On October 31, 2018, roughly one year after the beginning of the #MeToo movement, the U.S. Equal Employment Opportunity Commission (EEOC) held a public meeting at agency headquarters in Washington, D.C. entitled “Revamping Workplace Culture to Prevent Harassment.” The purpose of this meeting was to hear various approaches that different industries are implementing to prevent harassment and provide employers the skills, resources, and knowledge to respond workplace harassment.
Acting Chair Victoria Lipnic began the meeting by noting that the nation is at the apex of a cultural awakening that the EEOC has been tracking for years. Since the #MeToo movement went viral, hits on the EEOC website Continue reading
On October 17, 2018, the Trump Administration released its Unified Agenda of Regulatory and Deregulatory Actions (“Agenda”). Reports such as these, usually issued twice a year, set forth each federal agency’s forecast of its anticipated actions and rulemaking priorities for the next six-month period. It also provides estimated timelines for completion. This regulatory to-do list provides insight into the administration’s upcoming priorities. The current Agenda emphasizes the Trump Administration’s efforts to deregulate industry, but also includes several regulatory items of importance to employers.
Here is a summary, broken down by department, of the most significant employment-related items addressed in the Agenda.
Department of Labor
Wage and Hour Division
Joint Employment. The Obama administration took a much broader view of “joint employment” – situations in which a worker may be considered an employee of two or more separate employers. Following the lead of the NLRB, which last month issued its own proposed rule re-tightening the standard for joint employment, the DOL announced its intention to “clarify the contours of the joint employment relationship to assist the regulated community in complying with the Fair Labor Standards Act.” A notice of proposed rulemaking is scheduled to issue as early as December 2018 and will hopefully modernize the method for determining joint employment in today’s workplace.
White Collar Overtime Exemption. The DOL has listed as a priority its long-awaited rule to update the salary level for the exemption of executive, administrative and professional employees under the FLSA (the so-called white-collar exemption). It is expected to raise the threshold exemption for such employees from the historical level under the FLSA ($23,660 annually), but not as high as the former rule adopted by the Obama administration, which would have more than doubled the minimum salary level but was enjoined by a court. The timeframe is somewhat unclear and has been pushed back twice already. The Agenda states it is now expected in March 2019.
Regular Rate. Under the FLSA, employers must pay covered employees time and a half their regular rate of pay for hours worked in excess of forty hours in a workweek. The DOL has stated its intent to amend its regulations “to clarify, update and define the regular rate requirements under the FLSA.” The new proposal is expected in December 2018.
Tip Regulations. In March of 2018, the omnibus budget bill amended the FLSA and addressed rules affecting tipped employees and so-called “tip pooling.” The DOL is expected to issue a proposed rule this month to clarify and address the impact of the 2018 FLSA amendments.
Occupational Safety and Health Administration
Tracking of Workplace Injuries and Illnesses. OSHA proposed to amend its recordkeeping regulation to remove the requirement to electronically submit to OSHA information from OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and OSHA Form 301 (Injury and Illness Incident Report) for establishments with 250 or more employees which are required to routinely keep injury and illness records. Under the proposed rule, these establishments would be required to electronically submit only information from the OSHA Form 300A (Summary of Work-Related Injuries and Illnesses). OSHA also proposed to add the Employer Identification Number (EIN) to the data collection to increase the likelihood that the Bureau of Labor Statistics (BLS) would be able to match OSHA-collected data to BLS Survey of Occupational Injury and Illness (SOII) data and potentially reduce the burden on employers who are required to report injury and illness data both to OSHA (for the electronic recordkeeping requirement) and to BLS. OSHA is reviewing comments and is expected to publish a final rule in June 2019. Many entities submitted comments regarding the anti-retaliation provisions of the rule, but it is not known whether OSHA will make further changes to that aspect of the rule. Meanwhile, OSHA issued a memorandum on October 11, 2018 with the stated intent of clarifying that the rule does not prohibit workplace safety incentive programs or post-incident drug testing. Action taken under a safety incentive program or post-incident drug testing policy would only violate 29 C.F.R. § 1904.35(b)(1)(iv) if the employer took the action to penalize an employee for reporting a work-related injury or illness rather than for the legitimate purpose of promoting workplace safety and health. This rulemaking has been moved from the Proposed Rule Stage to the Final Rule Stage. Continue reading
Join Conn Maciel Carey Labor & Employment Practice Group partner, Mark Trapp, on November 14, 2018 when he presents an interactive workshop to help unionized employers understand and analyze what is often the most critical challenge facing their business – multiemployer pension withdrawal liability. Attendees will learn innovative and aggressive techniques and strategies to address this issue and proactively secure the future of their company.
This workshop will also discuss the current legislative environment for multiemployer pension plans and issues, particularly the work of the Joint Select Committee on Solvency of Multiemployer Pension Plans, charged with preparing a report and recommended legislative language by November 30 to “significantly improve the solvency” of multiemployer pension plans and the Pension Benefit Guaranty Corporation.
Workshop attendees will:
Gain a broad understanding of the challenges facing employers who participate in a multiemployer pension plan
Discover strategies for assessing and minimizing their withdrawal liability risks through collective bargaining and business planning
Examine the status and possibility of legislative relief from the Joint Select Committee on Solvency of Multiemployer Pension Plans
Click here to register.
