The U.S. Supreme Court has brought more small employers under the coverage of the federal employment laws, based on its January decision in Walters v. Metropolitan Educational Enterprises, Inc. 72 FEP Cas. (BNA) 1211(1997). The court said that employers with at least 15 employees on their payrolls are subject to Title VII of the Civil Rights law. This method, as opposed to counting individuals as employees only on days they actually worked, means more employees of small employers can sue for discrimination. This distinction can make a difference in a case of employers who have some employees who work part-time or who are on leave. The court unanimously ruled that a company's list of workers includes anyone that has an "employment relationship" with it, whether or not that person is at work on a given day. Title VII, the most broad-based federal discrimination law, applies to employers with 15 or more employees each working day in each of 20 or more calendar weeks in the current or preceding calendar year. The payroll method of counting employees, which counts hourly or part-time workers who are on the employer's payroll during the time in question, already is used by the EEOC for determining coverage under the Age Discrimination in Employment Act and by the Labor Department for the Family & Medical Leave Act. The number of workers necessary for coverage varies based upon which law is applicable. Title VII and the ADA, which prohibit discrimination on the basis of race, sex, religion, national origin, and disability, applies to employers with 15 or more workers. The Age Discrimination Law, a separate law, applies to employers of 20 or more employees. The Family & Medical Leave Act of 1993 applies to employers of 50 or more employees within a 75-mile radius. The Occupational Safety & Health Act applies to employers of 2 or more, except that inspections are only conducted for employers of 10 or more employees (smaller employers are subject to investigations for fatalities or complaints). Employers should also be aware that in some cases, there are state laws that may also apply. Smaller employers are thus encouraged to keep careful records of employees to avoid unexpected regulation. Under the new ruling, under the payroll method, all one needs to know about a given employee for a given year is when the employee started or ended employment, since the person is counted as an employee for each working day after arrival and before departure.

This synopsis is intended as general information and not legal advice. Contact any of the attorneys at Wimberly & Lawson before relying on any information provided here.

This article was extracted from Wimberly & Lawson's Employment Law Bulletin, a monthly synopsis of developments in labor and employment law of interest to employers. The Employment Law Bulletin is distributed free of charge to clients and friends of the firm. If you would like to be put on our mailing list, please e-mail your name, title, organization, mailing address, e-mail address and telephone number to with "Subscribe: Employment Law Bulletin" in the subject line.

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LAST REVISED February 25, 1997