Author: LP

NLRB Makes It Easier for Unions to Organize Staffing Employees

LPLeave a comment

The National Labor Relations Board just made it much easier for unions to organize employees of staffing firms – sometimes called temp agencies.

It used to be that both the staffing firm and the client had to consent before a union could represent a group of employees that included both staffing firm employees and your regular employees.

However, under the NLRB’s new standard, consent isn’t required.  This means that a union can lump together staffing firm employees and regular employees, even though they are employed by different companies and viewed and treated as separate groups.

Under the NLRB’s decision, unions will also have an easier time organizing all of a staffing firm’s employees, regardless of where they work or are assigned.

As a result of the NLRB’s decision, unions will have a far easier time organizing.

So what can you do? Here are 3 steps all Companies that work with staffing firms should take in response to the NLRB’s new standard:

  1. Ask your staffing firm what steps they’re taking to improve employee satisfaction and avoid unionization, keeping in mind that the lowest cost provider may bring with it lower employee satisfaction and higher risk of unionization.
  2. Take a close look at your company’s union avoidance efforts. Make sure that you’re paying attention to all employees – both direct and those through staffing companies – and consider stepping up your union avoidance efforts by educating your team about the realities of unionization and how to spot organizing campaigns.
  3. Finally, make sure your agreement with your staffing firm includes a cooperation clause so that, if there’s an organizing campaign, you’re in the best position to work together quickly to respond.

In avoiding unions, the best defense is a good offense.  Take steps now to ensure that you – and your staffing firms – are in the best position possible to avoid union organizing efforts.

New Overtime Regulations More Than Double Minimum Salary Threshold Effective December 1st

LPLeave a comment

Under final overtime regulations set to be published today, the new minimum salary for employees to be exempt from overtime under the “white collar” exemptions will more than double — to $913/week , which is $47,476/year — with further increases every 3 years thereafter, beginning on January 1, 2020.  The new regulations will become effective on December 1, 2016.

In a positive development, according to the Department of Labor’s (DOL) overview and summary of the new rule, employers will be permitted to credit bonuses and incentive payments for up to 10% of the new required minimum salary.

According to the DOL’s summary, the new regulations contain the following changes:

  • Increase of minimum salary for “white collar” exemptions from $455/week ($23,660/year) to $913/week ($47,476/year) — which is the 40th percentile for full-time salaried workers in the lowest-wage Census region (currently, the South).
  • Increase in the salary threshold for the Highly Compensated Employee exemption from $100,000 to $134,000 — which is currently the 90th percentile for full-time salaried workers nationally (note that the Highly Compensated Employee exemption isn’t effective in a number of states, including Illinois).
  • Automatic increases in the salary minimums every 3 years, with the first increase effective January 1, 2020.  For the regular “white collar” exemptions, the minimum salary will increase the  to the 40th percentile for full-time salaried workers in the lowest-wage Census region (estimated to be $51,168 in 2020).  For the Highly Compensated Employee exemption, it will increase to the 90th percentile of full-time salaried workers nationally (estimated to be $147,524 in 2020).
  • Up to 10% of the minimum salary for the regular “white collar” exemptions can be met with non-discretionary bonuses, incentive pay, or commissions, provided that they are paid at least quarterly.
  • The job duties tests remain unchanged.

The Department of Labor estimates that 4.2 million workers will be impacted by the new regulations.

While December seems like a long time away, changes to compensation structures take time.  In order to have all options available, companies need to start thinking now (if they haven’t already) about how the new regulations will impact their workforce and how they are going to react.  We strongly recommend that you speak with your employment attorney to determine the best course of action for your company.

 

EEOC Issues New Rules for Corporate Wellness Programs

LPLeave a comment

EEOC LOGOOver the last few years the Equal Employment Opportunity Commission has increasingly taken the position that corporate wellness programs — and in particular, the testing they require, the information they collect, and the benefits they provide — can violate discrimination laws. On Monday, the EEOC issued two final rules establishing the standards under which wellness programs will be reviewed.  (See our previous post regarding the proposed rules here.)

