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Manufacturing and Labor Regulations

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Introduction

Manufacturing industry in the United States has been adversely affected by many regulations that have been passed by a number of government agencies over the past last thirty years. In a recent report by the Manufacturers Alliance for Productivity and Innovation (MAPI), approximately 2,183 unique regulations had been passed that affect the growth of the manufacturing sector. Manufacturing companies have seen a number of labor regulations that have been adopted, which number some 214 with 27 being highlighted as major regulations. The manufacturing industry has estimated the cost of these new labor regulations from the Department of Health and Human Services to be around $10 billion.

Department of Health and Human Services Regulations

There have been a number of labor regulations that have been adopted over the last thirty years including regulations on union membership, anti-discrimination, employee benefits, employee compensation, and workplace safety.

  • Union Membership Regulations - The National Labor Relations Board (NLRB) is an independent federal agency which is required to protect employees' rights to organize and join a union. The NLRB will also act to prevent unfair labor practices committed by companies and unions. The NLRB will publish orders and expect companies to voluntarily comply with the order. When companies do not comply, the NLRB can seek enforcement in the US Courts of Appeals, which has favored the NLRB in about 80 percent of cases.
  • Anti Discrimination Regulations - The Office of Federal Contract Compliance Programs (OFCCP) is the part of the Department of Labor which deals with affirmative action and equal employment opportunity. There are a number of regulations that the OFCCP enforces such as the Americans with Disabilities Act (ADA), discriminating in employment based on Executive Order 11246, affirmative action and non-discrimination obligations, discrimination because of religion or national origin, sex discrimination, and employee selection procedures.
  • Employee Benefits - The Department of Labor enforces the Fair Labor Standards Act (FLSA), which requires employers to allow employees to take time off from work. Certain types of leave are required by law, whereas other types are voluntary incentives provided by employers. For example an employer is required to allow an employee to take employees with up to 12 weeks of unpaid, job-protected leave per year. It also requires that their group health benefits be maintained during the leave. This is part of the Family and Medical Leave Act (FMLA). The FLSA does not require payment for time not worked, such as vacations, jury duty, sick leave or holidays. However some states require employers to pay employees whilst on jury duty. The Employee Retirement Income Security Act (ERISA) is a federal law that sets minimum standards for retirement and health benefit plans in private industry. ERISA does not require any employer to establish a plan. It only requires that those who establish plans must meet certain minimum standards and the Department of Labor enforces this regulation.
  • Employee Compensation - The Fair Labor Standards Act (FLSA) does require the employers pay their employees at least the federal minimum wage for all hours worked. Employers are required to pay overtime at time and one-half the regular rate of pay for all hours worked over 40 hours in a work week. Each state can have its own minimum wage, but the higher rate will always be applicable. For example if Georgia has a minimum hourly wage of $7 and the federal minimum hourly rate is $7.25, then the federal rate would be used. If Georgia had a rate higher than the federal minimum hourly wage, then the state hourly rate would apply. Currently there are four states than have a minimum wage set lower than the federal minimum wage and there are eighteen states with minimum wage rates set higher than the federal minimum wage.
  • Workplace Safety - The Occupational Safety and Health Administration ( OSHA), which is part of the Department of Labor, enforces regulations on workplace safety. OHSA regulations focus on giving employees the working conditions that do not pose a risk of serious harm to them as they perform their work. OSHA regulations also allow employees to receive information and training about hazards, ask OSHA to inspect their workplace, review records of work-related injuries and illnesses, get copies of their medical records, and to be free from retaliation and discrimination if they complain to their employer or OSHA. Despite the efforts of OSHA employers still counter that the regulations are overcomplicated and too costly to them. Even with OHSA an average of twelve Americans are killed on the job every single day of the year. In addition, tens of thousands die every year from workplace disease and over 3.3 million workers each year are seriously injured on the job.

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