Labor Law Journal » Labor Center

Labor Center (30 unread)

Skip to page: 1 2 3 ... 5

New Massachusetts Personnel File Law

Posted: September 3rd, 2010, 6:52am EDT by Jolie

A new law strengthens the Massachusetts personnel file even more. Employers are required to notify workers within 10 days when any addition to their personnel record is made, if that addition could negatively impact the employee’s employment status, pay, salary increase, prospects for promotion, transfer or training, or if the information could result in disciplinary action.

In addition, the Massachusetts employee has the right to inspect his or her personnel file after receiving such notification. The law signed by Governor Deval Patrick was made retroactive to August 1, 2010. Although the new law limits the employee’s inspection of his or her personnel file to twice per calendar year, that limit excludes inspections triggered by notification that new negative material has been added. Employers must make the personnel file available to an employee within 5 business days after a written request by the employee.

The new law, called Chapter 240 of the Acts of 2010, section 148, raises more questions than it answers, according to attorneys with Ogletree Deakins.

For example, the law is not precise about what constitutes a “personnel record.” This raises a concern that even an informal email or casual note from one manager to another, which is not added to the official personnel file, could be considered an addition under the law and require notification.

The law is also not specific about whether the notification must be in writing, and whether the notification must include a copy of the negative document. Updates will be posted as more information is available, which may require judicial decisions.

The new Massachusetts personnel file law is enforced by the state Attorney General and violations carry a fine of $500 to $2,500. In addition, negative information may be excluded from any resulting lawsuit if the employee was not notified properly within 10 days. In some cases, this could result in terminated employees being reinstated, fines and penalties.

New Florida Background Check Required

Posted: September 1st, 2010, 6:03am EDT by Cara

Florida employers are required to implement a level 2 background check before allowing any employee to work with children or the elderly.

The Florida background check includes screening the employee’s fingerprints through both state and federal databases before allowing him or her to work with “vulnerable populations.”

The law applies to employees who work with the elderly, children or individuals with disabilities in certain group homes and care settings. Healthcare workers in residential or home care settings must also be cleared with a level 2 background check before having any contact with residents or clients. In addition, the employee must pass the background check before handling client property or funds, and before having access to resident living areas.

Employees in a variety of occupations are covered including family day care, foster homes, summer camps, mental health facilities and adoption agencies. An employee can be hired prior to the background check, but cannot work in any capacity involving children or the elderly until cleared by the background check. In practical terms, this means that most employers will not hire workers until they pass the background check.

Employees with criminal convictions will also find it harder to be granted an exemption under the new law. In many cases, former felons will be required to wait 3 years before working with children or the elderly. Sexual predators and sex offenders will be denied exemptions, and other employees with a criminal record may have their exemption revoked by the authorities.

The new law, HB 7069, was signed earlier this year by Florida Governor Charlie Crist and went into effect on August 1, 2010.

The requests for background checks must be sent electronically through a vendor approved by the Florida Department of Law Enforcement. For most employers, fingerprints must be submitted electronically after July 1, 2012. However, employers with a license through the Agency for Health Care Administration or AHCA or the Department of Children and Families or DCF must submit fingerprints electronically effective August 1, 2010.

With electronic fingerprints, background information is available in just 24 to 48 hours, while it may take 4 to 6 weeks for a background check with ink fingerprints on paper.

According to AHCA Secretary Tom Arnold, the measure will increase security for clients and ensure higher levels of care. Submitting electronic fingerprints will streamline the background check process, and provide added protection.

Kentucky Workers’ Compensation May Include Commute

Posted: August 27th, 2010, 6:35am EDT by Derrick

The Kentucky Supreme Court recently ruled that in some cases, an injury that occurs during the employee’s commute is covered by workers’ compensation, if the activity benefits the employer.

In the test case involving an AirTran Airways pilot, the employee was based in Atlanta but commuted as an air passenger to his home in Kentucky, making 8 to 10 round trips per month. Under an arrangement common for airlines, AirTran made free or low-cost fares on other airlines available to commuting employees.

The AirTran Airways pilot was a passenger who was killed when the Comair flight he was on crashed while taking off.

In Fortney v. AirTran Airways, even though the pilot was a passenger who was not working, on a different airline at the time of the crash, the Kentucky Supreme Court ruled that his loss of life was a valid workers’ comp claim against AirTran Airways. This was true despite the fact that the employee was not being paid and was not considered on duty until he checked in at the Atlanta airport, and the airline was not paying for the flight.

The Kentucky Supreme Court ruled that these reciprocal travel arrangements benefitted the employer as well as the employee, and therefore were covered under workers’ comp. The claim was denied, awarded by the workers’ comp board, denied again by the appeals court and eventually awarded by the state supreme court.

Under Kentucky law, as in most states, employees are usually not entitled to workers’ comp for accidents that occur during the daily commute. Because these events occur while the employee is going to or coming from work, it is called the “going and coming” rule.

However, there is an exception when the commute provides benefit to the employer. For example, an employee who transports materials or supplies in a company truck to the first worksite of the day may be covered by workers’ comp, because his commute offers benefits to the employer. In this case, the benefit is having materials on the truck transported.

While the Kentucky Supreme Court ruling addressed only the airline case, Kentucky employers should be cautious about allowing employees to use employer-owned vehicles. Kentucky employers should also be aware that an injury during a business trip could well be covered under workers’ comp.

Workers’ Compensation for Illegal Immigrants

Posted: August 25th, 2010, 6:24am EDT by Amelia

In many states, an undocumented worker who is hurt on the job is still entitled to workers’ compensation benefits, even though he or she should not have been employed in the first place. This is an important consideration for employers, since there are an estimated 3 million undocumented immigrants in California and Texas alone.

Many employers have had the unnerving experience of having an injured employee file for workers’ comp, only to learn that the employee was an illegal immigrant. Usually, the employee presented convincing fake documents at the time of hiring. However, often during the course of medical treatment or workers’ comp proceedings, the employee is revealed as an illegal immigrant who is not authorized to work in the U.S.

Under the federal Immigration Reform and Control Act or IRCA, it is a crime for the employer to knowingly hire anyone who cannot legally work in the U.S. However, many employers unintentionally violate the law by hiring an employee whose I-9 documents seem legitimate, only to discover months or years later that the documents were forged. Because it is also a crime for the employer to continue to employ undocumented workers, usually the employee is terminated.

However, the terminated employee may still qualify for workers’ comp in many case. State laws in Texas, New York, Florida and Utah specifically grant undocumented workers who are injured on the job the right to collect workers’ comp benefits. In Connecticut, Georgia, Nebraska, Louisiana, Ohio, Oklahoma, North Carolina, New Jersey and South Carolina, the courts have ruled that an employee cannot be denied workers’ comp solely because he or she was an undocumented worker who was illegally employed.

In other states, an illegal immigrant does not qualify for workers’ comp. Arizona and Wyoming courts have ruled that the illegal immigrant cannot legally enter into an employment contract, and therefore is not an employee. The same argument has failed in Georgia, Connecticut, Louisiana, Oklahoma, Texas and Ohio.

