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Human resource management: a review of major HR legislation.

Pick up a newspaper or magazine and you will likely find a discussion of some work place issue, perhaps sexual harassment, affirmative action, employee privacy or work place safety. More often than not, the discussion includes the opinion that the issue is, should or soon will be regulated by Federal legislation. During the New Deal of the 1930s, Congress passed a number of laws designed to protect workers and address the conditions of the Great Depression. Since that time these laws have been amended and new ones enacted which define to a large extent the boundaries within which most of us work. Many employees may be unfamiliar with a specific law yet are often acutely aware of the rights it provides.

The purpose of this article is to examine the major Federal legislation which affects human resource management. The discussion which follows is not legal advice, nor does it represent an exhaustive list of applicable Federal laws. Rather it is a basic discussion gathered from the text of the legislation itself or material generally available from the agencies which enforce or implement the legislation. Readers requiring an in depth understanding of any of these laws should consult the appropriate agency or private legal counsel.

In many instances, states or municipalities have enacted laws with broader or more extensive coverage than the Federal contractors are covered by a variety of laws and executive order which extend beyond the legislation examined. Nonetheless, the discussion may prove useful in outlining the basic requirements of employers and pointing the direction for further information.


The Fair Labors Standards Act of 1938, or FLSA, was not the first attempt by Congress to set wage and hour standards in the private sector, but it was the broadest to be upheld by the Supreme Court. Amended numerous times since its original passage, the FLSA today represents a complex web of rules and regulations regarding employee wages and hours. With the many amendments, the Act effectively covers nearly all employers, although not all employees are covered by the FLSA.

The terms non-exempt and exempt are common in many work places to refer to employees who occupy positions which are or are not covered by the FLSA. Determining those employees exempt from the FLSA's provisions can be complex. Exemption is provided for executive, administrative and professional employees, with executives generally those in management positions. Administrative and professional exemption is determined by a number of factors including the nature of the work performed, it's relationship to the management of the enterprise, supervision required and discretion exercised and the salary level.

For those employees covered by the FLSA, or non-exempt employees, the Act provides for the payment of minimum wages, $4.25 as of April 1, 1991, and pay for overtime hours. Overtime hours are those in excess of 40 per week and must be paid at the rate of one-and-one-half times the regular rate of pay. The FLSA, as enforced, also proscribes legal forms of compensation, sets forth complex rules on how pay rates can be determined, restricts child labor and covers special situations such as payment for travel time and on-call status.

The Wage and Hour Division of the Department of Labor is charged with administering and enforcing the FLSA. Employees can file complaints which will be investigated; remedies vary according to the severity of the violations. The most serious violations can prompt criminal charges with convictions resulting in imprisonment.

Labor/Management Relations

With the passage of the National Labor Relations Act, NLRA, in 1935, it became U.S. public policy to encourage collective bargaining and the Act guaranteed employees "...the right to self organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection."

In addition to delineating the rights of employees, the NLRA also identified a set of unfair labor practices on the part of employers. These unfair labor practices include interference with the right of self organization, dominance of any labor organization, discrimination in the hiring or terms or conditions of employment to encourage or discourage the exercise of rights, discrimination or discharge because an employee has filed a complaint under the Act, and refusal to bargain collectively with a duly designated labor organization. The NLRA also established the National Labor Relations Board, NLRB, to administer and enforce the Act. The NLRB oversees union elections and investigates unfair labor practice complaints.

In 1948, the Taft Hartley Act substantially amended the NLRA. These amendments, considered to be a re-balancing of labor-management power, provided the employee the right to refrain from activities protected in the employees and unions the right of free speech within the context of labor management relations. Further amendments to the NLRA, contained in the Landrum-Griffin Act of 1959, were intended to regulate the internal conduct of unions and strengthen other provisions of the Act.

The NLRA does not cover all employers and, like the Fair Labor Standards Act, some employees, most notably managers and supervisors, are exempt. However, many of the rights and obligations outlined in the NLRA have been incorporated into other Federal and State legislation and the basic framework set forth by the Act is that in which most labor-management relations occurs.

Employee Benefits and Insurance

Most individuals are familiar with the Social Security Act of 1935 which established a Federal old-age insurance system. Initially intended to prevent employees from facing poverty when they were older and no longer able to work, the Act has been modified many times to cover more individuals, lower the age of eligibility and provide benefits to the physically disabled and family members dependent upon Social Security recipients. What many people do not realize is that the Social Security Act also set up the basic framework for the unemployment compensation system in place today.

The original Act imposed a tax on employers which was offset if a tax was paid to the state to fund an unemployment compensation program which met basic Federal standards. In the absence of a state unemployment compensation fund, the tax went into the Federal coffers with no benefits accruing to the employers, employees or citizens of the state in which the tax was generated. All states quickly responded by passing legislation establishing unemployment compensation programs. State programs vary widely in eligibility requirements, benefit formulas and funding methods. A somewhat integrated system, the Federal government remains active in this arena by passing legislation which extends and funds benefits beyond the state programs.

The Employee Retirement Income Security Act, commonly known as ERISA, passed in 1974 and is one of the most complicated pieces of human resource legislation. The primary intent of ERISA was to protect pension plan assets by setting forth fiduciary standards, establishing vesting rights and requiring reporting and disclosure of pension and employee welfare benefit plans. Nearly every employer with a benefit program is covered by ERISA and its reach has extended far beyond pension plans and traditional benefits. Vacation programs, severance pay practices, scholarship funds and employer-sponsored day care have been determined to be under the scope of ERISA. Administered and enforced by three separate agencies -- the Department of Labor, the Department of Commerce and the Internal Revenue Service and the Pension Benefit Guaranty Corporation -- employers are well advised to seek appropriate counsel to ensure the complex and often confusing requirements of ERISA are satisfied.

