Donald TrumpWhile inauguration day is still several weeks away, employers are already wondering what is in store for them when Donald Trump takes office as the forty-fifth president. Throughout his campaign, Mr. Trump has set forth a number of promises and proposals that could have significant effects on American employers. It remains to be seen whether any of these proposals will become a reality, but the following are some of the top issues that employers will be watching.

Minimum Wage: On the campaign trial, Mr. Trump has said that he favors increasing the federal minimum wage to $10 per hour (up from the current $7.25), although such a move is not supported by Republicans in Congress. Even if the federal minimum wage increased to $10, it wouldn’t affect Massachusetts employers since the state minimum wage is already $10, and is set to increase to $11 per hour on January 1, 2017.

Overtime: The Department of Labor’s new overtime rule—which raises the FLSA’s minimum salary level for exempt employees to $47,476 per year—goes into effect on December 1, 2016, well before Mr. Trump takes office. However, Mr. Trump has said that he would like to see a “carve out” exempting small businesses from the new overtime rules. Also, lobbyists from the retail industry have indicated that they will try to persuade the Trump administration to eliminate the rule’s automatic triennial salary level adjustment.

Paid Leave for New Mothers: In an initiative spearheaded by his daughter, Ivanka—a working mother herself—Mr. Trump has promised to provide six weeks of paid maternity leave for new mothers. While the specifics have yet to be worked out, the plan calls for providing new mothers with temporary benefits through the unemployment insurance system rather than direct payments from employers. The plan does not appear to make any provision for new fathers, and it is unclear as to whether the proposed benefits will be available in cases of adoption and surrogacy.

Child Care: Mr. Trump has also promised to help workers deal with the high cost of child care. He has proposed an “above-the-line” deduction for child care costs on parents’ tax returns. He has also proposed the creation of tax-exempt dependent care savings accounts, into which parents could deposit up to $2,000 per year. Mr. Trump’s savings account proposal also calls for the government to provide a 50% match on the first $1,000 of contributions for qualifying low-income parents. Finally, Mr. Trump is calling for adding greater incentives, in the form of tax credits, for employers to offer on-site child care.

Healthcare: A centerpiece of Mr. Trump’s campaign has been his pledge to repeal and replace Obamacare. It is not clear, however, what Mr. Trump and the Republican-controlled Congress will replace it with. Some of the more popular aspects of the Affordable Care Act—such as protections for people with pre-existing conditions, and extended coverage for young adults under their parents’ plans—are likely to be retained, according to many pundits. Other changes will be hotly debated, and closely watched by employers, in the coming months.

Photo: Barry Richmond via Flickr (CC by SA 2.0)
Photo: Barry Richmond via Flickr (CC by SA 2.0)

Yesterday, with the approval of Question 4 by a 53.6% to 46.4% vote, Massachusetts joined a growing number of states that have legalized marijuana for recreational purposes. What does this change in the law mean for Massachusetts employers?

The new law, which goes into effect on December 15, 2016, allows Massachusetts residents over the age of 21 to possess up to one ounce of marijuana outside their home and up to ten ounces at home, and to grow a limited number of marijuana plants at home. The law also allows Massachusetts adults to give (but not sell) up to one ounce of marijuana to another adult. The law provides for the establishment of a Cannabis Control Commission to be responsible for regulating and licensing the commercial sale of marijuana, something that won’t begin until at least January 2018. It will still be illegal in Massachusetts to consume marijuana in public, to smoke it anywhere that smoking tobacco is prohibited, or to operate a motor vehicle under the influence of marijuana. The possession and sale of marijuana remains illegal under federal law.

For Massachusetts employers, however, this new statute doesn’t represent a significant change in the law. The text of the statute provides that employers are not required to permit or accommodate any of the conduct allowed by the statute in the workplace, and the law specifically provides that it does not affect employers’ authority to enact and enforce workplace policies restricting the consumption of marijuana by employees.

The use of marijuana for medical purposes is already legal in Massachusetts following a 2012 voter initiative. Many employers took that change in the law as an opportunity to establish or update policies and procedures relating to drugs in the workplace. For employers that don’t already have comprehensive drug and alcohol polices in place, now is a good time to address those issues with employment counsel to ensure that they comply with the law and achieve the employers’ objectives for a drug-free workplace.

