Banks must meet the personnel requirements placed on them by all state and federal legislation.1 There is no question that the changes in the legal framework over the last
1. For a thorough discussion of legislation affecting personnel practices, see C. Eugene Looper's Banker's Guide to Personnel Administration (Boston: Bankers Publishing Company, 1983) and Donald L. Caruth's Compensation Management for Banks (Boston: Bankers Publishing Company, 1986), from which portions of this chapter were adapted with permission from the publisher. Also see Richard I. Henderson's well-done series of articles titled "Job Descriptions-Critical Documents, Versatile Tools," a five-part series which appeared in Supervisory Management from November 1975 through March 1976. Looper, Caruth, and Henderson do an excellent job of charting the various government regulations which have affected not only the role of job descriptions but also the personnel relations field as a whole.
Several years have affected the importance of job descriptions in personnel relations. Listed here is some of the major legislation that has had an impact not just on job descriptions in banking, but also on the field of personnel management.
Social Security Act of 1935, As Amended
This Act created the Social Security Administration and established the existing system of old age, survivors, disability, and unemployment compensation insurance. Employees and employers share equally the cost of old age, survivors, and disability insurance-those items that are typically described as Social Security. Employers pay the full cost of unemployment insurance. Funding is accomplished through a payroll tax and benefits are paid through agencies in each of the fifty states. The Act also created a minimum period of twenty-six weeks of unemployment compensation.
National Labor Relations Act of 1935
Commonly known as the Wagner Act, this piece of legislation gives employees the right to form unions and requires employers to recognize unions of employees and to bargain with them in good faith relative to wages, hours of work, and other terms and conditions of employment. Also created by the Act was the National Labor Relations Board which has the responsibility of conducting elections to determine if employees wish to be represented by a union, determining which of two competing unions will be certified as the bargaining agent for a group of employees, preventing unfair labor practices in the area of unionization activities, and investigating reported claims of unfair labor practices.
Fair Labor Standards Act of 1938 (FLSA)
The FLSA was passed by Congress in 1938 to set up minimum living standards for workers. FLSA established a minimum wage and overtime payment for more than forty hours worked in a workweek, and also set restrictions on child labor.
It is from the passage of FLSA that the categories of "exempt" and "nonexempt" from overtime were derived. Employees who meet specific criteria set by FLSA are exempt from the FLSA's overtime payment provision. Part of the criteria for being exempt from having to be paid an overtime wage includes having the responsibility of managing a department or division and directing the work of at least two other people. Exempt employees have a say in hiring and firing people. They must also be in a position in which they are free to make decisions using their own judgment and discretion.
In order to ensure that jobs fall clearly into an exempt or nonexempt status, it is crucial that the work actually being performed by a jobholder be detailed in the job description. To determine exemption status, a jobholder's duties and responsibilities listed in the job description must meet the exemption criteria of the FLSA.
Labor-Management Relations Act of 1947
An amendment to the National Labor Relations Act of 1935 that was designed to restore a balance of power between unions and management, this statute, generally referred to as the Taft-Hartley Act, defines a number of unfair labor practices on the part of unions, prohibits the closed union shop, gives states the power to enact "right-to-work" laws, and grants management the right to refuse to recognize and bargain with unions of supervisory employees.
Equal Pay Act of 1964
Sexual discrimination in salary payment to employees is prohibited by the Equal Pay Act of 1964, which was amended by the Equal Pay Amendment of 1974. Skills, duties, and responsibilities performed under similar conditions must be rewarded equally paying no heed to an employee's race or sex. Performance or varying job requirements can, of course, cause people with similar jobs to be rewarded differently, but these rewards must be on the basis of merit and not race or sex.
Job descriptions should specify the skill, effort, and responsibility necessary to perform the job. If a bank is accused of sexual discrimination because of a discrepancy in pay to a man and woman for the same job performed, the job description should serve as an indicator of whether or not the job in question does indeed require the same skills, effort, and responsibility.
