Frost Brown Todd LLC

1

GENERAL PRINCIPLES

Forums For Adjudicating Employment Disputes

Parties adjudicate employment disputes in state and federal court and before various federal, state, and local agencies.


The Main Sources Of Employment Law

The main sources of employment law are court decisions, federal and state statutes and regulations, and local ordinances. The federal statutes include, but are not necessarily limited to, Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), the Fair Labour Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Pregnant Workers Fairness Act (PWFA). Kentucky statutes include, but are not limited to, the Kentucky Civil Rights Act found in KRS Chapter 344, the Kentucky Pregnant Workers Act, and Kentucky wage and hour laws found in KRS Chapter 337.


National Law And Employees Working For Foreign Companies

Both federal and state law apply to employees working for foreign companies in Kentucky.


National Law And Employees Of National Companies Working In Another Jurisdiction

Title VII of the Civil Rights Act of 1964 (federal), the Age Discrimination in Employment Act (federal), and the Americans with Disabilities Act (federal) apply to United States (U.S.) citizens working in another jurisdiction for American or American-controlled employers.

The Kentucky Civil Rights Act applies only to Kentucky employers that employ eight (8) or more employees in the state (15 or more employees for purposes of disability discrimination laws).


Data privacy

Kentucky private sector, non-union employees have little or no expectation of privacy in the workplace regarding the use of the employer’s computers, communication devices, and voicemail system. It is recommended that employees receive written notification of that lack of any expectation of privacy. Kentucky is a one-party consent state for purposes of audio recording.

2

HIRING THE EMPLOYEE

Legal Requirements As To The Form Of Agreement

Unless the parties agree otherwise, U.S. and Kentucky employees are employed at will and not subject to a contract of employment. However, there are federal and state laws governing certain terms and conditions of employment.


Mandatory Requirements
  • Trial Period

    • Employers do not have to provide new employees with a trial period.

  • Hours Of Work

    • State and federal law both provide that non-exempt employees must be paid one (1) and one (1) half times their regular rate of pay for all hours worked in excess of 40 hours in a single work week. Kentucky law requires employers who permit an employee to work seven (7) consecutive days in a work week to pay the employee one (1) and one (1) half times their regular rate of pay for time worked on the seventh day if the employee works more than 40 hours during that week. There are several exceptions to this seventh day overtime rule. For example, it does not apply to officers and supervisors who primarily direct and supervise other employees.

  • Special Rules For Part-time Work

    • There are no special rules regarding part-time work in Kentucky.

  • Earnings

    • The current state and federal minimum wage is US$7.25 per hour. The minimum wage is reviewed periodically by Congress but is not reviewed on an annual basis. The minimum wage applies to all “non-exempt” employees of covered employers regardless of their age.

  • Holidays/Rest Periods

    • Only public employers are required to provide holidays in Kentucky, except that no person can be compelled to work on Labour Day, designated by statute as the first Monday in September. Additionally, a Kentucky statute prohibits employers from requiring any employee to work without a rest period of at least 10 minutes during each four (4) hours worked, except those employees who are covered under the Federal Railway Labour Act. The law in Kentucky also requires employers to provide a reasonable lunch period between the third and fifth hour of each eight (8) hour shift.

    Under both federal law and the Kentucky Pregnant Workers Act, an employer must provide breaks to employees who are breastfeeding and need to express breast milk at work. Employers must provide a private space that is not a bathroom for this purpose.

    Paid time off from work is a matter of policy for employers in Kentucky. Some employers may be required to provide employees with time off/leave pursuant to the Family and Medical Leave Act (FMLA), which is a federal statute.

    FMLA leave is generally unpaid. Employees may be able to take paid FMLA leave when they have earned or accrued paid time off – e.g. vacation or sick days, and then substitute paid time off for otherwise unpaid FMLA leave.

