Labor Law Journal » Items by Amelia

Items by Amelia

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.

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.

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.

Workplace Sexting Policy Needed

Posted: May 12th, 2010, 6:23am EDT by Amelia

Employers may need to update company policies on use of the internet, cell phones, pagers and other electronic devices based on a recent case in the federal Ninth Circuit Court of Appeals. Although this case was tried in California, it involves federal law and affects employers nationwide.

In City of Ontario [California] v. Quon, the employer had a clear policy in place that devices issued by the employer, including computers and cell phones, were to be used for business communication only. The policy also stated that email and similar communications were not confidential. However, that policy did not specifically mention pagers or text messages.

Sgt. Jeff Quon, a member of the Ontario SWAT team, was issued a pager with texting capabilities. He used the pager regularly to send sexually graphic texts to his wife, girlfriend and a male co-worker, who responded in kind. Apparently, a number of these messages were sent when Sgt. Quon was supposed to be working.

Many employers would assume that this was clearly a violation of the employer’s policies, and that Sgt. Quon had no reasonable expectation of privacy when sending and receiving text messages on the employer’s pager – but they would be wrong. A lower court ruled that even though the employer owned the pager, they violated Quon’s Fourth Amendment right to privacy in reading the texts. The same court found that the company supplying the pager should not have provided the Ontario Police Department with transcripts of the text messages, unless Sgt. Quon and the other senders agreed.

The Ninth Circuit Court of Appeals ruled that since the employer’s computer and Internet policy did not specifically mention pagers, the employee may have had a reasonable expectation of privacy in using them. Lesson #1 for employers: Be sure that the Internet policy specifically mentions every device issued to employees, and states that text messages, as well as emails, are not confidential. The wisest policy is to prohibit the personal use of electronic devices and to state specifically that sending sexually explicit messages using company property is grounds for termination.

The problem was compounded by the fact that Sgt. Quon’s immediate supervisor, Lt. Steve Duke, failed to enforce the employer’s policy on personal use of the pagers. Instead, Lt. Duke implemented an informal policy allowing employees to send and receive personal texts on the pagers, as long as the employee paid any overage charges for excessive texts.

According to testimony, Lt. Duke specifically told employees that their texts would not be monitored, as long as they paid any overage charges. In this case, the contract for the pagers specified that overage charges applied after 25,000 characters of text. Lesson #2 for employers: Ensure that every supervisor enforces the company policy every time. Informal arrangements can override written company policy.

The federal court ruled that Duke’s informal policy of allowing employees to use the pagers for personal use invalidated the formal, written policy. The court also found that when Jeff Quon paid the additional fees every three or four months, that converted the electronic device from business use to part business, part personal use. It also conferred the reasonable expectation of privacy regarding the use of the pager. Lesson #3 for employers: Realize that employees who pay a portion of the cost of an electronic device may have a reasonable expectation of privacy. When in doubt, do not allow the employee to pay any portion of the cost of a company device.

Stay tuned – this case has been referred to the U.S. Supreme Court and may be updated soon.

Health Care Reform Compliance

Posted: May 7th, 2010, 6:23am EDT by Amelia

Employers should be aware of two new regulations issues under Health Care Reform, regarding coverage of adult offspring, and tracking part time employees.

Beginning in 2014, the Patient Protection and Affordable Care Act or PPACA will require employers with 50 or more full-time workers to pay a penalty if they do not provide a group health insurance plan. Under this law, a full time employee is defined as one who works 30 or more hours per week. Under this regulation, two employees who each work 15 hours per week count as one FTE, or the equivalent of one full-time employee. An employer who had 100 employees each working 15 hours per week would be covered under the PPACA, even though the employer did not have even one full-time employee.

The second major announcement regards taxation for parents who include their adult son or daughter on their group health insurance. The Internal Revenue Service recently released the first new guidelines under Health Care Reform. The initial regulations under the Affordable Care Act clarify that employees are entitled to cover children up to the age of 27, and that employers need not withhold taxes on those premiums – an issue that had been a concern for many employers.

This is only the first in what is sure to be a massive wave of regulations regarding President Obama’s healthcare reform law.

Beginning January 1, 2011 group health insurance plans that are run on a calendar year basis must allow parents to continue to cover their sons and daughters to the age of 26.

Under Health Care Reform, parents can continue to include their children on the employer’s group health insurance until the age of 27, even if the son or daughter is self-supporting. The young adult does not have to be a dependent on the parent’s income tax, to be covered under the parent’s group health insurance. In fact, this regulation applies even if the young adult is married.

These regulations apply to group health coverage that began on March 30, 2010 or later. Prior to that date, only coverage for a young adult who qualified as a dependent on the parent’s income taxes was tax free.

The exclusion will apply every year until the year in which the young adult turns 27. If Andrew’s 27^th birthday is on December 1, 2012, his parents need not pay tax on his healthcare premium in 2011. However, in 2012, the year that Andrew turns 27, that premium is taxable for the entire year.

There are sure to be dozens of additional regulations under health care reform in the next few months, so check back often for updates.

New ADA Guidelines for Fragrance Sensitivity

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

Employers need to be aware that allergies to fragrance or multiple chemical sensitivities can be disabilities under ADA, the Americans with Disabilities Act.

This was amply illustrated in a recent post on McBride v. the City of Detroit that ruled senior city manager Susan McBride’s chemical sensitivity was a disability under ADA because it interfered with the major life activity of breathing.

One of the major problems in that case was that the HR department for the City of Detroit simply refused McBride’s request, without any interactive process to uncover a reasonable accommodation.

According to the Job Accommodation Network or JAN, there are a number of ways that employers can accommodate workers with fragrance allergies or chemical sensitivities. JAN is a great resource for any employer dealing with an accommodation issue under ADA.

In the JAN guide on fragrance sensitivities, the non-profit organization suggests that employers take a number of steps before implementing a fragrance-free workplace. These include maintaining good indoor air quality an air purification system. Often, moving the disabled employee’s workstation or modifying his or her schedule is helpful. Employers should consider allowing the employee to communicate with coworkers by Skype, telephone or email, rather than face-to-face.

The most extreme accommodation is to implement a workplace policy asking or requiring all employees to use on fragrance-free products. This includes abstaining from perfume, cologne and aftershave as well as scented soaps and deodorants, and even using unscented laundry soap.

