Workplace Laws and Corporate Social Responsibility

Posted on Jan 29, 2025 in Management Assistance

Chapter 1: Employment Practices

Any recruitment, hiring, or selection practice, or any transfer or promotion policy, or any benefit provision or other function of the employer’s employment process that operates as an analysis or screening device.

Background Checks

This process for screening job applicants may include:

  • Contacting references
  • Verifying past employment
  • Verifying past military service
  • Confirming the candidate actually has degrees, licenses, etc.
  • Checking driving records
  • Checking for criminal convictions
  • Examining credit reports

Recruitment

Employers must use several recruitment mechanisms to avoid discriminatory hiring.

Recruitment mechanisms:

  • Want ads and job announcements
    • Wording must be neutral
  • Employment agencies
    • May not discriminate on behalf of employer clients.
  • Nepotism, word of mouth hiring
    • Unless workforce is already diverse, tends to recruit similar employees

Chapter 3: Fair Labor Standards Act (FLSA)

Fair Labor Standards Act

FLSA requires payment of a minimum wage.

Effective July 24, 2009, the federal minimum wage is $7.25/hr for each hour worked during a workweek (gross pay).

Exceptions:

  • Opportunity Wage: Employers may pay workers under age 20 the hourly wage of $4.25 for their first 90 days.
  • Tipped Employees: Employees who customarily and regularly receive at least $30/month in tips may be paid $2.13/hr, as long as hourly wage plus tips equals the minimum wage.
  • New regulations require employers to advise employees about the amount of the tip credit being claimed.
  • Only employees who regularly share tips may be included in tip pooling.
  • Employers may deduct credit card processing fees from tips.

FLSA: Overtime Pay

Overtime pay is 1 ½ times the regular pay for each hour in excess of 40 hours in a workweek.

Except for minors, there is no limitation on the number of hours an employee may work in a workweek.

Overtime pay must be calculated based on compensable time (time spent principally for the employer).

Public employers only may provide “compensatory time” instead of overtime pay.

Sick Pay Rights

What you’re entitled to be paid when you’re off sick varies from job to job, and there are also different sick pay schemes in operation – but there is advice available if you have problems.

How much sick pay you’ll receive

If you take time off from work due to illness, your pay depends on the terms of your contract of employment. These terms may be in writing, verbally agreed with your employer, implied by ‘custom and practice’ or a mixture of all three.

FMLA: Employer Notices of Leave

  • A specific statement that the leave is FMLA leave and will be counted against employee’s leave entitlement.
  • Requirements for producing medical certification of a serious health condition, and the consequences of failing to do so.
  • A statement of the employee’s right to substitute paid leave for FMLA leave, whether employer will require that, and any conditions for the substitution.
  • Any requirements for payment of employee share of health insurance premiums, arrangements for making payments, and employer’s right to recover premiums if the employee does not return to work.
  • Any requirements for employee to present fitness for duty certification prior to return.
  • A statement of the employee’s right of restoration to the same or equivalent job.
  • Designation of key employee status if employee meets the criteria, and circumstances under which restoration might be denied.

Chapter 4: Preventing Occupational Injuries and Illnesses

Employers should focus on eliminating hazards or reducing them to the maximum extent possible through use of engineering and administrative controls.

Safety rules should be clear, specific, consistent with one another, and strictly enforced.

Employers should be proactive in identifying and abating unsafe conditions in their workplaces.

Recommended: Establish an effective workplace safety program.

Workers’ Compensation

State workers’ compensation laws require employers to provide medical care and replace partial lost income for injuries of employees arising out of and in the course of employment.

Note that independent contractors performing the work of employees can be deemed “statutory employees,” requiring workers’ compensation coverage.

Employers must arrange workers’ compensation coverage for their employees and ensure that contractors provide similar coverage.

Responding to Workplace Injuries

Employers should require that employees report all workplace injuries as soon as possible, so that treatment can be provided.

Employers should err on the side of caution in referring injured employees for medical treatment.

Reports of injuries should be investigated immediately and thoroughly.

Hazards that caused the injuries should be identified and abated.

Workers’ compensation claims should not be contested unless there are reasonable grounds for doing so.

Performance Appraisals

Regardless of the efficacy of performance appraisals, they hold great legal significance.

The central legal concern is that they not be discriminatory.

In general, employers have no duty to conduct performance appraisals.

Employers cannot appraise only men and not women, as such action would be discriminatory.

Negative performance appraisals do not constitute discrimination.

However, if a biased negative appraisal becomes the basis for the denial of an employment opportunity, then disparate treatment discrimination can be alleged.

