Matthies Law Firm, P.C.  

Serving as Employment Law Advisors for over 25 years

Summary of Employment Laws of the US Federal Government

This summary of employment laws of the United States (US) federal government is presented courtesy of Matthies Law Firm, P.C. - a law firm which has been representing American and multinational employers of all sizes in employment-related claims in federal & state courts and before administrative agencies for over 25 years, as well as assisting such companies in preparation of policies/handbooks and conducting management training programs for supervisors and HR staff members. To learn more about Matthies Law Firm, please see the About Us section. Please refer to the Legal Notice for important information regarding our copyright on this information, together with other important information regarding these summaries.

To find the full text of cited laws or regulations, the federal government has the following free websites where the laws/regulations can be found:

For an overview of federal laws organized by type of employment action (such as hiring, benefits, leaves, terminations, etc.), please check the Training section.

Index of Laws

To go directly to a specific law, click on the highlighted text.  Otherwise, continue scrolling.

• Fair Labor Standards Act (FLSA)
• Title VII
• Age Discrimination (ADEA)
• Equal Pay Act (EPA)
• 1866 Civil Rights Act
• Family & Medical Leave Act (FMLA)
• Americans with Disabilities Act (ADA)
• ADA - Public Accommodations
• Executive Orders 11246 & 11478
• Drug-Free Workplace Act
• National Labor Relations Act (NLRA)
• Byrnes Act
• Worker Adjustment & Retraining Act (WARN)
• Rights of Servicement (USERRA)
• Occupational Safety & Health Act (OSHA)
• Immigration Reform & Control Act (IRCA)
• Health Maintenance Organization Act (HMO)
• Employee Retirement Income Security Act (ERISA)
• Consolidated Omnibus Budget Reconciliation Act (COBRA)
• Health Insurance Portability (HIPAA)
• New Hire Reporting
• Electronic Communications Privacy Act (ECPA)
• Consumer Credit Protection Act (CCPA)
• Fair Credit Reporting Act (FCRA)
• Federal Bankruptcy Code
• Jury Systems Improvement Act
• Employee Polygraph Protection Act
• Export Administration Act of 1977
  

Fair Labor Standards Act (FLSA):  (29 USC 201)

• This law is also known as "Wage/Hour" law, as it is enforced by the Wage & Hour Division of the U.S. Department of Labor (DOL). The FLSA has four main components: minimum wage requirements, overtime requirements, child labor regulations, and equal pay provisions.

• The minimum wage rules apply to any employee of any company who produces goods for interstate commerce or engages in duties affecting interstate commerce during any workweek.  In general, the law applies to most employees for work done for most employers, although there are certain exceptions for certain industries and locations.

• Overtime rules require pay at 1.5 times the hourly rate of the employee for all hours worked over 40 in any workweek, unless the employee performs work which is considered "exempt" from overtime. Generally, to be exempt, the work must be of a "professional" character (e.g., work performed by a "knowledge worker," such as a lawyer, doctor, accountant, teacher, or other person in a profession which is predominantly intellectual in nature); or the person must be performing work primarily as a manager or supervisor (working foremen often are not exempt); or the person must be performing work of a high-level executive or administrative nature (e.g., work as a negotiator or agent, with substantial discretion and authority); or the person must be an outside sales representative.

• Because a number of industries have managed to lobby for exceptions to minimum wage and/or overtime requirements, it may be useful to call your local Wage/Hour office to determine if any exceptions apply to your industry or to obtain the full text of the DOL regulations to check for such coverages.

• Generally, the child labor provisions restrict the employment of youths below the age of 18 to no more than 20 hours per week when school is in session, and further limit their ability to work around dangerous equipment and machinery. Some special provisions exist for children working for parents/relatives on family farms. Often, work certificates may be required to employ youths during the school year, so it is advisable to contact Wage/Hour early to obtain guidance, as fines can be imposed and bad publicity can result from failure to comply with the law.

• Employees who are not paid in compliance with the law may complain to DOL or can file their own actions in federal court.  They can recover the sums which they should have been paid (going back 2 years from the date of suit, or 3 years if the violation is found to have been willful), and also can recover an equal amount in liquidated damages unless the company can establish substantial justification for failure to comply with the law. They also may recover attorney fees.

• Of course, as is common in federal employment laws, any employee who makes a complaint to DOL or assists in such a complaint or attempts to enforce his/her rights is generally protected from retaliation (and may seek damages for emotional distress, as well as punitive damages, if retaliation is shown). In addition, the FLSA provides for criminal penalties (including fine and imprisonment), which are most often used for repeat offenders.

• The DOL has extensive regulations concerning the FLSA, and also has several publications which may be useful to employers which are available from the DOL website http://www.dol.gov. In addition, the DOL requires that a workplace poster be displayed which explains FLSA rights to employees. The provisions of the Equal Pay Act are discussed below, so this part of the FLSA will not be discussed here.

