Interview / Application
No. Employers may legally choose whom they extend an interview offer to; however, it is illegal for employers to refuse to interview based on forms of discrimination that are prohibited by law. Thus, it is illegal for an employer to refuse to interview you because of your religion, race, national origin, sex, age, or disability. Nonetheless, employers do not have to tell you why they are choosing not to interview you.
According to a recent study by Glassdoor Economic Research, the time it takes to get a job is increasing. On average, in the United States, it took 22.9 days in 2014 to complete the hiring process of an employee. The study notes that the length of the hiring process is most likely affected by additional screening methods being used by employers. These screening methods include phone interviews, one-on-one interviews, group panel interviews, presentations, IQ tests, job skills tests, personality tests, drug tests, and background checks.
In general, employers should only ask you questions about bona fide occupational qualifications (BFOQ) – or questions related to whether you would be able to perform the job and how you will handle certain employment challenges.
Employers cannot base hiring decisions on age. However, if there are laws on youth employment, the employer may ask questions to ensure compliance with those laws, such as “are you at least 18 years old?” Generally, though, employers should not ask questions about your age.
For more information on age discrimination in employment see our age discrimination page.
Following the BFOQ standard, the potential employer should only ask if you are taking any medications that could affect your ability to perform the job. Therefore, the only medication information you must disclose in the hiring process is information on such medications.
After you accept a job, the employer will have more rights to access your medical record, but once again, only medications or medical conditions that can affect your ability to perform your job can be used as a reason to fire you.
For more information on medical information in employment see our medical privacy page.
Employers should not ask you whether you are in a union or your opinion on unions. It is considered an “unfair labor practice by [the] employer” to discriminate in hiring decisions, continued employment or “any term or condition of employment” based on whether an employee is or is not in a union. Ultimately the employees decide whether there is a union and whether they want to be part of it – the employer has no control over this.
For information on your union rights once employed see our unions and collective action page.
Asking about your religion could be a sign of illegal discrimination by the employer. You may choose not to answer such a question. However, an employer can ask questions regarding scheduling when it is a bona fide occupational qualification – such as “This job requires you to work weekends, is this a problem?”
For more information about religious discrimination in employment see our religious discrimination page.
Yes. The employer can both ask you whether you can perform each of the job requirements and ask that you demonstrate your ability. Generally, everyone applying for the job should be asked to demonstrate the same job functions. However, if you have a visible disability or have told the potential employer about your disability, they can ask just you to demonstrate your ability to do essential job functions.
Generally, questions such as: “Are you pregnant?” “Are you married or do you plan to marry?” “How many children do you have?” “Do you have childcare arrangements?” “Does your spouse work?” – Are seen as discriminatory in that they are generally used to discriminate against women. Thus, you do not have to answer these questions – and if you think you were denied the job because of your answers you may have a case for employment discrimination. Remember that questions about scheduling – such as: “This job may require you to work a shift on short notice, is that a problem?” are legal as they relate to an essential part of the job. However, as a practical matter, if you really want the position you are applying for, you may want to answer the interviewer’s questions. In that case, try to look past the sexist nature of the questions and look to see what the employer is really worried about- ie: possible work conflicts. Thus, instead of simply answering these questions with facts about your personal life, also provide evidence of your commitment to your career. For more information on discrimination in this context see our pregnancy discrimination page, sex and gender discrimination page, and family responsibilities discrimination page.
Potential employers should not ask you about your citizenship status because it tends to show the intent to discriminate. However, remember that asking this question is not itself illegal, but rather discriminating against you based on your answer is. The Immigration Reform and Control Act of 12986 (IRCA) makes it illegal for employers to discriminate with respect to hiring, firing, or recruitment or referral for a fee, based on an individual’s citizenship or immigration status. Additionally, the Immigration Nationality Act (INA) forbids employment discrimination based on citizenship status or national origin.
Violations of the INA or IRCA can mean fines and oversight for employers. Recently, the U.S. Justice Department investigated a beef production plant’s hiring practices as to whether the plant was requiring non-citizen employees to show proof of their immigration status, but was not requiring the same of citizen employees. The production plant agreed to a $200,000 settlement before findings were made. Other conditions of the settlement include providing back pay to individuals who lost wages due to the hiring practice, and two years of compliance monitoring.
After an employment offer has been made, an employer can require that you prove your employment eligibility to work in the United States. Once again, this practice should be applied to all employees to truly be free from discrimination.
For more information on citizenship status discrimination in employment see our immigration status discrimination page.
Generally, potential employers should not ask whether you have been arrested but may ask about whether you have ever been convicted of a crime. However, some states limit these questions to certain types of crimes and recent convictions.
The Equal Employment Opportunity Commission notes that Title VII of the Civil Rights Act of 1964 prohibits employers from treating people with similar criminal records differently because of their race, national origin, or another Title VII-protected characteristic (which includes color, sex, and religion). Furthermore, Title VII prohibits employers from using policies or practices that screen individuals based on criminal history information if:
- They significantly disadvantage Title VII-protected individuals such as African Americans and Hispanics; AND
- They do not help the employer accurately decide if the person is likely to be a responsible, reliable, or safe employee.
For more information on ways that employers can use your criminal history see our criminal records page.
This issue is heavily debated. Legally, a religious institution is able to ask you about your past sexual history, ethically speaking is another question. The Ministerial Exception is the governing law on this issue which allows religious institutions to violate employment discrimination laws when hiring and firing their ministers. The exemption does not make every religious employee a minister, but it applies to employees with significant religious responsibilities including clergy and religious-school teachers. Thus, these questions are usually justified so long as the job is for a religious position. Religious institutions justify questions about sexual history by arguing that while there is not a direct correlation, there is a strong relationship between child molesters and those who were abused when they were children. Therefore, the religious employers are protecting themselves from potential liability related to potential abuse by employees. The case of Broderick v. King’s Way Assembly of God held the church liable for sexual abuse of a minor child by one of their employees. Thus, to protect themselves from potential liability, religious institutions argue that these questions must be taken into consideration when making hiring decisions.
Yes. Most employers will use an outside agency to run background checks on applicants, and to do so, they must have your permission as the applicant. However, if you want the job you will likely need to consent to the background check. If an employer does not get your permission before running a background check, you can file a complaint with the Federal Trade Commission (FTC).
If an employer uses information from your background check as a reason not to hire you, you have a right to receive a copy of the background check and an opportunity to address the information and contact the agency to correct any mistakes on the report.
If a credit check is relevant to the job, the employer may legally require it. The Fair Credit Reporting Act (FCRA) requires that the potential employer gets your consent before checking your credit.
For more information on credit checks in employment see our credit checks page.
Yes, if your credit is relevant to the job. If the employer decides not to hire you based on your credit report, they must give you the name, address, and phone number of the company that supplied the credit report or background information; give you a statement that the company that supplied the information didn’t make the decision to take the adverse action and can’t give you any specific reasons for it; and give you a notice of your right to dispute the accuracy or completeness of any information in your report and to get an additional free report from the company that supplied the credit or other background information if you ask for it within 60 days.
For more information on credit checks in employment see our credit checks page.
No. The ADA (Americans with Disabilities Act) limits when employers can require physical medical examinations to post-offer situations when the physical examination results are related to the employee’s ability to perform the job.
For more information on medical information in employment see our medical privacy page.
The Employee Polygraph Protection Act of 1988 (EPPA) limits the use of lie detector tests in private employment to security service firms (armored car, alarm, and guard) and of pharmaceutical manufacturers, distributors, and dispensers. If you are interviewing with a private employer outside of these exceptions, they may not ask you to take a lie detector test.
Yes, if the tests don’t ask intrusive personal questions — such as questions about your sex life. Additionally, these tests should be given to all applicants instead of a selected few.
Most private employers may require pre-employment drug tests; however, they may only be given post job offer. Thus, if you are just applying for a job and they have extended no offer of employment yet, the employer cannot require a drug test at that time.
For more information on drug tests in employment see our drug testing page.
Generally no. Employers may only require finger printing if they fall into a special legal category such as hospitals, public schools, a job involving firearms, pharmaceuticals, and some public jobs.
Yes, as long as they are not using the information they find out about you on social media to discriminate on an illegal basis such as age, race, disability, religion, national origin, or gender.
Additionally, depending on your area of employment, a lack of a presence on social media may concern your employer. If you are applying for a job where your duties may include maintaining a social media presence for the company, or one of their products or services, you should explain why you do not engage in social media privately. Perhaps specify that you understand how social media works and are capable of using it as a tool for the company, but simply choose not to maintain a social media presence for your private life.
For more information on social media in employment see our social networking and computer privacy page.
Unless the employee’s height and weight is directly job-related, an employer should not ask you your height and weight. This inquiry tends to disqualify applicants from protected groups so it should not be used unless job-related.
Yes. Employers can ask you about personal finances as long as the employer is using the information to help accurately identify responsible and reliable employees, and the same financial information is asked of all applicants of the same position. However, if the use of financial information tends to most often disqualify people of a particular race, color, national origin, religion, or sex it can be deemed illegal by the EEOC. Lastly, if someone’s disability affects his or her personal financial situation, the employer may have to make an exception for the applicant.
Yes. Employers can ask you about periods of unemployment if the employer is using the information to help accurately identify responsible and reliable employees, and the effect of screening out applicants based on periods of unemployment is applied to all applicants equally. Additionally, if screening out potential employees based on periods of unemployment tends to most often disqualify people of a particular race, color, national origin, religion, or sex it can be deemed illegal by the EEOC. As with financial information, if the reason for periods of unemployment is related to the applicant’s disability, the employer may have to make an exception for the applicant.
For more information about addressing how periods of unemployment can affect the hiring process see our unemployment discrimination page.
Additionally, if your employment history may give the potential employer the impression that you are a “job-hopper” or often accept a position, just to find a different one, you should explain the reasons for varied employment or perhaps tell them why this position would be different.
If the employer finds out that you lied on your resume you will likely be fired. You should not misrepresent yourself when applying for a job. Besides embarrassment and job loss, in some cases, employee misrepresentation can even lead to criminal charges.
If a policy or practice that seems neutral or legal on its face tends to disqualify applicants or employees of a particular race, color, national origin, religion, sex, age, employees who are pregnant, or employees who are disabled, the practice may be illegal. The EEOC prohibits the use of such practices when they are not job-related or necessary to the operation of the business.
For example, the EEOC recently found that employment assessments used by Target – designed to be a type of pre-employment personality and honesty test as in question 18 above – tended to screen out applicants for professional positions based on race and gender. Thus, while the test may have seemed neutral on its face, it had an illegal discriminatory result. Target settled the case at $2.8 million dollars.
For more information on this topic see the EEOC page on prohibited practices.
While the laws vary between states, typically an employer can perform a background check. In fact, for some jobs, like any job that involves working with children, employers are required to perform background checks. Some of the most common information an employers check is:
- Credit history
- Driving record
- Criminal record
- Court records
- Drug tests
- Past employers
- Sex offender lists
- School records
- Medical records
For a lot of information, like your school transcripts or medical records, your employer needs permission first. An employer also needs your permission if they use an outside agency to gather any background information.
However, employers can find out a lot about you without needing your permission just by typing your name into Google. When applying for a job, make sure to Google yourself so you know what shows up and can attempt to fix any wrong or unfortunate information.
The main federal law is the Fair Credit Reporting Act (FCRA). The FCRA regulates outside reporting agencies, consumer reporting agencies. If an employer wants a background check from a consumer reporting agency, the employer needs your written permission first. If an employer then takes any adverse action against you because of the report, like refusing to hire you or firing you, you are entitled to a copy of the background check used and a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act,” as well as an opportunity to respond to the allegations and correct any incorrect information.
Yes, you can get your credit report whenever you want, but you may have to pay for it. However, you can get the information for free if:
- a person has taken adverse action against you because of information in your credit report;
- you are the victim of identity theft and place a fraud alert in your file;
- your file contains inaccurate information because of fraud;
- you are on public assistance; or
- you are unemployed but expect to apply for employment within 60 days.
You are also entitled to one free credit report every 12 months, which you can request at annualcreditreport.com or one of many other credit reporting websites.
For more information about credit checks, you can read our Credit Checks page.
If the information in your credit report is wrong, the FTC, which enforces the FCRA, suggests you write to the credit reporting company as well as the information provider for the credit reporting company. The FTC has more information, as well as sample dispute letters, on the FTC consumer webpage.
As for old information, a credit report company typically cannot report on any negative information that is seven-years-old or older, or ten-years-old or older in the case of bankruptcies.
Maybe not as much as you would expect. There is a growing campaign known as Ban the Box that is convincing states to pass laws that push back background checks into later in the hiring process and remove the question about past criminal convictions on job applications. You can read more about Ban the Box and criminal records in general at our Criminal Records page.
Like background checks in general, while the laws vary between states, employers generally can perform drug tests, and in some cases are required to do so. You can read more on this topic at our Drug Testing.
An employer could have several reasons to want to view your medical records. There could be a legitimate business reason, like the job requiring a lot of physical activity. Or an employer may need to provide information to the company healthcare provider. No matter what the reason, you have rights in this area, including the federal Health Insurance Portability and Accountability Act (HIPPA). To learn more about the HIPPA and medical privacy in general, you can read our Medical Privacy page.
You do have a right to privacy. If you feel as though your employer has violated your privacy, you should contact a lawyer. Workplace Fairness can help you find an employment lawyer.
As for whether or not an employer has violated your privacy, courts use a balancing test. First, a court will look at your reasonable expectation of privacy in the area of the background check. For example, you have a higher reasonable expectation of privacy for your medical records than for what you post on social media. Second, a court will look at the reason the employer conducted the background check. Those two are then weighed against each other to determine whether or not an employer has crossed the line.
In a situation like this, the more relevant law may be discrimination law as opposed to the laws about background checks. The Equal Employment Opportunity Commission is the federal agency responsible for enforcement in this area. For more information, review Workplace Fairness’ in depth section on employment discrimination.
Arbitration is a commonly used form of alternative dispute resolution (ADR). ADR is a process for resolving disputes outside of the public court system. Arbitration usually involves the submission of claims, which might otherwise have been brought to the public court system, for resolution by a private arbitrator. The arbitrator is paid by one or both of the parties involved in the dispute. Discovery (the ability to obtain relevant information from the other side) is generally limited. Although some arbitrators are experts in their fields, arbitrators are not required to be judges or attorneys, and are not required to know and/or follow the law that is the subject of the dispute.