Also, unwarranted negative performance appraisals could constitute “materially adverse actions” in cases of retaliation if they are used to punish employees for exercising their rights.

Performance Appraisal Process

A performance appraisal which is inconsistent with prior appraisals raises legal issues.

  • After an employee has filed a charge, it appears to be retaliation.
  • Shortly before layoffs or a termination, it appears to be pretext to justify the decision to layoff or terminate.

Performance appraisals must not be manipulated and made more negative than actual performance warrants.

Who Conducts Performance Appraisals?

Employers should provide training or written instructions to those who conduct performance appraisals.

If coworkers or others also participate in performance appraisals, they also require instruction in good appraisal techniques and legal issues.

Chapter 5: Social Responsibility

The Classical View

Management’s only social responsibility is to maximize profits (create a financial return) by operating the business in the best interests of the stockholders (owners of the corporation).

Expending the firm’s resources on doing “social good” unjustifiably increases costs that lower profits to the owners and raises prices to consumers.

The Socioeconomic View

Management’s social responsibility goes beyond making profits to include protecting and improving society’s welfare.

Corporations are not independent entities responsible only to stockholders.

Firms have a moral responsibility to larger society to become involved in social, legal, and political issues.

“To do the right thing”

From Obligation to Responsiveness to Responsibility

  • Social Obligation: The obligation of a business to meet its economic and legal responsibilities and nothing more.
  • Social Responsiveness: When a firm engages in social actions in response to some popular social need.
  • Social Responsibility: A business’s intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society.

Does Social Responsibility Pay?

Studies appear to show a positive relationship between social involvement and the economic performance of firms.

Difficulties in defining and measuring “social responsibility” and “economic performance raise issues of validity and causation in the studies.

Mutual funds using social screening in investment decisions slightly outperformed other mutual funds.

A general conclusion is that a firm’s social actions do not harm its long-term performance.

How Managers Can Improve Ethical Behavior in An Organization

  • Hire individuals with high ethical standards.
  • Establish codes of ethics and decision rules.
  • Lead by example.
  • Set realistic job goals and include ethics in performance appraisals.
  • Provide ethics training.
  • Conduct independent social audits.
  • Provide support for individuals facing ethical dilemmas.

Effective Use of a Code of Ethics

  • Develop a code of ethics as a guide in handling ethical dilemmas in decision making.
  • Communicate the code regularly to all employees.
  • Have all levels of management continually reaffirm the importance of the ethics code and the organization’s commitment to the code.
  • Publicly reprimand and consistently discipline those who break the code.

Ethical Leadership

Managers must provide a good role model by:

  • Being ethical and honest at all times.
  • Telling the truth; don’t hide or manipulate information.
  • Admitting failure and not trying to cover it up.
  • Communicating shared ethical values to employees through symbols, stories, and slogans.
  • Rewarding employees who behave ethically and punish those who do not.
  • Protecting employees (whistleblowers) who bring to light unethical behaviors or raise ethical issues.

Awareness of Social Issues

  • Social Entrepreneurs: Are individuals or organizations who seek out opportunities to improve society by using practical, innovative, and sustainable approaches. Want to make the world a better place and have a driving passion to make that happen.
  • Social Impact Management: Is the field of inquiry at the intersection of business practice and wider societal concerns that reflects and respects the complex interdependency of those two realities. Seeks to answer the question of how to go about increasing managers’ awareness within their decision-making processes of how society is impacted by the conduct and activities of their firms.

The Manager: Omnipotent or Symbolic?

Omnipotent View of Management

  • Managers are directly responsible for an organization’s success or failure.
  • The quality of the organization is determined by the quality of its managers.
  • Managers are held accountable for an organization’s performance yet it is difficult to attribute good or poor performance directly to their influence on the organization.

Symbolic View of Management

  • Much of an organization’s success or failure is due to external forces outside of managers’ control.
  • The ability of managers to affect outcomes is influenced and constrained by external factors.
    • The economy, customers, governmental policies, competitors, industry conditions, technology, and the actions of previous managers.
    • Managers symbolize control and influence through their action.

How Employees Learn Culture

  • Stories: Narratives of significant events or actions of people that convey the spirit of the organization.
  • Rituals: Repetitive sequences of activities that express and reinforce the values of the organization.
  • Material Symbols: Physical assets distinguishing the organization.
  • Language: Acronyms and jargon of terms, phrases, and word meanings specific to an organization.