Workplace Safety

The Occupational Safety and Health Act has weathered substantial controversy since it was passed in 1970. Intended to set basic workplace safety and health standards, together with a system to inspect workplaces and investigate complaints, OSHA has been criticized from all sides. Employer coverage under OSHA is broader than most other legislation discussed, extending to all employers engaged in interstate commerce or effectively all employers. The Occupational Safety and Health Administration was set up to enforce the Act and set safety standards, and the National Institute for Occupational Safety and Health was created to conduct research to enhance workplace safety.

Under OSHA, employers must maintain a workplace that is free from hazards. They are also required to collect and report data regarding work-related injuries and illnesses. Similarly, employees must comply with job safety standards and are protected from retaliation from filing a complaint under the Act. Complaints filed by employees will be fully investigated and OSHA has a broad set or remedies to utilize depending upon the seriousness of the violation. Citations issued by OSHA state the nature of the violation, what is required to correct the violation and the timetable under which the corrections must be made. OSHA citations must be posted in the workplace for a specific time, or until the violation is corrected, whichever is longer. In the most severe cases, OSHA may pursue criminal prosecution of employers who fail to comply with the Act.

Equal Opportunity

Title VII of the Civil Rights Act of 1964 was the first law which broadly prohibited discrimination in private employment. Title VII, as amended in 1972 and 1978, outlaws discrimination with regard to pay, terms, conditions or privileges of employment on the basis of race, color, religion, sex or national origin, and makes it illegal to refuse to hire or terminate the employment of a pregnant woman or force her to take a maternity leave. Title VII covers not only employers with 20 or more employees, it also covers unions, employment agencies and state and local governments.

The Equal Employment Opportunity Commission enforces Title VII and investigates complaints. Upon receiving a complaint, the EEOC follows a detailed investigate process and mediates settlement where appropriate. If the EEOC does not investigate a complaint within 180 days, the complainant may request a right to sue letter which allows the individual the ability to file suit in Federal court. Given the substantial backlog of cases at the EEOC, investigations are often not completed within 180 days.

The EEOC will also investigate complaints of sexual harassment under Title VII, and has issued guidelines on this subject. Generally, two broad categories of sexual harassment exist: quid pro quo and hostile work environment. Quid pro quo most often involves an individual in a position of power who uses said position to promise positive treatment if sexual advances are accepted, or to retaliate if they are refused. In this circumstance, an employer can be held liable for the actions of her supervisors even without knowledge that the action occurred. The hostile environment frequently involves a co-worker or peer whose behavior creates and environment which is unsuitable for others. Supervisors may be equally responsible for creating a hostile environment if they knew or should have known of the behavior and failed to take action. In both cases, if the behavior is unwanted and of a sexual nature, it constitutes sexual harassment.

Employers who wish to limit their liability are advised to have a policy prohibiting sexual harassment and train their employees and supervisors. In addition, any complaints should be promptly investigated and action taken to stop the harassment and prevent it from occurring in the future.

After lengthy debate and political machinations, Congress passed and President Bush signed the Civil Rights Act of 1991, which further amends Title VII. In addition to allowing compensatory and punitive damages in cases of intentional discrimination because of sex, disability and religion (damages already allowed in cases of race discrimination under the Civil Rights Act of 1866), the Act reverses the effects of several recent Supreme Court decisions. For instance, it restored the requirement for employers to prove that practices which have a disparate impact on a member of a protected class are both related and a business necessity.

The Age Discrimination in Employment Act, originally passed in TABULAR DATA OMITTED 1967 and amended several times, protects employees age 40 or older from discrimination based on age. The EEOC is responsible for enforcing the ADEA and investigating complaints as discussed preciously. An important amendment in 1990, the Older Workers Benefit Protection Act, prohibits discrimination in employee benefits based on age and sets limits on waivers in which employees give up their rights to bring legal claims of age discrimination.

Perhaps the most sweeping legislation since the Civil Rights Act of 1964, the American with Disabilities Act or ADA passed in 1990 includes broad prohibitions against discrimination of individuals with physical and mental disabilities. Title I of the ADA deals with employment and went into effect on July 26, 1992. The requirements of the ADA will not be fully understood until its provisions are tested in the courts. As enacted, however, ADA prohibits covered employers from discriminating against qualified individuals with disabilities, requires employers to make reasonable accommodations so that the individual can perform the essential functions of job unless the accommodation poses an undue hardship. Title I of ADA also refers to Title VII of the Civil Rights Act of 1964, as amended, with the clear intent that individuals with disabilities be offered the same rights and remedies as minorities and women. ADA also prohibits employers from creating or maintaining a workplace with significant barriers to persons with a physical disability.


The legislation discussed by no means constitutes an exhaustive list of human resource legislation, but rather a brief overview of the most significant laws. In Table 1, each of the laws discussed is indicated together with the agency responsible for administering or enforcing it. Individuals requiring further information can contact the local office of the respective government agency or consult legal counsel.

Jay Allen is a consultant in human resources based in Boulder, Colorado. He previously worked in the human resources area for IBM for more than 15 years.
COPYRIGHT 1992 National Society of Public Accountants
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:human resource
Author:Allen, Jay
Publication:The National Public Accountant
Date:Sep 1, 1992
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