Forced arbitration is arbitration that is imposed as a condition of employment or required for the receipt of a benefit related to employment. Although it is called “forced” arbitration, there is no legal requirement that any employee accept arbitration as a method of resolving claims that could otherwise be presented to the public court system. However, employers often condition valuable benefits – such as getting or keeping a job – on your “agreement” to submit claims to arbitration which otherwise could have been presented to the public court system. Usually such agreements provide that you have no right to go outside the arbitration system and present your claims to the public courts. In forced arbitration situations, your job may depend on accepting such a provision: your only other choice is to not take the job.
No. Voluntary arbitration has been used for years in the context of commercial disputes. Companies have employed panels of arbitrators experienced in the industry or field to settle matters quickly and relatively inexpensively when disputes arise between them.
This has also been true in the situation of organized workplaces where workers are represented by unions. Union/management arbitration is often the end of the grievance process for employees covered by a collective bargaining agreement.
In general, this process has worked well for parties to commercial disputes and union disputes in part because the arbitrators are familiar with and well versed in the business and workplace that they are asked to deal with in the arbitration proceedings. Generally, the matters before the arbitrator involve issues of interpreting the contract, and involve repeat users of the system. The parties have equal bargaining power and equal access to evidence necessary to prove their case.
However, in these types of arbitrations, arbitration is a voluntary agreement between the parties. The arbitration process is affected by the fact that the parties have agreed to arbitration and could – with some limitations – decline to participate in arbitration in the future. This distinguishes arbitration generally from “forced” arbitration, which is becoming more prevalent.
Yes. For a variety of reasons, forced arbitration is generally bad for employees. Forced arbitration deprives you of your right to access the public court system. The denial of that access – without you being able to make a meaningful voluntary choice to surrender that right – is a significant loss.
The public court system provides the protection of a system relatively free from the influence of the employer – a protection often not provided in forced arbitration. Additionally, the court system is open to public scrutiny and its decisions are subject to appeal. In employment cases, access to discovery is critical, since so much of the information you need to prove your case is in your employer’s hands. Unlike arbitration in labor or commercial disputes, instead of having a contract govern the relationship between the parties, there are laws that must be interpreted and enforced as they apply to the employment relationship, which make these cases more complex and require judges well-versed in the law. These and many other valuable features of the public court system are either limited or not available in the forced arbitration system.
Lastly, not only are there often much higher costs associated with forced arbitration than with use of the public court system, but recent evidence shows that employees who are governed by forced arbitration rarely file claims. This allows employers who violate employee protection laws to continue to do so without being held accountable for their actions.
Yes. The Federal Arbitration Act, or FAA, was passed in 1925 in response to a variety of court decisions that held arbitration agreements unenforceable. This law provides that arbitration agreements are generally valid and enforceable. The major exception to this provision is that the arbitration agreement is not enforceable if it violates the general law of contracts – which applies to all contracts under the law of the state that governs the agreement.
Generally, yes. The United States Supreme Court decided in 2001 that the FAA applies broadly to employment contracts. Most decisions before this limited the ability of employers to force employees to agree to arbitration provisions under the FAA. Since the US Supreme Court’s decision in 2001, the use of forced arbitration agreements by employers has increased greatly, as have the decisions enforcing such agreements against employees. However, even this general policy enforcing forced arbitration has limits.
It is important to remember that state contract law governs whether an arbitration agreement is enforceable. So while arbitration agreements are generally ok, a state’s specific contract laws may make a particular arbitration agreement unenforceable depending on the facts of that case or contract. A good example of how this works is on the issue of consideration in contract law. One important concept in contract law is that a valid contract must be based on adequate “consideration. This means that in order for a contract to be enforceable the benefit of the contract must be bargained for, in other words each party gets something of value in exchange for something else of value. In the context of arbitration, you are conferring a benefit on the employer by agreeing to arbitrate any future claims, and thus you should receive something of value in return. For instance, if an arbitration agreement is signed as part of the initial employment contract, your employment can be valid consideration – You give up your rights to potential legal action in exchange for a job. However, what constitutes valid consideration in the employment context varies from state to state. For instance, in Baker v. Bristol Care, Inc., the Supreme Court of Missouri held that an arbitration agreement lacked consideration where the agreement was based on continued employment (after the employee had already been hired). So, the Missouri court held that the employee’s continued employment was not valuable enough to constitute consideration for the benefit gained by the employer (the agreement to arbitrate) – therefore, the agreement was unenforceable for lack of consideration. Courts in a different state might have a different outcome under the same facts based on the contract law of that state.
One major exception to the general rule that forced arbitration agreements are legal also exists in the context of Federal contracting. Federal Acquisition Regulation (FAR) 22.2006, implementing Section 6 of the 2014 executive order, Fair Pay and Safe Work Places, requires that in contracts estimated to exceed $1,000,000, that are not contracts for commercial goods, the decision to arbitrate claims arising under title VII of the Civil Rights Act of 1964, or any tort related to or arising out of sexual harassment, shall only be made with the voluntary consent of employees or independent contractors after such disputes arise. This means that parties engaged in federal contracting cannot require arbitration of all potential claims as a condition of employment.
However, FAR 22.2006 does not apply to (1) Employees covered by a collective bargaining agreement negotiated between the Contractor and a labor organization representing the employees [union]; or (2) Employees or independent contractors who entered into a valid contract to arbitrate prior to the Contractor bidding on a contract containing this clause[.] Furthermore, [t]his exception does not apply: (i) If the contractor is permitted to change the terms of the contract with the employee or independent contractor; or (ii) When the contract with the employee or independent contractor is renegotiated or replaced.
The legal limits of forced arbitration are still being defined. The limits depend to a degree on the state court system in which the agreement will be tested, as well as the area of the country in which your case might be heard. Different federal circuit courts of appeal have taken very different positions on forced arbitration in general. Some courts have been skeptical of enforcing forced arbitration against unwilling employees, whereas others have embraced the practice. The issues and factors that the courts use to determine whether an “agreement” violates the limits of forced arbitration vary somewhat from state to state and from one federal court to another.
Broadly speaking, the questions that courts will ask about an arbitration agreement fall into two categories – substantive unconscionability and procedural unconscionability. Each of these are discussed in more detail below. It is unlikely that an agreement will be struck down unless a court determines that it is both substantively and procedurally unconscionable.
For example, in Arnold v. Burger King, where an employee alleged she was raped by a supervisor while at work, the Ohio State court struck down a forced arbitration agreement signed by the employee. The court held that the arbitration agreement was procedurally unconscionable given the disparity in bargaining power between the parties, and substantively unconscionable as it sought to include a claim of rape within its broad scope. Thus, the combination of procedural and substantive unconscionability rendered the agreement unenforceable.
Yes. In a 5-4 ruling in the case Epic Systems Corp. v. Lewis the Supreme Court upheld employers’ use of class-action waivers in arbitration agreements. Justice Neil Gorsuch said that the 1925 Federal Arbitration Act trumps the National Labor Relations Act. Therefore, If you sign the agreement, you give up your right to band together with your coworkers to sue in court over workplace issues, and are instead forced to handle your dispute individually through arbitration.
It might seem obvious that the public court system would get to decide whether the agreement denying an employee access to the public court system is enforceable. However, in 2010, the Supreme Court of the United States held in Rent-a-Center, West, Inc. v. Jackson, that where an agreement to arbitrate includes a provision that the arbitrator will determine the enforceability of the agreement as a whole, if a party challenges that particular provision, then a district court may consider the enforceability of that provision, but if a party challenges the enforceability of the whole agreement, then the provision controls and the arbitrator decides whether the agreement as a whole is enforceable. Thus, effectively, you may be prevented access to the courts even to decide whether you should have access to the courts.
Procedural unconscionability deals with how the arbitration agreement was formed. What was the bargaining power of the parties? There are limits that courts have imposed on the manner in which the employee is made to “agree” to arbitration. Factors which courts have considered in determining whether an arbitration agreement is procedurally unconscionable include:
the time an employee was given to review and consider the agreement
whether an employee was permitted to speak to a lawyer about the rights that he or she was giving up by agreeing to such a provision,
whether the employer threatened the employee with the loss of his or her job or other important employment benefit if he or she did not accept the arbitration provision,
whether an employee was told that the agreement was termed ‘just a form,’ or ‘not important,’ and/or that it was not necessary to read the agreement before signing it,
whether the agreement was snuck in to fine print inconspicuously located at the bottom of documents or on the back side of documents.
Substantive unconscionability looks at the fairness of the process under the agreement versus what an employee would otherwise have in the public court system. Does the arbitration provision eliminate some claims that could have been made in a court such as a claim for a penalty which might be available under the law for late payment of wages? Or, do the arbitration provision eliminate remedies which might otherwise be available? These and other similar issues are a limitation on the employee’s substantive rights and may be substantively unconscionable.
In 2013, the Supreme Court of the United States noted in American Express Co. Et. Al. v. Italian Colors Restaurant et al., that the fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy. Thus, the waiver of class arbitration was upheld even where the cost of arbitrating an individual claim exceeded the potential recovery. Employers will likely rely on this to support their incorporation of waivers of class action claims within employee arbitration agreements.
Nonetheless, in 2014 the National Labor Relations Board held in Murphy Oil that a forced arbitration agreement in which employees waived their right to participate in collective legal claims constituted an unfair labor practice on the part of the employer and was thus unenforceable. It is important to note that when cases are heard by an NLRB judge, the losing party has the right to appeal the decision for review by the full five-member board, and finally may appeal the decision to a federal court. So it is important to remember that a decision at the NLRB level, whether positive or negative, may not survive the appeals process. Federal courts have varied by jurisdiction on their decisions to enforce forced arbitration agreements.
Factors courts often look to in determining whether an agreement is substantively unconscionable include:
the cost of arbitration to the employee,
limitations on the relief the employee can get in arbitration versus public court,
mutuality – that is, whether the employer and employee are both bound to arbitrate their claims,
limits on methods used to get evidence which would otherwise be available in a public court to the employee,
justifications for one-sided results,
overall imbalance in the obligations imposed.
Imposing high costs on an employee who wishes to enforce his or her rights under the law may, depending on the circumstances, render an arbitration agreement unenforceable. It is important for an employee to realize that these costs are at times not obvious. Arbitrators may require a very high fee even for getting involved in the case – sometimes thousands of dollars – in addition to charging an hourly rate for their services. Proof of the costs of arbitration is sometimes hard to come by and is sometimes required by courts to use this ground as a basis to strike down an agreement. No fixed dollar amount is set in law as too high to force an employee to pay.
All that can be fairly said in general is that the higher the cost imposed on the employee to engage in arbitration the greater the likelihood that the court will strike the arbitration provision down as unenforceable. The trend is moving in the direction of not enforcing agreements that require employees to incur any costs that are higher than the employee would otherwise have to pay in court.
An area of unconscionability which courts are very sensitive to in general is any biased method of selecting the arbitrator. For instance, if the employer maintains complete control over selection of the arbitrator, most courts have found the agreement unenforceable. Unfortunately, this is a situation that is still somewhat difficult to discover, as employers often use what appear to be neutral or independent agencies to supply arbitrators. However, in many situations, these agencies actually advertise their services exclusively to employers and emphasize that they are a means of controlling the cost of employee claims. Also, there are times when arbitrators do regular business with an employer and depend upon the income from that employer’s business. All of these are factors that can influence a court in deciding whether an arbitration “agreement” is unenforceable because it does not protect the employee’s right to a neutral party as an arbitrator.
Generally, courts have looked very critically at any limitation on the relief that, absent the arbitration agreement, would otherwise be available in public court.. As a result, most forced arbitration agreements now specifically provide that there is no limitation on the claims or damages that the employee can receive. Any restriction on remedies that the employee would have had available in court greatly increases the chance that the agreement will be struck down as unenforceable by the courts.
For example, in Iskanian v. CLS Transportation Los Angeles LLC, the California Supreme Court said that while forced arbitration agreements class action waivers are generally enforceable, a PAGA (Private Attorneys General Act) claim is unwaiveable. It is important to look to the law of the state that governs your employment contract to see if there are unique claims available to you as an employee.
Courts vary in requiring “mutuality” of agreement to submit claims to arbitration. That is, some courts require, as a condition of enforcement, that the employer agree to submit any clams it has against the employee to arbitration as well as requiring the employee to do so with claims against the employer. The idea that a contract must have reciprocal promises and not be completely one-sided is basic to contract law. However, not all courts enforce this rule in the arbitration area, as many have said there is no “mutuality” requirement for arbitration agreements.
Many discrimination claims and other employment claims are difficult if not impossible to prove without getting information from the employer. This can include information about you – the wronged employee – and about other employees. It may include information about employer policies, investigations, pay and benefits. In public court systems such information is usually available through a process known as discovery. The availability of discovery is often very limited in arbitration proceedings. This is a major disadvantage to arbitration for many employees. Courts are becoming more sensitive to limitations on discovery, and are becoming more likely to strike down discovery limitations, such as those that prohibit depositions.
You have a difficult decision to make, although it may not matter whether you sign the “agreement” or not. If you continue to work after you are informed that a forced arbitration agreement governs your employment, you may be bound by it, even if you refuse to sign it. If you quit – or if you are fired for refusing to sign the “agreement”- you may not have any grounds to sue. This depends on the facts of your job, how the “agreement” is presented, and the court jurisdiction that controls your situation. If you do sign it, you will probably be stuck with arbitration as the only method of legal redress for any job related problems.
Here are some potential responses that may help better protect you in this situation:
Ask your employer whether you have a choice to sign the agreement.
Have it reviewed by legal counsel to determine whether it’s enforceable in your jurisdiction.
Make careful notes of any conversations you have with your employer about modifying or not signing the agreement.
Let your employer know, and document, that you are concerned about the additional costs of arbitration.
If there is a way, without jeopardizing your employment, to indicate that you’re only signing the document to keep your job, rather than voluntarily consenting to arbitration, then do so. However, you must carefully balance your interest in challenging the policy with your interest in keeping your job, so you may wish to consult with an attorney before taking this step.
No. But you may have to in order to get the job. What then? As stated in the previous question, you have a difficult decision to make, although it may not matter whether you actually sign the “agreement” or not, you could still be bound by it.
In this situation, it is important to consult with an attorney to determine what rights you may have. Depending on the issue involved and the provisions of the agreement, you may need to quickly make a strategic decision about whether to proceed under the forced arbitration process that is in place, or to challenge the process in court. There may be fast-approaching deadlines that will affect your legal strategy, so it is important to consult with an attorney immediately in order to preserve the widest range of options for yourself.