One of the rules specifically applies to Title I of the Americans with Disabilities Act (ADA), while the other applies to Title II of the Genetic Information Nondiscrimination Act (GINA).

The Final ADA Rule. The final ADA rule provides that “wellness programs that are part of a group health plan and that ask questions about employees’ health or include medical examinations may offer incentives of up to 30 percent of the total cost of self-only coverage.” The rule requires employers to give participating employees notice that tells them “what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential.”

The Final GINA Rule. The final GINA rule provides “that the value of the maximum incentive attributable to a spouse’s participation may not exceed 30 percent of the total cost of self-only coverage, the same incentive allowed for the employee… No incentives are allowed in exchange for the current or past health status information of employees’ children or in exchange for specified genetic information … of an employee, an employee’s spouse, and an employee’s children.”

A few notes about the new rules directly from the EEOC:

  • Both rules will be effective beginning on January 1, 2017.
  • Both rules apply to all workplace wellness programs, including programs in which employees or their family members may participate without also enrolling in a particular health plan.
  • Both rules prohibit employers from requiring employees or their family members to agree to the sale, exchange, transfer, or other disclosure of their health information to participate in a wellness program or to receive an incentive.
  • Employers should ensure confidentiality by adopting and communicating clear policies, training employees who handle confidential information, encrypting health information, and providing notification to employees and their family members if breaches occur.

In light of these new rules, we suggest that you carefully review your wellness programs and corresponding financial incentives to ensure compliance. Also, note that under existing laws – even before the introduction of these new rules – you cannot:

  • Require employees to participate in a wellness program;
  • Deny health insurance to employees who do not participate in the program;
  • Take any adverse employment action or retaliate against, interfere with, coerce, or intimidate employees who do not participate in the program; or
  • Deny employees with disabilities reasonable accommodations that allow them to participate in a wellness program and receive any related incentives.

 

 

New Defend Trade Secrets Act Requires Notice in Employee Agreements

LPLeave a comment

pillarsOn Wednesday, President Obama signed into law the Defend Trade Secrets Act of 2016 (DTSA). The DTSA sets a single national standard for trade secret protection and gives the option of bringing trade secret cases in federal court and provides for remedies (such as seizure and recovery of stolen trade secrets).  The DTSA also creates whistleblower protections for employees who disclose trade secrets to an attorney or governmental official for the purpose of reporting or investigating a suspected violation of law.  But most urgently for employers, the DTSA contains a new notice requirement that employers need to take action quickly to satisfy.

Effective immediately, any new or updated agreements with employees, consultants or independent contractors that govern trade secrets or confidential information need to include a “notice-of-immunity.”  The notice may be provided via reference to a general policy document rather than restating the entire immunity provisions in each agreement.  An employer that fails to provide this notice will forfeit their right to exemplary double damages and attorneys’ fees in an action brought under the DTSA.

Employers wishing to take advantage of the DTSA’s protections need to revise their standard agreements and ensure that any agreement provided on or after May 11, 2016 includes the required notice-of-immunity.  We recommend that you consult with legal counsel to ensure compliance with this new requirement.

 

EEOC Provides Guidance on Leave as a Reasonable Accommodation under the ADA

LPLeave a comment

EEOC LOGOEarlier this week, the Equal Employment Opportunity Commission (EEOC) issued a new resource document on when leave constitutes a reasonable accommodation under the Americans with Disabilities Act (ADA).  Although the EEOC has always taken the position that employer-provided leave can be a reasonable accommodation, the new document highlights some of the standards for when and how leave must be granted.  At its core, the EEOC resource clarifies that unpaid leave is a reasonable accommodation unless the employer can show that the leave causes an undue burden.

