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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.

Employer Liable Despite Employee’s Admission She Knowingly Breached Policy

Contributed by Suzanne Newcomb

Last week the Indiana Court of Appeals reaffirmed its earlier decision holding an employer liable for its employee’s breach of its privacy policy. After the employee’s husband divulged he had fathered a child with another woman and contracted herpes, the employee searched her employer’s database and accessed the other woman’s prescription records. Of course the employer had a strict confidentiality policy in place. In fact the employee admitted she knew accessing patient information for personal reasons violated company policy. Why then is the company on the hook for more than a million dollars? The answer: Respondeat Superior.

Under the common law doctrine of respondeat superior, which is recognized in all fifty states, an employer is liable for wrongful acts its employees commit within the scope of their employment. When wrongs are committed during the course of employment, the employer is vicarious liable. In other words, the employer is liable by virtue of its relationship to the wrong-doer, not because the employer itself did anything wrong. In this case, the employee’s regular job duties included accessing patients’ prescription records. Though she had no job-related reason to access this particular patient’s records, the court found there was sufficient evidence tying her actions to her job duties, so it allowed the jury to decide whether she was acting within the scope of her employment when she violated the patient’s privacy. The jury concluded she was. As a result, both the employee and her employer are liable.

So, what can a prudent employer do to protect itself? Well-drafted, clearly-defined policies remain the frontline defense. Despite the large jury verdict, this case really was a close call. The company’s policy left no doubt the employee knew her actions were inappropriate. In light of this, a different jury could have reached a different result.

Comprehensive and recurring training is a crucial next step. Even the best-crafted written policy is easily tossed into a drawer and forgotten. The more often you reinforce the rules, the less likely your employees will break them.

Finally, consistent enforcement is vital. Even an employer with well-drafted policies and comprehensive training can find itself facing possible respondeat superior liability. An employer that is also able to prove “we do not tolerate violations of this policy” is much more likely to convince a jury that its rogue employee was not acting within the scope of her employment. Notably, this employer chose to discipline, but not fire the employee. Might the outcome have been different had they fired her straightaway? It is impossible to know for sure, but firing her immediately upon confirming her breach would have strengthened the employer’s argument that it does not tolerate breaches of patient privacy.

Take Down the Christmas Lights and Post Your OSHA Form 300A

Contributed by Julie Proscia

It’s January and you know what that means….it’s time to take down your Christmas lights and get your OSHA Form 300A ready for the February 1, 2015 deadline. Oh, the fun never ends! Every year we receive numerous inquiries regarding requirements under the OSHA Form 300A, and this year is no exception – except it is an exception.  As of January 1, 2015, some of the industries that were exempt from this requirement have changed.

Prior to the change, the list of exempted industries was based on the Standard Industrial Classification (SIC) system.  As of January 1, 2015, the list is based on the North American Industry Classification System (NAICS).  The following is a link to the new list of exempted industries: https://www.osha.gov/recordkeeping2014/reporting_industries.html

Industries that are no longer on the exempted list are NOT required to post on February 1, 2015 (as this is the summary of the previous year), but will be required to track 2015 data for posting in 2016. While the industry exemption list has changed, employers with 10 or fewer employees are still exempt from the posting requirement. As such, all non-exempt employers with more than 10 employees must still post the form.  So how do you count the 10 employees?

Under the federal regulations, an individual is counted as an employee for purposes of OSHA Form 300 if the employee is on a company’s payroll, regardless of whether the employee is “labor, executive, hourly, salary, part-time, seasonal, or migrant.”  29 C.F.R. 1904.31(a).  A company must also count individuals who are not on the company’s payroll, including employees from a temporary/staffing/leasing agency and the employees of a contractor, if the company supervises those individuals on a day-to-day basis.  Id. at 1904.31(a), 1904.31(b)(2) and (3).  However, self-employed individuals are not covered.  Id. at 1904.31(b)(1).  If a company had 11 or more employees at any time during the last calendar year, the company must comply with the recordkeeping requirements.