Registered Apprenticeships are apprenticeship programs that meet the national apprenticeship standards for registration with the U.S. Department of Labor (DOL) or federally recognized State Apprenticeship Agencies.
During the registered apprenticeship program, the apprentice will earn paychecks. Upon completion of the program, the apprentice receives a nationally recognized credential from the DOL and is elevated to journey-worker status. The new status leads to increased pay and advanced career opportunities.
Every registered apprenticeship program has a sponsor who is responsible for the overall operation of the program. Registered apprenticeship programs include structured on the job training and related instruction either through a community college, technical school, apprenticeship training school, or by the sponsoring business.
The hiring process for apprenticeships varies based on the employer.
The DOL has an interactive map that shows apprenticeship openings by city
The DOL also provides a database with all apprentice sponsors in your state and county. This can be helpful in seeing what types of apprenticeships are offered in your area.
Once you find an apprenticeship program, you are interested in you can apply online through the sponsor’s website.
The National Apprenticeship Act (Fitzgerald Act) governs apprenticeship programs and gives the Department of Labor authority to formulate and promote standards of apprenticeship in connection with the Department of Education.
Yes, an apprenticeship is a job. The average beginning wage for an apprentice is approximately $15 per hour. Wages can increase over time based on knowledge and performance advancements.
Yes, most employees in the United States are employees “at-will” employees and work for without an employment contract. Employees “at-will” may be fired without any warning and without cause. Apprentices are not employees “at-will.” Apprentices’ employment status depends on their apprentice agreement. Most apprentice agreements are term agreements that stipulate that an apprentice can only be terminated for good cause with due notice.
Yes, the Fair Labor Standards Act (FLSA), sets out the federal minimum wage and requirements for calculating hours worked. These provisions apply to apprentices as followed:
The time apprentices spend working on the job are hours worked. The time apprentices spend on classroom instruction outside of working hours may or may not be hours worked depending on the terms of the apprenticeship agreement.
For time spent on training to be hours worked, the apprentice must be employed under a written apprenticeship agreement or program that meets the standards of the Office of Apprenticeship of the U.S. Department of Labor (OA) and the training must involve productive work or performance of the apprentice’s regular duties. An agreement stating that training will be classified as hours worked must be in writing.
The U.S. Department of Labor’s Office of Apprenticeship (OA), works with State apprenticeship agencies to administer national apprenticeship programs. The OA along with state agencies work to ensure programs meet federal and state standards. The Office of Apprenticeship seeks to protect the safety and welfare of apprentices. OA issues nationally recognized and portable Certificates of Completion of Apprenticeship, and promotes the development of new programs.
Each registered apprenticeship program will have its own qualifications tailored to the apprenticeship. The apprentice sponsor will identify the minimum qualifications needed to apply for that program. All applicants are required minimally to meet the qualifications set out by the apprenticeship sponsor to be considered for the program. Apprenticeship programs require that the starting age be no less than 16 years of age. Programs in hazardous occupations usually require the starting age to be 18.
The length of an apprenticeship program depends on the occupation and type of program the apprentice enters. Most programs run from one to six years. For each year of the apprenticeship, the apprentice will normally receive 2,000 hours of on the job training and a recommended minimum of 144 hours of related classroom instruction.
Apprenticeship programs benefit both employers and apprentice employees. Companies can invest in talent by training apprentices in the latest advancements in a particular industry.
Apprentices can benefit by starting a career and earning a wage while continuing an educational program. Apprentices become highly skilled within an industry and can increase earnings and advance their careers
Over 150,000 businesses have registered apprenticeship programs with the DOL offering over 1,000 career areas. Here are a few examples of fields that provide apprentice careers:
- electrical work
- construction labor
Flexible and Predictive Scheduling
Flexible scheduling is an alternative to the traditional 9 to 5, 40-hour work week. It allows an employee to work hours that differ from the normal start and stop time. Flexible scheduling gives employees stability in their schedule as well as opportunities to balance other commitments.
Predictive or Predictable scheduling refers to employers providing employees advance notice of their work schedule, and minimizing alterations to an employee’s schedule once it is posted. Predictive scheduling operates to protect hourly workers, typically food service, retail, and hospitality employees, from unpredictable schedules, which can pose difficulties for employees trying to maintain a work-life balance.
Traditionally, there are different types of flexible scheduling that companies may consider for their workers to use. Common types include:
-Flex/Alternative Work Schedule: A flex or alternative work schedule allows employees to vary start and end times on a weekly or daily basis. This, however, does not alter the total number of hours worked per week.
–Compressed Work Week: A compressed work week allows for an employee to work a 40-hour workweek but in less than the typical five workdays. For example, this can be four ten-hour work days.
–Flexplace/Telecommute: A flexplace or telecommute arrangement allows an employee to work remotely.
No, the FLSA is the act that governs American employment. However, the FLSA does not address flexible work schedules.
The Department of Labor has stated that “allowing employees to vary their arrival and/or departure time is a matter of agreement between the employer and the employee.”
The Federal Employees Flexible and Compressed Work Schedules Act (FEFCWA) removes traditional scheduling requirements for government employees. Generally, federal law requires agencies to set traditional work hours over a Monday through Friday schedule. FEFCWA authorizes – but does not require – agencies to establish alternative work schedules. This can either be a flexible work schedule or a compressed work schedule.
Under a flexible work schedule, an agency still has the discretion to establish core hours that all employees must be at work. Employees are then allowed to vary their arrival and departure time around those core hours.
“Just-in-time” scheduling involves a tentative work schedule where employers analyze factors, including weather conditions and customer traffic, to schedule employees, often at the last minute. This type of scheduling is used to maximize revenue but requires that employees always be available at a moment’s notice.
The lack of stability and predictability in scheduling for employees in occupations like retail, food service, and hospitality makes it difficult to balance other commitments, like providing child care, getting or keeping a second job, and accessing and receiving needed medical care, among others responsibilities.
No, the FLSA does not regulate employee scheduling, with the exception of certain child labor provisions.
According to the Department of Labor “…an employer may change an employee’s work hours without giving prior notice or obtaining the employee’s consent (unless otherwise subject to a prior agreement between the employer and employee or the employee’s representative).”
Currently, there are no federal laws that cover predictive scheduling. However, that could soon change. Recently, Congress introduced a bill called the Schedules That Work Act, which would allow employees to “request changes to their work schedule without fear of retaliation and ensure that employers consider these requests.”
Yes, the state of Oregon is the first state to pass a predictable scheduling law. Some cities, such as San Jose, San Francisco, Seattle, New York City, and Washington, D.C. have also enacted laws related to predictive scheduling, which have added stability and predictability to worker’s income and schedules. Predictive scheduling laws are an emerging trend and employees should monitor local ordinances and state predictable scheduling enactments.
“Clopening” is the scheduling practice of requiring employees who close the business at night to return and reopen in the morning.
This practice has come under increasing scrutiny. It does not offer enough rest time between shifts and makes it difficult for employees to fulfill responsibilities outside of work.
Currently, there are no federal or state labor laws that govern the intervals between shifts. However, certain unions have advocated that their members be off a minimum amount of time between shifts.
On the state level, bills have been introduced in Maryland, Massachusetts, and Minnesota, which would require employers to give workers at least 11 hours between shifts. These bills would also require compensation if employees are called in before 11 hours have passed between shifts.
Non-compete agreements, also known as covenants not to compete or restrictive covenants, are quite common in employment agreements, employment applications, and in contracts for the sale of businesses. The general purpose of these agreements is to restrict the ability of employees who sign the agreement to go into business against the employer within a certain geographic area for a certain period of time. If you sign it, typically you are agreeing that you will not compete with your employer by engaging in any business of a similar nature, as an employee, independent contractor, owner, part owner, significant investor, and whatever other forms of competition your employer identifies to cover its bases.
No. However, not agreeing to a non-compete agreement, may cost you your potential job (or your current job, if your current employer now wants you to sign an agreement that did not apply to your employment before.) If the employer is unwilling to give up on the agreement or alter the form or content to better suit you, you may be not be hired, or you may be fired if you are already employed.
While non-compete agreements are analyzed under state law, and each state is different, there are some common factors that courts look at to determine whether a non-compete agreement is reasonable:
Does the employer have some legitimate interest it is protecting with the non-compete agreement?
What is the geographic scope of the restriction? Will it keep you from making a living?
How long is the non-compete agreement in force?
Does the agreement keep you from doing a type of work very different from what you had been doing?
Did the employer provide you with additional compensation or benefits in return for getting your agreement to sign the non-compete?
Each state has its own standards with respect to the validity of non-compete clauses. For specific information on your state’s non-compete laws and pending legislation, please check with an attorney in your state. At the federal level, the White House published a 2016 report on non-compete contracts in employment, holding that they “can impose substantial costs on workers, consumers and the economy more generally.”
In a New York case against the sandwich chain Jimmy Johns, the court held that the company’s non-compete preventing employees from working in a similar industry that worked primarily with sandwiches for two years was invalid. In response to this case, there is legislation currently proposed that would prohibit the use of non-compete agreements for employees earning less than $15/hour ($31,200 a year) or the applicable minimum wage in the employee’s municipality. Keep checking back to determine the status of this legislation.
It is not enough that your employer simply doesn’t want you to take your skills and abilities to a competitor. There needs to be some good reason for the non-compete. For example, if the employer introduced you to all its best customers, it may have a legitimate interest in keeping you from going to a competitor and luring those customers away. The goodwill developed in terms of customer relations, gives the employer a competitive advantage. They may want to prevent you from capitalizing on it, thus they are entitled to protection.
Or, if you gained certain confidential knowledge that you would inevitably use in the course of working for your new employer, a court may find that to be a legitimate reason to uphold a non-compete agreement.
It depends. Courts often consider these factors: geographic scope, length of time, nature of duties restricted and consideration – in relation to one another. For instance, a broad geographic scope – say an entire state – may be more likely to be enforceable if the duration of the restriction is short – say a month. On the other hand, a broad geographic scope coupled with a long time period of prohibition is more likely to be held unenforceable by a court. When looking at geographic scope courts examine the services provided by the employer. The court generally will not permit a non-compete that prevents an employee from working in a region where the employer does not do business.
As discussed in the previous question, what length of time is considered reasonable will generally be analyzed in conjunction with the other factors. For example, if the non-compete agreement is designed to protect valuable information the reasonable duration is for the time the information has value.
Lifetime bans on a particular area of work have been upheld in unique circumstances, but, generally, courts analyze the “protectable interest” the employer has and will not uphold time restrictions which go far beyond the employer’s “protectable interest.” For more information about the employer’s protectable interest, see the next question.
To answer this it is important to define the employer’s “protectable interest.” This is analyzed by courts using tests which vary from state to state. In general, courts look to the following factors
the nature of the work performed,
the length of time the employee was employed by the employer,
whether the employer conferred special training or education as a benefit of employment,
whether the employer shared trade secrets with the employee which could substantially affect the employer if used by a competitor,
whether the information the employee possesses is really kept confidential by the employer, and
whether the knowledge the employee has is unique to the employer, or of a general nature, such as general sales experience.
There may be are restrictions which are so broad that they eliminate the ability to work at all in a given field or profession. Because in some states constitutions protect the right to earn a living, some courts have held there are state constitutional rights to be able to earn a living, some courts have held that these restrictions should are to be scrutinized very closely.
The employer seeking a non-compete agreement may, in some cases, pay what is called “consideration”: additional compensation in exchange for the employee or seller agreeing to this provision, or some other non-monetary benefit, such as a change in job duties or responsibilities. However, whether this is required may depend on the law of your state. Generally, your employer does not have to give you additional financial compensation, but not doing so may have consequences when the employer tries to enforce the agreement. Some states require the payment of consideration, while others merely consider it as an important factor for courts to consider when determining whether to enforce the agreement.
Yes. However, whether it is legal for the employer to take adverse action against you – such as firing you or writing you up — for refusing to sign will depend on the circumstances of your case and may depend on whether the agreement the employer wants you to sign is enforceable under the law of your state. Contract law issues in your state may also be a factor in whether an agreement you are coerced or threatened into signing is enforceable. One is whether your employer is required to pay you additional money or give you other consideration as discussed in the previous question.
For example in Ohio, the Ohio Supreme Court held that in the case of an at will employee, continued employment was enough consideration to make the agreement enforceable.
It depends. The approach of courts to non-compete agreement clauses varies greatly from state to state. Some states are very eager to enforce covenants not to compete and will actively rewrite those which are too broad in geography or time to make them more readily enforceable. Other state courts have taken a very negative view of covenants not to compete and have enforced only those which very clearly were reasonable in geography and in time and which are supported by substantial consideration (the payment of money in return for the agreement.) This approach varies state to state and often depends on the facts of the individual case.
For example in Florida the law supports non-competes, so the facts of your situation, and the state you live in determine where the agreement will be enforced against you.
It depends. First look at the terms of the non-compete itself. Does it address termination? Assuming it does — and that it says the non-compete still applies even if you are terminated — the next question is: is that legal? Again, the answer is: it depends. If the reason for your termination is employer misconduct – discrimination, illegal activity by the employer or similar misconduct – then most courts have held that a non-compete is no longer enforceable. That is because illegal conduct by the employer was not part of the employee’s expectation at the time he or she agreed to the non-compete. If the reason for your termination is employee fault – attendance, poor performance or similar problems – then the fact that you were terminated will probably not be as significant. Nonetheless, courts may be less eager to enforce a non-compete agreement where it was the employer’s decision to terminate the relationship, not yours.
Probably not. Most courts have held that an employer who is engaged in illegal activity which results in an employee quitting cannot enforce a non-compete agreement against the employee who left for that reason.
Courts are very reluctant to enforce a non-compete that is so broad it keeps an employee from working at all. Also, there are courts which have relied on state constitutions to limit the ability of employers to restrict an employee from working at all.
It depends. There may be claims you can make against the new employer for not telling you up front that this was a requirement. These claims will vary from state to state and may depend on the enforceability of the non-compete.
Legally no, but it may give you a hint that the employer does not see the cost and risk of trying to enforce the agreement as worth it. It may also be that the employer has decided the agreement is probably not enforceable anyway. That is no guarantee the employer will not try and enforce it in your case, unfortunately. Before you deliberately choose to violate a non-compete agreement to which you are subject, consult a lawyer who can go over the agreement with you and help you assess an appropriate course of action.
