SHRM-CP / SHRM-SCP Certification Exam: Workplace - U.S. Employment Law and Regulations

Functional Area 15—U.S. Employment Law and Regulations
Here is SHRM’s BoCK definition: “U.S. Employment Law and Regulations refers to the knowledge and application of all relevant laws and regulations in the United States related to employment—provisions that set the parameters and limitations for each JR functional area and for organizations overall.”

As an HR professional, you are responsible for the compliance of HR programs and policies to be in alignment with employment laws and regulations. You may be educating the workforce and leadership, coaching executives on various matters and options, and tracking compliance with required reporting. It’s one of the most important focuses of the HR professional in an organization.

Key Concepts
The key concepts within this functional area are in six broad categories of U.S. laws, regulations, and Supreme Court cases relating to employment. The examples listed here from the SHRM BoCK62 are not an exhaustive list, nor are the categories. Also know that state, municipal, and other local-level laws, regulations, and cases are not included.
- Compensation
- Employee Retirement Income Security Act of 1974 (ERISA)
- Fair Labor Standards Act of 1938 (FLSA; Wage-Hour bill; Wagner-Connery Wages and Hours Act) and amendments
- Equal Pay Act of 1963 (amending FLSA)
- Lilly Ledbetter Fair Pay Act of 2009
- Employee relations
- Labor Management Relations Act of 1947 (LMRA; Taft-Hartley Act)
- National Labor Relations Act of 1935 (NLRA; Wagner Act; Wagner-Connery Labor Relations Act)
- NLRB vs. Weingarten (1974)
- Lechmere, Inc. vs. NLRB (1992)
- Job safety and health
- Drug-Free Workplace Act of 1988
- Guidelines on Sexual Harassment
- Occupational Safety and Health Act of 1970
- Equal employment opportunity
- Age Discrimination in Employment Act of 1967 (ADEA) and amendments
- Americans with Disability Act of 1990 (ADA) and amendments
- Civil Rights Acts
- Equal Employment Opportunity Act of 1972
- Uniform Guidelines on Employee Selection Procedures (1978)
- Griggs vs. Duke Power Co. (1971)
- Phillips vs. Martin Marietta Corp. (1971)
- Leave and benefits
- Family and Medical Leave Act of 1993 (FMLA; expanded 2008, 2010)
- Patient Protection and Affordable Care Act (ACA “Obamacare”)
- National Federation of Independent Business vs. Sebelius (2012)
- Miscellaneous protection laws
- Employee Polygraph Protection Act of 1988
- Genetic Information Nondiscrimination Act of 2008 (GINA)

The following are the proficiency indicators that SHRM has identified as key concepts:

HR and the Legislative and Regulatory Environment
Legislatures in state houses around the country, and in Congress at the nation’s capital, have been busy in recent years placing more worker protections into law. Where the legislatures would not act, President Obama took the reins and placed requirements on employers through the federal contracting regulations. With approximately 60,000 federal contractors, from small companies with only 50 employees to mega-corporations like Boeing and General Motors, a great many changes can be accomplished through the federal contracting employer community.

Organizational Compliance
Compliance has become expensive for employers, in and out of the federal contracting world. In the first few years of this century, the federal government has enacted the following rules regarding employee management.
- 2000: The Needlestick Safety and Prevention Act
- 2001: The Economic Growth and Tax Relief Reconciliation Act
- 2001: The USA Patriot Act
- 2002: The IRS Intermediate Sanctions
- 2002: The Sarbanes-Oxley Act
- 2002: The Homeland Security Act
- 2003: The Fair and Accurate Credit Transactions Act
- 2006: The Pension Protection Act
- 2008: Jobs for Veterans Act
- 2008: Americans with Disabilities Act Amendments Act
- 2008: The Genetic Information Nondiscrimination Act
- 2008: The Mental Health Parity and Addiction Equity Act
- 2008: The National Defense Authorization Act
- 2009: The Lilly Ledbetter Fair Pay Act
- 2009: The American Recovery and Reinvestment Act
- 2009: The Health Information Technology for Economic and Clinical Health Act
- 2010: The Dodd-Frank Wall Street Reform and Consumer Protection Act
- 2010: The Patient Protection and Affordable Care Act
- 2012: The FAA Modernization and Reform Act

In addition to these federal laws, states have been busy working on their own versions of employee protections. Those protections vary widely, and HR professionals find themselves faced with having to track and adapt to changing requirements from one state to another. International enterprises have even more challenges with compliance requirements. Other countries have quite different views of employee management requirements. HR professionals must constantly be monitoring the legal updates to be sure they are allocating proper budget amounts for compliance work and covering all of the requirements placed on them by these different jurisdictions.