Photo: Jason Lawrence via Flickr (CC by 2.0)
Photo: Jason Lawrence via Flickr (CC by 2.0)

Upon a motion for preliminary approval of the class-action settlement for $100 million, a federal court found that the settlement between Uber and drivers in two states was “not fair, adequate and reasonable” and denied approval.  It ordered the parties to confer about how they wanted to proceed.  A joint status report is due on September 8th and a status conference is scheduled with the court for September 15th.

The litigation involves current and former Uber Technologies Inc. drivers in Massachusetts and California who brought claims alleging that they were improperly classified as independent contractors rather than as employees.  The actions cover about 385,000 drivers.  After three years of contentious litigation, and on the eve of trial earlier this year, the parties reached a settlement of these two class-action lawsuits.  Among other terms, Uber agreed to pay $84 million plus an additional $16 million depending if the company went public.  Drivers would remain classified as independent contractors and Uber agreed to institute certain processes and procedures internally.  See my previous post about some of the settlement terms.

In his review of the proposed settlement, Judge Edward Chen of the U.S. District Court for the Northern District of California cited case law noting that “whether a settlement is fundamentally fair…is different from the question whether the settlement is perfect in the estimation of the reviewing court.”  But “when…the settlement takes place before formal class certification, settlement approval requires a ‘higher standard of fairness.'”  As the judge explained, in this case, “because the Settlement Agreement covers the claims of both certified class members and drivers who fall outside the class definition and thus have not been certified (for example, all Massachusetts drivers and the California drivers who drove for a third-party transportation company or under a corporate name), this Court must apply the more ‘exacting’ standard in determining whether this settlement is fair, adequate, and reasonable.”

Of primary concern to the court was that the $1 million allocated to California’s “Private Attorneys General Act” (PAGA) claim was modest.  PAGA is a law that allows private citizens to seek civil penalties for labor violations.  The judge noted that the settled PAGA portion was .1% of the potential $1 billion-plus statutory penalty against Uber claimed in the lawsuit.  “Here, the court cannot find that the PAGA settlement is fair and adequate in view of the purposes and policies of the statute.”  Essentially, the federal court found that the amount of the settlement allocation to the state was not large enough.

The court also ruled that the arbitration provision on appeal deserved further consideration. The appeal pending at the 9th Circuit Court of Appeals on an earlier decision by Judge Chen involves a determination as to whether certain arbitration agreements signed by drivers are enforceable.  Judge Chen recognized that if he were reversed on appeal, it would have a significant impact on the case as many of the drivers would need to proceed through arbitration.

Both sides have reported their disappointment in the ruling.  This ruling by the federal court, however, does not prevent the parties from reaching a new settlement which addresses the judge’s concerns, particularly as to the PAGA.

This case is being watched closely by those companies using on demand workers.  It is also a good reminder about the potential class-action liability employers face for the misclassification of a group of employees.   All employers should be reviewing their independent contractor classifications to make sure those persons are not really employees under an incorrect label.

Ernst & Young, LLP, a global professional services firm, made an effort to stem the tide of challenging and expensive class action litigation by including in their employment agreements a clause by which employees waive their rights to file work-related claims as a collective group.  The contracts require employees to arbitrate claims individually.  Ernst & Young followed the actions of a number of companies large and small which are increasingly requiring employees to sign these waivers.  Not only do such waivers purport to save employers a lot of money which would be used to defend class actions, they may very well dissuade employees from filing individual claims which might be costly and  difficult to pursue on their own, especially if relatively small amounts of money are at issue.

In ruling this week, the 9th Circuit Court of Appeals became the second federal appellate court to bolster the NLRB’s position that such waivers are unenforceable and violate the National Labor Relations Act (the “Act’).  The Act guarantees employees the right to engage in concerted activity which includes filing legal action against an employer as a group.  It is noteworthy that two Circuit Courts have gone the other way, ruling that such waivers are indeed enforceable.  This leads to the conclusion that this issue will end up before the United States Supreme Court for final resolution.

The case before the 9th circuit was brought by two former Ernst & Young employees who alleged on behalf of the purported class that the company failed to pay overtime in accordance with federal and state law.  The court did not rule that arbitration clauses in and of themselves were unenforceable as to individual claims, only that the employees were entitled to pursue a class action on behalf of themselves and other similarly situated employees.