This is in contrast to court rulings on FLSA, which have held that the undocumented worker is entitled to back wages for overtime, even if he or she should not have been employed in the first place.

Missouri Governor: No Sexual Orientation Discrimination

Posted: August 20th, 2010, 6:17am EDT by Jolie

The governor of Missouri, Jay Nixon recently issued an executive order that bans employment discrimination based on sexual orientation. The order applies to state agencies and public schools but does not apply to private employers.

The same executive order also bans discrimination based on veteran status.

There is no federal law that bans discrimination against gay or lesbian workers in private industry. Several states have laws that prohibit discrimination based on sexual orientation in all employment, including New York, California, New Jersey and Illinois. However, Missouri does not have any state law that prohibits discrimination based on sexual orientation.

Apparently the Governor felt that he needed to take the matter into his own hands, at least regarding discrimination against homosexuals, bisexuals and transsexuals by state agencies.

In the executive order, the governor alluded to the Declaration of Independence’s assertion that “all men are created equal” and strongly suggested that any law, regulation or judicial decision that permitted discrimination based on sexual orientation was illegal.

Under Executive Order 10-24, the Missouri executive branch of government is prohibited from discriminating in:

Public education, including elementary schools, secondary schools and colleges

State financial assistance

Healthcare services provided by the state

Employment and services provided by all state agencies

Job training

State regulatory and licensing agencies

The ban covers all employment-related activities including layoffs, hiring, training, recruiting, promotions, benefits, layoffs, transfers, termination, demotions, and salary or wages.

Governor Jay Nixon is the 55^th governor of Missouri, a Democrat elected in a landslide victory in November, 2008. Prior to becoming chief executive, he served in the state Senate and four terms as Missouri Attorney General. The Missouri legislature has a Republican majority, making it unlikely that any state law banning sexual orientation discrimination would be passed during the governor’s current term. The Democratic governor has gone head-to-head with state lawmakers on a number of issues, usually unsuccessfully.

OFCCP Seeks Comments on Disability Hiring

Posted: August 18th, 2010, 6:11am EDT by Madison

The federal OFCCP or Office of Federal Contract Compliance Programs seeks suggestions from employers on more effective ways to recruit, hire, train and promote disabled workers. Comments must be received by the OFCCP by September 21, 2010.

In particular, the federal government is interested in comments about successful programs used by businesses to recruit, hire and retain qualified disabled workers. The request for comments was published in the Federal Register.

Read the proposed regulations and post comments here.

Several federal laws and executive orders require federal contractors to take affirmative action to hire disabled workers. Yet, employment of disabled workers lags far behind. According to the OFCCP, nationwide just 21.7 percent of disabled people were in the workforce in June 2010, compared to 70.5 percent of other workers. Unemployment for disabled persons was 14.4 percent, while unemployment among those with no disability was 9.4 percent for the same timeframe.

Patricia A. Shiu, OFCCP Director, noted that work is central to our sense of self, financial independence and integrity. She added that the OFCCP is reassessing the proactive measures that federal contractors must take to seek out qualified disabled individuals for employment.

The agency also seeks input on:

What data are available to help establish benchmarks and goals for hiring individuals with disabilities.
How linkage agreements can be strengthened to facilitate the hiring of disabled persons

The OFCCP enforces several federal laws that prohibit discrimination against workers with disabilities and require businesses with federal contracts in excess of $10,000 to have affirmative action plans in place, to recruit, identify and hire persons with disabilities. Those laws include:

Executive Order 11246
The Vietnam Era Veterans’ Readjustment Assistance Act
Section 503 of the Rehabilitation Act

Tennessee Allows Payroll Debit Cards, Direct Deposit

Posted: August 13th, 2010, 6:04am EDT by Cara

A new law allows Tennessee employers to issue payment to workers by prepaid debit card or direct deposit as well as cash or check. The law went into effect on July 1, 2010.

Previously, Tennessee law allowed an employer to pay by cash or check, but did not mention direct deposit, debit cards, or any other electronic form of payment. The new law allows direct deposit, a convenient form of payment that has become the standard for many employees. Direct deposit, also referred to as electronic automated funds transfer, is preferred by many employees because the funds are often accessible faster than payments by check.

The new Tennessee payment law also permits employers to pay workers with a prepaid debit card. However, certain conditions must be met:

An employer must permit the employee to make a choice between being paid by direct deposit or prepaid debit card.
The debit card must permit employees to make one or more transfers or withdraw each pay period without charge.
An employer must disclose debit card fees to the employees and explain both payment systems to them.

If an employee opting for direct deposit fails to provide bank account information, the employer can legally pay by debit card instead.

Under current Tennessee law, employers are also prohibited from making deductions without the employee’s authorization. When an employee is terminated, including laid off, fired or resigning, the employee must be paid his or her wages owed in full by the next regular payday, but not more than 21 days after the employee’s last day at work.

Employees must be paid at least twice per month, and notice of paydays must be prominently displayed in at least two locations in the workplace.

The Tennessee Department of Labor and the Labor Standards Division enforce these laws.

Limits on Audits of Federal Contractors by OFCCP

Posted: August 11th, 2010, 6:11am EDT by Amelia

In a move that is good news for federal contractors, a judge has decided that audits by the OFCCP or Office of Federal Contract Compliance Programs are limited in scope.

In a landmark case involving the Frito-Lay plant in Dallas, Texas, the judge ruled that the OFCCP could not continue asking for more and more information to audit. Instead, the original audit scheduling letter set limits on the documents the government agency was allowed access to. Frito-Lay is the corporation headquartered in Dallas that produces potato chips, corn chips and other snack foods. They provide 59% of nationwide sales of snack chips.

Initially, in July 2007, the OFCCP requested applications, affirmative action plans and other documents related to hiring at the Dallas plant for 2006 through June 2007. According to OFCCP, those documents showed a pattern of adverse impact in the hiring of women. Later, the OFCCP requested info through December 2007 and from July 13, 2005 to December 31, 2005. Frito-Lay complied with the request.

Then on November 10, 2009, the OFCCP requested more records, from January 1, 2008 to October 31, 2009, and Frito-Lay refused to provide them. Attorneys for the snack-food company argued that the OFCCP was unlawfully extending the scope of its original investigation into hiring practices at the Dallas facility, past the date of the original letter.

The OFCCP argued that because they found evidence of disparate impact in hiring, they had the right and the duty to investigate the subsequent period.

The judge agreed with Frito-Lay. In his ruling, the judge for administrative law noted that the U.S. Department of Labor specifically provided assurances in comments to its regulations that compliance reviews would not be unending. Therefore, he reasoned, the agencies own regulations dictated that the OFCCP investigation launched in July 2007 could not extend beyond that date. In other words, the agency could not provide notice that they would audit events that had not yet occurred.

According to consultant David Cohen of DCI Consulting Group in D.C., “If the OFCCP drags the case on, it can’t ask for more data.”