    FMLA leave provides eligible employees of covered employers with up to 12 weeks of job protected leave in any 12-month period. The leave must be for a specific reason, which includes caring for a new-born, placing a child for adoption, a serious health condition of the employee, and/or to care for a family member with a serious health condition.

  • Minimum/Maximum Age

    • State and federal law place restrictions on employing individuals under 18 years old.

  • Illness/Disability

    • The federal Family and Medical Leave Act requires covered employers to provide eligible employees with up to 12 weeks of unpaid, job-protected leave to care for their own serious health condition or to care for a spouse, child, or parent with a serious health condition.

  • Location Of Work/Mobility

    • The Kentucky Civil Rights Act and/or the Americans with Disabilities Act may require an employer to provide “reasonable accommodation” to assist an employee with mobility issues. The Kentucky Pregnant Workers Act, which became effective in June 2019, may also require an employer to provide “reasonable accommodation” to an employee due to pregnancy, childbirth, or a related medical condition.

  • Pension Plans

    • Employers do not have to provide employees with a pension plan.

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)

    • The federal Family and Medical Leave Act requires covered employers to provide eligible employees with up to 12 weeks of unpaid job-protected leave because of the birth of a child and to care for the new-born child or because of the placement of a child with the employee for adoption or foster care. Kentucky law also provides for up to six (6) weeks of leave upon adoption of a child under the age of ten (10).

    The Kentucky Pregnant Workers Act, which became effective on 27 June 2019, makes it unlawful for an employer with 15 or more employees in the state to discriminate against an employee due to pregnancy, childbirth, or a related medical condition. In addition, it is unlawful for an employer to fail to make reasonable accommodations for any employee with limitations related to pregnancy, childbirth, or a related medical condition who requests an accommodation, and those accommodations may include, but are not limited to, unpaid time off to recover from childbirth absent undue hardship to the business. Other forms of reasonable accommodation under the Act may include but are not limited to: (i) more frequent or longer breaks; (ii) acquisition or modification of equipment; (iii) appropriate seating; (iv) temporary transfer to a less strenuous or less hazardous position; (v) job restructuring; (vi) light duty; (vii) modified work schedule; or (viii) a private space that is not a bathroom for expressing breast milk.

  • Compulsory Terms

    • There are no compulsory terms that an employee or an employer is subject to.

  • Non-Compulsory Terms

    • Parties are free to negotiate non-compulsory terms.


Types Of Agreement

There are no general rules applicable except in certain circumstances.


Secrecy/Confidentiality

Kentucky state law governs the protection of trade secrets. Employers and employees may enter private agreements to protect other confidential information.


Ownership of Inventions/Other Intellectual Property (IP) Rights

Generally, employers own IP created by their employees as part of their employment or created using the employer’s information, equipment, or materials.


Pre-Employment Considerations

It is unlawful to discriminate against applicants for employment on the basis of race, religion, colour, gender, sexual orientation, disability, national origin, ancestry, age (40 and over), status as a veteran, pregnancy, childbirth or related medical condition, and status as a smoker or non-smoker. In many counties and cities, it is also unlawful to discriminate against applicants on the basis of gender identity. Employers must not ask questions on job applications that might reveal protected characteristics. Employers should also train hiring managers and supervisors to avoid asking questions in interviews that might reveal an individual’s protected class, such as “when did you graduate high school?”, or “tell me about your community involvement - are you involved with any charitable organisations or churches?”

Many employers may also make job offers contingent upon passing a drug test and/or criminal background check. If an employer uses a third party to conduct these background checks, it may have to comply with the federal Fair Credit Reporting Act and provide certain notices to applicants of their rights under the FCRA.


Hiring Non-Nationals

Employers should be aware that foreign nationals must be authorised to work in the U.S. U.S. laws, rules, and regulations governing the work authorisation of foreign nationals are complex. Basically, U.S. Citizenship and Immigration Services (USCIS) regulations establish three (3) classes of foreign nationals who are allowed to work in the U.S.: (i) aliens authorised to work incident to their immigration status; (ii) aliens who are permitted to work for a specific employer incident to their status; and (iii) aliens who must apply for and obtain permission from the USCIS in order to accept employment in the U.S.


