HRM 466

U.S. EMPLOYMENT LAWS AND REGULATIONS

(SHRM)

Part I
Dr. Heather M. Clarke
 U.S. EMPLOYMENT LAWS AND
REGULATIONS
• Topic Groups:
– Part I
• HR and the Legislative and Regulatory Environment
• Organizational Compliance with Laws and Regulations
• Employment and Authorization to Work
– Part II
• Equal Employment Opportunity
– Part III
• U.S. Compensation Laws
– Part IV
• U.S. Leave and Benefits Laws
– Part V
• U.S. Employee Safety and Health Laws
• Employee Relations Laws
• Employee Records Management Requirements in the U.S.
HR and the Legislative and Regulatory
Environment
 HR AND THE LEGISLATIVE AND
REGULATORY ENVIRONMENT
• Subtopics:
– Sources of Law
 SOURCES OF LAW
• The Constitution - The Constitution is the highest law in the country
and the foundation on which all U.S. law has been built.
– Note: Private employees are not protected by the constitution, but public
employees are. For example, a public employee could rely on the Fourth
Amendment, which protects people from unreasonable searches and seizures by
the government) but a private employee could not. .

• Statutes - Statutes refer to actions passed by legislative bodies,

such as Congress and state legislatures, and by local government
units, such as cities and counties.
• Regulations - Regulations are proposed, adopted, and enforced by
administrative agencies to whom government units have delegated
specific rule-making authority. Regulations reflect how laws will be
implemented and often have the force of law.
 SOURCES OF LAW
• Agency Guidelines - Administrative agencies may also issue
guidelines that interpret how laws and regulations will be enforced.
Such agency guidance includes agency interpretations, policy
statements, letters, and advisory materials to supplement or explain
regulations and statutes.
– Example: EEOC’s Uniform Guidelines

• Executive Orders - An executive order is a directive by the chief

executive of a governmental unit (e.g., the President) telling that
governmental unit how it will act.
• Common Law - Common law is based on court decisions, rather
than statutory law, and is recognized on the federal level and in
whole or in part in nearly all states. Those court decisions are often
referred to as precedent.
Organizational Compliance with Laws and
Regulations
 ORGANIZATIONAL COMPLIANCE WITH
LAWS AND REGULATIONS

• Subtopics:
– Impact of the Law
– Managing Compliance Risks
– HRM Involvement in the Litigation Process
 IMPACT OF THE LAW
• There are things every business should have in place to
be compliant and to prevent potential liabilities and
employee lawsuits.
• Examples:
– Workplace policies, procedures, and training
• Orientation and compliance training
– Workplace posters
– Workers’ compensation insurance
– Proper withholding of taxes
– Organizational code of conduct
– Reporting mechanisms and protections
MANAGING COMPLIANCE RISKS
• Legal compliance prevents:
– Direct costs of fines, judgments, legal fees, etc.
– Costs of turnover, decreased productivity, reputation, etc.
• HR compliance checklists and audits are vital for
ensuring compliance.
– HR professionals typically use compliance checklists to prepare
for an HR compliance audit.
– Using a compliance checklist to prepare for an HR compliance
audit can effectively help to:
• Keep the organization compliant with employment laws and regulations.
• Prevent potential liabilities and employee lawsuits.
• Ensure that business operations are generating results and supporting the
organization’s brand.
MANAGING COMPLIANCE RISKS
• If an organization has legitimate concerns that an HR audit
may reveal organizational noncompliance with employment
laws and regulations, the organization should follow strict
audit procedures and protocols and consider hiring outside
legal counsel to conduct the audit.
• HR must also be able to recognize when to consult legal
counsel.
• Employment practices liability insurance
– Covers organizations against claims by job candidates and current
and former employees.
– E.g., wrongful dismissal, discrimination, breach of contract, etc.
 HR INVOLVEMENT IN THE LITIGATION
PROCESS
• Attorney-Client Privilege and Discoverability
– Communications between attorney and client are typically privileged,
meaning they are confidential and not discoverable (i.e., they do not
have to be shared with the other side).
– Some activities that are performed by HR during the process of
litigation may be covered by the attorney work product privilege where
those activities are specifically directed by the attorney.

