Employment Law: Management Anyone who hires an employee needs to understand the rules and obligations that apply to the employer-employee relationship, which is regulated by both Illinois and federal law.
The rules that employers must comply with cover a wide range of topics, including minimum wage, workplace safety, privacy, sexual harassment, medical and military leaves, and various types of discrimination.
Employment at will. Employees in Illinois are deemed to be employed at will, which means that an employer can fire an employee for a good reason, a bad reason, or no reason at all. The right to hire someone at will, however, is limited in a couple of ways. First, if the employer and the employee have a contract, any contract terms on the right to fire would supersede the employment at will statute. For example, if the contract said that the employer agreed to hire the employee for one year, the employer cannot fire the employee at will during that year. In effect, the "at will" status of the relationship is suspended for the time that the contract is in effect.
Second, the employer cannot fire an employee if the firing violates statutory protections given to all employees, such as protections against race, age, disability, or gender discrimination and protections against retaliation, such as for firing someone because she filed a worker's compensation claim. If there is no contract and the situation doesn't involve prohibited discrimination, the employer can fire an employee for any reason or for no reason.
Employment status. The first step in understanding a worker's rights in the workplace is with a determination of the worker's status. The important distinction is between employees and independent contractors. An employee is someone who has been hired by the company, is on the payroll, receives employee benefits, and works only for that company. An independent contractor, on the other hand, is paid by the job, works for multiple clients, and sets his or her own hours. A long list of factors is used to make the determination, which boils down really to control. If the company controls when, where, and how the work is performed, the worker is an employee. If not, the worker is an independent contractor.
The distinction is important because independent contractors generally do not have the workplace rights that employees have.
Discrimination. In Illinois, state and federal laws prohibit employers from discriminating against protected groups in any employment practice, including hiring, firing, promoting, transferring, providing benefits to, or laying off employees. The protected groups are age, ancestry, arrest record, citizenship, color, creed, disability, marital status, national origin, race, religion, sex, or unfavorable military discharge. Employers are free to discriminate against anyone who doesn't fall into any of the protected classes. Thus, an employer could discriminate against left-handed people, redheaded people, heterosexuals, people who drive convertibles, or people who wear tennis shoes.
In a few limited areas, certain types of discrimination are allowed. A Catholic organization, for example, can limit a job to Catholic applicants, if the job is related to the performance of religious duties, but not if it is not, such as if the opening is for a janitor. A theater company, for example, casting for the lead in Othello, can presumably limit applicants to black males.
Retaliation. There are several laws that specifically prohibit an employer from retaliating against an employee who files a claim, who sues the employer for discrimination, or who reports violations to the government, including the workers' compensation statutes, the occupational safety and health laws, and the whistleblower laws.
The general rule to remember is that if the employee is exercising in good faith a right that the employee is entitled to exercise, the employer cannot retaliate. Retaliation extends not just to firing the employee, but also to any other act intended to punish the employee for exercising the right, such as demotions, denial of benefits, or any act intended to make the employee quit.
Sexual harassment. In addition to prohibiting discrimination based on sex, the federal and Illinois laws also prohibit sexual harassment, which is defined as offensive sexual comments, contacts, innuendo, pictures, or the like in the workplace. Sexual harassment occurs either where sex is used as a tradeoff for a workplace-related event, such as a promotion or a hiring, or where offensive comments create a hostile work environment. The standard is whether a reasonable person would find the comments and contact offensive.
Privacy. In the area of privacy, the general rule is that employees have a right to privacy where a reasonable person would conclude that there is an expectation of privacy. There is generally no expectation of privacy where an employee uses an employer-provided device, such as a telephone or a computer. Thus, employers generally have the right to read an employee's private email sent through a company computer.
In addition, employees are entitled to inspect their own personnel records. The right extends to any record regarding employment qualifications, promotions, compensation, discipline, and related matters. The law does not require employers to keep records; it only requires access if they are kept.