Title VII (Discrimination): (42 USC 2000e)

• Covers all companies with 15 or more employees (Note: in some cases, parttime or temporary workers, as well as leased employees or employees of affiliates, may be included to achieve coverage).

• Title VII prohibits discrimination due to race, color, religion, sex (gender), and national origin in hiring, employment (all terms, conditions and benefits), and termination. Prohibits discrimination due to pregnancy and requires that pregnancy be treated the same as any other non-work-related disability. Also bars retaliation against the person who made a complaint or assisted the complaining party.

• One of the key provisions is prohibition of sexual or racial/religious/ethnic harassment by supervisors, coworkers or even by third parties. Companies usually are strictly liable for discrimination by supervisors which results in tangible loss of job benefits.  Otherwise, companies normally are liable only when the company failed to make reasonable efforts to stop the harassment (at least where the company had alerted employees to their right to complain and provided a reasonable avenue to receive complaints).

• Another key provision is prohibition of unintentional discrimination by use of requirements which have an adverse effect (disparate impact) on protected groups, such as use of educational requirements, tests or lifting restrictions which exclude disproportionate numbers of certain protected groups, unless the employer can prove that the requirements are job-related and that the use of these standards is required by business necessity.

• Enforced by the U.S. Equal Employment Opportunity Commission (EEOC) and by state agencies in states which have comparable civil rights laws.

• Charges usually have to be filed within 180-300 days after act of discrimination, and EEOC has 180 days thereafter to process charge, after which employee can file suit. Employee also can sue within 90 days after receipt of notice of termination of proceedings by EEOC.

• Damages recoverable include backpay, reinstatement (or front-pay, if degree of hostility prevents reinstatement), damages for emotional distress and punitive damages for intentional bias (the combined totals for punitives and compensatories are capped, and range from $50,000 for companies with under 101 employees to $300,000 for employers with more than 500 employees).

• EEOC has issued extensive regulations which interpret this statute http://www.eeoc.gov, and also requires that display of a poster explaining rights under the act (a copy is available from the EEOC site).

Age Discrimination (ADEA): (29 USC 621)

• Applies to all companies with 20 or more employees.

• Prohibits discrimination in hiring, employment or termination against applicants and employees age 40 and over (no upper limit), with certain very limited exceptions.

• Also prohibits retaliation against person making complaint or those assisting complainant.

• Bars release of claims by older worker in exchange for severance pay or other benefits unless provisions of Older Workers Benefit Protection Act (OWBPA) are followed.

• Charges must be filed with EEOC with 180-300 days, and suit can be brought once EEOC has 60 days to process charge. Employee has the option of filing suit once waiting period has expired or waiting until EEOC issues notice of termination of proceedings (suit must be filed 90 days after such notice).

• Damages include backpay, reinstatement or front pay (similar to Title VII), attorney fees, and possible liquidated damages equal to the actual damages (only for willful violations).

Equal Pay Act (EPA): (29 USC 206(d))

• Applies to all employers who are covered by the Fair Labor Standards Act (which covers most businesses).

• Prohibits discrimination due to sex in the payment of wages, by barring payment of a lower wage to one sex than to the opposite sex for jobs of equal skill, effort and responsibility which are performed under similar working conditions.

• Limited exceptions for pay differentials where employer can show that difference is due to a seniority system, merit system, a system which bases earnings on quantity or quality of production, or some other bonafide factor other than sex. Burden of proof is on employer, not on employee, once it is shown that jobs are equivalent and pay is different.

• A company CANNOT justify lower pay to a woman employee who is doing identical work to a male employee, simply because she did not bargain as well. Likewise, it is NOT considered lawful to set starting payrate based on prior salary alone (as so many women receive lower pay in the job market that this is considered a subterfuge for sex discrimination).

• Some "factors other than sex" which have been accepted by the courts include: differences in education, training, and experience; "red-circle" rates designed to cushion demoted worker from a pay cut; enrollment in a bonafide training program (which must be time-limited and fairly structured - simply labelling the male as a "management trainee" will not work); and possession by the higher-paid worker of specialized skills which are job-related and actually will be used on the job.

• Damages are the same as for the ADEA. The employee can elect to file charges under both the EPA and Title VII, or proceed directly to court on the EPA claim. Suits under the EPA must be brought within 2-3 years (depending on whether the violation was willful).

1866 Civil Rights Act: (42 USC 1981)

• Provides that all persons shall have the same right as white citizens to make and enforce contracts, and to have equal treatment under the laws of each state.

• U.S. Supreme Court has held that this law applies to employment discrimination against minority group members, as well as members of various ethnic groups, but it does not apply to women.

• Damages include actual damages, compensatory damages (such as emotional distress) and punitive damages, as well as attorney fees.

Family & Medical Leave Act (FMLA): (29 USC 2601)

• Applies to companies with 50 or more employees, at all facilities which have 50 or more employees in 75-mile radius of location where employee worked.