This is good news for any federal contractor that would prefer not to be subject to unending audits.

Exempt Administrator Status Update

Posted: August 6th, 2010, 6:08am EDT by Derrick

The U.S. Department of Labor is interpreting the regulations regarding exempt salaried employees much more strictly, and taking action against employers who stray over the line. In particular, the exempt status of outside salespeople and administrators is coming under fire.

The situation is expected to get worse, not better. The U.S. Department of Labor has a backlog of opinion letters. As soon as a Wage and Hour administrator is confirmed, that backlog will be signed, and carry the force of law. Courts must defer to the DOL opinion letters unless they are “arbitrary and capricious”, according to Gregory Jacob with Winston & Strawn.

In the most recent example, the DOL issued an opinion that pharmaceutical reps do not meet the FLSA standards for exempt employees, either as outside salespersons or as exempt administrators. The issue arose in litigation with Novartis Pharmaceutical Corp, but will affect every U.S. drug company, and many others.

In the Novartis case, drug reps cannot legally sell or take an order for the medications. Representatives work with little direct supervision, but implement detailed company policy on almost every aspect of the job.

The U.S. Department of Labor ruled that simply scheduling their own time and appointments sis not qualify the employees for the administrative exemption, because they did not routinely exercise independent judgment on matters of significance.

According to attorney Jacob of Washington, D.C., this ruling makes it much harder for any employee to qualify as an exempt administrator. In addition, the DOL may very well narrow the definition further in the near future. For that reason, employers should examine every exempt employee’s duties and consider making any administrators non-exempt.

Although the U.S. Department of Labor handles only about 10% of wage and hour enforcement in the country, many states follow the federal regulations regarding exempt status.

School Visitation Law Update

Posted: August 4th, 2010, 6:40am EDT by Cara

A number of states require the employer to give employees unpaid time off to attend school events such as parent-teacher conferences and classroom events. This includes California, Colorado, Illinois, Massachusetts, Minnesota, Nevada, North Carolina, Rhode Island and Vermont — all have school visitation laws.

The Colorado Academic Activities Leave Law applies to employers with 50 or more workers. It permits the parent or guardian of a K-12 student to take off 6 hours per month in increments of up to 3 hours each, up to a total of 18 hours per academic year. Paid leave may be substituted for the unpaid school visitation leave, but the law does not apply to supervisory employees.

Illinois provides for parents and guardians to take up to 8 hours of unpaid leave

California has two separate school visitation laws that prevent the employer from taking any negative action against employees who take unpaid school visitation leave. One law applies to employers of any size, and requires that parents or guardians be given unpaid time off to attend disciplinary events at school such as hearings regarding a suspension or expulsion.

The second California school visitation law applies only to employers with 25 or more workers at the same location. That law gives parents, guardians and grandparents with custody of children in kindergarten through grade 12 the right to take time off for concerts, school plays, sporting events, art shows and other school events. The law also applies to children in a licensed daycare. Time off is limited to 8 hours per month, and 40 hours per year. The employee may use PTO, vacation time or comp time, or take unpaid time off in accordance with the employer’s policies. When both parents work for the same employer, only one can take leave under this law at a time.

Several other states such as Arkansas, Tennessee, Utah and Louisiana simply recommend the leave, they do not require it. Texas has a school visitation leave law, but it applies only to employees who work for the Texas state government.

For more info on school visitation laws in other states, post a query in our comments section.

ADAAA Expands FMLA for Adult Children

Posted: July 30th, 2010, 6:04am EDT by Amelia

Just when employers thought they had FMLA figured out, ADAAA throws in a new wrinkle.

According to attorney Joan Gale and several other noted experts, the expansion of ADA under ADAAA will enable many more employees to take FMLA for adult children, even when those children are not members of the military or veterans.

An employee can take unpaid, job-protected leave of up to 12 weeks under the federal Family and Medical Leave Act when an immediate family member has a serious health condition. Originally, the FMLA was crafted so that immediate family members included parents, a spouse, and a son or daughter under the age of 18.

Sons and daughters over the age of 18 were included in an employee’s FMLA leave only if they had a disability under ADA and were incapable of self-care.

Essentially, the ADA extended the “son or daughter” status indefinitely, but only for individuals that met the narrow ADA standard for a disability. Generally, the ADA required that the disability interfere with basic life functions in three or more areas, such as being unable to bathe, dress or groom themselves, being unable to walk or use public transportation, and physically unable to shop or cook food. In many cases, a blind or deaf individual over 18 did not meet this very strict definition of disability, and his or her parent would not qualify for FMLA, even if the blind or deaf offspring also had a serious health condition such as cancer.

The “disability” designation is still a requirement, however, under ADAAA a new standard for disability has been introduced. The more liberal standard for disability includes many more conditions than in the past. Certain conditions including blindness, deafness and mental retardation are presumed to be disabilities under ADAAA. Other conditions are often disabilities, such as arthritis or diabetes. In addition, a condition such as cancer or rheumatoid arthritis is a disability, even if it is currently in remission. An employee can take FMLA to care for a son or daughter over the age of 18 with any of these conditions, who is also unable to care for themselves for any reason, including a serious health condition.

A 27-year-old blind son who is in traction with two broken legs, probably cannot care for himself. His mother or father would be entitled to take FMLA to care for him. If the son were not blind, the parents would not qualify for FMLA for his serious health condition, because he is over the age of 18.

The adult child must still require supervision or active assistance to complete self-care activities in three or more activities of daily living or instrumental activities such as paying bills, using a telephone and telephone directory or using a post office. A minor illness such as a cold, flu, ear infection or a broken arm not requiring traction would not interfere with the adult child’s ability to care for himself, and not trigger FMLA.

Many types of surgery do not render the adult child incapable of self-care, and therefore do not permit the employee to take FMLA. Brain damage, paralysis or other long-term illnesses or accidents may very well make the offspring incapable of self-care. When there is doubt, the FMLA certification form should be used for the physician to designate whether or not the patient is capable of self-care.

The ADAAA still does not permit a parent to take time off to care for a daughter over the age of 18 who has recently given birth. In the overwhelming majority of cases, the daughter is capable of self-care after normal childbirth.

Employers should remember that an employee can take leave for a child of any age who is in the military service, or who is a veteran injured on active duty.

Colorado Medical Marijuana in the Workplace

Posted: July 28th, 2010, 6:19am EDT by Amelia

Two new Colorado laws designed to limit the rapid growth of the legal medical marijuana industry, also provide guidance for employers n this troubling topic.

Since 2001, workers in Colorado who have a “debilitiating medical condition” can use marijuana when it is “medically necessary” to treat a condition. It is frequently prescribed to alleviate nausea during chemotherapy, as well as for other conditions.

The 2001 law also took the enormous leap of assuming that possession of less than two ounces of marijuana, or possession of up to three flowering plants, was presumed to be lawful. However, medical marijuana users must register with the state and obtain a medical marijuana card issued by the Colorado Department of Public Health to legally use the controlled substance.