The case is Morris v. Ernst& Young, 9th U.S. Circuit Court of Appeals, No. 12-16599.

Open to the PublicEffective October 1, 2016, “places of public accommodation” in Massachusetts are prohibited from discriminating against persons based on their gender identity.  Under this new anti-discrimination law signed by Governor Charlie Baker this summer, places of public accommodation must allow individuals to use or access gender-segregated areas such as bathrooms and locker rooms consistent with their gender identity.

A place of public accommodation is “any place, whether licensed or unlicensed, which is open to and accepts or solicits the patronage of the general public,” including:

  • Hotels, inns, motels, campgrounds, resorts;
  • Restaurants, bars, and other establishments serving food or drink;
  • Theaters, concert halls, sports stadiums, and other places of entertainment;
  • Auditoriums, convention centers, lecture halls, houses of worship, and other places of public gathering;
  • Sales and rental establishments, including stores, shopping centers, automobile rental agencies, and other retail establishments;
  • Service establishments, including laundromats, dry-cleaners, banks, barber shops, travel agents, gas stations, funeral parlors, employment agencies, and providers of professional services such as lawyers, doctors, dentists, accountants, and insurance agents;
  • Health care facilities, including dental and medical offices, pharmacies, clinics, hospitals, nursing homes, and other health facilities;
  • Transportation vehicles of all types and transportation stations, terminals, depots, platforms and facilities appurtenant thereto;
  • Museums, libraries, galleries, and other places of public display or collection;
  • Parks, zoos, amusement parks, and other places of recreation;
  • Child care centers, senior citizens centers, homeless shelters, food banks, adoption agencies, and other social service establishments;
  • Gymnasiums, health spas, bowling alleys, swimming pools, beaches, golf courses, and other places of exercises or recreation.

The Massachusetts Commission Against Discrimination (MCAD) oversees enforcement of this law.  It is authorized “to adopt, promulgate, amend, and rescind rules and regulations or to formulate policies and make recommendations to effectuate” its purposes.

Gender identity has been a protected category in the Commonwealth in employment, education, and housing since legislation in 2011.  Employers with six or more employees are prohibited from discriminating against transgender individuals in the workplace.   Following the adoption of that law, MCAD issued a fact sheet that advised employers that denying employees permission “to use the bathroom of one’s identifying gender could be viewed as discriminatory.”

The EEOC has also issued a fact sheet entitled “Bathroom Access Right for Transgender Employees Under Title VII of the Civil rights Act of 1964.”  Under that publication, the EEOC takes the position that discrimination based on transgender status is sex discrimination in violation of Title VII.  Thus, the EEOC would find the denial of equal access to a common restroom of the employee’s gender identity or requiring an employee to undergo or provide proof of surgery or other medical procedure as sex discrimination.  That publication also cites to OSHA’s A Guide to Restroom Access for Transgender Workers.  OSHA advises that the best restroom policies include options, which employees may choose from, and include:

  1. Single-occupancy gender-neutral (unisex) facilities; and
  2. Use of multiple-occupant, gender-neutral restroom facilities with lockable single occupant stalls.

OSHA has noted that, “Regardless of the physical layout of a worksite, all employers need to find solutions that are safe and convenient and respect transgender employees.”

Some businesses have expressed safety concerns about people accessing segregated facilities like bathrooms or locker rooms for improper reasons.  In the education setting, my colleague Linda Johnson has written about the U.S. Supreme Court’s decision on August 3, 2016 to put on hold a lower federal court ruling that a transgender male student be allowed to use the bathroom of his gender identity until the Supreme Court rules on the School Board’s petition for appeal.  My colleague Adam Hamel has also written about laws, and proposed laws, which seek to limit access to public restrooms based on the gender assigned to a person at birth and what those “bathroom bills” mean for employers.

Massachusetts employers who open their doors to the public should train their employees on this new law.  Employees need to understand these gender identify protections for members of the public accessing their facilities.  Companies should also review their non-discrimination policies to ensure that they are up-to-date.

Photo: Rafael Sato via Flickr (CC by 2.0)
Photo: Rafael Sato via Flickr (CC by 2.0)

On August 3, 2016, the US Supreme Court voted 5-3 to put on hold a lower federal court ruling that a transgender male student be allowed to use the bathroom of his gender identity.