• Allows up to 12 weeks of unpaid leave when employee or covered family member has serious health condition which requires medical care or treatment and physician certifies that leave of employee is necessary.

• Requires extension of health insurance coverage during leave on same basis as prior to leave, and requires reinstatement to same or equivalent job in most cases.

• Provides for intermittent leave under certain circumstances.

• Prohibits retaliation against employees who take FMLA leave.

• Extensive summary of statute on this website (see links below).

• Administered by U.S. Department of Labor, which has issued extensive regulations interpreting FMLA. DOL also requires display of a workplace poster to advise employees of their rights under this act (to obtain a copy, see the DOL website).

• Damages awardable include backpay, reinstatement, and possible liquidated damages equal to the actual damages, as well as an award of attorney fees.

Americans with Disabilities Act (ADA): (42 USC 12101)

• Applies to companies with 15 or more employees.

• Prohibits employment discrimination against individuals with a serious disability (or who have a past history of a serious condition, such as cancer) if they can perform the essential functions of the job with no special accommodations, or if they can perform such functions with special accommodations which are "reasonable" based upon the size of the company; the nature of the job; and the costs of the accommodations.

• Employers do not have to make accommodations which would place an undue hardship on the business, or which would not allow the employee to become able to perform the essential job functions.

• Also prohibits discrimination against individual because of relationship with a person who has a disability (such as refusal to hire individual who has a disabled child, or refusal to provide equal benefits to such an individual).

• Requires case-by-case analysis as to whether individual is able to do the essential job functions and regarding what accommodations may be necessary. Usually also requires accommodations to applicants to allow them to complete the application process (even if applicant may be found unable to do the job).

• Bars pre-offer inquiries about medical history or existence of disabilities, but does allow physical exam after offer to determine ability to do the job.  Requires that employee medical information be kept confidential.

• Damages are identical to those provided by Title VII.

ADA - Public Accommodation Provisions: (42 USC 12181)

• The ADA also contains many provisions which require architectural modifications of buildings (including restrooms, elevators, walkways, etc.) in various circumstances. These modifications also may impact disabled employees, and companies need to be alert to the possible requirement to modify facilities (especially when remodelling work is being done).  The architectural guidelines can be found as an Appendix to 28 CFR 36).

• In addition, the public accommodation provisions of the ADA require that companies make adjustments to allow disabled patrons of the business to obtain the same services as non-disabled patrons. This may include the requirement to provide special seating; interpreters; special parking or delivery services; TTD-equipped telephones; or other assistive devices. It is highly important to train managers and employees on the duty to accommodate, in order to avoid litigation (as well as negative publicity). The regulations with respect to public accommodation requirements are found at 28 CFR 36.

Executive Orders 11246 & 11478:

• These executive orders require that federal contractors and subcontractors adopt affirmative action programs to correct under-utilization of minorities and women.  As a result of these executive orders, the DOL formed the Office of Federal Contract Compliance Programs (OFCCP) and issued extensive regulations with respect to the format and coverage of these affirmative action programs.  These regulations are found at 41 CFR 60-1, et seq.

• Later, Congress adopted the Vietnam Era Veterans' Readjustment Assistance Act, and the Rehabilitation Act, which provide for affirmative action by federal contractors and subcontractors in the employment of veterans and persons with disabilities.  The OFCCP also was placed in charge of these AAPs, and issued extensive regulations on the format of these additional programs, which are found at 41 CFR 60-250 and 41 CFR 60-741.

Drug-Free Workplace Act: (P.L. 100-690)

• Requires federal contractors to take certain actions to insure that they maintain a drug-free workplace, including advising employees that possession, use or distribution of drugs in the workplace is prohibited; initiating a drug-free awareness program about the dangers of illicit drugs and the availability of EAP programs for employees, as well as penalties which can be assessed for violations of the policy; and advising employees of their obligation to promptly report a conviction for workplace drug violations, so that the company can report the same to the contracting agency.

• Penalties to companies for failure to comply with these requirements includes possible termination of the federal contract and debarment from future contracts (although this is only likely if persistent problems occur, and the contractor appears to be doing little or nothing to penalize such behavior).  Federal Acquisition Regs (FAR) contain detailed requirements and forms (55 F.R. 30465).

• A companion law, the Omnibus Transportation Employee Testing Act (P.L. 102-143), requires drug and alcohol testing of transportation industry employees who have safety-sensitive functions, and forbids employment of an offender in a covered job until the person has successfully completed a rehab program.   A similar law was passed which is applicable to employees of contractors working in the space program (P.L. 102-195). A number of federal agencies have issued regs which interpret the obligations of contractors and licensees under one or both of these acts.

