Need to Know the Employment Law

A growing web of HR related laws effects virtually every HR decision the HR or line manager makes. Equal employment laws set guidelines regarding how the company writes its recruiting ads, what questions its job interviewers ask, and how it selects candidates for training programs or evaluates its managers. Occupational safety and health laws mandate strict guidelines regarding safety practices at work. Labor laws lay out among other things, what the supervisor can and cannot say and do when the union intervention calling to organize the company’s employees. As one employment lawyer sums up, “the use of such terms as probationary period, permanent employee, merit increases. White collar annual salary in a job offer and personality problems on the termination form now causes serious exposure to a lawsuit.

Consider some examples. You discharge a worker for excessive absenteeism, but her excessive absenteeism was caused by a work related injury. The employee sues the company, saying that she was actually fired her for filing a Workers’ Compensation claim.

The company may have to show in court that they did not fire the employee in retaliation for filing the claim, but for absenteeism. As another example, a company’s vice president of marketing dated one of his female marketing managers for several months. He subsequently tells her that if she doesn’t start dating him again, she won’t get a promotion. She refuses, but he promotes her anyway. However, she still sues for sexual harassment. The law says she has a legitimate case, even though she got her promotion. The vice president created a sexually hostile environment by suggesting she may have to return the favor if he promoted her.

Because legal issues are so central to all HR activities, the HR and other managers must specially know Employment Law (of the country or place) text sections that will address crucial legal aspects of relevant topics.

Headlines regarding ethical lapses at companies ranging from Enron and MCI to Arthur Andersen and Italy’s Parmalat underscore the need for ethical corporate behavior. Given that many of these firms, such as the accounting firm Arthur Andersen, were literally put out of business because of ethical lapses, it is clear that ethics needs to play a bigger role in managers’ decisions.

Congress passed the Sarbanes Oxley Act in 2003. To help ensure that managers take their ethics responsibilities seriously Sarbanes-Oxley is intended to curb erroneous corporate financial reporting. Among other things, Sarbanes-Oxley requires CEOs and CFOs to certify their companies’ periodic financial reports, prohibits personal loans to executive officers and directors, and requires CEOs and CFOs to reimburse their firms for bonuses and stock option profits if corporate financial statements subsequently require restating.

HR managers need to be heavily involved in implementing ethics laws like these. For example, every employer now needs a new code of ethics for CFOs probably promulgated by HR which will also have to modify various company policies to include reference to Sarbanes-Oxley. The new policies must make it clear that managers may not retaliate against employees for exercising their responsibilities under the new act.

The HR manager’s responsibilities for implementing an act are just the tip of the iceberg when it comes to how HR can influence ethical practices. One survey found that six of the ten most serious ethical issues – workplace safety, security of employee records, employee theft, affirmative action, comparable work, and employee privacy rights were HR related.

The HR manager’s tasks are growing more complex; human resources management is becoming more professionalized. Over 60,000 HR professionals have already passed one or both of the Society for Human Resource Management’s (SHRM) HR professional certification exams. SHRM’s Human Resource Certification Institute offers these exams. Two levels of exams test the professional’s knowledge of all aspects of HR, including management practices, staffing, HR development, compensation, labor relations, and health and safety. Those who successfully complete all requirements earn the SPHR (senior professional in HR), or PHR (professional in HR) certificate.

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  • Ashok Pathak

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