Still, that law does not require the employer to accommodate the use of medical marijuana in the workplace. The new laws further clarifiy that requirement, and allow an employer to discipline an employee who is under the influence under certain circumstances.

Effective June 10, 2010, a registered marijuana user cannot:

Perform any task under the influence of medical marijuana that would constitute negligence or professional malpractice
Drive, pilot a plane, or be in actual physical control (including operating or navigating) a motorboat, plane or vehicle while under the influence of medical marijuana
Use medical marijuana in a vehicle, plane or motorboat. (Apparently use in rowboats, canoes and kayaks is acceptable)
Use or possess medical marijuana on school grounds or on a school bus

Currently 14 states have laws that permit limited use of medical marijuana by a patient with a valid prescription for it. Those states include California, Alaska, Hawaii, Maine, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont and Washington. Several of the states have provided almost no guidance for employers on handling an employee whose off-duty consumption of cannabis creates performance or safety problems in the workplace.

New Connecticut Family Violence Leave

Posted: July 23rd, 2010, 6:25am EDT by Cara

Connecticut is the most recent state to enact a law that specifically grants leave to victims of family violence. Illinois, California and several other states already have similar laws.

Effective October 1, 2010, Connecticut employers must provide up to 12 days of paid or unpaid leave to employees to address a family violence issue.

The Connecticut Family Violence Leave statute, signed into law by Governor Jodi Rell on June 7, permits employees to take time off to:

Seek medical care for physical injuries or disabilities
Seek psychological care of counseling for psychological injuries
Obtain services from an organization on behalf of the victim, including a woman’s shelter or similar non-profit agency
Relocate to a new home
Participate in a criminal or civil court case related to the family violence

The domestic violence leave law applies to employers with three or more employees. State law already allowed victims of certain crimes time off to attend court proceedings and to assist police in an investigation. However, this law provides additional leave to relocate, and seek medical care or counseling.

Under the new Connecticut law, family violence is any incident causing bodily injury including physical harm or an assault, or any threatened act of violence that produces fear of imminent physical harm. The assault or threat must be between family members or members of the same household, for this law to apply. It can apply to live-in lovers and roommates, as well as spouses, offspring, etc. Generally speaking, verbal abuse and arguments do not qualify unless there are specific threats and a likelihood that the aggressor will act on those threats.

Family Violence Leave can be paid or unpaid. The employer can count comp time, paid vacation, paid personal days or other time off as leave under this new law. It is against the law to discharge, penalize, or threaten an employee who takes leave under this law. When the need for leave is foreseeable, the employee must give at least 7 days notice in advance. However, if the need for leave arises suddenly, no notice is required.

The employer can require that the employee furnish proof to support the use of Family Violence Leave including police or court records, records from an attorney, a victim services organization, victims’ advocate or medical professional. In the absence of other records, the employee may furnished a signed written statement of his or her own that the leave is related to family violence.

Overtime Per Diem Update

Posted: July 21st, 2010, 2:46pm EDT by Amelia

Slick maneuvers by employers to artificially lower the hourly wage for straight time and thereby avoid overtime are being regularly rejected in court.

The 5^th Circuit Court of Appeals recently ruled that virtually every payment made to an employee during the first 40 hours of work must be figured into the employee’s “regular hourly rate” for overtime. When a worker puts in more than 40 hours in the payroll week, he or she must be paid 1.5 times the “regular hourly rate.”

Recent court rulings show that state and federal agencies are getting tough with employers on wage and hour issues, including misclassifying employees as independent contractors, exempt status and now overtime.

In the most recent case, when United Technisource Inc. or UTI hired Timothy Gagnon, a highly skilled aircraft painter, the prevailing wage for that job was $18.00 per hour. Yet, UTI offered Gagnon just $5.50 per hour, with a $12.50 per hour per diem, up to $500 total. The per diem caps out at exactly 40 hours in the payroll week. UTI further offered Mr. Gagnon $20 per hour for hours in excess of 40 hours per week.

When Gagnon eventually filed a wage complaint for unpaid overtime, the company argued that the law required only $5.50 x 1.5 = $8.25 per hour overtime, and Gagnon was being paid almost three times that amount. A lower court found for the company.

However, the court of appeals disagreed. The judges found that if Mr. Gagnon worked 40 hours per week, his wages were $220 +$500 per diem = $720, or $18 per hour. Therefore, he was entitled to 1.5 times the “regular hourly rate” of $18, or $27 per hour for overtime.

In a similar suit in 2006, the court ruled that commissions and sales bonuses must be included in the “regular hourly rate” for Wal-Mart employees, resulting in a multi-million-dollar award.

In Gagnon v. United Technisource Inc, the judges ruled that, “The regular rate by its very nature must reflect all payments which the parties have agreed shall be received regularly during the workweek, exclusive of overtime payments. The ‘regular rate’ becomes a mathematical computation once the parties have decided on the amount of wages and the mode of payment, which is unaffected by any designation to the contrary in the wage contract.”

The court was especially suspicious of this pay arrangement because the per diem rate was capped.

Employers should note that Mr. Gagnon agreed to this compensation arrangement and worked under it for more than a year, before filing suit. An employee cannot bargain away or waive rights to minimum wage or overtime under the FLSA.

The court followed the U.S. Department of Labor regulations, which require any per diem rate to be included in the “regular hourly rate” to calculate overtime.

This case also underscores just how expensive even a relatively minor overtime miscalculation can be for an employer. The court awarded Mr. Gagnon $9,500 in unpaid overtime plus damages, and more than $55,000 in attorney’s fees, meaning the company paid almost $65,000 for its illegal attempt to avoid about $8,000 in overtime payments.

NLRA Poster Required

Posted: July 16th, 2010, 6:11am EDT by Madison

Every federal contractor must display a poster informing employees of their rights under the National Labor Relations Act or NLRA. Under a directive recently issued by the U.S. Department of Labor, merely posting the notice electronically is not sufficient. The poster must also be posted in conspicuous locations in the workplace.

Inspectors will check for the NLRA posters as a routine part of the on-site compliance inspection in awarding contracts. Prominently displaying the poster puts the employer in compliance with Executive Order 13496.

An employer who posts employee notices electronically must include the NLRA information. However, the employer must also display posters in the worksite, in addition to the online information.

The NLRA poster informs employees of their legal rights to join a union, form a union or assist a union. In addition, the poster informs employees that they have the right to enter into collective bargaining agreements with the employer. It includes examples of legal and illegal contracts. The poster also includes information on how an employee may contact the National Labor Relations Board or NLRB with complaints and questions. Posters are available at www.laborlawcenter.com.

Under EO 13496, the poster must also be supplied in a language other than English that is understood by employees, when a significant portion of the employees do not speak English.

Beginning with federal contracts issued on June 21, 2010, employers must include specific language that outlines the posting obligations and includes the text of the employee notice. This contract must cite 29 CFR Part 471, Appendix A to Subpart A. Compliance officers have the right to inspect all contracts, as well as verify that the posters are being displayed.

