Assignment 1_HR

HSA530.chp3.pdf

Home >Business & Finance homework help >Operations Management homework help >Assignment 1_HR

The Legal Framework of Contemporary

Human Resources Chapter Objectives

After reading this chapter, readers will be able to:

• Understand the evolution of the regulated environment within which human resources must work in serving a healthcare organization

• Trace the chronology of legislation affecting employment, beginning in 1932, with a brief explanation of each pertinent law

• Agree that 1964 was a pivotal year in legislation affecting human resources

• Understand highlights of legislation enacted in 1964 and beyond • Acknowledge 1964 as the beginning of an effort by the federal

government to shift considerable social responsibility to employers • Describe the cumulative effects of employment legislation to date

■ CHAPTER SUMMARY

This chapter is intended to provide readers with sufficient background and knowledge of employment legislation to enable them to develop an under- standing of the effects of employment law on the activities of a department manager. It provides a review of the laws affecting aspects of the employment relationship. These pieces of legislation are described using nonlegal terminol- ogy. In each instance, how the pertinent piece of legislation approaches its subject is discussed. The importance of each law is reviewed, along with the

C H A P T E R

9781449688837_CH03_041_066.indd Page 41 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 41 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

success each has had in addressing a societal need through the legislation’s stated intent. Effects of the more significant laws are reviewed, along with descriptions of some apparently unintended outcomes.

Case Study: Does Weight Constitute a Disability?

Susan J. applied for a position as a licensed practical nurse at County Memorial Hospital. She had generated an impressive record during her training, possessed good references from prior employment in two different private duty situations, and interviewed well. Susan was clearly very heavy. Helen Harding, director of nursing at County Memorial, estimated her weight to exceed 300 pounds. An ideal weight for her five-foot, five-inch body was 125 to 130 pounds. A reasonable weight range for someone of that height was 120 to 140 pounds. After the interview, Helen extended a tentative offer of employment to Susan. The offer was contingent on pass- ing the hospital’s pre-employment physical examination.

The County Memorial employee health physician examined Susan but declined to approve her for employment unless she could first achieve a safer weight, in her case less than 275 pounds. Susan failed to get the job because of her overweight condition. She then filed a complaint with the State Division of Human Rights charging discrimination based on disability, citing Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act of 1990. She claimed that her only responsibility was to demonstrate that she was capable of doing the job, and that in spite of her physical handicap she could still adequately perform all required duties of the job. Her obesity, she claimed, was due to a medical condition over which she had no control.

County Memorial moved for dismissal of the complaint on three grounds. First, it argued that obesity was not a true physical impairment under the law. Second, it claimed that Susan’s condition resulted from her own voluntary actions. Finally, the hospital claimed that she could reduce and control her weight if she so chose.

How might the foregoing situation be resolved? Is obesity truly a disabil- ity, or will a different argument prevail? Do you believe that the hospital will be successful in getting the complaint dismissed, or will Susan successfully persuade the Division of Human Rights to act on her complaint? Why?

■ A REGULATED ENVIRONMENT

An important disclaimer is in order before proceeding with the contents of this chapter. Nothing in this chapter constitutes legal advice, and no such advice should be inferred from its contents. Individuals with questions about the applicability of any particular point of law should take those questions to the appropriate people in their organization. These may be persons in

42 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 42 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 42 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

human resources (HR), administration, risk management, or perhaps even in-house legal counsel who can provide or secure appropriate responses.

The pivotal year when HR began to change to its current incarnation was 1964. Internal operations that addressed issues related to employees were still called “personnel” in most organizations. Sweeping civil rights legislation came into being with the passage of the Civil Rights Act of 1964; the specific turning point was the appearance of Title VII. This legislation marked the beginning of significant changes in relations between government and business. It marked a change in philosophy that resulted in a completely new direction for government in concern for the citizens of the United States.

Pre-1964: Regulation Minimal and Tolerable Before 1964, businesses were free to treat employees essentially as they chose, with only two exceptions: wage-and-hour laws and labor-relations laws. Prior to 1964, the only laws that had noticeable impact on the em- ployment relationship were the Fair Labor Standards Act and related state laws, and the National Labor Relations Act.

The Fair Labor Standards Act and its numerous amendments governs the payment of wages and other related conditions of employment. This and similar laws existing in some of the states are commonly referred to as wage-and-hour laws.

The National Labor Relations Act governed relationships between work organizations and labor unions. Similar laws existed in some but not all states. They were relevant only to organizations where employees were unionized or where active union organization efforts were under way.

Prior to 1964, managers did not have to be knowledgeable about many regulatory requirements. Few legal restrictions impinged on HR operations or on managers in general. The majority of business organizations complied with the wage-and-hour laws as a matter of operating routine. Leaders of organi- zations where there was a union presence, either being organized or already under contract, generally expected to comply with all applicable labor laws.

Other applicable legislation was in place before 1964, but the Fair Labor Standards Act and the National Labor Relations Act were the only ones hav- ing a visible influence on HR operations and department management. These two are discussed more fully in the chronology of legislation that follows.

The turning point of 1964 heralded a change in philosophy concern- ing government’s relationship with business. For years, the governing philosophy had largely been one of hands-off to the maximum practi- cal extent. Employers were expected to concern themselves only with wage-and-hour requirements and restrictions imposed by labor relations legislation. Since 1964, however, the government has been addressing many of the perceived needs of individuals by involving employers in meeting those requirements. President Lyndon Johnson’s signature on the Civil Rights Act in 1964 initiated a significant change in the actions

A Regulated Environment 43

9781449688837_CH03_041_066.indd Page 43 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 43 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

that government would be taking on behalf of its citizens. This trend continues to the present day.

The Growing Regulatory Environment: Chronology of Legislation Some of the legislation included in the following chronology will receive little more than a brief description because it is addressed more thoroughly in subsequent chapters. These laws will be so identified. For others, implica- tions for HR and department managers are briefly reviewed.

Norris–LaGuardia Act (1932) The first significant piece of legislation to address the growing organized labor movement in the United States was the Norris–LaGuardia Act of 1932. This law reflected an important shift in public policy concerning labor unions, from a posture of legal repression of unions and their ac- tivities to one of actual encouragement of union activity. Although the Norris–LaGuardia Act legalized union organizing activities and affirmed workers’ rights to organize for collective bargaining purposes, it did little or nothing to directly restrain employers in their conduct toward labor organizations. During the first three decades of the 1900s, many workers who attempted to organize for collective bargaining lost their jobs because of their involvement with the organizing process and other union-related activities. Often, their organizational efforts were countered with violence. The impact of the Norris–LaGuardia Act today has waned. It is mentioned here because of its role as a forerunner to subsequent labor legislation.

National Labor Relations Act (1935) Also known as the Wagner Act, the National Labor Relations Act (NLRA) established a number of rules for the conduct of both unions and employers in labor organizing and collective bargaining situations. Although it seemed largely to favor unions and encourage their presence, the NLRA established some boundaries on what unions could do in their organizing activities. In addition to affirming the right of employees to organize, the NLRA made it illegal for an employer to refuse to negotiate with a union. This requirement assumed that the union had conducted a legal organizing campaign and had won a proper representation (cer- tification) election.

