During last night’s State of the Union Address, President Obama announced that he would issue an Executive Order raising the minimum wage for employees working under new federal contracts to $10.10. President Obama pushed Congress to raise the regular minimum wage to $10.10 per hour and peg it to inflation. The general minimum wage increase is being championed by Democrats in both Houses of Congress, but with the current congressional deadlock, its passage remains unlikely.
Supreme Court says safety gear = clothes. Should I care?
Yes, at least a little. It’s true that the Supreme Court’s decision today in Sandifer v. United States Steel Corp. only directly impacts employers whose employees are unionized, wear safety gear and aren’t paid for the time spent “donning and doffing” their safety gear before and after their shift. However, Sandifer is a unanimous decision (other than a footnote with which Justice Sotomayor disagreed) from the Supreme Court that relies on a common sense interpretation of the statutory language and reaches an employer-friendly result. The decision also includes an interesting discussion of the de minimis rule (which employers often rely on to avoid paying employees for incidential, very short periods of off the clock work). It remains to be seen how courts will interpret today’s decision.
Do you E-Verify?
More than half a million U.S. employers are now enrolled in the E-Verify program. The E-Verify program is an electronic system that employers can use to verify eligibility to work in the United States. And while the system initially faced significant challenges and skepticism (due in large part to reliability issues), the program has improved and become more accepted. Illinois’ ban on using E-Verify no longer applies and many states have made use of E-Verify mandatory. Whether to use E-Verify is a very company-specific decision, but more and more businesses are deciding it makes sense.
To commemmorate the 500,000 participant milestone, the U.S. Citizenship and Immigration Services (USCIS) has released a new video that introduces the program’s benefits. USCIS has also launched an updated E-Verify website.
Supreme Court to Hear Arguments on whether FICA is Owed on Severance Pay
Today the Supreme Court will hear arguments in the case of U.S. v. Quality Stores. The issue before the Court is whether FICA needs to be withheld and paid on severance payments. The question is whether severance payments are “remuneration for employment” which are taxable for FICA purposes (as the IRS and Obama administration argue) or “supplemental unemployment benefits” which aren’t taxable for FICA purposes (as the former employer Quality Stores argues). In September 2012, the 6th Circuit Court of Appeals ruled in Quality Stores’ favor, holding that the severance payments to former employees were not taxable under FICA and that the amounts paid to the government should be refunded. While the amount at issue in the Quality Stores case is relatively modest, a decision in Quality Stores’ favor would open the door to employers across the country seeking FICA refunds. We expect a decision in June and will post an update when it’s issued.
Court of Appeals Deals a Blow to NLRB and a Boon to Individual Arbitration
In a long awaited decision in the D.R. Horton case, the 5th Circuit Court of Appeals ruled yesterday that an employer was within its rights to require employees to sign an arbitration agreement that mandated individual arbitration (i.e. not allowing for class claims). The National Labor Relations Board had taken the position that employees’ right to engage in concerted activity means that they cannot waive their right to participate in class or collective litigation or arbitration. The court disagreed, finding that the Federal Arbitration Act required that the arbitration agreement be enforced as written. This is a significant win for employers that seek to avoid class and collective actions by requiring employees to sign arbitration agreements that require that claims be brought individually. Employers using or considering such agreements should take heed, though, at the court’s finding that arbitration agreements need to make clear that they do not prohibit an employee from filing charges with the NLRB.
Senate Passes ENDA. House Unlikely to Follow Suit.
By a vote of 64-32, the Senate voted on November 7, 2013 to pass the Employment Non-Discrimination Act (ENDA). ENDA would prohibit employers, employment agencies, and labor unions from using an individual’s sexual orientation or gender identity as the basis for employment decisions. The scope of the protections provided and procedures for enforcement are nearly identical to those under Title VII. Interestingly, however, the legislation specifically provides that claims based on a disparate impact theory will not be permitted. Although passage by the Senate takes the legislation one step closer to becoming law, its prospects in the House appear dim. Speaker of the House Boehner has indicated that he does not intend to allow the legislation to come up for a vote. Employers in Illinois should note that the Illinois Human Rights Act already prohibits discrimination on the basis of sexual orientation and the Chicago Human Relations Ordinance and Cook County Human Rights Ordinance prohibit discrimination on the basis of both sexual orientation and gender identity.