So now that you know if you need to comply, what is the OSHA Form 300A anyways? Form 300 is the Occupational Safety and Health Administration (OSHA) injury log.  Form 300A is the summary of the same. Form 300A reports an employer’s total number of deaths, missed work days, job transfers or restrictions, and injuries and illnesses as recorded on Form 300 for the previous year. Form 300A also includes the number of workers and the hours they worked for the year. Downloadable forms can be found on the United States Department of Labor’s website at: https://www.osha.gov/recordkeeping/RKforms.html

Employers are only required to post the Form 300A summary, not the full log.  However, the full log must be available for inspection by employees, their representatives or OSHA investigators upon request. Generally, a full copy of the log is kept with the compliance office, safety officer or human resources. Employers with multiple job sites should keep a separate log and summary for each location that is expected to be operational for at least a year.

In November, the Department of Labor (DOL) announced its current rulemaking activity and OSHA topped the list with the most rulemaking activity within the DOL. As such, 2015 is projected to be a year rife with OSHA inspections and audits. Making sure that you are up to date with your log is one way to ensure compliance and reduce headaches.

With A New Year Comes New Rules! Here’s Your State Employment Law Update

Contributed by Heather Bailey

California: Effective January 1, 2015, the required paid for rest periods are considered “hours worked” by the employee, and, consequently, are not subject to wage deductions by the employer.  (California also has special requirements for making any deductions from their paychecks that you should be aware of before making any).

Colorado: Minimum wage rose to $8.23 per hour on January 1 

Connecticut: As of the first of the year, CT’s minimum wage went to $9.15 per hour.  Are you aware there is a paid sick leave law in CT?  If not, be sure to contact your employment counsel or the blog author as some changes were made beginning January 1st.

DCAs of December 17, 2014, employers cannot ask applicants certain information about their criminal backgrounds and any rescinding of a conditional offer of employment must be backed up with a legitimate business reason.  Moreover, employers are required to reasonably accommodate pregnant women when their workload is affected by pregnancy, child birth and child-related medical conditions (i.e., breast feeding).

Massachusetts:  Effective January 1, minimum wage increased to $9 per hour.  July 1, 2015, employers with 11 or more employees will be required to offer up to 40 hours of paid sick leave to employees.

MarylandMaryland’s minimum wage rose to $8.00 as of January 1st.

Missouri: Effective January 1, all equal-priority garnishments should now be prioritized by date of receipt.

New Jersey: NJ joined the other states starting March 1, 2015 to “Ban the Box” and prohibits job advertisements from stating only those without a criminal past can apply.

New York Effective December 31st this past year, minimum wage increased for NY to $8.75 per hour.  Effective immediately, employers will not be required to notify their employees in writing by February 1 about pay rates, pay days, etc. and get signed acceptance.  Employers do still need to abide by their obligation to notify employees of the same at time of hire.

Ohio:  Ohio has now given employers the ability to seek out protective orders when dealing with employees’ stalker or menacing issues when the conduct is directed at the employer.

Rhode Island: Your minimum wage increased to $9 an hour beginning this month.

Vermont: Your minimum wage increased to $9.15 an hour beginning this month.

Please keep in mind that the majority of states increased their minimum wages and you should contact your employment labor counsel or the blog author to confirm you are in compliance.

Small Employers in Chicago Must Ban the Box, Too

Contributed by Steven Jados

Effective January 1, 2015, employers that have fewer than 15 employees and either maintain a business facility within Chicago’s city limits or are subject to any of the license requirements of Title 4 of the Chicago Municipal Code (or both), are prohibited from pre-screening applicants for employment based on criminal history.  Essentially, Chicago has taken the Illinois Job Opportunities for Qualified Applicants Act (otherwise known as the Illinois Ban-the-Box law), and applied it to the employers doing business in Chicago who are too small to be covered by the statewide law.

