Employment Law Case Study

Employment Law Brief
The Clapton Commercial Construction Company located in Detroit, Michigan, is planning to expand its business into the state of Arizona. It is a medium-sized company with 650 employees and possibly increasing an additional 20% in the new state. Prior to the move, the human resources (HR) department must be aware of applicable employment laws that may affect the business. Outlined below are brief summaries and consequences for noncompliance of the following employment laws: Title VII of the Civil Rights Act of 1964, the Immigration Reform and Control Act (IRCA), the American with Disabilities Act of 1990 (ADA), and the Fair Labor Standards Act of 1938, as amended (FLSA).
Relevant
Employment Laws
Title VII of the Civil Rights Act of 1964 is the first employment law to consider. It prohibits discrimination on the basis of race, color, religion, sex, or national origin in aspects of employment such as hiring, wages, assignment, promotions, benefits, and discipline. “Title VII is the most important federal Equal Employment Opportunity law because it contains the broadest coverage, prohibitions, and remedies” (Cascio, 2013, p. 83). Under the law, the Equal Employment Opportunity Commission (EEOC) exists to implement laws dealing with employment discrimination. According to Cascio (2013), the law was expanded in 1972 to cover almost all public and private employers with 15 or more employees; except private clubs, religious organizations, and Indian reservations. The EEOC has the authority to conduct investigations, create resolution programs, and file lawsuits.
Failure to comply with Title VII exposes the employer to both civil and criminal lawsuits with possible outcomes of fines, compensatory and punitive damages, or even imprisonment. The company may also have to reinstate or promote the affected employee. In 1991, the Act amended several statues enforced by the EEOC. Parties were able to obtain jury trials and recover compensatory and punitive damages with cases involving intentional discrimination. The Act also placed monetary caps for future cases based on size of the company. Another provision was enforcement of those American controlled companies
abroad. The next employment law to consider is the Immigration Reform and Control Act of 1986. This law applies to employers regardless of size and every employee regardless of status: full-time, part time, or seasonal. The IRCA prohibits employers from hiring or continuing to employ personnel which are not legally authorized to work in the United States. The Clapton Commercial Construction Company is expanding business to Arizona with the intent of increasing the number of employees by 20%. The company must consider the demographics of that area with regard to potential employees and take measures to ensure an employee has documents to work legally in the United States, such as a passport or resident alien card. Other examples are located on the Employment Eligibility Verification I-9 form that potential employees are required to complete. Penalties for noncompliance may result in fines for each violation and denial of federal contracts. According to the Department of Homeland Security (2013), in fiscal year 2010, Immigration and Customs Enforcement removed more than 392,000 illegal workers nationwide. The American with Disabilities Act of 1990 (ADA) is another law to consider. “Almost 13% of people ages 21 to 64 in the United States have at least one disability, a percentage that more than doubles to 30.2% for people ages 65 to 74” (Cascio, 2013, p. 89). The ADA prohibits an employer from discriminating against a qualified person with a disability. A qualified person is someone who can perform the essential functions of a job with or without accommodation. The physical or mental impairment that limits one or more major life activities is called a disability, such as seeing, walking, hearing, or talking. The ADA expanded protection of drug and alcohol rehabilitation and those individuals who have tested positive for HIV/AIDS. The ADA applies to private employers with 15 or more employees, state and local governments, employment agencies, and labor unions.
The Clapton Commercial Construction Company is not required to lower work standards or tolerate misconduct on the job; however, reasonable accommodations must be made to assist qualified job applicants. For example, the company can purchase a computer screen magnifying glass for the vision impaired. The EEOC enforces the provisions outlined in the ADA. Violations can result in hiring, reinstatement, promotion, restored benefits, legal fees and civil penalties. According to the Association of Corporate Counsel (2013), civil penalties may be up to $55,000 for first violation or $110,000 for each subsequent violation and intentional discrimination resulting in compensatory and punitive damages. The final employment law to consider is the Fair Labor Standards Act (FLSA) that affects every organization in the Unites States and protects worker rights with regard to minimum wage, overtime pay, and other employment standards. The federal minimum wage is $7.25 per hour, but some states have their own minimum wage standards. Craig, Balitis, and Meister (2013), remark that the minimum wage in Arizona will increase to $7.90 effective January 1, 2014. The Commercial Construction Company must pay the higher wage to their new employees. According to the United States Department of Labor (2031), the employee is entitled to the higher of the two minimum wages when the employee is subject to both federal and state wages. According to the United States Department of Labor (2013), the minimum wage for Michigan is $7.40. This is a $0.50 increase with the company relocating to Arizona. The company must also review all potential vacant job positions. The FLSA restricts employment for personnel under the age of 18 in certain jobs considered too dangerous and restricts hours for those under the age of 16. According to the United States Department of Labor (2013), violation of the FLSA may result in fines up to $10,000 and imprisonment for subsequent violations; civil penalties up to $50,000 and double if resulting in death of a minor.
Conclusion
The U.S.
Department of Labor governs many employment laws and the EEOC deals with those laws specifically with regard to discrimination in the workplace. Many laws are intricate and can be confusing without an HR section to clarify all aspects of the laws and protect the business from liability. Failure to comply with federal, state, or local employment laws can have a negative impact on a business. Employers are vulnerable to both civil and criminal lawsuits with possible outcomes of fines, compensatory and punitive damages, or even imprisonment. The HR section must take action to protect the business by informing managers and employees of employments laws. One simple action is to post all applicable laws in a common are for all to see. The aforementioned employment laws are just a few examples in which a business must consider. This employment law compliance plan will assist the expansion planning for the Clapton Commercial Construction
Company.

References

Association of Corporate Counsel. (2013). The Americans with disabilities act. Retrieved from http://www.acc.com/legalresources/quickcounsel/tawda.cfm.
Cascio, W. F. (2013). Managing human resources: Productivity, quality of work life, profits (9th ed.) Boston, MA: McGraw-Hill/Irwin.
Craig, F., Balitis, J. & Meister, S. (2013). Arizona’s minimum wage increase takes effect January 1, 2014. Retrieved from http://www.lexology.com/library/detail.aspx?g=493cac6a-2b7e-4f71-8f0a-91012dcc0e32.
Department of Homeland Security. (2013). Enforce and administer our immigration laws. Retrieved from https://www.dhs.gov/enforce-and-administer-our-immigration-laws.
United States Department of Labor. (2013). Wage and hour division. Retrieved from http://www.dol.gov/whd/minwage/america.htm.