The NLRA created the National Labor Relations Board. This body was charged with administering the Wagner Act by conducting representation elections to determine whether employees in particular groupings (called bargaining units) wished to have union representation. The NLRA speci- fied that a union chosen by a majority of the employees in an appropriate unit would be the exclusive representative for all employees in the unit. The NLRA delineated a list of unfair labor practices that were punishable by fines. Many unfair labor practices pertain to management reactions to union organization activities. The NLRA was subsequently modified by the Taft–Hartley Act and the Landrum–Griffen Act.

44 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 44 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 44 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

Social Security Act (1935) The Social Security Act established a basic system of contributory social insurance and a supplemental program for low-income elderly persons. In 1939, it was expanded to provide benefits to survivors of covered work- ers and dependents of retirees. The Social Security Act has been further expanded to cover workers who become permanently disabled. Coverage under the Social Security Act was again expanded in 1965 to provide Medicare health insurance coverage for the elderly.

Fair Labor Standards Act (1938) In part, the Fair Labor Standards Act (FLSA) was intended to reduce the high unemployment rate that typified the years of the Great Depression. Congress intended to reduce the length of a work week to a uniform stan- dard, thus spreading available work among a greater number of workers. In addition to defining a normal work week, the FLSA set minimum pay rates, established rules and standards for the payment of overtime, and regulated the employment of minors. Over the years, FLSA has been amended many times by raising the minimum wage due to changing circumstances imposed by inflation and other economic and social concerns. The FLSA remains as the country’s basic wage-and-hour law and has served as the model for the wage-and-hour laws of many states.

Labor–Management Relations Act (1947) The Labor–Management Relations Act, commonly referred to as the Taft– Hartley Act, amended the National Labor Relations Act. As passed in 1935, the NLRA clearly favored unions over employers. The principal intent and subsequent effect of the Taft–Hartley Act was to level the playing field to some extent by more appropriately balancing the responsibilities and advantages of both unions and employers. Taft–Hartley listed additional unfair labor prac- tices. Although many experts still view it as a law favoring labor unions, the Taft–Hartley Act was clearly a change in the direction of management’s rights.

Two points are of immediate interest concerning the Taft–Hartley Act. Most mentions of the NRLA are actually referring to the NLRA as amended by Taft–Hartley. The Taft–Hartley Act was itself amended in 1975 specifi- cally to address not-for-profit hospitals by removing the exemption that had been in place since its original passage in 1947.

Labor–Management Reporting and Disclosure Act (1959) The Labor–Management Reporting and Disclosure Act is more commonly known as the Landrum–Griffen Act. It further amended the National Labor Relations Act. Because it amended the NLRA as amended by Taft–Hartley, it is sometimes jokingly referred to as an amendment to an amendment. Among its numerous provisions, the Landrum–Griffen Act required employers, in- cluding not-for-profit hospitals and other nonprofit healthcare facilities, to report any financial arrangements or transactions that were intended to improve or retard the process of unionization in detail to the Secretary of Labor. Reporting and disclosure requirements were imposed on unions.

A Regulated Environment 45

9781449688837_CH03_041_066.indd Page 45 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 45 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

Equal Pay Act (1963) The Equal Pay Act was an amendment to the Fair Labor Standards Act. It prohibited the payment of unequal wages for men and women who worked for the same employer in the same establishment performing equal work on jobs requiring equal skill, effort, and responsibility, and performing under similar working conditions. Simply put, people doing the same work in the same place in the same way have to be paid equally regardless of gender. Although the Equal Pay Act came into being before 1964, it had no notice- able impact on the activities of HR and no effect on the roles of department managers. To this day it remains evident that equality of pay rates is not universal; many men continue to earn more than women for comparable jobs.

Civil Rights Act (Title VII) (1964) This legislation has led to greater regulation of the employer–employee rela- tionship by the government. Title VII provided the legal basis for all people to pursue the work of their choosing and to advance in their chosen occupations subject only to the limitations imposed by their own individual qualifica- tions, talents, and energies. This legislation defined unlawful employment discrimination as the failure or refusal to hire or to otherwise discriminate against any individual with respect to compensation or other terms, condi- tions, or privileges of employment because of that individual’s race, color, religion, sex, or national origin. The act prohibits setting limits, segregating, or classifying employees or applicants for employment in any way that de- prives them of employment opportunities or otherwise adversely affects their status as employees because of race, color, religion, sex, or national origin.

The Civil Rights Act of 1964 established the Equal Employment Opportunity Commission (EEOC) to enforce the antidiscrimination re- quirements of Title VII. The act was amended in later years to compensate for perceived erosion of its strength and effectiveness owing to a number of Supreme Court decisions.

Age Discrimination in Employment Act (1967) The Age Discrimination in Employment Act (ADEA) legally established the basic right of individuals to be treated in employment situations on the basis of their ability to perform the job rather than on the basis of age-related stereotypes or artificial age limitations. The ADEA prohibits discrimination in employment on the basis of age in hiring, job retention, compensation, and all other terms, conditions, and privileges of employment. Originally enforced by the Department of Labor, in 1978 enforcement of the ADEA was transferred to the Equal Employment Opportunity Commission. The threshold for defining age discrimination is 40. Therefore, workers age 40 and older constitute a protected class for EEOC purposes.

The ADEA has had a direct effect on retirement. Before ADEA, employ- ers were free to mandate retirement at a specific age. The most commonly mandated age for retirement was 65. When passed in 1967, the ADEA raised

46 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 46 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 46 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

the limit such that employers could no longer mandate retirement at any age younger than 70. When the ADEA was again amended in 1986, the age 70 limitation was removed. This means that retirement can no longer be required by any specific age. The sole legal criterion for continuing employment is an individual’s ability to fulfill the requirements of the job. Some exceptions exist under which retirement by a stated age can be mandated for a limited number of specific occupations. These include police officers, firefighters, airline pilots, surgeons, and some policy-making executives—generally all occupations for which it can be established that age is a bona fide occupational qualification (BFOQ). In many instances the ADEA has permitted people who wished to keep working to do so. This has ensured the continuing employment of some workers who might otherwise have to depend on government assistance.

Occupational Safety and Health Act (1970) Passed in 1970 and effective in 1971, the Occupational Safety and Health Act (OSHA) is a highly influential piece of legislation concerning employee safety in the workplace. Before this law was passed, efforts to ensure health and safety in the workplace were minimal. The “A” in OSHA indicates either Act or Administration, depending on the specific situation and reference. The intent of Congress in establishing the Occupational Health and Safety Act was to provide all persons with workplaces free from recognized hazards that have the potential to cause serious physical harm or death to employees. The Occupational Safety and Health Administration is authorized to promulgate legally enforceable workplace safety standards, respond to employee com- plaints, and, as necessary, conduct on-site inspections to follow up on employee safety complaints or on lost-workday injury rates that are considered exces- sive. The act also created the independent Occupational Safety and Health Review Commission to review enforcement priorities, actions, and cases and established the National Institute of Occupational Safety and Health (NIOSH).

