International Labor Markets:

Definition: A labour market is the place where workers and employees interact with each other. In
the labour market, employers compete to hire the best, and the workers compete for the best
satisfying job. Description: A labour market in an economy functions with demand and supply
of labour.

Summary of the Fair Labour Standards Act

http://www.dol.gov/whd/regs/statutes/fairlaborstandact.pdf

Congress passed the Fair Labor Standards Act on June 25, 1938. Its job was to eliminate
labor conditions that led to low standards of living. The act, known as FLSA, was originally
enacted during the Great Depression. The belief was that maintaining higher living standards
helped to keep workers efficient and healthy.

Definition

FLSA sets minimum wage, overtime pay, equal pay, record keeping and child labor
standards. The provisions originally applied to private sector employees only, but now
generally apply to public sector as well. Some specific cities and towns still have exempt
employees. The Wage and Hour Division enforces FLSA for private employment, state and
local governments and federal employees from the Library of Congress, United State Postal
System, Postal Rate commission and the Tennessee Valley Authority. The U.S. Office of
Personnel Management handles other executive branch employees and U.S. Congress
enforces it for legislative branch employees.

Scope

All employees of any enterprise that matches one of the following three criteria are covered
under FLSA. First, if the business has an annual gross volume of sales of at least $500,000.
Second, if the business is a hospital or otherwise engaged in caring for the sick, elderly or
mentally disabled or if it is a educational institution including preschools, elementary,
secondary schools or higher education institutions. Third, employees are covered if the
enterprise is an activity of a public agency. FLSA covers domestic service workers such as
housekeepers, cooks, nannies and groundskeepers if their annual wages are at least a yearly
minimum set by the Social Security Administration--$1,500 in 2007--or if they work more
than eight hours in one week.

Function

FLSA sets the federal minimum wage standard, although many states set their minimum
requirements higher. In 2008, federal minimum wage was $6.55, and it rose to $7.25 in July
2009. Overtime pay must be at least 1.5 times an employee’s regular hourly pay and applies
to any additional hours worked past 40 in a normal workweek. The FLSA does not regulate
all employment practices, including severance or sick pay; meal or rest periods; holidays or
vacations; pay raises or bonuses; or premium pay for weekend or holiday work.
Provisions

The FLSA sets a lower minimum for workers younger than age 20 during their first three
months of employment with a given employer: $4.25 per hour as of 2009. Employers must
not replace over-aged workers with youth workers in order to pay lower wages. They are also
prohibited from reducing hours, wages or benefits in order to hire younger workers.

Considerations

Some individuals are exempt from the minimum wage standards in specific situations. These
include student learners, such as vocational education students, full-time students in retail or
service establishments or those that work in institutes of higher education. Employers may
also pay lower wages to employees whose productivity is limited due to physical or mental
disability, including those related to age or injury.

Family and Medical Leave Act of 1993 (FMLA)

https://www.dol.gov/general/topic/benefits-leave/fmla

The Family and Medical Leave Act of 1993 (FMLA) is a United States labor law requiring
covered employers to provide employees with job-protected and unpaid leave for qualified
medical and family reasons. These include pregnancy, adoption, foster care placement of a
child, personal or family illness, or family military leave. The FMLA is administered by the
Wage and Hour Division of the United States Department of Labor.

The FMLA was intended "to balance the demands of the workplace with the needs of
families." The Act allows eligible employees to take up to 12 work weeks of unpaid leave
during any 12-month period to attend to the serious health condition of the employee, parent,
spouse or child, or for pregnancy or care of a newborn child, or for adoption or foster care of
a child. In order to be eligible for FMLA leave, an employee must have been at the business
at least 12 months, and worked at least 1,250 hours over the past 12 months, and work at a
location where the company employs 50 or more employees within 75 miles. The FMLA
covers both public- and private-sector employees, but certain categories of employees are
excluded, including elected officials and their personal staff members.