After the lawsuit with Susan McBride, the City of Detroit added the following section to its ADA Handbook:

“Our goal is to be sensitive to employees with perfume and chemical sensitivities. Employees who are sensitive to perfumes and chemicals may suffer potentially serious health consequences. In order to accommodate employees who are medically sensitive to the chemicals in scented products, the City of Detroit requests that you refrain from wearing scented products, including but not limited to colognes, after-shave lotions, perfumes, deodorants, body/face lotions, hair sprays or similar products. The city of Detroit also asks you to refrain the use of scented candles, perfume samples from magazines, spray or solid air fresheners, room deodorizers, plug-in wall air fresheners, cleaning compounds or similar products. Our employees with medical chemical sensitivities thank you for your cooperation.”

Fragrance Sensitivity a Disability Under ADA

Posted: April 21st, 2010, 6:49am EDT by Amelia

A recent court ruling means that some employers will have to ban perfume, cologne and other scents in the workplace.

In McBride v. City of Detroit, senior city planner Susan McBride was awarded $100,000. In addition, the City of Detroit (the employer) agreed to revise its ADA handbook and training, and to post notices about the fragrance-free policy.

McBride, who suffers from Multiple Chemical Sensitivity, complained when a new coworker wore heavy perfume and used a room deodorizer. The coworker agreed to unplug the room deodorizer at McBride’s request, but refused to stop wearing perfume. McBride appealed to her supervisor and the HR department. The city failed to recognize this as an ADA issue and informed McBride that her coworker had a constitutional right to wear perfume to work. They also informed McBride that since she had the allergy, it was her problem, not the employer’s. McBride took time off under FMLA but that failed to resolve the problem when she returned to work.

However, the federal courts disagreed. The court ruled that an allergy to scents can be a disability under ADAAA, the most recent amendment to ADA, the Americans with Disabilities Act. Under this law enforced by the EEOC, when an employee has severe symptoms as a result of being exposed to odors or scents, that can be a disability. Such symptoms would include asthma, breathing difficulties, or an itchy, inflamed rash called contact dermatitis. Once an employee has an allergy to a chemical, the symptoms are likely to be triggered by smaller and smaller amounts of exposure.

The court found that McBride’s MCS was a disability that interferred with the major life activity of breathing.

The reasonable accommodation in many cases would be for the employer to take steps to ensure that the workplace is free of scents, including banning other employees from using perfume, cologne and scented soaps.

In the most severe cases of this allergy, employees may have a condition called MCS or Multiple Chemical Sensitivity, which may cause a variety of symptoms including excruciating nerve pain along the arms and legs. MCS is a controversial diagnosis. While medical experts agree that individuals with MCS suffer severe, often debilitating pain, not all agree that chemicals are the cause. However, employers still need to make accommodations for employees who are diagnosed with MCS.

Not every employee with an allergy to fragrance is entitled to an accommodation. Employees with a minor allergy that causes a runny nose or sneezing are not entitled to accommodation under ADA. In order to be considered a disability, an employee must have a condition that substantially limits one or more major life activities. The next blog will include information on how employers can accommodate employees with fragrance allergies or chemical sensitivity.

New Health Reform Law

Posted: March 26th, 2010, 6:27am EDT by Amelia

According to industry experts, the healthcare reform signed into law on March 23, 2010 and amended earlier today will have wide-reaching effects on employers nationwide.

The greatest change for HR pros and employers under the Patient Protection and Affordable Care Act will come from penalties to employers who fail to provide group health insurance. The law technically stops short of a mandate, because it does not require that employers provide healthcare benefits to workers. However, companies that fail to offer health care coverage will have to pay a penalty of $2,000 per employee beginning January 1, 2014. The law makes an exception for small employers, as the first 30 workers do not count towards the penalty.

If the employer offers health care benefits, if even one employee applies for a federal subsidy to purchase individual health insurance, the employer may be fined $750 per person, under the law signed by President Barack Obama.

One important change involves how employees are enrolled in healthcare plans. Under the new system, employers with 200 or more employees will automatically enroll new employees in the group health insurance. Employees will have to intentionally opt out of the plan, in order to not receive healthcare.

The law also includes provisions to make healthcare coverage more affordable for low-income workers, according to the Society for Human Resource Management or SHRM. An employee who earns less than four times the federal poverty level will have the option of buying health insurance through a health care exchange.

Small business owners and employees will have the option of purchasing health insurance through an exchange, which will offer lower rates for insurance than currently available. So-called SHOP exchanges, or Small Business Health Options Programs, will be available to employers with 100 workers or less.

When an employee chooses to purchase healthcare through an exchange, the employer must provide a free-choice voucher. With the voucher, the employer promises to pay an amount equal to the cost of healthcare benefits to other employees. This provision is designed to promote competition in the health insurance field, resulting in better care and lower prices.

While a number of these provisions go into effect in 2013 or later, two parts of the bill go into effect during the next benefit year. Those include provisions that will require healthcare plans to cover pre-existing provisions, and to offer preventative care.

Buy 2014, individuals will be required to purchase health insurance, and middle-class workers will receive tax credits for doing so.

Any employee with a religious objection to healthcare coverage will have the ability to apply for a waiver. Additional waivers are available to those who cannot afford coverage. Those without coverage or a waiver would pay penalties beginning at $95 in 2014 and rising to $750 or more in 2016.

While the healthcare reform law provides grant to employers who offer wellness programs to all employees, it eliminates financial incentives to employees who participate in such programs.

Gender-specific Profanity is Hostile Work Environment

Posted: March 24th, 2010, 10:26am EDT by Amelia

A recent court case highlights the necessity for employers to eliminate gender-specific vulgarity from the workplace. While some employers may still choose to allow swearing at work, language that is defamatory towards any sex or racial group should be forbidden, even if it does not target any one individual.

In a case involving trucking company C. H. Robinson Worldwide Inc., sales rep Ingrid Reeves complained repeatedly to upper management about the pervasive use of crude and derogatory terms for women, including female co-workers, clients and women in general. She was also exposed daily to a radio program that was vulgar and made derogatory statements about women. Reeves objected almost daily to her coworkers about their conduct, first in person and then by email.

As the only female Transportation Sales Rep, Reeves worked in an open cubical floor plan at C.H. Robinson with men who viewed porn in full sight of her and their supervisors.

Reeves complained to the branch manager, whose conduct was similarly vulgar. He claims to have discussed her complaints with the male workers, but acknowledges that no change in their actions occurred.

In the initial ruling, a lower court determined that vulgar, offensive language in itself is not sex discrimination. On appeal, the 11^th U.S. Circuit Court of Appeals agreed, but found that pervasive sexually offensive language, especially denigrating women, created a hostile work environment for a female.

The federal court in Alabama had previously ruled that sex-specific profanity is more degrading to women then to men.

In an important ruling for the workplace, the court determined that even if the offensive language is not directed at the female employee, it can create a hostile work environment.

