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    Welcome to the Labor and Employment Law Update where attorneys from SmithAmundsen blog about management side labor and employment issues. We cover topics including addressing harassment and discrimination in the workplace, developing labor law, navigating through ADA(AA), FMLA and workers’ compensation issues, avoiding wage and hour landmines, key legislative, case law and regulatory changes and much more!
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    The Labor and Employment Law Update is provided for information purposes only, and should not be construed as legal advice on any subject matter, nor should it be construed as creating an attorney client relationship. Do not send confidential information or facts about a legal matter. The opinions of this blog's contributors do not reflect the opinions of SmithAmundsen LLC as a whole. See the disclaimer page for further information.

OSHA Inspection Guide: In Preparation for Increased OSHA Enforcement in 2015

Contributed by Jonathon Hoag and Matthew Horn

Numerous employers can verify first hand that OSHA is actively fulfilling the promise it made a few years ago, “to get back in the enforcement business.”  In recent years, we have seen increased enforcement activity, including a significant increase in OSHA site inspections.  There is no indication OSHA’s ramped up inspection activity will slow down any time soon.  In fact, last month, the Department of Labor (DOL) announced its current rulemaking activity and OSHA topped the list with the most rulemaking activity within the DOL.  This, coupled with OSHA’s new reporting requirements for 2015, requiring that employers report to OSHA all incidents requiring in-patient treatment for just one employee, signals that 2015 will likely be OSHA’s busiest year to date.

Understanding the OSHA inspection process and having a plan for when the OSHA inspector arrives on your doorstep is critical.  Now is the time to arm your workforce with the tools necessary to effectively respond to OSHA, as we are certain the number of OSHA site inspections in 2015 will only increase.  The enclosed step by step guide was created to be used as an aid in training your workforce and to consult as a reference guide when faced with an actual inspection.  Click here for your copy.

The Final Rule on LGBT Equality in Federal Contracts is Here

Contributed by Steven Jados

Back in July, we told you that President Obama signed Executive Order 13672, which directed the Department of Labor to expand the Equal Employment Opportunity requirements for certain federal contracts so as to prohibit discrimination by contractors based on sexual orientation or gender identity.

Taking the cue from that Executive Order, on December 3, 2014, the Department of Labor issued its Final Rule implementing the Executive Order.  The Final Rule will take effect on April 8, 2015.

A central component of the Final Rule is its directive that covered contracts and subcontracts, as well as policy, notice, and affirmative action plan documents, must be re-drafted so that where those documents formerly stated “sex, or national origin,” they must now state, “sex, sexual orientation, gender identity, or national origin.”  Notably, the Final Rule does not define sexual orientation or gender identity, which means the definitions of those terms will likely be taken from judicial decisions and agency guidance—much of which has developed under various states’ laws.

Federal contractors should recognize that the Final Rule does not require contractors to collect information about applicants’ or employees’ sexual orientations or gender identities.  In that same vein, the new Final Rule does not require employers to undertake any data analysis based on applicants’ or employees’ sexual orientations or gender identities.  However, nothing in the Final Rule, itself, prohibits asking applicants or employees to identify their sexual orientation or gender identity.  That said, state and local laws may prevent such questioning, and we generally advise against asking employees and especially applicants to identify their membership in protected classes as doing so may make discrimination claims more difficult to defend.

The requirements of the Final Rule will apply only to contracts that are entered into or modified after the effective date of the Final Rule.  Contracts entered into prior to April 8, 2015, and which are not modified after that date, are not required to include the sexual orientation and gender identity language.

But this is more than just a paper change.  To the extent federal contractors had not already done so, they must now train their managers to recognize and properly address potential instances or complaints of sexual orientation or gender identity-based discrimination.  Additionally, all employees of covered federal contractors and applicable subcontractors must be clearly advised that discrimination and harassment based on sexual orientation or gender identity is prohibited, and that there are complaint mechanisms in place in the event discrimination or harassment occurs.

