Last month, President Trump nominated Judge Neil Gorsuch from the United States Court of Appeals for the Tenth Circuit to fill the vacant seat left by the late Antonin Scalia on the United States Supreme Court. While Judge Gorsuch’s nomination has been met with both praise and criticism from a divided electorate, it may bring good news to employers wrestling with leave requests under federal disability laws. Continue Reading Supreme Court Nominee’s Record on Disability Leave Favorable to Employers
The winter season presents employers with many weather related issues ranging from obligations to keep outdoor areas safe to deciding whether to close the business for all or part of the day. Closing the business due to inclement weather raises pay issues – what pay are employees entitled to when the business closes? It depends, in part, whether the employee is considered exempt or non-exempt and whether, the employee is paid on a salary basis. Continue Reading Winter Weather and Employee Challenges – To Pay or Not to Pay?
On February 3, 2017, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced that it would extend the notice and comment period for its proposed enforcement guidelines on unlawful harassment under EEOC-enforced employment discrimination laws. The extension, which provides an additional forty (40) days for public input, gives in-house counsel and human resources professionals a good opportunity to review and familiarize themselves with the standards by which the EEOC is likely to evaluate harassment-based discrimination claims.
The EEOC’s proposed guidance (“Guidance”), released on January 10, 2017, follows up on the agency’s June 2016 Report of the Co-Chairs of the EEOC’s Select Task Force on the Study of Harassment in the Workplace (“June 2016 Report”). The June 2016 Report found that discriminatory harassment remains a pervasive problem in the American workforce, amounting to almost a third of all discrimination charges the EEOC received in FY 2015.
The Guidance outlines the agency’s position, with accompanying caselaw, on the following topics related to discriminatory harassment:
- Covered bases for discrimination. The Guidance identifies certain bases for harassment that, in the EEOC’s view, may amount to unlawful race, national origin, religious, sex, age, disability, or genetic information. Examples include black hairstyles (race discrimination), sexual orientation and/or gender identity (sex discrimination), and foreign accent or cultural diet (national origin discrimination).
- Establishing Causation. The Guidance sets forth several examples of harassment the EEOC considers to be sufficiently “connected” to a protected classification, such as: derogatory or hostile comments regarding a protected classification, whether or not the comments are directed against a specific employee; ostensibly neutral conduct that is related to an overall pattern of class-based harassment; harassment that begins or escalates shortly after learning of the complainant’s protected status; and higher productivity standards for women as compared to similarly situated male employees.
- “Severe” or “pervasive” harassment. In explaining when conduct is sufficiently severe and/or pervasive to amount to unlawful harassment, the Guidance identifies certain actions that could create a hostile work environment even if they occur only once: sexual assault, sexual touching of an intimate body part, physical violence or threats, use of symbols of violence or hatred, use of the “n-word” by a supervisor, use of animal imagery, and threats to deny job benefits for rejecting sexual advances.
- Subjectively and objectively hostile work environment. In its Guidance, the EEOC agrees that a harassment plaintiff must establish that s/he actually and reasonably perceived the conduct to be severe or pervasive. The EEOC disagrees, however, with the various U.S. Circuit Courts of Appeals that have required plaintiffs to separately establish that the harassing conduct was “unwelcome.” The Guidance also notes that the EEOC does not consider “prevailing workplace culture”—i.e., a longstanding workplace habit of engaging in relatively crude, coarse, or vulgar conduct—to excuse conduct that would otherwise amount to unlawful harassment.
- Relatedness of the harassing conduct to the work environment. The Guidance discusses when the EEOC will find conduct that occurs outside an employee’s regular place of work, or in a non-work-related context, as contributing to a hostile work environment for which the employer may be held responsible. Among other examples, the Guidance states the EEOC might consider conduct on a private social media platform as contributing to a hostile work environment if coworkers discussed the conduct in the workplace—even if the social media postings occurred during non-working time.
