Employment Law, Employee Rights, and Global HR Flashcards
Employment Law and Employee Rights: Employment-at-Will (EAW)
Definition of Employment-at-Will (EAW): A legal doctrine where employers have the right to terminate employees at any time, for almost any reason, and employees likewise have the right to quit at any time.
Rationale for EAW: It provides organizational flexibility for the employer and freedom of movement for the employee, though it can lead to potential abuse if not governed by specific limitations.
Legal and Policy Exceptions to EAW: * Public Policy: Employers cannot fire an individual for reasons that violate the law or public interests. An example is refusing to break the law at the employer's request or participating in a legal proceeding. * Implied Contract: Verbal or written promises, such as statements regarding job security or long-term employment in an employee handbook, can override the default EAW status. * Good Faith and Fair Dealing: In some states, employers are prohibited from acting maliciously or in bad faith. This includes firing an employee simply to avoid paying commissions or earned compensation.
Specific Prohibitions: An employer cannot fire an employee for filing a workers’ compensation claim.
The Seven Tests of Just Cause
Context: Used primarily in unionized environments to justify disciplinary actions and protect employees from arbitrary treatment.
The Seven Tests:
1. Notice: Did the company give the employee forewarning or foreknowledge of the possible or probable disciplinary consequences of the employee’s conduct? This determines if the employee was aware the action was prohibited.
2. Reasonable Rule: Was the company’s rule or managerial order reasonably related to (a) the orderly, efficient, and safe operation of the company’s business and (b) the performance that the company might properly expect of the employee?
3. Investigation: Did the company, before administering discipline, make an effort to discover whether the employee did in fact violate or disobey a rule or order? If the supervisor finds reasonable evidence of an infraction through investigation, the test is passed.
4. Fair Investigation: Was the investigation conducted fairly and objectively? This requires utilizing facts, figures, and knowledge (the OUCH test) rather than emotional reactions.
5. Proof: Upon investigation, was there substantial evidence or proof that the employee was guilty as charged? * Substantial Evidence: A large body of circumstantial information showing the individual probably committed the offense. * Clear and Convincing Evidence: A legal term meaning ‘substantially more likely to be true than untrue.’ * Note: Disciplinary actions do not have to meet court-level standards of proof; substantial evidence is sufficient.
6. Equal Treatment: Has the company applied its rules, orders, and penalties evenhandedly and without discrimination to all employees? It identifies whether rules are applied equitably. For example, giving one person a reprimand and another a discharge for the same infraction suggests a lacks evenhandedness.
7. Appropriate Discipline: Was the degree of discipline reasonably related to (a) the seriousness of the offense and (b) the record of the employee’s service? This allows for different punishments based on history (e.g., a first-time offender vs. a repeat offender).
Ethical and Legal Employee Rights
Right to Life and Safety: The right to a workplace free from hazards, enforced by OSHA.
Right to Free Consent: Employees must not be coerced; they must know and understand requested tasks and expected outcomes, performing them voluntarily. An example of a violation is using pressure to force unsafe work.
Right to Privacy: Limits exist on monitoring personal information. While lockers or emails can be searched if necessary, there is a limit to how much an employer can intrude.
Right to Free Speech: This is limited in the workplace. Employees can voice concerns or work-related issues without fear, but social media rants that harm the organization are generally not protected.
Right to Due Process: The right to fair procedures before discipline is enacted. Individuals must know their accusations, the evidence against them, and the consequences.
Right of Freedom of Conscience: Employees should not be forced to violate personal values and beliefs, provided those beliefs align with commonly accepted societal norms.
Workplace Monitoring and Corrective Action
Monitoring Procedures: Employers track emails, internet usage, and use cameras to balance productivity with privacy. Employers may monitor work-provided email accounts but generally not personal accounts.
Corrective Action Process (Steps to fix behavior):
1. Verbal warning
2. Written warning
3. Suspension
4. Termination
Primary Goal: The objective of corrective action is to improve behavior, not to punish the employee.
Termination Process: Requires thorough documentation, fairness, and legal compliance. Exit interviews are common practice.
Legal Risks in Discharge:
* Wrongful Discharge: An illegal firing that violates law or contract.
* Constructive Discharge: When an employer makes working conditions so intolerable that an employee is essentially forced to quit.
Implied Contract: Unwritten promises such as ‘you’ll always have a job if you perform well.’
Whistleblowers: Employees who report illegal or unethical behavior. They are protected by law from retaliation.
Compensation and Pay Theory
Expectancy Theory: A motivation theory based on the formula:
* Expectancy: The belief that effort leads to performance.
* Instrumentality: The belief that performance leads to a reward.
* Valence: The value the individual places on the reward.
* Example: If raises appear random, instrumentality is low, and motivation drops.
Types of Compensation:
* Direct: Salary and wages.
* Indirect: Benefits like insurance and Paid Time Off (PTO).
* Intrinsic: Personal satisfaction derived from the work itself, rather than monetary gain.
Pay Strategies:
* Lag: Paying below the market average.
* Match: Paying at the market average.
* Lead: Paying above the market average.
Economic Adjustments:
* CPI (Consumer Price Index): A metric used to measure inflation.