On Thursday, October 25, 2018, at 1 pm EDT, join Kara M. Maciel and Andrew J. Sommer of Conn Maciel Carey’s national Labor & Employment Practice Group for a complimentary webinar: “A Business Primer on Disability Access Laws: Preventive Tools and Defense Strategies“
Businesses continue to be plagued by litigation under the Americans with Disabilities, Title III (ADA) over alleged access barriers. Lawsuits against hotels and retailers, among other public accommodations, appear to be on the rise with a disproportionate share in California.
This webinar will provide an overview of ADA, Title III standards as they apply to construction existing before the enactment of the ADA in 1992 as well as to subsequent new construction and alterations. The webinar will also address Continue reading
It has been about a year since the #MeToo movement went viral, spreading greater awareness about sexual misconduct and harassment, and, more generally, the role of women, in the workplace. So, where are we now, and has anything changed? Was it just an awareness movement? Or, have things actually started to shift in the legal landscape with respect to the way employers are required to handle sexual misconduct and harassment? And what about with the way women are represented at work? Even if #MeToo may have started out as an awareness movement, states like New York and California are implementing changes in the law that are now imposing, or will soon impose, new requirements on employers, in hopes of giving #MeToo a significant, lasting effect. So, what should employers in New York and California do now? And, given that these states are often at the forefront of labor and employment issues, how should employers outside New York and California prepare in case new laws are passed in their states?
New York’s New Anti-Sexual Harassment Laws
On April 12, 2018, New York Governor Andrew Cuomo signed into law the 2019 New York State Budget, updating the state’s sexual harassment laws. Among other changes, there are two key components under these laws. First, every employer in New York must establish a sexual harassment prevention policy. These policies should have already been adopted and provided to all employees by October 9, 2018. The New York Department of Labor and New York Division of Human Rights have established a model sexual harassment prevention policy for employers to adopt. But employers are not required to use this model, so long as their policy meets or exceeds the minimum standards of the model and set forth in the laws. Employers must distribute the policy to all employees in writing or electronically, and must ensure that all future employees receive the policy before they start work. Additionally, employers are encouraged to post a copy where employees can easily access it.
Under a line of California cases, employees must be separately compensated at least minimum wage for all time worked. These cases have stated that employers may not meet the requirement by showing employees are effectively paid at least minimum wage by averaging the amount an employee receives for paid and non-paid work hours. For example, in Armenta v. Osmose, the court found an employer’s refusal to pay an hourly wage for workers’ time spent driving to job sites or processing paper work violated California minimum wage requirements even though the employer’s higher hourly rate averaged over all hours worked was above the minimum wage. The court concluded the federal model of averaging all hours worked in a work week to calculate an employer’s minimum wage obligation was inappropriate under California law.
A recent decision out of the California Court of Appeal added some nuance to the analysis of minimum wage compliance in an established line of case law. In Certified Tire and Service Centers Wage and Hour Cases, the California Court of Appeal for the Fourth District considered whether the defendant tire and service centers violated California law with its compensation program.
In Certified Tire, employees in a certified wage and hour class action argued the employer violated the applicable minimum wage and rest period requirements with its compensation program, which allowed technicians to earn a higher hourly wage for all hours worked during each pay period based on certain productivity measures.
Under the compensation program, technicians were assigned an hourly wage upon hire that exceeded the legal minimum wage. However, technicians had the opportunity to earn a higher hourly rate under a set formula that rewarded technicians for work billed to a customer as a separate labor charge. The employer applied the formula to determine a technician’s “base hourly rate” for a given pay period. If the base hourly rate exceeded the technician’s regular hourly rate, the technician was paid the higher rate for all time worked during the pay period. If the base hourly rate was less than the technician’s regular rate, the technician was paid the regular rate for all time worked during the pay period.
The employees relied on Armenta and similar cases in arguing its employer secretly paid nothing for work that could not be billed to a customer and through averaging made it look like they were paying at least minimum wage for the “non-billed” time. The employees further argued that since a technician could not increase his or her base hourly wage when working on activities not associated with “billed time” or during rest breaks, such non-billed time was essentially uncompensated.
The court rejected the employees’ argument that the compensation program ran afoul of California minimum wage requirements. Unlike in cases violating the Armenta rule, the employer in Certified Tire did not have to average employee’s hourly rate to show compliance with minimum wage requirements. It directly established such compliance by paying technicians an hourly rate that is above minimum wage for all hours on the clock, including rest breaks. Technicians were required to be clocked in during all work hours, except for their lunch period, and were paid an hourly rate for all hours on the clock. Technicians also took rest breaks as required by law and did not clock out during such breaks.
The court distinguished Armenta and three other cases on which Plaintiff relied because in each case employers failed to compensate employees for certain work time and/or rest breaks. (In Armenta the employer failed to pay for workers’ time spent driving to job sites or processing paper work; in Gonzalez v. Downtown LA Motors, automobile service technicians paid under a piece-rate compensation system were not directly compensated for non-repair tasks; in Bluford v. Safeway Stores, Inc., truck drivers paid under a piece-rate compensation system were not separately compensated for rest periods; in Vaquero v. Stoneledge Furniture LLC, furniture employees paid under a commission-based system were not separately compensated for rest periods.)
Certified Tire is certainly a win for an employer providing an incentive to earn more than the regular hourly rate for all hours worked based on certain productivity measures. The key was the Certified Tire system did not violate the rule against averaging non-paid and paid work hours to comply with minimum wage requirements. Certified Tire is a good reminder to periodically review your company’s pay practices for compliance with California wage and hour law, including the applicable California wage order and the constantly changing body of case law.
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Legal Updates from the Labor & Employment Practice Group at Conn Maciel Carey
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