- Supervisor/coworker liability. The Guidance reiterates the four standards of harassment liability based on the relationship of the harasser to the employer:
- The employer’s proxy or alter ego (strict liability);
- The employer’s supervisor who engages in a “tangible” employment action against the victim (vicarious liability);
- The employer’s supervisor who engages in harassment but does not engage in a “tangible” employment action against the victim (vicarious liability, subject to the affirmative defense that the employer exercised reasonable care to prevent and correct harassment and the employee failed to take advantage of any preventive or corrective opportunities);
- Non-supervisors (liability if the employer negligently failed to prevent or correct the harassment).
- Systemic harassment and pattern-or-practice claims. The Guidance explains the theories of systematic or widespread discrimination, in which the employer subjects all employees of a protected group to the same discriminatory circumstances in the workplace as a whole.
- Best practices to prevent harassment. The Guidance reiterates the holdings from the EEOC’s July 2016 Report, including five principles for preventing and addressing harassment: committed and engaged leadership; consistent and demonstrated accountability; strong and comprehensive harassment policies; trusted and accessible complaint procedures; and regular, interactive training tailored to the audience and the organization.
Public comments originally were due by February 9, 2017, but the EEOC has now extended the deadline until March 21, 2017. The agency already has received approximately 70 comments from individuals and organizations. Comments are publicly posted, and may be submitted and viewed here.
Typically with an incoming administration there is a waiting period of sorts before changes in pending and certainly existing regulations kick in. The current administration, however, appears to be working at an accelerated pace toward upending the status quo. So, it appears time for a quick check-in on where we are and what to expect.
On Inauguration day, White House Chief of Staff Reince Priebus Jan. 20 instructed federal agencies to freeze all pending regulations, a move that seems to include a number of labor and employment initiatives that were in the works under the Obama administration.
This type of freeze is not unusual when a new president takes office. An action of this nature does not necessarily mean that significant changes are coming, but given candidate Trump’s campaign promise to roll back regulation on business, we can at least predict that the administration will be in no rush to move on the pending matters. Continue Reading Two Weeks Into the Trump Administration: Where are we with Labor and Employment Regulations?
On January 27, 2017, President Trump issued an Executive Order (EO) entitled “Protecting the Nation From Foreign Terrorist Entry Into the United States.” Among other things, the EO attempted to implement a travel ban whereby individuals from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen would be prohibited from entering the United States. Immediately, nationals from the named countries faced extraordinary hardship in entering the U.S. Individuals with valid non-immigrant visas, such as F-1 student visas, H-1B work visas and other individuals with valid visas were affected. Green card holders (immigrant visa holders) were also affected. These non-immigrants and immigrants are individuals who live in the United States, have family, jobs, homes, or other ties to the U.S., and who have gone through the lengthy and rigorous immigration process to obtain valid visas to enter the U.S. The EO extended to effect refugees who had been vetted by the U.S. government and granted refugee status by the U.S. to escape persecution. Continue Reading The Effects of President Trump’s Immigration Executive Order
Last week, a three-judge panel of the U.S. Court of Appeals for the First Circuit upheld the dismissal of a suit filed by construction-industry employers and their trade associations seeking to block enforcement of the Massachusetts Earned Sick Time Law in settings where collective bargaining agreements are in place.
The employers claimed that Section 301 of the Federal Labor-Management Relations Act, 29 U.S.C. § 185(a), preempts any claim that might be brought by an employee or the Massachusetts Attorney General under the Massachusetts Earned Sick Time Law. The employers argued that, since the Labor-Management Relations Act preempts state-law suits alleging violations of CBAs, it would bar claims brought under the Massachusetts Earned Sick Time Law in union settings because the determination of any such suit would require analysis and interpretation of the applicable CBA.
The trial court dismissed the employers’ suit, finding that it was not ripe because no earned sick time claim had yet been filed by any union employee or by the Massachusetts Attorney General on behalf of unionized workers. Therefore, the trial court found that the employers’ claims were “at best hypothetical.” On appeal, the First Circuit upheld the dismissal, agreeing that the employers’ request was not yet ripe because it was “too contingent,” and based on “as-yet-unknown features of as-yet-unspecified claims.”