On May 25, 1986, OSHA began enforcement of the second phase of an elaborate set of rules known formally as Hazard Communications. These rules provide workers with the right to know about any hazard- ous substances to which they are exposed or handle in the course of performing their job duties. According to OSHA’s hazard communica- tion rules, health facilities are required to create and deliver programs for informing and training employees about hazardous substances in their workplace, ensure that warning labels on all incoming containers are intact and clearly readable, and inform and train employees in the nature and appropriate handling of hazardous substances at the time of initial assignment. Suppliers are required to create and distribute a ma- terial safety data sheet (MSDS) for all products containing a hazardous substance that they produce. These must be provided to all purchasers of their product. The OSHA hazard communication rules mandate that employers maintain copies of MSDSs for all hazardous substances in the workplace, supply copies of MSDSs to employees upon request, and

A Regulated Environment 47

9781449688837_CH03_041_066.indd Page 47 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 47 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

maintain current copies of MSDSs for all products so that they are ac- cessible to any employee on all work shifts.

Under OSHA regulations, more than 1,000 substances are considered to be hazardous. A number of the states have enacted right-to-know laws with requirements that are similar to OSHA regulations. Federal and state standards for the handling of hazardous substances require that employ- ers distribute material safety data sheets, ensure that warning labels are always in evidence on workplace containers, and be able to produce a written employee orientation program at any time. Department managers are typically assigned the responsibility for ensuring that these regulations are followed and all requirements are fully satisfied within the department or areas under their direct supervision. Personnel from HR usually supply training materials and provide supportive services to department managers.

A section of the act permitted and encouraged states to adopt their own occupational safety and health regulations, providing that state standards and enforcement are at least as effective as the federal act in cultivating a safe and healthful workplace.

Health Maintenance Organization Act (1973) This legislation was passed as part of a Nixon administration cost contain- ment initiative, preempting all state regulations that posed any barriers to health maintenance organization (HMO) formation. It set conditions for HMOs to become federally qualified and mandated that most employers offer an HMO option if a federally qualified HMO in the area requested inclusion in their benefits offerings (this condition was eliminated in 1995). In theory the act was intended to reduce costs by eliminating regulatory barriers to HMO development and encouraging the proliferation of what was seen as a more cost-effective healthcare delivery system.

Rehabilitation Act (1973) Although disabled persons were mentioned in the Civil Rights Act of 1964, they were addressed separately for the first time in the Rehabilitation Act of 1973. Congress recognized that the handicapped were subject to cultural myths and prejudices similar to those biases that existed against women and ethnic minorities. However, this law applied only to employees of the federal government and to employers doing a specified amount of business with the government.

One portion of the Rehabilitation Act prohibited discrimination in the hiring, promotion, and other employment of the handicapped, essentially paralleling Title VII of the Civil Rights Act of 1964. Another portion required employers doing more than $2,500 in business with the federal government to apply affirmative action guidelines so as to employ and promote qualified handicapped individuals. Employers having more than 50 employees and fulfilling government contracts worth $50,000 or more were required to have written affirmative actions programs as required by the Office of Federal Contract Compliance Programs. These employers were

48 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 48 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 48 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

required to make reasonable accommodations for the physical or mental limitations of employees or applicants. The Rehabilitation Act is significant because it was a precursor of the Americans with Disabilities Act (1990).

Employee Retirement Income Security Act (1974) The Employee Retirement Income Security Act (ERISA) established four basic requirements governing employee retirement plans. The Employee Retirement Income Security Act mandated that employees must become eligible for retire- ment benefits after a reasonable length of service (also known as vesting or being vested), adequate funds must be reserved to provide the benefits promised under the plan, the persons who administer the plan and manage its funds must meet established standards of conduct, and sufficient information must be made available on a regular basis so plan participants, auditors, or other interested parties may determine whether ERISA requirements are being met. The provisions of this act were later reinforced by legislation included in the Retirement Equity Act of 1984 that greatly increased the complexity of ERISA and added multiple layers of Internal Revenue Service regulations.

Taft–Hartley Act Amendments (1975) The Taft–Hartley Act, which, as noted earlier, was an amendment to the National Labor Relations Act, was itself amended in 1975. This “amend- ment to an amendment” was created specifically to address not-for-profit hospitals by removing the exemption that had been in place since Taft– Hartley’s original passage in 1947. Beginning in 1975, not-for-profit hos- pitals could no longer be considered beyond the reach of labor unions. The exemption was removed, but specific rules were created in recognition of the special circumstances of this vital service that deals in matters of human life. For example, written notice must be provided by a union to the healthcare institution and the Federal Mediation and Conciliation Service 10 days prior to engaging in any picketing, strike, or other concerted refusal to work. No such notice is required prior to similar actions in other industries.

The 1975 amendments preempt all state labor laws that previously ap- plied to nongovernmental hospitals. Also, the 1975 amendments apply to healthcare institutions previously covered by the act, such as proprietary hospitals and nursing homes, as well as to all those institutions brought under federal law by these amendments to the act.

A significant element of Congress’s intent in passing the amendments was to provide time to transfer patients from a struck or threatened institution to another facility and to obtain limited assistance from another facility without risking secondary strikes or boycotts against the assisting institution.

Pregnancy Discrimination Act (1978) The Pregnancy Discrimination Act defined that discrimination on the basis of pregnancy, childbirth, or related medical conditions as unlawful sex discrimination under Title VII of the Civil Rights Act of 1964. From this point forward, pregnancy has been considered to be a medical disability and is treated accordingly as a disability of some six to eight weeks’

A Regulated Environment 49

9781449688837_CH03_041_066.indd Page 49 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 49 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

duration. The exact length varies and depends on whether federal or state guidelines are applied.

Consolidated Omnibus Budget Reconciliation Act (1986) The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a complex piece of legislation that addresses many concerns. However, most pertinent to employment is the provision that COBRA allowed for the extension of group insurance coverage to employees and their dependents on a self-pay basis for set periods of time for those who would otherwise lose group health or dental benefits due to a loss of employment, change in employment status, or other defined events. The maximum period for COBRA benefits is 36 months. The length of the period depends on the qualifying event or the reason for accessing COBRA. By making it possible for these employees and dependents to remain on the group contracts under which they had been covered, COBRA shifted to employers a portion of the cost of health coverage for many individuals who would otherwise be uninsurable except under government programs. As far as health insurance is concerned, COBRA simply provides temporary or stopgap coverage. Persons who continue coverage under COBRA must secure other insurance after the eligibility period expires. Insurance coverage can be continued up to 18 months for laid-off employees, up to 29 months for dis- abled individuals, and up to 36 months for dependents following separation, divorce, or the death of the previously covered employee. Should the employer go out of business or for some other reason terminate its health insurance plan, however, all rights under COBRA immediately cease.

Immigration Reform and Control Act (1986) The Immigration Reform and Control Act (IRCA) requires employers to review and, as necessary, modify their hiring practices. They must institute procedures to verify that all job applicants are United States citizens or oth- erwise legally authorized to work in the United States. This law established civil and criminal penalties for knowingly hiring, recruiting, referring, or retaining in employment persons designated as unauthorized aliens. The act prohibits employers from discriminating against job applicants on the basis of citizenship status or national origin.

