Preface PR 25
This section addresses several federal laws that govern relationships between the employer and an employee or potential employee in the workplace. While field office interviewers will be deciding unemployment insurance eligibility under the Unemployment Insurance Code and not under the underlying federal law, the interviewer must be aware that certain practices are either required or proscribed by federal law.
CAUTION: The interviewer is cautioned, at the outset, not to attempt to decide whether or not the employer has violated federal law; the Department has no authority in that arena. The guidelines expressed here are to assist the interviewer in determining the reasonableness of a quit, discharge, or suitable work issue in cases in which the claimant contends that he or she was not offered, or could not have continued in, employment for some reason reflected in an applicable federal law. In some cases, the applicable law also offers reasonable alternatives that the claimant may investigate prior to resorting to a quit, discharge, or job refusal. But note: the federal law may exclude application of the law to the federal government itself (e.g., UCFE claims) or to Indians on reservations.
A. The Civil Rights Act
The Civil Rights Act of 1964, Title VII, Equal Employment Opportunity (Title 42 United States Code, Sections 2000e and following sections) created the Equal Employment Opportunity Commission (EEOC). That commission administers the Act, which is applicable to any employer engaged in interstate commerce who employs 15 or more persons for each working day in each of 20 or more calendar weeks. Most California employers are considered to be engaged in interstate commerce; a telephone or use of the Postal Service is sufficient to bring the employer within the definition.
The Act, and its amendments, provide that it is an unlawful employment practice for an employer, because of the person’s:
- Sex, or
- National origin.
- Fail to hire,
- Refuse to hire,
- Discharge an employee,
- Or otherwise to discriminate against any person
- With respect to compensation, terms, conditions, or privileges of employment, including limiting, segregating, or classifying employees or applicants so as to affect status as an employee.
Comparable prohibitions apply to employment agencies, labor unions, and apprenticeship committees. exceptions to the rule apply:
- When religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operation of the business, or
- When the religion or religious corporation, wholly or in substantial part, owns, supports, controls, or manages the institution, or the curriculum is directed toward the propagation of a particular religion.
- When there is a bona fide national security reason for refusing to hire or denying access to the premises, administered under a federal statute or Presidential (executive) order.
The 1964 Act also provides that an employer cannot discriminate against an employee "because he has opposed any practice made an unlawful employment practice . . . or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing. . . ." The same section also provides that notices or advertisements may not provide for classification, preference, limitation, or discrimination based on race, color, religion, sex, or national origin, unless to meet a bona fide occupational qualification for employment.
The Civil Rights Act of 1991 added a subsection to Title VII, making it unlawful for an employer, in hiring or promoting, to adjust employment-related test scores on the basis of race, color, religion, sex, or national origin. The 1991 Act also expanded the definition of "employee" to U.S. citizens employed in a foreign country, provided that compliance with the Act would not cause an employer to violate the law of the foreign country in which the worksite is located.
B. The Americans With Disabilities Act (ADA)
The Americans With Disabilities Act (ADA) became effective on July 26, 1992, for all employers, whether governmental or private, with 25 or more employees. The Act will be extended on July 26, 1994, to employers with 15-24 employees. It is a counterpart to Title VII (see A., above), addressing a discrete group of employees or potential employees - persons with disabilities - that were not covered in the earlier Civil Rights legislation. The ADA prohibits workplace and employment discrimination against individuals with disabilities, as defined below, and covers approximately 43,000,000 American workers with disabilities. The ADA is also administered by the Equal Employment Opportunity Commission (EEOC).
- The term "Americans" refers to all qualified individuals ("qualified" as defined in 2., below) with disabilities, regardless of their citizenship status or nationality.
- "Disability" reflects the most current terminology in use at this time; the term is synonymous with "handicap," as that term is used in the Rehabilitation Act of 1973.
1. Basic Discrimination Rules
Purpose of the ADA: The ADA’s purpose is expressed in Section 12101 of Title 42 of the United States Code:
(1) To provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities;
(2) To provide clear, strong, consistent, enforceable standards addressing discrimination against individuals with disabilities;
(3) To ensure that the Federal Government plays a central role in enforcing the standards established in this Act on behalf of individuals with disabilities; and
(4) To invoke the sweep of congressional authority, including the power to enforce the fourteenth amendment and to regulate commerce, in order to address the major areas of discrimination faced day-to-day by People with disabilities.