Despite the daily use of words that cannot be aired on prime-time TV, plus additional derogatory terms for women, the employer argued that the harassment was not severe or pervasive. They also argued that because both men and women were subjected to the same high level of profanity and vulgarity, this did not constitute sexual harassment.

In this case, the court found that the harassment was severe enough to “alter the terms and conditions of her employment and create an abusive working environment.” Read the ruling for more information on the words used.

COBRA Subsidy Extended Again

Posted: March 5th, 2010, 5:39am EST by Amelia

As predicted, the federal government extended the COBRA subsidy on March 2, 2010. The Temporary Extension Act of 2010 results in a continued COBRA premium subsidy to American workers who are unemployed through no fault of their own. In addition, the act extends the subsidy from 9 months to 15 months for many affected workers.

The COBRA subsidy extension applies to employees who are involuntarily terminated between September 1, 2008 and March 31, 2010.

Under a new provision of the COBRA subsidy, workers who are terminated involuntarily on or after March 2, 2010 are eligible if that termination follows a qualifying event that was a reduction of hours. The qualifying event must have occurred between September 2, 1008 and March 31, 2010. For example, if an employee’s hours were reduced in November 2009 and he is subsequently laid off after March 2, 2010, he will qualify for the COBRA premium reduction.

The current premium reduction lasts for 15 months and applies to employees who were laid off on or after February 17, 2009. Some of these employees have already had the COBRA subsidy for 9 months. For those employees, the new act allows for a 60-day “transition period” when the workers must be notified of the continued availability of benefits and given additional time to pay. Employers with questions about these requirements should consult the Frequently Asked Questions on the COBRA Premium Reduction Extension Provisions on the EBSA website at www.dol.gov/cobra.

Individuals who lost their subsidy and paid the full 100 percent premium for December 2009 should contact their plan administrator or employer sponsoring the plan to discuss a credit for future months of coverage or a reimbursement of the overpayment.

As with the previous COBRA premium reductions, employers must face a new round of worker notification.

Under the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly called COBRA, employees with group health insurance can continue coverage during periods of unemployment. Usually employees must pay 102% of the total monthly premium for their group health insurance, including any amount previously paid by the employer.

However, the COBRA premium reduction permits eligible persons to pay just 35% of the total premium. The employer pays the remaining 65%, and is reimbursed by the federal government when filing quarterly payroll taxes.

New York Uniform, Meals and Lodging Rules

Posted: February 10th, 2010, 5:34am EST by Amelia

New York employers need to be aware of several recent changes in the Wage and Hour regulations, including rules regarding maintenance of uniforms, meals and lodging.

This comes on the heels of news that the New York Department of Labor reached a settlement on January 27, 2010 with a Queens supermarket for not paying grocery baggers at all. Apparently, the food store required baggers to work for tips only, without any wages. When one employee complained that this was illegal, he was terminated.

The supermarket paid more than $300,000 in back wages to three baggers and reinstated the employee, under the terms of the settlement.

“It continues to frustrate me how employers can continue to flaunt the law and simply not pay their workers. We are glad that the employer agreed to pay workers the wages they owe them, and to reinstate the worker they fired,” Labor Commissioner Smith said.

The wage and hour changes proposed by the wage board were recently approved by the New York Labor Commissioner M. Patricia Smith.

The new regulations require that New York employers follow the federal regulations regarding uniform maintenance costs. In the past, the employer was required to reimburse employees for the cost of cleaning uniforms. In the case of uniforms that could be machine washed, the employer still had to pay employees for time spent laundering the uniforms. The new regulations exempt employers from such payments for time spent doing laundry.

When uniforms must be dry cleaned, the New York regulations still require that the employer pay this expense. The regulation applies even when the employee’s salary far exceeds the minimum wage.

In spite of the Wage Board’s recommendation, the Labor Commissioner refused to change the New York regulations that allow employers to take credit toward the minimum wage for meals and lodging if the employer failed to enter that credit into the payroll system. The Labor Commissioner ruled that – at least for the present – such a regulation would unfairly punish employers without sophisticated computerized payroll systems.

However, New York employers should be prepared for such a change in the regulations in the future.

New York Non-Exempt Employee Rules

Posted: February 3rd, 2010, 5:22am EST by Amelia

The New York Labor Commissioner recently issued a ruling that non-exempt employees must be paid an hourly rate. This law is in contrast to the federal FLSA and most state laws, which permit an employer to pay any worker (exempt or non-exempt) by salary, as long as applicable minimum wage and overtime laws are followed. It applies to almost every employer in New York.

Although this new ruling has not yet gone into effect, every New York employer should be aware of it. As soon as the Labor Commissioner finalizes regulations, they will be published in 10 New York newspapers. Thirty days after publication, the new rules will go into effect.

When that happens, only exempt employees can be paid on a salaried basis under New York law. Because the Labor Commissioner has not yet issued guidelines, the implementation of this ruling is not clear. As soon as the guidelines are clarified, they will be covered here.

This change came about after a five-month study of New York minimum wage laws by the New York Wage Board. The study was requested by the New York Labor Commissioner.

In addition, the report issued by the Labor Commissioner had additional new regulations in it. Among them is a ruling that in certain industries, the employer must pay workers a premium of an extra hour’s pay for any workday that exceeds 10 hours. The changes have the most impact on restaurant and hotel employers in New York state, including New York City.

In the past, employers could take a set-off against this fee if the employee averaged more than the minimum wage. However, that set-off has been eliminated. Under the new regulations, when an employee works a shift of 10 hours or more, he or she is entitled to an additional hour of pay. An employee who works 10 hours must be paid for 11 hours. An employee who works 12 hours must be paid for 13 hours, at the employee’s average rate. Overtime premiums still apply. However, this “spread of hours” bonus pay need not be calculated in figuring overtime.

New York Tipped Minimum Wage is $4.75

Posted: January 27th, 2010, 5:11am EST by Amelia

Effective January 1, 2010 the tipped minimum wage for food service workers in New York increased to $4.75 per hour. Under the same regulations, on January 1, 2011 the tipped minimum wage will increase to $5.00 per hour.

Restaurant owners should be prepared for further increases in the state tipped minimum wage. The Labor Commissioner has said that these two increases are just the first step in increasing the tipped minimum wage to the same level as the minimum wage for non-tipped employees, currently $7.25.

Several states including Washington already require that tipped employees be paid the same minimum wage as other workers.

Under the new regulations, the Labor Commissioner also requires that New York employers must inform workers of the tip credit to be taken. If an employer neglects to notify employees, no credit is allowed. This requirement for employers covered under the federal minimum wage law has now been extended to employees covered by the New York state minimum wage law. For example, an employer who pays workers $4.75 per hour would be taking a tip credit of $2.50 per hour.