Probably not. Most courts require that you affirmatively agree to the terms of a non-compete – such as by reading and signing it. It is usually not enough for that the employer to just tell you it is there for you to be bound by its terms.
If you choose to leave an employer with whom you have a covenant not to compete, the employer may do nothing. In this case be sure to come to some kind of agreement with the employer so you can do what you want. Additionally be sure to get the employer to release you from your non-compete agreement with a signed document.
On the other hand, the employer may sue you and go to court seeking what is called an “injunction” or restraining order to prevent you from violating your agreement. Because a violation of a non-compete agreement can cause an employer immediate harm, the court will often use expedited procedures in these cases. Once your employer requests an injunction or restraining order it may only be a matter of days or weeks before you have a hearing scheduled before a judge. You may have very little time to retain an attorney and discuss your case with that person, so make sure that you enlist the help of an experienced employment lawyer as soon as you know that your employer is challenging your actions.
At the first hearing the court may make a temporary decision to stop you from doing to challenged activity or decide that what you are doing is ok for the time being. A temporary order will only be effective until you come back to court for a more complete, and usually more lengthy trial to decide the matter finally. Alternatively, depending on the facts of your case and your state’s procedures, your first hearing may be the final hearing. The court will hear evidence from you and from your employer and decide whether to issue an order stopping you from engaging in the challenged activity or to deny your employers request and leave you free to continue the challenged activity.
If an injunction is granted by the court, this is a legal remedy which can stop you as an employee from working. It can cause you to lose your ability to be employed in violation of the covenant not to compete for whatever period of time the court sets. This can last for months or years until the court reaches a resolution of the final decision on whether the covenant not to compete which the employee signed is actually enforceable or not. Of course, practically speaking, most employees can’t wait months or years without the ability to earn a living, so the T.R.O. hearing is effectively the trial in most cases.
Probably. Your employer can also seek what is called “liquidated damages” if those are set forth in the non-compete agreement. Liquidated damages are a set sum that the employer and employee agree to as damages if the employee breaches the covenant not to compete. Not all liquidated damages are enforceable under the law, however. This too depends on the facts of each case and the law of each state.
Additionally, the employer can seek any actual damages or losses which they claim have occurred because the employee left in violation of the covenant not to compete – this could include lost profits from customers, the loss of secret employer information and similar losses.
In most states the answer is yes. Most states provide a mechanism for testing the enforceability of a contract. This mechanism is called declaratory judgment. Depending on the availability of this remedy in your state and the tactics involved in each individual situation, it may make sense for the employee to bring a declaratory judgment action asking the court to determine whether the agreement is enforceable. There are many practical and tactical considerations involved in deciding whether or not you as an employee should initiate a declaratory judgment action challenging a covenant not to compete. No one-size-fits-all answer applies to this issue.
In the sale of a business, it is typical for a purchaser to include in a contract for sale the requirement that the seller does not engage in the same type of business within a certain geographic area for a certain period of time. Whether these types of non-compete agreements are enforceable or not and the degree to which courts will enforce them varies greatly from state to state.
The best thing would be to not have a non-compete agreement at all. Failing that, you should try and limit it as much as possible in geographic scope and in duration. Limit it narrowly to the area the employer is really concerned about you working in – not the whole industry or line of work. For instance, you might ask that the limitation is to the area of clothing retail if you work in a clothes store, versus retail generally, which would cover a very broad range of possible jobs that are truly unrelated. The goal is to limit the agreement to what is necessary to protect the employer. You should also consider asking for severance pay in the event of an involuntary termination.
Whether an agreement is likely to be valid depends greatly on the analysis of state law as applied to the specific facts of you and your employer’s situation. With so much potentially at stake, if you have any concerns at all about an agreement, it would be wise to consult with a lawyer who is familiar with these types of agreements. Guessing wrong about the validity of the agreement could seriously affect your ability to work and could cost you a lot of money, so you want to proceed carefully.
Non-Disclosure Agreements (NDA’s)
Non-compete agreements, also known as covenants not to compete or restrictive covenants, are quite common in employment agreements, employment applications, and in contracts for the sale of businesses. The general purpose of these agreements is to restrict the ability of employees who sign the agreement to go into business against the employer within a certain geographic area for a certain period of time. If you sign it, typically you are agreeing that you will not compete with your employer by engaging in any business of a similar nature, as an employee, independent contractor, owner, part owner, significant investor, and whatever other forms of competition your employer identifies to cover its bases.
There are typically three points during your employment relationship when you may be asked to sign an NDA.
- You may be asked when you are hired to sign an NDA, to keep the company’s trade secrets or business strategies confidential. An NDA and a non-compete agreement [link] limiting who you can work for in your next job may be contained together in the agreement you sign when you are hired.
- If you are terminated, you may be asked to sign an NDA in exchange for a severance payment. Since employers are generally under no legal obligation to provide a severance agreement, this strategy is designed to prevent you from disclosing the terms of the severance and possibly that you received one at all. The severance agreement may also contain a release limiting the conditions under which you can file a lawsuit against the company.
- Employers often use NDAs to keep the terms of settlement agreements confidential, which may also have the effect of preventing toxic practices within their workplace, including sexual harassment, from being exposed or known to other employees who may have similar experiences.
The specific terms of an NDA will differ depending on the circumstances. The information that may be covered by an NDA is virtually unlimited. Generally, by signing an NDA, you promise to not release the confidential information shared with you by your employer.
NDAs are often used to stop the victims from speaking out. They are included in settlement agreements and prohibit victims of sexual harassment or assault from publicly discussing the settlement and what happened to them. Many victims fear the legal action that may be taken against them if they violate the terms of their agreements.
No survivor is obligated to share their story. Some survivors prefer to keep the harassment or assault private and willingly enter into an NDA. However, NDAs can have significant consequences. For example, the NDAs used in sexual harassment cases can enable the person or company to repeat the same harassment and assault for decades by silencing victims from warning other’s about the behavior.
Pending bills in state legislatures across the country, currently including in California, New York, and Pennsylvania, would prohibit employers from requiring employees to sign agreements that block them from exposing alleged workplace sexual harassment.
If you are a victim of sexual assault or harassment in the workplace and you have signed an NDA, you may still be able to break your silence. Because NDAs can differ, you should consult with an attorney to discuss whether you will be vulnerable to legal action for violating settlement terms or for defamation.
What may happen after you break the terms of an NDA may depend on what’s in your agreement. Take a look at the agreement you signed, what information it relates to, and what the consequences of breaking the agreement are. Quite often, in practice, many companies do not go after NDA violators, because doing so risks bringing even more attention to an often egregious workplace issue. However, it is also a likely scenario that your employer may be able to claim breach of contract and take legal action against you.
You should consult a lawyer before breaking the terms of an NDA. If you’re bound by an agreement not to disclose trade secrets, there is a chance that the language could be construed to cover any public statements about what happens in the workplace, although it’s not yet clear whether that argument would hold up in court.
As an employee, you may be asked to sign an NDA as a condition of employment, as part of a severance package, as part of a settlement agreement or in a personal context.
· Be cautious of an over broad agreement that seems to be less about protecting confidential company information and more about forcing employees to be silent about everything regarding the company.
· Check for liquidated damages provisions which specify a cash amount an employee must pay per breach of an NDA. If the number is very high, it may create a dynamic where employees are terrified to come forward even about illegal company behavior because they are afraid of being sued. Courts may throw out a provision where the damages/penalties for violating the agreement are much greater than the harm caused to the company when the agreement is violated.
· Time limits that go on for your entire lifetime are overreaching and should raise a red flag. They may be considered reasonable by a court if they are for a shorter period of time, but that will vary by state.
· Forced arbitration clauses or clauses requiring private and confidential arbitration rather than in a public court of law. While those clauses may be legal to include, you should be aware of what they mean.
If what you are told is different from what you see in the written agreement, you need to clarify before signing because the written agreement is binding. Additionally, if the NDA prevents you from bringing discrimination or harassment claims to the proper authority than the NDA is unenforceable.
If you are unsure about the terms of your agreement, you should speak with a lawyer for further clarification.
Sometimes, yes. If you are asked to sign an NDA, you can ask to modify it, but an employer may or may not be receptive to this suggestion. If you can change the NDA, you may consider adding the following provision:
“Nothing prevents [Your Name] from using his/her own generalized skill, knowledge or expertise that he/she already had, or is publicly available.”
Including this clause in an NDA puts the burden on the employer to prove what you already knew in the case of an alleged breach.
· Anything that is a matter of public record
· Any information that employee has prior knowledge of or gained from sources other than their employer
· Any information that is common knowledge in a field
Additionally, an NDA is not meant to protect a company from doing something illegal. If your company has unethical or illegitimate business practices, you still have a right to whistleblow (inform) to proper authorities.
An NDA also cannot prohibit an employee from filing a sexual harassment complaint with the Equal Employment Opportunity Commission.
Yes, there are two types; unilateral and mutual.
A unilateral NDA is more commonly used. It is used when a business or employer discloses information to their employee, and the employee receives the information and agrees to keep the information confidential.
A mutual NDA is used when the two parties agree keep confidential each other’s information. The mutual NDA is generally used between businesses.
A nondisparagement clause generally prevents an employee from saying anything negative about the company, even on social media. Nondisparagement clauses have gained popularity in the startup world where they are often used to hide the sexist culture in the tech industry. If you are subject to a nondisparagement clause, it is best not to publicly discuss your employer, and especially not online, where proof of your comments could be saved as evidence of a violation. Consult with an attorney to review the agreement before speaking out, even anonymously.
Section162(q) of the new tax bill was originally intended to stop businesses/employers from being able to deduct sexual misconduct settlements conditioned on NDAs, however it currently states, “no deduction shall be allowed under this chapter for—(1) any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a non-disclosure agreement, or (2) attorneys’ fees related to such a settlement or payment.”
Some have interpreted this statute to apply to both businesses and individuals. Therefore, under this language of this statute, victims of workplace sexual assault or harassment who settle their claims subject to an NDA, would be prohibited from deducting the portion of their settlement allocated for attorney’s fees, and would have to pay taxes on the entire amount they were given for the settlement.
As a result of this uncertainty, Sen. Robert Menendez has announced plans to introduce legislation clarifying that §162(q) is meant to apply only to businesses/employers. In the meantime, you should consult with a tax attorney or accountant knowledgeable in this area to determine what amounts of your settlement payment are deductible.
Salary History Disclosure
Employers tend to use your past salary to gauge your market value. It also gives them a sense of what salary you may be expecting.
No. Employers may legally choose whom they extend an interview offer to; however, it is illegal for employers to refuse to interview based on forms of discrimination that are prohibited by law. Thus, it is illegal for an employer to refuse to interview you because of your religion, race, national origin, sex, age, or disability. Nonetheless, employers do not have to tell you why they are choosing not to interview you.
Yes, in most states and cities, but this is changing. The level of restrictions varies from state to state (as listed below). States and localities that have passed laws on salary history are listed here. All of these statutes prohibit screening job applicants based on their past and/or current pay information. According to the National Conference of State Legislatures, many other states are considering this type of legislation. These states currently include Connecticut, Delaware, Georgia, Iowa, Idaho, Illinois, Maryland, Maine, Mississippi, Montana, North Carolina, New Jersey, Oregon, Rhode Island, Texas, Virginia, Pennsylvania, Vermont, and Washington.
Effective January 25, 2017, New Orleans now prohibits city agencies from asking for applicants’ salary histories.
Effective January 30, 2017, Pittsburgh prohibits the city from asking about a job applicant’s salary history. It also forbids the city from relying on pay history in the employment process, unless the applicant volunteered the information.
Philadelphia’s “Fair Practices Ordinance: Protection Against Unlawful Discrimination” (effective date pending) will prohibit employers from asking about or requiring disclosure of a job applicant’s pay history. It will also prohibit employers from conditioning the offer of employment or consideration for an interview based on pay disclosure. The ordinance will also prohibit hiring managers from relying on the past compensation history that was received from applicant’s current or former employer when determining the applicant’s pay at any stage in the employment process. This includes during the negotiation or drafting of any employment contract unless the applicant “knowingly and willingly” tells his or her past pay history to the employer.
Effective March 8, 2017, Puerto Rico hiring managers may not ask a job applicant, or his or her current or former employer, about the applicant’s salary history. However, the applicant may voluntarily tell the employer that information. If the applicant does, or the employer has already offered to hire him or her, the employer may further ask about or confirm the person’s salary history. The Puerto Rico law also promotes pay transparency in the workplace by prohibiting employers from restricting applicants’ or employees’ questions or discussions about their pay information or the pay information of another employee with similar duties.
Effective October 6, 2017, Oregon prohibits hiring managers from screening job applicants based on their current or past pay. Additionally, it is prohibited to set an applicants’ pay based on their current or past compensation. This law does not apply to current employees who want to transfer to another position.
Effective October 31, 2017, New York City will prohibit hiring managers from asking job applicants, their current or former employers about the applicants’ past salary. The ordinance will also prohibit employers from conducting public records searches to find the applicants’ pay history, as well as relying on any past pay data to determine the salary, benefits, and other compensation for applicants during the hiring process. The New York City ordinance allows discussions between the prospective employer and the applicant about expectations concerning desired compensation. The ordinance allows the applicant to voluntarily give the information about his or her past pay to the employer. If the applicant voluntarily tells the employer this information, the employer may verify it and consider it in determining the applicant’s salary, benefits, and other compensation. The New York City ordinance will not apply to current employees transferring to a new position.
Effective December 14, 2017, Delaware hiring managers will not be allowed to screen job applicants based on their pay histories, including by requiring their prior pay meet a minimum or maximum criteria, or find out the applicants’ pay history from their current or former employers. The law will not prohibit the employer from discussing and negotiating pay and expectations with the prospective employee if the individual’s past pay history remains confidential. The law will allow the employer to ask about and verify the job applicant’s past pay history, but only after the offer of employment stating the compensation terms has been accepted by the applicant.
Effective January 1, 2018, California hiring managers will be prohibited from seeking (on their own or through third parties) and relying on job applicants’ past pay information as a factor to determine whether to give a person a job and payment terms of that job. The California law, unlike other laws, will also require employers, upon reasonable request, to provide the pay range for the applied-for position. In California, job applicants may voluntarily contribute information about their pay history. If the applicant gives this information, employers can weigh or rely on the information when determining compensation.