Much initial business reaction to IRCA was strong, vocal, and nega- tive. Because IRCA forces employers to take steps to screen out illegal immigrants (the majority of whom enter this country with employment as a goal), many organizational heads have expressed the belief that busi- nesses are being made to perform a function that more correctly belongs within the purview of the federal government. Skrentny (1987) provided the following early assessment of the act: “This onerous piece of legis- lation for business turns every employer in the country, whether he or she hires a lone housekeeper or 10,000 auto workers, into an arm—an agent or a cop, if you will—of the Immigration and Naturalization Service (INS).” The Homeland Security Act of 2002 required the INS in 2003 to

50 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 50 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 50 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

be dismantled and separated into three components: the U.S. Citizenship and Immigration Service (USCIS), Immigration and Customs Enforcement (ICE), and Customs and Border Protection (CBP).

Most employment legislation specifies the minimum-size organization to which it applies. For example, the Family and Medical Leave Act applies only to employers with 50 or more employees. The Immigration Reform and Control Act pointedly applies to all employers of one or more employ- ees. The basis for this requirement is the premise that a significant number of undocumented aliens find work as household help.

This legislation has created work in the form of a document known as the Employment Eligibility Verification Form I-9, which is ordinarily completed in HR as part of the hiring process. Each new employee or employee-to-be must furnish specified proofs of identity and, in the instance of legal aliens, proof of authorization to work in the United States. After examining (and usually copying) the appropriate proofs, a representative of the employer signs the I-9 attesting to having seen the documents. An employer has three business days from the date of hire to complete an I-9 form. This requirement changes to the first day of employment if the term of hire is to be less than three days. Completed I-9 forms are retained in employees’ personnel files, where they are subject to inspection and audit by ICE. Forms may also be inspected by the Department of Labor and certain immigration-related branches of the Department of Homeland Security other than ICE. Financial penalties may be imposed for missing or incomplete I-9 forms. Significant penalties can be imposed if illegal aliens are discovered in the workforce.

Some critics have claimed that the Immigration Reform and Control Act has resulted in increased employment discrimination. Employment applicants who look or sound foreign, especially Asians and Hispanics, are often faced with an increased likelihood of discrimination by employers who may shy away from hiring them because they fear inadvertently hiring illegal aliens and thus exposing themselves to action by the ICE. Laws af- fecting employment have proliferated to such an extent that some of them occasionally come into conflict with each other. Title VII of the Civil Rights Act declares that discrimination on the basis of race or national origin is illegal, while the Immigration Reform and Control Act encourages closer scrutiny of applicants on the basis of national origin.

Pension Protection Act (1987) This act requires organizations with underfunded pension plans to make additional payments to the Pension Benefit Guarantee Corporation (PBGC). The PBGC is a government agency established to guarantee benefit pay- ments to participants of legally qualified defined-benefit pension plans. In addition to increasing employers’ payments to the PBGC, this legislation reduces or eliminates the deduction of contributions by employers for better-funded plans.

A Regulated Environment 51

9781449688837_CH03_041_066.indd Page 51 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 51 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

Drug-Free Workplace Act (1988) The Drug-Free Workplace Act requires organizations having $25,000 or more in federal contracts or grants to make good-faith efforts to maintain a drug-free workplace and to establish drug education and awareness programs for their employees. As a precondition to receiving a contract or grant, the law requires an organization to certify that it will provide and maintain a drug- free workplace. The manager of any department involved in the fulfillment of any portion of an appropriate federal contract or grant will be involved at several points in the following process. An organization must notify all employees in writing (via a published statement) that the possession, use, manufacturing, or distribution of a controlled substance in the workplace is prohibited. The statement must include the penalties that will be imposed for violations of company rules. Each organization must establish a drug-free awareness program to inform employees of the dangers of drug abuse in the workplace; comply with the external requirement of a drug-free workplace as a condition of seeking and accepting contracts and grants; note drug counseling, rehabilitation, or employee assistance programs that may be available to them; and enumerate the penalties to which the organization may be exposed for violations that occur in the workplace.

An organization must require that each individual employee who is to be involved in the fulfillment of an appropriate contract or grant possess a copy of the organization’s published statement concerning controlled substances. Furthermore, the organization must notify all employees receiving the con- trolled substances statement that they are expected to abide by all terms of the statement and notify their employer of any criminal drug statute convic- tion for a violation in the workplace no later than five days after conviction. Within 10 days of receiving such a notice of criminal drug statute convic- tion, the granting or contracting agency must be notified of the conviction. Within 30 days of receiving notice of an employee’s criminal drug statute conviction, an employer must take appropriate disciplinary action against the employee, or require the employee to complete an approved drug-abuse assistance or rehabilitation program in a satisfactory manner. Finally, each employer must make a good-faith effort to maintain a drug-free workplace through implementation of the foregoing procedures and requirements.

All healthcare institutions have an interest in keeping their work environ- ments free from dangers to patients, visitors, and employees created by the use of illegal drugs or controlled substances. For a number of years, drug abuse in the workplace has made it necessary for employers to develop and implement different means of addressing this growing problem. Although the require- ments of the Drug-Free Workplace Act apply only to employees receiving federal contracts and grants, conscientious management practices suggest that a comprehensive policy and drug-free awareness program be implemented for all employees. Conscientious departmental managers should have a strongly vested interest in displaying a high level of concern for maintaining a drug-free work environment whether or not there are external requirements for doing so.

52 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 52 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 52 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

Employee Polygraph Protection Act (1988) The Employee Polygraph Protection Act (EPPA) prevents most private- sector employers from requiring job applicants or current employees to take polygraph (lie detector) tests. Under EPPA, the routine use of polygraph tests is permitted only in organizations that produce and distribute con- trolled substances and in those concerned with nuclear power, transporta- tion, currency, commodities, or proprietary information.

In most organizations, an employee may be asked to submit to a poly- graph when other evidence gives management reason to suspect an indi- vidual of wrongdoing. This is sometimes referred to as reasonable suspicion or, somewhat inaccurately, as reasonable cause. However, an employee may not be disciplined or discharged solely on the results of a polygraph test. Under EPPA, an employer may not ask an employee or job applicant to submit to a polygraph test other than in the situations already delin- eated. Furthermore, an employer may not take any adverse action against an employee or applicant for refusing to take a polygraph test. Finally, the results of a polygraph test to which a person has submitted for one specific reason cannot be used for a different purpose.

Worker Adjustment and Retraining Notification Act (1988) The Worker Adjustment and Retraining Notification Act (WARN) requires employers with 100 or more employees at any individual site to provide ad- vance notification of major reductions in force. An employer must provide 60 days’ notice of an impending layoff of 50 or more employees, and must notify local government and the appropriate state agency, bureau, or unit responsible for dislocated workers that provides employment and training services.

Americans with Disabilities Act (1990) The Americans with Disabilities Act (ADA) provides individuals with dis- abilities with the same protections afforded to minorities and other pro- tected groups under the Civil Rights Act of 1964. The ADA calls for access equal to that available to others in regard to employment, transportation, and telecommunications, and ensures that all services and facilities are available to the public, whether under private or public auspices.

Disabilities are broadly defined under the Americans with Disabilities Act, including, in addition to physical limitations ordinarily thought of as disabilities, hearing and visual impairments, paraplegia and epilepsy, HIV or AIDS, and literally dozens of other conditions. The list of recognized disabilities is long, and it continues to expand as legal challenges continue over what constitutes a disability.