Suitable locations for displaying the NLRA poster include employee bulletin boards, break rooms common work areas, HR or personnel offices and other areas where legal notices or employment posters are displayed.

South Carolina Immigration Update

Posted: July 14th, 2010, 6:43am EDT by Derrick

Effective July 1, 2010 even the smallest employers in South Carolina are covered by the state’s tough immigration law. Employers with 100 or more workers were covered beginning July 1, 2009 but compliance for smaller companies was delayed.

The South Carolina Illegal Immigration Reform Act prohibits a business from employing undocumented workers. Smaller employers must now follow additional steps to very the work status of new hires.

A free online training program for employers is available here.

Any employer who violates the law is subject to strict penalties including suspension of the business license. Repeated violations would result in the not being allowed to hire any workers in the future, essentially forcing the employer out of business.

South Carolina employers must verify the legal work status of all newly hired employees. An employer can use E-Verify to meet this requirement. E-Verify is a joint venture between the Department of Homeland Security, Social Security and Customs and Immigration, that verifies and confirms the authenticity of documents submitted at hiring. The program is free and takes less than one minute to verify an employee.

As an alternative to E-verify, an employer can use a South Carolina driver’s license or state identification card to verify legal employment status and identity. Driver’s licenses and I.D. cards from some – but not all – other states are also acceptable.

Employers who violate the South Carolina immigration law can be fined $100 to $1000 per employee. An employer who knowingly hires undocumented workers can have his or her employment license temporarily suspended or permanently revoked. This would mean that while the employer can remain in business, they could not legally hire any employees whatsoever.

The law is enforced by the South Carolina Department of Labor, Licensing and Regulation. The agency already has inspectors and investigators in place to enforce the law. This is one of the toughest immigration laws in the country.

Arkansas Drug Test Update

Posted: July 9th, 2010, 6:23am EDT by Madison

The Arkansas Department of Labor issued new drug test rules for employers under the 2009 Drug Test Law. Effective May 1, 2010, the new rules generally prohibit an employer from charging an employee for a drug test. However, the rules permit an Arkansas employer to require the employee to pay for a drug or alcohol test, under very specific circumstances. Routine pre-employment drug screening must be free to the applicant, and the applicant must receive a copy of the results at no cost if requested in writing.

The same provisions apply to medical exams and drug tests before and during employment. An employee who requests that a sample be retested after a positive drug test can be required to pay for the retest – but not for the initial screening.

Certain exceptions apply to further drug tests if the employee has tested positive for an illegal drug (including alcohol) and has agreed to a plan as a condition of continued employment. In that case, the employee can agree in writing to pay for future drug tests.

However, the Arkansas regulations set a number of limits on such agreements between the employee and the employer.

Under the law, illegal drugs include controlled substances and any prescription medication unless the employee has a valid prescription for the drug at the time of the test.

Alcohol can be considered an illegal drug under the law if the employer has a written policy in place that:

Prohibits alcohol use in the workplace or before work

Establishes a test procedure for alcohol abuse

Defines a blood alcohol level considered a “positive” test

If an employee has a history of positive drug or alcohol tests, the employee can agree in writing to pay for future tests as a condition of employment. Such tests can be required by an employer who is required to make reasonable accommodation for a drug- or alcohol-dependent employee under ADA, the Americans with Disabilities Act. The Arkansas Department of Labor can demand a copy of such written agreement. Fees can be deducted from the employee’s paycheck or paid in another way.

The regulations impose penalties on Arkansas employers who violate this law. Each offense is a misdemeanor punishable by a $100 fine, plus recovery of the drug test fee paid by the employee.

Healthcare Reform Changes for 2010

Posted: July 7th, 2010, 6:14am EDT by Cara

Every employer should be aware of recent guidelines for healthcare reform under the Affordable Care Act. The new guidelines released by the departments of Health and Human Services, Treasure and Labor include immediate restrictions on pre-existing conditions for plan participants under the age of 19. This measure is effective for plans beginning on September 23, 2010 or later.

Under the Patient Protection and Affordable Care Act, employees covered by group health insurance will be able to choose their own primary care physician or pediatrician, and must be able to see an obstetrician or gynecologist without a referral. Plans cannot require prior approval for emergency care at a hospital, even if the hospital is out of the network.

The final rule published in the June 28, 2010 Federal Register goes into effect on August 27, 2010.

Effective with the next plan year, health insurance companies cannot:

Impose limits on coverage based on pre-existing conditions for those 18 and under
Take away coverage based on an unintentional mistake on the health insurance application
Set limits on lifetime coverage

The healthcare reform law also eliminates dollar limits on annual coverage, except in specific circumstances. In general, the insurer cannot limit annual coverage.

The restrictions on annual limits will be phased in. Plans that begin before September 23, 2011, can have an annual limit of $750,000. For 2012, that limit will be increased to $1.25 million and for 2012, the insurer can impose a $2 million limit. After December 31, 2013, generally no annual limits can be imposed.

However, FSAs (flexible spending accounts) and MSAs (Medical Spending Accounts) are specifically excluded from this provision. Under the law, FSAs will be limited to $2,500 per year beginning in 2013. That amount will be adjusted for inflation annually. According to the overview of the final regulations issued by the Department of Labor, “annual contributions to MSAs and HSAs are subject to specific statutory provisions that require that the contributions be limited.”

Beginning with the plan year 2014, pre-existing conditions must be covered for all individuals. The plan cannot decline to pay for treatment of a pre-existing condition like arthritis or asthma. Nor can coverage be declined based on a pre-existing condition. Exclusions that apply regardless of when the condition arose will still be acceptable.

Oregon Limits Use of Credit History

Posted: July 2nd, 2010, 6:57am EDT by Jolie

Effective July 1, 2010 a new Oregon law limits how an employer may use an employee’s credit history. The new law prohibits discrimination against employees with bad credit history. The law applies to any employment action including hiring, promotion, demotion, termination, retaliation, etc.

Use of a credit report to select applicants has become a thorny issue in the past two years, as many competent employees have been laid off and unable to pay their bills. Others were caught in an upside-down mortgage when the real estate bubble burst, and in extreme cases have had a home foreclosure or declared bankruptcy. The law was passed because Oregon legislators believe that depriving these people of jobs is not in the state’s best interest.

Under federal regulations, an employer can consider a worker’s credit history when making hiring decisions for positions of responsibility, usually assumed to mean for management positions. The assumption is that someone with a poor credit history displays bad judgment in his or her personal life, and would not be any better at handling the employer’s money.

An Oregon employer can still check credit history if it is directly related to the employee’s job, and if the employer discloses in writing that they will be checking the history and how that information will be used. The burden of proof rests with the employer meaning the employer should have a signed release from each applicant or employee before checking credit history.

However, opponents of this policy have long argued that usage of credit reports in selection results in de facto discrimination because African Americans and other minority applicants are statistically more likely to have poor credit history.