The commissioner has not yet issued required ruling for the tip credit notification.

Also under the same ruling, a New York employer can require tip pooling, requiring all service employees to share tips with one another. There are no restrictions on this regulation. The regulation does not specify which employees may receive tips from the pool.

In a recent case, the New York Court of Appeals ruled that any service charge must be distributed to service personnel when the customer understands it to be a gratuity. Traditionally, the employer could keep a percentage of any service charge added to a restaurant or banquet bill, as long as the business paid tax on that amount.

The ruling in Samiento v. World Yacht requires that the employer inform the customer clearly and unambiguously that the service charge is not a gratuity and will be retained by the employer.

Oklahoma Direct Deposit

Posted: January 20th, 2010, 5:42am EST by Amelia

A recent opinion letter issued by the Oklahoma Attorney General allows employers to require wage payment by direct deposit but not by payroll debit card.

This opinion letter overturns a former ruling, that Oklahoma employers could not require payment by direct deposit.

An Oklahoma employer may require that an employee accept payment of wages by direct deposit, under this new ruling. However, the employer cannot require that the employee use a certain bank for wage payment. The employee must be free to use a bank of his or her choice for payroll deposits.

If an Oklahoma employer had a policy allowing employees to receive payroll direct deposits only on a certain bank, then the employer must offer another option for wage payment. That option may be a payroll check, or payment in cash, or either. For example, a small bank in Oklahoma might require that if employees use direct deposit, it be into an account at their bank. However, because the employer sets such limits, the bank must offer employees an option between direct deposit and another form of payment: cash or paycheck.

On the other hand, a business in Oklahoma that allows employees’ wages to be direct deposited into an account at any bank, is under no obligation to offer paychecks as well.

However, an employer still cannot require payment by payroll debit card only. An employer can offer payment by debit card, but must also offer another payment option to employees, according to the Oklahoma Department of Labor.

In the same ruling, Oklahoma Attorney General Drew Edmondson determined that wage statements (or pay stubs) do not need to be in writing; they can be electronic if this form of delivery places no burden on the employee. However, posting wage statements on a website requiring employees to login with a password would not be lawful – because there is a burden, however slight, on the employee in obtaining this information. The Attorney General did not give an example of an acceptable form of electronic wage statement.

According to the Attorney General, this ruling reflects the fact that federal law overrides state law in some circumstances. In this case, the federal Electronic Fund Transfer Act or EFTA specifically overrides some provisions of Oklahoma law that forbid wage payment by mandatory direct deposit. While state law does not allow employers to mandate direct deposit, in the Attorney General’s opinion this is overridden by the federal law. However, he takes pains to note that other provisions of the Oklahoma law are still in effect, because those issues are not addressed by the federal law.

2010 Minimum Wage Recap

Posted: January 1st, 2010, 5:40am EST by Amelia

The good news for employers is that most state minimum wages are holding steady in 2010. In January 2009, more than a dozen states increased their minimum wages. In 2010, only a few minimum wage changes are in effect.

The Kansas minimum wage increased from $2.65 to $7.25 on January 1, 2010. This is the first time in more than two decades that the Kansas minimum wage has increased. The change comes after more than a decade of efforts by Kansas Democrats. On December 31, 2009, Kansas had the lowest minimum wage of any state. Effective today, X states have lower minimum wages.

To be fair to Kansas, five states have no minimum wage whatsoever. They are Mississippi, Alabama, Louisiana, Tennessee and South Carolina.

In an unprecedented step, the Colorado minimum wage actually decreased by 4 cents from $7.28 per hour to $7.24 per hour today. Most employees in the state are still covered by the federal minimum wage of $7.25 per hour.

About a dozen states annually increase the minimum wage based on the cost of living. However, in most areas the cost of living has shown a decrease of 1% to 2%. While many state statutes prevent the minimum wage from being reduced, they have not been increased.

States that have skipped the annual increase in minimum wage this year include Ohio, Washington, Oregon, Vermont, Nevada, Montana, Missouri and Arizona.

In Florida, by statute the state minimum wage cannot be lower than the federal minimum wage. The state has experienced a very slight increase in the cost of living this year. However, even adjusted for inflation, the state minimum wage would be lower. Therefore, the federal rate of $7.25 per hour prevails.

The Illinois minimum wage was increased from $7.75 to $8.00 on July 1, 2009. It is scheduled to increase again, to $8.25 on July 1, 2010.

Due to the decrease in the cost of living, the ranking of the state minimum wages has changed little over the past 12 months. The Washington minimum wage is the highest in the nation at $8.55 per hour. The Oregon minimum wage is second, at $8.40 per hour and Vermont is third at $8.06 per hour. California, Connecticut, Illinois and Massachusetts are in a four-way tie for fourth highest minimum wage, at $8.00 per hour.

In total, 14 states have minimum wages higher than the federal rate of $7.25 per hour, while 26 states have a minimum wage of $7.25. Only Georgia, Minnesota, Wisconsin and Arkansas have a minimum wage lower than the federal minimum wage.

Vermont Minimum Wage 2010 is $8.06

Posted: December 30th, 2009, 5:56am EST by Amelia

The Vermont minimum wage in 2010 will remain at the current rate of $8.06 per hour. This is good news for employers in a state where the minimum wage normally increases every year.

Under state law, the Vermont minimum wage increases each year based on the cost of living. According to a press release issued by the Vermont Department of Labor, the cost of living fell by 1.5% between September 1, 2008 and August 31, 2009. Because the state law does not permit a decline in the minimum wage, it will remain at the current level until 2011.

The annual adjustment in the Vermont minimum wage is based on the Consumer Price Index or CPI. The increase each year is limited to a maximum of 5%.

“A steady minimum wage reflects our economic times, “ according to Labor Commissioner Patricia Moulton Powden. “The cost of living has fallen and the ability of employers to increase pay is limited by the recession.”

The Vermont minimum wage for tipped employees will also remain stable at $3.91 per hour for employees who earn at least $120 per month in tips for direct, personal service. However, those employees are still entitled to the minimum wage of $8.06 when tips and wages are added together. If the employee does not average $4.15 per hour in tips over the payperiod, the employer must pay the difference in direct wages.

The Vermont overtime law is unchanged. An employer msut still pay 1.5 times the employee’s average hourly wage when employee work more than 40 hours in the week. However, retail, service establishments, hotels, restaurants, local governments and amusement or recreational employees are exempt from the state overtime law.

Under Vermont law, most employees must be paid at least every other week, no more than 6 days after the end of the payroll period. An employee who is discharged from employment is entitled to payment within 72 hours.

