Author Archives: smithamundsen

Does Your Workplace Wellness Program Comply With Existing Laws?

Contributed by Allison Sues, May 23, 2017

The National Business Group on Health’s Eighth Annual Survey on Corporate Health recently revealed the growing prevalence of workplace wellness programs. Many such programs are expanding their aim to not only better the physical health of employees, but also to improve employees’ emotional health and financial security.

employee wellness

Words “Employee Wellness” with a red circle around it

Employers should be cautious that health and wellness programs, particularly those dealing with the physical and emotional health of employees, do not run afoul of existing laws. Many employers offer employees health promotion and disease prevention activities, commonly including programs aimed at smoking cessation, weight management, and physical activity challenges. Any wellness program that asks participants to provide personal medical information or submit to health testing should comply with the Americans with Disabilities Act (ADA), Genetic Information Nondiscrimination Act (GINA), and the Health Insurance Portability and Accountability Act (HIPAA).

Looking closer at the ADA, it generally prohibits employers from making disability-related inquiries or requiring employees to submit to medical exams. The statute exempts wellness programs from this prohibition, stating that employers may “conduct voluntary medical examinations, including voluntary medical histories that are part of an employee health program available to employees at that worksite.” 42 U.S.C. § 12112(d)(4)(B). EEOC regulations confirm that wellness programs must be voluntary, confidential, and reasonably designed to promote health or prevent disease.  29 C.F.R. § 1630.14 (d)(1)-(4).

  • Wellness programs must be used only to improve the health of participating employees. A wellness program is reasonably designed to promote health or prevent disease if it has a reasonable chance of bettering the health of participants, is not overly burdensome, and is not a subterfuge for violating the ADA or any other law.
  • Employers must be able to show how they utilize any collected medical information to better participants’ health. A wellness program will raise suspicion if it collects employee health information through questionnaires, testing, or screening without providing any results, follow-up information, or advice designed to improve the participant’s health.
  • Wellness programs that collect employee health information must be voluntary. This means that employees may choose not to participate in the wellness program without suffering any retaliation or adverse action, including denial of coverage under a group health plan.
  • An incentive-based program may still be deemed voluntary. Use of a financial reward, financial penalty, or other incentive to encourage participation in a wellness program does not render the program involuntary if the maximum incentive does not exceed regulatory thresholds. For employers offering a group health plan, incentives must not exceed thirty percent of the total cost of coverage for the employee (including both contributions from employer and employee).
  • Employers must provide employees with notification about the wellness program. The notification must describe all personal medical information that will be collected and how it will be used. The notification must also explain what measures the employer will take to ensure the information is not improperly disclosed.

A Hint of Change: NLRB Allows Employer to Defend Blanket Prohibition on Use of Cameras/Video Recording Devices

Contributed by Beverly Alfon, May 16, 2017

Recently, there has been much discussion about the composition of the five-member board in Washington, D.C., including President Trump’s appointment of Philip Miscimarra as National Labor Relations Board (NLRB) Chairman, and the expected shift from pro-labor initiatives – especially in light of the expiring term of the NLRB General Counsel who was appointed by President Obama. The NLRB recently issued an order that may be a sign of things to come.

No Camera

Camera with a red circle and slash over it

On May 5, a divided NLRB denied the NLRB General Counsel’s motion for summary judgment (a request for judgment as a matter of law where there are no disputed facts) against Mercedes-Benz. Mercedes-Benz U.S. International, Inc. (MBUSI), 365 N.L.R.B. No. 67 (May 5, 2017). The General Counsel argued that legal precedent clearly establishes that a company rule prohibiting any use of cameras and video recording devices without prior authorization interferes with employees’ rights to engage in union or protected concerted activity. The General Counsel relied upon the NLRB decisions in Whole Foods Market, 363 NLRB No. 87 , slip op. at 3-5 (Dec. 24, 2015) (in which a similar rule was found unlawfully overbroad) and T-Mobile USA, Inc., 363 NLRB No. 171 , slip op. at 3-5 (April 29, 2016) (same). These decisions state that blanket bans on workplace photography and recordings generally violate the Act.