The new law does permit an employer to consider information that is “substantially job-related” in selecting employees. This includes an employee who will have access to financial information beyond what is required for a retail transaction, and for occupations where credit history is required for bond or insurance purposes. Banks are excluded from this law, as are most agencies that hire law enforcement officers who will handle criminal cases.

The Oregon Bureau of Labor and Industry or BOLI is conducting training classes on the new rule, but those classes are already filled to capacity with employers eager to learn about the law.

Employees who think they are the victim of such credit history discrimination can sue the employer (and recover attorney’s fees if they win, plus damages and penalties) or file a complaint with BOLI.

New FMLA Entitlement for Aunts, Uncles, Grandparents, Same-Sex Parents

Posted: June 30th, 2010, 9:22pm EDT by Cara

A new U.S. Department of Labor regulation underscores the fact that gay parents and others in nontraditional families have the right to take up to 12 weeks of FMLA to care for a child with a serious health problem, or to bond with a child (under 18) who is new to the home.

This regulation is no surprise. Even before the 2009 Final Rule, any employee who was acting in loco parentis – in place of a parent – was entitled to take FMLA leave when the child had a serious health problem. An employer could require “proof” of the employee’s relationship to the child, but adoption papers or a court order were not required. In fact, even a hand-written statement from the employee that he or she was responsible for the child and was acting in the place of a parent, was sufficient under the federal Family and Medical Leave Act.

The clarification issued by assistant administrator Nancy Leppink of the Wage and Hour Division simply underscores that regulation. Leppink points out that the new regulation would permit a stepparent to take time off to bond with a new child or to care for a child with a serious health condition. The new regulation specifically extends FMLA coverage to both partners in a gay relationship who coparent a child, whether the partners are married, united in a civil union or single. This action is seen as a perk specifically intended for the lesbian, gay, bisexual and transgender or LGBT community.

The new regulation also expressly states that a child can have more than two “parents” under the FMLA definition – in fact, a dozen or more people could be acting in parental roles for the child, and could be entitled to unpaid time off. A child’s father, mother, stepmother, stepfather, three uncles, two aunts, and four grandparents could each take up to 12 weeks of unpaid FMLA under the new regulation, as long as each person was acting as a parent to the child.

The major beneficiaries of FMLA this new regulation may well be grandparents. In the past, many employers have been reluctant to grant FMLA to a grandparent if the child had two parents on the scene. For example, if a 16-year-old gave birth, many employers were reluctant to grant leave to the maternal grandparent to care for the child. Under this regulation, the teen mother’s parent would be acting as a parent to the new baby, even though the teenage parents were still on the scene and financially responsible for the child.

The new FMLA regulation specifically states that anyone acting in the role of caring for a child is entitled to leave, regardless of the legal or biological relationship – or lack of relationship. The leave also applies to military family members such as uncles, aunts and grandparents.

New Wage and Hour Ruling on Protective Gear

Posted: June 25th, 2010, 6:48am EDT by Derrick

The U.S. Department of Labor recently ruled that employees must be paid to don and doff protective gear. In addition, the agency ruled that putting on special work clothing or protective gear may trigger the continuous workday, meaning employees would have to be paid for all time after that event.

The Wage and Hour Division has long determined that an employee need not be compensated merely for changing clothes. For example, a server in an expensive restaurant who arrives in street clothes and changes into his tuxedo before work, is not entitled to payment for the time spent changing. However, the issue of changing into protective clothing is more complex.

The Department of Labor has waffled on this issue in the past. The agency issued letters in 1997, 1998 and 2001 that suggested employees were entitled to payment for time spent putting on protective gear including plastic arm guards, polar sleeves, mesh gloves, rubber boots, wrist wraps, shin guards, and mesh aprons. The 1997 memo specifically addressed protective gear worn in poultry processing plants.

Two opinion letters issued during the George W. Bush administration overturned that directive. In those letters, dated 2002 and 2007, Wage and Hour used a convoluted argument based on a 1982 dictionary to “prove” that protective clothing including face masks and bullet-proof vests is “clothing” and time spent changing was not compensable.

The June 16, 2010 opinion letter issued by Deputy Administrator Nancy Leppink overturns that decision. Leppink argues that protective gear used in the meatpacking industry today, including impermeable gloves and face masks, is far more elaborate, and employees should be paid for changing time.

Leppink also notes that even when employees are not paid for changing into protective gear, doing so may trigger the beginning of a continuous workday – meaning the employees are entitled to payment for all time after that. An employee who changes into protective gear and then walks 10 minutes to a work station where he or she waits 15 minutes to begin the day, would be entitled to payment for the walk and waiting time under the FLSA or Fair Labor Standards Act.

Whether or not the courts will uphold Leppink’s opinion is yet to be determined. For the present, however, it is safer for an employer to pay employees for changing time, and to consider changing the beginning of a continuous workday.

Supreme Court Sides with Employer in Sexting Case

Posted: June 23rd, 2010, 6:07am EDT by Amelia

The Supreme Court unanimously ruled that an employer has the right to audit personal text messages sent on a company pager. The ruling overturned a lower court’s opinion reported here earlier.

In the June 17, 2010 ruling, the Supreme Court determined that the Ontario, California police department did not violate the Fourth Amendment rights of SWAT Sergeant Jeff Quon when the employer read his explicit text messages to his girlfriend, estranged wife and a male coworker.

In the majority opinion, the court reasoned that the California employer was within their rights to audit text messages in an attempt to determine if the city’s contract with the company providing the pagers was sufficient.

When the city provided pagers to team members, it introduced a computer policy that allowed the city to monitor all network activity including Internet use and email, “with or without notice.” The pager plan included 25,000 characters of free text messages per month. However, Sgt. Quon’s supervisor told team members they could use the pagers for personal messages, as long as the team member paid any overage fees. The supervisor implied that as long as the team member paid the additional charges, texts would remain private. Sgt. Quon did pay overage fees on his pager several times.

Eventually, the city conducted an audit to determine if the pager contract provided a sufficient number of text messages per month. During the course of the audit, the employer learned that Sgt. Quon had sent many sexually explicit messages, often while he was on duty. The employee argued that this was a violation of his Fourth Amendment rights to privacy, but the Supreme Court disagreed.

In the unanimous opinion, Justice Anthony Kennedy noted that because the search was due to a legitimate work-related purpose, not excessive in scope, it was legal. The employer’s policy gave Sgt. Quon no reasonable expectation of privacy in this situation.

Employers should note that this case has limited applications to other situations. The case does not give the employer the right to read every text message sent by every employee, or to use the text messages as a way to monitor employee performance. However, it found that the employer can enforce a written company policy that provides access to employee texts, even if enforcement has been inconsistent.

Even Justice Kennedy noted that the court must proceed with care in infringing on an individual’s rights to privacy of electronic communications via equipment owned by the employer, or a government agency.

Rhode Island Discrimination Update

Posted: June 18th, 2010, 6:28am EDT by Jolie

Employees in Rhode Island now have 3 years to file a suit under the state Civil Rights Act, instead of one. Earlier this year, the General Assembly overrode a July 2009 veto from Governor Donald Carcieri, to revise the statute.

