Chapter XII A Survey of Labor and Employment and Workplace Safety and Health Law for Construction Lawyers

• Library: SC Construction Law Desk Book (SCBar) (2022 Ed.)

Chapter XII A Survey of Labor and Employment and Workplace Safety and Health Law for Construction Lawyers

W. Kyle Dillard John T. Merrell

The purpose of this chapter is survey some of the principal federal and state labor and employment laws of which construction lawyers should be aware. Many of these topics are complex and could warrant their own chapter (or book). While this chapter is not intended to be comprehensive, it is designed to provide a level of baseline knowledge from which practitioners may draw when advising construction industry clients on labor and employment related matters. A more focused treatment is given to the legal regulation of workplace safety and health under federal and state law. This body of law is itself quite complex, and the information set forth herein should be used as a primer to afford the practitioner a basic, working understanding of the system of regulation and enforcement of safety and health laws.

A. At-Will Employment and Exceptions

South Carolina is an at-will employment state, which means that employees can be terminated at any time, for any reason, with or without notice, as long as the termination does not violate federal or state law. This section will focus on laws that may limit a contractor's ability to terminate, discipline, demote, or transfer an at-will employee.

1. Employee Handbook Disclaimers

Under South Carolina law, an employee handbook can create an employment contract that limits an employer's ability to terminate an employee. In order for an employer to avoid having its employee handbook regarded as an employment contract, the employer may comply with S.C. Code Ann. § 41-1-110 (Supp. 2011) by issuing a compliant disclaimer with the employer's handbook. To comply with this statute, an employer's handbook must include disclaimer language in underlined capital letters on the first page of the handbook, and the disclaimer must be signed by the employee.¹

2. Federal Anti-Discrimination Laws

a. Title VII

Title VII of the Civil Rights Act of 1964, which applies to employers who have 15 or more employees, prohibits an employer from discriminating against an employee or job applicant based upon the person's race, color, religion, sex, pregnancy, or national origin.²

b. The Age Discrimination in Employment Act (ADEA)

The Age Discrimination in Employment Act of 1967 (ADEA), which applies to employers with 20 or more employees, prohibits employers from discriminating against individuals who are 40 years of age or older.³

c. The Americans with Disabilities Act (ADA)

The Americans with Disabilities Act of 1990, as amended, which applies to employers who have 15 or more employees, prohibits employers from discriminating against qualified individuals with disabilities.⁴ The ADA also requires employers to make reasonable accommodations to help qualified disabled individuals do their jobs, except where such accommodations would impose an undue hardship on the employer's business.

d. The Genetic Information Nondiscrimination Act (GINA)

The Genetic Information Nondiscrimination Act of 2008 (GINA), which applies to employers with 15 or more employees, prohibits employers from discriminating against an employee based upon his or her genetic information.

e. Equal Pay Act

The Equal Pay Act provides that females workers must be paid the same amount as their male counterparts when performing equivalent work.⁵ This includes all forms of pay, including salary, overtime pay, bonuses, vacation and holiday pay, and other benefits.

3. State Law Exceptions to At-Will Employment

a. Public Policy Exception

South Carolina courts recognize an exception to the at-will employment doctrine where an employee's termination violates the public policy of the state, such as where the employee was terminated for refusing to violate the law or where the termination itself violates the criminal law of the state.⁶

b. Implied or Express Contract

If an employer makes oral or written promises to an employee that it will not terminate the employee's employment except in certain circumstances or until a certain period of time has passed, it may create an implied employment contract.⁷ An example of this is where an employer has a policy indicating that it will exercise progressive discipline in the event of employee misconduct - if the employer attempts to skip a step in exercising discipline, it may be held to have broken an implied employment contract with its employee (which is all the more reason for employers to include a South Carolina-compliant disclaimer with any and all employee handbooks or policies, and to make it clear that the employer reserves the right to skip steps when imposing discipline).

