Employment Law and Compliance

AuthorLawrence Kleiman, Tim Barnett

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Employment law and compliance concerns the legal framework within which organizations must operate in their treatment of employees. Employers must comply with a myriad of federal and state laws and regulations. Laws and regulations exist covering a wide range of human resource practices, including recruiting, hiring, performance appraisal, compensation, health and safety, and labor relations.

The discussion that follows identifies and summarizes the major federal laws that comprise employment law.


Exhibit 1 provides a summary of some of the more important federal employment laws. The exhibit is divided into four sections: anti-discrimination law, compensation law, health and safety law, and labor relations law. The sections that follow provide additional information on each of these areas, with special emphasis on anti-discrimination laws, which probably have the greatest impact on employers.


Without a doubt, the most important anti-discrimination law is Title VII of the Civil Rights Act of 1964. Title VII was initially motivated by the U.S. government's desire to end workplace discrimination against African Americans, which was brought to national attention by the civil rights movement of the 1950s and 1960s. However, by the time the law was passed and signed into law in 1964, it had become a comprehensive workplace anti-discrimination law.

Title VII prohibits workplace discrimination on the basis of race, color, religion, national origin, and sex. Affected organizations must not discrimination in any employment decision or in regard to any term or condition of employment. Title VII applies to all U.S. organizations with fifteen or more employees, as well as labor unions and public sector employers. Only a few U.S. employers with more than fifteen employees are exempt from Title VII.

Title VII was amended in 1972 by the Equal Employment Opportunity Act. This law strengthened the enforcement of Title VII, which up to that time had been largely ineffective in changing workplace practices. The Equal Employment Opportunity Commission, a quasi-independent federal government agency, is in charge of enforcing Title VII, as well as many other anti-discrimination laws.

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Exhibit 1

Sampling of Major Federal Employment Laws

Anti-Discrimination Laws Major Provisions
Title VII of the Civil Rights Act 1964 Prohibits employment discrimination based on race, color, religion, national origin, and sex.
Age Discrimination in Employment Act 1967 Prohibits employment discrimination against applicants or employees aged 40 and older.
Americans with Disabilities Act 1990 Prohibits employment discrimination against qualified applicants or employees with a physical or mental disability.
Civil Rights Act 1991 Codifies the "adverse impact" theory of discrimination. Clarifies and strengthens rules for enforcement of the anti-discrimination provisions in Title VII.
Compensation Laws
Fair Labor Standards Act 1938 Requires employers to pay a federal minimum wage to non-exempt workers. Requires employers to pay overtime pay to non-exempt workers.
Equal Pay Act 1963 Requires employers to pay men and women equally for doing substantially the same work, unless differences in pay are based on merit, quantity or quality of production, or any other factor other than sex.
Labor Laws
Wagner Act 1935 Establishes the National Labor Relation Board. Lays out the framework for union organizing activities. Identifies and bans unfair management practices in regard to unionization.
Taft Hartley Act 1947 Identifies and bans unfair labor union practices in regard to union organizing efforts. Bans the closed shop and allows states to pass "right-to-work" laws that give workers the right to refuse to join a union. Allows the president to temporarily stop strikes that imperil the national interest.
Health and Safety Laws
Occupational Safety and Health Act Establishes general safety standards and standards for specific industries. Requires employers to record and report accidents that occur in the workplace. Lays out rules for federal workplace inspections and penalties for violations of the act.

Employees alleging workplace discrimination that falls under the purview of the EEOC must report the alleged discrimination to the EEOC or one of the state-level fair employment offices that exist in every state. The EEOC has the right to investigate claims of discrimination or to initiate investigations itself. Many times the EEOC will attempt to work out a solution with the affected organization, which may or may not involve an admission of guilt by the employer. If conciliation fails, the EEOC also has the right to bring class-action discrimination lawsuits against organizations on behalf of a "class" of employees who have allegedly suffered from discrimination.

If the EEOC's investigation does not reveal a strong case of discrimination, the agency can still issue a "right-to-sue" letter to a plaintiff, which gives that person the right to bring their charges of discrimination against an employer to state or federal court, whichever is appropriate in a given case. Some claims of discrimination filed with the EEOC do not have merit and the EEOC often issues findings to that effect—but such findings still do not prevent the individual plaintiff from filing his or her own lawsuit against an employer.

For many years, most discrimination claims filed under Title VII were race discrimination cases. However, with the advent of sexual harassment law-suits in the late 1970s and 1980s, sex discrimination cases became quite common, as well. Sexual harassment has become such a major...

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