The job description can often be an excellent defense for an employer accused of sexual discrimination in salary practices. It is as important to remember, however, that the job description can also be used by the employee as proof of discrimination if it does indeed indicate that similar qualifications and responsibilities are being compensated inequitably.
Title VII of the Civil Rights Act of 1964
The primary requirement of Title VII of the Civil Rights Act of 1964 prohibits basing employment decisions including pay, work terms, conditions, privileges, and hiring and firing on race, color, religion, sex, or national origin.
Of course, banks and companies can still hire the best qualified candidate, but they must be able to prove, if called upon to do so, that they did not discriminate in their hiring process. The job description can be incredibly useful in delineating the performance requirements of a job. Job descriptions can also be used by the bank to show that hiring practices are non-discriminatory and fall under the guidelines of Title VII of the Civil Rights Act of 1964.
Age Discrimination in Employment Act of 1967, As Amended
This Act protects persons between the ages of 40 and 70 from discrimination by employers in matters of hiring, job retention, job privileges, and other terms and conditions of employment. An employer cannot refuse to hire a person simply because of age nor can an employer discharge an employee simply because of age if the person is between the protected ages of 40 to 70.
Occupational Safety and Health Act of 1970 (OSHA)
Safe working conditions and procedures were ensured by the passage of the Occupational Safety and Health Act of 1970 (OSHA).
Some job descriptions feature a section detailing job conditions. If working conditions are particularly grueling, these conditions should be elaborated upon in the job description so the prospective employee can know what he or she is going to face. There are limits, however, to how "grueling" working conditions can be, and banks should be reminded that they must comply with all OSHA regulations. Banks typically should concern themselves with potential problems such as possible hazards in the workplace, sufficient lighting in work areas, care to avoid glare and reasonable noise levels in computer areas, adequate lavatory facilities, and elimination of anything that could possibly cause injury.
Banks must concern themselves with fairness in employment practices. A well-written, accurate job description can go a long way to ensure that banks maintain fair, nondiscriminatory, and legal hiring and performance standards.
Vocational Rehabilitation Act of 1973
The Rehabilitation Act covers government contractors, subcontractors, or organizations receiving federal grants in excess of $2,500. It requires employers to make reasonable accommodations in hiring and promoting handicapped persons. A handicapped person is defined as an individual who has physical or mental impairments that substantially limit one or more major life activities. Banks with fifty or more employees, as well as other organizations of the same size are required to take positive steps (Affirmative Action) to recruit and promote handicapped persons.
Health Maintenance Organization Act of 1973
Employers with twenty-five or more employees are required to offer the option of membership in an HMO in lieu of medical insurance coverage if an HMO exists within a twenty-five mile radius of the employment site. The Act covers employers engaged in interstate commerce who are covered by the Fair Labor Standards Act and provide health care coverage to their employees.
Employee Retirement Income Security Act of 1974
Without doubt this is one of the most complex pieces of legislation ever enacted in the compensation area. The statute applies to employers with pension/retirement plans and regulates such items as employee vesting rights, accrual of benefits, survivor benefits, and funding of pensions and retirement plans. Termination insurance is provided to protect employees in the event that an employer defaults on its pension plan obligations. Limitations are placed on pension benefits; the maximum benefit allowed is $75,000 per year or 100 percent of the employee's average salary for the highest three years of earnings. All employees twenty-five years of age or older who have completed one year of service with the organization are protected by the provisions of ERISA. Various reporting requirements are also mandated for the employer.
Pregnancy Discrimination Act of 1978
An amendment to Title VII of the Civil Rights Act, this statute prohibits discrimination based on pregnancy, childbirth, or complications arising from either. Mandatory pregnancy leaves are illegal. An organization cannot refuse to hire pregnant women and cannot discharge pregnant women. Disability arising from pregnancy must be treated the same as disability arising from any other cause.