The ADA prohibits discrimination against a qualified individual based on a disability in the application, hiring, advancement, compensation, training, discharge, or other terms and conditions of employment. The Act governs:
- Recruitment and job application procedures;
- Hiring, promotion, transfer, termination, layoff, and similar status changes;
- Rates of, and changes in, compensation
- Job assignments and classifications, organizational structures, position descriptions, and seniority;
- Leaves of absence, sick leave, or other leave;
- Fringe benefits, whether or not the employer actually administers them;
- Selection and financial support for training procedures and programs;
- Activities sponsored by an employer, including social and recreational programs;
- Any other term, condition, or privilege of employment;
- Limiting, segregating, and classifying disabled applicants or employees in ways that adversely affect employment opportunities; and
- Making contractual or other arrangements that have the effect of subjecting disabled applicants or employees to prohibited forms of discrimination.
2. "Disabled," Defined
Under the ADA, "disability" is defined as:
- A physical or mental impairment that substantially limits one or more of the major life activities of the employee;
- A record of such an impairment; or
- The perception that one has such an impairment.
a. Physical or Mental Impairment
"Physical or mental impairment" is defined as: 1) any physiological disorder or cosmetic disfigurement, or anatomical loss affecting a major body system, or 2) any mental or psychological disorder such as mental retardation, emotional illness, or specific learning disabilities.
By regulation, "anatomical loss affecting a major body system" is a disability that affects one or more of the following body systems: neurological, musculo-skeletal, special sense organs, respiratory (including speech organs), cardiovascular, reproductive, digestive, genito-urinary, hemic and lymphatic, skin, and endocrine.
What a Disability Is Not:
NOT INCLUDED in the definition of "disability" are:
- A predisposition to illness or disease; and
- Such temporary and non chronic impairments of short duration such as broken limbs, sprained joints, concussions, appendicitis. and flu.
Also EXCLUDED by statute (Title 42, United States Code, Section 12211) are:
- Homosexuality, bisexuality, transvestitism, transsexualism, pedophilia, exhibitionism, voyeurism, and gender identity disorders not resulting from physical impairments;
- Compulsive gambling;
- Pyromania; or
- Psychoactive substance use disorders resulting from current illegal use of drugs.
Also excluded are physical characteristics such as eye color, hair color, left-handedness, height, weight, and muscle tone that are within the "normal" range and are not the result of a physiological disorder; personality traits such as poor judgment or a quick temper that are not a symptom of a mental or physiological disorder; and environmental, cultural, or economic disadvantages, such as poverty, lack of education or a prison record. The regulations illustrate a distinction, for instance, between persons who are unable to read because they were never taught to read, and those who are unable to read because of dyslexia; the former is not an impairment, while the latter (a learning disability) is considered an impairment. Advanced age, in and of itself, is not an impairment, but various medical condition associated with age, such as hearing loss, osteoporosis, or arthritis would constitute impairments.
b. "Perception" of Impairment
There are three ways in which a person may be perceived as being impaired:
- The person’s impairment, which is not substantially limiting, is seen by the employer as being substantially limiting;
- The person’s impairment, is only substantially limiting because of the attitudes of others toward the impairment; or
- The individual has no impairment at all, but is regarded by the employer as having a substantially limiting impairment.
A perception of impairment may arise through stereotyping and prejudice. Although persons with severe burn scarring, cerebral palsy, muscular dystrophy, multiple sclerosis, infection with HIV, cancer, heart disease, and certain diabetics and epileptics may not have an actual impairment, the ADA protects such persons because they may face discrimination by those who consider them to be impaired. The name of the impairment or its diagnosis is not determining; the determining factor is the effect of the impairment on the life of the individual. Even if the impairment is kept completely in check with medication or, for instance, a hearing aid, the impairment still exists.