Rhode Island prohibits discrimination based on race, sex, religion, color, age, disability or country of origin. The very broad Rhode Island Civil Rights Act simply entitles individuals to “enjoy equal benefits of the law.” This is usually interpreted to mean protection from employment discrimination and retaliation, among other rights. Until recently, this law had no statute of limitations on lawsuits.

A second law, the Fair Employment Practices Act or FEPA, specifically includes a one-year statute of limitations. In 2007, the Rhode Island Supreme Court ruled in Horn v. Southern Union that the two laws must be consistent. Therefore, the court imposed a one-year statute of limitations on the Civil Rights Act.

The state legislature decided that the one-year statute of limitations was too narrow, and specifically passed a law giving an employee three years to sue the employer for discrimination. State representative Donna M. Walsh pointed out that citizens have the right to sue for three years for other types of infractions, and that the one-year statute of limitations was not fair to victims.

Governor Carcieri disagreed, noting that the two laws should be consistent, and that it was unfair for employers to maintain records for three years. The General Assembly overruled him.

The new law means that Rhode Island employers should ensure that their labor law posters are up to date. In addition, employers should maintain all employment records and personnel files for at least 3 years after termination. Those files should contain objective evidence of every employment decisions, including promotions, terminations, demotions, training, performance evaluations, hiring qualifications, and disciplinary warnings.

Wisconsin Bans Workplace Smoking

Posted: June 16th, 2010, 6:59am EDT by Derrick

The Wisconsin smoking ban, which prohibits smoking in virtually every workplace, goes into effect on July 5, 2010. The 2009 Wisconsin Act 12 is more restrictive than many other state smoking bans. It requires business owners to enforce the non-smoking law, and provides greater penalties for business owners who fail to do so.

The Wisconsin non-smoking law prohibits smoking indoors in public places, including workplaces with two or more walls. This prohibits smoking in warehouses, auto shops, taverns, restaurants, sports arenas, theaters, private clubs and stores. Smoking is banned in all state and local government offices, all schools, and prisons. The law also bans smoking on public transportation and even in bus shelters.

Restaurants and bars may permit smoking in a designated outdoor area such as a patio or porch, as long as the space has only one wall. The state law permits smoking outdoors, even inches away from an open door or window.

Many states permit residents of nursing homes to smoke in certain designated areas. Wisconsin will not. All hospitals, clinics and nursing homes are included in the smoking ban.

The new law repeals an earlier statute that allowed a business owner to designate certain areas where smoking was permitted, such as private offices or an employee break room. Smoking is banned throughout the employer’s building, including cafeterias, break rooms, restrooms, vehicles, elevators and even private offices within a public building.

Under the law, even holding a lit cigarette, pipe or other smoking implement without inhaling or exhaling is smoking.

Wisconsin employers are required to eliminate ashtrays, and to prominently display non-smoking signs and no smoking posters.

In addition, by law the employer must take the following steps to enforce the Wisconsin Smoking Ban:

Refuse to serve a patron who is smoking in a bar, restaurant or private club
Ask a patron or employee who lights up to stop smoking
Ask the patron or employee to leave the building if he or she continues to smoke
Take appropriate measures against an employee who is smoking indoors
Call the police if the patron or employee who is smoking refuses to leave

Any employer who fails to enforce the smoking ban is subject to a fine of $100 per day.

National Labor Relations Act

Posted: June 11th, 2010, 5:08pm EDT by Madison

The National Labor Relations Act or NLRA is a federal statute signed in 1935 to protect the rights of workers to organize into unions, although the statute was billed as “protecting both employers and employees.”

Under the NLRA, employees have the right to organize into a labor union. When a majority of the employees choose to be represented by a union, the employer must negotiate wages and working conditions with the union. Prior to the enactment of the NLRA, many employers would simply fire employees who favored a union and hire new ones. In some cases, the employee fired every employee and hired a whole new staff. The NLRA prohibits that action by an employer.

Every employer should prominently display an NLRA poster in the workplace, where it can be seen by all employees. The NLRA permits employees to free associate with whomever they please, including union organizers.

If some workers want a union and others do not, union representation is determined by a majority vote. Recent changes to the NLRA make it easier for employees to unionize. In the past, a union could only be voted in when a simple majority of the employees voted for the union in an open election. If the company had 100 employees, at least 51 employees had to vote – and vote in favor of unionization – for the resolution to pass. If 49 employees voted, even if every one of them voted for the union, the resolution failed. Under the current rules, only a majority of those voting must cast ballots for the union. If 49 of 100 employees vote under the current regulations, and 30 of them vote for the union, the workplace becomes unionized.

Employers should be aware that they cannot legally forbid an employee from discussing his or her own salary with others, under the NLRA. An employee can still be disciplined for a discussion of a third party’s salary under the act.

Illinois Minimum Wage Increases to $8.25

Posted: June 9th, 2010, 6:44am EDT by Cara

On July 1, 2010 the Illinois minimum wage will increase by 25 cents, from $8.00 to $8.25 per hour. The law applies to employers with 4 or more workers, excluding family members. The federal minimum wage of $7.25 per hour applies to employers with 3 or fewer workers. By law, any employee covered by both the federal and Illinois minimum wage laws must be paid the higher rate.

Every Illinois employer is required to display updated state labor law posters. The easy and economical way to receive free updates is to subscribe to a compliance protection plan.

Several exceptions to the law permit an Illinois employer to pay some workers less than the state minimum wage, usually an “optional rate” that is 50 cents per hour less. Youths under the age of 18 can be paid just $7.75 beginning July 1, 2010. Employees over the age of 18 can be paid $7.75 during the first 90 days of employment, as a “training wage.”

The new minimum wage for tipped employees is $4.95 per hour, an increase of 15 cents from the previous rate of $4.80 per hour. If the tipped employee does not average $8.25 per hour in tips and wages over the payroll week, the employer must pay the difference. A tipped employee under the age of 18, or in the first 90 days of employment, can be paid just $4.65 per hour, but must average $7.75 per hour in tips and wages.

Both Illinois and federal law require employers to pay overtime after 40 hours.

Illinois employers are not obligated to increase wages for any employee who is already earning at least the new minimum wage. The law does not require the employer to pay more than $8.25 per hour to employees.

This Illinois minimum wage increase is the final step in a multi-tiered program passed by the now-infamous former Illinois Governor Rod Blagojevich beginning in 2007. The law allowed for annual increases of 25 cents each year, for four years. Overall, the Illinois minimum wage has increased $3.10 in just over six years.

With this increase, the Illinois minimum wage is tied with Connecticut as the fourth-highest state minimum wage. Only Oregon ($8.40), Washington ($8.55) and Vermont ($8.06) have higher minimum wages. The relative status is likely to continue, since Oregon, Washington and Vermont increase the minimum wage annually based on the cost of living, while Illinois does not.

The new Illinois minimum wage is higher than the rates in California and Massachusetts, at $8.00 per hour. In all, 14 U.S. states plus the District of Columbia ($8.25) have minimum wages higher than the federal rate of $7.25 per hour.