Hiring Specified Categories Of Individuals

Federal contractors have certain affirmative action obligations under Executive Order 11246.


Outsourcing And/Or Sub-Contracting/Temporary Agency Work

Under certain situations, independent contractors and individuals retained by a company through a temporary employment agency or leasing company may be considered “employees” of the company for the purposes of employment laws.

3

MAINTAINING THE EMPLOYEE RELATIONSHIP

Changes To The Contract

Contract principles apply to contract changes made by either party. Changes typically require additional consideration (other than simply continuation of the “at-will” employment relationship) and the employee’s consent. Such consent may be express (by the employee agreeing to the change) or implied (by the employee continuing to work for the employer without protest for an appropriate period of time after being made aware of the change).


Change In Ownership Of The Business

There are no general rules pertaining to changes in business ownership. Most issues, including transfer or termination of employees, are subject to negotiation and private agreement between the seller and buyer. However, if the employees are organised or represented by a union, the successor owner may be required to bargain with the employees’ union. In addition, the Family and Medical Leave Act – a federal law – may require the successor employer to credit employees’ length of employment with the prior employer when determining employees’ eligibility for FMLA leave.

Employees do not have an automatic right to transfer to the new employer. Whether or not the employees transfer to the new employer is subject to a private agreement/negotiation between the seller and the buyer. If employees are not transferred, they are not entitled to any compensation but may be eligible for state unemployment insurance benefits.


Social Security Contributions

Both the employee and employer are required to contribute to social security.


Accidents At Work

Federal Occupational Safety and Health Act of 1970 (OSHA) and Kentucky Revised Statutes Chapter 338 govern workplace health and safety. In most cases, state workers’ compensation law prevents employees from suing employers directly for work-related injuries.


Discipline And Grievance

There are no laws mandating a discipline or grievance process for private sector employees who are not part of a collective bargaining unit.


Harassment/Discrimination/Equal pay

Federal and state law prohibit employers from discriminating in terms and conditions of employment based on race, religion, national origin, colour, gender, sexual orientation, age (40 and over), disability, or ancestry. The prohibition against age discrimination only applies to those who are aged 40 or older. Federal and state law also prohibit discrimination against individuals with physical or mental disabilities.

The federal Pregnancy Discrimination Act amended the Title VII Civil Rights Act of 1964 to prohibit discrimination on the basis of pregnancy, childbirth, or related medical conditions. The federal Pregnant Workers Fairness Act became effective on 27 June 2023 and provides further protection for pregnant employees, requiring employers to provide reasonable accommodations to an employee’s known limitations related to pregnancy, childbirth, or related medical conditions unless the accommodation will cause the employer an undue hardship.

The Kentucky Pregnant Workers Act (KPWA) became effective on 27 June 2019, and provides additional protection for employees due to pregnancy, childbirth, and related medical conditions. It applies to employers with 15 or more employees in the state and prohibits discrimination on the basis of pregnancy, childbirth, and related medical conditions, including breastfeeding. The KPWA also requires employers to provide reasonable accommodations to employees who have limitations due to these conditions absent undue hardship to the business. Reasonable accommodations may include but are not limited to: (i) more frequent or longer breaks; (ii) time off to recover from childbirth; (iii) acquisition or modification of equipment; (iv) appropriate seating; (v) temporary transfer to a less strenuous or less hazardous position; (vi) job restructuring; (vii) light duty; (viii) modified work schedule; or (ix) a private space that is not a bathroom for expressing breast milk.

Kentucky law limits the hiring of employees under the age of 18. Kentucky also prohibits discrimination “because the individual is a smoker or non-smoker, as long as the person complies with any workplace policy concerning smoking”.


