EE, ER, & Types of Employment PP

MGT 432 study guide

THEORY X

Workers dislike their jobs and are inherently lazy. Have little motivation
and prefer direction from superiors. Need consistent rewards/punishments to
ensure work is completed. Workers do not have a desire to grow or achieve
personal goals.

THEORY Y

Workers are willing to accept challenges and are proud of the work that
they do. Workers do not need to be micromanaged; they are self-directed.
Workers are eager to participate in decision-making. Workers are happy to
contribute and feel internally satisfied.

Who came up with Theory X & Y

Douglas McGregor

Employee (EE)

an individual who is hired by an organization for the purposes of
fulfilling designated work activity required and offered by an employer and
voluntarily agrees to the pay and other remuneration payments (wages and benefits)
for such labor services. Receives a W-2 at end of year for labor during the year.
On the employer’s payroll (*)

Employer (ER)

any group/entity/person acting as an agent or representative for a
profit/non-profit organization who engages individuals to provide labor services to
said agency.

Independent Contractor

this person is self-employed

Characteristics of an independent contractor

The general rule is if the payer has the right to
control or direct only the result of the work and not what will be done and how it will be done.
▪ The earnings of a person who is working as an independent contractor are subject to Self-
Employment Tax and paying Social Security Taxes.
▪ The independent contractor invoices the payer when services are rendered.
▪ Contractor completes a W-9 IRS Form with appropriate Tax ID # for the payer.
▪ Contractor receives a 1099 at the end of the tax year from the various payers they worked for in the
year.
▪ Guiding principles under the Fair Labor Standards Act (FLSA)

Employment at Will

▪ Either party may end the “employment relationship” with or without reason and with or without
notice.
▪ Due process has changed this somewhat and we will discuss later in course.

Most states recognize Employment at Will except…

Montanna

Right to Work

Taft Hartley Law – 1947 allows states to pass laws to permit employees not to join a union if the so desire.

Employee Contracts are considered the same as an Employee Offer

False

Employee Contracts

• Usually for a specified time frame and carries within the agreement particular rules
  governing pay and any benefits (could be similar to other regular employees who do
  not have an employment agreement).

• Contract provides necessary requirements for either party to end the employment by
  either party. Severance agreement. Notice periods.

Are employee contracts the norm for the US?

No

What is the difference between Employee Contract and Employment Offer?

The Employment Offer usually provides a clause
within the contract that indicates the person is an “employee at will”

Expressed contract

when the agreement between two parties is specifically stated,
orally or in writing.

Implied contract

when an agreement is formed by parties’ actions (verbal or hand-
shake) rather than a specific oral/written agreement.

Quasi contract

a court ordered implied agreement that prevents one party from
benefiting at the expense of another.

The Davis-Bacon and Related Acts

Act that applies to contractors and subcontractors
performing on federally funded or assisted contracts in excess of $2,000

The Davis Bacon Act enforces…

• Contractors and subcontractors must pay their laborers and mechanics employed
  under the contract no less than the locally prevailing wages and fringe benefits for
  corresponding work on similar projects in the area.

• directs the Department of Labor to determine such locally
  prevailing wage rates.