In School Board of Nassau County v. Arline, a 1987 U.S. Supreme Court case, the court pointed out that a person may have a qualifying impairment that does not, in fact, substantially limit a major life activity (Ms. Arline was a school teacher with susceptibility to tuberculosis, which is contagious). "Such an impairment might not diminish a person’s physical or mental capabilities, but could nevertheless substantially limit that person’s ability to work as a result of the negative reactions of others to the impairment," the court stated. "Congress acknowledged that society’s accumulated myths and fears about disability and diseases are as handicapping as are the physical limitations that flow from actual impairment."
Common attitudinal barriers that frequently result in employers excluding individuals with disabilities include concerns regarding productivity, safety, insurance, liability, attendance, cost of accommodation and accessibility, workers’ compensation costs, and acceptance by co-workers and customers.
c. Record of Impairment
The intent of this provision is, in part, to ensure that people are not discriminated against because of a history of disability (e.g., former cancer patients), or because they have been mis classified as disabled (e.g., learning disabled). Records on which an employer could rely to determine disability are education, medical, or employment records.
The fact that the person is a disabled veteran, or is on disability retirement, or is classified as disabled for other purposes, does not mean the person is disabled for purposes of the ADA (or for purposes of unemployment insurance).
d. Substantial Limitation of One or More Major Life Activities
A physical or mental impairment does not constitute a disability unless it is so severe that it results in a substantial limitation of one or more major life activities.
A "substantial limitation" is one in which the employee or prospective employee is unable to perform that activity, or is significantly restricted in performing it because of the condition, manner, or duration of the activity. The person’s level of disability is measured against that of an average person performing the same activity: a significant restriction is an inability to perform either a class of jobs or a broad range of jobs in various classes as compared to an average person.
A claimant was a commercial airline pilot, but had to give up his employment because of a minor vision impairment. He is still able to work as a commercial airline co-pilot or a pilot for a courier or charter service. He is not "substantially limited" because of his impairment.
The claimant, a professional baseball pitcher, developed an arthritic elbow and can no longer throw a baseball. He is, however, not substantially limited in the ability to perform other work.
In Examples 1 and 2, the claimants are not substantially limited in the ability to perform any other major life activity, and are only unable to perform either a particular specialized job or a narrow range of jobs.
The claimant, a construction worker, has a back condition that prevents him from performing any heavy labor job; he is substantially limited because the impairment eliminates the ability to perform a class of jobs.
Factors to consider in determining whether the impairment is substantial include:
- The geographical area to which the person has reasonable access;
- The job from which the person has been disqualified because of the impairment; and other similar jobs, using similar skills, knowledge, and abilities, from which he is also disqualified because of the impairment class of jobs);
- The number of types of jobs not using similar skills, knowledge, and ability, and from which the claimant is also disqualified because of the impairment (broad range of jobs in various classes.)
A "major life activity" encompasses those basic activities that the average person in the general population can perform with little or no difficulty. They consist of functions such as caring for oneself; performing manual tasks such as sitting, standing, lifting, and reaching; walking; seeing; hearing; speaking; breathing; learning; and working. While a paraplegic will have difficulty in the major life activity of walking and a deaf person will have substantial difficulty in hearing, persons with an infected finger are not impaired in a major life activity and are not considered "disabled."
e. "Qualified" Individual
Before the employer can be found to be discriminating against an employee, the employee must be determined to be qualified for the denied job or benefit. Title 42 United States Code, Section 12111(8), provides:
Qualified individual with a disability. - The term "qualified individual with a disability" means an individual with a disability who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires .
Commentary to Title 29 of the Code of Federal Regulations, Section 1630.2(m), provides guidance in determining whether the person with a disability is qualified. It is a two-step process:
(1) Does the individual satisfy the prerequisites for the position, such as possessing the appropriate educational background, employment experience, skills, licenses, etc.? The answer to this question will indicate whether the employee or prospective employee is "otherwise qualified" for the job in the first place.
(2) Can the individual perform the essential functions of the position held or desired, with or without reasonable accommodation? The employment decision should be based on the capabilities of the person at the time of the employment decision, and not on speculation that the employee may become unable in the future to do the job, or will increase health insurance or workers’ compensation costs.
f. "Essential Functions of the Position"
Critical to a determination of whether the individual is qualified for the job is the recognition of which functions of the job are essential to it. "Essential functions" are those that the person holding the position m ust be able to perform unaided, or with the assistance of a reasonable accommodation. Questions to ask include:
(1) Does the employer actually require employees in the position to perform the functions that the employer contends are essential?