Mercedes-Benz argued that it should be allowed to show that employees did not interpret the rule to restrict protected activity under the National Labor Relations Act (NLRA) and that the rule furthers legitimate business interests, including the protection of proprietary and confidential information, the maintenance of safety and production standards, and open communication. These are nearly identical to the arguments that the board rejected in Whole Foods Market. However, this board majority, including Chairman Miscimarra, agreed that the employer should be allowed to present their evidence at a hearing. Interestingly, they relied upon two decisions in which the employer was ultimately found to have violated the NLRA, including the Whole Foods Market decision.

Bottom line: This NLRB order is notable because it shows some flexibility from the NLRB as to work rules and legitimate business interests – in contrast to recent decisions that many viewed to curb management rights. Ultimately, however, the law has not changed (yet) and the Whole Foods Market decision remains intact. Therefore, before disciplining an employee for taking photos or making recordings in the workplace, you must consider whether the employee’s actions constitute protected activity under the NLRA. Employer policies should remain carefully tailored to specify the restrictions and the business reasons for them. We will be monitoring the developments in this case. Stay tuned.

Responding to and Preparing for Pending Legislation

Contributed by Noah A. Frank, May 9, 2017

As the Trump administration looks to unburden employers through the rollback of employment-related regulations and Executive Orders, one of the likely results will be an increase in state and local employment legislation and regulation—especially in so-called “blue states.”

16306823 - 3d illustration of scales of justice and gavel on orange background

scales of justice and gavel on orange background

Employers have long been forced to consider state and local laws—in addition to federal—regulating their workforces. Many state and local laws already serve to increase employee protections over and above those contained in federal law counterparts—i.e., adding additional protected classes to EEO laws, or making such laws apply to smaller employers. However, since January 20, 2017, there has been a significant increase in proposed legislation and regulation at the state and local level. Such activity is especially prevalent in Illinois, and the proposed changes would place additional and significant burdens and restrictions on Illinois employers.

One such piece of proposed legislation—an amendment to the Illinois Equal Pay Act (HB2462)—already has been passed by the Illinois House of Representatives. Among other changes, the bill would prohibit employers from seeking wage and salary history from job applicants. The bill is similar to a Philadelphia ordinance we discussed previously. The bill must be passed by the Illinois Senate before advancing to the Governor.

While many cities, counties, and taxing districts (like airports and special economic zones) already have passed mandated sick leave laws, a bill requiring statewide paid sick leave has advanced from the Illinois House to the Senate (HB2771). This proposed legislation, similar to the Chicago and Cook County Earned Sick Leave Ordinances, would apply to nearly every employer in the state and mandate up to five paid sick days per employee. Employees would accrue one hour of leave per 40 hours worked, with an employee becoming eligible to take such leave after 180 days of employment. While the purpose of this bill is to provide some paid leave to employees at the marginal edges, unintended consequences likely could be that employers further restrict hiring, or will be less willing to keep or train marginal employees past the 180-day mark, in order to avoid additional costs associated with providing such mandated leave. This could result in an increase in gig and contingent labor.

Examples of other bills pending in Illinois include HB2802, requiring employers with 25 or more employees within a regional transit area to provide a transportation benefit program, and SB1720, amending the Illinois Wage Payment & Collection Act to increase criminal and other penalties for violation of federal, state, and local wage and hour laws.

What is an employer to do?

First, without employers voicing their concerns, organized labor and other purported workers’-rights groups have the ears of their legislators. Call, email, and mail your representatives.

Second, evaluate your benefits, including your vacation and other leaves. Consider how they will be impacted by proposed mandated benefits, such as paid sick/family leave, transportation benefits, and minimum wage laws.

