A
Synopsis of Selected
Compensation Related
Statutes
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Caution:
The attached
summaries DO NOT constitute legal advice. One must
contact a lawyer to obtain legal advice. The sole
purpose of the attached summaries is to provide a
general guideline as to the intent of the law,
decision or executive order in
question.
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Equal
Pay for Equal Work
Federal
Pay Statutes
Davis-Bacon Act of
1931:
Basic Premise: Workers
working on Federal contracts are entitled to receipt of
wages equivalent to the prevailing wages paid for equivalent
work. Usually the local union negotiated rate of pay is
considered to be the "prevailing wage."
Impact on HR decisions:
Employers who bid on, and
receive, Federal contracts must be prepared to pay the
prevailing union journeyman rate.
Social Security Act of
1935 as Amended:
Basic Premise: Unemployed
and retired workers are entitled to government
reimbursement. Employers MUST calculate, collect and pay the
Federal payroll tax to the Federal government for all
employees. Anyone whose work is controlled by an employer is
an employee.
Impact on HR decisions:
Employers must calculate,
collect and pay FICA and unemployment payments for all
employees. Contract employees MUST meet very strict
guidelines. It is probably safest to hire contract workers
from a temporary employment agency.
Walsh-Healy Act of
1936:
Basic Premise: Forty
hours (40) is the standard work week for non-exempt
employees.
Impact on HR decisions:
Employers must be prepared
to pay overtime to non-exempt employees who work more than
40 hours per week.
Fair Labor Standard
Act of 1938 as
Amended:
Basic Premise: Employers
must pay all non-exempt employees at least the Federally set
minimum wage, non-exempt workers must be paid at 150% the
regular hourly rate when required to work more than 40 hours
per week and children can not be overworked.
Impact on HR decisions:
Employers MUST keep accurate
records, must not employ children illegally and must be
prepared to pay the required rates. Executives,
administrative employees, professional employees and outside
salespersons are "exempt" and DO NOT have to be paid
overtime.
Equal Pay Act of
1963:
Basic Premise: Men and
women must be paid the same amount when they perform equal
work.
Impact on HR decisions:
Employers must NOT discriminate
in pay according to an employee's sex.
Employment Retirement
Income Security Act of
1974:
Basic Premise: Retirees are
entitled to the retirement money they and their employer
have been saving for that eventuality.
Impact on HR decisions:
Employers who offer a
retirement plan MUST comply with the standards written into
this law. Employers are NOT required to offer a retirement
plan.
Consolidated Omnibus
Budget Reconciliation Act of 1985
(COBRA):
Basic Premise:
Employees who quit because
of a "qualifying event" must be allowed to purchase health
insurance at their former employer's group rate for a given
number of months after separation.
Impact on HR decisions:
Employers with more than 20
employees must be prepared to make this part of their
severance package. Termination, reduction of hours, death of
an employee, divorce or legal separation from an employee,
eligibility of the covered employee for medicare benefits,
or a child ceasing to be a dependent are considered to be
"Qualifying Events."
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