ARE Daily | PcM #10 — HR: Employment Law

Quick Recall (from #09 — Employee Benefits, Evaluations & the AXP)

A firm gives an employee their first-ever negative performance review and terminates them in the same meeting. What HR practice did the firm likely fail to follow?

Documented, progressive performance management. Good HR practice requires that employees know what's expected, receive ongoing feedback, and have the opportunity to correct deficiencies before termination. A single meeting that combines first negative review with termination exposes the firm to claims that the process was pretextual — particularly dangerous if the employee is a member of any protected class.

Today's Content

Employment law is one of the most tested areas in PcM HR content, and the exam approach is consistent: know which law covers what, and know the employee thresholds that trigger each one. The laws are organized here by applicability — some apply to all employers, some kick in at 15+ employees, and one at 50+.

All Employers, Regardless of Size

The National Labor Relations Act (Wagner Act) protects private-sector employees' right to organize into unions and prohibits unfair labor practices by employers. The Equal Pay Act requires equal pay for employees doing substantially the same work with the same responsibilities and experience — it directly targets gender-based wage gaps. Employee Eligibility Verification requires employers to maintain a Form I-9 for each employee verifying their right to work in the U.S., retained for at least three years or one year after termination, whichever is longer. The Fair Labor Standards Act (FLSA) sets minimum wage, overtime pay requirements, recordkeeping standards, and child labor rules. OSHA (Occupational Safety and Health Act, 1970) requires a safe work environment — though primarily aimed at industrial settings, it applies to offices too (first aid kits, safety postings, fire extinguishers). HIPAA protects the privacy of individually identifiable health information. ERISA sets minimum standards for private-sector pension plans for employers who offer them — it does not require employers to offer a pension plan at all. If no plan exists, ERISA doesn't apply. If a plan does exist, ERISA governs how it must be administered.

Employers with 15 or More Employees

COBRA (Consolidated Omnibus Budget Reconciliation Act, 1986) actually kicks in at 20 or more employees — a common exam trap. It requires employers to offer continued group medical coverage when employment ends, hours are reduced, or major life events occur. The Civil Rights Act of 1991 prohibits discrimination based on sex, race, color, religion, or national origin. The ADA (Americans with Disabilities Act) prohibits discrimination based on disability in hiring, firing, compensation, and terms of employment.

Employers with 50 or More Employees

The ADEA (Age Discrimination in Employment Act, 1967) prohibits age discrimination against employees 40 and over — applies at 15+ employees, not 50. The FMLA (Family and Medical Leave Act) requires employers with 50 or more employees to provide up to 12 weeks of unpaid, job-protected leave for the birth or adoption of a child, care for a seriously ill spouse, child, or parent, or the employee's own serious health condition.

One important termination note: employees cannot be terminated for reporting company violations of health or safety laws (whistleblower protection), for military service obligations, or for jury duty — in addition to all the protected class characteristics discussed throughout this section.

Today's Questions

1. An employee at a 22-person firm is laid off. They ask about continuing their health insurance. What law applies, and what does it require?
2. What is the ADEA, and what is the minimum employee threshold for it to apply?
3. A 60-person firm denies a male employee's request for parental leave after his child is born, arguing the policy only applies to mothers. What law does this violate?
4. An employee reports an OSHA violation to the government. The firm terminates them the next week, citing performance issues. What legal concept is potentially at play?

Next up: Business Development — Marketing Plan & Techniques

Answers from #09 — Employee Benefits, Evaluations & the AXP

1. What is an ESOP and its primary advantage beyond cash? → An Employee Stock Ownership Plan gives employees partial ownership in the firm through a company-managed trust. Beyond cash, it builds a sense of ownership, aligns employee and firm goals, and creates a long-term retention incentive through a vesting schedule — typically 10% per year over ten to fifteen years.
2. Why keep salary reviews separate from performance evaluations? → Salary depends on factors beyond individual performance — market rates, firm profitability, tenure, cost-of-living — so conflating the two creates confusion. An employee who performs well but gets no raise due to firm finances shouldn't walk away thinking the performance review was dishonest.
3. AXP supervisor vs. mentor? → The supervisor is a licensed architect at the intern's firm — required, formal, responsible for daily guidance, experience opportunities, and certifying experience reports. The mentor is voluntary, may be outside the firm, and provides broader professional perspective in a less structured relationship.
4. First-ever negative review + termination in same meeting — what practice failed? → Progressive performance management and documentation. Employees should have clear expectations, ongoing feedback, and a documented record of performance issues with the opportunity to improve before termination.

Additional Quick Recalls

From #05 — Office Regulations What is the difference between annual and biannual license renewal, and what do most states require to maintain a license?

Annual = once per year; biannual = once every two years. Most states require continuing education credits in addition to the renewal fee to maintain an active architectural license.

From #08 — Hiring, Contracts & At-Will Employment What three IRS factors determine whether a worker is an employee or an independent contractor?

Behavioral control (does the firm control how work is performed?), financial control (does the firm control the financial relationship — pay method, expense reimbursement, exclusivity?), and nature of the relationship (written contracts, benefits, permanency of the relationship). All three are weighed together.

From #07 — AIA Code of Ethics What does Canon V require regarding employee compensation and working conditions?

Members must provide associates and employees with suitable working conditions and fair compensation — this is a Rule of Conduct (mandatory). It also requires giving credit to others for their professional work, also a Rule of Conduct.