Scope of rights

The Family and Medical Leave Act of 1993 generally applies to employers of 50 or more
employees in 20 weeks of the last year. Employees must have worked over 12 months and
1250 hours in the last year (around 25 hours a week). However, employees "at which such
employer employs less than 50 employees if the total number of employees employed by that
employer within 75 miles of that worksite is less than 50." A worksite includes a public
agency, including schools and state, local, and federal employers. The 50 employee threshold
does not apply to public agency employees and local educational agencies. There are special
hours rules for certain airline employees.

Employees must give notice of 30 days to employers if birth or adoption is "foreseeable", and
for serious health conditions if practicable. Treatments should be arranged "so as not to
disrupt unduly the operations of the employer" according to medical advice

Summary of the Occupational Safety and Health Act

https://www.osha.gov/

Congress passed the Occupational and Safety Health Act to ensure worker and workplace
safety. Their goal was to make sure employers provide their workers a place of employment
free from recognized hazards to safety and health, such as exposure to toxic chemicals,
excessive noise levels, mechanical dangers, heat or cold stress, or unsanitary conditions.

In order to establish standards for workplace health and safety, the Act also created the
National Institute for Occupational Safety and Health (NIOSH) as the research institution for
the Occupational Safety and Health Administration (OSHA). OSHA is a division of the U.S.
Department of Labor that oversees the administration of the Act and enforces standards in all
50 states.

Consolidated Omnibus Budget Reconciliation Act (COBRA),

https://www.dol.gov/general/topic/health-plans/cobra

What is COBRA?

‘The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their
families who lose their health benefits the right to choose to continue group health benefits
provided by their group health plan for limited periods of time under certain circumstances
such as voluntary or involuntary job loss, reduction in the hours worked, transition between
jobs, death, divorce, and other life events. Qualified individuals may be required to pay the
entire premium for coverage up to 102 percent of the cost to the plan’

Who is eligible for COBRA

Employees who voluntarily or involuntarily terminate their employment for reasons other
than gross misconduct. Reduced hours of work that would cause the employee to lose health
benefits. The covered employee becoming eligible for Medicare. An individual who becomes
divorced or legally separated from the covered employee. Death of a covered employee
(family can continue coverage under COBRA).The loss of status of a dependent child under
plan rules

What is the cost of health coverage under COBRA?

if the individual elects COBRA continuation coverage, that individual could be responsible
for up to 102% of the cost of the plan. 100% of the total premium + 2% administration fee.

How long does an individual have to elect COBRA?

Employer, Plan, or Insurer has 14 days after the termination date to send an election notice.
Individuals have 60 days after they have received an election notice from the plan
administrator to elect heath care coverage under COBRA.

Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).

https://www.hhs.gov/hipaa/for-professionals/privacy/laws-regulations/index.html

The Standards for Privacy of Individually Identifiable Health Information (“Privacy Rule”)
establishes, for the first time, a set of national standards for the protection of certain health
information. The U.S. Department of Health and Human Services (“HHS”) issued the
Privacy Rule to implement the requirement of the Health Insurance Portability and
Accountability Act of 1996 (“HIPAA”).1 The Privacy Rule standards address the use and
disclosure of individuals’ health information—called “protected health information” by
organizations subject to the Privacy Rule — called “covered entities,” as well as standards for
individuals' privacy rights to understand and control how their health information is used.
Within HHS, the Office for Civil Rights (“OCR”) has responsibility for implementing and
enforcing the Privacy Rule with respect to voluntary compliance activities and civil money
penalties.

Who is Covered by the Privacy Rule

The Privacy Rule, as well as all the Administrative Simplification rules, apply to health plans,
health care clearinghouses, and to any health care provider who transmits health information
in electronic form in connection with transactions for which the Secretary of HHS has
adopted standards under HIPAA (the “covered entities”). For help in determining whether
you are covered, use CMS's decision tool.