National Labor Relations Act (NLRA): (29 USC 151)

• Prohibits employers in any industry affecting interstate commerce (i.e., virtually all businesses) from discriminating against employees who choose to engage in (or to decline to engage in) any union-related activities.  Protected activities include: joining a union or asking others to join; banding together collectively for "mutual aid and protection" (whether or not a union is involved); seeking to deal on a group basis with the employer about working conditions; and engaging in other concerted activities for the purpose of negotiating more favorable employment terms.

• The act broadly covers collective action by employees, whether or not any formal union represents the workers.  There also may be coverage for an individual employee who tries to stand up for collective rights of all employees (depending on the circumstances).

• This Act prohibits employers from interrogating employees about union -related actions, making threats to dissuade them from engaging in such actions, making promises to induce them to abandon these activities, and spying upon employees to find out about their union-related activities.

• The law provides procedure for a union which seeks to represent employees of a company to seek a government-supervised election to certify the union as the bargaining agent for a group of employees, as well as procedure which employees may follow if they wish to decertify a union or get rid of "union shop" rules.

• This law also has rules which govern collective bargaining with the union, as well as rules which bar certain misconduct by unions towards disfavored employees and employers.

• In addition, there are rules against kickbacks, graft or corruption by unions and companies in the negotiation of union contracts, and provisions which allow employees to sue unions under certain circumstances where the union failed to represent them fairly (as well as to sue companies which breach the provisions of the union contract).  There also are provisions to enforce arbitration provisions in union contracts, and to prevent mid-contract strikes over arbitrable subjects.

• The Act is administered by the National Labor Relations Board (NLRB).  Generally, charges must be filed within 6 months, and the NLRB then has full control of the case (employees usually have no right to bring a private action, and the NLRB prosecutes the case with its own lawyers if it finds a violation).  After hearing, the NLRB can order reinstatement, backpay, and other relief designed to "make the employee whole".  In a few situations, such as suits to enjoin illegal strikes, direct access to the courts is permitted without resort to the NLRB.

Byrnes Act: (18 USC 1231)

• Prohibits transportation of strikebreakers across state lines for the purpose of obstructing or interfering by force or threats with peaceful picketing or other union activities of employees. Violation is a felony, punishable by fine or up to two years in prison.

Worker Adjustment & Retraining Act (WARN): (29 USC 2101)

• Applies to companies which have 100 or more fulltime-equivalent employees (i.e., any combination of 100 workers or more who work a minimum of 4,000 hours per work week, excluding overtime).

• Generally requires 60 days advance notice to be given to employees of plant closures which will result in job loss for 50 or more employees.

• Also usually requires 60 days advance notice in cases of mass layoffs which are expected to last for 6 months or longer.  Mass layoffs include any layoff resulting in loss of 500 jobs, as well as any layoff affecting 1/3 of the workforce (as long as at least 50 employees are laid off).  Where multiple layoffs are occurring, any layoffs within 90 days of the latest layoff are counted to determine if WARN notice is required.

• The WARN notice period can be reduced or eliminated entirely if not possible to give full notice (such as an emergency shutdown caused by strikes at another company, natural disasters, unexpected loss of a major account, etc.). Notice period also can be shortened if company was negotiating with bank or other lending agencies for additional capital to keep the business running, and reasonably believed that provision of early notice would ruin the deal. In these cases, company must give as much notice "as is practicable".

• Notice must be given to each affected employee (or to the union, if they are represented), as well as to state and local officials designated to handle such notices.

• Once notice of the impending job loss is received, the state and local governments are expected to provide assistance to affected workers.

• Failure to provide required notice results in liability for up to 60 days of backpay, plus reimbursement for medical or other expenses which would have been covered during the time period.  Newly-hired workers (less than 120 days) can receive backpay and lost benefit coverage only up to 1/2 of the days actually worked.  Company also may be subject to a fine, as well as payment of attorney fees to the plaintiff(s).

Uniformed Services Employment & Reemployment Rights: (38 USC 4310)

• Unlawful to refuse to hire, or to discriminate during employment, because an individual has military service obligations (covers all aspects of employment, including denial of raises, promotions or other benefits of employment).

• Also unlawful to deny reinstatement to an individual who leaves employment to perform military service if total length of absences due to service is not more than 5 years (unless time is extended under DOL regs due to war, emergencies, etc.); and individual was not released from duty by bad conduct or dishonorable discharge (or under other than honorable terms); and individual was employed in a position which was not temporary or short-term in nature; and individual reapplies within 90 days after discharge (14 days if period of military service was less than 181 days).  Leaves for short-term training duty also are covered, and reinstatement from those leaves typically is immediate.

• Reinstatement generally required to comparable job, although exceptions arise where job has been eliminated, or where veteran no longer can do the job, but can be reassigned elsewhere.

• During time in military service, the employee is treated as if on an unpaid leave of absence. Thus, the employee may continue health benefits and other benefits by payment of the same sums required from employees on other leaves of absence of similar duration (e.g., general COBRA rules apply to long-term absences, but the employee only must pay the regular employee-side contribution if the absence is less than 30 days).  Full insurance coverage must be given immediately upon reinstatement (no waiting period can be applied - however, treatment for service-connected health problems may be excluded in some cases).