The ADA prohibits potential employers from asking about a job appli- cant’s medical conditions, if any, and imposing major limitations on pre- employment physical examinations. Under the law, a physical examination cannot be conducted until after a job offer has been extended. If a physical examination reveals a medical condition that does not affect the person’s ability to perform the major functions of the job being sought, an employer

A Regulated Environment 53

9781449688837_CH03_041_066.indd Page 53 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 53 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

may be expected to make a reasonable accommodation to the needs of the applicant. The key to applicability of the ADA lies in an individual’s ability to perform the major functions of a job satisfactorily. Thus, an individual cannot be denied a job because an impairment prevents performance of a minor or nonessential activity. The employer may find it necessary to make a reasonable accommodation for the condition, providing such accommodation does not cause unreasonable expense or hardship.

From time to time each department manager may have reason to be familiar with some aspects of the law concerning disabilities. Involvement surely will be required should a need arise to make a reasonable accom- modation for one or more employees in the department. However, it is not always possible to identify an individual who is disabled. Unlike race or gender, disabilities may not be visually apparent.

Managers should not be concerned unless they know factually that a disability exists. To obtain protection available under antidiscrimination laws, employees must identify themselves as being disabled. If a disability is neither apparent nor declared, then the employee in question should be treated the same as any other worker. Managers who suspect the presence of a disability that has not been declared are advised not to inquire about the situation with the employee in question. Furthermore, they should not offer unsolicited advice to an employee about a possible but undeclared problem. Such a course of action has been ruled as treating an employee in a different manner and is against the law.

The Americans with Disabilities Act has frequently been in the news. A decade after its passage, lawyers argued before the Supreme Court that the ADA went too far in allowing disabled public employees to sue state and local governments in federal court (Hearst News Service, 2000). States and localities generally have immunity against such lawsuits unless Congress has documented sufficient discrimination in the states to deny them that immunity. The federal government must invoke its power under the 14th Amendment to ensure that people have equal protection under the law. States have contended that Congress has been lax in demonstrating that individual states were not enforcing their disability laws.

In a 2002 decision, the Supreme Court unanimously narrowed the num- ber of people covered by the ADA. The opinion held that “merely having an impairment does not make one disabled for purposes of the ADA,” that a person’s ailment must extend beyond the workplace and affect everyday life, and that the ability to perform tasks that are of central importance to most people’s daily lives must be “substantially limited” before an in- dividual can qualify for coverage under the original legislation that was intended to protect the disabled from discrimination because of physi- cal impairments (Newsday, 2002). In other words, the court ruled that individuals who could function normally in daily living could not claim disability status because of physical problems that limited their ability to perform some manual tasks on the job.

54 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 54 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 54 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

In another opinion that was viewed by some as a defeat for disabled workers, the Supreme Court ruled that disabled workers are not always en- titled to premium assignments intended for more senior workers (Associated Press, 2002a). The practical implication of this ruling is that, in the majority of instances, seniority can take precedence over disability. In continuing its series of clarifications and rulings limiting rights under the ADA, the court ruled that disabled workers cannot demand jobs that would threaten their lives or health (Associated Press, 2002b). This ruling arose from a case in which a worker with a particular medical condition wanted to return to his original position although it was considered medically risky for him to do so. The ADA’s requirement for reasonable accommodation has always made exceptions for those who may be a threat to the health or safety of others on the job. This decision interpreted the exception as applying to workers who may present a risk only to themselves.

In September 2008, Congress passed the Americans with Disabilities Act Amendments Act (ADAAA), intended to provide broader protections for disabled workers and reverse a number of court decisions that Congress considered too restrictive. The ADAAA added to the ADA a number of ex- amples of “major life activities” and overturned a Supreme Court case that held that an employee was not disabled if the impairments could be corrected by mitigating measures, specifically providing that an impairment must be determined without considering corrective measures. It also overturned the interpretation that an impairment that substantially limits one major life activity must also limit other activities to be considered a disability.

Case law continues to influence the ongoing implementation of the ADA. A number of cases are still pending, and it is likely that the Americans with Disabilities Act will continue to be refined through Supreme Court deci- sions over the next several years.

Older Workers Benefit Protection Act (1990) The Older Workers Benefit Protection Act (OWBPA) amended the Age Discrimination in Employment Act (ADEA) by clarifying the authority of the ADEA relative to employee benefits. Although still requiring equal benefits for all workers, as a result of several legal decisions, the ADEA allowed reductions in benefits for older workers in situations where added costs were incurred to provide the benefits. The OWBPA removed employ- ers’ option to justify lower benefits for older workers. It requires that any waivers or releases of age discrimination must be voluntary and part of an understandable, written agreement between employer and employee. In other words, this law prohibited an employer from unilaterally providing a reduced benefit to an employee on the basis of age.

Civil Rights Act Amendments (1991) Adding to the original Civil Rights Act of 1964, the 1991 amendments allowed employees to receive compensatory and punitive damages from employers who committed violations with malice or reckless disregard for an individual’s

A Regulated Environment 55

9781449688837_CH03_041_066.indd Page 55 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 55 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

protected rights. They allowed women and disabled workers to sue for com- pensatory and punitive damages, a right they previously did not have. This legislation provided for jury trials in such discrimination cases. Previously, these had been handled with nonjury processes. For employers, the overall impact of these amendments was to increase the likelihood of longer and costlier legal processes and to increase potential penalties. The effect of this act was to add “teeth” to portions of the Civil Rights Act of 1964, expand certain other parts, and generally make possible more and larger damage awards.

Family and Medical Leave Act (1993) The Family and Medical Leave Act (FMLA) applies to eligible persons in orga- nizations having 50 or more employees. The FMLA defines eligible employees as those having been employed for at least one year and having worked at least 1,250 hours during the previous 12 months. These persons are permitted to take up to 12 weeks of unpaid leave during any 12-month period when unable to work because of a serious health condition, or to care for a child upon birth, adoption, or foster care, or care for a spouse, parent, or child with a serious health condition. Under specified circumstances, leave may be taken intermit- tently or on some reduced time schedule. This has the potential to extend any given leave over a period longer than 12 calendar weeks. Employees who are entitled to a set amount of paid time off are ordinarily required to use that time as part of their 12 weeks. Most employees on leave ordinarily use up their available paid time off rather than experiencing their entire leave without pay.

The Family and Medical Leave Act does not take precedence over any state or local laws that happen to provide greater leave rights. Some states mandate a threshold lower than 50 employees. For example, in Maine the threshold is 15 or more employees for private employers and 25 or more for pubic employ- ers; in the District of Columbia the threshold is 20 or more employees. Several states have their own definitions of “family.” Some, for example, include “domestic partners,” and a number include grandparents and parents-in-law. With FMLA, as with all instances in which federal and state governments have passed laws addressing the same issue, it is the more stringent law—that is, the one that is more generous to employees—that applies.

While on approved leave, employees must continue to receive healthcare benefits but are not entitled to accrue vacation, sick time, or seniority. The employer must guarantee that, upon returning from leave, an employee will be reinstated to the previous position held or placed in a fully equivalent position with no loss of benefits or seniority.