• HR professionals may need to work with the employer’s

attorney:
– Gathering information relevant to the litigation.
– Giving testimony.
– Crafting settlements or implementing court-ordered remedies.
Employment and Authorization to Work
EMPLOYMENT AND AUTHORIZATION
TO WORK
• Subtopics:
– Immigration Reform and Control Act
– Green Cards and Visa Types
– Deferred Action of Childhood Arrivals Policy
– Employment-at-Will
– Fair Credit Reporting Act and Fair and Accurate Credit
Transactions Act
 IMMIGRATION CONTROL AND
REFORM ACT
• Immigration Reform and Control Act (IRCA)
– Enforced by U.S. Citizenship and Immigration
Services (USCIS)
– Two main purposes:
• Requires employers to verify authorization to work and sets
penalties for hiring undocumented workers.
– Applies to all employers.

• Prohibits discrimination based on national origin and

citizenship.
– Applies to employers with four or more employees.
– However, can choose U.S. citizen over legal alien when the two are
equally qualified.
 IMMIGRATION CONTROL AND
REFORM ACT
• Form I-9: Eligibility Verification Form
– Verifies employee’s identity and right to work in the U.S.
– Employee completes Section One no later than first day of
employment.
– Employer competes Section Two no later than third day of
employment.
– Employee chooses which documents to provide to establish
identity.
– [Link]
 IMMIGRATION CONTROL AND
REFORM ACT
• E-Verify - an internet-based verification system that
allows employers to verify the employment eligibility of
their employees regardless of citizenship status.
– Checks the information on the I-9 against the records of the
Department of Homeland Security and the Social Security
Administration.
 GREEN CARDS AND VISA TYPES
• Two types of visas:
– Immigrant visas, typically referred to as green cards, give the
individual permanent residence status.
• Green card holders can live and work in the U.S. and enjoy most, but not all,
of the same benefits as a U.S. citizen. The most significant differences are:
• Green cards must be renewed every 10 years.
• Green card holders do not have the right to vote.
• Green card holders do not have as high a priority in sponsoring other family members for green
cards.
• Green card holders may not run for political office.
• Green card holders are not issued a U.S. passport.
• Full protection from deportation is not guaranteed to green card holders.

– Nonimmigrant visas allow temporary entry into the U.S.

• To visit, work, study, do business, etc., depending on the type of visa.
• Work permits are nonimmigrant visas.
– See Exhibit 36: Common Nonimmigrant Visas
 GREEN CARDS AND VISA TYPES
• H-1B Nonimmigrant Work Visa
– See Exhibit 36 for explanation of this visa type.
– Individuals cannot apply for an H1-B visa; the U.S. employer must
petition for entry of the employee.
– H-1B petitions are submitted by employers based on their need for a
non-U.S.-resident employee in a professional-level position that requires
at least a bachelor’s degree or equivalent.
– Before initiating the H-1B application process, organizations considering
H-1B employees must make “good-faith” attempts to recruit resident
U.S. workers using “procedures that meet industry-wide standards” and
“offering compensation at least as great as that offered to the H-1B
alien.”
– H-1B nonimmigrants may be admitted for a period of up to three years.
The time period may be extended but generally cannot go beyond a
total of six years.
 DACA

• Deferred Action of Childhood Arrivals (DACA) Policy

– Policy adopted in 2012/2022 to allow certain individuals who
came to the U.S. as children to request deferred action with
regard to removal for a two-year (renewable) period, during
which time they are authorized to work.
– They are provided with an Employment Authorization Document.
• If an employees’ Employment Authorization Document (EAD) expires, an
organization can no longer employ the employee in question, unless they
have found another way to obtain work authorization.
– As of 2022, renewals, but not new applications, continue to be
processed.
 EMPLOYMENT-AT-WILL
• Employment-at-will
– An employment relationship where there is no contractual
obligation to remain in the relationship; either party may
terminate the relationship at any time, for any reason and
without notice, except as prohibited by law.
• Employer can hire, fire, demote, or promote at will.
• Employee can quit at will.
• The U.S. is the only country with employment-at-will.

