Employment Law Outline
I. Fair Labor Standards Act (FLSA)
A. Major Provisions
1. Minimum Wage – §206
a. Justification: Fair days pay for a fair days work
b. Cost of this is a reduction in employment in the covered sector hen employees shift to non-covered sector
i. Youngest and lowest skilled lose job first
c. Subminimum Wage – You employees can be paid less than unemployment for first 90 days of employment
2. Maximum Hours – §207
a. Justification: Overtime pay will spread work over more workers instead of having same workers work more hours
b. Time and a half for anything over 40 hrs
3. Child Labor Restrictions – §212
a. Justification: protect children
i. Better done by a program such as OSHA
b. Oppressive labor §203(k)(1)
B. What is an Employee? §213 Exemptions
1. §213(a)(1) – Bona fide executive, administrative, or professional capacity
a. White collar exemption – greatest potential for error\
b. FLSA Executive Exemptions (FLSA 207(a)(1)) – burden on employer to prove exemption
i. Salary
ii.Primary duty is management
iii. Directs the work of 2 or more other workers
iv. Authority to hire/fire
2. §213(a)(5) – Fishing
3. §213(a)(6) – Agriculture
a. Limits placed here – see code
4. §213(a)(14) –Tobacco
C. Overtime Cases
1. Bright v. Houston Northwest Medical Center (pg 587)
a. FACTS: guy was on call and wanted overtime
b. ISSUE: On-call time count for overtime?
c. COURT: No
d. TEST: Can the employee use the time for his own purposes
2. Renfro v. City of Emporia (p 593)
a. FACTS: Firefighters on-call 24 hrs
b. COURT: Must be compensated for on-call time
3. Dunlop v. Gray-Goto Inc (p 600)
a. FACTS: fringe benefits instead of overtime wages
b. ISSUE: Can fringe benefits be given instead of min wage?
c. COURT: No – they are not wages
4. Note 1 on pg 601
a. ISSUE: What constitutes “Regular Rate?”
b. COURT: Bonus is part of regular rate and thus must be included when calculating unemployment
5. Theisen v. City of Maple Grove (Note 3 pg 602)
a. ISSUE: Are fringe benefits part of “Regular pay?”
b. COURT: payments not made for hours of work are not part of regular pay
i. FLSA §207(e)(2) – defines regular rate
D. Minimum Wage Cases
1.
erience rated – highest tax rate on those employers that cost the system the most
2. Wait Unemployment – temporarily laid-off don’t necessarily have to look for work
B. Types of Unemployment
1. Frictional – temporary while employee looks for right job
2. Structural – geographic or skill mismatch
a. Most worrisome
C. Economic Principles
1. Endowment effect – people value a benefit more once they own it
a. assign a property interest
2. Selection effect – one state imposing regulation may give incentive for people to leave state
D. Conclusion
1. Depends on what jurisdiction whether or not unemployment insurance will be paid
a. Different statutes in different states
E. Issues
1. Must look for work and be available (Knox)
2. Must leave old job for “good cause” or be fired
3. If fired it can’t be for willful misconduct (Pricket v. Service)
F. Unemployment Cases