New GINA Regulations

Posted: December 23rd, 2009, 5:13am EST by Amelia

Employers across the nation need to review HR practices and employee wellness programs to ensure they do not violation GINA, the Genetic Information Non-discrimination Act.

The newest GINA regulations issued by the US Department of Labor, the IRS and the Department of Health and Human Services go into effect for plans starting on December 7, 2009 or later.

GINA prevents employers from gathering information on employees’ genetic makeup, and from making employment decisions based on that information. Many employers are surprised to learn that while they do not engage in genetic testing, common HR practices may still put them in violation of the law.

In addition, every employer needs a to prominently display a GINA poster in the workplace.

A behavior as simple as asking an employee returning from an uncle’s funeral about the cause of death may be a GINA violation.

Genetic information is interpreted very broadly under the sweeping new GINA regulations. In addition to genetic testing, GINA also includes an employees requests for or receipt of genetic services, and family medical history. This includes any manifestation of a disease or disorder in the employee’s family members including dependents plus all relatives to the fourth degree without regard to whether they are related by blood, marriage or adoption. This would include current medical information about an employee’s children, spouse, grandparents, great-grandparents, parents, aunts and uncles, and first cousins.

Title I of GINA prohibits employers and insurers from increasing group health premiums or contributions based on genetic information. This means that employers are prohibited from:

Requesting or requiring genetic testing, before or during employment
Collecting genetic information including family medical history prior to or in connection with enrollment in wellness or health insurance plans
Collecting family medical information or genetic information for underwriting purposes

Title II of GINA also prohibits employers from using genetic or familial medical information in employment discrimination. Although this provision of GINA went into effect on November 21, 2009, the final regulations for that provision of the law have not yet been written by the EEOC.

Kansas 2010 Minimum Wage Increases to $7.25

Posted: December 9th, 2009, 5:14am EST by Amelia

On January 1, 2010 the Kansas minimum wage will increase by $4.60 from $2.65 per hour to $7.25 per hour. The increase is one of the largest in recent memory, dwarfing the three 70-cent increases in the federal minimum wage between July 24, 2007 and July 24, 2009.

It is critical that every employer prominently display a Kansas minimum wage poster, to avoid penalties and fines.

This move puts the Kansas minimum wage on a par with the minimum wages of 28 states including Alaska, Delaware, Georgia, Idaho, Indiana, Kentucky, Maine, Maryland, Nebraska, New Jersey, New York and Pennsylvania.

While having a minimum wage that is the same as the federal minimum wage may not seem like an astounding achievement, it represents a major change in philosophy for Kansas politicians.

Despite annual efforts by Kansas Democrats, the state minimum wage has been frozen at $2.65 per hour for more than a decade. Prior to New Year’s Day, Kansas still has the lowest minimum wage in the United States. However, to be fair it should be noted that five states have no minimum wage at all. Those states are Mississippi, Alabama, Louisiana, Tennessee and South Carolina.

This move means that only four states will have minimum wages lower than the federal minimum in 2010. Those states are Arkansas at $6.25 per hour and Minnesota at $6.15 per hour. Both Georgia and Wyoming are at $5.15 per hour. While Florida technically has a lower minimum wage, the statute requires all affected employers to pay the higher federal rate of $7.25 per hour.

Between 1996 and 2006, there was a grassroots movement to increase the minimum wage in many states. During that period the federal minimum wage was stuck at $5.15 per hour for more than a decade. Critics pointed out that the wage had less purchasing power in 2006 than the $1.60 minimum wage did in the 1960s. However, during that entire decade, the Kansas legislators resisted the temptation to increase the state minimum wage.

2010 Washington Minimum Wage is $8.55

Posted: December 2nd, 2009, 5:33am EST by Amelia

The Washington minimum wage will remain at $8.55 per hour in 2010, the same rate as in 2009. This marks the first year there has been no increase in the state minimum wage since 1998. Despite this, the Washington minimum wage remains the highest in the nation.

The Washington Department of Labor & Industries or L&I calculates the state minimum wage each September under initiative 688, passed by voters in 1998. Under that law, the Washington minimum wage has risen from $5.15 in 1998 to $8.55 in 2009.

Each year the increase is based on change in the federal Consumer Price Index or CPI for Urban Wage Earners and Clerical Workers during the 12 months ending on August 31.

For the 12 months ending August 31, 2009 the cost of living as measured by the CPI decreased 1.9%. While there is no provision under the law to reduce the Washington minimum wage, this means that there will be no increase.

A 5.9% increase in the CPI in 2008 led to an increase of 48 cents in the Washington minimum wage on January 1, 2009, making the Washington minimum wage the current rate of $8.55 per hour.

The Washington minimum wage applies to most workers and most industries in the state. Unlike many other states, the minimum wage applies even to agricultural workers. In one of the few loopholes, youths who are 14 or 15 years old may be paid 85% of the state minimum wage, or $7.27 per hour. That rate is slightly higher than the federal minimum wage of $7.25 for workers of all ages.

Nine states in addition to Washington adjust their minimum wages each year for inflation. They are Oregon, Vermont, Ohio, Nevada, Montana, Missouri, Florida, Colorado and Arizona. Most of those states plan no minimum wage increase for 2010. In Florida, the state minimum wage will increase by

On the other hand, in Colorado the state minimum wage will decrease by 4 cents from $7.28 per hour to $7.24 per hour. This marks the first time in history that any state minimum wage has decreased.

New Law Expands FMLA and NDAA for Military Families

Posted: October 30th, 2009, 6:38am EDT by Amelia

A new law signed by President Barack Obama on October 28, 2009 expands FMLA for military families even more than the NDAA or National Defense Authorization Act of 2008.

This change in the law will require every employer to update the Military Caregiver poster, even if they do not have any employees who qualify.

The National Defense Authorization Act for 2010 provides for two major changes to current FMLA regulations:

Families of Armed Forces members on active duty are covered, not just family members of the National Guard and Reserve
Military caregiver leave is expanded to cover the families of some veterans

It appears that these changes are retroactive, according to Matthew Effland, an Indianapolis attorney specializing in FMLA issues.

Active Duty Included

Under the new law, when a member of the Armed Forces is deployed to a foreign country, his or her spouse, son, daughter, parent, step-child, or step-parent can take up to 12 weeks of unpaid, job-protected FMLA leave for any “qualifying exigency.”

Many employers have already been granting this leave to military families, and not just the families of Reserve or National Guard members who are called to active duty. In fact, it is unclear why the U.S. Department of Labor interpreted the original law so narrowly in the final days of the second Bush administration.