(2) If the person holding the position is actually required to perform the function, would removing the function fundamentally alter the Position?
(3) Does the position exist to perform a particular function? (e.g., the ability to read is essential to a person hired to proofread documents.)
(4) Are there other employees available to perform that function, or among whom the job may be distributed? (If the employer has a relatively small number of employees available to perform the work, each employee must perform more than one function; the performance by each employee becomes more critical and the options for reorganizing the work become more limited.)
(5) What is the degree of expertise or skill required? In certain professions and highly skilled positions, the employee is hired for his/her expertise or ability to perform the function; performance of the specialized task is an essential function of the job.
(6) Is the work provided for in a job description, prospectus, or collective bargaining agreement?
(7) What was the work experience of past employees in the job, or of current employees in similar jobs?
(8) How much time is dedicated to performing that function? (If an employee spends the vast majority of the time at a cash register, this becomes evidence that working the cash register is an essential function.)
(9) What are the consequences of failing to perform the job? (Although a firefighter may not regularly carry an unconscious adult out of a burning building, the consequences of failing to require the firefighter to be able to perform this function would be serious.)
NOTE: However, if an employer requires its typists to type 75 words per minute, it will not be called upon to explain why an inaccurate work product, or a typing speed of 65 words per minute, would not be adequate. Nor will a hotel who requires its service workers to thoroughly clean 16 rooms per day have to explain why it requires either a thorough cleaning, or 16 rooms. The only requirement imposed upon the employer is that the employer actually impose such a requirement in fact, and not just on paper. An inquiry into essential functions is not intended to second-guess an employer’s business judgment concerning production standards, or require employers to lower those standards.
3. Requirement of "Reasonable Accommodation"
An employer is required to provide "reasonable accommodation" to an employee or prospective employee in any of three categories: 1) accommodations required to ensure equal opportunity in the application process; 2) accommodations that enable the disabled employee to perform the essential functions of the job held or desired; and 3) accommodations that enable the employees to enjoy equal benefits and privileges of employment as are enjoyed by employees without disabilities. In addition, an employer cannot prefer or select a qualified individual without a disability over an equally qualified person with a disability because the disabled person will require an accommodation.
"Reasonable accommodation" of a person with a disability may include:
- Making existing facilities used by employees readily accessible and usable, including break rooms, lunch rooms, training rooms, restrooms, etc.;
- Job restructuring, by reallocating or redistributing nonessential, marginal job functions;
- Part-time or modified work schedules:
- Reassignment to a vacant position (available to employees only, not to applicants; reassignment should be considered only when accommodation within the existing position would pose an undue hardship. The reassignment should be to an equivalent position in terms of pay, status, etc., if the individual is qualified and the job is vacant within a reasonable amount of time, determined by the totality of the circumstances.);
- Acquisition or modification of equipment or devices;
- Appropriate adjustment or modifications of examinations, training materials or policies;
- Provision of qualified readers or interpreters.
The claimant is disabled with a back impairment, requiring a special chair. An employer is not required to supply a state-of-the-art mechanical lifting device (the "best" accommodation possible) if it provides the employee with a less expensive or more readily available device that enables the employee to perform the essential functions of the job.
"Reasonable accommodation" may also include allowing the employee access to services even though the employer is not required to supply them. It is a reasonable accommodation for an employer to permit the employee to bring and use a guide dog at work, even though the employer is not required to supply a guide dog for the employee. The employer is only required to supply job-related accommodation, and not one which helps the person throughout daily activities, off and on the job.
It is the responsibility of the person with a disability to inform the employer that an accommodation is needed; an employer is not required to accommodate disabilities of which he or she has no knowledge. If the need for the accommodation is not obvious, the employer may require the employee to provide documentation of the need for accommodation. The employer may not, however, compel a qualified person with a disability to accept an accommodation.
