping, and child labor; regulates amt of $ an employee must be paid/hr& OT compensation employers intentionally misclassify employees to avoid costs/liabilities → jail/$10k fine **DISCRIMINATION AND AFFIRMATIVE ACTION**
Discrimination laws dont apply to ICs, but Courts and Equal Employment Opportunity Commision (EEOC) examines variety of factors to determine true relationship btwn the worker and the organization National Labor Relations Act (NLRA) protects employees, not ICs, from unfair labor practices **COST REDUCTIONS**
hiring ICs avoids OT pay
employer avoids work-related expenses like tools, training, traveling employer = guaranteed satisfactory performance b/c its ICs contractual obligation to adequately perform contract w/ employer if breach of...
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