Expert Panelists Testify Before EEOC on “Revamping Workplace Culture to Prevent Harassment”

shutterstock_me tooOn 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

Fall 2018 Unified Agenda Forecasts Several Significant Employment-Related Regulatory & Deregulatory Actions

By: Mark M. Trapp and Aaron R. Gelb

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 LaborFall 2018 Agenda_DOL_3

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

Lasting Effects of the #MeToo Movement

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, orshutterstock_me too 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.

Continue reading

Court Finds that Employer Compensation Program Did Not Violate California Law Against Averaging Paid and Non-Paid Time to Meet Minimum Wage Requirements

California flag

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.)

Takeaways

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.

Hurricanes Headaches:  HR FAQs for Employers

It’s hurricane season again in the US! Be prepared!

The Employer Defense Report

Hurricane.jpgHurricane Florence is approaching the United States, and first and foremost, employers need to make sure their employees, customers, and guests are safe from the storm.

Natural disasters such as hurricanes, earthquakes and tornadoes have posed unique human resource (HR) challenges from wage-hour to FMLA leave and the WARN Act. The best protection is to have a plan in place in advance to ensure your employees are paid and well taken care of during a difficult time.

Although no one can ever be fully prepared for such natural disasters, it is important to be aware of the federal and state laws that address these situations. Our guidance can be used by employers in navigating through the legal and business implications created by events such as hurricanes.  In addition, the information may be applicable to other crises and disasters, such as fires, flu epidemics and workplace violence.

Frequently Asked Questions 

If…

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US DOL Issues FMLA Opinion Letters Clarifying No Fault Attendance Policy Rules and…Organ Donation

By: Aaron R. Gelb

Until last week, the US Department of Labor (the “DOL”) had not issued an Opinion Letter regarding the Family and Medical Leave Act (the “FMLA”) since George W. Bush was packing up and preparing to leave the White House in January 2009.  DOL Iterp Letter ImageOn August 28, 2018, Bryan Jarrett, the Acting Administrator of the DOL’s Wage and Hour Division (the “WHD”) issued two Opinion Letters—one addressing an important consideration facing employers with no-fault attendance policies and another that addresses whether organ donation surgery can qualify as a “serious health condition” under the FMLA for the purposes of taking leave.  While the answer to the latter question will likely not surprise anyone who regularly deals with employee requests for leave under the FMLA, the WHD’s opinion regarding whether and how points should be removed from an individual’s record while they are on protected leave does indeed provide much needed clarity on that topic.

But first, a bit of background regarding why the mere issuance of these letters is significant.  An opinion letter is an official, written opinion issued by the Wage and Hour Division of the DOL explaining how a certain law applies in specific circumstances described by an employer, employee, or other entity requesting the opinion. The DOL noted in a June 2017 press release that the Wage and Hour Division had been issuing opinion letters for more than 70 years until the Obama administration replaced them with general guidance memoranda in 2010.  “Reinstating opinion letters will benefit employees and employers as they provide a means by which both can develop a clearer understanding of the Fair Labor Standards Act and other statutes,” said Secretary Acosta in the press release. “The U.S. Department of Labor is committed to helping employers and employees clearly understand their labor responsibilities,” said Secretary Acosta, explaining that such letters would enable employers to “concentrate on doing what they do best: growing their businesses and creating jobs.”

Turning to the two opinion letters issued on August 28, 2018, we will first address the leave for organ donation, then consider no-fault attendance policy rules. Continue reading

At the NLRB, Big Labor’s Clock Has Not Yet Struck Midnight

By: Mark M. Trapp

shutterstock_424794466As part of an apparent package deal to move through the Senate numerous Trump judicial and other nominees, President Trump on Tuesday re-nominated Democratic member Mark Gaston Pearce for another term on the National Labor Relations Board (“NLRB” or “Board”). Pearce, who has served on the Board since 2010 (when he received a recess appointment from President Obama), saw his latest 5-year term expire at midnight on Monday, only to be renominated within 24 hours.

Pearce served as Chairman of the Agency for nearly six years until President Trump installed his own Chairman in early 2017. His renomination by Trump comes in the face of sharp criticism from the business community and Republicans, upset that in his more than eight years on the NLRB, Pearce was a consistent vote for pro-union outcomes, including the controversial Browning-Ferris joint-employer decision in 2015. An August 17th editorial in the Wall Street Journal summarized the business community’s complaints against Pearce as follows:

Among other labor hits, Democrats allowed graduate students to unionize; required employers to disclose to unions the names, phone numbers and email addresses of workers; and protected workers who vilify their employers on social media. Mr. Pearce also ruled that employees who had resigned their union membership after their labor contract expired could be dunned for back dues. A D.C. Circuit Court of Appeals panel overruled his decision in June. As chairman, Mr. Pearce snubbed Republican colleagues. GOP member Brian Hayes told a member of Congress in 2011 that Mr. Pearce wasn’t sharing information and public comments on the board’s “quickie election” rule that trampled employers’ due process rights. Mr. Pearce then accused Mr. Hayes of threatening to resign to deny the board a quorum, which prompted an investigation by the board’s Inspector General. Mr. Hayes was exonerated, but Mr. Pearce jammed through the election rule anyway without letting him vote. A federal judge appointed by Mr. Obama blocked the rule because the board lacked a quorum.

If confirmed by the Senate, Pearce will not upset the recent 3-2 Republican majority on the NLRB, which is traditionally staffed by three members of the president’s party and two members of the minority party. But many Republicans and business advocates remember the precedent set during the Obama presidency, which repeatedly left open Republican seats when those members’ terms expired, including once for a full two years. This allowed the Obama-era Board to utilize lengthy 3-1 Democrat advantages to reverse over 4,500 years of NLRB precedent, according to one study.

Now with Trump in office, many business owners and Republicans hope to reverse as many as possible of the Pearce-led changes, a task which would become much easier were Pearce’s seat to remain vacant. Many cases are decided by random three-member panels, and if the Board is 3-1 Republican, no such panel will have a Democratic majority, and cases decided without dissent can move more quickly through the NLRB’s internal processing. In addition, the Democrats have been pushing to force the recusal of Republican members John Ring and William Emanuel on the joint-employer issue. A Pearce confirmation combined with the recusal of these two Republicans would give the Democrats a 2-1 majority on perhaps the biggest issue to many business owners.

It will be interesting to see whether Pearce can make it through Senate confirmation as, for now, it does not appear that the nomination is a “done deal” in that Chamber. In the meantime, the Board will operate with four members. Many employers and business owners large and small would like to see this period extended as long as possible, even if Pearce is ultimately confirmed. If and when Pearce is again confirmed, he would serve until August 27, 2023.

Of course, we here at Conn Maciel will be keeping an eye on this issue of importance. For now, for employers it’s “four-speed ahead!”