The new EEOC document covers the following topics and provides specific examples of each:

  • Equal Access To Leave.  Employees with disabilities must be afforded access to leave on the same basis as all other similarly-situated employees.  In other words, if an employer receives a request for leave from a qualified disabled employee, and the leave would be covered  under the employer’s existing leave policy, the employer must treat the individual the same as an employee who requests leave for reasons unrelated to a disability.  The EEOC notes here that “employers are entitled to have policies that require all employees to provide a doctor’s note or other documentation to substantiate the need for leave,” but employers can’t apply that requirement discriminatorily.
  • Unpaid Leave.  Employers must consider providing unpaid leave as a reasonable accommodation to an employee with a disability if the employee requires it to return to work, as long as the leave would not create an undue hardship on the employer’s operations or finances.  This is required even if: “the employer does not offer leave as an employee benefit; …the employee is not eligible for leave under the employer’s policy; or … the employee has exhausted the leave the employer provides as a benefit …”
  • Interactive Process.  The employer is required to engage in an “interactive process” with the employee once the employee requests leave and the employer determines that the leave is not permitted under another program (such as PTO, FMLA or Worker’s Compensation).  As the EEOC acknowledges, the interactive process will likely continue during the employee’s leave, with the employer checking in on the employee’s progress and/or need for additional leave. When a leave is at issue, the EEOC recommends that the  process focus on the following questions:
    • “the specific reason(s) the employee needs leave …
    • whether the leave will be a block of time…, or intermittent …; and
    • when the need for leave will end
  • Maximum Leave Policies.  Employers may have leave policies that establish a maximum amount of leave allowed, but more time above the maximum would be a reasonable accommodation, unless the employer can show that allowing such leave would cause an undue hardship.
  • Return to Work.  An employer cannot require an employee to be “100% healed or recovered” to return to work — it must provide the employee a reasonable accommodation (including reassignment, for example) as long as the accommodation does not create an undue hardship.  An employer can refuse to allow an employee to come back to work with a medical restrictions only if the employee would pose a “direct threat” of substantial harm to him/her self or to others.
  • Undue Hardship.  When considering whether a leave would cause an undue hardship, the EEOC considers the following factors:
    • “the amount and/or length of leave required…;
    • the frequency of the leave…;
    • whether there is any flexibility with respect to the days on which leave is taken…;
    • whether the need for intermittent leave on specific dates is predictable or unpredictable…;
    • the impact of the employee’s absence on coworkers and on whether specific job duties are being performed in an appropriate and timely manner…; and
    • the impact on the employer’s operations and its ability to serve customers/clients appropriately and in a timely manner, which takes into account, for example, the size of the employer.”

We encourage all employers to read this new EEOC resource document in full.  Although “nothing new” per se, it serves as a great reminder for ADA compliance and offers many specific examples that may be pertinent to your own employee leave issues.

 

 

New Overtime Regulations Closer to Reality

LPLeave a comment

The long-awaited new overtime regulations took a big step forward this week when the Department of 600px-US-DeptOfLabor-Seal_svgLabor submitted the proposed final regulations to the White House Office of Management and Budget for final review and approval.  This last step in the review process is anticipated to take up to 90 days, with the final regulations anticipated sometime during Q2.

As we noted in our post on June 30, 2015, the proposed regulations more than double the minimum salary requirement for the “white collar” overtime exemptions (administrative, professional and executive) from $455/week ($23,660/year) to approximately $970/week ($50,440/year), with annual increases thereafter based on a to-be-determined index.  The proposed regulations also increase the minimum salary for the Highly Compensated Employee exemption from $100,000/year to more than $122,000/year (though it is important to note that this exemption does not apply under some states’ overtime laws).  Finally, while the proposed regulations did not change the job duties tests, they did suggest that the final rules may impact the job duties tests in addition to the minimum salary requirement.

There are various strategies available to businesses to minimize the financial, operational and employee-relations impact of the new regulations, but it is important to act quickly to consider available options for impacted employees.  Companies should also consider whether other changes to exempt status classifications make sense, as the regulatory change is a good opportunity to improve compliance across the board.

DOL Speaks On Joint Employer Relationships

LPLeave a comment

600px-US-DeptOfLabor-Seal_svgThe U.S. Department of Labor (DOL) has issued guidelines for when companies will be considered joint employers for purposes of the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). This guidance was issued in the wake of the National Labor Relations Board’s crucial Browning-Ferris ruling this past summer, drastically expanding who may be considered a joint employer under the National Labor Relations Act (NLRA).

