Page 643 - Business Principles and Management

Unit 7

23.3 Employment Law

Goals Terms
• Describe several ways that employ- • Fair Labor Standards • Medicare
ees are protected through federal Act (FLSA) • workers’
and state employment legislation. • Occupational Safety compensation
• Discuss the steps that government and Health Act • unemployment
and businesses have taken to (OSHA) insurance
remove discrimination in employ- • Social Security
ment opportunities.

Regulating Employment Conditions and Benefits

State and federal governments have been concerned for years about employee/
employer relationships and the protection of employees. They have passed several
laws to protect employees, improve their health and safety, and provide minimum
employee benefits. The federal Department of Labor (DOL) administers and
enforces more than 180 laws related to employment and workplace safety. The
laws cover about 10 million employers and 125 million workers. HR depart-
ments are responsible for understanding the laws and ensuring that the business
complies with their requirements. The major laws regulating employment are
reviewed next.

THE FAIR LABOR STANDARDS ACT

The Fair Labor Standards Act (FLSA) prescribes standards for wages and overtime
pay. FLSA affects most private and some public employers. It requires employers to
pay covered employees at least the federal minimum wage and overtime pay of
one-and-one-half times the regular rate of pay. Most managers and other types
of salaried employees are exempt from FLSA regulations. Also, businesses that are
not involved in interstate commerce but conduct all their activities within one state
may not be covered. However, many states have their own minimum-wage laws.

THE OCCUPATIONAL SAFETY AND HEALTH ACT
The Occupational Safety and Health Act (OSHA) regulates safety and health
conditions in most businesses. Employers have a duty to provide their employees
with a workplace free from unsafe working conditions and other hazards. The
act is enforced through workplace inspections and investigations.

SOCIAL SECURITY AND MEDICARE

Social Security is a social insurance program funded through payroll contributions.
The formal title of the program is the Federal Old-Age and Survivors Insurance
Trust Fund and the Federal Disability Insurance Trust Fund (OASDI). The largest
component of OASDI is the payment of retirement benefits. Throughout a person’s

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