* COLA (Cost of Living Adjustment): A pay increase tied to the CPI to maintain purchasing power.
Equity Concepts:
* External Equity: Fairness of pay compared to other companies.
* Internal Equity: Fairness of pay within the same company.
Structure and Worth:
* Job Evaluation: The process of ranking jobs based on their value to the organization.
* Pay Structures: Utilizing pay grades and ranges to ensure fairness.
* Comparable Worth: The principle of providing equal pay for jobs of equal value, even if the roles are different.
* Wage Compression: When there is a very small pay difference between new hires and experienced employees.
Variable Pay and Incentives
Variable Pay: Pay that is tied directly to performance, shifting financial risk from the employer to the employee.
Incentive Types:
* Bonus: A one-time reward for achievement.
* Commission: Pay calculated as a percentage of sales.
* Profit Sharing: Distribution of a portion of company profits to employees.
* Gainsharing: Rewards based on the performance of a specific team or unit.
Incentive Levels:
* Individual Incentives:
* Pros: High motivation for the individual.
* Cons: Can cause competition and stress.
* Group Incentives:
* Pros: Encourages teamwork.
* Cons: Risk of "Social Loafing," where some individuals contribute less because the reward is shared.
Benefits and Insurance
Healthcare Options:
* PPO (Preferred Provider Organization): Flexible choice of doctors but more expensive.
* HMO (Health Maintenance Organization): Restricted network of providers but generally cheaper.
FMLA (Family and Medical Leave Act): Provides up to weeks of unpaid, job-protected leave for qualifying reasons.
Cafeteria Plan: A system where employees choose the specific benefits that meet their needs.
Retirement Plans:
* Defined Contribution: Plans where the employee contributes (e.g., ).
* Defined Benefit: Plans that provide a guaranteed payout upon retirement.
Vesting: The process by which an employee earns ownership of employer-contributed benefits over time.
COBRA: Allows employees to continue health insurance coverage after leaving a job, though the employee must pay the full cost.
EAPs (Employee Assistance Programs): Provide help with personal issues like stress or addiction.
Social Protection:
* Workers’ Comp: Coverage for injuries sustained on the job.
* Unemployment: Temporary income for individuals who have lost their jobs through no fault of their own.
Labor Laws and Unionization
FLSA (Fair Labor Standards Act): Governs minimum wage and overtime rules.
Davis-Bacon Act: Requires the payment of prevailing wages on federal construction projects.
Prevailing Wage: The standard wage paid for a specific type of work in a geographic area.
NLRA (National Labor Relations Act / Wagner Act): Protects the rights of workers to form unions and engage in collective bargaining.
LMRA (Labor Management Relations Act / Taft-Hartley Act): Placed limits on union power.
Union Processes:
* Certification: The process where workers vote to bring a union in.
* Decertification: The process where workers vote to remove a union.
Collective Bargaining: Negotiations between a union and an employer.
Collective Bargaining Agreement (CBA): The final contract outlining pay, rules, and working conditions.
ADR (Alternative Dispute Resolution): Using mediation or arbitration to resolve disputes instead of going to court.
WARN Act (Worker Adjustment and Retraining Notification): Requires employers to provide advance notice before mass layoffs.
Safety and OSHA (Occupational Safety and Health Administration)
Employer Responsibilities: Providing a safe workplace, training, and necessary safety equipment.
Employee Responsibilities: Following all established safety rules.
OSHA Documentation:
* Log 300: A summary of work-related injuries for the entire year.
* Form 301: A detailed report for each specific injury; must be reported within days.
Health and Safety Issues:
* Workplace Stress: Caused by workload, lack of control, or poor management.
* Cumulative Trauma Disorders: Repetitive motion injuries, such as carpal tunnel syndrome. * MSDS (Material Safety Data Sheets): Contain information on hazardous materials and proper handling/lifting.
Enforcement:
* OSHA Violations: Failing to meet safety standards.
* Inspections: Periodic checks by OSHA to ensure compliance.
Wellness Programs: Initiatives designed to promote employee health, such as gym memberships or mental health support.
Global Human Resource Concepts
Management Orientations:
* Ethnocentrism: The belief that the home country’s approach is the best.
* Polycentrism: Adapting management styles to the host country’s culture.
* Geocentrism: Adopting a global perspective and using the best practices from around the world.
* Parochialism: Having a narrow view of the world and ignoring cultural differences.
Hofstede’s Cultural Dimensions:
* Power Distance
* Individualism vs. Collectivism
* Masculinity vs. Femininity
* Uncertainty Avoidance
* Long-term Orientation
Types of International Employees:
* Parent-country nationals (PCN): Employees from the country where the company is headquartered.
* Host-country nationals (HCN): Employees from the local country where the branch is located.
* Third-country nationals (TCN): Employees from a country other than the HQ or host country.
Global Pay Approaches:
* Balance Sheet: Equalizing living standards to ensure pay is consistent with the home country.
* Going rate: Paying according to the local market rate in the host country.
* Local-plus: Paying local rates plus additional extras/benefits.
* Split-pay: Paying the employee in multiple currencies.