Illinois also has a Right to Privacy in the Workplace Act, which forbids an employer from discriminating against an employee who uses lawful products off the premises during nonworking hours. Thus, an employer that frowns on alcohol consumption cannot fire or otherwise discriminate against an employee who drinks legally on his own time. An exception is made for nonprofits whose primary purpose is to discourage those products. Thus, a temperance union could discriminate against an employee found drinking after hours.
Illinois has a second workplace privacy-related law that prohibits an employer from inquiring whether a prospective employee has ever filed a workers' compensation claim. Thus, an employer, following a job interview with a prospective employee, cannot pick up the phone and calls the employee's previous employer to find out if a workers' compensation claim was ever filed.
Pregnancy. Title VII of the Civil Rights Act of 1964 prevents discrimination against pregnant women. The law requires that employers treat pregnant women just as they would treat any employee with a temporary disability.
Wage and hour rules. The minimum wage for employees 18 and over is $7.25. Workweeks are limited to 40 hours. The required overtime rate is one and a half times the regular rate for every hour worked over 40 hours in a week.
The rules do not apply to employees who are classified as exempt employees. An exempt employee is someone who is in an executive, administrative, or professional position and who receives at least $250 per week in salary or fee.
Children under 12 are not allowed to work, except on farms. Students who area 14 or 15 are limited to three hours per day during the school and to eight hours per day while on vacation. Any child who is under 16 must have an employment certificate in order to work.
A victim of sexual harassment can file a complaint with the Illinois Department of Human Rights, the federal EEOC, or the Illinois Human Rights Commission.
Leaves. In certain situations, employees who are on temporary leave must be given the same or a similar job back when they return to work. One example is the Family and Medical Leave Act of 1993, which allows employees, both men and women, to take up to 12 weeks of unpaid leave for the birth or adoption of a child, to receive a foster child, to care for an immediate family member with a serious health problem, or to care for the employee's own serious health problem.
The law, which applies only to employers with at least 50 employees, requires that the employer allow the employee to continue to accrue benefits and to return to the same or similar job upon return to work.
A second example is the Veterans' Reemployment Rights Act, which entitles veterans returning from active service to reclaim the job they had before they went on active duty. If exact same job is not available, the veteran is entitled to one with similar pay, seniority, and status.
Workplace safety. Under federal and state laws, employers are responsible for maintaining a safe working environment. A safe workplace is one that at a minimum is free from hazards that are likely to cause serious injury or death. Workplace safety rules, as defined by the Occupational Safety and Health Act, must be conspicuously displayed in the workplace.
Restrictive covenants. Employers will often ask key employees to sign a pre-employment restrictive covenant preventing them from starting up a new business in competition with the employer or from sharing trade secrets or customer lists with competitors. These restrictive covenants are generally legal, subject to certain limitations.
Restrictive covenants that prevent an employee from starting up a business in competition with the former employer are upheld where the restrictions are reasonable as to time and geography. The restrictive covenant must also be legitimately designed to prevent the former employee from taking customers and not for some other reason, such as spite.
Taking trade secrets to a competitor can always be forbidden by restrictive covenant, but taking customers cannot be. Generally, employees can be restricted from taking customers who have long-standing relationship with the employer, although "long-standing" is subject to different interpretations. In some cases, it has meant customers that existed prior to the salesman's arrival; in others, it has meant only those customers that have provided the employer with repeat business over a long period of time.
Unemployment benefits. Employees who are fired are entitled to unemployment benefits, unless they were fired for cause. Where an employee who is not eligible for unemployment benefits tries to get them, the employer should contest the case because its unemployment tax may be based on its claims experience.
Referrals. Employers should be careful what they say in referral letters when asked to comment by a business that is considering whether to hire the employer's former employee. Some companies, concerned about being sued by the former employee for libel, have implemented a policy of only providing employment dates and salary history.
Whatever the policy, employers should only make statements in referral letters that are verifiably true. For example, employers should say that the employee was fired for repeated absences if the statement is true and it can be verified from attendance records.