The DOL guidelines discuss in detail a wide variety of employment relationships, including shared employees, subcontracted employees, staffing agencies, third-party management companies, and others. According to the DOL, the “possibility of joint employment should be regularly considered in FLSA and MSPA cases, particularly where (1) the employee works for two employers who are associated or related in some way with respect to the employee [i.e. horizontal joint-employment]; or (2) the employee’s employer is an intermediary or otherwise provides labor to another employer [i.e. vertical joint employment].” Although not new, the guidelines set forth in detail various factors to be used in determining joint employer status.

As with the Browning-Ferris decision, the DOL guidance is particularly important for companies that work with subcontractors or staffing firms, or are themselves contractors or staffing firms. These companies, as well as others in similar relationships, should carefully review the guidelines, weigh the benefits of control against the risk of being deemed to be a joint employer, and reflect their desired balance in their contracts, practices and procedures.

 

2016 Labor and Employment Law Checklist

LPLeave a comment

Each year, LP’s Labor & Employment Practice Group is pleased to provide a short checklist of steps that all companies should consider taking to measure their readiness for the coming year. We hope you find this 2016 Labor and Employment Law Checklist a helpful guide to best practices for the year ahead.

􀂅 Look out for the new FLSA overtime regulations and prepare for them. The proposed Fair Labor Standards Act (FLSA) overtime regulations likely will be issued in late 2016. The new regulations will drastically increase minimum salary thresholds with annual increases after implementation.  It’s possible that the final regulations also will include changes to the job duties tests. We expect that the new regulations will take effect 30 days after they are published. To prepare, check how many of your exempt-classified employees are paid a salary (or other guaranteed pay) of less than $52,000 per year and consider which of the two options for these employees – increasing salary or paying overtime – is the better solution for your business. Also consider whether you have any larger issues with how employees are classified, as the new regulations will provide a good opening for reclassification.

􀂅 Carefully reconsider independent contractor relationships. The DOL recently warned employers that most workers qualify as employees under the FLSA – regardless of what the worker and the company may have agreed to. Other agencies, too, are coming after companies for improperly classifying workers as independent contractors when, under applicable legal standards, they should be treated as employees. The consequences of misclassification are steep, including damages and penalties under tax, wage and hour, and other employment laws. In addition, the Affordable Care Act exposes companies that misclassify workers to significant penalties based on failure to offer coverage to the required portion of the workforce and in situations where a misclassified worker obtains coverage on an exchange.

􀂅 Consider instituting a formal policy on after-hours smartphone use. Does your team communicate with non-exempt employees after hours? If so, do you have a clear, formal policy on how after-hours smartphone use is handled (including any procedures to be followed by employees to report time spent after hours)? This type of policy can significantly improve your chances of employees bringing a wage claim.

􀂅 Pay attention to staffing/temporary firm relationships. More and more companies are working with staffing firms to provide a flexible workforce. Unfortunately, the agreements between staffing companies and their clients often lack necessary protections, which could expose both parties to significant liability. Make sure your staffing contracts appropriately allocate responsibilities and risk, require compliance with laws, and provide the framework for the true partnership that is the hallmark of a successful staffing relationship.

􀂅 Review unpaid internship programs. Unpaid internships were in the spotlight in 2015, and we expect that light to continue to shine in 2016. If you have unpaid interns, make sure that they qualify as “non-employees” under the test that applies in your state. If they don’t, they need to be paid at least minimum wage and overtime for hours over 40.

􀂅 Understand the new NLRB “Quickie Election” rules and prepare for organization efforts. The NLRB’s new rules, which took effect on April 14, 2015, shorten the election process and reduce the types of challenges employers can make, giving the union an advantage in most elections. As soon as a representation petition is filed, there may be as few as 10 days until the election is held. Given this short time frame, it’s important that employers prepare for a union campaign before a petition is filed by keeping communication channels open with employees, making sure all employment policies and practices comply with the NLRA, considering possible unit determination issues, and providing periodic training for managers and supervisors on how to detect union “storm warnings.” Employers may also consider drafting a “war plan”—which may include campaign materials—that is ready to go as soon as a petition is filed.