While the First Circuit’s decision leaves open the question of whether the Labor-Management Relations Act preempts the Massachusetts Earned Sick Time Law, the opinion does provide some insight into how the issue might be resolved when it arises again. The First Circuit noted that the Labor-Management Relations Act does not necessarily preempt state laws that establish rights and obligations independent of a labor contract. Moreover, the fact that a court might need to refer to a CBA to determine an employee’s damages in a state-law claim (such as to calculate the employee’s hourly rate of pay), does not mean that the claim arises under the CBA and should therefore be preempted.
Employers with unionized workforces will want to keep a close eye on this issue as it continues to develop.
Annually, the New Hampshire Department of Labor issues a list of the top ten most frequent violations it sees in audits and claims filed before it. The list doesn’t change dramatically from year to year, but violations move up and down the list giving us a clue as to where the DOL may focus its enforcement efforts in 2017. So here we go….
- Failure to Secure and Maintain Worker’s Compensation Coverage for Misclassified Workers. The issue of employee misclassification has been a focus of both state and federal agencies for the past ten years. We have written many blog posts directing the attention of business to the issue of independent contractors and how difficult it is to meet the criteria set out by the various agencies who address it. This year, misclassifying workers and failing to provide worker’s compensation coverage for them is at the top of the list.
- Failure to Pay All Wages Due for Hours Worked. Employers must be very cognizant of making sure that their employees properly record their hours worked and that employees are paid for all time. Approximations, auto-deductions, and flat time entries are insufficient. Non-exempt employees must record, time in, out for lunch, back in and out for the day as well as time spent answering calls at night, stopping at the post office on the way home and checking email on weekends.
- Failure to Have a Written Safety Plan, Joint Loss Management Committee and Safety Summary Form on File. All employers with 15 or more employees must comply strictly with RSA 281-A:64 and the related regulations.
- Employing Illegal Aliens (Undocumented Workers). Although this issue is typically within the purview of the federal government, DOL inspectors will review I-9’s and supporting documentation during audits and cite employers for missing or incomplete forms.
- Failure to keep accurate records of all hours worked. Similar to number 2 above, the DOL frequently cites employers for failing to maintain accurate documentation of time work and then to follow the legal requirements for paying employees. Non-exempt employees are entitled to a 30 minute unpaid meal break after five continuous hours of work, and employers should make sure that this time is accurately recorded. Similarly, employers may not dock employee pay for breaks of less than 20 minutes.
- Failure to Provide Written Notice to Employees of Their Wage Rate, Pay Period, Pay Day and Notice of Fringe Benefits At the Time of Hire and At the Time of Any Change. With careful education, this one has dropped down the list, but is still a frequent issue, especially for businesses which come from out of state. All of this information must be provided to the employee in writing, and the document must be signed by the employee and kept on file. This is a very NH specific requirement. A good way to handle this is to provide an offer letter which the employee needs to sign or at least a pay status document which can be updated with changes such as annual raises.
- Youth Employment Violations. The DOL is not forgiving of youth employment violations. Employers must make sure proper parental consent certificates or letters should be on file before a minor begins work. There are also very specific rules about hours and days of work and restrictions on dangerous occupations with which businesses should become familiar if they are going to hire younger workers.
- Failure to Pay Two Hours Minimum Pay on Any Day an Employee Reports to Work at the Request of the Employer. This is sometimes referred to as “show up pay” or the
“snow day” or “not enough work day” rule. If an employee is scheduled for work and comes in, he or she must be paid a minimum of two hours even if the business closes down for the day or sends the employee home due to lack of work. The employer can certainly require the employee to stay and work for the two hours.
- Improper deductions from wages. Not following list of approved deductions. New Hampshire has a very specific list of what deductions employers can make from wages and very clear rules on how and when those deductions may be taken. Employers should carefully review RSA 275:48 and the attendant regulation. Although the approved list has been expanded, the deductions must still be voluntary and in most cases authorized in writing by the employee.
