Employment law foundations: human rights, standards and discrimination

Dr. Rahimi opens the third session with a warning delivered as a joke. The most expensive sentence in management, she says, is the one a manager says to a colleague in the hallway after a difficult meeting, because it is the sentence that will be read aloud in a tribunal or a courtroom two years later. Her point is serious. Every HR decision in this course, from the questions asked in an interview to the way a layoff is carried out, is made inside a framework of law. General managers do not need to be lawyers, but they need to know where the lines are, why they are there, and when to call for advice before acting rather than after.

She sets out the course's approach. The law differs between Canada and the United States in ways that matter for every practice the cohort will design, and it differs within each country by province or state. This lesson covers the foundations: who regulates employment, the minimum standards every employer must meet, the law against discrimination and harassment, the duty to accommodate, and how employment ends. Later lessons return to the law where it shapes a practice, such as selection in lesson 5, pay transparency in lesson 8 and unions in lesson 10.

Who regulates employment

In the United States, employment is regulated by both federal and state law, and often by cities and counties as well. Federal statutes set a floor: the Fair Labor Standards Act for minimum wage and overtime, Title VII of the Civil Rights Act and related laws against discrimination, the Occupational Safety and Health Act, and the National Labor Relations Act for unions. States add their own minimum wages, leave laws, anti-discrimination laws covering more employers or more grounds, and rules on non-compete agreements, background checks and pay transparency. A retailer such as Cedarline, with stores in several states, must meet the strictest applicable rule in each location, so its policies must either meet the highest standard everywhere or vary by location.

Dr. Rahimi notes a second layer that general managers sometimes forget: the employment contract itself. Written contracts, offer letters, handbooks and the terms implied by courts all create obligations. A handbook that promises a progressive discipline process may bind the employer to follow it. A collective agreement, covered in lesson 10, replaces much of the individual contract for unionized employees.

Minimum standards

The Fair Labor Standards Act sets the federal minimum wage, which has been 7.25 dollars an hour since 2009, and requires overtime at one and a half times the regular rate for hours over 40 in a workweek for non-exempt employees. Executive, administrative and professional employees can be exempt from overtime if they meet duties tests and are paid a salary above a threshold; a 2024 rule raising the threshold was struck down by a federal court the same year, leaving the earlier level of 684 dollars a week in place. States set their own minimums, and most of the population lives in states with minimums above the federal one: Illinois reached 15 dollars an hour in January 2025, and Chicago's own minimum is higher still. Federal law requires no paid vacation or paid sick leave, but many states and cities do. The Family and Medical Leave Act gives eligible employees of employers with 50 or more employees up to 12 weeks of unpaid, job-protected leave a year for a birth, adoption or serious health condition.

Misclassification is a common and costly error in both countries. Treating a worker as an independent contractor when the relationship is really employment, or treating an employee as exempt from overtime when the job does not meet the tests, exposes the employer to back pay, penalties and sometimes class actions. The tests look at the substance of the relationship, such as who controls the work, who owns the tools, who bears the risk of profit or loss and whether the work is integral to the business, not at the label in the contract. Leo admits that Kestrel's early customer support staff were hired as contractors to save on payroll costs; the company converted them to employees after its first audit raised the question.

Discrimination and harassment

Federal law prohibits discrimination in employment on protected characteristics. Title VII of the Civil Rights Act of 1964 covers race, color, religion, sex and national origin, and the Supreme Court held in Bostock v. Clayton County in 2020 that discrimination because of sexual orientation or gender identity is discrimination because of sex. The Age Discrimination in Employment Act protects workers aged 40 and over, the Americans with Disabilities Act protects qualified people with disabilities, the Pregnant Workers Fairness Act of 2023 requires reasonable accommodation of pregnancy-related limitations, and the Equal Pay Act of 1963 requires equal pay for equal work regardless of sex. Title VII applies to employers with 15 or more employees; state laws such as the Illinois Human Rights Act often reach smaller employers and add grounds. Claims generally begin with a charge to the Equal Employment Opportunity Commission or a state agency before a lawsuit. In 2025 the Supreme Court held in Ames v. Ohio Department of Youth Services that plaintiffs from majority groups face the same standard of proof as anyone else.

Discrimination law recognizes two broad forms. Disparate or differential treatment is treating someone less favorably because of a protected characteristic: refusing to promote a woman because she might have children, or dismissing an older worker to bring in someone younger and cheaper. Adverse effect or disparate impact discrimination arises when a practice that looks neutral, such as a height requirement, a test or a rule about schedules, falls more heavily on a protected group and cannot be justified by the needs of the job. Lesson 5 shows how employers check selection methods for adverse impact.

US law developed disparate impact through the Supreme Court's 1971 decision in Griggs v. Duke Power, which struck down a high school diploma requirement and an aptitude test that excluded Black applicants at much higher rates and had not been shown to relate to job performance. The Civil Rights Act of 1991 wrote the framework into Title VII: once a plaintiff shows a disparate impact, the employer must show the practice is job-related and consistent with business necessity, and the plaintiff can still win by showing a less discriminatory alternative the employer refused to adopt. The federal government's enforcement emphasis has shifted: in June 2026 the Department of Justice issued an opinion that the EEOC's guidance on disparate impact was unconstitutional and that liability should be confined to practices that suggest intentional discrimination. Private lawsuits under the statute continue, and many states have their own disparate impact rules, so employers still validate their practices.