"Undue Hardship": An employer is expected to make a reasonable accommodation for an employee or potential employee if the person is qualified for the job, but is not expected to undergo undue hardship. "Undue hardship" refers to an accommodation that would require significant difficulty or expense, considering the overall financial resources available, the number of persons employed, and the impact of such accommodation upon the facility’s operation. In determining whether the claimant has exercised all reasonable options or alternatives before resorting to a quit, the interviewer will accept the employer’s word that he was unable to accommodate the claimant.
The claimant has a disabling visual impairment that makes it extremely difficult to see in dim lighting. He applies for a job as a waiter in a nightclub, and asks that the nightclub be brightly lit as a reasonable accommodation. The nightclub will probably be able to demonstrate that that particular accommodation, although inexpensive, would impose an undue hardship because it would destroy the ambiance of the club or make it more difficult for the customers to see the stage show.
In Mantolete v. Bolger, a 1985 Ninth Circuit Court of Appeals decision, Ms. Mantolete was denied employment because she was an epileptic, with what the trial court termed an "elevated risk" of injury. The Ninth Circuit held that an "elevated risk" was not sufficient, and applied the standard of "reasonable probability of substantial harm." They also found that accommodation would have been both simple and inexpensive, consisting of a Plexiglas guard and a $30.00 pair of tongs for clearing paper jams from the equipment; the tongs were already in use at some worksites. (See also, VQ 235)
An employer may require, as a qualification standard (see B.2.e., above) that the employee or potential employee not pose a direct threat to the health or safety of himself or others. Title 29, United States Code, Section 1630.2(r), provides:
Direct Threat means a significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation. The determination that an individual poses a "direct threat" shall be based on an individualized assessment of the individual’s present ability to safely perform the essential functions of the job. This assessment shall be based on a reasonable medical judgment that relies on the most current medical knowledge and/or on the best available objective evidence. In determining whether an individual would pose a direct threat the factors to be considered include:
(1) The duration of the risk;
(2) The nature and severity of the potential harm;
(3) The likelihood that the potential harm will occur; and
(4) The imminence of the potential harm.
The standards are to be applied to all applicants and employees, not just to those with disabilities; but if a person poses a direct threat as a result of a disability, the employer must determine whether a reasonable accommodation would either eliminate the risk or reduce it to an acceptable level. If no accommodation exists, the employer may refuse to hire an applicant or may discharge an employee.
The risk must be a significant risk (a high probability of substantial harm); a slightly increased risk is insufficient. Identification of the risk is made on a case-by-case basis.
- For individuals with mental or emotional disabilities, the employer must identify the specific behavior that poses the direct threat.
- For individuals with physical disabilities, the employer must identify the aspect of the disability that poses the direct threat.
- In both cases, the consideration must rely on objective, factual evidence, and not on subjective perceptions, irrational fears, patronizing attitudes, or stereotypes.
The potential employee suffers from narcolepsy, frequently and unexpectedly losing consciousness. The employer is not required to hire the person for a carpentry job requiring the use of power saws and other dangerous equipment.
The potential employee suffers from a stress-related disorder. The employer cannot refuse to hire the potential employee based only on a generalized fear, if there is no factual substantiation of a high probability of substantial harm.
It is the employee’s responsibility to advise the employer that reasonable accommodation is needed. The appropriate reasonable accommodation will be mutually determined. The need for accommodation cannot enter into the hiring, discharge, promotion, or similar employment decision, unless the employer can establish that there is no reasonable accommodation that would not impose a hardship.
4. Employment Testing: What Is Required
Employers are required to provide reasonable accommodation if they know, prior to administering the test, that the applicant is disabled and that the disability impairs sensory, manual, or speaking skills.
Title 29, Code of Federal Regulations, Section 1630.11, provides:
It is unlawful for a covered entity to fail to select and administer tests concerning employment in the most effective manner to ensure that, when a test is administered to a job applicant or employee who has a disability that impairs sensory, manual, or speaking skills, the test results accurately reflect the skills, aptitude, or whatever other factor of the applicant or employee that the test purports to measure, rather than reflecting the impaired sensory, manual, or speaking skills of such employee or applicant (except where such skills are the factors that the test purports to measure).
As accommodation, the employer may:
- Schedule a retest;
- Administer the test in large print or Braille, or via a reader or sign interpreter;
- Evaluate the skill in another manner (through an interview, or through education, license, or work experience requirements);
- Allow additional time to complete the test; or
- Make the test site accessible.