Under the current regulations, qualifying exigencies include attending military-sponsored functions, making appropriate financial and legal arrangements, handling details of a short-notice deployment, attending counseling, and making alternate childcare arrangements. In addition, an employee can take up to 5 days of FMLA for rest and recreation or R&R under the law. The employee can also use FMLA up to 90 days following deployment for arrival ceremonies, post-deployment ceremonies and other military events.

Military Caregiver Leave Expanded to Veterans

The NDAA also permits an employee who is the son, daughter, spouse, or parent to take up to 26 weeks of unpaid, job-protected FMLA during a 12-month period to provide care for a service member who has been injured or contracted a disease in the line of duty.

This extended FMLA leave also applies to the injured soldier’s next-of-kin, regardless of the relationship. This means in some cases that an in-law, grandparent, sibling, aunt, uncle or cousin could qualify for military caregiver leave.

The new law permits the family member to take this leave for up to 5 years after the soldier leaves active duty, if the soldier develops an illness or injury that is service-related. The law’s authors note that often soldiers develop traumatic brain injury or post-traumatic stress disorder, PTSD, years after military service.

California Approves Exempt Salary Reduction

Posted: October 16th, 2009, 6:05am EDT by Amelia

The California Labor Agency recently issued an opinion allowing employers to reduce an exempt employee’s salary and hours worked, at the same time, without endangering the worker’s status as a salaried exempt employee.

In the example used, the state labor agency permitted an employer faced with economic difficulties to reduce the work schedule of exempt employees from five days to four days. The state DLSE or Department of Labor Standards Enforcement ruled in a recent opinion letter that simultaneously reducing the employee’s salary by 20% “did not violate the ‘salary basis’ for the workers’ overtime exemption under the state Labor code and wage orders” as long as the employer’s action is a temporary measure.

This is a radical change, since the DLSE took the opposite position in 2002. In an opinion letter issued in that year, the California agency ruled that the employer could reduce an employee’s salary. However, if the employee’s work hours were also reduced, that change the employee from exempt to non-exempt status.

This is a primary concern for California employers, since non-exempt employees are entitled to overtime under state law. California has the strictest overtime regulations of any state, requiring overtime after 8 hours per day, double-time after 12 hours per day, and special premiums on the 7^th consecutive day of work.

The new California policy on exempt employees includes several crucial conditions:

When economic conditions permit, the exempt employee must be restored to full salary
The salary reduction is permitted only when the employer is experiencing “significant economic difficulties”
Affected employees whose new salary is not at least twice the state minimum wage for full-time employment, will become eligible for overtime
The employer cannot alter the employees salary so often that the salary basis becomes a “sham.”

This newest California exempt employee regulation puts the state law on a par with federal regulations under FLSA, the Fair Labor Standards Act. However, there is one important exception: under FLSA, the salary reduction must be in effect for at least 3 months. Under California regulations, the original salary must be restored as soon as economic conditions permit.

3 New Illinois Laws

Posted: October 9th, 2009, 6:37am EDT by Amelia

Illinois Governor Pat Quinn recently signed three new employment bills into law. The laws address wage discrimination at the state level, and increase the rights of victims of domestic abuse.

Expanded Leave Rights

Every Illinois employer needs to be aware of an amendment to the Illinois Victims Economic Security and Safety Act. The new law requires employers to extend unpaid, job-protected leave to victims of domestic violence or sexual violence.

Under the new law, effective August 24, 2009, employers with 50 or more workers must provide up to 12 weeks of FMLA-type leave to employees who are victims of rape, sexual assault or another type of sexual violence. The law requires employers with 15 to 49 employees to provide 8 weeks of unpaid leave.

Employers must also extend the same benefits to victims of domestic violence of any kind.

This new law is notable because Illinois has no family leave law at the state level – so this is the state’s first intrusion into expanding FMLA to smaller employers. Currently, there is no Illinois law that requires an employer with 15 to 49 workers to provide leave for any reasons other than sexual violence or domestic violence.

New Illinois Discrimination Law

Under a new Illinois discrimination law, victims of stalkers, domestic violence and other crimes are protected from employment discrimination. The amendment to the Illinois Human Rights Act prohibits the employer from discriminating against an employee who is protected by an order of protection or a similar order issued in anther state.

Under the law, which goes into effect on January 1, 2010, the employer cannot make employment decisions based entirely or in part on whether a worker is shielded by an order of protection. For example, the employer could not refuse to hire Jane, a teacher, simply because she has an order of protection against her ex-husband Ted. Nor could the employer decline to promote Jane, based on her protection status.

However, an Illinois employer could still refuse to hire Ted because he is the aggressor with an order of protection against him.

Illinois Ledbetter Equal Pay Act

In the final of the 3 new laws, the state enacted protections against discrimination in pay similar to the federal Lilly Ledbetter Act. Under that law, when pay discrimination exists, each paycheck resets the statute of limitations in filing a discrimination claim under the Illinois Equal Pay Act. The law extends the deadline for an employee to file a complaint of pay discrimination with the Illinois Department of Labor to one year rather than 180 days. It also extends the deadline for filing a pay discrimination lawsuit in state court from 3 years to 5 years, and requires employers to preserve certain payroll records for 5 years. This law became effective on August 14, 2009.

New Definition of Disability

Posted: September 25th, 2009, 6:38am EDT by Amelia

The federal EEOC just published new regulations that redefine disability under the Americans with Disabilities Act.

The new regulations specifically address the definition of disability within the ADAAA of 2008, which has been in effect since January 1, 2009.

Under the new rule, certain impairments will create a presumption of disability. These impairments include epilepsy, diabetes, multiple sclerosis, developmental disabilities, deafness, blindness, use of a wheelchair due to mobility problems, autism, cerebral palsy, HIV/AIDS, muscular dystrophy, major depression, bipolar disorder, partial or complete amputations, post-traumatic stress disorder, obsessive-compulsive disorder and schizophrenia.

The new ADA rules mean that an employee who has been diagnosed with any of those conditions is presumed to be disabled and entitled to reasonable accommodation.

This may seem to be a common-sense approach to disabilities, but it has not always been so.

Under the old rules, each employee claiming a disability had to individually demonstrate that the condition limited one or more major life activities. A very large company might have 10 blind employees. Each blind employee would have to individually prove that blindness impaired their performance at one or more major life activities like reading, walking, using a phone book, using public transportation, cooking, shopping, personal grooming, etc.

An individualized assessment of whether a substantial limitation exists should still be done, according to the EEOC. However, the federal agency claims this “can be done very quickly and easily with respect to these types of impairments, and will consistently result in a finding of disability.”