The federal government has made a clear commitment to LGBT equality in employment under federal contracts, so federal contractors and subcontractors would do well to make efforts to transition seamlessly to compliance with the Final Rule’s sexual orientation and gender identity EEO requirements.

NLRB Approves Quickie Election Rules

Contributed by Jonathon Hoag

The NLRB has issued a controversial final rule amending its regulations on union representation elections.  The final rule was adopted by a 3-2 vote and will take effect on April 14, 2015, unless enforcement is blocked by a court or Congress.

The quickie election rules (also referred to as “ambush” election rules) will drastically change the representation election process to limit the amount of time an employer has to respond to a petition and oppose unionization.  The NLRB has been harshly criticized for passing these rules, which clearly favor big labor and take away the employer’s right and opportunity to engage in protected speech.  The following are some of the significant changes set forth in the new rules:

  • Employers will be required to submit a Position Statement on all issues raised by the proposed bargaining unit within 7 days after receipt of the petition – issues not raised will be deemed waived!
  • Places limitations on matters to be considered for pre-election hearings with a push to review most objections related to election to post-election hearings.
  • Requires employers to furnish union organizers with all available personal email addresses and phone numbers of workers eligible to vote.
  • The automatic stay of 25-30 days before elections to allow time for the board to consider a request for review is eliminated.
  • The opportunity to file written briefs is reduced.
  • Election petitions and other documents may be electronically filed.

The driving force behind the new rules is to short circuit the employer’s opportunity to oppose unionization, which will give unions significant advantage and increase the odds of winning union election campaigns.  The employer community is deeply disturbed by the board’s obvious bias in favor of big union, and legal challenges to the new rules are expected in the coming months.  In the meantime, employers should recognize that the new rules reinforce the importance of creating/maintaining a culture that has no desire or need for a union.  Under the new rules, employers will have very limited time to inform employees of all the reasons unionization is not the answer; it simply might be too late.  As such, that conversation must start now and be ongoing.

Supreme Court Rules No Pay for Employees’ Time Waiting in Security Line

Contributed by Sara Zorich

On December 9, 2014, the U.S. Supreme Court handed down a victory for employers in Integrity Staffing Solutions, Inc. v. Busk, No. 13-433, 2014 WL 6885951 (U.S. Dec. 9, 2014) when the Court held that time spent by employees waiting for and undergoing security screenings before leaving the employer’s workplace was not compensable under the Fair Labor Standards Act (FLSA).

Plaintiffs sued Integrity Staffing Solutions alleging that it required hourly workers to undergo anti-theft screening, taking about 25 minutes per day, before leaving the warehouse and the end of each shift and that such time was compensable time under the FLSA.

The Supreme Court overturned the Ninth Circuit by deciding that the security screenings were noncompensable postliminary activities under the FLSA.  The Court stated that the screenings were not the principal activities the employees were employed to perform.  Instead, employees were hired to retrieve products from warehouse shelves and package such for shipment.  Furthermore, the Court held that the activities were not “integral and indispensable” to the employee’s job activities.  The Court noted that “an activity is therefore integral and indispensable to the principal activities that an employee is employed to perform if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.”

The Court’s decision rejected the Ninth Circuit’s test focusing on whether the activity was required by the employer and instead looked to whether the activity was tied to the productive work the employee was hired to perform.  The Court held that a test that turns on whether the activity is for the benefit of the employer is overbroad and would make activities compensable that the Portal-to-Portal Act was enacted to address.  The Court provided further guidance noting that an activity is compensable if the employee could not perform his/her principal activities without putting on certain clothes but would not be compensable if changing clothes was merely for the convenience of the employee and not directly related to his/her principal activity.

Conclusion: This decision clarifies and limits what are compensable activities under the FLSA.  If the pre or post activity is something the employee must do in order to perform the principal activities of his/her job then it is compensable.  In light of this decision, employers should review their pay policies and procedures and consult with employment counsel regarding the applicability of the Portal-to-Portal Act.