• The employee may use accrued paid leave during the absence if desired, but cannot be required to use such leave by the employer.

• Upon reinstatement, the veteran is entitled to be treated for benefit purposes as if seniority was unbroken (i.e., years spent in service are treated as years of service with the employer).

• Rights can be enforced by Labor Department, or by private suit.

• Remedies include reinstatement, backpay, attorney fees and liquidated damages (equal to backpay sums) for willful violations.  Some states also have military leave laws which may provide greater damages or greater rights to employees performing military service.

Occupational Safety & Health Act (OSHA): (29 USC 651)

• Applies to any employer engaged in a business which affects interstate commerce, and imposes general duty to maintain safe place to work and to comply with OSHA regs issued by the Labor Department.

• Failure to comply with OSHA regs and standards can lead to serious fines.  Where compliance with requirements is not possible, there are provisions to seek a variance (but a detailed plan and timetable for compliance generally are required).  Notice must be given to employees of any application for a variance.

• OSHA also requires that certain records be maintained with respect to work-related injuries and exposures, and that certain reports be filed (especially in case of workplace deaths).  In addition, a poster explaining OSHA must be posted.  Copies of the poster can be obtained from the DOL website.

• OSHA has right to enter into facility to check compliance with safety standards, and to review records.  Generally, the employer and a union representative may accompany the OSHA inspector during the inspection.  Where violations are found, a citation may be issued which requires correction of the hazard by a set date and which imposes a fine for the violation (usually with additional fines if the correction is not made).  A copy of the citation must be posted in the workplace, near the location of the hazard cited.  The citation is presumed correct unless the company files a prompt notice of contest. Employees and/or their unions also can file a contest and seek shorter times for abatement or other similar remedies.  Administrative review and enforcement procedures apply, similar to those under the NLRA.

• In addition, OSHA protects employees who report safety hazards, participate in OSHA proceedings, or who attempt to exercise their rights under the Act (such as refusing to operate defective equipment or machinery in situations where a high risk of severe injury or death are present).  Employees who believe that they have been discriminated against for these protected activities must complain to the DOL within 30 days (commercial motor carrier employees have 180 days), and DOL handles the matter from there. [In some states, a whistleblower claim also may be available].

Immigration Reform & Control Act (IRCA): (8 USC 1324a-b)

• Makes it unlawful for any person or entity to employ any individual with knowledge that the individual is not authorized to work in the US, as well as to continue to employ an individual if the employer subsequently discovers that the individual is an illegal alien.

• If employer has required the alien to fill out the necessary paperwork (I-9), and has obtained the required documentation, then the employer usually is entitled to a presumption that no intentional violation existed. Copies of the forms must be retained for three years (and it is advisable to also retain a copy of the documentation reviewed, in order to prove that the documents were produced and reviewed).

• Necessary I-9 forms and instructions are available from DOJ, and often are carried by office supply stores.

• Penalties for employing an illegal alien without first filling out the proper I-9 paperwork include fines of up to $2,000 per alien for the first offense, and up to $10,000 per alien for further offenses.  Simple paperwork problems (such as employing a known individual who is not an alien without filling out the paperwork) involve fines of up to $1000 for each instance of failure to obtain the proper paperwork (although, for first offenses by small businesses, fines may be substantially reduced). Criminal penalties also may be imposed in flagrant violations, including up to 6 months in prison.  In addition, cease-and-desist orders may be entered, which could place a company in contempt of court if further violations occur.

Health Maintenance Organization Act (HMO): (42 USC 300e-9)

• Requires employers with 25 or more employees who are already providing health insurance benefits (contributory or non-contributory) to offer an alternative HMO option to employees, if a qualified HMO is available in the area where at least 25 of the employees live.

• Also requires employer to allow employees to make their contributions for their share of the cost through payroll deduction.

• Provides for assessment of a civil penalty of up to $10,000 for each 30-day period in which this option is not provided (but certain exceptions extend the deadline, such as where existing contract is in effect which sets annual enrollment dates, in which case the HMO option must be provided during the next open enrollment period).

Employee Retirement Income Security Act (ERISA): (29 USC 1001)

• ERISA is a complex and lengthy statute, which creates certain rules with respect to retirement plans and other benefit plans (mainly insurance plans) offered by companies to their employees.  There are a number of areas covered by ERISA.

• First, ERISA places certain duties and responsibilities on plan sponsors and plan administrators to act in prudent manners to safeguard the assets for plan participants, and to treat plan members fairly. Various types of self-dealing are prohibited, and various requirements are imposed for filing reports with the government with respect to the plan. In addition, retirement plans may be assessed premiums which are used to insure against defaults by certain plans.