Harassment is a form of discrimination when it is linked to a protected ground, and it is also regulated as a health and safety hazard in many jurisdictions. It includes sexual harassment and unwelcome conduct based on race, religion, disability or other grounds that a reasonable person would find hostile. Employers are expected to have a clear policy, more than one channel for complaints, prompt and impartial investigations, protection against retaliation, and corrective action proportionate to what is found. Dr. Rahimi's experience is that most of the damage in harassment cases comes not from the original conduct but from a weak response: complaints ignored, investigations run by the accused person's friend, complainants moved to worse shifts.

The duty to accommodate

US employers must provide reasonable accommodation to qualified employees with disabilities under the Americans with Disabilities Act, to pregnant workers under the Pregnant Workers Fairness Act, and to employees' religious practices under Title VII, unless it would cause undue hardship. For disability, undue hardship means significant difficulty or expense relative to the employer's resources. For religion, the Supreme Court held in Groff v. DeJoy in 2023 that the employer must show a substantial burden in the overall context of its business, not just more than a trivial cost as earlier cases had suggested. Accommodation is an interactive process: the employee identifies a need, the employer asks for information about limitations rather than diagnoses, and both explore options such as modified duties, schedules, equipment or reassignment to a vacant position.

Hana says accommodation is a daily issue at Lakeview. Nurses with back injuries need modified duties; a nurse who observes a religious sabbath needs scheduling flexibility; a parent needs to avoid rotating night shifts. Her lesson has been that accommodation works best when supervisors have a simple process and support from HR, rather than treating each request as an exception to resist. Dr. Rahimi adds that accommodation costs are usually small compared with the cost of losing an experienced employee and defending a claim.

How employment ends

Most US employment is at will: either party can end it at any time for any lawful reason or no reason, without notice. The exceptions matter. An employer cannot dismiss for a discriminatory reason, in retaliation for a complaint or for protected activity such as union organizing or whistleblowing, or in breach of a contract or collective agreement. Courts in many states recognize exceptions for dismissals that violate public policy, and Montana requires good cause after a probation period. The Worker Adjustment and Retraining Notification Act requires employers with 100 or more employees to give 60 days' notice of plant closings and mass layoffs, and several states, including Illinois, have their own versions. Severance pay is not required by law, but employers often offer it in exchange for a release of claims; for workers aged 40 and over, a valid release must meet the timing rules of the Older Workers Benefit Protection Act.

# US overtime and layoff notice checks, simplified
def weekly_pay(rate, hours):
    regular = min(hours, 40) * rate
    overtime = max(hours - 40, 0) * rate * 1.5
    return regular + overtime

for hours in (36, 40, 46, 52):
    print(f"{hours} hours at 21.00: pay {weekly_pay(21.0, hours):8.2f}")

def warn_applies(employees, laid_off_at_site, site_headcount, closing):
    if employees < 100: return False
    if closing: return laid_off_at_site >= 50
    return laid_off_at_site >= 500 or (laid_off_at_site >= 50 and laid_off_at_site >= site_headcount / 3)

cases = [(1450, 60, 520, False), (1450, 60, 120, False), (1450, 55, 55, True), (80, 70, 70, True)]
for c in cases:
    print(c, "60-day notice required" if warn_applies(*c) else "federal notice not required")

36 hours at 21.00: pay   756.00
40 hours at 21.00: pay   840.00
46 hours at 21.00: pay  1029.00
52 hours at 21.00: pay  1218.00
(1450, 60, 520, False) federal notice not required
(1450, 60, 120, False) 60-day notice required
(1450, 55, 55, True) 60-day notice required
(80, 70, 70, True) federal notice not required

The statutory figures are a floor, and the real cost of a dismissal depends on the legal system and the quality of the process. Dr. Rahimi's advice applies in both countries. Document performance problems honestly and as they happen, not in a burst before a dismissal. Give clear warnings and a real chance to improve. Treat similar cases alike, because inconsistency is the raw material of a discrimination claim. Conduct terminations with dignity, in private, with a witness, and with the practical details ready. And involve legal advice early in any dismissal involving long service, a protected ground or a recent complaint.

Privacy, monitoring and new technology

US employee privacy law is a patchwork of federal, state and local rules. Employers generally may monitor work systems with notice, but several states require notice of electronic monitoring, Illinois's Biometric Information Privacy Act imposes strict consent rules on collecting fingerprints or facial scans, and New York City requires bias audits and notice for automated employment decision tools. Illinois amended its Human Rights Act, effective 1 January 2026, to prohibit the use of artificial intelligence in ways that discriminate in employment decisions and to require notice when it is used. Employers using algorithmic tools in hiring remain responsible for any discrimination those tools produce.