- Failure to Pay Minimum Wage for All Hours Worked. It is hard for most to imagine that this is still an issue. New Hampshire follows the federal minimum wage ($7.25) which is lower than the minimum wage of all of our neighboring states. The difficulty typically comes into play in very specific scenarios such as commissioned inside sales employees, tipped employees and others who are paid at special rates.
This time of year is a good time to do some risk avoidance planning. It might be a good time to schedule a wage and hour audit or self-audit for January or February, once the dust settles on the New Year celebrations.
A new Employment Eligibility Verification (Form I-9) was released on November 14, 2016. Under the Immigration Reform and Control Act of 1986 (IRCA), employers are required to verify the employment eligibility and identity of new employees by reviewing documents provided by the employee (such as passports, visas, licenses, etc.) and completing the Form I-9. This requirement applies to all new employees including U.S. citizens. Although the Form I-9 is currently two pages and may seem simple, it is difficult to comply with all I-9 requirements. Errors are frequently made when completing the form, which may lead to penalties and fines to the employer. The new form is intended to help reduce errors, and allow completion of the form on the USCIS website.
The on-line form now includes drop-down lists and calendars for filling in dates, on-screen instructions for each field, easy access to the full instructions, and an option to clear the form and start over. This should not be confused with the electronic I-9 used in the E-verify system.
Other changes include prompts to ensure information is entered correctly, the ability to enter multiple preparers and translators, a dedicated area for including additional information rather than having to add it in the margins, and a supplemental page for the preparer/translator.
The instructions have also been separated from the form, and include specific instructions for completing each field.
Although employers may continue to use either the old version (dated 3/8/2013) or the new version, they will be obligated to use the new version as of January 22, 2017.
Late in the afternoon on November 22, Judge Amos Mazzant of the U.S. District Court in Sherman, Texas issued an order granting an injunction which will at least delay and possibly derail the changes to the overtime rules under the Fair Labor Standards Act (FLSA), which are scheduled to go into effect on December 1.
Twenty-one states filed an emergency motion for a preliminary injunction in October to halt the rule. They claimed that the DOL exceeded its authority by raising the salary threshold too high and by providing for automatic adjustments to the threshold every three years.
The states’ case was consolidated last month with another lawsuit filed by the U.S. Chamber of Commerce and other business groups, which raised similar objections to the rule.
The court found, on a preliminary basis, that Congress intended for the classification of executive, administrative, and professional employees under the FLSA to be determined with regard to duties, and not solely based on a minimum salary level test. The court found that the new overtime rule, with its increase in the salary level test to $913 per week, will render millions of employees ineligible for the EAP exemption without regard to their job duties, in violation of Congress’s intent. The court likewise took issue with the new rule’s automatic triennial increase to the salary level test.
The court referred to the injunction as a means of maintaining the status quo while it took sufficient time to make a final determination on the issue of whether the USDOL had the authority to promulgate the rule as well as whether the rule is valid. Unfortunately, many businesses have already implemented the changes which would have been required for compliance.
Employers are undoubtedly asking what they should do now and what happens next. Some suggestions:
- If you procrastinated and have not made the changes or informed employees of your intended changes, do nothing for now. Time will tell whether the rule will remain, be modified or revert to the current rule.
- If you have made the changes or have notified employees of new classifications or new pay rates, stay the course. Taking away pay increases now will not only affect employee morale, it could lead to wage and hour complaints, especially if part of the reason for reclassification was that the employees did not meet the duties tests which were NOT changed by the new regulation.
- If during this process, you have discovered that you have misclassified employees based on the duties test, make the changes anyway. If employees should be non-exempt based on their duties, now is the best time to make it right.
As far as what the future holds, it is hard to say. The court could make a decision between now and December 1 or it might delay even longer. Once that decision is made, the issue could end up before the US Supreme Court, which still has only eight members. If nothing is done between now and January 20, the new administration could decide not to defend the rule promulgated by the DOL, an arm of the federal government.