Kansas Smoking Ban

Posted: June 4th, 2010, 6:36am EDT by Derrick

On July 1, 2010 the Kansas Clean Indoor Air Act goes into effect, banning smoking in most workplaces throughout the state.

The new law prohibits smoking in bars, restaurants, taxis and most workplaces. By law, a hotel will be required to designate no more than 20% of rooms as smoking, with 80% designated as smoke-free. Smoking will be prohibited within 10 feet of doors, windows and air ducts for non-smoking buildings.

Smoking will still be permitted on the gambling floors in casinos, although other casino areas must be non-smoking. Tobacco shops can still permit smoking. Smoking is permitted in designated indoor areas of outdoor recreation clubs such as hunting clubs and golf clubs, but only in areas where minors are banned. Certain other private clubs formed before January 1, 2009 can permit smoking if they notify the state by September 28, 2010 of their intention to do so.

The Kansas smoking ban requires that every employer have a written policy that prohibits smoking in the workplace. The employer must communicate the non-smoking policy to all employees, by prominently displaying non-smoking posters and signs.

According to the Kansas Health Policy Authority, the law is expected to result in a savings of $21 million in hospital fees during the first year, and will reduce heart attacks by 2, 160 each year. These figures are based on a New York study that showed a significant reduction in heart attacks among smokers and non-smokers, in the 12 months after a smoking ban was implemented.

The smoking ban will also reduce illegal teen smoking, cancer, and diseases related to tobacco including emphysema and lung cancer, according to a statement released by the governor.

The Kansas Clean Indoor Air Act was passed by the legislature on February 25, 2010 and signed into law by Governor Mark Parkinson on March 12, 2010.

New York Discrimination Law

Posted: June 2nd, 2010, 11:03am EDT by Cara

Employers in New York City have even greater liability for random acts by rouge managers, than in other parts of the country under a recent court ruling that makes it even more difficult for New York employers to defend against charges of illegal discrimination.

The New York Court of Appeals ruled in Zakrzewska v. the New School that simply having an anti-discrimination policy in place is not enough to prevent successful claims. In that suit, Dominika Zakrzewska alleges that she was sexually harassed while a student at The New School. In 2003, Zakrzewska began working in the school computer lab as a freshman. Her immediate supervisor, Kwang-Wen Pan, sent harassing emails and sexually harassed her in person. When Zakrzewska complained, Pan monitored her Internet use in the computer lab in retaliation.

Under federal law, when an employer has an anti-discrimination policy in place, and a system to address discrimination such as a hotline, the employer can use them as an affirmative defense against charges of illegal discrimination. However, that defense is effective only if the employee suffered no tangible negative employment action such as demotion or termination, and the employee failed to use the resources available to address the issue. This affirmative defense is called the “Faragher-Ellerth defense” after two landmark cases.

Different rules apply in New York. The court in Albany ruled that under the New York City Human Rights Law or NYCHRL, the Faragher-Ellerth defense is ineffective. In other words, even if the employer has an anti-discrimination policy in place, and a system to address discrimination issues, which the employee fails to use, the lawsuit can still be successful.

In the ruling, the court concluded that “The NYCHRL does not harmonize with the defense crafted by the [federal] Supreme Court to federal harassment claims.” The court noted that in reviewing the NYCHRL in 1991, the New York City Council specifically included “strict liability in the employment context for acts of managers and supervisors.”

New York employers still need a strong anti-discrimination policy, especially as relating to sexual harassment. They also need a system in place to address discrimination complaints. While these two items alone will not defend against any discrimination lawsuit, they will reduce the potential awards, according to the New York Court of Appeals.

Increased Penalties for Misclassifying Workers

Posted: May 28th, 2010, 5:33pm EDT by Amelia

Does misclassification of employees as independent contractors increase during a recession? Some experts seem to think so. Several states and the federal government are reacting to this crisis with increased enforcement and higher penalties against employers who violate these statutes.

Speaking to SHRM, the Society for Human Resource Management, attorney Frank Connolly said,” When it comes to a lot of start-ups or small businesses that don’t have a lot of assets, a lot of it is naïveté and a lot of it is convenience. I don’t have the money to pay a lot of people a lot of cash. I can avoid it by calling these people independent contractors.” Connolly, with the firm of Jackson Lewis in Washington, D.C. adds, “These employers probably don’t realize that they are violating the law.”

In most cases, if the employer controls when, where or how work is performed, the worker is an employee, not an independent contractor. There are a number of dangers in classifying a worker as an independent contractor when he or she should be an employee:

Violates state and federal tax regulations, triggering an IRS audit
No workers’ comp insurance coverage violates federal law and may cost the employer his or her business if the employee is injured
Violates federal and state minimum wage and overtime laws
Violates state unemployment laws

The U.S. Department of Labor recently announced increased enforcement against employers who misclassify workers.

In addition, several states have implemented new laws that increase penalties for employers who make this mistake. In Massachusetts, a worker is considered an employee unless the service is performed outside the usual course of business of the employer. In California, the law goes one step further. An independent contractor cannot be delivering the business’s primary service or product. A messenger service, for example, cannot employ messengers as independent contractors – they must be employees.

Connecticut recently passed a bill that would make misclassifying workers a felony, and require the employer to immediate stop work. Each day the independent contractor works is a separate violation subject to a $300 fine. That law is expected to be signed by Governor Jodi Rell in the near future.

California: Civil Rights Enforcement Focus is on Large Cases

Posted: May 26th, 2010, 6:41am EDT by Amelia

The California agency responsible for investigating discrimination complaints recently announced that efforts will be focused on class action suits against large employers with a pattern or practice of illegal discrimination. That is welcome news to many smaller employers with strong anti-discrimination policies in place.

The California Department of Fair Employment and Housing or DFEH announced that it will pursue large cases on behalf of a group of class of workers. The agency’s Special Investigations Unit or SIU will conduct the investigations.

This is important news for smaller employers because it means that the agency will no longer investigate every complaint in the order in which it is received. Instead, complaints will be graded based on their merits. For example, a large company that has several claims that appear to be based in fact and indicate a pattern of discrimination will be investigated first. A small business with a single claim of dubious merit would be given a lower priority and investigated later, if at all.

However, the agency will also focus on cases involving smaller firms if they involve legal issues that have not yet been tried in court.

While the press release from DFEH did not specifically cite budgetary considerations, many observers believe that the agency simply has more complaints than they have the staff or budget to investigate. As a result, the agency will focus on high-profile cases involving large employers.

Under the current statutes, the DFEH has two years to investigate a discrimination complaint. After that time, the agency cannot investigate a complaint.

Small employers in California should still be vigilant about avoiding discrimination and have a clear anti-discrimination policy in place, including sexual harassment prevention training for supervisors. However, this new focus makes it less likely that a small employer will be sued by the state for a minor, one-time violation by a supervisor. However, employees will still have the right to sue the employer for such actions.