Employment law governs the relationship between workers and their employers. This law, contained in federal and state statutes, administrative regulations, and judicial decisions, specifies the rights and restrictions applicable to each party in the workplace. Employment law differs from labor law, which primarily deals with the relationship between employers and labor organizations.
Employment law in the United States regulates such issues as employee benefits, discipline, hiring, firing, leave, payroll, health and safety in the workplace, non-compete agreements, retaliation, severance, unemployment compensation, pensions, whistle-blowing, worker classification as independent contractor or employee, wage garnishment, work authorization for non-U.S. citizens, worker's compensation, and employee handbooks.
When an employer promulgates a policy regarding an issue in the workplace, generally, that policy is legally binding provided that the policy itself is legal. Policies can be communicated in various ways: through employee handbooks and manuals, memos, and union contracts.
Relevant federal statutes on employment law include the Americans with Disabilities Act of 1990, Title VII of the Civil Rights Act of 1964, Age Discrimination in employment Act of 1967, Fair Labor Standards Act, Occupational Safety and Health Act, Employee Retirement Income Security Act, and Family and Medical Leave Act, though many more federal and state laws and regulations govern virtually every aspect of the employer/employee relationship in the workplace.
Most employment in the U.S. is an at-will relationship between employer and employee, meaning that either party can terminate the relationship with no liability if there was no express contract for a definite term governing the employment relationship. Although several exceptions to this legal doctrine exist, generally, the employer may freely discharge employees for any legal reason or even with no cause at all, and an employee may leave a job for any reason at any time.
In the United States, employees have many rights, including the right not to be discriminated against or harassed because of race, national origin, skin color, gender, pregnancy, religious beliefs, disability, or age. In some places, laws also protect employees from discrimination on the basis of marital status, sexual orientation, gender identity, or other characteristics.
Employees also have the right to fair pay. Employees must be paid the minimum wage, as well as any overtime pay for any hours worked over forty in one week (or, in some places, over eight hours in one day). Federal law establishes the minimum amount that a worker can be paid per hour; this amount changes in the United States but is currently $5.15 per hour. Most states and some municipalities have enacted their own minimum wage laws. For example, California's minimum wage is $7.65 per hour; in San Francisco, California, workers must be paid a minimum wage of $8.50 an hour. Where an employee is subject to both the state and federal minimum wage laws, the employer must pay the higher of the two minimum wages. However, federal law exempts executive, administrative, professional and outside sales employees from both minimum wage and overtime pay laws.
Regulations and statutes also protect employees' rights to back pay, severance pay, paid time off, unemployment and retirement benefits. On August 17, 2006, President Bush signed the 900-plus page Pension Protection Act of 2006 (PPA), putting in place many reforms to federal tax and employee benefit laws intended to protect the security of employer-provided pension plans.
Some American employees are provided the right to take leave due to the employee's own or a family member's illness, birth, or adoption. The Family Medical Leave Act of 1993 (FMLA) gives workers who are employed in a company of 50 or more persons a total of 12 work weeks of unpaid leave during any 12-month period for the birth and care of an employee's child; for adoption of a child by an employee; to care for an immediate family member (spouse, child, or parent) with a serious health condition; or to take medical leave when the employee is unable to work because of a serious health condition.
Federal and state laws also guarantee employees in the U.S. the right to a safe workplace. The U.S. Occupational Safety and Health Administration (OSHA), a federal agency, issues and enforces rules to prevent work-related injuries, illnesses, and deaths. OSHA's standards apply to most private, or nongovernmental, workplaces. Many states also have their own plans to protect workers' occupational safety and health, and if those plans are approved by the U.S. Department of Labor, they may be applied to both private and public workplaces.
Employment law affords employees some right to privacy in personal matters. Employers increasingly require drug testing of employees before employment, which is generally permissible under the law. However, some organizations seek to drug test current employees. Such testing is subject to restrictions that vary with state law.
Some employers also want prospective and current employees to submit to medical screenings. The Americans With Disabilities Act (ADA) protects individuals with disabilities from being screened out by requiring a job offer be made before an employer can require medical testing.
The Federal Employee Polygraph Protection Act (29 U.S.C. § 2001) prohibits most private employers from requiring their employees to take lie detector tests, and many states ban this practice.