Chicago’s Ban-the-Box ordinance states:

Employers that are not subject to the Illinois Job Opportunities for Qualified Applicants Act, including the City of Chicago and its sister agencies, may not inquire about or into, consider, or require disclosure of an applicant’s criminal record or criminal history until after the applicant has been determined qualified for the relevant position and notified that he has been selected for an interview, or, if there is no interview, until after a conditional offer of employment is extended to the applicant.

The same three carve-outs in the Illinois Act are also present in the Chicago ordinance: (1) federal and state law exclusions based on certain crimes; (2) standard fidelity bond-related disqualifications; and (3) positions subject to the licensure requirements of the Emergency Medical Services Systems Act.  Chicago’s Ban-the-Box also does not prevent an employer from providing written notice of specific offenses that will disqualify an applicant from employment.

Additionally, the Chicago ordinance prohibits the city and its sister agencies, which include the Chicago Public Schools and Chicago Park District, among others, from automatically disqualifying an applicant based on criminal convictions discovered after the applicant is interviewed or given a conditional job offer.  The ordinance also provides nine factors that the city and its agencies are to consider when making an employment decision based on an applicant’s criminal past.

But perhaps the ordinance’s most significant provision is that any employer with a facility in Chicago or subject to the city’s Title 4 license requirements that uses an applicant’s criminal past as a complete or partial basis for rejecting the applicant must communicate that fact to the applicant when telling him or her of the rejection.  In light of the EEOC’s current enforcement strategy for employment decisions based on criminal records, an employer’s admission that it based an employment decision on an applicant’s criminal record could expose the employer to a substantial risk of legal liability.

Complaints of alleged violations of Chicago’s Ban-the-Box ordinance can be made to the Chicago Commission on Human Relations, and the penalties for violations may include fines of $100 to $1,000, and “license discipline” for city licensees.

Regular Attendance Remains an Essential Job Requirement Notwithstanding Employer’s Work-At-Home Policy

Contributed by Jonathon Hoag

The 7th Circuit’s recent decision in Taylor-Novotny v. Health Alliance Medical Plans, Inc., 772 F.3d 478 (7th Cir. 2014) provides a reminder to all employers that in order for an employee to establish an ADA claim he or she must show they are a “qualified individual with a disability.”  That is, the employee must be able to perform the essential functions of the job with or without reasonable accommodation.  In this case, the 7th Circuit reiterated that regular attendance is an essential function of most jobs and the fact that an employer allows flexibility through a work-at-home policy does not automatically eliminate the essential nature of regular attendance.

Home OfficeNovotny began work in November 2005 and experienced almost immediate punctuality and attendance problems.  She was rated poorly in this area during  her January 2007 performance evaluation.  A few months later Novotny was diagnosed with multiple sclerosis.  The company adjusted Novotny’s start time and made other accommodations to Novotny’s physical work space.  Novotny was also approved for intermittent leave under FMLA.

In 2008, Novotny began working from home two days a week under a work-at-home policy.  The company required Novotny to adhere to an agreed-upon work schedule, to be available by phone, email, voice mail, pager, or modem during that scheduled time, to report absences, and to be available for staff meetings and other in-services.  Novotny continued to have difficulties with attendance and tardiness.  The company documented the ongoing issues and stressed that Novotny could use intermittent FMLA leave when applicable, but she would be subject to discipline if she failed to timely communicate the absence or tardiness and for absences and tardiness unrelated to FMLA.

In May 2010, the company issued a final warning due to Novotny’s ongoing late arrivals.  Following this final warning, Novotny logged in late on multiple occasions while working from home.  Novotny provided excuses for logging in much later than her start time, but there was no dispute that Novotny did not timely notify her supervisor when logging in late.  In July 2010, Novotny was terminated.  Novotny filed suit alleging disability discrimination, among other things.

While the court noted that Novotny’s claim would fail because she was not meeting the company’s legitimate expectations, it disposed of her claim by ruling that she cannot allege disability discrimination because she was not a “qualified individual” with a disability.  Novotny’s condition was a “disability” under the ADA, but the evidence was clear that Novotny had ongoing attendance and punctuality problems.  As such, Novotny could not perform an essential function of the job (i.e. maintain reliable and regular attendance) with or without accommodation.  Novotny pointed out that she was allowed to work from home arguing that attendance and punctuality standards were flexible and not an essential function of the job.  The court disagreed by emphasizing that the work from home arrangement was pursuant to a written policy that clearly articulated requirements for her to maintain a regular schedule and be available at scheduled times.