The Virginia student, who was born a girl and now identifies as a male, had been granted the right to use the boys’ bathroom during the coming school year. The Supreme Court’s order on Wednesday now means that the student will not be able to use the restroom of his gender identity when school starts.

In April of this year, the 4th Circuit Court of Appeals had ruled that not allowing the student to use the bathroom of his gender identity was a violation of Title IX, a federal law which prohibits sex or gender discrimination at any educational institution that receives federal funds. The school board asked the US Supreme Court to block the ruling arguing that it deprived parents of the right to direct the education and upbringing of their children.

The Supreme Court will take this up in the fall but, in the meantime, it would appear that this young man cannot use the school restroom of his gender identity.

For further reading, click the links below:

“Supreme Court Blocks Transgender Bathroom Ruling” by Pete Williams

“US Supreme Court blocks transgender toilet ruling”

“SCOTUS: School can block transgender teen from boys’ room”

Co-written by: Jacqueline Botchman, a third year law student at the University of New Hampshire School of Law

The U.S. Equal Employment Opportunity Commission on Wednesday, July 13, 2016 publicized a revised proposal to expand pay data collection through the Employer Information Report (EEO-1). The proposed revision would require private employers and federal contractors with 100 or more employees to include pay and hour data by sex, race, and ethnicity as well as job category to their EEO-1 starting in 2017. Data collected will help the EEOC better understand the scope of the pay gap and focus enforcement resources on employers that are more likely to be out of compliance with federal laws.

The proposal, if accepted, will require employers to collect data on ten job categories by both gender and race and ethnicity.

  • The ten EEO-1 job categories are: Executive/Senior Level Officials and Managers; First/Mid-Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; Service Workers.
  • The seven race and ethnicity groups are: Hispanic or Latino; White (Not Hispanic or Latino); Black or African American (Not Hispanic or Latino); Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino); Asian (Not Hispanic or Latino); American Indian or Alaska Native (Not Hispanic or Latino); and Two or More Races (Not Hispanic or Latino).

The proposal’s goal is to combat pay discrimination by assisting the agencies in identifying possible pay discrimination and helping employers in promoting equal pay in their workplaces.

In the press release, EEOC Chair Jenny R. Yang stated, “More than 50 years after pay discrimination became illegal, it remains a persistent problem for too many Americans.” “Collecting pay data is a significant step forward in addressing discriminatory pay practices. This information will assist employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal anti-discrimination laws.”

U.S. Secretary of Labor Thomas E. Perez added, “Better data means better policy and less pay disparity. As much as the workplace has changed for the better in the last half century, there are important steps that we can and must take to ensure an end to employment discrimination.”

Employers must be careful as there are laws protecting employees from sharing information or complaining about pay. As of January 1, 2015, New Hampshire prohibits employers from retaliating against employees for disclosing their wages to another employee. (To view this statute, click here.) Additionally, an employer is prohibited from discharging or discriminating against an employee in retaliation for making a complaint, instituting a proceeding, or testifying in a proceeding concerning New Hampshire’s equal pay laws. Under these laws, an employer may not discriminate on the basis of sex in the payment of wages. An employer who retaliates against the employee could be charged with a misdemeanor. (To view this statute, click here.) Employers should train managers and supervisors on this law.

Members of the public have until August 15, 2016, to submit comments on the revised rule proposal to the United States Office of Management and Budget. The link to provide information to the EEOC is http://www.regulations.gov, which is the Federal eRulemaking Portal. Members can also submit a comment by e-mail or mail.

Want to learn more about our Labor and Employment Practice Group? Please contact us with any questions.

In a historic moment, yesterday, Governor Charlie Baker signed into law a comprehensive pay-equity bill aimed at eradicating the wage gap in Massachusetts. With the bill’s passage, Massachusetts has become the first state in the nation to prohibit employers from asking job applicants to provide a salary history during the interview process.

Supporters of the law argued that the practice of requesting a salary history has been shown to disadvantage women, who, on average, are paid less than men. The bill aims to eliminate discrimination in the payment of wages on the basis of gender, promote salary transparency, and encourage employers to review salaries to identify pay disparities within their organizations.

The new law is discussed in more detail here. The legislation goes into effect on July 1, 2018.