• Secondly, ERISA places duties on plan sponsors and administrators to advise employees of their rights under the plans (including the obligation to periodically provide the employees with summary plan descriptions (SPDs) of the basic provisions of the plan); to timely provide information requested by employees with respect to their rights under the plan; and to establish procedures to allow employees to obtain review of disputes concerning the operation of the plan or payment of benefits under the plan.

• Thirdly, ERISA establishes certain minimum requirements for retirement plans, including minimum funding requirements.

• Other requirements include provisions regarding which employees must be allowed to participate in the plan, as well as when they must become eligible; setting limits on the time before rights will vest under the plan; and establishing rules concerning benefits to persons who terminated employment before retirement, as well as rules concerning payment of benefits to those eligible to receive retirement benefits.  Certain amendments to ERISA also establish extensive requirements for health insurance plans, including provisions requiring non-discrimination against those with mental illnesses, setting minimum hospitalization times for childbirth, and setting an assortment of requirements with respect to initial eligibility, premiums and continuation of coverage after termination (see discussions of Cobra and HIPAA, below).

• Finally, ERISA prohibits retaliation against an employee who asserts rights under a plan covered by ERISA.  It also prohibits termination of an employee in order to prevent the employee from obtaining benefits (e.g., firing someone just before pension benefits vest, in order to deprive him of benefits).

Consolidated Omnibus Budget Reconciliation (COBRA): (29 USC 1161)

• Applies to companies with 20 or more employees at work for more than 50% of the work days in the prior year (whether fulltime, parttime or otherwise).  Allows employees (and/or dependents) who otherwise would lose coverage under company medical insurance plans to continue their existing insurance coverage by payment of the company's cost for such insurance (plus a 2% administrative fee).  For non-contributory plans, the employee picks up the entire share of the premium for coverage. For contributory plans, the employee picks up the company's share, plus his own regular contribution.

• For example, if the company's monthly total premium to the insurance carrier for the employee's coverage is $300/month, the employee would have to pay $300/month to continue the coverage, plus a 2% administrative fee of $6/month.  Premiums are due by the first day of coverage for the month (e.g., January 1), except that initial premiums after electing coverage are not due until 45 days after election of coverage (but the initial payments must pick up all premiums outstanding, retroactive to the date of the qualifying event).  Coverage cannot be cancelled if payment is received by no later than 30 days after due (e.g., by January 31st if due on January 1).

• Eligible employees and dependents can extend their health insurance coverage for up to 18 months in most cases (36 months coverage allowed for spouses and minor children in the event of death, disability or divorce).  Events which may trigger the right to COBRA coverage include termination, layoff (or substantial reduction of hours), divorce or legal separation, qualification by the employee for Medicare (usually due to disability determination), or death.

• If the employee or family members have pre-existing conditions, it is very important to obtain COBRA coverage if laid off or terminated, as this helps to preserve the right to obtain immediate benefits at a future employer (see HIPAA, below).

• Insurance can be cancelled if the employee fails to pay the premiums by the end of the grace period, or when the employee gets insurance coverage from another employer without pre-existing condition exclusions, or if the company stops offering any health insurance plan to any of its employees, or if the employee uses up all COBRA benefits available.

• Several states have adopted some form of mini-Cobra law which permit almost any employee in a small group plan sponsored by his employer to extend coverage after termination or layoff (regardless of the size of the employer), so companies which are not covered by COBRA should check state law and/or to check with the insurance carrier which handles the plan to determine whether such extended benefits must be offered.

New Hire Reporting: (42 USC 602(a)(2))

• Requires states to institute a system of mandatory reporting of new hires, in order to establish a national database to track parents who are not paying child support.

• In general, new hires must be reported within 20 days of hire.

• Where company operates in several states, the company may elect to report all workers in a single state or can file reports on a state-by-state basis.  If electing to file in one state, the company must so advise the other states.

• Most states have detailed information on the internet on filing these reports, and many permit electronic filing.

Health Insurance Portability (HIPAA): (42 USC 300gg)

• Generally effective for plan years commencing on or after June 1, 1997.

• Applies to any company (or insurance carrier) which provides group health insurance to 2 or more current employees (including self-insured plans), and also has some provisions which apply to individual policies.

• Forbids group plans from adopting eligibility rules based upon health-related factors (i.e., cannot refuse to allow entry into the plan, or drop someone from the plan, based upon poor health), and also prohibits charge of higher premiums due to health factors.

• Prevents companies from applying any pre-existing condition exclusion to an employee who was covered under a prior company's plan within 63 days of the time of hire.

• Allows exclusion of pre-existing conditions of employees without prior health plan coverage for up to a period of 12 months (except that pregnancy cannot be excluded, nor can coverage of newborns or adopted children enrolled in plan within 30 days of coming into the family).  Where an employee initially declines coverage, the pre-existing condition exclusion can be extended to 18 months.

• Where a medical condition was excluded under an existing plan as a pre-existing condition, this exclusion is barred after 12 months of coverage under the plan.