Compulsory Training Obligations

There are no compulsory training obligations imposed on the employer or the employee.


Offsetting Earnings

Kentucky law prohibits withholding “any part of the wage agreed upon” with certain limited exceptions “when a deduction is expressly authorised in writing by the employee”.


Payments For Maternity And Disability Leave

Employees are not entitled to payment for maternity or disability leave.

The Kentucky Pregnant Workers Act became effective on 27 June 2019. It prohibits discrimination on the basis of pregnancy, childbirth, and related medical conditions. The KPWA also requires employers to provide reasonable accommodations to employees with limitation due to pregnancy, childbirth, and related medical conditions, absent undue hardship. Reasonable accommodations may include but are not limited to: (i) more frequent or longer breaks; (ii) time off to recover from childbirth; (iii) acquisition or modification of equipment; (iv) appropriate seating; (v) temporary transfer to a less strenuous or less hazardous position; (vi) job restructuring; (vii) light duty; (viii) modified work schedule; or (ix) a private space that is not a bathroom for expressing breast milk.


Compulsory Insurance

Kentucky law does not require employers to provide health insurance, although employers may be obligated to provide insurance under the federal Affordable Care Act in some circumstances. Kentucky law, however, requires employers to provide worker’s compensation insurance for work related injuries and unemployment insurance.


Absence For Military Or Public Service Duties

The federal Uniformed Services Employment and Reemployment Act governs military leave and reinstatement following such leave. Kentucky statutes also offer employment protections to members of the Kentucky National Guard.


Works Councils or Trade Unions

Employees have rights for collective bargaining and “acting in concert” under the National Labour Relations Act (NLRA), a federal law.


Employees’ Right To Strike

Employees have a right to strike. See discussion of collective bargaining rights in U.S. Federal law section.


Employees On Strike

See discussion of collective bargaining rights in U.S. Federal law section.


Employers’ Responsibility For Actions Of Their Employees

Employers are responsible to third parties for the actions of their employees except when the employee is acting outside the course of their employment.

4

FIRING THE EMPLOYEE

Note that the following questions assume the existence of an employment contract. In the U.S., most employees are not subject to a contract, but are “at-will”. The responses address “at-will” employees. To the extent that an employee has a contract with the employer, the agreement would be covered by contract law. The termination of employees who are part of a collective bargaining unit is typically covered by the Collective Bargaining Agreement (CBA).

Procedures For Terminating the Agreement

An employer who engages in a “mass layoff” or “plant closing” must follow the procedures in the federal Worker Adjustment and Retraining Notification Act. These procedures generally require advance notice of the layoff.


Instant Dismissal

Employers and employees may terminate their “at-will” employment relationship at any time and for any reason, but not a discriminatory reason. If an employee is a member of a collective bargaining unit, the CBA would govern the termination of the employee’s employment.


Employee's Resignation

The employment relationship may be terminated by employee resignation.


Termination On Notice

Generally, no minimum notice period is required. However, advance notice may be required in cases of mass layoffs or plant closings. See above “Procedures for Terminating the Agreement”.


Termination By Reason Of The Employee's Age

Employers cannot terminate employees because of their age (40 and older) except in very limited cases where mandatory retirement is required by law.


Automatic Termination In Cases Of Force Majeure

An employment relationship may be terminated automatically in cases of force majeure.


Collective Dismissals

An employer who engages in a “mass layoff” or “plant closing” must follow the procedures in the federal Worker Adjustment and Retraining Notification Act. These procedures generally require advance notice of the layoff and apply only to employers with 100 or more employees.


Termination By Parties’ Agreement

The employment relationship may be terminated by agreement of the parties.


Directors Or Other Senior Officers

No special rules exist for the termination of directors or senior officers.


Special Rules For Categories Of Employee

The Collective Bargaining Agreement controls termination of employees who are part of the collective bargaining unit.