Health Plans. Individual and group plans that provide or pay the cost of medical care are
covered entities.4 Health plans include health, dental, vision, and prescription drug insurers,
health maintenance organizations (“HMOs”), Medicare, Medicaid, Medicare+Choice and
Medicare supplement insurers, and long-term care insurers (excluding nursing home fixed-
indemnity policies). Health plans also include employer-sponsored group health plans,
government and church-sponsored health plans, and multi-employer health plans. There are
exceptions—a group health plan with less than 50 participants that is administered solely by
the employer that established and maintains the plan is not a covered entity. Two types of
government-funded programs are not health plans: (1) those whose principal purpose is not
providing or paying the cost of health care, such as the food stamps program; and (2) those
programs whose principal activity is directly providing health care, such as a community
health center,5 or the making of grants to fund the direct provision of health care. Certain
types of insurance entities are also not health plans, including entities providing only
workers’ compensation, automobile insurance, and property and casualty insurance. If an
insurance entity has separable lines of business, one of which is a health plan, the HIPAA
regulations apply to the entity with respect to the health plan line of business.

Health Care Providers. Every health care provider, regardless of size, who electronically
transmits health information in connection with certain transactions, is a covered entity.
These transactions include claims, benefit eligibility inquiries, referral authorization requests,
or other transactions for which HHS has established standards under the HIPAA Transactions
Rule.6 Using electronic technology, such as email, does not mean a health care provider is a
covered entity; the transmission must be in connection with a standard transaction. The
Privacy Rule covers a health care provider whether it electronically transmits these
transactions directly or uses a billing service or other third party to do so on its behalf. Health
care providers include all “providers of services” (e.g., institutional providers such as
hospitals) and “providers of medical or health services” (e.g., non-institutional providers such
as physicians, dentists and other practitioners) as defined by Medicare, and any other person
or organization that furnishes, bills, or is paid for health care.

Health Care Clearinghouses.Health care clearinghouses are entities that process

nonstandard information they receive from another entity into a standard (i.e., standard
format or data content), or vice versa.7 In most instances, health care clearinghouses will
receive individually identifiable health information only when they are providing these
processing services to a health plan or health care provider as a business associate. In such
instances, only certain provisions of the Privacy Rule are applicable to the health care
clearinghouse’s uses and disclosures of protected health information.8 Health care
clearinghouses include billing services, repricing companies, community health management
information systems, and value-added networks and switches if these entities perform
clearinghouse functions.

Business Associates Business Associate Defined. In general, a business associate is a person

or organization, other than a member of a covered entity's workforce, that performs certain
functions or activities on behalf of, or provides certain services to, a covered entity that
involve the use or disclosure of individually identifiable health information. Business
associate functions or activities on behalf of a covered entity include claims processing, data
analysis, utilization review, and billing.9 Business associate services to a covered entity are
limited to legal, actuarial, accounting, consulting, data aggregation, management,
administrative, accreditation, or financial services. However, persons or organizations are not
considered business associates if their functions or services do not involve the use or
disclosure of protected health information, and where any access to protected health
information by such persons would be incidental, if at all. A covered entity can be the
business associate of another covered entity.
Business Associate Contract. When a covered entity uses a contractor or other non-workforce
member to perform "business associate" services or activities, the Rule requires that the
covered entity include certain protections for the information in a business associate
agreement (in certain circumstances governmental entities may use alternative means to
achieve the same protections). In the business associate contract, a covered entity must
impose specified written safeguards on the individually identifiable health information used
or disclosed by its business associates.10 Moreover, a covered entity may not contractually
authorize its business associate to make any use or disclosure of protected health information
that would violate the Rule. Covered entities that had an existing written contract or
agreement with business associates prior to October 15, 2002, which was not renewed or
modified prior to April 14, 2003, were permitted to continue to operate under that contract
until they renewed the contract or April 14, 2004, whichever was first.11 See additional
guidance on Business Associates and sample business associate contract language.