• Defines pre-existing condition as a condition for which medical treatment was received (or about which the employee consulted a doctor) within 6 months of the time when seeking entry into the new health plan.

• Plans may establish a waiting or affiliation period before coverage will begin (affiliation periods usually are limited to 60 days).

Electronic Communications Privacy Act (ECPA): (18 USC 2510)

• Makes it unlawful for any employer to use any type of electronic or mechanical device to intercept the conversations of employees, except where the employee has no reasonable expectation of privacy or one party to the conversation has consented to the interception of the communication (or where a court order requiring the employer to permit wiretapping has been obtained by appropriate law enforcement personnel as a part of a criminal investigation).  Prohibited types of mechanical or electronic interceptions include: interception of telephone calls, interception of personal discussions through the audio feed of a video camera, use of a hidden tape recorder or microphone, use of a parabolic listening device, or even use of a water-glass against a partition.

• Companies are entitled to monitor phone calls by using an extension line in order to check for quality, or even to see if the employee is making personal calls on working time. However, as soon as the company determines that the call is private in nature, it is generally unlawful to continue to listen (although an exception may exist where clear notice has been given that all calls will be monitored and employees have been given access to pay phones or other private lines to make personal calls and employees are aware that actual routine monitoring is being done).

• The prevailing view is that companies should not listen to voicemail messages which are plainly personal, as there may be an expectation that such messages are private (at least, in the absence of plain notice to the contrary).

• Failure to follow this Act can result in possible criminal charges for illegal wiretapping.  In addition, injured persons can file a civil lawsuit for the invasion of their privacy, and also can sue to prevent use of any information obtained unlawfully (e.g., if an employee was terminated as a result of an illegal wiretap, the employee could bar any use of the illegal information and even might be able to overturn the discharge itself, at least if the court decides that the company would not have caught them and fired them otherwise).

• States are free to impose broader restrictions, and several states prohibit interception of any conversation unless both parties have agreed to the interception.  Some states even have statutes to protect privacy of email message.

Consumer Credit Protection Act (CCPA): (15 USC 1671)

• Places limits of the amount of wages which may be garnished by a creditor to no more than 25% of disposable income (ie., net amount after tax withholding).  However, in addition to the general 25% limit on garnishments, there is further protection for lower-paid or parttime workers, as they have the right to receive all wages up to 30 x the current minimum wage (and only the sums above this amount can be garnished, up to the limit of 25%).

• Exceptions exist which allow garnishments beyond the 25% limit to pay a tax lien. Exceptions also exist to allow higher garnishments to provide payment of child/spousal support (which vary, depending on the current marital status and current other dependents of the employee). Generally, a single employee with no other dependents may be required to pay up to 60% of disposable income for support obligations, while someone who is supporting additional dependents usually will be required to pay up to 50% of disposable income.  Garnishment law can be complex in the support area, especially if other garnishments also are being served, and consultation with the court and/or company legal counsel is advisable.

• In addition, the Act prohibits the termination of any employee because of garnishments which arise out of a single debt (eg., an employee cannot be terminated because of multiple garnishments to pay off an overdue account at Sears).  However, employees may be terminated for garnishments arising out of 2 or more different debts which occur in a 12 month time period (e.g., separate garnishments from Sears and Visa).

• Penalties include a fine of up to $1000 and/or imprisonment of up to one year. Employees terminated in violation of the law also may sue for damages, reinstatement and other relief.

Fair Credit Reporting Act (FCRA): (15 USC 1681)

• Forbids obtaining or using a "consumer credit report" in connection with decisions about employment (including initial employment) without: obtaining the separate written consent of the employee before the report is ordered; giving written notice to the employee of rights under FCRA; and then, if adverse action is taken based on the report, giving notice to the employee, allowing the employee to obtain a free copy of the report, and giving the employee the right to dispute its accuracy.  Separate procedures apply to certain DOT-covered jobs where the only prior contact has been electronically or by mail.

• Also forbids obtaining an "investigative consumer report" about an employee, without sending a notice to the employee within 3 days to advise that such a report has been requested, which informs the employee of  the name of the consumer reporting agency which is providing the report; advises the employee of applicable FCRA rights; advises the employee of the nature/scope of any investigation, upon request; and allows the employee to see the entire contents of the file kept by the consumer reporting agency (except that sources may be excluded).

• The FTC broadly interprets a "consumer reporting agency" to include a private investigator or even an attorney hired to conduct an investigation of an existing employee or prospective applicant (at least where the PI or attorney regularly performs such services for the client and arguably falls within the definition of a "consumer reporting agency").  A copy of the FTC interpretative ruling can be seen at: http://www.ftc.gov/os/statutes/fcra/vail.htm. Thus, there is some question as to whether current employees under investigation for sexual harassment or other misconduct might be entitled to receive a copy of any results of any investigation by third parties such as company attorneys (although the FTC opinion seems likely to be overturned in future litigation, at least with respect to any requirement to turn over privileged attorney-client work product or privileged communications to the client).  In the interim, counsel should be consulted about whether to follow the FTC interpretation, as well as whether to limit outside investigations to those conducted by counsel.