Specific Rules For Companies in Financial Difficulties

The Worker Adjustment and Retraining Notification Act protects workers by requiring advance notice of covered plant closings and covered mass layoffs. There are exceptions, including an exception for unforeseeable business circumstances and for a faltering business.


Restricting Future Activities

Contractual provisions restricting future activities must be reasonable in scope, geographic limitation, and time.


Whistleblower Laws

KRS 61.101 et seq. protects state employees who report a violation of any state law.

KRS Chapter 338 protects both private and public employees who report unsafe working conditions.

There are also several federal laws that provide whistle-blower protection for employees who report wrongdoing by their employers. The federal False Claims Act prohibits retaliation against an employee who files a qui tam action asserting that their employer has defrauded the federal government. The federal Sarbanes-Oxley Act prohibits retaliation against an employee who reports their employer for securities, shareholder, and other types of fraud.

Federal and state anti-discrimination laws also prohibit retaliation against employees who file a Charge of Discrimination with an administrative agency or otherwise engage in protected activity under the applicable civil rights statutes.


Special Rules For Garden Leave

There are no special rules for garden leave. Non-exempt employees do not have to be paid when they do not work. Exempt employees generally have to be paid their full weekly salary for any week in which they perform any work with certain limited exceptions, including exceptions for the initial and final weeks of employment.


Severance Payments

There are no federal laws requiring severance payments. Kentucky requires payment of all accrued wages upon the end of the employment relationship. Whether or when accrued, unused vacation or paid time off is accrued and therefore owed at termination and may be defined by the employer in its written policies.


Special Tax Provisions And Severance Payments

No special tax provisions exist regarding severance payments.


Allowances Payable To Employees After Termination

Employers must contribute to unemployment insurance which is payable to terminated employees eligible under the provisions of the state statute.


Time Limits For Claims Following Termination

State: Employees must file a charge alleging discrimination with the Kentucky Commission on Human Rights within 180 days after the unlawful discriminatory practices alleged in the charge were committed. Employees must file a lawsuit alleging violation of the Kentucky Civil Rights Act within five (5) years after the unlawful discriminatory practices alleged in the suit were committed. Employees are required to choose one (1) venue or the other; the election of a remedy in one (1) forum precludes use of the other.

Federal: Employees must file a charge alleging discrimination with the Equal Employment Opportunity Commission (EEOC) within 300 days after the unlawful discriminatory practices alleged in the charge were committed. The employee’s right to sue in federal court is contingent upon filing a charge of discrimination with the EEOC. Suit in federal court alleging a violation of Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act and/or the Age Discrimination in Employment Act must be filed within 90 days of receipt of the EEOC’s Dismissal and Notice of Rights. Suits for unpaid wages or alleging a violation of the federal Equal Pay Act (EPA) must be filed in federal or state court within two (2) years (three (3) years for wilful violations) of the alleged underpayment.

5

GENERAL

Specific Matters Which Are Important Or Unique To This Jurisdiction

While the Kentucky Civil Rights Act does not specifically mention sexual orientation or gender identity as protected classes for employment discrimination purposes, many Kentucky counties and municipalities recognise such claims by local ordinance. The U.S. Supreme Court has also recently recognised sexual orientation as being a protected class or category under federal law. Also, see the information on “at-will” employment in the U.S. Federal section. It is unlawful for employers in Kentucky to discriminate against an applicant or employee because he/she is a smoker or non-smoker. Employees must comply with the employer’s workplace smoking policy. Employers cannot regulate or prohibit employees from using tobacco while off duty.

Kentucky law also makes it unlawful for employers to discriminate or retaliate against employees who file or pursue claims for worker’s compensation benefits.



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Kathleen B. Wright
Frost Brown Todd LLC
United States


Disclaimer:

© 2024, Frost Brown Todd LLC. All rights reserved by Frost Brown Todd LLC as author and the owner of the copyright in this chapter. Frost Brown Todd LLC has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: February 2024