We’ll See Your Bid and Raise (Our Exposure)

Contributed by Terry Fox

If you weren’t playing Texas hold’em, would you ever raise the stakes?  Or, as an employer would you ever promise to do more than the law requires to comply with anti-discrimination law?  Costco Wholesale Warehouse provided language in its employee handbook that was found to provide more protection for employees than the law requires.

Peter Marini worked as a baker’s assistant at a Costco Warehouse in Connecticut.  He suffers from Tourette’s syndrome, which causes involuntary twitches and other unusual physical manifestations and verbal utterings.  Unfortunately, he was assigned to work with a co-worker who never rose above junior high taunting.

When the co-worker unmercilessly taunted Marini for years, Marini complained. He then started secretly recording his interactions with co-workers and customers.  When Costco discovered this recording (brought out in an EEOC investigation), Costco terminated Marini for violating rules against recording customers/employees without their consent.  Marini sued Costco, asserting claims for violation of ADA, Connecticut Fair Employment Practices, breach of contract and common law claims. The ADA claims were found time-barred.

On December 1, 2014, the United States District Court granted Costco’s motion for summary judgment on all claims except the breach of contract claim. Why? Because the employee handbook at issue stated that:

. . . employees are expected to be sensitive to and respectful of their co-workers and others with whom they come into contact with while representing Costco.  We prohibit all forms of harassment based upon any protected status, including . . . disability . . . or on the basis of any other protected status.

*             *             *

Examples of conduct we prohibit [includes] . . .[e]pithets, slurs, negative stereotyping or threatening, intimidating or hostile acts that relate to the above-mentioned protected groups.

Marini v. Costco Wholesale Corp., 3:11-cv-00331-JAM, Slip Op. (12/1/14), at p.14.  Further, the employee handbook provided additional broad definitions of harassment and investigative duties, as well as a statement that corrective action will be taken regardless if any handbook violation actually violates the law. Slip op., p.15.

The district court labeled the policies “super anti-harassment provisions” and rejected the employer’s argument that the ADA pre-empted any contractual provisions that offered parallel protections.  The employee handbook did not contain any contractual disclaimers, allowing Mr. Marini to proceed to trial on a breach of contract theory that the employer did not protect him from harassment by reason of his disability.

Important Lesson:  Consult counsel when drafting your employee handbook to avoid providing protections broader than that required by “background law,” a term utilized by the Marini court to gauge whether the employee handbook offered more protection than required. If the protections are broader, the employer may face breach of contract exposure from its employees even where the conduct at issue doesn’t violate the law.

Newsflash: Chicago Minimum Wage Increasing to $13.00/hour

Contributed by Noah A. Frank

On December 2, 2014, the Chicago City Council approved The Chicago Minimum Wage Ordinance (Chicago Municipal Code §1-24), increasing the minimum wage to $13.00 per hour.  Here are nine points you need to know now:

  1. Covered employees are those who work for at least two hours in any two-week period within Chicago’s geographic boundaries, including driving through the city (e.g., that delivery driver that takes Route 94 from Evanston to Gary and gets stuck in rush hour traffic is covered!).  Time commuting between home and work does not count.Wage
  2. Employers with at least one covered employee are subject to the Ordinance (excluding various City entities, local, state, and federal government, and employees during certain stages of employment and in certain subsidized programs).
  3. The City of Chicago Minimum Wage (“CCMW”) only needs to be paid for work while the employee is physically present within the geographic boundaries of Chicago (you may need to determine how long your driver was stuck in traffic).
  4. CCMW for non-tipped employees will increase: on July 1, 2015 to $10.00/hour, on July 1, 2016 to $10.50/hour, on July 1, 2017 to $11.00/hour, on July 1, 2018 to $12.00/hour, and on July 1, 2019 to $13.00/hour.  Each July 1 thereafter, the CCMW will increase by an amount announced by the Commissioner of Business Affairs and Consumer Protection (and, of course, if the CCMW is less than the Illinois or Federal minimum wage, then the highest wage rate applies).
  5. For tipped employees, the CCMW will increase: on July 1, 2015 to the greater of the Federal or Illinois minimum wage for tipped employees plus $0.50/hour, and on July 1, 2016 by an additional $0.50 ($1.00 total).  Each July 1 thereafter, the CCMW will increase by an amount announced by the Commissioner.
  6. There is no grandfathering for current “in-force” collective bargaining agreements!  Unlike other municipalities’ similar recent laws, there is no exemption or safe harbor for currently in-force CBAs.  This means that, depending on the provisions of a current CBA, there could be an automatic increase in all employees’ wages (i.e., if only the lowest paid employee’s rates are defined and each other level is based a percentage higher), or the union could even demand to re-open bargaining mid-contract.  We anticipate that there will be substantial controversies over this.
  7. Notice: Employers with a physical location within Chicago must post a notice; notice must also be provided with the first paycheck subject to the Ordinance.
  8. Penalties include daily fines of $500 to $1000.
  9. Damages:  Through a private cause of action, covered employees may recover three-times the underpayment, attorney fees, and costs.

The bottom line: Employers with employees working in or traveling through Chicago should start planning for wage increases now, and review CBAs as well.

Readers are encouraged to reach out to experienced LE counsel for advice and direction.

Holiday and Weather Closures – Do Employees Get Paid?

Contributed by Noah A. Frank

Every year at this time, employers ask us the same set of questions: Do we have to pay employees for holiday time off, or overtime if they work on a holiday? What about inclement weather closings?

Non-Exempt Employees

Non-exempt employees are those that are covered by the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA) and its state counterparts.  These are the bulk of the workforce, and typically hourly workers.  Non-exempt employees generally (exceptions follow) only need to be paid for hours they actually work – and not for holidays or weather-related office closings. For example:

  1. Non-exempt employees do not need to be paid for New Year’s Day if they are given the day off.
  2. If the business is closed during inclement weather (e.g., snow days, burst pipes), non-exempt employees do not need to be paid when the business is closed and they are not working.
  3. If employees report to work and are sent home early (e.g., due to imminent ice storm), then non-exempt employees only need to be paid for the hours they worked, and not for the time that they were sent home early and are not working.

Where non-exempt employees do work on a holiday (federal, state, etc.), they only need to be paid overtime (time-and-a-half) if they have worked over 40 hours in the workweek (or 8 hours in a day in some states):  An employee who works New Year’s Eve and New Year’s Day does not receive a shift premium (sometimes referred to as “overtime”) merely by virtue of working a holiday, unless the employee has actually worked more than 40 hours – in which case, overtime is paid only for those hours worked over 40 in the week.

Exceptions: Various state wage laws, employer policies (e.g., employee handbooks) and other contracts may obligate an employer to pay employees for certain holidays or business closings, and even pay shift premiums for working on holidays.

Exempt Employees
Exempt employees are those who are not covered by the FLSA’s overtime requirements.  When paid on a salary basis, these employees’ salaries may not be reduced in any week in which they work, except for limited circumstances (e.g., the employee’s personal absence not for sickness or disability, first/last week of employment).  These exceptions do not permit an employer to reduce a salaried, exempt employee’s wages for holiday or inclement weather closures.  Thus, these employees must be paid their regular, full salary, even though the business is closed for a holiday or due to weather (assuming the weather closure was for less than a week).

And of course, other than the exceptions noted above, there is no overtime or shift premium required for an exempt employee working on holidays.

The Bottom Line

Holiday time off and holiday pay are benefits offered by employers and have become all but expected by employees.  Employers should review their policies (or draft written policies) to ensure that they have carefully defined:

-          what (if any) holidays or types of business closures are paid;

-          what classes of employees (non-probationary, full/part-time) receive holiday or business closure pay; and

-          how much pay will be granted.


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