U.S. Laws and Regulations
This guide details the federal laws most commonly impacting HR professionals who are responsible for compliance in interstate commerce organizations. You should be familiar with all of these requirements, regardless of your specific corporate obligations.

Employee Records Management
There are increasing obligations for records management in today’s climate. It used to be that “good management practices” were the guiding element in determining how an employer established records creation and retention. That’s not so any longer.
 

There are three reasons why proper recordkeeping is a requirement for employers. First, it simply makes good business sense to have accurate information handy and organized when you want to use it. Second, most business owners and managers will eventually encounter the need to produce documentation about employee performance and work history. Having the proper records to retrieve is vital when the need presents itself. Third, some employee records are required by federal or state governments and must be kept somewhere. Organizing them by employee name makes access easy.

There are some important cautions to be given about the subject of identifiable employee information. Generally, state laws permit employees the right to examine their personal employment records. This simply allows individuals the opportunity to confirm information in the file and identify any specific information that is believed to be incorrect. Employees are not universally guaranteed the right to copies of all file contents, however. As the employer, you usually have the right to control the time and location of these examinations as long as you are reasonable in doing so. The objective, of course, is to ensure accuracy of information about each person. In most states, ownership of the personnel file and its contents rests with the employer who maintains it.
Access to information about employees should be strictly limited to those people in your business with a need to use the information in their jobs. Many states are aggressive protectors of employee privacy, and random or unauthorized access to personnel files can bring on severe penalties. Make sure that you store personnel files in a secure location and that they are not left unattended even during the business day. When asked by people outside the company to provide “verification” of certain employment information about your employees, make it a practice to confirm only the information your employees have authorized you to release. Employment verifications are usually required to support such things as mortgage applications, credit applications, and the like. Employee authorization should be in writing and specify the information they want you to reveal. Tell your employee the policy is designed for their protection.
Job applicants may not have decisions about their applications made based on protected categories such as race, color, sex, religion, national origin, and so on. Therefore, having any information on the application that identifies these categories is inappropriate and may be considered illegal. It is permissible, and for some employers required, to request demographic data from job applicants. This information is directed to a location separate from the hiring manager, however, to avoid even the suspicion of discrimination.
For employees (someone you have put on your payroll), it is necessary to have information in the personnel file that would be considered illegal to gather prior to the job offer being made. For example, you need a birth date to enroll your employee in health insurance and life insurance programs. As long as such information is used for legitimate purposes, employers will have no problem.

Personnel File
A personnel file is often a collection of record files maintained by various people in various locations. The central file is usually maintained by the HR department. However, additional employee records could be located in the training department, in the labor relations department, and in the desk of the immediate supervisor. Each of these files contains different information, yet they all comprise personnel records. Taken together, they represent the personnel file.

The following should be in a personnel file when circumstances require them:
 

Employment Request for Application
- Employee’s original employment application
- Prescreening application notes
- College recruiting interview report form
- Employment interview report form
- Education verification
- Employment verification
- Other background verification
- Rejection letter
- Employment offer letter
- Employment agency agreement if hired through an agency
- Employee handbook acknowledgment form showing receipt of handbook
- Checklist from new employee orientation showing subjects covered
- Veterans/disabled self-identification form
- Transfer requests
- Relocation offer records
- Relocation report
- Security clearance status
- Payroll
- W-4 form
- Weekly time sheets
- Individual attendance record
- Pay advance request record
- Garnishment orders and records
- Authorization for release of private information
- Authorization for all other payroll actions
 

Performance Appraisals
- New employee progress reports
- Performance appraisal forms
- Performance improvement program records
 

Training and Development
- Training history records
- Training program applications/requests
- Skills inventory questionnaire
- Training evaluation forms
- In-house training notification letters
- Training expense reimbursement records
 

Employee Separations
- Exit interview form
- Final employee performance appraisal
- Exit interviewer’s comment form
- Record of documents given with final paycheck
 

Benefits
- Emergency contact form
- Medical/dental/vision coverage waiver/drop form
- Vacation accrual/taken form
- Request for nonmedical leave of absence
- Retirement application
- Payroll deduction authorizations
- COBRA notification/election
- Hazardous substance notification and or reports
- Tuition reimbursement application and or payment records
- Employer concession and or discount authorization
- Annual benefits statement acknowledgment
- Safety training/meeting attendance/summary forms
 