5. Employment Testing: What is Allowed
Note that if the test is administered to test sensory, manual, or speaking skills as part of an essential function of the position, the rule stated above does not apply. In general, the employer is only required to provide reasonable accommodation if it knows, prior to the administration of the test, that the individual is disabled. If the applicant or employee, however, does not realize in advance of the test that he or she will need accommodation, the applicant or employee must notify the employer immediately.
6. Association or Relationship With a Person With a Disability
Title 29, Code of Federal Regulations, Section 1630.8, provides:
It is unlawful for a covered entity to exclude or deny equal jobs or benefits to, or otherwise discriminate against, a qualified individual because of the known disability of an individual with whom the qualified individual is known to have a family, business, social or other relationship or association.
A qualified applicant without a disability applies for a job, and tells the employer that the spouse has a disability. The employer may not refuse to hire the applicant because the employer believes that the applicant would have to miss work, or leave work early, to care for the spouse.
7 Use of Drugs
a. Current Use of Drugs
A person currently engaging in the illegal use of drugs is not a person with a disability under the Act. "Illegal use of drugs" refers both to contraband drugs and the unlawful use of prescription drugs.
By the phrase "currently engaging," the Act does not require the drugs) to have been taken the day of, or even the week before, the personnel action. By "currently engaging," the Act refers to the illegal use of drugs that has occurred recently enough to indicate that the individual is actively engaged in such conduct.
b Drug Rehabilitation
Persons who have either been rehabilitated successfully or are in the process of completing a rehabilitation program are considered disabled for purposes of the Act.
In Nisperos v. Buck, a 1989 District Court case, Mr. Nisperos was an attorney for the Immigration and Naturalization Service in San Francisco. His work did not reveal any drug-related problems, and he received favorable reviews. In August, Mr. Nisperios told his supervisor that he wanted to enter a detoxification program for substance abuse, but he did not enter the program because of planned attendance at training classes. In September, Mr. Nisperos fired a shot at an imaginary intruder and realized that he needed immediate help. He applied to the Veterans’ Administration Hospital, but was told there would be a two-week wait for admission. The following day, he was arrested in his home for being under the influence of cocaine and for possession of narcotic paraphernalia. He entered an in-patient rehabilitation program, and the charges against him were dismissed following the completion of the drug diversion program. While in the treatment program, Mr. Nisperos was on leave without pay. Two days after he completed the in-patient treatment program, he was notified he was being terminated for cocaine use and the arrest.
Mr. Nisperos sued for reinstatement under the Rehabilitation Act, which contained terms substantially similar to those of the ADA. The court found that Mr. Nisperos was "regarded as having . . . an impairment" by the INS, and was "rehabilitated or rehabilitating" at the time he was terminated. The court continued:
Defendant’s main contention, and the crucial issue before the Court, is that Nisperos’ use of illegal drugs and his related arrest alone disqualify him from employment . . . in other words, that freedom from past drug use and related arrest is an essential qualification for the job. . . . The burden is on the defendant to demonstrate that its asserted essential qualification is truly essential and is not merely a "remote concern." (Emphasis in original.)
Defendant contends that an admitted drug user criminally involved with drugs cannot be qualified to be an INS general attorney because a general attorney’s duties include representing the INS in deportation proceedings, and some deportation proceedings are based on the alien’s use of illegal drugs. In addition, a general attorney may be called on to render advice and assistance regarding drug laws to INS border patrol agents and other INS personnel . . .
While in the best of all worlds attorneys should not be involved with drugs, defendant must do more than recite broad generalizations to demonstrate that a drug-free history is an "essential" element of a general attorney’s job. The INS has made no showing that Nisperos’ employment would "pose a danger to Public health or safety or the national security." The link between the former drug use of a rehabilitated addict and the impact of the legal opinions he might render to INS personnel is too tenuous to support the contention that a drug-free history is an essential requirement of Nisperos’ position.
Mr. Nisperos was granted summary judgment.
Employers are entitled to seek reasonable assurances that no illegal use of drugs is occurring or has occurred recently enough to be considered a real and ongoing problem. Employers may adopt reasonable policies and procedures, including drug testing, to determine that the employee is no longer using illegal drugs.
