Eleanor Finch
The constitution has a significant impact on HR salary and benefits, with the Supreme Court interpreting the substantive due process and elaborating a restrictive conception of federal commerce power. The Fifth and Fourteenth Amendments protect the freedom of contract, allowing employers to discharge employees at any time and vice versa. This freedom of contract has been a key consideration in court cases such as Lochner v. New York (1905) and Muller v. Oregon (1908). The NLRA prohibits employers from discharging employees for union activities, and court cases such as Railway Employees Department v. Hanson (1956) and Machinists v. Street (1961) have upheld this. The constitution also impacts specific sectors, such as the Department of Energy, which provides compensation and benefits to employees suffering from cancer caused by radiation exposure. Additionally, the Black Lung Benefits Act provides payments and benefits to coal miners with pneumoconiosis.
| Characteristics | Values |
|---|---|
| Constitution impact on salary | The constitution does not directly impact salary, but it does protect the freedom of contract and employment at-will, allowing employers to set wages and employees to negotiate or quit. |
| Constitution impact on benefits | The constitution does not directly impact benefits, but labor laws and union agreements can influence benefits like healthcare, retirement, and compensation for injury or illness. |
| Salary characteristics | Base salary, commissions, bonuses, and indirect compensation like stock options or perks. |
| Benefits characteristics | Health insurance, stock options, gym memberships, flexible work hours, extra vacation days, learning opportunities, retirement plans, and more. |
| HR strategies | Salary range penetration, compa ratio, and range spread are used to compare pay across the organization and market rates. |
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What You'll Learn
Compliance with federal and state laws
Federal laws, such as the Davis-Bacon Act, the McNamara-O'Hara Service Contract Act, and the Walsh-Healey Public Contracts Act, set standards for wages, benefits, and labour conditions for employees of federal contractors and subcontractors. These laws ensure that workers receive prevailing wages and benefits, protecting them from potential exploitation. The Federal Employees' Compensation Act (FECA) establishes a comprehensive workers' compensation program, providing benefits for wage loss, disability, and death resulting from work-related injuries.
Additionally, the Department of Labor enforces laws like the Black Lung Benefits Act, which provides monthly cash payments and medical benefits to coal miners suffering from pneumoconiosis ("black lung disease"). The Employee Retirement Income Security Act (ERISA) is another critical piece of legislation that regulates employers offering pension or welfare benefit plans. ERISA imposes fiduciary, disclosure, and reporting requirements on those managing these benefit plans.
State laws also play a role in labour regulations, as seen in the Railway Labor Act upheld by the Supreme Court in cases like Railway Employees Department v. Hanson (1956) and Machinists v. Street (1961). This act addresses the relationship between unions and their members, protecting union funds and promoting democracy within unions. While the NLRA prohibits employers from discharging employees for union activities, it also recognises the employer's right to unilaterally shut down part of its business for economic reasons, as seen in First National Maintenance v. NLRB (1981).
In summary, compliance with federal and state laws is crucial for HR professionals to ensure fair and legal compensation and benefit practices. These laws provide a framework for wage standards, worker protection, and employee benefits, shaping the employment landscape and influencing HR strategies.
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Discrimination and equal employment opportunities
Discrimination in the workplace is prohibited by the US Constitution, which guarantees equality of opportunity for all citizens. This principle is further upheld by federal laws and acts, such as Title VII of the Civil Rights Act of 1964, which specifically prohibits employment discrimination based on race, colour, religion, sex, or national origin. The Equal Pay Act of 1963 (EPA) also plays a role in preventing sex-based wage discrimination, while the Age Discrimination in Employment Act of 1967 (ADEA) protects individuals over 40 years of age.
Additionally, the Americans with Disabilities Act (ADA) prohibits employment discrimination against qualified individuals with disabilities in the private sector, as well as in state and local governments. Sections 501 and 505 of the Rehabilitation Act of 1973 further protect individuals with disabilities who work in the federal government.
The US Constitution also mandates that government agencies and officials ensure non-discrimination in employment. This includes compliance with Executive Order 11478, which relates to equal employment opportunities within the Federal Government.