􀂅 Consider sexual orientation and gender identity as protected categories. The EEOC has taken the position that Title VII protects against discrimination based on sexual orientation and gender identity. And while that issue is currently before the courts, many states (including Illinois) separately prohibit discrimination on these grounds. To help guard against claims, include these classifications in your EEO and harassment policies and consider them just as you would other protected categories before taking any adverse employment action.

􀂅 Understand new requirements for federal contractors and subcontractors. The minimum wage for employees of federal contractors and subcontractors increased to $10.15 in 2016. Prohibitions on discriminating against applicants and employees who discuss, disclose, or inquire about compensation (which is defined very broadly to include all types of pay and benefits) or based on sexual orientation or gender identity are now effective as well.

􀂅 Make sure you are complying with new pay and benefit requirements. Chicago’s minimum wage is now $10/hr, as is the state-wide minimum wage in California, while the minimum wage in New York State increased to $9/hr and the minimum wage in the District of Columbia increased to $10.50/hr (and will increase again on July 1st to $11.50/hr). Equal pay requirements are also getting tighter, as the Illinois Equal Pay Act now applies to all employers, regardless of size (with increased penalties for violations), and New York and California have both implemented new, stricter prohibitions on pay discrimination. In addition, certain employers in New York City, San Francisco, and the District of Columbia are now required to provide transit benefit programs.

􀂅 Ensure that sick leave laws are being followed. California, Connecticut, Massachusetts, Oregon, and the District of Columbia now require most employers to provide paid sick leave – though the specific requirements vary from state to state. Likewise, federal contractors and subcontractors will have to provide paid sick/family leave for contracts beginning in 2017.

For a PDF of this checklist, please click here.

New California Law Broadens “Equal Pay“ Protections

LPLeave a comment

Effective January 1st, California will have one of the toughest pay equality laws in the country.pillars

Existing California and federal law already prohibit employers from paying women less than men for the “same jobs.”  But many feel that these laws were proving ineffective in California – citing data including a U.S. Census Bureau report this year that found that full-time women employees in California are paid substantially less (a median 84 cents for every dollar) than their male counterparts.

The new law, referred to as the California Fair Pay Act, has as its stated purpose attempting to close this gap and broaden the scope of existing equal pay laws by mandating that employers pay male and female employees the same amount for “substantially similar work” under similar working conditions.  So, employees performing “substantially similar work” under similar working conditions must be paid the same amount even if they have different titles or work at different locations.  This new standard will likely make it significantly easier for employees to bring a pay discrimination claim under the California law than under the federal Equal Pay Act.  The law also prohibits retaliation against employees who complain of pay inequities.

California employers should review and update their existing compensation systems and policies to ensure that differences in pay are reasonably related to legitimate business factors (like merit or seniority), and not based on gender.  This is especially important because we anticipate that new legislation will lead to a spike in litigation — especially given that plaintiffs will have an easier task in establishing that they were performing “substantially similar work” rather than the “same job.”

New Overtime Regulations — Mid to Late 2016?

LPLeave a comment

600px-US-DeptOfLabor-Seal_svgThe #1 question we’ve been receiving from our clients this fall is “When will the new overtime regs be issued?”  While previously we were left guessing on the specific timing in 2016, the Wall Street Journal and National Law Review are reporting that the Solicitor of Labor has indicated that the final regulations likely will not be issued until mid-to-late 2016.

It remains to be seen what, exactly, the final regulations include.  Per our blog post when the proposed regulations were first issued, the proposed regulations focused on the minimum salary thresholds, significantly raising those amounts.  However, the DOL also invited comment on the duty rules, so it remains possible that the final regulations may include changes beyond the salary threshold.

We will continue to monitor the status of the regulations and keep you posted on any developments.