8. Employment Applications
Employers are prohibited from asking certain questions on employment applications. Employers may not ask, "Do you have any disabilities? If you do, what are their nature and severity?" and "Do you receive, or have you received, Workers Compensation?"
The employer may ask: "Are you able to perform the functions of this job?"
C. The Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) is a federal act; its counterpart in state law is the (California) Industrial Welfare Commission’s Wage Orders. Most California employers are subject to both California and federal law; the following discussion is confined to just the FLSA.
1. Who is Covered?
An employee is protected by the FLSA minimum wage and overtime rules if:
- The employee is engaged in interstate commerce. "Interstate commerce" is defined as any commerce (i.e., commercial transactions) between a state and another state, or a state and any place outside the state, incoming or outgoing. The employee’s involvement must be in production, manufacturing, mining, handling, or transportation of goods in interstate commerce, or "any closely related process or occupation directly essential" to the Production.
- The dollar/volume test. If the business is "an enterprise engaged in commerce or the production of goods for commerce" and meets certain dollar and volume tests, all employees of the business will be covered, regardless of their actual duties.
2. Who is Exempt From Coverage?
There are three major categories of exemption: for "executive" employees, for "administrative" employees, and for "professional" employees. The definitions of these terms are detailed and will not be covered here, except to say that there is a "duty" requirement and a "salary" requirement before the exemptions become effective.
Additional, minor categories include outside salespersons and independent contractors.
3. What Are the Benefits Under the FLSA?
In the event that a separation or job refusal occurs out-of-state, interviewers should be generally familiar with the federal requirements. Employees who are covered by the FLSA are protected in the following:
- They must be paid the federal minimum hourly wage (but if the California minimum wage is higher, the California provisions will control for California employees).
- They must be paid premiums for split shifts.
- They must be paid overtime for hours worked in excess of 40 in a workweek (California law is different).
Other states may also have rules similar to California’s Industrial Welfare Commission Orders; the affected employer should be able to relate their provisions, which may control the employment situation, either separation or job refusal.
D. The Worker Adjustment and Retraining Notification Act (WARN)
The Worker Adjustment and Retraining Notification Act (WARN) became effective February 4, 1989, to require an employer to give 60 days’ notice for an "en masse" layoff or plant closing. It is administered by the Department of Labor.
1. Affected Employers, and Exceptions
WARN applies to employers employing 100 or more employees who work, in aggregate, at least 4,000 hours per week, excluding overtime. The employment may be for profit or nonprofit. There are special rules for seasonal fluctuations, as well as for independent contractors and subsidiaries.
Exceptions to the 60-day notice requirement concern part-time employees, fewer than 50 employees affected, temporary hires, strike or lockout situations, a good-faith belief that notice would hinder corporate refinancing, unforeseen circumstances (such as loss of a contract), and Acts of God (flood, earthquake, drought).
2. Notice Requirement
An affected employer cannot order a plant closing or mass layoff until 60 days after it serves notice to:
- The authorized union representative for the employees affected:
- Each affected employee, if there is no union representative;
- The state dislocated worker unit (EDD); and
- The chief elected official in the area in which the layoff or plant closing will occur.
E. The Federal Unemployment Tax Act (FUTA)
The Federal Unemployment Tax Act, or FUTA, is the federal law that underlies the California Unemployment Insurance Code. There are specific sections of FUTA that specifically affect the payment of benefits:
1. Job Refusals: Strike, Lockout, Other Labor Dispute
26 USC Section 3304(a) is the basis for Unemp. Ins. Code Section 1259, and Provides:
The Secretary of Labor shall approve any State law submitted to him, within 30 days of such submission, which he finds provides that:
(5) compensation shall not be denied in such State to any otherwise eligible individual for refusing to accept new work under any of the following conditions:
(A) if the position offered is vacant due directly to a strike. lockout. or other labor dispute;
(C) if as a condition of being employed the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organization.
(For discussion, please refer to Trade Dispute BDG.)