Any individual who believes that their employment rights have been violated may file a charge of discrimination with the Equal Employment Opportunity Commission (EEOC). Federal employees or applicants for federal employment may refer to the Federal Sector Equal Employment Opportunity Complaint Processing fact sheet for guidance on filing a complaint.
It is important to note that the concept of disparate-impact liability has been criticised for hindering businesses from making hiring decisions based on merit and skill. This concept holds that any differences in outcomes among different groups may indicate unlawful discrimination, even in the absence of discriminatory policies or intent. Critics argue that this undermines national values and runs contrary to equal protection under the law, as guaranteed by the Constitution.
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Wage and hour laws
State laws also play a crucial role in regulating wages and hours, and in some cases, they may set minimum wages higher than the federal minimum. For instance, the applicable minimum wage can vary depending on factors such as the nature of the job and the job holder, with specific provisions for workers with disabilities, full-time students, youth under 20, tipped employees, and student learners. Additionally, state laws can mandate maximum hours for specific industries, as seen in cases like Bunting v. Oregon, where the statute limited work in mills, factories, or manufacturing establishments to 10 hours per day, with the possibility of three hours of overtime at time-and-a-half pay.
The Department of Labor (DOL) also has a significant role in enforcing wage and hour laws through its Wage and Hour Division (WHD). This division administers and enforces laws like the Davis-Bacon Act, which ensures prevailing wages and benefits for employees of contractors on federal government construction projects. Similarly, the McNamara-O'Hara Service Contract Act sets wage rates and labour standards for service contractors working for the federal government, and the Walsh-Healey Public Contracts Act mandates minimum wages and labour standards for contractors supplying materials and services to the federal government.
Beyond federal and state regulations, there are also specific protections in place for certain groups, such as veterans, who have special employment rights with the federal government, including hiring preferences and protection during workforce reductions. Additionally, the Family and Medical Leave Act (FMLA), administered by the Wage and Hour Division, guarantees up to 12 weeks of unpaid, job-protected leave for eligible employees experiencing significant life events like childbirth, adoption, or serious personal or familial illnesses.
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Workplace benefits
The types of benefits offered can vary widely and are often tailored to meet the diverse needs of employees. Some common examples include health insurance, stock options, gym memberships, flexible working hours, additional vacation days ("summer Fridays"), learning and development opportunities, and retirement savings plans. These benefits are designed to incentivize employees, increase their engagement and loyalty, and accommodate their unique circumstances and life stages. For instance, an older employee might prioritize a comprehensive pension plan or parental leave, whereas a recent graduate might value flexible working hours and professional development opportunities more highly.
In the United States, the Department of Labor plays a crucial role in regulating and overseeing workplace benefits. Several major laws fall under its jurisdiction, including the Energy Employees Occupational Illness Compensation Program Act, which provides compensation and medical benefits to employees of the Department of Energy and related contractors who suffer from cancer or specific illnesses caused by exposure to radiation, beryllium, or silica during their work. Another key legislation is the Federal Employees' Compensation Act (FECA), which establishes a comprehensive workers' compensation program for federal employees, covering disabilities or deaths resulting from injuries sustained while performing their duties.
Additionally, the Black Lung Benefits Act provides monthly cash payments and medical benefits to coal miners disabled by pneumoconiosis ("black lung disease") acquired during their employment. This Act also extends benefits to the survivors of a deceased miner if their death was a consequence of black lung disease. Furthermore, the Employee Retirement Income Security Act (ERISA) is a pivotal piece of legislation that regulates employers offering pension or welfare benefit plans. Title I of ERISA, administered by the Employee Benefits Security Administration (EBSA), enforces various fiduciary, disclosure, and reporting requirements on those involved with pension and welfare benefit plans.
