Because of the complexity of employment relationships and the wide variety of situations that can arise, employment law involves legal issues as diverse as discrimination, wrongful termination, wages and taxation, and workplace safety. Many of these issues are governed by applicable federal and state law. But, where the employment relationship is based on a valid contract entered into by the employer and the employee, state contract law alone may dictate the rights and duties of the parties.
Employers have an obligation to follow federal and state employment and labor laws -- including those pertaining to discrimination, fair pay, employee privacy, and safety in the workplace. The employer's legal obligations do not only pertain to hired employees, but extend to job applicants as well. For example, a prospective employer cannot ask a job applicant certain family-related questions during the hiring process.

When an employer promulgates a policy regarding an issue in the workplace, generally, that policy is legally binding provided that the policy itself is legal. Policies can be communicated in various ways: through employee handbooks and manuals, memos, and union contracts. Relevant federal statutes on employment law include the following:

  • Americans with Disabilities Act of 1990
  • Title VII of the Civil Rights Act of 1964
  • Age Discrimination in employment Act of 1967
  • Fair Labor Standards Act
  • Occupational Safety and Health Act
  • Employee Retirement Income Security Act
  • Family and Medical Leave Act
  • though many more federal and state laws and regulations govern virtually every aspect of the employer/employee relationship in the workplace.

    Most employment in the U.S. is an at-will relationship between employer and employee, meaning that either party can terminate the relationship with no liability if there was no express contract for a definite term governing the employment relationship. Although several exceptions to this legal doctrine exist, generally, the employer may freely discharge employees for any legal reason or even with no cause at all, and an employee may leave a job for any reason at any time.

    Employees must be paid the minimum wage, as well as any overtime pay for any hours worked over forty in one week (or, in some places, over eight hours in one day). Federal law establishes the minimum amount that a worker can be paid per hour; this amount changes in the United States but is currently $5.15 per hour. Most states and some municipalities have enacted their own minimum wage laws. For example, California's minimum wage is $7.65 per hour; in San Francisco, California, workers must be paid a minimum wage of $8.50 an hour. Where an employee is subject to both the state and federal minimum wage laws, the employer must pay the higher of the two minimum wages. However, federal law exempts executive, administrative, professional and outside sales employees from both minimum wage and overtime pay laws. Regulations and statutes also protect employees' rights to back pay, severance pay, paid time off, unemployment and retirement benefits. On August 17, 2006, President Bush signed the 900-plus page Pension Protection Act of 2006 (PPA), putting in place many reforms to federal tax and employee benefit laws intended to protect the security of employer-provided pension plans.

    Federal and state laws also guarantee employees in the U.S. the right to a safe workplace. The U.S. Occupational Safety and Health Administration (OSHA), a federal agency, issues and enforces rules to prevent work-related injuries, illnesses, and deaths. OSHA's standards apply to most private, or nongovernmental, workplaces. Many states also have their own plans to protect workers' occupational safety and health, and if those plans are approved by the U.S. Department of Labor, they may be applied to both private and public workplaces.

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