Wage/Salary Administration
- Job description form
- Job analysis questionnaire
- Payroll authorization form
- Fair Labor Standards Act exemption test
- Compensation history record
- Compensation recommendations
- Notification of wage and or salary increase/decrease
 

Employee Relations
- Report of coaching/counseling session
- Employee Assistance Program consent form
- Commendations
- Employee written warning notice
- Completed employee suggestion forms
- Suggestion status reports

The following should not be in a personnel file:
 

Medical Records
- Physician records of examination
- Diagnostic records
- Laboratory test records
- Drug screening records
- Any of the records listed previously in the discussion on HIPAA
- Any other medical records with personally identifiable information about individual employees
 

Investigation Records
- Discrimination complaint investigation information
- Legal case data
- Accusations of policy/legal violations
 

Security Clearance Investigation Records
- Background investigation information
- Personal credit history
- Personal criminal conviction history
- Arrest record
 

Insupportable Opinions
- Marginal notes on any document indicating management bias or discrimination (for example, comments about an applicant’s race, sex, age, disability, national origin, or other protected class membership)

Medical File
The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires employers and health care providers to protect medical records as confidential, separate, and apart from other business records. That means you may no longer retain medical information in a personnel file.

Here are some examples of information you should extract from your personnel files and place in separately protected files as medical information:
- Health insurance application form
- Life insurance application form
- Request for medical leave of absence, regardless of reason
- Personal accident reports
- Workers’ compensation report of injury or illness
- OSHA injury and illness reports
- Any other form or document that contains private medical information for a specific employee

Questions about employee access to review their personnel file come up frequently. Each employer should have a policy addressing such questions that complies with state requirements. Federal law does not address the question. Government employees and private sector employers are usually controlled by state laws. So, multistate employers must comply with requirements in all of the states in which they operate.

Investigation File
Any time a complaint is lodged or law enforcement agencies get involved with individual employees, it may be necessary to conduct an investigation of facts. Each time that happens, a written record should be created that documents what investigative steps were taken and what actions resulted from them. Complaints of illegal employment discrimination are a good example.
These files will have specific employee-identifiable information that may be of a sensitive personal nature. Facts may involve criminal activity or behavior that could result in civil action. For the sake of privacy, each investigation file should be held under the same security provisions as medical records. Only those people having a need to access the content of the files should be allowed access. Records should be secured at all times so passersby cannot pull open a file drawer and remove documents.

Recordkeeping Legal Compliance
As with many HR issues, retention requirements do change from time to time. Be sure you confirm the requirements for your situation before destroying any records. Because these requirements are fluid in nature, we suggest you confirm your specific needs through discussion with your management attorney or by checking the Internet for guidance. Be careful about relying on the Internet without knowing your source, however. You still have the responsibility and the liability for proper records retention even if you get bad advice from an Internet source.

Some possible sources include the following:
- www.management-advantage.com/products/retainrecords.htm
- http://nctc.fws.gov/courses/references/job-aids/supervisors/suprefdocs/documents/FederalRecordRetentionGuidelines.pdf
- www.nationalscanning.com/document-retention-guidelines.html

The following table lists some of the most common federal requirements for record retention:
 

Records Destruction   

Once a record has reached its expiration date (been retained for the period required by law), it should be destroyed. Destruction is something that should be done by shredding so that records cannot be reconstructed by someone rifling through the trash bin.
There are commercial records storage and destruction companies almost everywhere in the United States. For a fee, they will come to your work site, collect the records you want to have destroyed, and either shred them in their truck while at your location or take them back to a central location where the documents will be shredded. Some specialize in certain industries such as medical records.

SHRM-SCP
As with other subject areas, the difference between SHRM-CP and SHRM-SCP requirements lies with the level of policy involvement. Strategic policy development is in the realm of the senior HR responsibilities.
For example, developing a records retention policy requires involvement of all operations, departments, and support organizations such as accounting and payroll, benefits administration, legal, and safety administration. Coordinating input from all of those sources requires a level of skill defined as “senior” for the human resource professional.
Senior Certified Professionals (SCPs) must be masters of all the knowledge required of federal laws and regulations. They must also be capable of understanding how those compliance requirements impact their daily interactions with employees and managers. The formulation of strategic policies is the result of a process built on knowledge, skill, and experience.