In many situations, the Family and Medical Leave Act has made life con- siderably more difficult for department managers. When an employee in an essential position takes leave, that position and its responsibilities must be covered. Some positions cannot be left vacant for a few days, let alone for a 12-week period. Filling the position and later returning the employee to an equivalent position is not readily accomplished. Courts and other external agencies have repeatedly interpreted equivalent as essentially the same in all

56 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 56 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 56 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

aspects: pay, benefits, tasks, and responsibilities. Some courts have ruled that equivalent extends to reinstating similar hours and shifts. Because equivalent has been so strictly interpreted, the safest course of action for managers is to preserve the original position of the person on leave. Managers are often advised to juggle coverage until the employee returns from leave. This often requires the use of temporary employees, overtime, reassignments, and other means. The practical result of the FMLA is that staffing and scheduling has become more difficult, time consuming, and expensive for some managers.

Some critics of the FMLA suggest that the law mandates various forms of leave that are used more often by female employees than by males and thus renders women more expensive to employ than men (the same criticism has been leveled at the Pregnancy Discrimination Act of 1978), arguing that this will encourage employers to engage in subtle discrimination against women in the hiring process. Supporters point out that since FMLA applies to both women and men, it encourages both men and women equally to make use of family-related leave.

Along with the ADA, the FMLA continues to be subject to frequent clarification and adjustment. In late 2009, Congress acted to provide alter- nate eligibility criteria for airline flight crew members with some additions specific to that employee group. Also, a section of the National Defense Authorization Act of 2010, passed in October 2009, expanded the defini- tion of “serious injury or illness” to specifically include aggravation of existing or preexisting injuries or illnesses incurred in the line of military duty. Also in late 2009, the Department of Labor (DOL) updated its regula- tions to provide better understanding of workers’ rights and responsibilities. The DOL expanded FMLA coverage for military family members, and revised employee notice rules to minimize workplace disruptions due to unscheduled FMLA absences.

It is likely that the FMLA, along with the ADA, will be affected by pe- riodic adjustments and clarifications for some time to come.

Retirement Protection Act (1994) The Retirement Protection Act strengthens and accelerates funding of underfunded pension plans and increases Pension Benefit Guarantee Corporation (PBGC) premiums for plans that pose the greatest risk. It im- proves the flow of pension-related information for workers and increases the PBGC’s authority to enforce compliance with pension obligations.

Small Business Job Protection Act (1996) Despite the title of this legislation, its provisions are not restricted to small businesses. This legislation included the 1996 increase in the minimum wage. It increased pension protection and makes it easier for workers to roll over (change to another fund or plan) their retirement savings upon changing employment. It simplified pension administration to an extent and reduced the vesting period for selected multiemployer plans from

A Regulated Environment 57

9781449688837_CH03_041_066.indd Page 57 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 57 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

10 years to five years. The act allows specified smaller employers to estab- lish simplified 401(k) plans for their employees.

Health Insurance Portability and Accountability Act (1996) When the Health Insurance Portability and Accountability Act (HIPAA) came upon the scene in 1996, as far as most persons working in health care were concerned, HIPAA had little effect. At the time the most visible portion of HIPAA addressed “portability and accountability” in reference to employee health insurance. The intent was to enable workers to change jobs without losing coverage. This let workers move from one employer’s plan to another’s without gaps or waiting periods and without restrictions based on preexisting conditions. A worker could move from plan to plan without interruption of coverage.

Not a great many managers in health care concerned themselves with HIPAA in 1996. Human resource managers were the ones who became most aware of this new legislation because it affected their benefit plans. However, even many HR managers had little involvement with HIPAA. In most instances the required notifications were handled by the employ- ers’ health insurance carriers, so there was little for HR to do other than answer employee questions. At that time nothing about HIPAA affected the role of individual non-HR managers. In the minds of many who did not look beyond the simple implications of the law’s title, the organization had little more to do than to ensure the portability of health insurance. However, the real impact of HIPAA was yet to come, and its arrival was a surprise to many.

HIPAA consists of five sections or “titles,” each addressing different topics and different areas of responsibility:

• Title I: Healthcare Access, Portability, and Renewability • Title II: A. Preventing Healthcare Fraud and Abuse B. Medical Liability Reform C. Administrative Simplification • Title III: Tax-Related Health Provisions • Title IV: Group Health Plan Requirements

• Title V: Revenue Offsets

THE CONTENTIOUS TITLE II The portion of HIPAA having the most far-reaching implications for many healthcare managers in the performance of their jobs is C, Administrative Simplification (which for many has proven to be anything but “simple”).

Managers within health care, some to a greater or lesser extent than others, are finding or are yet to find their jobs affected by portions of HIPAA. Eleven separate “Rules” have been designated. Not all of them have yet been released for implementation, so for healthcare managers HIPAA implementation will be a continuing process for some time to come.

58 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 58 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 58 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

The controversy over the intent versus the reality of HIPAA primarily concerns the requirements of the Privacy Rule. The intent was to strike a balance between ensuring that personal health information be accessible only to those who truly need it and permitting the healthcare industry to pursue medical research and improve the overall quality of care. Essentially, patient privacy is at the center of most current interest in HIPAA.

HIPAA has impacted not only HR but also nearly every department and division of all healthcare organizations. Although there may be future modifications to some of its rules and mandated procedures, the heightened emphasis on personal privacy and the confidentiality of patient informa- tion is here to stay.

Patient Protection and Affordable Care Act (2010) The Patient Protection and Affordable Care Act (PPACA) was signed into law on March 23, 2010, and was immediately amended by the Health Care and Education Act of 2010, which became law on March 30, 2010. The PPACA is, of course, the currently controversial “healthcare reform” undertaking of the Obama administration. The law includes provisions that take effect over several years, including expanding Medicaid to cover more lower-income people, subsidizing insurance premiums for persons of a certain income level, providing incentives for businesses to provide healthcare benefits, prohibiting denial of claims or coverage because of preexisting conditions, and other fixes aimed at expanding coverage to in- clude greater numbers of people, controlling costs, and reducing the deficit.

Passage of the PPACA did not stem the continuing controversy over how the nation should address the widespread problems of health insurance cost and availability. If anything, controversy increased as the law came under criticism from several quarters and some in Congress and elsewhere began advocating its repeal.

Some of the changes called for during the first year of enactment (2010–2011) included the following: insurance companies were barred from dropping people from coverage because of illness, young adults could remain on their parents’ plans until age 26, coverage was made possible for uninsured adults with preexisting conditions, insurers were forbidden to deny coverage to children with preexisting conditions, and a number of changes were made that affected Medicare. Changes targeted for 2011 included: Medicare bonus payments to primary care physicians and general surgeons, Medicare coverage of annual wellness visits, and other changes to Medicare and Medicaid.

The legislation stipulated that additional reforms would be imple- mented annually between 2012 and 2015. Some new requirements are scheduled for 2018. One extremely controversial feature scheduled for implementation in 2014 is the requirement for most people to obtain health insurance coverage or pay a tax if they do not so.

The PPACA is likely to affect most healthcare managers in two ways. First, the manager may be affected as a participant in the employer’s health

A Regulated Environment 59

9781449688837_CH03_041_066.indd Page 59 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 59 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

insurance plan. Depending on the nature of the plan and its features, there could be changes that affect coverage for all employees, including the manager. Second, the individual manager is likely to be asked questions by employees who want to know how the plan’s changes will affect them and what will happen to their present coverage. The manager will need to be knowledge- able enough to respond to general questions and to know where in Human Resources to go for more complete answers. For the most part, the interpreta- tion of the features and effects of plan reform on the organization’s health insur- ance plan will reside with the benefits-management area in the HR department.