Employee Retirement Income Security Act of 1974 (ERISA)

https://www.dol.gov/general/topic/health-plans/erisa

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets
minimum standards for most voluntarily established pension and health plans in private
industry to provide protection for individuals in these plans.

ERISA requires plans to provide participants with plan information including important
information about plan features and funding; sets minimum standards for participation,
vesting, benefit accrual and funding; provides fiduciary responsibilities for those who manage
and control plan assets; requires plans to establish a grievance and appeals process for
participants to get benefits from their plans; gives participants the right to sue for benefits and
breaches of fiduciary duty; and, if a defined benefit plan is terminated, guarantees payment of
certain benefits through a federally chartered corporation, known as the Pension Benefit
Guaranty Corporation (PBGC).

In general, ERISA does not cover retirement plans established or maintained by

governmental entities, churches for their employees, or plans which are maintained solely to
comply with applicable workers compensation, unemployment or disability laws. ERISA also
does not cover plans maintained outside the United States primarily for the benefit of non-
resident aliens or unfunded excess benefit plans.

Pension vesting

Before ERISA, some defined benefit pension plans required decades of service before an
employee's benefit became vested. It was not unusual for a plan to provide no benefit at all to
an employee who left employment before the specified retirement age (e.g. 65), regardless of
the length of the employee's service.
Under the Pension Protection Act of 2006, employer contributions made after 2006 to a
defined contribution plan must become vested at 100% after three years or under a 2nd-6th
year gradual-vesting schedule (20% per year beginning with the second year of service, i.e.
100% after six years). (ref. 120 Stat. 988 of the Pension Protection Act of 2006.) The
Technical Explanation of H.R.4, of the PPA, Page 156 Vesting Rules, states that the PPA
amends both the ERISA and Code. Different rules apply with respect to employer
contributions made before 2007. Employee contributions are always 100% vested. Accrued
benefits under a defined benefit plan must become vested at 100% after five years or under a
3rd-7th year gradual vesting schedule (20% per year beginning with the third year of vesting
service, and 100% after seven years). (ref. 26 U.S.C. 411(a)(1)(B), 29 U.S.C. 203(a)(2).)

Pension funding

ERISA established minimum funding requirements for pension plans, which includes defined
benefit plans and money purchase plans but not profit sharing or stock bonus plans.

Before the Pension Protection Act of 2006 (PPA), a defined benefit plan maintained a
funding standard account, which was charged annually for the cost of benefits earned during
the year and credited for employer contributions. Increases in the plan's liabilities due to
benefit improvements, changes in actuarial assumptions, and any other reasons were
amortized and charged to the account; decreases in the plan's liabilities were amortized and
credited to the account. Every year, the employer was required to contribute the amount
necessary to keep the funding standard account from falling below $0 at year-end.

In 2008, when the PPA funding rules went into effect, single-employer pension plans no
longer maintain funding standard accounts. The funding requirement under PPA is simply
that a plan must stay fully funded (that is, its assets must equal or exceed its liabilities). If a
plan is fully funded, the minimum required contribution is the cost of benefits earned during
the year. If a plan is not fully funded, the contribution also includes the amount necessary to
amortize over seven years the difference between its liabilities and its assets. Stricter rules
apply to severely underfunded plans (called "at-risk status").

The PPA has different funding requirements for multiemployer pension plans, which preserve
most of the pre-PPA funding rules, including the funding standard account. Under PPA,
increases and decreases in the plan's liabilities are amortized, but the amortization period for
benefit improvements adopted after 2007 are shortened. As with single-employer plans,
multiemployer pension plans that are significantly underfunded are subject to restrictions.
The restrictions, which may limit the plan's ability to improve benefits or require the plan to
reduce employees' benefits, vary depending whether a pension plan's funding status is termed
"endangered", "seriously endangered", or "critical". The restrictions accompanying each
deficient funding status are progressively more severe as funding status worsens