Effective July 1, 2018, San Francisco’s “Parity in Pay Ordinance” will prohibit hiring managers from asking about a job applicant’s salary history and prohibit hiring managers from relying on pay history information as a factor in determining whether to hire the employee. San Francisco employers will also be prohibited from releasing a current or former employee’s compensation information to his or her prospective employer unless that employee has given written authorization. As with some other laws, the applicant may voluntarily, and “without prompting,” offer this information themselves to the prospective employer. In that case, the employer may consider or verify the information. The ordinance allows the applicant his or her prospective employer to participate in pre-employment compensation negotiations.
Effective July 1, 2018, Massachusetts hiring managers will not be allowed to require that a term of employment, that the applicant refrains from talking about his or her pay or the or the pay of others. The law will also prohibit employers from screening applicants based on their pay history, requiring applicants to disclose previous pay as a condition of employment or requiring that the applicant’s former pay meets a certain minimum or maximum criteria. While Massachusetts will not allow the employer to seek the applicant’s pay history from the applicant or any of his or her current or former employers, the law does allow the applicant to voluntarily discuss his or her pay information.
No. Salary history is personal information that you may choose to withhold from your employer. However, while there is no legal obligation to disclose your previous salary, there is no way to be sure how a particular employer may react. Declining to disclose your previous salary could result in losing the job opportunity.
Many people (especially minorities and women) choose not to disclose their previous salary because it may limit how much the company offers them for a new job. If a person is underpaid in a previous job, disclosing their previous salary to a new potential employer will likely result in being underpaid in their new job as well.
Basing salaries on a person’s previous pay rate perpetuates the pay gap between men and women and minorities. As noted above, many states are moving towards banning salary history questions altogether.
Employers are urged to provide this information in job postings. Asking for a salary range upfront can avoid wasting the company’s time and yours and reminds a company that it is important to provide transparency of the fair market rate for the role that they are trying to fill.
A polite way to ask for salary range would be by saying:
- “I want to be respectful of your time. Is there a specific salary range for this position?”
- “I want to be respectful of your time. There is a specific salary range I’m looking for. Can we talk about that upfront?”
- “If you don’t mind me asking, what is the salary range for this role?”
Since it is still standard practice for many employers to not disclose a salary range up front, you may be met with resistance. There is no way to be sure of how a particular employer may react to this question. There is always a risk that it could result in losing the job opportunity. However, as more employers begin to realize the benefit of providing salary information up front, this will become less of a problem.
If it’s not a required field on an online form, or if it is a physical form, leave it blank. If it is a required field on an online form, enter $0 or $1. It will be clear to employers that you do not want to answer the question.
Enter the interview with all the knowledge you can about the salary range for the position. Visit sites like Payscale.com, Glassdoor.com, Indeed.com, and Salary.com to get more information. The research will allow you to know in advance your desired salary range and allows you to be realistic in your expectations. You will also have a leg up in the interview if the employer seems to give a lower number than the fair market value for the position.
You can also ask for the compensation range of the position you applied for, before the interview process, during a phone screen, or e-mail exchange. Be prepared for this question to lead to being asked what your expectations are. You can respond by saying “The range sounds in line with my expectations.”
No. You may be tempted to exaggerate during salary negotiations, but it would be in your best interest not to. Headhunters and human resources professionals are well versed in this area and can catch you in your lie. If you lie, you will lose credibility, lose the job you are applying for and damage your professional reputation.
- “I prefer not to tell you my past salary because I’d like to have an honest, fair negation based on what I can do to make your business more successful.”
- “I’d be happy to talk about that at the appropriate time. Why don’t you tell me more about …?”
- “Before we get to that, let me make sure I’m even in your ballpark. What is the salary range for this position?”
- “I’m not comfortable discussing salary at this stage. Perhaps we can do so when we meet in person?”
- “My current employer does not allow me to discuss the terms of my employment.”
- “For a person with the skills and experience you want, I’d expect that this position would not pay less than ‘X.’ Correct?”
If your potential employer asks many times, and none of the above answers are working for you, you can always decide to share your salary information. If you know your last job underpaid you from looking at your fair market value, don’t hesitate to bring that up to your potential employer.
To address some of the inequities in pay which leads to potential pay discrimination against women, racial, and ethnic minorities, a proposal for employers to include pay data on a report called the EEO-1 was finalized in 2016.
The EEO-1 is a form from the Equal Employment Opportunity Commission (EEOC) which employers with at least 100 employees and government contractors with at least 50 employees must fill out each year. In the form, employers are required to disclose the race-ethnicity, gender and job category of their employees.
The expanded EEO-1 form would require employers to categorize their employees by gender, race, type of work, and place them into one of twelve wage brackets. For example, if a company has 50 men of the same race, who do similar work for a similar amount of money, then they would be grouped together.
Although the EEO-1 is confidential and not accessible to the public, the information would be disclosed to government agencies responsible for monitoring workplace discrimination and allow companies to identify pay gaps to take internal corrective action.
However, on August 30, 2017, the White House Office of Management and Budget announced that the pay data reporting requirement is suspended indefinitely. It is now unclear whether this proposal will move forward or whether employers will be required to disclose pay data except as requested in a lawsuit or other pay dispute.
Most people who perform work for someone else are considered employees of that person or company. However, an alternative arrangement is to consider those who perform work to be independent contractors. The difference between employees and independent contractors is more than just the title.
If you are an “independent contractor,” your working terms are decided by an agreement or contract. The terms of the agreement may be a formal written contract, or may just be a verbal agreement. In fact, a contract for work can be created simply by doing things the way they have always been done, without writing down the terms and without even talking about them. However, even if your employer labels you an “independent contractor,” the U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) may still consider you to be an employee based on the nature of your work relationship.
If you are considered a contractor, you may not have the same legal rights as an employee. For example, most federal laws that prohibit discrimination only apply to employees. Another example: an employer is required to pay its hourly employees minimum wages and overtime wages, but contractors don’t have to be paid any specific amount. Employers that provide benefits to employees do not have to provide those benefits to contractors. An employer is required to deduct payroll taxes from the pay of an employee. No payroll taxes are deducted from money paid to a contractor.
A new category of independent contractors is called “on-demand” workers which are employees that work for online app-based companies that are gaining revenue and profits from these workers. An example of an “on-demand” worker is an Uber driver. In this field of employment, employers have faced criticism for their treatment of these “on-demand” workers; however, employers defend on the grounds that labor regulation will crush the innovation they seek to advance. Employers of “on-demand” workers further argue that they are not employers and these workers are not employees; however, critics of this arrangement now argue that these types of companies are performing a labor-brokering function. Thus, legislation is being developed to determine these workers’ rights on the job such as minimum wage for all hours worked, right to a voice on the job, social insurance programs, and many other benefits and protections a normal employee would obtain. Please check back for any developments surrounding the rights of “on-demand” workers.
Both the IRS and the DOL care about whether you are properly classified. Each of these agencies has guidelines to help you decide whether you should be paid as an employee or as an independent contractor.
There is no single rule or test that determines whether you are an independent contractor vs. an employee. It is the particular facts of a situation that control. However, both the IRS and the DOL have developed guidelines to help both businesses and workers choose the correct status.
The IRS wants to be sure that proper federal taxes are being paid. The IRS collects income taxes from employers and employees. Taxes are deducted from employee paychecks. The employer is required to forward to the IRS the money collected from the employee deductions. If an employer is not properly taking deductions or forwarding the money, the IRS may act against the employer to correct the tax violations.
If an independent contractor is involved, the IRS has no authority to act against the employer, but the IRS does have the authority to audit the tax payments of the independent contractor. Contractors who earn over a certain amount also must pay what is known as a “self-employment tax,” which covers their share of Social Security taxes.
Under IRS rules, workers are presumed to be employees. The burden is on the employer to prove that a worker is an independent contractor and not an employee. The IRS has recently simplified their previous list of 20 factors into a 3 category evaluation system to determine whether a worker is an employee or an independent contractor.
These 3 categories: (A)Behavioral Control, (B) Financial Control, and (C) Type of Relationship, include a total of 13 factors. The importance of each factor depends on your particular situation. These categories are detailed below:
Type of Instructions Given: Employees must follow the instructions of the employer as to when, where, and how to perform the work. Independent contractors can set their own hours and decide how to perform the job or complete the project. The company will review the finished project.
Degree of Instruction: Degree of Instruction means that the more detailed the instructions, the more control the business exercises over the worker and the closer the worker is to an employee. Less detailed instructions reflect less control, indicating that the worker is more likely an independent contractor.
Evaluation: If an evaluation system measures the details of how the work is performed, then these factors would indicate that you are an employee. If the evaluation system measures just the end result, then you could be either an independent contractor or an employee.
Training: The employer may hold classes, meetings or closely supervise on-the-job to train employees. Independent contractors can perform the work as they choose.
Significant Investment: Employees do not invest in the facility and do not buy equipment. Independent contractors must invest in their own workplace and equipment.
Unreimbursed Expenses: Independent contractors are more likely to have unreimbursed expenses than are employees. Fixed ongoing costs that are incurred regardless of whether work is currently being performed are especially important. However, employees may also incur unreimbursed expenses in connection with the services that they perform for their business.
Opportunity for Profit or Loss The profit or loss of the company does not change the pay that employees earn. Independent contractors can profit or lose money based on good or bad results and time spent working on the project.
Services Available to the Market: Employees generally serve one employer. Independent contractors can provide services to the general public, advertise services, and recruit new customers–all while working for one or more other companies.
Method of Payment: Employees are paid on specific dates in regular amounts, and may be reimbursed for travel and business expenses. The contract between the company and the independent contractor determines how payment is to be made. Independent contractors may include expenses as part of the contract or may pay expenses independently.
Type of Relationship:
Written Contract: Although a contract may state that the worker is an employee or an independent contractor, this is not sufficient to determine the worker’s status. The IRS is not required to follow a contract stating that the worker is an independent contractor, responsible for paying his or her own self-employment tax. How the parties work together determines whether the worker is an employee or an independent contractor.
Employee Benefits Employee benefits include things like insurance, pension plans, paid vacation, sick days, and disability insurance. Businesses generally do not grant these benefits to independent contractors. However, the lack of these types of benefits does not necessarily mean the worker is an independent contractor.
Permanency of the Relationship: Employees have an ongoing relationship with the employer. Independent contractors are hired for a specific job. When that job is finished, the working relationship ends.
Services Provided as Key Activity of the Business If a worker provides services that are a key aspect of the business, it is more likely that the business will have the right to direct and control his or her activities. For example, if a law firm hires an attorney, it is likely that it will present the attorney’s work as its own and would have the right to control or direct that work. This would indicate an employer-employee relationship.
The DOL monitors and regulates the wage and hour laws passed by Congress. If for example, an employee is not paid minimum wages or overtime, the DOL may act to correct the unfair or unlawful wage practices. If an independent contractor is involved, the DOL has no authority to act.
The Department of Labor states that “economic realities” factors are helpful guides to determine whether a worker is an employee or an independent contractor. While there is no single rule or test, the Supreme Court has held that it is the totality of the working relationship between the worker and employer that is determinative.
Although the factors considered can vary, the factors generally considered to determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act (FLSA) include:
The extent to which the work performed is an integral part of the employer’s business. If your duties are an integral part of the business, that fact leans toward finding you to be an employee. If your duties are not central to the primary business, that fact leans toward finding you to be a contractor.
Whether the worker’s managerial skills affect his or her opportunity for profit or loss. Managerial skill may be indicated by the hiring and supervision of workers or by investment in equipment. Analysis of this factor should focus on whether the worker exercises managerial skills and, if so, whether those skills affect that worker’s opportunity for both profit and loss. An employee usually has a set wage and only shares in the profits or losses of the business under a shareholder agreement or benefit program. A contractor can be more profitable by performing their services more efficiently. The profits and losses of a contractor are not linked to the profits and losses of the business that is using your services.
The relative investments in facilities and equipment by the worker and the employer. The worker must make some investment compared to the employer’s investment, and bear some risk for a loss, in order for there to be an indication that he/she is an independent contractor in business for himself or herself. A worker’s investment in tools and equipment to perform the work does not necessarily indicate independent contractor status, because such tools and equipment may simply be required to perform the work for the employer. If a worker’s business investment compares favorably enough to the employer’s that they appear to be sharing the risk of loss, this factor indicates that the worker may be an independent contractor.
The worker’s skill and initiative. As a contractor, you are free to exercise your own initiative and judgment. You can take advantage of open market competition to set your prices and pick your work. The employee is required to follow directions from the employer and under normal circumstances cannot compete with the employer.
The permanency of the worker’s relationship with the employer. More permanent relationships create an employee-employer relationship. Temporary services are more likely to create a contractual relationship.
The nature and degree of control by the employer.The more control the business has over the work you do, the more likely you are to be an employee. If you are free to perform your services without detailed direction or supervision, you are more likely to be a contractor.
No. What you are called is not important. Employers in some cases have called their workers “freelancers” or contractors, but after a lawsuit, those workers were actually found to be employees.
The rise of on-demand services provided through app/web-based companies brings new challenges to worker classification. The United States Supreme Court recently considered the question of the worker classification of Lyft drivers. The Court used a “totality of the circumstances” approach utilizing the FLSA standards but ultimately decided a jury was needed to determine whether the drivers are employees or independent contractors. Thus, this question has yet to be answered.
However, at the state level, the California Labor Commissioner’s office recently ruled that an Uber driver is an employee, rather than an independent contractor. It is important to note that this ruling only applies to the individual employee who filed her case. Furthermore, Uber is appealing the decision. Nonetheless, at this time, whether you will be considered an employee or an independent contractor depends on your specific circumstances and the forum in which your case is heard.
The law in this area is changing very rapidly with the rise in on-demand employment and app-based services. If you work for one of these companies and question whether or not you are being paid properly, please consult with an attorney in your area to determine the current state of the law applicable to you.
Not necessarily. The time or method of payment is just one of the factors considered when deciding if you are an employee or a contractor. While a flat fee payment arrangement makes it more likely that you are an independent contractor, it is the totality of the circumstances of the working relationship that will ultimately determine whether you are an employee or independent contractor. Otherwise, employers could just offer each employee a flat fee for the completion of work, or choose any particular method that might circumvent the laws.
An employer is not responsible for your unemployment benefits if you are an independent contractor. While employees are always eligible for unemployment benefits if they are laid off, an independent contractor will only be eligible if they pay separately into the state unemployment fund.
However, if your status as an independent contractor is questionable, filing for unemployment may be worth a try. While cases considering Uber drivers’ employment status are still making their way through the courts, a Florida Uber driver recently filed for and was granted, unemployment benefits as an Uber employee.