■ GREATER RESPONSIBILITIES AND INCREASED COSTS FOR ORGANIZATIONS

In addition to the laws described in the previous section, there are state laws that often vary from state to state. Other federal statutes have employment implications, but these are not discussed in this chapter.

The closing decades of the 1900s were accompanied by the federal government spreading its influence over an increasing number of aspects of the employment relationship. Fortunately, the proliferation of employ- ment legislation has slowed since 1999. In addition to creating added work for HR personnel by designating what cannot be done or imposing new requirements, many of the laws affecting employment have created new or tighter boundaries within which managers must operate.

Overall, the effect of employment legislation has been to compel employers to be more socially responsible for their employees. This is especially evident in significant pieces of legislation such as the Americans with Disabilities Act and the Family and Medical Leave Act. Legislation affecting social respon- sibility and rules of conduct for interactions between employers and their employees imposed added work responsibilities and supporting systems to organizations. These requirements have increased the cost of doing business and thus increased costs to the ultimate consumers of all goods and services.

While some new laws have required only minor changes in procedures or modest alterations in recordkeeping practices, most have clearly increased the cost of doing business because provider organizations and their custom- ers are the only entities available to pay the increased costs. Legislators know very well that costs are associated with implementing any new law. Legislators and senior managers are often far from agreement concerning the costs of implementing new legislation. When elected officials create new programs, they are undoubtedly aware that only three options exist to cover the costs associated with implementation. Legislators can discon- tinue an existing program to free up funds. This rarely occurs because it is politically unpopular. Legislators can raise taxes, but suggesting to do this is even more unpopular. Finally, legislators can find other parties or organizations (someone else) to bear the costs of new legislation. The enti- ties that have been paying to implement most of these laws affecting the

60 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 60 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 60 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

employment relationship are businesses and other commercial enterprises. Ultimately, the costs are passed along and paid by individual consumers.

■ A CUMULATIVE EFFECT: SOME PERSONAL COMMENTS

Exhibit 3-1 presents a list of all of the laws discussed earlier by decade of passage. It is not difficult to see the shift from the pre-1964 concerns with collective bargaining and wage-and-hour issues to the growing post-1964 concerns with social responsibility.

A simple comparison of the pre-1964 years with the present day dem- onstrates how significantly the employment environment has changed. Although very few of the laws reviewed replaced features of earlier legisla- tion, most of the legislation enacted since 1964 has exerted new and often different influences on how work organizations treat employees and how managers can direct their own departments. The accumulation of more than four decades of legislation affecting the employment relationship has transformed personnel from the days of an employment office to the mod- ern HR department. A contemporary department manager must comply with countless rules for supervising and directing employees. Although the accumulation of new legislation seems to have slowed somewhat, most experts agree that the future is likely to bring more, not less, regulation.

Discrimination cannot be legislated out of existence. Discrimination is extremely personal, as it resides in individual attitudes, likes, and dislikes. It is the product of both home and culture. Therefore, no job is completely immune from the possibility of discrimination.

A new law can come into being in a relatively brief period, yet it can take a very long time for the changes in human behavior required by that law to come about. Title VII of the Civil Rights Act of 1964 provides a useful illustration. Employment discrimination has been prohibited by law for five decades, but problems of discrimination continue to exist in many organizations. However, the workforce in the United States is becoming increasingly diverse. Organizations that eliminate discrimination will be the ones best able to value and manage this diversity.

For five decades employee rights have been an extremely active legal topic in the federal and state legislatures and thus in the courts. We can expect this interest in individual rights to continue, probably even to in- tensify from time to time. The employment environment has changed and will continue to change. Those who manage within this environment must either change with it or be left behind.

■ CONCLUSION

The legal aspects of HR have changed dramatically over the past 80 years. The emphasis on the right of workers to form unions and establishing basic parameters such as length of a working week and establishing a

Conclusion 61

9781449688837_CH03_041_066.indd Page 61 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 61 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

Exhibit 3-1 Employment Legislation by Decade

1930s • Norris–LaGuardia Act (1932) • National Labor Relations Act (1935) • Social Security Act (1935) • Fair Labor Standards Act (1938)

1940s • Labor–Management Relations (Taft–Hartley) Act (1947)

1950s • Labor–Management Reporting and Disclosure (Landrum–Griffen)

Act (1959)

1960s • Equal Pay Act (1963) • Civil Rights Act (Title VII) (1964) • Age Discrimination in Employment Act (1967)

1970s • Occupational Safety and Health Act (1970) • Health Maintenance Organization (HMO) Act (1973) • Rehabilitation Act (1973) • Employee Retirement Income Security Act (1974) • Taft–Hartley Act Amendments (1975) • Pregnancy Discrimination Act (1978)

1980s • Consolidated Omnibus Budget Reconciliation Act (1986) • Immigration Reform and Control Act (1986) • Pension Protection Act (1987) • Drug-Free Workplace Act (1988) • Employee Polygraph Protection Act (1988) • Worker Adjustment and Retraining Notification Act (1988)

1990s • Americans with Disabilities Act (1990) • Older Workers Benefit Protection Act (1990) • Civil Rights Act Amendments (1991) • Family and Medical Leave Act (1993) • Retirement Protection Act (1994) • Small Business Job Protection Act (1996) • Health Insurance Portability and Accountability Act (1996)

2010s • Patient Protection and Affordable Care Act (2010) • Health Care and Education Act (2010)

62 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 62 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 62 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

minimum wage has changed. The emphasis of most recent legislation has been grounded in social responsibility. As government has compelled em- ployers to become more socially responsible, the costs of those government- mandated changes have been shifted to consumers.

American workers can expect equal access to employment and to receive equal pay for similar jobs. They can expect to work in safe surroundings without being discriminated against on the basis of age, gender, race, re- ligion, national origin, or personal preference. Persons with disabilities must be treated like any other workers. They can expect to work in an environment that is free of drugs and harassment. American workers can take time off during a pregnancy or illness. They can expect access to healthcare benefits after losing their jobs. To a degree, pension rights have been established. Information related to one’s health is now protected and considered to be private.

Human resources personnel must be familiar with the requirements of the legislation discussed in this chapter. This task has made the jobs and activities of HR employees more complex and challenging. Compliance with the legal requirements has imposed additional costs on organizations. Most experts expect that this trend will continue, although the pace of implementing changes is likely to slow.

Case Study Resolution

Returning to the initial case study, it is reasonably certain that County Memorial’s request for dismissal of the complaint will be unsuccessful. The Americans with Disability Act prohibits potential employers from imposing major limitations on pre-employment physical examinations. Concerning Susan and her complaint, the potential employer should at- tempt to negotiate a reasonable agreement and offer her employment in some capacity, rather than allow the State Division of Human Rights to conduct a full investigation and run the risk of imposing a costly settlement. The division might consider Susan to be a handicapped person (anyone who has a physical or mental impairment that substantially limits one or more major life activities). If it so rules, the division can then sue County Memorial Hospital on Susan’s behalf.

Susan’s case is far from cut and dried, however. Different jurisdictions have rendered varying decisions related to any disability. For example, a New York state court ruling declared obesity to be a handicap, but a Pennsylvania decision stated that obesity can be but is not always automati- cally a handicap. As is often the case with disputes that arise under some aspect of employment law, clarification of the law in its application is left to the courts. Courts in different jurisdictions and locations do not always see the same situation in the same light.