Employers should note that the list of impairments is not exhaustive. Other conditions may still be disabilities under the new definition. Some conditions such as asthma, learning disabilities and back or leg impairments may be disabilities for some employees, and not for others.

Another change from the previous definition of disability is the use of mitigating measures that may reduce the effects of an impairment. Mitigating measures must not be included in the assessment now. An example would be an artificial leg. An amputee might be unable to walk or complete normal life activities without the artificial limb, but unimpaired when the prosthesis is in place. Prior to 2009, the employer had to assess the employee’s abilities with the artificial leg. Under the current definition, the employee will be considered disabled if he or she is impaired without the leg. The mitigating measure – the artificial leg – cannot be included in the assessment.

The only mitigating measures that can still be included are ordinary eyeglasses or contact lenses.

E-Verify Regulations

Posted: September 18th, 2009, 7:17am EDT by Amelia

After more than 15 months of debate, the E-Verify mandate for federal contractors went into effect on September 8, 2009. The regulation also applies to most sub-contractors working on federal projects.

The new regulations apply to any business that signs or renews a federal contract worth $100,000 or more, on or after September 8, 2009. Federal contractors are also required to ensure that any sub-contractor they hire complies with the E-Verify regulations, which adds another layer of administration for many employers.

Employers may think they are covered because they already use E-Verify for all new hires, but they will be mistaken. The new regulations require employers to enroll anew in E-Verify, designating their business as a federal contractor.

A unique feature of the system is that employers must verify the work authorization of existing employees working on federal projects, as well as new hire. This means that even an employee who has been with the company for 50 years must prove that he or she is legally authorized to work in the U.S.

In a business where a single employee may handle varied tasks, it can be difficult to determine who is and is not working on a particular federal contract. In that case, the employer can verify the work authorization status of all existing employees.

However, if an employer chose to verify the work authorization status of only Hispanic employees, or only those who were non-citizens, that would be illegal discrimination based on race, color or national ancestry. The employer must re-verify all employees, or only those working on federal projects.

As part of the DHS E-Verify system, an employer can require that an employee or new hire who is a citizen use a Social Security card as one of the identity documents required on the I-9. Employers who do not use E-Verify still cannot dictate which identity documents an employee chooses to use, from the list provided on the I-9 form.

New USERRA Regulations

Posted: September 2nd, 2009, 6:38am EDT by Amelia

A recent 7^th Circuit Court of Appeals ruling limits USERRA scheduling provisions for National Guard Members nationwide.

Under the USERRA or Uniformed Services Employment and Reemployment Rights Act, employers must allow members of the military to take time off for National Guard duty and training. Other provisions of the USERRA apply to employees or former employees on active military duty.

The law also requires that employers prominently display a USERRA poster, even when they have no employees who are covered under the law.

The lawsuit involved the city of Mount Vernon, Illinois. Several city police officers were also National Guard members. In the past, the city allowed the officers to use their vacation, sick or personal leave for National Guard training. This allowed the police officers to collect their full city salary, plus military pay, for the days they were away with the National Guard.

In addition, in the past Mt. Vernon allowed National Guard members to rearrange their work schedules when they conflicted with military obligations. By “bumping” other employees, a National Guard member could arrange his or her days off so that on National Guard weekends, the employee received full pay from both the city and the military, without using any vacation time. In effect, the employees were being paid twice for those weekends.

The National Guard employees were also permitted to reschedule themselves off on weekends, even when another employee had long requested the weekend off for a wedding or other special event.

Employers should note that by law, the employer must give the National Guard employee time off to attend required training. Time off was never the issue in this case – the issue was whether the employee would have to use a sick or vacation day in order to be paid twice for National Guard duty.

In 2006, the city of Mt. Vernon reversed this policy and although the city still gave National Guard members the time off, they were required to take it unpaid or to use a vacation day. One of the officers sued the city, claiming that the policy change was a violation of the USERRA.

The court granted summary judgment to the city. The appeals court upheld that summary judgment.

In its decision, the 7^th Circuit Court of Appeals noted that the USERRA requires employers to offer the same benefits to National Guard (and active military) members as to other employees. However, the USERRA does not require employers to grant special privileges or benefits to members of the military. The court ruled that even though the city had given preferential treatment to National Guard members in the past, eliminating that policy was lawful under USERRA.

Under USERRA, members of the military are still entitled to reinstatement after their service ends. In addition, they are entitled to the benefits and promotions that they would have received, if they had still been on the job.

Mandatory Sick Leave Law

Posted: June 19th, 2009, 3:32am EDT by Amelia

Senator Ted Kennedy recently introduced a bill – called the Healthy Families Act– that would implement a mandatory sick leave law.

If passed, the bill would require most employers to provide up to 7 paid sick days per year to employees.

In the House, the mandatory sick leave law introduced by Rep. Rosa DeLauro is called HR 2460.

The mandatory sick leave law would apply to employers that have 15 or more full-time workers (or the equivalent) for at least 20 weeks of the year.

The bill would require that workers earn one hour of paid sick leave for every 30 hours worked, beginning on the day the worker is hired. Employees would be eligible to use paid sick leave after 60 days.

GINA Genetic Information Nondiscrimination Act Goes Into Effect

Posted: June 12th, 2009, 4:23am EDT by Amelia

GINA imposes even more stringent confidentiality laws on employers than HIPAA does, regarding genetic information and an employee’s family medical history.

On November 21, 2009, Title II of GINA, the Genetic Information Nondiscrimination Act, will go into effect. This portion of the law prohibits employees from discrimination against an individual based on genetic testing. Title I of the law, which went into effect in May 2009, prohibits health insurance providers from discrimination against an individual based on genetic testing.

For example, a health insurance company could not refuse to cover an individual because he or she had a genetic predisposition for breast cancer, diabetes or heart disease. Nor could an employer refuse to hire an employee, based on that genetic information. In fact, it would be a violation of the law for the employer to even acquire information about an employee’s genetic profile.

More than 13 years in the making, GINA was signed into law by President George W. Bush on May 21, 2008. The law was passed partly out of concern that individuals were refusing genetic testing, which might have improved their health care, because they feared discrimination from employers or health insurance providers.

The EEOC recently released GINA guidelines for employers to be in compliance with this new law.

Under Title II, GINA prohibits employers from intentionally acquiring genetic information about applicants and employees. The law also imposes strict confidentiality requirements on employers. While the EEOC has not yet released final regulations regarding GINA, they are expected to be very similar to the proposed rules issued on March 2, 2009.

GINA applies to employers with 15 or more employees, including private employers, employment agencies, labor unions, and joint labor-management training programs. It also applies to government employers with 15 or more workers, including state and local governments, agencies of the federal executive branch and Congress. Each of these employers is referred to as a “covered entity” in the GINA regulations.