As with unemployment benefits, an employer is not responsible for workers comp benefits if you are an independent contractor. Most states permit an independent contractor to be eligible for workers comp benefits by paying separately into the state workers compensation fund.
Only employees are covered under federal discrimination laws, not independent contractors. However, some states have discrimination laws that define “employee” more broadly than the IRS and DOL. You should check your state and local discrimination laws to see if you would be covered, or consult with a local attorney who can help you find out how you might be protected.
Under the Affordable Care Act, also known as “ObamaCare”, Employers with 50 or more full-time employees, or a combination of full and part time employees equivalent to 50 full time employees, who do not provide a minimum level of affordable healthcare coverage to their employees may be required to make an “Employer Shared Responsibility” payment if at least one of their full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges, also called a Health Insurance Marketplace (Marketplace).
Furthermore, if an employer subscribes to an IRS-approved medical plan that covers all employees, that plan must provide coverage without discrimination. If you are an independent contractor, you must provide your own health coverage.
The IRS regulates the amount all people must pay for income taxes and contributions to Social Security, Medicaid, Medicare, etc. These taxes are automatically deducted from an employee’s paycheck. As an independent contractor, you must pay your own taxes. However, as an independent contractor, you may also take deductions for all of your business expenses, so you may actually end up paying lower taxes than an employee.
First, you should have a written agreement that explains why you are an independent contractor and not an employee. The company must be willing to give you broad discretion in how, when, and where you perform your duties. You must review all of the IRS and DOL factors and be sure that your agreement considers all of those factors. If the company has numerous people performing the same job that you perform in a company building, using company supplies and equipment, with supervisors controlling your assignments, even an independent contractor agreement may not keep you from being called an employee by the IRS or DOL.
Talking to company management is a good start. If your management is alerted that there may be a problem with your classification, that may be enough incentive for them to change your status to comply with the IRS and DOL factors.
If you are presently an employee and want to become an independent contractor, your job assignments must be consistent with the IRS and DOL factors. You should discuss your request with management to see if the company is willing to give you the freedom to be an independent contractor.
If there are job openings, you can apply for an employee position. But, if the company insists on calling you and paying you as an independent contractor, and you feel that the job you are doing fits the IRS and DOL factors defining an employee, the solution may be difficult.
First, you should talk to an attorney who can help you analyze your situation. Then, you can decide whether going to management or going to a government agency is the best way to address your concern. Where a company is avoiding employment laws by calling large numbers of workers independent contractors, the DOL may act to enforce federal law.
First, you should talk to an attorney who can help you analyze the IRS factors. Even though reporting IRS violations is a protected activity, you might expose yourself to unlawful retaliation. If you want the IRS to determine whether you are an employee, you can file an IRS Form SS-8.
The IRS also has a hotline (800-829-0433) where you can make a report. For more information, and/or other ways to report IRS violations, see the IRS page, How Do You Report Suspected Tax Fraud Activity?
The IRS, the DOL, and similar state agencies enforce wage, hour, and tax laws. Independent contractors must rely on the terms of their independent contractor agreement, or the implied understanding, and would have to go to court to enforce that agreement or understanding. Possible claims might include breach of contract and breach of promise, sometimes called promissory estoppel. For more information, see our site’s contracts page.
The Fair Labor Standards Act (FLSA) is enforced by the Wage-Hour Division of the DOL. The Wage-Hour Division’s enforcement of the FLSA is carried out by investigators stationed across the U.S. who conduct investigations and gather data on wages, hours, and other employment conditions or practices in order to determine whether an employer has complied with the law. Where violations are found, they also may recommend changes in employment practices to bring an employer into compliance.
It is a violation of the FLSA to fire, or in any other way discriminate against an employee, for filing a complaint or participating in a legal proceeding.
Willful violations may be prosecuted criminally and the violator fined up to $10,000. A second conviction may result in imprisonment. Employers who willfully or repeatedly violate the minimum wage requirements are subject to a civil money penalty of up to $1,000 for each such violation.
The FLSA makes it illegal to ship goods in interstate commerce that were produced in violation of the minimum wage, overtime pay, child labor, or special minimum wage provisions.
To contact the Wage-Hour Division for further information and/or to report a potential FLSA independent contractor violation, call:
Toll Free: 866-4-USWAGE (866-487-9243) TTY: (877) 889-5627 (available Monday – Friday, 8 a.m. – 6 p.m. Eastern Time)
You may also contact your local Wage-Hour Division office. If you need further information about your state’s law relating to independent contractors and/or wish to report a potential state law violation, then you may wish to contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.
If an agency or a court finds that you should have been treated as an employee, the company could be forced to classify you as an employee. If you lost income or benefits because you were not classified as an employee, you could be compensated for those losses.
There are several different methods under the FLSA for an employee to recover unpaid wages; each method has different remedies.
The Wage-Hour Division of DOL may supervise the payment of back wages.
The Secretary of Labor may bring suit for back wages and an additional penalty, called “liquidated damages,” which can be equal to the back pay award (essentially doubling the damages) if an employer willfully violated the statute.
An employee may file a private lawsuit for back pay and an equal amount as liquidated damages, plus attorney’s fees and court costs. An employee may not bring a lawsuit if he or she has been paid back wages under the supervision of the Wage-Hour Division or if the Secretary of Labor has already filed suit to recover the wages.
The Secretary of Labor may obtain an injunction to restrain any person from violating the FLSA, including the unlawful withholding of proper minimum wage and overtime pay.
Your state law may have different methods for recovery of unpaid wages, and different remedies to be awarded to those who succeed in proving a violation. For further information, please contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.
To file a complaint for unpaid wages under the FLSA, you may either go to the Wage-Hour Division of DOL, which may pursue a complaint on your behalf or file your own lawsuit in court (which may require you to hire an attorney).
Do not delay in contacting the Wage-Hour Division or your state agency to file a claim. There are strict time limits in which charges of unpaid wages must be filed. To preserve your claim under federal law, you must file a lawsuit in court within 2 years of the violation for which you are claiming back wages, except in the case of an employer’s willful violation, in which case a 3-year statute applies. However, as you might have other legal claims with shorter deadlines, do not wait to file your claim. You may wish to consult an attorney before filing your claim, but you are not required to have an attorney to file a claim with the state and federal administrative agencies.
Your state wage law may have different deadlines for recovery of unpaid wages. For further information, please contact the agency in your state which handles wage and hour/labor standards violations, listed on our site’s state government agencies page.
Temporary/ Leased Employees
A worker who seeks employment through a temporary agency is the most common type of leased employee. A temporary agency is a company that contracts with businesses to provide workers on a contingent basis. These temporary agencies handle all payroll, tax, and other human resources functions for the workers.
Other leased employees (other than workers from temporary agencies) are employed by employee leasing firms (also called “professional employer organizations”) that supply companies with an entire work force of employees for extended amounts of time, rather than on day-to-day basis. The leasing firm takes over all payroll, tax, and other human resources functions for the workers.
You may also hear the term “contingent worker” used to refer to temporary and leased employees, as well as other kinds of non-permanent work arrangements. The contingent workforce comprises many categories of workers, ranging from highly paid management consultants who are satisfied with their work arrangements to low-paid service sector workers who receive no benefits and would rather have full-time, permanent jobs.
Workers take temporary and other contingent jobs for a variety of reasons, both personal and financial. These reasons include workers’ preference for a flexible schedule due to school, family, or other obligations; need for additional income; inability to find a more permanent job; and hope that the position will lead to permanent employment.
Employers hire contingent workers for a number of legitimate reasons: to accommodate workload fluctuations, fill temporary absences, meet employees’ requests for part-time hours, screen workers for permanent positions, and save on wage and benefit costs, among other reasons.
However, some employers may use contingent workers for less praiseworthy reasons, such as to avoid paying benefits, reduce their workers’ compensation costs, and prevent workers’ attempts to unionize, or allow them to lay off workers more easily. When a workplace uses contingent workers, it shifts costs traditionally borne by employers — such as health insurance, pensions, and job training — to both individual workers and taxpayers. From the employer’s viewpoint, treating workers as non-employees immediately saves payroll costs ranging from 15 to 30%.
Temporary workers and other leased employees are covered by the same employment laws as regular workers. However, because of the short-term, often project-oriented nature of their work, temporary workers are sometimes misclassified as independent contractors and, as a result, denied their rights as employees. Whether or not you have been misclassified will depend on whether you perform the same duties as regular workers.
Workers who work for companies or businesses through a temporary agency or other employee-leasing firm are usually considered to be employees of both the temporary agency/leasing firm and the business. The application of employment laws normally depends on whether the employer using the leased employees is considered to be a “joint employer” with the leasing agency.
A subcontracted employee is a worker who is employed by a primary employer but who provides services to a secondary employer on a contract basis. As in the situation of temp/leased workers, subcontracted employees are generally considered jointly employed by both companies. Whether the company has status as the employer of the worker will depend on the employer’s right to control the employee.
Usually, a temporary agency/employee-leasing firm will put you on its payroll and make the necessary payroll deductions on your behalf, as well as make the employer’s contribution to these taxes. However, if there is a violation of these payroll requirements, a court could determine that both the employer and the temp agency/leasing firm are legally liable for the failure to pay you correctly. Likewise, if you are not paid overtime or have other wage and hour problems (such as not getting a final paycheck or vacation pay), the temp agency/leasing firm and the employer may both be legally liable. For more information, see our pay and hours section.
It depends. Temporary workers and other leased employees can receive unemployment insurance if they are otherwise eligible to receive it (e.g. they were not fired for misconduct, are actively seeking employment, etc.).
However, you may have difficulty qualifying for unemployment insurance because you may not have worked consistently enough to establish the requisite “base period” of wages needed to make you eligible. See our site’s Unemployment Insurance section for additional information.
Yes. Temporary workers/leased employees are generally eligible to receive workers’ compensation, usually through the temp agency/leasing firm by whom the worker is employed.
A temporary agency/leasing firm can be held liable as an employer if it discriminates in providing job opportunities (e.g. job placement, advertisements, employment counseling, and job referrals) to the employee. Employers that lease employees have also been held liable for employment discrimination that occurs in the workplace.
Using a “Right to Control” test (similar to the test used in determining independent contractor status), employers that lease employees have also been held liable for employment discrimination, including harassment, that occurs in the workplace. If you are being harassed by an employee of the employer, you should complain to both the employer (following any published rules or policies) and also to the agency (again following any rules or policies of the agency).
A staffing firm is required to inform its client (the employer) of any harassment complaints and insure that the client investigates promptly and takes corrective measures. Additionally, it is against the law for the staffing firm to replace you because you complained of harassment, even at the client’s request, but the agency may also be able to offer you the opportunity to take a different assignment at the same rate of pay/benefits if you would prefer that to remaining at your current job placement.
Typically, a staffing firm is considered your prospective employer during the application process because it has not yet identified the client for whom you will work. In such cases, only the staffing firm is obligated to provide reasonable accommodation through the application process. If a staffing firm and a client are joint employers, both are responsible for providing reasonable accommodation, absent undue hardship, if there is notice of the need for accommodation or if the need for accommodation is obvious. (For more information on disability discrimination, please see our site’s disability discrimination page.)
Yes. The Occupational Safety and Health Act (OSHAct) requires employers to maintain a safe and healthy workplace for their employees. The act does not distinguish contingent workers from other employees and covers contingent workers except for independent contractors and other self-employed workers. The party (whether the recipient employer or temp agency/leasing firm) responsible for unsafe conditions in a workplace will be liable for OSHAct violations.
Yes, as long as you meet the other requirements for coverage, discussed in more detail at our site’s family/medical leave page. Under FMLA, temp/leased employees are considered to be jointly employed by the leasing firm and the recipient employer, and must be counted by both the leasing firm and the recipient employer in determining employee coverage and employer liability.
As the primary employer of the worker, the temp agency/leasing firm is responsible for giving required notice to the employees, providing FMLA leave, and maintaining health benefits. In addition, the temp/leasing agency is primarily responsible for restoring the employee to the same or an equivalent job.
However, the recipient employer is also responsible if it replaces the employee with another leased employee from the same leasing agency. The recipient employer is also prohibited from interfering with the temp/leased employee’s rights under the act or retaliating against an employee for asserting those rights.
You are legally entitled to be treated like a regular employee by the recipient employer for retirement plan purposes if you are a “common law employee” of the recipient employer, regardless of any pension plan of the leasing organization. A “common law employee” is defined as a worker who performs services for an employer who has the right to control the result of the work and the way in which it is done.
If you are not a common law employee, but have worked for the recipient employer on a full-time basis for at least one year, you must also be treated as a regular employee for retirement plan purposes. However, in that case, the recipient employer does not have to cover you under its plan if you are covered by a suitable plan through the leasing organization.
Please note that you are still subject to any requirements that regular employees must meet, such as job tenure and minimum hours requirements.
In August, 2015, the National Labor Relations Board issued a ruling expanding the liability of companies who utilize temporary or leased workers to staff their facilities. Now these parent companies may be considered a joint-employer of the workers at their facilities/franchises. This has significant implications for unions negotiating on behalf of temporary/leased employees. For instance, if temporary or leased employees working at a franchise are able to successfully unionize, the union will have the power to negotiate on their behalf, not only with the owner of the individual franchise, but also with the franchise’s corporate headquarters. However, any concessions made by the corporate headquarters will only apply to those employees specifically represented by the union in the negotiations, not all similarly situated employees of the corporation.
The case of Miller & Anderson makes it easier for unions to organize temporary workers along with permanent workers. The ruling in Miller overturned the case of Oakwood Care that barred a union from petitioning the board to allow temporary workers and permanent workers in a single bargaining unit. Now, unions may be “mixed.”
“Day laborers” are people employed on a temporary, day-to-day basis, normally working in construction, light manufacturing, landscaping, and other similar jobs. Day laborers find work either through a temporary day labor agency (or labor hall) or by waiting on a designated street for an employer to arrive and hire workers as needed. Workers often do not know from day to day whether they will get work.
Day laborers typically encounter a number of problems in getting paid fairly for their work. Day laborers are regularly denied payment for their work, many are subjected to serious hazards at their job sites, and most endure insults and abuses by employers. They are often hired by individuals who are trying to minimize their costs and have maximum flexibility. Day laborers may deal with two separate “employers,” the agent who hires and pays the workers, and the person at the work site directing the work. Day laborers are not represented by unions and lack protections guaranteed to unionized workers in the same occupations. Many day laborers are undocumented and lack work authorization, making them vulnerable to exploitation.