Conclusion 63

9781449688837_CH03_041_066.indd Page 63 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 63 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

SPOTLIGHT ON CUSTOMER SERVICE

Customer Service, the Law, and Creators of Laws

The legal system, through many pieces of legislation enacted over the past 80 years, makes many demands on human resources departments. Many statu- tory programs require HR departments to collect money or information or both. Some HR insiders joke that they have been turned into bill collectors.

Customer service has been exempted from the pieces of legislation that have affected HR. No statutes outline how customers should be treated. Statutes do not stipulate that customers should receive any particular treatment.

How customers are treated is determined locally. Often, supervisors of employees that interact with the public have the responsibility to establish norms for interaction and treatment. Many managers choose not to exercise their responsibilities.

A small number of companies have made customer service an organization- wide priority. The phrase “The customer is always right” was an early attempt (1909) to establish norms for customer service. Harry Gordon Selfridge is generally credited with originating the phrase for the London department store that bears his name. In the United States, F. W. Woolworth adopted the approach for his company. Today, the Disney Company has a reputation for training its employees to provide excellent customer service.

The bottom line for the first part of this story is that customer service cannot be legislated. It must emerge because individuals and organizations care about their customers.

What about the individuals who actually create the legislation? Many elected officials claim that they have devoted their lives to public service. An important question then becomes, “Does a relationship exist between public service and customer service?”

Maybe. For most lawmakers, the answer is likely to be determined using the following

logic. Customer service often (usually) requires putting the welfare and satisfaction of customers first. When discussing lawmakers, constituents can be substituted for customers. Lawmakers put themselves first, ahead of constituents, because lawmakers must be reelected if they want to continue their present employment.

Programs that increase taxes or fees provide convenient examples. In order to curry favor with constituents, most lawmakers are reluctant, often to the point of refusal, to vote for legislation that openly requires constituents to spend money.

Lawmakers like to claim that they enact legislation that benefits their constitu- ents without the constituents having to pay increased taxes or fees to the govern- ment. When affected businesses raise prices to recover additional costs required to comply with requirements of the new legislation that benefits constituents, lawmakers can claim that they are not responsible because they did not raise the prices. Whether money to cover the costs associated with a new program is paid to a governmental unit or to a company, constituents ultimately bear the costs.

64 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 64 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 64 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

References

Associated Press. (2002a, April 30). Seniority outweighs disability, court says. Democrat & Chronicle, Rochester, New York.

Associated Press. (2002b, June 11). Top court disallows dangerous jobs for disabled. Democrat & Chronicle, Rochester, New York.

Hearst News Service. (2000, October 12). High court scrutinizes Disabilities Act. Democrat & Chronicle, Rochester, New York.

Newsday. (2002, January 9). High court limits disability law. Democrat & Chronicle, Rochester, New York.

Skrentny, R. (1987). Immigration reform—What cost to business? Personnel Journal, 66(10), 53–59.

Discussion Points

1. Why is 1964 and the passage of the Civil Rights Act (Title VII) a turn- ing point in the evolution of HR? Stated differently, other than 1964 representing the beginning of a steady flow of regulations to follow, what occurred that constituted a change of direction? Why?

2. Define and describe a contemporary bargaining unit as defined by the National Labor Relations Act. How, if at all, does it differ from a bargaining unit in 1935?

3. When and how was the Equal Employment Opportunity Commission established? What is its purpose?

4. What is a bona fide occupational qualification? Provide at least two specific examples.

5. What is the intended goal of the right-to-know laws? In your opinion, have they been successful? Why or why not?

6. Well before the passage of the Americans with Disabilities Act, in some instances employers were required to provide reasonable accommoda- tion of the limitations of an employee or applicant. When did this occur, and what were the conditions under which this requirement applied?

7. What appears to have been the primary intended purpose of the Employee Retirement Income Security Act? Why was this legislation deemed to be necessary?

Back to public service and customer service. For individuals willing to overlook payment realities that are not discussed and the fact that this allows lawmakers to put their own welfare ahead of their constituents, the answer to the question is yes, lawmakers do provide customer service. For individuals that understand the deception of the undiscussed connection, the answer to the question becomes no, lawmakers do not provide customer service.

Customer service is, or should be, synonymous with openness.

Conclusion 65

9781449688837_CH03_041_066.indd Page 65 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 65 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd

8. What have been the primary effects of the Immigration Reform and Control Act on businesses?

9. Pose two hypothetical examples of situations in which a healthcare employer might legally require a polygraph (lie detector) test as a condition of either initial or continued employment.

10. Viewing the Family and Medical Leave Act from the perspective of a working department manager, describe the ways in which this legisla- tion has affected a supervisor’s ability to manage.

Resources

Books Buckley, J. F., & Green, R. M. (2004). State by state guide to human resources

law, 2005. Frederick, MD: Aspen. Guerin, L. (2005). Create your own employee handbook: A legal and practical

guide with CD (2nd ed.). Berkeley, CA: NOLO. Kaiser, S. E. (2004). Develop an affirmative action program as a risk management

tool. Lincoln, NE: iUniverse. Shilling, D. (2004). The complete guide to human resources and the law. Amsterdam:

Wolters Kluwer.

Periodicals Edelman, L. B. (1992). Legal ambiguity and symbolic structures: Organizational

mediation of civil rights law. American Journal of Sociology, 87, 1531–1576. McGlothlen, C. A. (1999). Seventh Circuit ruling allows employers to cap AIDS

benefits. AIDS Policy Law, 14(14), 7–9. O’Brien, G. V., & Ellengood, C. (2005). The Americans with Disabilities Act: A

decision tree for social services administrators. Social Work, 50(3), 271–279. Popovich, P. M., Scherbaum, C. A., Scherbaum, K. L., & Polinko, N. (2003). The

assessment of attitudes toward individuals with disabilities in the workplace. Journal of Psychology, 137(2), 163–177.

Ritchie, A. J. (2002). Commentary: Implementation of the Americans with Disabilities Act in the workplace. Journal of the American Academy of Psychiatry and Law, 30(3), 364–370.

Sassi, F., Carrier, J., & Weinberg, J. (2004). Affirmative action: The lessons for health care. British Medical Journal, 328(7450), 1213–1214.

Schiff, M. B. (2004). A primer on case law under the Americans with Disabilities Act. Tort Trial and Insurance Practice Law Journal, 39(4), 1141–1196.

Takakuwa, K. M., Ernst, A. A., & Weiss, S. J. (2002). Residents with disabilities: A national survey of directors of emergency medicine residency programs. Southern Medical Journal, 95(4), 436–440.

Weill, P. A., & Mattis, M. C. (2003). To shatter the glass ceiling in healthcare management: Who supports affirmative action and why? Health Services Management Research, 16(4), 224–233.

Westreich, L. M. (2002). Addiction and the Americans with Disabilities Act. Journal of the American Academy of Psychiatry and Law, 30(3), 355–363.

66 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES

9781449688837_CH03_041_066.indd Page 66 7/17/13 9:21 AM f451 9781449688837_CH03_041_066.indd Page 66 7/17/13 9:21 AM f451 /205/JB00081/work/indd/205/JB00081/work/indd