Third, review your employment and pay policies. With increased scrutiny and penalties in the wage and hour arena, it is imperative that employers take steps to properly classify employees/independent contractors and exempt/nonexempt workers, prohibit off-the-clock work and missed meal breaks, and mandate early reporting by employees of any wage and hour errors.

Finally, consult experienced employment counsel to develop a dynamic, strategic plan to keep your business ahead of the curve—rather than scrambling to react to a government audit or charge, or a civil lawsuit.

Is Your Company Ready For the Chicago and Cook County Sick Leave Ordinances Effective July 1, 2017?

Contributed by Sara Zorich and Beverly Alfon, May 3, 2017

51162387 - calendar on white background. 1 july. 3d illustration.

calendar on white background – July 1

The July 1st effective date of the Cook County and Chicago Sick Leave Ordinances is quickly approaching and employers must review their paid time off, sick and vacation policies now to ensure compliance with the new ordinances. Some of the key similarities and differences of the ordinances provisions are highlighted below:

Similarities:

  • Covered Employee – An employee who: (1) works for an  employer at least 80 hours within any 120-day period; and (2) performs at least 2 hours of work in Cook County (or the City of Chicago depending on the ordinance being applied) during any 2 week period — including driving through county (or city) for business purposes.
  • Accrual Rate – Employees earn 1 hour of earned sick leave for every 40 hours they work.
  • Cap – Employees can earn up to 40 hours of paid sick time per 12 month period.
  • Carryover – 20 hours for non-FMLA employers but if the employee is FMLA eligible, an additional 40 hours may be carried over for FMLA purposes only.
  • Permitted Use – Employee’s own or family member’s illness, injury, medical treatment or diagnosis, preventative care; also domestic violence or sexual assault, or public health emergency closure related to child’s school or care facility.
  • Family Member Definition – Employee’s child, legal guardian or ward, spouse, domestic partner, parent, spouse or domestic partner’s parent, sibling, grandparent, grandchild, including step and foster relationships, or any other individual related by blood or whose close association with the employee is the equivalent of a family relationship.
  • Restriction on Use – Generally, only 40 hours of paid sick leave may be used per 12 month period.  However, if the employee is eligible to carry over additional paid sick leave hours for FMLA purposes, up to 40 hours can be used for FMLA purposes only, and an additional 20 hours can be used for other purposes – for a total of 60 hours.
  • Employee Notice to Company – Employers can require the employee to give up to 7 days’ notice if need for leave is reasonably foreseeable (e.g., prescheduled appointments, court dates). Otherwise, the employee may give the employer notice of the need for leave as soon as practicable via phone, email or text message.
  • Payout – No payout at termination.
  • Posting Requirements – Both written notice with first paycheck after 7/1/17 and poster (to be created by the enforcing agency).
  • Documentation – An employee may be required to provide documentation to support absence of more than 3 consecutive work days.
  • Retaliation – No retaliation for using accrued sick leave under the ordinance.

Differences:

  • Employer coverage is only required if you have a “place of business” in Cook County, whereas in Chicago an employer is subject to the ordinance if they “maintain a business facility” in Chicago or are subject to Chicago’s business licensing requirements. This means that more employers outside of Chicago may be subject to the ordinance solely because they have a Chicago business license.

Key Issues to Consider

Employers must take the time to carefully review their existing policies to determine if their policies are compliant with the new ordinances or if changes need to be made. Issues for the company to consider include:

  • Do you have a paid time off or sick leave policy?
  • Have attendance and administrative processes been updated to reflect the requirements of the law (e.g., receiving notice of unforeseeable leave by phone, email, or text message)?
  • Are federal or local disability laws implicated by an employee requesting or taking leave, or returning to work from leave?
  • What procedures are in place to engage in the reasonable accommodation interactive process?
  • Have employment policies been vetted by experienced employment counsel?

Along with these general issues, there are some “tricky situations” employers with multiple locations must consider:

  • Will the company change its sick policy or create a new policy for all Illinois employees?
  • How to address and track when an employee triggers accrual when that employee’s normal business location is not in Cook County or Chicago?

