Creation of Employment ContractsBusiness LawMrs. A

LESSON 27-1LESSON 27-11

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WHAT IS EMPLOYMENT?• In general, employment exists when an

employer contracts to pay an employee to do work under the employer’s supervision and control.

• No contract, no supervision, no control – NOT an employment relationship.

• Employer

• Employee

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Scenario #1

Phil contracts with Bill’s Roofing Service to reroof his home after a terrible wind storm. Phil promised to pay Bill $3500.00 for the job.

•Is Bill an employee of Phil?

•No, Bill is an independent contractor. Phil is not supervising or controlling Bill’s work.

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TERMS OF THE EMPLOYMENT CONTRACT (Stated in many ways)•Express agreements

Written/Oral Breach – violate an agreement

•Implied agreements Employment at Will – no time stated, can be

terminated for a good reason, a bad reason, or no reason at all

Custom or trade determined

•Items determined by federal and state law▫ Minimum wage▫ Max hours▫ Overtime pay

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Scenario #2Hal applied for a part-time job as a cook in a

restaurant. Hal and his manager Joe discussed hours and agreed Hal would work 3 p.m. to

5 p.m. on Monday, Wednesday and Friday.

Hal was given a company policy manual that described the pay scale and benefits. It showed that he would be paid $10/hour. Also, Joe told Hal how he wanted the food cooked.

What are the expressed terms?What are the implied terms?What state or federal law is in effect?

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EMPLOYEE DUTIES

•Obedience (rules/orders)

•Reasonable skill

•Loyalty and honesty (Employer’s best

interest)•Reasonable performance (prescribed time

and manner)

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Scenario #3

Vinnie hires Matt as a welder for a three year period. Vinnie requires all welders to wear protective helmets and goggles while working. Matt, who has long hair that makes it difficult to wear the helmet, refuses to do so.

•Can Vinnie discharge (fire) Matt without

liability since Matt has a 3-year contract?

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Employer’s Basic Duties

LESSON 27-2LESSON 27-28

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EMPLOYER’S DUTIES TO EMPLOYEES

1. Reasonable treatment

2. Safe working conditions

3. Fair Labor Standards Act (wage, hours,

overtime)

4. Payroll deductions (taxes withheld)▫ The employer makes worker’s

compensation and unemployment payments. NOT EMPLOYEES

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EMPLOYER’S DUTIES TO EMPLOYEES5. Duties to minors

▫State Laws Max # of hours to work No night work Sets the age for hazardous occupations

▫Federal law Illegal to work if under 14 years old Exceptions : actors, working on farms, newspaper

routes

6. Military service7. Voting8. FMLA

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EMPLOYER’S DUTY TO THOSE INJURED BY EMPLOYEESIf an employee, acting within the scope of employment, commits a tort, the employee and the employer are both liable for the damages.

If an employee, not acting within the scope of employment, the employee alone is liable.

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Scenario #4

•Eddie was an electrician for Century Electric. One day Eddie was sent to repair mixing machines at Miller Chemical Company. Eddie did the work in a negligent manner, causing several thousand dollars’ worth of damage to the machines.

•Who is liable for the damages?

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Termination of Employment Contracts

LESSON 27-3LESSON 27-313

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TYPES OF EMPLOYMENT CONTRACTS

1. Employment Contracts an Employee can quit at anytime

▫Wrongful discharge Refuse to commit perjury File a Work Comp claim Report a work violation

▫Employer violates contract terms “Treat employees fairly” – promise not to fire

without a fair reason

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TYPES OF EMPLOYMENT CONTRACTS

2. Employment contracts for a specific length of time (athletes)

3. Employment contracts with governments

▫ Entitled to “due process” – reasons/hearing

4. Right to unemployment pay:▫Fired without cause – you did nothing

wrong, layoff, let you goFired with cause (employee violated a

rule) NO UNEMPLOYMENT PAY

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