The company was able to defeat Novotny’s claim largely because it had clear documentation to establish that regular attendance and punctuality were essential job functions.  Employers should keep in mind that the courts give employers a fair amount of discretion in determining what aspects of a job are essential, but the employer’s policies, job descriptions, and other writings must be reviewed and updated to remain consistent with the employer’s expectations of what constitutes an essential job function.

2015 IRS Mileage Rates Are Here

Contributed by Julie Proscia

The IRS recently released its standard mileage reimbursement rates for the year 2015.  As of January 1, 2015, those rates, which apply to the use of a car, van, pickup, or panel truck, are:

  • 57.5 cents per mile for business miles driven;
  • 23 cents per mile driven for medical or moving purposes; and
  • 14 cents per mile driven in service of charitable organizations.

Employers should remembCar on Roader that the law does not require mileage reimbursement at these or any other rates.  Instead, employers must reimburse employees for mileage only if a contract requires such reimbursements.  Employers should also note that such contracts can be formed orally or by implication in certain circumstances, and if a contract exists, the actual reimbursement rate depends on the terms of the contract—which may not necessarily call for the IRS reimbursement rates.

With all of that in mind, employers who reimburse according to the IRS rates should be sure to update their reimbursement practices to reflect the current IRS mileage rates for 2015.


Illinois Governor Signs Bill Creating Mandatory Retirement Program for Illinois Businesses

Contributed by Kelly Haab-Tallitsch

The Illinois Secure Choice Savings Act (Secure Choice Act) was quietly signed into law by Illinois Governor Pat Quinn over the weekend.  The controversial legislation will require most businesses in Illinois to adopt a retirement savings plan for their employees by June 1, 2017.

The Secure Choice Act creates a state-run retirement savings program in which eligible workers can contribute to a Roth IRA through automatic payroll deductions from their paychecks. Employers with 25 or more employees, who do not offer another type of retirement program, will be required to offer the state-run IRA arrangement or be subject to a fine of $250 per employee per year. Employers that sponsor other types of private retirement plans, such as a 401(k) or pension plan, are not subject to the requirement or fines.

Once the Illinois Secure Choice Program is up and running – expected to be 2017 at the earliest – employees will be automatically enrolled in the program, with a default 3% payroll deduction per paycheck.  Employees will have the option to change their deduction percent or to opt out of the program entirely. Employers and the state will not make contributions to employees’ accounts.

The Secure Choice Act creates yet another set of administrative and recordkeeping requirements for small businesses. Once the program is implemented by the state, employers will be required to:

  • Set up and maintain a payroll deposit savings arrangement that provides for payroll deduction of funds from employees paychecks and deposits those funds into the program;
  • Provide employees with the state-provided information packet upon launch of the program and to new hires on an ongoing basis; and
  • Enroll all employees who don’t opt out of the program using the form provided by the state.

The Secure Choice Act provides for implementation of the program within 24 months, with the potential to delay further if the Illinois Secure Choice Board fails to obtain adequate funds to implement the program. The federal government could also delay the implementation if it determines that the IRA arrangements offered are not tax qualified or that the program is an ERISA employee benefit plan, and thus governed by federal, not state, law.

Employers affected by the Secure Choice Act should begin to examine other types of retirement plans while awaiting further information on implementation of the state program. Several options are available for small to mid-sized businesses, including IRAs, 401(k) Plans, and Simplified Pension Plans (SEP). IRS resources on retirement plans for small businesses can be found at http://www.irs.gov/Retirement-Plans/Help-with-Choosing-a-Retirement-Plan.

The passage of the Illinois Secure Choice Act makes Illinois the only state in the country with a state-run automatic enrollment payroll deduction retirement savings program for private sector employers.


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