The Cook County Commission on Human Rights has issued its proposed regulations governing the Ordinance which can be found under downloads on the Cook County website. Any entity can submit comments to the Cook County Commission on Human Rights by mail and/or email (human.rights@cookcountyil.gov) by May 8th.  SmithAmundsen is working on its submission to the commission for clarification of some of the proposed regulations.

It should be noted that certain municipalities have opted out of the requirements of the Cook County ordinance: Barrington, Bedford Park, Elmwood Park, Mount Prospect, Oak Forest, River Forest, Rosemont, Schaumburg and Tinley Park. More municipalities are expected to opt out prior to July 1.

Supreme Court Clarifies That Limited Appellate Review Applies To EEOC Subpoena Enforcement

Contributed by Steven Jados, May 2, 2017

The Supreme Court’s recent McLane Company v. EEOC decision addresses the constraints placed on appellate review of actions to enforce or quash broadly written Equal Opportunity Employment Commission (EEOC) subpoenas. The case arose from a supply chain company’s requirement that employees in certain physically demanding positions pass a physical examination prior to returning to work from medical leave. The company terminated an employee who failed the exam three times while attempting to return to work after taking maternity leave.

gavel

Gavel

The employee filed a discrimination charge with the EEOC, and the EEOC eventually issued a subpoena to the company seeking, among other things, the names, social security numbers, and last known contact information for all employees, nation-wide, who had been asked to take the physical exam at issue. The company refused to comply with the subpoena, and the EEOC filed actions against the company in the Arizona federal district court to enforce the subpoena.

Federal law gives the EEOC the authority to issue subpoenas that are “relevant” to a charge of discrimination and “reasonable.” The meanings of relevant and reasonable are often unclear—and employers that have been the target of EEOC-issued subpoenas know all too well the EEOC’s tendency to use subpoenas to transform what may be minor employee complaints into nationwide investigations.

When facing a wide-ranging EEOC subpoena, employers must carefully decide how much to push back on the EEOC by making objections to the subpoena and refusing to comply. As the McLane case demonstrates, an employer’s refusal to comply with the EEOC’s subpoena carries the risk that the EEOC will file an action in federal court to compel the employer’s compliance.

In McLane, the Arizona district court ruled against the EEOC, in relevant part, and the EEOC appealed to the Ninth Circuit Court of Appeals. The ninth circuit conducted an entirely new review of the matter, and overruled the district court. The case then went to the U.S. Supreme Court, which ruled that the ninth circuit should not have conducted an entirely new review of the matter. Instead, according to the Supreme Court, appellate courts reviewing orders on EEOC subpoenas should only decide whether the lower court abused its discretion in ruling upon the subpoena. Generally speaking, a court abuses its discretion only when it makes a serious error of judgment, such as applying the wrong legal standard or ignoring an essential element of a legal claim.

Because the abuse of discretion standard is difficult to meet, the McLane decision may cause the EEOC to re-evaluate its subpoena strategy, and issue subpoenas more narrowly tailored to facts actually relevant to the underlying charge of discrimination. Whether the EEOC changes its strategy or not, McLane also demonstrates that companies must make the strongest, most comprehensive objections possible at the earliest stage of the subpoena response because, in practical terms, the application of the abuse of discretion standard means the company may only have one true chance to challenge an EEOC subpoena in court.

It’s Internship Time!

Contributed by Carlos Arévalo, April 27, 2017

56243229 - interns wanted internship training trainee concept

Interns sitting next to a sign that says “Interns Wanted”

It’s that time of the year when college students will come knocking looking for a job or an internship. Depending on the nature of an organization’s business, an unpaid intern might be a great idea. But before organizations start engaging summer intern help, they need to make sure that they are complying with the Department of Labor (DOL) requirements, which include the following six factor test:

  • The internship is similar to training that would be offered in an education environment;
  • The internship experience is for the benefit of the intern;
  • The internship is not displacing a regular employee;
  • The training provided by the employer to the intern may impede employer’s operations;
  • The intern is not expecting a permanent position at the conclusion of the internship; and
  • Both the employer and intern understand that there is no compensation.