Under GINA, the EEOC definition of “genetic information” includes information about an individual’s family medical history. The law would prohibit an employer from asking about family medical history during an interview, or at any time after the employee is hired.

GINA also prohibits employers from gathering information about the employee through individual genetic tests, or genetic tests of a family member.

Some information is not protected under GINA. The law does not cover information about the sex or age of the employee or the employee’s family members. Nor does it protect information that an individual or a family member currently has a disease or disorder. Oftentimes, that information is protected under ADA, the Americans with Disabilities Act.

Tests for drug and alcohol use are specifically excluded from GINA. In states where it is legal, employers may still give drug and alcohol tests, and may still use them as the basis for employment decisions.

GINA prohibits covered entities from basing any workplace decisions related to “terms, conditions or privileges of employment” on genetic information. An employer cannot refuse to promote a 47-year-old employee to CEO, based on the information that the male employee’s father, grandfather and great-grandfather all died of heart attacks by the age of 48. Nor can the employer require or request that the prospective CEO submit to genetic testing for heart disease or any other condition.

When GINA goes into effect on November 21, 2009 it will also prohibit employers and other covered entities form intentionally acquiring genetic information. This will make the question, “How did your father die?” illegal in the workplace.

When employers inadvertently acquire genetic information, they are required to keep it confidential. In this case, that would include keeping any information in the employee’s confidential folder with other protected medical information. It also includes not discussing an employee’s family medical history or genetic profile with anyone inside or outside the company, ever. Employers are also prohibited from retaliating against an employee who files a good-faith claim of discrimination under GINA, even when that claim proves to be unfounded.

California Noncompetition Agreements

Posted: May 27th, 2009, 3:54am EDT by Amelia

Nationwide employers should note that both federal and state courts in California will now throw out almost all noncompetition agreements. California has one of the most restrictive laws regarding noncompetition agreements. In fact, such agreements are almost always unenforceable in the state.

California law specifically requires that every individual shall retain the right to pursue any lawful employment opportunity.

Recently, Edwards v. Arthur Andersen upheld that principle. A tax manager for Arthur Anderson LLP in Los Angeles, Raymond Edwards signed a noncompete agreement in 1997.

The agreement specifically noted that Edwards would not work directly for any of his Arthur Anderson clients, for 18 months after his separation from Arthur Anderson.

After the Enron debacle, Arthur Anderson closed its Los Angeles office and laid Edwards off. Another company offered Edwards a job, but only if he was released from the Arthur Anderson noncompetition agreement. Edwards and Anderson were unable to reach an agreement, and the other firm withdrew its job offer.

Initially, according to SHRM, the Society for Human Resource Management, the California courts ruled against Edwards, because the agreement was for a limited time and covered a limited scope. However, both the California Appeals Court and the California Supreme Court ruled in Edward’s favor. They noted that the federal “narrow restraint exception” did not apply under California law.

Companies that do business nationwide should consider having a separate noncompete agreement for California, or none at all.

Across much of the country, noncompetition agreements are tested by a “rule of reason”. When a noncompetition agreement is for a short period, limited to a certain geographic area and limits the prohibited activities, it is generally lawful. For example, a non-compete clause that prohibited a car salesman from ever selling cars again, would be unenforceable. The courts would rule that it set too severe limits on the employees ability to earn a living, and support his or her family.

However, an agreement that the employee, once terminated, would not be permitted to work in a sales capacity for another new car dealership within 20 miles, for 3 months, would probably be enforceable.

Noncompete agreements are very common in the entertainment industry. The courts have generally upheld noncompetition agreements where the employee is paid at least 50% of his or her salary, for the life of the agreement.

New Illinois Sexual Harassment Law

Posted: May 15th, 2009, 3:59am EDT by Amelia

Employers in Illinois need to be aware of a new ruling that holds them liable for the conduct of any supervisor towards any employee – especially in regards to sexual harassment.

The Illinois Supreme Court recently ruled that an employer is responsible for sexual harassment by an employee who happens to be a supervisor, even if the employee is not in that supervisor’s chain of command.

In other words, it is sexual harassment when a supervisor or manager makes advances towards any employee, not just one who works for the supervisor.

This ruling makes it even more important than ever, that Illinois employers train supervisors and managers to prevent sexual harassment and a hostile work environment.

In Sangamon County Sheriff’s Department v. Illinois Human Rights Commission, the judge ruled on April 16, 2009 that the employer was strictly liable for any manager’s or supervisor’s actions.

Sangamon County is primarily a rural area, about 200 miles southwest of Chicago.

Under Title VII of the Civil Rights Act of 1964, the federal anti-discrimination law, an individual is not a “supervisor” in a case unless he or she has the authority to affect the victim’s employment status directly.

However, under the Illinois Human Rights Act, no such restriction applies. The employer is liable for the conduct of every supervisor in the organization, towards each and every employee in the organization.

In this case, a female records clerk with the Sangamon County Sheriff’s Department filed a complaint of sexual harassment and retaliation against the department. She alleged that a sergeant within the department, who was not her supervisor, was harassing her.

On appeal, the judge ruled that the employer had established a hostile work environment.

Interestingly enough, initially the suit was against both the male supervisor and the employer. The male supervisor, however, was dismissed from the case after settling out of court. This left the employer alone liable for his behavior.

The judge ruled that the employer was “strictly liable” for harassment by its supervisory employee, even though he was not the victim’s supervisor – or even in her chain of command.

According to SHRM, “strict liability” means that the employer is liable for sexual harassment even if the employer did not know of the offending conduct. It applies whether the harassment is unwelcome sexual advances or a hostile work environment. The victim was awarded $10,000 in damages and $13,000 in fees and costs.

In a 4-2 ruling, the Illinois Supreme Court upheld the lower court’s ruling — the sheriff’s department could be held strictly liable in such circumstances. This ruling in effect expanded strict liability under Illinois law.

In its ruling, the Illinois Supreme Court said, “The issue in this case is whether an employer is strictly liable under [the IHRA] for the ‘hostile environment’ sexual harassment of its supervisory employees, where the supervisor has no authority to affect the terms and conditions of the complainant’s employment. The answer is yes.”

The court added that the employer is reasonable for the harassment by the supervisor, “regardless of whether [the employer] was aware of the harassment or took measures to correct the harassment.” The court said the complainant still bears the burden of proving that the offending conduct is harassment.

The court admitted that this ruling “imposes a standard of liability that appears to be without precedent in any jurisdiction in the United States.”

Under federal law, the court would have ruled that the employer was liable only if the employee’s supervisor, or another manager who could directly affect her employment, harassed the employee.