– Excluded from employment-at-will are:

• Employees with an employment contract that states otherwise;
• Employees governed by a collective agreement; and
• Government employees.
 EMPLOYMENT-AT-WILL
• Exceptions to employment-at-will:
– Violation of public policy – employees may not be fired without
cause if this would violate state or federal laws.
• For example, firing an employee based on a prohibited ground of
discrimination, for exercising a legal right (e.g., taking an FMLA leave), for
fulfilling a legal duty (e.g., jury duty).

– Implied contract – created by employer actions, promises, or

statements by individuals or the organization.
• E.g., statements in employment letter, employee handbook, organizational
policies; statements made by recruiters, managers, etc.
• To avoid this, statements reinforcing employment-at-will are typically
included in employee handbooks and other employment-related documents.
 EMPLOYMENT-AT-WILL
• Exceptions to employment-at-will (cont.):
– Covenant of good faith and fair dealing – implied contractual
obligation to act in good faith in the fulfillment of each party’s
contractual duties.
• Prevents one contracting party from unfairly frustrating the other party’s right
to receive the benefits of the agreement.
• Does not exist in Wisconsin.
 FAIR CREDIT REPORTING ACT
• The Fair Credit Reporting Act (FCRA) of 1970 regulates the
collection and use of consumer credit information.
– The FCRA’s purpose is to protect the privacy of background information and to
ensure that the information supplied is accurate.

– Requires full disclosure of consumer reports by consumer reporting agencies so

that individuals subject to them can dispute the accuracy, wrongful use, or
interpretation of the information.
• Consumer reports include credit reports, criminal background checks, motor vehicle history,
employment verifications, and reference checks.

– Applies to employers who use a third party (CRA) to pull credit consumer reports,
run criminal background checks, or conduct detailed background checks on
applicants, employees, and independent contractors.
 FAIR CREDIT REPORTING ACT
• FCRA Requirements:
– Written notice and authorization
• Employer must notify applicants/employees in writing, in a document
consisting solely of that notice, that a report may be used.
• The notice cannot be incorporated into an employment application.
• Employer must also get the person’s written authorization before asking a
CRA for a report.

– Pre-adverse action
• If, based on the report, an employer decides take adverse action against an
applicant/employee, the individual must be provided with a copy of the report
and given “a reasonable period of time” to present evidence challenging the
information contained in the report.
 FAIR CREDIT REPORTING ACT
• FCRA Requirements (cont.):
– Adverse action procedures
• After the employer has taken adverse action based on the consumer report,
the employer must give the applicant or employee notice that such action
has been taken.

– Certifications to credit bureaus

• Credit bureaus require employers to certify that they are in compliance with
the FCRA and that they will not misuse any information in the report.

– Penalties
• Plaintiffs can recover damages and costs depending on whether the
noncompliance with the act is willful or negligent.
 FAIR AND ACCURATE CREDIT
TRANSACTIONS ACT
• Fair and Accurate Credit Transactions Act (FACT Act) of 2003
– FACT creates an exception to the FCRA consent and disclosure
requirements.
• When an employer uses a third party (e.g., lawyer, consultant, investigator) to conduct
an investigation of an employee involving workplace misconduct, policy violation, or
illegal activity, the employer is not required to disclose prior to the investigation.
• Subsequent disclosure is still required.
• A summary of the information discovered during the investigation, but not the source of
the information, must be provided to the employee.

– FACT also requires written consent for requests of medical information

about an applicant or employee.
DODD-FRANK WALL STREET REFORM AND
CONSUMER PROTECTION ACT
• The Dodd-Frank Wall Street Reform and Consumer Protection Act
amended the FCRA in 2011.
• Employers who take adverse action against a prospective or current
employee or an independent contractor based on information
contained in the individual’s consumer report have additional
disclosures to make to the affected individual.
– Based on the Dodd-Frank amendment, whenever any adverse action is taken
against an individual, either partly or wholly because of information contained in
a consumer report, the employer must provide the individual with oral, written, or
electronic notice of the adverse action as well as specific credit score information
used and the name of the consumer reporting agency or person that furnished
the credit score.