Organization Culture Issues

Creating a Customer-Responsive Culture

  • Hiring the right type of employees (ones with a strong interest in serving customers).
  • Having few rigid rules, procedures, and regulations.
  • Using widespread empowerment of employees.
  • Having good listening skills in relating to customers’ messages.
  • Providing role clarity to employees to reduce ambiguity and conflict and increase job satisfaction.
  • Having conscientious, caring employees willing to take initiative.

Spirituality and Organizational Culture

Workplace Spirituality

  • The recognition that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community.
  • Characteristics of a Spiritual Organization
    • Strong sense of purpose.
    • Focus on individual development.
    • Trust and openness.
    • Employee empowerment.
    • Toleration of employees’ expression.

True/False – Multiple Choice/Fill in the Blank

Chapter 2: Job Related Tests

Even if a test has an adverse discriminatory impact, it may be used if the employer can establish that it is job related and consistent with business necessity.

Employer must establish validity.

  • Does the test measure what it purports to measure?
  • Two primary ways to establish validity:
    • Content validity
    • Criterion validity

Chapter 3: Determining Compliance with Wage and Hour Standards

Determining whether wage and hour standards have been met requires accurate information on compensation received, compensable work hours, and the exempt or non-exempt status of employees.

Although wages generally must be paid in cash, calculation of the minimum wage may include other benefits such as lodging and meals provided for employees’ benefit.

FMLA Qualifying Events

  • Birth of a son or daughter.
  • Placement of a son or daughter with the employee by adoption or foster care.
  • The need to care for a spouse, son, daughter or parent with serious health condition.
  • The inability of the employee to perform the functions of his job due to a serious health condition.
  • The need to care for a service member who suffered a serious injury or illness while on active duty.
  • Any “qualifying exigency” arising because a family member is or soon will be placed on active duty.

Chapter 4: Enforcement of the OSH Act

An inspection begins with a conference, explaining the circumstances of the inspection.

An employer representative has the right to accompany the OSHA compliance officer but may not intimidate or interfere.

The compliance officer creates a report, noting observations, taking photographs, taking instrument readings, and asking questions of employees. Apparent violations are pointed out.

Performance Criteria and Standards

Employers can and should hold disabled employees to the same standards of performance as nondisabled employees who do the same jobs.

Receipt of a reasonable accommodation should not be held in any way against a disabled employee.

If a disabled employee is unable to perform a marginal function of a job, that function should be removed from the job and not be reflected in performance ratings.

Chapter 5: Values-Based Management

  • Values-Based Management: An approach to managing in which managers establish and uphold an organization’s shared values.
  • The Purposes of Shared Values
    • Guiding managerial decisions.
    • Shaping employee behavior.
    • Influencing the direction of marketing efforts.
    • Building team spirit.
  • The Bottom Line on Shared Corporate Values: An organization’s values are reflected in the decisions and actions of its employees.

Managerial Ethics

  • Ethics Defined: Principles, values, and beliefs that define what is right and wrong behavior.
  • Values: Basic convictions about what is right or wrong on a broad range of issues.

The Value of Ethics Training

  • Can make a difference in ethical behaviors.
  • Increases employee awareness of ethical issues in business decisions.
  • Clarifies and reinforces the organization’s standards of conduct.
  • Helps employees become more confident that they will have the organization’s support when taking unpopular but ethically correct stances.

How Culture Affects Managers

  • Cultural Constraints on Managers
    • Whatever managerial actions the organization recognizes as proper or improper on its behalf.
    • Whatever organizational activities the organization values and encourages.
    • The overall strength or weakness of the organizational culture.

Simple rule for getting ahead in an organization:

Find out what the organization rewards and do those things.

Defining the External Environment

  • External Environment: Those factors and forces outside the organization that affect the organization’s performance.
  • Components of the External Environment
    • Specific environment: external forces that have a direct and immediate impact on the organization.
    • General environment: broad economic, socio-cultural, political/legal, demographic, technological, and global conditions that may affect the organization.

How the Environment Affects Managers

  • Environmental Uncertainty: The extent to which managers have knowledge of and are able to predict change their organization’s external environment is affected by:
    • Complexity of the environment: the number of components in an organization’s external environment.
    • Degree of change in environmental components: how dynamic or stable the external environment is.

Stakeholder Relationships

  • Stakeholders: Any constituencies in the organization’s environment that are affected by the organization’s decisions and actions.
  • Why Manage Stakeholder Relationships?
    • It can lead to improved organizational performance.
    • It’s the “right” thing to do given the interdependence of the organization and its external stakeholders.

Good Luck to Everyone