Assuming all of these apply, the Fair Labor Standards Act (FLSA) is not triggered and the intern need not be paid minimum wage or overtime. While there are limited exceptions applicable to local government agencies or those who volunteer their time without anticipation of compensation for religious, charitable, civic, or humanitarian purposes to non-profit organizations, the six-factor test is generally applicable to most organizations.

In 2015, however, the federal second circuit court issued a decision in a case involving an unpaid intern for the award winning movie Black Swan. There, the court established a more employer-friendly test heavily focused on training, integration of coursework and receipt of academic credit, accommodation to the intern’s academic calendar and the duration of the program as it related to beneficial learning. The court also emphasized that a clear understanding must exists that there is no expectation of compensation. This test was subsequently adopted by the eleventh circuit in August 2016. To date, the DOL has not amended the six-factor test.

Thus, as organizations develop internship programs, special care must be taken to ensure that it is the intern who is drawing the benefit from the program as opposed to the company. In other words, the focus should be on the intern attaining valuable and useful skills and experience in his chosen discipline instead of the company aiming to receive “free labor.” To avoid slipups, interns should not be engaged in menial tasks that can be performed by clerks or other administrative personnel already on board. Such tasks might include making copies, fetching coffee, delivering mail or running errands. Rather, interns should be assigned to career related tasks – for instance an IT intern might assist staff in performing backup and maintenance functions or update user and technical documentation.

Congress has made it clear that its intent is not to discourage volunteerism or to prevent willing individuals from attaining skills and training by serving as unpaid interns. Nevertheless, managers in charge of internship program development should be mindful of the DOL requirements and consult experienced counsel to ensure compliance and design internship programs that truly benefit participants.

Before You Acquire That Business, Understand the NLRB’s Successor Bar Doctrine

Contributed by Beverly Alfon, April 24, 2017

handshake over contract

Two business people shaking hands over a contract

When a change of ownership occurs for a business that employs individuals who are represented by an incumbent union, the new owner must be aware of the National Labor Relations Board’s (NLRB) successor bar doctrine.  It used to be that following a sale or a merger of a business, there was a window of time during which employees, the new employer, or a rival union, could challenge a union’s majority status as representative of those employees. However, in 2011, the NLRB modified the doctrine in UGL-UNICCO Service Co., 357 NLRB No. 76 (Aug. 26, 2011), holding that for stability, the new relationship between the successor employer and incumbent union should be insulated from challenges for a reasonable period of time (6 months if the new employer adopts the previous terms and conditions; 6-12 months if the new employer sets new terms and conditions).

A few weeks ago, a federal appellate court in NLRB v. Lily Transportation Corp. (1st Cir. March 31, 2017), affirmed the revised successor bar doctrine, holding that the NLRB had a sound basis to implement it. The court also held that the NLRB properly applied that revised successor bar doctrine in finding that Lily Transportation unlawfully refused to bargain with a union that represented a group of truck drivers at a newly acquired facility.

Lily argued to the board that less than a month after it took over operations, it received signed statements from a majority of drivers indicating that they no longer wanted to be represented by the union. Lily argued that the successor bar would force a union upon the employees who had clearly rejected it. The NLRB rejected the argument and required Lily to negotiate with the union.

On appeal, Lily challenged the validity of the successor bar doctrine itself. It argued that the NLRB should be required to provide reasoned explanation for the change in precedent. The court rejected the arguments, reasoning:

The greater the number of successor situations with unionized employees, the greater the potential volatility in union-management relationships across the national labor market. The greater the level of that instability, the greater the likelihood of precipitate disruption in litigation challenging union support during the unsettled period with the new employer.

Bottom line: NLRB activism or not, the modified successor bar doctrine has survived the scrutiny of a federal appellate court. Employers must carefully evaluate all potential labor and employment issues prior to the acquisition of any business.