Yes, although day laborers often face difficulty asserting their legal rights due to economic or immigration status, the nature of the work does not impact your coverage under U.S law. You are covered by employment laws the same way as other employees.
No. Although it is illegal for employers to knowingly hire you if you are not authorized to work in the United States, you still have many of the same workplace rights as a documented worker, including:
- The right to organize: It is illegal for an employer to punish or threaten you for organizing to improve your work conditions.
- The right to be paid: You have the right to be paid minimum wage and overtime. If you do not receive all of your pay for time you actually worked, you can recover that pay.
- The right to be free from discrimination: It is illegal for an employer to discriminate against or harass you based on such characteristics as race, color, religion, age, disability, national origin, or sex.
- The right to be safe on the job: You are protected by workplace health and safety protections.
- The right to remain silent: After you have been hired, you have the right to remain silent when your employer or anyone else asks about your immigration status.
At most, you may be denied back wages or reinstatement as a remedy for the period for which you were not working due to being illegally fired (but not for time which you actually worked), based upon a U.S. Supreme Court decision concerning an undocumented worker who was fired for helping to organize a union.
It is against the law, in most cases, for your employer to report or threaten to report you to Immigration and Customs Enforcement (ICE) (formerly known as the Immigration and Nationality Service (INS)) because you opposed unlawful employment practices. If your employer appears to have acquired information about your unauthorized status after you complained of an unlawful employment practice, the government agency investigating your complaint will also attempt to determine whether your employer’s purpose in finding out information about your immigration status was to retaliate against you.
Any person facing deportation, whether as a result of incidents occurring at work or not, should consult immediately with a lawyer who specializes in immigration law, as this is a serious and complex legal issue beyond the scope of the information provided by this website.
It depends. Day laborers often have problems getting paid for all the time they are required to wait before and after performing a job. The standard used to determine whether or not a day laborer is entitled to be paid for time spent waiting revolves around whether a day laborer was “required to be at the employer’s disposal,” (at either the day labor agency or the work site) during the time in question. If you are not free to leave the premises and use the time for your own purposes, then you should be paid. Generally, this means that you should at least be paid wages from the time that a job is assigned.
Prior to an assignment, you are usually free to stay or go as you wish and so courts are unlikely to consider you to be employed before a job is assigned. This makes it more difficult to get paid for the period between arriving at the labor hall, or job pick-up site, and the time the job is assigned. If you are required to report (at the day labor agency or worksite) at a specified time and wait each day for the same job over a number of days, it is easier for you to get paid for that waiting time, even if you have to wait until a later time for the actual work to begin.
Your employer does not have to pay you for time you spend before or after work on activities at the worksite that are solely for your own convenience and are not integral to your job. The issue is whether the waiting was primarily for your own benefit or for the employer’s benefit.
Under federal law, an employer may make certain types of legally authorized deductions from your pay, however, generally the deduction cannot bring your pay below the minimum wage, and laws in your state may offer you even greater protection.
Permitted Deductions: Federal law does allow employers to make deductions that do not cut into the federal minimum wage provided the following circumstances are met:
- The employee actually and voluntarily received the benefit
- The benefit was not furnished primarily for the benefit or convenience of the employer
- The benefit was not furnished in violation of any state or federal law
- The deduction is provided at a reasonable cost
- The payment of noncash wages is not prohibited by a union agreement
- The benefit is customarily provided to employees. That is, the item must be provided regularly or similar items must be provided by other employers in similar businesses in comparable geographic locations
Examples of permitted deductions might include meals or check cashing, assuming the benefit was received on a voluntary basis.
Prohibited Deductions: Benefits that actually work to the convenience of the employer may not be credited against a day laborer’s wage. For example, if you offer to arrive at the facility by making your own transportation arrangements, but the employer does not allow this in order to make sure that everyone shows up on time, then the transportation is for the employer’s benefit and cannot be credited against the minimum wage. Or if the employer provides transportation so that work-related business or training can start during the trip, you may also be entitled to be paid for travel time. Some employees may value the convenience of being able to eat the employer’s food for cost, and may choose to have that cost deducted from their paychecks, but it must be voluntary. Here are some other examples of deductions that may not bring employee wages below the federal minimum wage:
- Fees for transport (If transportation is part of and necessary to employment,) transportation deductions cannot bring an employee wage below the federal minimum wage. Also, federal courts have held that travel time by day haul workers to and from a recruitment site to fields is generally not compensable in the absence of some work related activity at the recruitment site or during the trip.
- Essential Tools and Safety Equipment: These items should generally not be deducted from wages as they are regarded as necessary and convenient in order for the employer to lawfully ask his employees to perform he work requested of them. If safety equipment is required under state law, then they are to be regarded as uniforms, which are also not to be deducted from employee pay.
- Uniform: uniforms are not to be deducted from a worker’s wages if they are required by law, the employer, or by the nature of the work performed.
For more information, see our site’s page on deductions from pay.
As previously explained, generally no. Items which would be considered to be for the benefit or convenience of the employer, and cannot be deducted if it would cause your salary to be reduced below the minimum wage, are:
- Uniforms required by the employer that can only be worn on the job (including required safety equipment such as hard hats, boots, and gloves;
- Tools used in your work;
- Compensation for damages to the employer’s property by the employee or any other individuals;
- Compensation for financial losses due to clients/customers not paying bills; and,
- Compensation for theft of the employer’s property by the employee or other individuals.
Employees may not be required to pay for any of the cost of such items if, by so doing, their wages would be reduced below the required minimum wage or overtime compensation. This is true even if an economic loss suffered by the employer is due to your own negligent actions. For more information, see our site’s page on deductions from pay.
If the service is voluntary, it could be considered primarily for the benefit of employees, which means that it is legal to deduct a fee from your wages, unless the fee would cause your pay to end up below the minimum wage. If the service is mandatory, it may not be deducted from your wages. For more information, see our site’s page on deductions from pay.
If a worker is hurt on the job, the employer is responsible for all of that person’s medical treatment, lost wages, vocational rehabilitation, and in the worst-case scenario, survivor benefits. However, many employers who use day laborers do not pay into the workers’ compensation system. If you are hired through an agency, the agency may be responsible for paying workers’ compensation on behalf of its laborers. Some homeowners’ insurance policies provide coverage when a homeowner hires a laborer for a job who is then injured while working on the premises.
If you have been injured while working as a day laborer, and the employer refuses to take responsibility, you should talk with an attorney, community group, or legal services organization to find out what your rights are in this situation.
Often you may not have enough information about your employer to allow you to pursue any legal claims you might have. You should always take writing materials with you when you go to work so that you can write down the name and address of the employer, the address of the worksite, and as much additional information about the employer as possible. You also should keep a record of the date, time, and number of hours worked.
If you don’t have that information, it may be difficult for you to pursue a legal claim against your employer, but you should talk with an attorney, community group, or legal services organization to make sure. There may be other workers who have faced similar problems with the same employer or agency, so the attorney or legal services organization may already have some of the information you would need to proceed with a legal claim against an employer or agency who consistently fails to pay its workers. In most areas, it will be necessary to file a claim for your wages with a government agency or file a claim in small claims court, but in a few cities, it is a crime not to pay workers the wages they have earned.
A worker may be considered “probationary” in a few situations:
- When the worker is first hired (whether under a union contract or based on the employer’s personnel policies);
- When the worker is being disciplined by the employer.
- When an existing employee receives a new position within the company but did not complete its initial probationary period; and
- When an existing, or a new, employee is appointed to their first supervisory or managerial position.
A probationary period is an initial period of employment where an employer can consider whether an employee is able to meet its standards and expectations. It is a type of trial period that usually lasts anywhere from 6 months to a year and gives the supervisor an opportunity to evaluate an employee’s conduct and job performance, and if necessary remove or reassign the employee. This type of a system ensures a high quality performance from employees as well as providing the employee with an opportunity to prove themselves.
A collective bargaining agreement between a union and an employer may place newly hired workers in a “probation” period. During that “probation,” you are usually not allowed to use the union’s grievance procedures if you are disciplined or discharged, making you essentially an “at will” employee.
In all other aspects, as a probationary employee, you are usually covered by other provisions of the collective bargaining agreement, such as seniority, hours of work, etc.
If an employer places an employee on probation for disciplinary reasons, that employee nevertheless still has the same legal rights as regular employees. There is no legal significance to this probationary status other than as notice to the employee that s/he is in danger of being fired.
Generally, employment laws cover probationary employees in the same way as regular employees. Whether an employer places an employee on a “probationary” period at the beginning of his/her employment, or an employee is on probation for disciplinary reasons, the employer is still required to abide by minimum wage, discrimination, and workers’ compensation laws regarding that employee.
A newly hired probationary employee who becomes unemployed prior to the end of the probationary period may be ineligible for unemployment insurance because the worker may not have worked the minimum number of hours required during the unemployment insurance “base period.” However, a probationary employee may be able to receive unemployment if s/he can satisfy the past earnings requirement by totaling the hours worked in previous jobs.
If you are terminated for failure to satisfy the conditions of your probation, you may be denied benefits if your conduct violated your state’s standards for eligibility. In some states, an employee who engaged in willful misconduct is deemed ineligible to receive benefits. In other states, an employer needs to show only that it had “just cause” for terminating an employee.
For more information, see our site’s unemployment insurance pages.
An employer can exclude probationary employees from the business’ vacation policy by stating that the employees do not accrue vacation time during the probationary period. However, an employer may not prevent you from earning vacation time if the policy provides that once you have completed the probationary period, you accrue vacation from the very first day of employment. For more information, see our site’s vacation pay page.
A contract is an oral or written agreement between two or more persons to take or refrain from taking some action. A legally enforceable contract is one in which both (or all) parties to the contract provide something of value to the other party or parties in the agreement. For example, if you take your car into a repair shop to be fixed, you ordinarily enter into a legally enforceable contract with the shop. The repair shop agrees to fix your car, which is a value to you. You agree to pay for the work performed, which is a value to the business.
To create an employment contract, the employer must make a specific offer and there must be acceptance of the terms of the offer by the employee. Normally the employee accepts the offer by remaining on the job and continuing to work. In addition, there usually must be a meeting of the minds or mutual intent that the promise be binding.
Not all agreements are enforceable in court. For instance, if your neighbor wins the lottery, and, in a fit of generosity, promises you that he is going to treat you to breakfast in the morning, there is an agreement for your neighbor to take you to breakfast. If he breaks his promise and doesn’t take you, you can’t sue in a court of law. You did not provide or agree to provide your neighbor anything of value in exchange for the promise of breakfast. To be legally enforceable, a contract must contain an exchange of value (or, in legal terms, “consideration”).
If one party to the agreement breaks (or “breaches”) the terms of a contract, the other party can file a lawsuit to have the court order the other party to live up to the agreement or to pay the other party for any monetary loss or damages incurred because of the broken contract.
Every person who works for wages has at least one express contract with his or her employer. By entering into an employment relationship, you agree to perform specified work for your employer. Your employer agrees to pay you for your work. If your employer does not pay you, your employer has broken this most basic of employment contracts.
Written contracts are, of course, the most easily recognized employment contracts. They usually contain specific terms and conditions of the employment relationship, such as duration, pay, and responsibilities. These contracts are signed by both employer and employee. Employees most likely to have individual contracts include athletes, entertainers, and high-level executives. If you have a written contract for a fixed term, for example, two years, the law requires that the employer have “just cause” for termination.
Employer handbooks, policy manuals, letters of agreement, memoranda of understanding, letters reflecting a job offer or other written statements of the employer’s policies or rules may also be considered contracts. Whether such writings are enforceable contracts depends on the facts and circumstances of the particular case. For these types of writings to be considered legally enforceable contracts limiting the employer’s right to terminate the employee at will, the document must contain language which shows that the employer and employee did not intend an at-will relationship.
Review your employer’s policies or written rules to see if they contain any statements about termination or discharge. Check all manuals issued by your employer from the date you were first employed to the date of your termination. Check also for promises of job security. Statements of an employer’s policy of retaining your employment unless you engage in certain prohibited conduct may sometimes be considered limitations on the employer’s right to fire you “at will.” A written policy that there will be no terminations without just cause may be enforceable as a contract.
If you had a written agreement which was broken by your employer, you have the right to sue your employer for any economic damages you sustained. Such damages can include the wages and benefits you will lose as a result of the broken contract or expenses incurred in locating another job. Before going to court, however, you should confront your employer and try to negotiate a peaceful settlement of the matter.
Oral contracts are spoken agreements. Agreements that are not in writing may sometimes be binding. There are certain limitations on the enforceability of oral employment contracts that do not exist for written employment contracts. Oral employment contracts are difficult to prove, but do not automatically assume that you have no enforceable agreement with your employer just because it is not written down, especially if others heard the statements.
Express oral and written agreements between an employer and an employee are not the only type of employment contract recognized by courts. In the employment setting, certain terms of employment may be implied by your employer’s conduct, policies and practices. These are known as implied contracts.
Progressive discipline policies, statements made about job security, and even your employer’s past history of requiring just cause for termination can all be evidence of an implied employment contract between you and your employer that you will not be fired without cause. Again, you must closely examine your employer’s policies, rules, handbooks, practices and any statements made to you by managers to see if you might have an implied employment contract with your employer regarding the circumstances under which you can be terminated.
Under certain conditions, a promise by an employer may be enforced in a court of law, even though the employee did not give or promise something of value in exchange for the employer’s promise. To make a promise enforceable in the employment setting, you must show the following:
- A specific promise by your employer to take some action;
- That you relied on the promise;
- That your reliance on the promise was reasonable;
- That your reliance on the promise caused you harm or was detrimental to you in some way; and
- That to avoid unfairness, the promise should be enforced.
The best way to illustrate this concept, known as “detrimental reliance” or “promissory estoppel,” is by example. A salesman, Archie, has worked for 22 years for a manufacturer. He is recruited by a competitor and offered a job with a higher base salary and commission structure. Archie offers his resignation to his current employer. The company president assures Archie that his job is secure, that he has always been an excellent employee, and that if he continues to perform well, he will have a job with the company for at least five years. Archie is satisfied with that answer and informs the competitor company that he is staying at his current job. Two months later, the sales manager accuses Archie of complaining about him to the president. “You’re fired,” the manager tells him. Two days later, he receives a letter, signed by the president, confirming his termination.