2. Job Refusals: Prevailing Wage
26 USC Section 3304(a) is the basis for Unemp. Ins. Code Section 1259, and provides:
The Secretary of Labor shall approve any State law submitted to him, within 30 days of such submission, which he finds provides that :
(5) compensation shall not be denied in such State to any otherwise eligible individual for refusing to accept new work under any of the following conditions:
(B) if the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality.
(For discussion, please refer to Suitable Work BDG.)
3. Lag Period Claims
26 USC Section 3304(a) is the basis for Unemp. Ins. Code Section 1281(a), and provides:
The Secretary of Labor shall approve any State law submitted to him, within 30 days of such submission, which he finds provides that:
(B)(7) an individual who has received compensation during his benefit year is required to have had work since the beginning of such year in order to qualify for compensation in his next benefit Year.
(For discussion, please refer to Miscellaneous BDG.)
4. State-Approved Training
26 USC Section 3304(a) is the basis for Unemp. Ins. Code Section 1267, and provides:
The Secretary of Labor shall approve any State law submitted to him, within 30 days of such submission, which he finds provides that:
(8) compensation shall not be denied to an individual for any week because he is in training with the approval of the State agency (or because of the application, to any such week in training, of State law provisions relating to availability for work, active search for work, or refusal to accept work).
Unemp. Ins. Code Article 1.5, Retraining Benefits, was to sunset January 1, 1993, but was amended and extended by passage of Senate Bill 2004 to January 1, 1997. (For discussion, please refer to FOM California Training Benefits.)
5. Interstate Claims
26 USC Section 3304(a) is the basis for Unemp. Ins. Code Sections 451 through 454, and provides:
(9)(A) compensation shall not be denied or reduced to an individual solely because he files a claim in another State (or a contiguous country with which the United States has an agreement with respect to unemployment compensation) or because he resides in another State (or such a contiguous country) at the time he files a claim for unemployment compensation.
6. Combined Wage Claims
26 USC Section 3304(a) is the basis for Unemp. Ins. Code Sections 455 through 456, and provides:
(9)(B) the State shall participate in any arrangements for the payment of compensation on the basis of combining an individual’s wages and employment covered under the unemployment compensation law of other States which are approved by the Secretary of Labor in consultation with the State unemployment compensation agencies as reasonably calculated to assure the prompt and full payment of compensation in such situations. Any such arrangement shall include provisions for (i) applying the base period of a single State law to a claim involving the combining of an individual’s wages and employment covered under two or more State laws, and (ii) avoiding duplicate use of wages and employment by reason of such combining.
7. Cancellation of Wage Credits
26 USC Section 3304(a) is the basis for Unemp. Ins. Code Section 1260.1, and provides:
(10) compensation shall not be denied to any individual by reason of cancellation of wage credits or total reduction of his benefit rights for any cause other than discharge for misconduct in connection with his work, fraud in connection with a claim for compensation, or receipt of disqualifying income .
26 USC Section 3304(a)(12) is not specifically addressed by the Unemp. Ins. Code, but is implicit in the requirements of "real, substantial, and compelling" for separations, and "ready, willing, and able" in availability determinations. The federal section Provides:
(12) no person shall be denied compensation under such State law solely on the basis of pregnancy or termination of pregnancy .
9. School Employees and Athletes
26 USC 3304 Sections (a)(6)(A) and (a)(6)(B) apply to school employees, and Section (a)(13) applies to athletes. These sections are incorporated into Unemp. Ins. Code Sections 1253.3 and 1253.4. For school employees, please refer to the School Employee Claims Handbook.
26 USC Section 3304(a)(14) applies to aliens, and is incorporated into Unemp. Ins. Code Section 1264. Please refer to Miscellaneous BDG, MI 50.
11. Deductible Pensions
26 USC Section 3304(a)(15) refers to periodic pension payments. Please refer to Total and Partial Unemployment BDG.
12. Department of Labor Certification
Each year, on October 31, the Secretary of Labor must certify that the states are complying with federal law. If a state has amended its law so that the above provisions are no longer present, or the state has failed to comply substantially with the provisions even if they are present, the Secretary of Labor must provide notice and a hearing to the Governor before denying the certification. Failure of certification means that there will be no Unemployment Trust Fund moneys forwarded to the state for unemployment insurance purposes.