Employers have a new resource document to use when determining when and how to grant employees leave as a reasonable accommodation under the Americans with Disabilities Act.  The document, published by the EEOC, is entitled Employer-Provided Leave and the Americans with Disabilities Act.

The ADAstock-photo-disability-medical-message-background-health-care-poster-design-121187878 applies to employers with 15 or more employees.  It requires employers to provide disabled employees with reasonable accommodations that allow them to perform the essential functions of their jobs unless doing so would cause an undue hardship.  Reasonable accommodations may include providing employees with leave from work or modifying a company’s leave policy for an employee with a disability.

In issuing this technical assistance, the EEOC noted the increase in disability charges.  2015 hit a new high for disability discrimination claims brought before the agency.  The EEOC intends this resource document as a way to educate employers about leave as an accommodation.  For each category addressed, the EEOC provides examples or scenarios to assist employers.

As noted in its release of this document, “[o]ne troubling trend the EEOC has identified in ADA charges is the prevalence of employer policies that deny or unlawfully restrict the use of leave as a reasonable accommodation. These policies often serve as systemic barriers to the employment of workers with disabilities. They may cause many workers to be terminated who otherwise could have returned to work after obtaining needed leave without undue hardship to the employer. EEOC regulations already provide that reasonable accommodations may include leave, potentially including unpaid leave that exceeds a company’s normal leave allowances.” 

Commissioner Victoria Lipnic added, “Leave issues often present some of the toughest situations for employers and employees to deal with in our workplaces. This document provides needed one-stop guidance on how the EEOC approaches many of the common issues we see.”

The key topics addressed include:

  • Equal Access to Leave Under an Employer’s Leave Policy.  Employers must provide employees with access to leave “on the same basis as other similarly-situated employees.”  Policies may require all employees to provide documentation to substantiate the need for leave — like a doctor’s note.
  • Granting Leave as a Reasonable Accommodation.  Employers must provide employees with leave as a reasonable accommodation.  This includes providing unpaid leave to an employee with a disability so long as doing so does not create an undue hardship for the employer.  An employer is not required to provide paid leave beyond its paid leave policy.  Employers may also not penalize an employee for taking leave as a reasonable accommodation.
  • Communication after an Employee Requests Leave.  This is also referred to as the “interactive process.”  Employers must engage in the interactive process after a disabled employee requests leave, or additional leave, for a medical condition.  Employers must treat the request as a request for a reasonable accommodation.  As the EEOC explains, the interactive process is “a process designed to enable the employer to obtain relevant information to determine the feasibility of providing the leave as a reasonable accommodation without causing an undue hardship.”  At times, the employer may need more information so that it can understand the amount and type of leave, the need for leave, and whether there is a reasonable accommodation available other than leave.
  • Communication During Leave and Prior to Return to Work.  Employers should continue to engage in the interactive process if the disabled employee seeks additional leave due to a medical condition.  Employers may also ask for information from the employee as to the leave and the employee’s return to work.
  • Maximum Leave Policies.  Employers will be found in violation of the ADA if they enforce maximum leave policies.  While employers may have policies that set a maximum amount of leave the employer will allow, employers may need to grant exceptions to disabled employees and allow them additional leave beyond the maximum as a reasonable accommodation.
  • Return to Work and Reasonable Accommodation (Including Reassignment).  Employers will be found in violation of the ADA if they require employees to be 100% recovered or have no restrictions before they can return to work.  Employers should continue engaging in the interactive process if employees return to work with restrictions.  This allows discussion as to reasonable accommodations that will allow an employee to perform the essential functions of the job or consider reassignment to a vacant job position for which the employee is qualified.
  • Undue Hardship.   Employers may determine whether granting leave, or additional leave, is an undue hardship.  Factors that may be considered include impact on the employer’s operations and ability to serve customers, impact on co-workers and duties of job, whether intermittent leave is predictable or unpredictable, whether there is flexibility on when leave is taken, frequency of the leave, and amount and/or length of leave.

The EEOC’s resource document ends with citations to additional guidance on leave laws under the ADA, Family and Medical Leave Act (FMLA), and  worker’s compensation.

Companies should review their policies and procedures on leave so that they can make sure they are properly considering requests for leave by disabled employees.  Training on leave laws, leave requests, and the interactive process are also considered best practices.  Consultation with counsel is also advisable as properly considering leave or extended leave requests and documenting the interactive process may avoid liability.