In this scenario, the employer specifically promised Archie that his position with the company was secure for five years as long as he continued to perform his job well. Based on the president’s assurances, Archie refused the employment offer at the other company. Archie’s reliance was harmful or detrimental because he could have had a higher paying position with another company. Unfairness would certainly result if the promise were not enforced.
If you believe that your employer broke a specific promise to you, you may be able to enforce the promise and recover damages if there was detrimental reliance. You should certainly consult an attorney if you think this doctrine might apply to your situation.
The parties to any contract, including an employment contract, have a duty of “good faith and fair dealing” towards each other. As a general rule, the duty does not limit the employer’s right to dismiss an employee. However, a very few states do apply the covenant to a contractual employment relationship and permit a dismissed employee to sue for bad faith discharge.
In most states, the law presumes that private sector employees are employed “at will.” The employment-at-will doctrine is that both employer and employee can end the employment relationship at any time without notice or reason. This means that your employer has the right to terminate your employment at any time, for any reason, or for no reason at all or for a bad reason, so long as the reason is not illegal — even if your performance has been outstanding. The other side of the “at will” coin is that you, as an employee, can quit your job for any reason at any time. You cannot be forced to work for an employer. You don’t have to give your employer a reason for quitting.
The presumption for most non-union, non-governmental employees is that employment continues only at the will, whim, and discretion of the parties. If you are fired from your employment without just cause, you will be entitled to unemployment compensation benefits, but nothing more. Because of the employment-at-will doctrine, an unfair or unjust termination, without more, does not necessarily mean that your employer has done anything illegal.
Being fired because your boss just doesn’t like you, or wants to hire her cousin to take your job, or has set impossible standards without giving you a chance to prove yourself, doesn’t mean that your employer has necessarily done anything illegal. None of these bad motives alone is illegal. Also, the fact that you have worked hard for many years and were a good performer does not, standing alone, protect you from termination.
Most people believe an employer has a legal duty to treat employees fairly. Many people think an employer cannot fire an employee without just cause. Unfortunately, the general law is to the contrary. Because of the “employment-at-will” doctrine, employees have no general protection against unfair treatment. There is no “just cause” protection for non-union, non-government employees in the United States. This lack of protection is now the exception among highly industrialized countries. For example, all the countries of Western Europe have legislation prohibiting employers from discharging workers without just cause. In this country, the state of Montana, Puerto Rico, and the Virgin Islands have statutes prohibiting unjust termination. However, as of this writing, no other states have similar laws protecting employees. As a result, each year thousands of employees in the rest of the country are terminated unfairly and have no legal remedy to correct the injustice.
There are noteworthy exceptions to employment at will. Some commentators have stated that the at-will doctrine has been drastically eroded, and that the exceptions are now so numerous as to have “swallowed the rule.” The presumption of at-will employment can be rebutted by the relationship between a particular employer and employee. For example, there may be an employment contract which forbids unfair or arbitrary discharges. Many federal and state statutes place restrictions on the right to discharge. There are many laws forbidding various kinds of discrimination and other forms of wrongful discharge. For example, you cannot be fired solely because you are a woman. You cannot be fired because your supervisor does not like your religion. You cannot be fired for taking time off for jury duty. These and other exceptions to employment at will are discussed in later sections.
For more information on private sector employees and at-will employment see our Termination and Unemployment Page.
The collective bargaining agreement between a union and an employer determines a union employee’s rights. To determine whether a certain employment decision, for example, termination or demotion, was illegal, a union employee must first look to the collective bargaining agreement (CBA or contract).
Union employees are not usually employees at will. The collective bargaining agreement contains rules governing when and how discipline and discharge shall be meted out. The CBA generally drastically limits the employer’s ability to fire employees at will. Usually the employer must have just cause to terminate a union member’s employment. The union member has an established grievance procedure to challenge the reasons for his or her termination. Union employers often are required to utilize progressive discipline and issue written warnings prior to dismissal.
Employers must permit union members to use applicable grievance procedures to challenge decisions made about their employment. When employers and employees are unable to agree to a resolution of the grievance, the union typically has the right to have the matter submitted to an impartial arbitrator for a final and binding decision. Arbitrators often have the power to reinstate employees with or without backpay and their rulings are enforceable in court.
All union members have the right to see their union contract. If you don’t understand some of the provisions of the CBA, contact the union and speak to a representative. Your union exists to represent your interests, and should be able to explain your employment rights to you.
For more information regarding Union employees see our Unions and Collective Action Page.
All public employees are protected from any termination that violates the United States Constitution or the constitution of the state in which they work. Frequently, an employee’s rights to freedom of speech, association, or religion, or freedom from unlawful search and seizure are at issue when an employee is terminated. In some circumstances, a government employee may have a property interest or a liberty interest in his or her position which cannot be taken away by the government, except through due process. Due process means generally that the governmental employer must give you notice of the charges against you and an opportunity to answer those charges before you are terminated from employment. If the reason given for your termination is one that would stigmatize you, jeopardizing future employment prospects, you have the right to a “name clearing” hearing.
A governmental employer may, however, establish work rules to ensure the efficient operation of the agency or branch of government or to maintain the public confidence in elected officials. Sometimes these rules place limitations on a public employee’s speech or conduct. Such limitations are lawful if the government’s interest in creating the rules outweighs the interest of the individual. If the speech or conduct disrupts the efficient operation of the government or would compromise the integrity of the office in which that person works, the employee may be fired for the conduct.
Most public employees who are in the civil service cannot be terminated unless the employer has just cause and the termination serves to advance the purposes of the agency. Non-civil service employees of the government have less protection from discharge, but they may have other legal protections. There may be a special statute that prohibits their termination without cause or the employee may have a contract with the governmental agency prohibiting such terminations.
Federal civil service employees who believe that they were terminated without just cause, who are in the “competitive service” and who have passed a one-year probationary period, or who are in the “excepted service” and have completed two years of service in the same or similar position, can appeal their terminations to the United States Merit Systems Protections Board (MSPB). The appeal must be filed within 30 days of the effective date of the termination. Employees who do not meet these criteria may still be permitted to appeal a termination by filing a claim with the U.S. Office of Special Counsel if they believe the termination was in retaliation for whistleblowing. If they believe that the termination was discriminatory based on age, sex, religion, disability, race, color or national origin, they must contact an Equal Employment Opportunity (EEO) counselor in their employing agency within 45 days of the termination notice. Most states have similar administrative bodies to hear appeals from employees who are part of the state civil or classified service.
Public employees who are union members and are covered by a labor agreement may also have the separate or alternative right to arbitration.
Certain categories of public employees do not have protection from unjust discharge. Political appointees, employees serving “at the pleasure” of the governmental unit, policy-making employees, fiduciary employees (those exercising independent discretion and who hold a special position of trust), or employees who serve in other positions that require special political loyalty may be terminated without cause or for political reasons.
For more information on rights as a government employee, or more specifically as a Federal Employee, see our Whistleblowing and Retaliation Page, Federal Employees- Discipline/Removal Page, and our Federal Employees- Discrimination Page.
If you are a true independent contractor, you are not an employee. Most federal and state laws protecting employees do not apply to self-employed, independent contractors. When a company does not retain the right to control and supervise the individual’s time, work performance, method of work, job activities and working conditions, there usually is no employment relationship. In determining the independent contractor issue, courts also often look at whether the individual is truly in business for himself or whether as a matter of economic reality, he or she is solely dependent on the company.
An employee of an agency, leasing, or staffing company that provides temporary personnel is not normally considered an employee of the worksite employer. However, there are many occasions when the worksite employer is considered a “joint employer” who is indeed responsible for discriminatory or other wrongful acts committed by its supervisors against such employees. Most temporary workers have no job security and no fringe benefits.
For more information on our rights as a temporary employee see our Temporary/Leased Employees page.
Yes, in most cases.
Executive Order 11246 prohibits federal contractors (who do over $10,000 in Government business per year) from discriminating in employment decisions based on race, color, religion, sex, sexual orientation, gender identity or national origin.
Section 503 of the Rehabilitation Act, prohibits federal contractors from discriminating in employment based on a person’s disabilities.
The affirmative action provisions of the Vietnam Era Veterans’ Readjustment Assistance Act prohibit federal contractors from discrimination in employment decisions based on protected veteran status.
The Office of Federal Contract Compliance Programs (OFFCP) ensure federal contractors comply with these provisions. See their Workplace Rights fact sheet for more information on these protections, and how to file a complaint.
Yes, Section 503 of the Rehabilitation Act, not only prohibits federal contractors from discriminating in employment decisions based on disability, but actually requires federal contractors and subcontractors with government contracts in excess of $10,000 to take affirmative action to recruit, employ, train, and promote qualified individuals with disabilities.
For more information on Section 503 of the Rehabilitation Act, see this fact sheet from the OFCCP.
Yes, in regards to veterans with protected status. Veterans have protected status if they are disabled or have recently separated from the armed forces (this is defined as a three-year period beginning from the date of discharge or release from active duty). The affirmative action provisions of the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) require federal contractors to take affirmative action to recruit, employ, and promote these veterans.
For more information on VEVRAA, see this fact sheet from the OFCCP.
In its most basic sense, pay transparency is the ability to know how much your coworkers are being paid. It can be a valuable tool in negotiating a fair salary and act as an important check on discrimination in the workplace.
In 2014, President Obama issued Executive Order 13665 promoting pay transparency in federal contracts. On September 11, 2015, the Department of Labor issued a Final Rule implementing that order; thus, the order took effect on January 11, 2016.
This order protects employees of federal contractors from discrimination based on compensation inquiries, discussions, or disclosures. The final rule incorporated the nondiscrimination provision into the EOC (Equal Opportunity Clause) governing federal contracts. However, if the worker who is disclosing pay discrepancies with other coworkers is someone who handles pay data as part of their essential job functions, i.e.: payroll manager, and if other coworkers do not have access to this information, this behavior is not protected. Thus, a contractor can defend against a discrimination claim for a negative employment action with this “essential job functions” defense.
However, such an employee is protected from discrimination if they disclose pay information in response to a formal complaint, charge or investigation, or if disclosure is consistent with contractor’s legal duty to provide information. Additionally, an employee whose essential job functions includes handling undisclosed pay data and notices a pay discrepancy can disclose this to their manager or through the employer’s formal complaint process.
Additionally, federal contractors are required to notify their employees of their rights under this pay transparency rule. The rule requires federal contractors to incorporate pay transparency nondiscrimination provision into employee handbooks or manuals, and the information must be posted in either on the employer’s website or in a place on the employer’s premises that is easily seen by employees. This is an additional posting requirement to posting the “EEO (equal employment opportunity) is the law” poster and its supplement. All three should be posted in the workplace. Furthermore, the EOC clause, which now includes the nondiscrimination provision, should be included in federal contractor contracts or purchase orders either by reference or in its entirety.
For more information on this rule see the OFFCP pay transparency fact sheet.
The Office of Federal Contract Compliance Programs (OFCCP) is the enforcement agency for labor rules affecting federal contractors. Thus, if you work for a federal contractor and think your rights have been violated you should file a complaint with the OFCCP. You can start on the Department of Labor’s OFCCP How to File a Complaint page.
In the United States, an undocumented worker or undocumented immigrant is a foreign-born person who is not a permanent resident and is not a U.S. citizen. “Undocumented immigrant” may refer to a person whose immigration status is not resolved. Due to the unresolved status, the worker does not have permission to work in the United States. For information on types of immigrant status visit the U.S. Citizenship and Immigration Services website.
These two terms are sometimes used to mean the same thing. An illegal immigrant/alien is an individual who has entered the U.S. illegally and can be deported. It may also refer to a person who entered the U.S. legally but who has lost their legal status and can be deported. An undocumented immigrant/worker has entered the U.S. legally but has overstayed the time limits of their original status. Overstaying time limits makes their presence in the U.S. unlawful.
“Illegal immigrant/alien” is an offensive term to some people because it implies that the person is somehow “illegal.” While the person may be in the U.S. illegally, they are not “illegal,” only their status is. “Undocumented” better describes the situation of an immigrant who doesn’t currently have valid legal status in the U.S.
Federal anti-discrimination laws protect all employees in the United States, regardless of their citizenship or work eligibility. Undocumented workers are protected as much as any other worker.
Regardless of immigration status, any worker whose employer has 15 or more employees is protected by federal employment discrimination laws. This includes protection under the following laws:
- Title VII of the Civil Rights Act of 1964. Title VII prohibits employment discrimination based on race, color, sex, religion, and national origin;
- the Equal Pay Act of 1963 (EPA). The EPA prohibits employers from discriminating against employees of the opposite sex performing equal work in one workplace;
- the Age Discrimination in Employment Act of 1967 (ADEA). The ADEA protects individuals age 40 and older from employment discrimination because of age;
- Title I of the Americans with Disabilities Act of 1990 (ADA). Title I prohibits employment discrimination against individuals with disabilities based on their disability.
The Immigration and Nationality Act (INA) protects undocumented workers specifically. The INA prohibits:
- citizenship status discrimination in hiring, firing, or recruitment or referral for a fee;
- national origin discrimination in hiring, firing, or recruitment or referral for a fee;
- unfair document practices in the employment eligibility verification (Form I-9), and E-Verify processes; and
- retaliation or intimidation.
Under the Immigration Reform and Control Act of 1986 (IRCA) it is illegal for employers to knowingly employ undocumented workers. When employees are hired, their employer is required to ask for documents. The documents must show their identity and authorization to work in the U.S. Those documents must “reasonably appear to be genuine.”
Employers must terminate, or refuse to hire, an undocumented worker if the find the worker is unauthorized to work. But, the employer cannot use immigration status as an excuse to fire undocumented workers who make discrimination complaints. Undocumented workers are covered by federal discrimination laws. The law prohibits employers from retaliating against workers who assert their legal rights. If an employer retaliates against an employee for exercising their right to file a discrimination complaint, the employer is breaking the law.
Undocumented workers cannot receive prospective remedies such as back pay, front pay, and reinstatement because they are unavailable for work.
Civil remedies under the FLSA and Title VII, are available for workers regardless of their immigration status. These civil remedies include damages under the anti-retaliation provisions. Undocumented workers can also recover back pay under the FLSA. Under FLSA, “back pay” is payment of wages the worker earned but was not paid. Under the NLRA and anti-discrimination laws, back pay is payment of wages that the worker would have earned if not for the unlawful termination or other discrimination. This type of back pay is not available to undocumented workers.