c. Jury Duty/Compliance with a Subpoena

South Carolina law prohibits employers from discharging or demoting an employee for complying with a valid subpoena calling the employee to testify in court or in an administrative proceeding or to serve on a jury.⁸

d. Smoking

Under South Carolina law, an employer cannot fire, refuse to hire, demote, refuse to promote, or take any other personnel action against an employee based on the fact that the employee uses tobacco products outside of the workplace.⁹However, employers are allowed to prohibit employees from using tobacco products while on duty.

e. Political Beliefs

South Carolina law prohibits employers from firing an employee because of the employee's political opinions or exercise of political rights and privileges.¹⁰

4. Harassment

Many of the above-mentioned federal discrimination laws also prohibit workplace harassment based upon a protected category, such as race, sex, national origin, religion, disability, or age. Harassment may take the form of tangible employment actions, such as a change in employment status, or the creation of a hostile work environment. Employers can minimize the risk of a hostile work environment claim by taking preventative measures, such as adopting a policy that prohibits harassment and requires employees to report any harassment they see or experience in the workplace.

5. Retaliation

Most of the above-mentioned statutes, including the ADA and Title VII, contain specific provisions prohibiting employers from retaliating against employees for filing a discrimination charge or complaining to their employer about discrimination. Likewise, federal statutes such as the Occupational Safety and Health Act¹¹ and the Fair Labor Standards Act¹² also prohibit retaliation against employees who exercise their rights under those laws. Additionally, South Carolina law prohibits an employer from retaliating against an employee because that employee has instituted or participated in a proceeding under the South Carolina Workers' Compensation Act.¹³

B. Wage and Hour Laws

1. The Fair Labor Standards Act

The Fair Labor Standards Act ("FLSA") provides that non-exempt employees must be paid a minimum wage¹⁴ ($7.25 per hour as of July 24, 2009) and must be paid overtime of at least one-and-a-half time their regular rate of pay for all time worked over 40 hours per week.¹⁵ The "regular rate of pay" is based on "all remuneration for employment paid to, or on behalf of, the employee" and may include bonuses, on-call pay, and non-cash benefits such as lodging provided to the employee, depending on the circumstances.¹⁶ Employees who are exempt from the FLSA, such as executive employees or certain administrative employees, do not have to be paid overtime. Effective January 1, 2020, an employee must be paid a salary of at least $684 per week to be considered exempt.

2. South Carolina Payment of Wages Act

The South Carolina Payment of Wages Act requires that employees be notified in writing at the time they are hired of the following:

a. Their hours of work and the amount of wages that they will be paid for those hours;

b. The time and place of payment; and

c. Any deductions that will be made from wages, including payments to insurance programs.¹⁷

"Wages" are defined by the Payment of Wages Act as "all amounts at which labor rendered is recompensed, whether the amount is fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the amount and includes vacation, holiday, and sick leave payments which are due to an employee under any employment policy or employment contract."¹⁸

The Payment of Wages Act also requires employers to give their employees at least seven days' advance notice of any reduction in wages or other change in the terms of employment.¹⁹ When an employer separates an employee from the payroll for any reason, the employer must pay the employee all wages due to him or her within 48 hours of the time of separation or the next regular payday (which may not exceed 30 days).²⁰

When an employer and an employee are in a dispute concerning the amount of wages that are due to the employee, the employer should give the employee a written statement of all the wages it does not dispute and should pay those wages.²¹If an employee believes that his employer has wrongfully withheld wages, he can sue for those wages. If he succeeds, he can receive treble damages and attorneys' fees.²²

C. Independent Contractors vs. Employees

The question of whether a person performing work on a job site is an employee or an independent contractor can be of great importance to a contractor. Unlike employees, independent contractors generally do not have rights to workers' compensation benefits or unemployment benefits. Further, an employer generally is not responsible for the negligence of its independent contractors, absent some act of negligence by the employer.²³

There are several different tests that may be used to determine whether an individual is an employee or an independent contractor. Courts in the Fourth Circuit have applied the "Economic Realities Test," the "Reid Test," and the IRS 20-Factor Test.

1. The Economic Realities Test

The Economic Realities Test, which is frequently used in determining employment status for...