If employers find themselves in a quandary our FLSA Task Force is available to assist. Contact us at FLSA@mclane.com.
On Wednesday, November 16, 2016, the U.S. District Court for the Northern District of Texas issued a permanent nationwide injunction striking down the DOL’s efforts to vastly expand the type of “persuader” activities subject to public reporting under the Labor-Management Reporting and Disclosure Act (LMRDA). See Nat’l Fed’n of Independent Bus. v. Perez, No. 5:16-cv-066 (N.D. Tex. Nov. 16, 2016). While the court’s decision was not unexpected in light of the preliminary injunction it already granted against the DOL’s highly controversial persuader rule, it nevertheless represents a significant victory for employers who rely on attorneys and consultants for advice in the face of union organizing campaigns.
Along with requiring employers to file public reports on payments made to unions and union officers, Section 203 of the LMRDA, 29 U.S.C. § 433, requires employers and consultants (including lawyers) to file reports on agreements or arrangements to perform activities with an object to persuade employees to exercise (or not exercise) their right to organize and bargain collectively, or to supply employers with information about employees’ activities in connection with a labor dispute.
Engaging in the above “persuader” activities triggers significant obligations under the LMRDA. Not only are both the consultant and the employer required to file reports on the persuader services, but the consultant is additionally required to report on all “labor relations advice or services” that the consultant performed for any employers during that same year—regardless of the purpose of the advice or services. These reports are public information and available online at the Department of Labor’s Office of Labor-Management Standards website. Violations of the LRMDA’s reporting obligations is punishable by criminal penalties, including fines up to $10,000 and imprisonment.
Section 203(c) of the LMRDA, however, contains an important exemption to these reporting obligations. Under the “advice exemption,” no reporting obligation is triggered when a consultant (such as an attorney) merely provides “advice” or materials to an employer that employer is free to accept or reject and when the consultant has no direct contact with the employer’s non-management employees. Typical examples of historically exempt “advice” have included the preparation of documents and speeches for employers to use during an organizing campaign, the development of personnel policies, and the training of managers and supervisors, among others.
Had the DOL’s new interpretation of the “advice” exemption gone into effect, the above definition of exempt “advice” would have been significantly narrowed. Under the DOL’s new persuader rule, certain advisory activities would have been reportable if they had a direct or indirect object to affect an employee’s decisions regarding representation or bargaining rights—even if the consultant (such as an attorney) had no direct contact with employees. Consultants (including attorneys) who drafted speeches or written materials for the employer to present to employees, conducted seminars for supervisors, planned employee group meetings, or developed personnel policies (such as employee handbooks) would have engaged in reportable persuader activity under the DOL’s new rule if they did so with an object to persuade employees regarding representation or bargaining rights—subjecting them to the broad reporting obligations (and criminal penalties for failing to comply) described above.
The new interpretation of the “advice” exemption was set to apply to all arrangements and payments made on or after July 1, 2016. On June 27, 2016, however, the Northern District of Texas issued a nationwide preliminary injunction against the new rule. The court held that the plaintiffs were likely to succeed in showing that the DOL’s revised interpretation of the “advice” exemption contradicted the LMRDA’s plain language, was arbitrary and capricious, was unconstitutionally vague, imposed an undue burden on employers’ First Amendment right to hire and consult an attorney, and violated the Regulatory Flexibility Act. The DOL appealed the order (see Nat’l Fed’n of Indep. Bus., et al. v. Perez, et al., No. 16-11315 (5th Cir. Aug. 29, 2016)), arguing that its new interpretation of the “advice” exemption was a permissible exercise of its regulatory authority and consistent with the First Amendment, and that nationwide relief was inappropriate in light of other similar suits pending in Minnesota and Arkansas.
The court’s November 16, 2016 order issuing a permanent, nationwide injunction against the rule offered no additional analysis, instead referring to the parties’ briefing and its previous preliminary injunction order. While the DOL’s appeal of the preliminary injunction will likely become moot once the district court enters its final judgment in the case, it remains to be seen whether the Department of Labor will appeal the permanent injunction.