Beyond these acts, there are other laws that safeguard employee benefits. The Davis-Bacon Act, for instance, ensures that employees of contractors engaged in federal government construction projects receive prevailing wages and benefits. Similarly, the McNamara-O'Hara Service Contract Act sets wage rates and labor standards for contractors providing services to the federal government, and the Walsh-Healey Public Contracts Act mandates minimum wages and labor standards for contractors supplying materials and supplies to the federal government. These laws are administered by the Wage and Hour Division and the Office of Federal Contract Compliance Programs, which also enforce civil rights laws to ensure equal employment opportunities.
While the constitution itself may not directly dictate salary or benefit amounts, it does provide a framework that influences labor laws and the freedom of contract between employers and employees. This framework has evolved over time, with the Supreme Court interpreting substantive due process and elaborating on the federal commerce power in the nineteenth century. As a result, the courts have invalidated legislation that they deemed to interfere unreasonably with the contractual freedom of both parties, as seen in the Lochner v. New York case in 1905. Nevertheless, the courts have also recognized the importance of collective bargaining and the right of workers to unionize, as demonstrated in the Textile Workers Union v. Darlington Manufacturing Co. case in 1965.
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Employee lawsuits
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Employee Benefits and Compensation
Employee benefits and compensation are frequently litigated areas. The Employee Retirement Income Security Act (ERISA) is central to this, regulating pension and welfare benefit plans. For instance, in Firestone Tire & Rubber Co. v. Bruch (1989), the Supreme Court clarified that paying discharged employees for unused vacation time does not constitute an employee welfare benefit plan under ERISA.
Federal Employees and Sovereign Immunity
Federal employees face unique considerations when it comes to lawsuits. The federal government has sovereign immunity, which means federal employees generally cannot sue the government unless immunity is waived. Qualified Immunity also protects government officials from personal lawsuits, unless there is a violation of clearly established constitutional rights. Federal employees must navigate administrative channels, such as the EEOC or MSPB, before initiating legal action.
Wage and Hour Laws
Lawsuits may also arise from disputes over wages and hours. The Fair Labor Standards Act (FLSA) sets standards for minimum wage, overtime pay, and child labour. In Smith v. City of Jackson (2005), the Supreme Court ruled that time spent by employees walking between a changing area and a production area while donning protective clothing is compensable under the FLSA.
Workplace Safety and Health
Workplace safety and health standards are critical, with laws such as the Occupational Safety and Health Act (OSHA) enforcing these standards. The Energy Employees Occupational Illness Compensation Program Act provides compensation for employees of the Department of Energy who suffer from cancer or specific illnesses caused by exposure to radiation or hazardous substances.
In conclusion, the Constitution, along with federal laws and Supreme Court interpretations, significantly shape employee lawsuits. HR professionals must be cognizant of these legal frameworks to effectively navigate employment-related litigation and ensure compliance with applicable laws.
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Frequently asked questions
HR uses compensation and benefits to attract top talent and boost retention rates. Compensation is the money an employee receives in exchange for their labour, including salary, wages, commission, and bonuses. Benefits are extra perks that may have financial value but are not given as direct cash, such as health insurance, stock options, and retirement savings plans.
The Supreme Court has interpreted the Constitution to protect the "freedom of contract" within the liberty covered by the Fifth and Fourteenth Amendments. This means that legislation regulating wages, hours, and working conditions may be invalidated if it unreasonably interferes with the contractual freedom of employers and employees.
Yes, the Court has held that an employer may unilaterally shut down part of its business purely for economic reasons without violating the National Labor Relations Act (NLRA). This decision emphasised the importance of entrepreneurial freedom in managing a profitable business.
No, the NLRA prohibits employers from discharging employees in retaliation for union activities. This includes joining a union and participating in union activities, such as paying union dues or agency shop fees, which have been upheld by the Supreme Court as consistent with the First Amendment.
Yes, there are industry-specific laws that impact HR salary and benefits. For example, the Energy Employees Occupational Illness Compensation Program Act provides compensation and medical benefits to employees of the Department of Energy who suffer from cancer or specific illnesses caused by exposure to radiation or certain substances. The Black Lung Benefits Act provides similar benefits to coal miners and their survivors for pneumoconiosis ("black lung disease").
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