Agency Law and Employment Standards: Key Principles

Agency Relationships and Legal Criteria

The third party must believe they are dealing with the agent of the principal. Operation of law involves family relationships and emergency circumstances.

Agent Duties to the Principal

• Performance: The agent must use diligence and skill in performing their work.
• Notification: The agent must notify the principal of all relevant matters.
• Loyalty: The agent must act solely for the benefit of the principal.
• Obedience: The agent must follow all lawful and clearly stated instructions; deviation constitutes a violation.
• Accounting: The agent must keep and provide an accounting of all funds and property received.

Principal Duties to the Agent

• Compensation
• Reimbursement and Indemnification
• Cooperation
• Safe working conditions

Authority and Liability

Authority can be either expressed or implied:

• Expressed: Clearly stated, direct, and definitive; can be transferred in writing or orally.
• Implied: Conferred by custom (e.g., a real estate agent).

Liability in the agency relationship depends on disclosure:

• Disclosed: The principal's identity is known by the third party.
• Partially Disclosed: The principal is not known by the third party, but the agent is aware of the principal's identity.

Federal Labor Standards and Benefits

Fair Labor Standards Act (FLSA)

The FLSA prohibits child labor, establishes the federal minimum wage, and dictates overtime rules. Exemptions include executives, administrative and professional staff, outside salespersons, and computer programmers.

Social Security and Medicare

• Retirement: Old age retirement benefits begin at age 62.
• FICA: Survivor benefits can include disability insurance.
• Medicare: A federal health insurance program administered by the Social Security Administration for those 65 or older or disabled. Asset limits generally include a house, a car, and $2,000.

Workers' Compensation and Disability

Misrepresentation: If an employee knowingly misrepresents a material fact to secure benefits, it is considered fraud. Compensation requires a work-related event; employers are not liable for pre-existing injuries unless the work environment exacerbates the condition.

Levels of Disability

• Permanent Total
• Temporary Total
• Permanent Partial
• Supplemental Earnings Benefits

Death Benefits: An employee is responsible for $7,500, with the remainder given to heirs. Children who are mentally or physically disabled may receive benefits for their entire life.