• Penalties for failure to comply with FCRA include actual damages arising from the failure (with a minimum penalty of $100 to $1000), plus punitive damages and attorney fees. Arguably, because FCRA makes it unlawful to obtain a report if proper notice has not been given, an employee might be able to claim wrongful termination based upon the "illegal report" (even though guilty as sin).  Courts likely will be loathe to read the statute in this fashion (as no court will be anxious to reward an employee who was faking an injury, or stealing parts/equipment, simply due to a paperwork error), and seem more likely to be inclined to award only the minimum penalty.  Nonetheless, to avoid such litigation, the best course may be to provide the notice - or to do the investigation in-house with the guidance of counsel (as internal investigations clearly are not covered by FCRA).

Federal Bankruptcy Code: (11 USC 525)

• Makes it unlawful to terminate an employee, or discriminate in employment against an individual, because that person has filed for bankruptcy or because an associated individual (i.e., spouse, parent, child) has filed for bankruptcy.

• Also unlawful to discriminate against such persons because of insolvency or failure to pay a debt which would be dischargeable in bankruptcy.

Jury Systems Improvement Act: (28 USC 1875)

• Unlawful to discharge or threaten/coerce any permanent employee because of participation or expected participation as a juror in the federal system.

• Employee is entitled to be treated as if on leave of absence during jury service, and is entitled to full reinstatement upon conclusion of jury duty.  Insurance and other benefits must be the same as offered to other employees on leaves.

• Hourly employees may be docked for time spent on jury service.  It is unclear whether this is true for exempt employees, in light of the DOL regs (29 CFR 541.118) which appear to require payment of full salary (at least for partial weeks of jury service). However, given the clear statutory wording that employees who are absent due to jury service are to be treated as being on leave, it seems likely that the courts will permit docking of exempt employees (at least for jury service of one week or longer).

• Remedies include backpay and lost benefits, reinstatement, a possible fine of up to $1,000.00 per violation, as well as attorney fees and costs.  No compensatory or punitive damages are available.

Employee Polygraph Protection Act: (29 USC 2001)

• Except in certain limited circumstances, forbids any request or suggestion to an employee to take a lie detector test; to use the results of any lie detector test; to discipline or terminate an employee based upon refusal to take a test and/or the results of such a test; or to otherwise retaliate against an employee who exercises any rights under this law.

• Exceptions include use of polygraphs for employees working for defense contractors or in national security-related activities with private companies; security guards and other security-related personnel; and employees in protective service jobs.

• In addition, polygraphs may be given to employees who are the subject of an ongoing investigation of a theft or other business loss by the employer (but only if the employee had access to the stolen material and reasonably is suspected of involvement in the loss, and the employee is provided with a written statement which identifies such information).

• Tests also may be given in connection with investigations of drug security problems for employees involved in the manufacture, transportation or distribution of controlled drugs. However, the results of the test and/or the fact that an employee refuses to take the test cannot form the sole basis for termination or discipline (i.e., there must be some independent evidence pointing to the employee).

• If tests are otherwise permissible, the employee must be advised of the right to terminate the test at any time; the test must be administered in a non-degrading fashion; certain questions (such as inquiries about sex life or religious/political beliefs) are off-limits entirely; and the employee may avoid the test entirely if a physician certifies that the test would be harmful or the results would be inaccurate due to some medical or mental condition.  In addition, before the test, the employee must be given advance written notice of the right to consult counsel or his union about the test; must be told what tests and instruments will be used; whether the test will be recorded or observed; is allowed to review all questions to be asked; and is told that no test may be required as a condition of employment.  Bottom-line: Few companies use these tests any more, because the paperwork burden is enormous and very few employees agree to take the tests once they are advised that they have a legal right to refuse to participate.

• Damages for failure to comply with the law include backpay, reinstatement (or front pay), compensatory and punitive damages, as well as attorney fees.  A civil fine of up to $10,000 also may be imposed.

• Requires posting of notices of this law in the workplace (for copies of this poster, see the DOL website).

Export Administration Act of 1977: (50 USC 2407)

• Makes it unlawful to engage in job discrimination in order to further any boycott of a foreign nation against any other nation which is friendly with the US.  Adopted during Arab boycott of Israel, in order to protect Jewish-owned businesses and business which employed Jewish individuals from being subjected to retaliation or discrimination.

• However, the law is broadly worded to protect women, minorities and members of various ethnic or racial groups from being denied employment as a part of any boycott. The law also prohibits disclosure of the information regarding the race, religion, sex or national origin of owners, directors or employees of the business.

• Penalties include criminal and civil sanctions, as well as the possibility of denial of any future export license.

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