Illinois Passes Same-Sex Marriage Bill
The Illinois legislature passed landmark legislation on November 5, 2013 that will legalize same-sex marriages in the state (The Religious Freedom and Marriage Fairness Act
). The bill is currently scheduled to be signed by Governor Quinn on November 20th and to go into effect on June 1, 2014. One state legislator has proposed an amendment that would make the legislation effective earlier in the year, but that amendment has not yet been acted upon. Employers should begin to prepare for changes in the workplace resulting from the legislation. For example, the definition of “spouse” in the Family and Medical Leave Act will now apply to same-sex spouses who reside in Illinois (see our earlier post on the FMLA guidance on this topic). Spousal benefits under medical plans and retirement plans will now be applicable to Illinois same-sex spouses and Illinois same-sex spouses will have COBRA rights. Employers should review plans, policies, forms and procedures to make sure they contemplate equal treatment for same-sex spouses. Also, keep in mind that Illinois will continue to permit couples (whether same-sex or opposite-sex) to choose a civil union over a marriage. Accordingly, to the extent federal law recognizes marriages but not civil unions, employers will need to continue to recognize this distinction in their benefit administration.
Employment Law Update: A Look Back and a Look Ahead
This year, LP’s Labor & Employment attorneys tried something different with our annual “Employment Law Update” and hosted the program as a webinar. The new format allowed us to record this year’s program and make it available for all our blog friends, colleagues and clients who were unable to participate. LP labor and employment attorneys Peter Donati, Laura Friedel and Kenneth Kneubuhler highlighted recent updates in labor and employment law and tips to keep your workplace practices current.
You can find the recording here and the presentation materials here.
To give you an idea of what topics are covered in this year’s “Employment Law Update” here are the topics we discussed:
•The impact of recent Supreme Court decisions on supervisor liability and the burden of proof for retaliation claims
• Trends involving arbitration agreements: Will they prevent class claims? Should your business be using them?
• Same sex marriage: How it affects employee rights under the FMLA and benefit plans
• Recent Illinois cases involving non-compete agreements. Will your agreements be enforceable when you need them?
• New developments at the National Labor Relations Board that affect both union and non-union workplaces
• How to properly use background checks to avoid scrutiny by the EEOC and avoid violating state laws
• Current wage and hour issues, including developments involving interns and independent contractors
• Other important state law trends, including laws on concealed weapons, medical marijuana, and social media passwords
Keeping Guns Out of Your Workplace in Illinois
In July, Illinois passed legislation permitting the concealed carry of firearms (The Illinois Firearms Concealed Carry Act, 430 ILCS 66). Under the legislation, employees with concealed carry gun permits are allowed to bring their guns with them to work unless 1) they work in a location where concealed carry is specifically prohibited under the statute, such as a school or hospital, or 2) they work in a building where the owner has posted a specific 4 inch by 6 inch sign prohibiting guns on the premises. The Illinois State Police recently released an example of the sign that must be used by building owners in this second situation. Employers that want to keep guns out of their workplaces and that own the buildings where their workplaces are located should post the approved sign at all entrances. Employers that do not own the buildings where their workplaces are located should work with the building owners to have the signs posted. Also, employers need to remember that although they may be able to keep employees from bringing guns into their workplaces by following these steps, the employees are still permitted by the legislation to keep their guns in their vehicles in the employers’ parking lots.
DOL Updates FMLA Guidance to Cover Same-Sex Spouses
Ever since the Supreme Court’s decision in U.S. v. Windsor striking down the federal Defense of Marriage Act (DOMA), employment lawyers have struggled to keep up with the implications of the ruling for various federal and state employment laws. For example, under the Family and Medical Leave Act (FMLA), same-sex spouses prior to the Windsor ruling did not have all of the same leave rights as opposite-sex spouses because federal law did not recognize same-sex marriages. Now that the DOMA has been overturned, the Department of Labor (DOL) has issued updated FMLA guidance remedying this situation, at least for some same-sex couples. Fact Sheet 28F issued by the DOL in August clarifies that “spouse” for purposes of qualifying leave under the FMLA means “a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including ‘common law’ marriage and same-sex marriage.” As a result, same-sex spouses who reside in one of the states recognizing same-sex marriage should now be entitled to the same leave rights as opposite-sex spouses. Unfortunately, same-sex spouses who move to a state that does not recognize such marriages will not benefit from this guidance. Many commentators believe that help for same-sex spouses falling in this second category will only come through a formal change to the FMLA regulations by the DOL.
The Employment Lawyers 