Category Archives: employers

Missouri Appellate Court Declines To Recognize Cause Of Action For Negligent Recommendation To A Prospective Employer

Contributed by Brian Wacker, June 12, 2019

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

There is no duty of care to “not make a negligent recommendation to a prospective employer” in Missouri. That is the upshot of an April, 2019 ruling out of Missouri’s Southern District Appellate Court, Doe v. Ozark Christian College, which is sure to have Missouri employers and human resource professionals breathing a collective sigh of relief – at least for now.

In Ozark, the defendant is a religious college. The school educates students in ministry and from time to time makes recommendations to prospective employers – i.e., churches – regarding placement of those students in open positions. The college has no affiliation with the churches who hire students the school recommends. The plaintiff in Ozark claimed he was sexually abused by a minister at his church from 2006 to 2010. The minister had been hired by the church upon the college’s positive recommendation of him in 2004. The plaintiff filed suit against the college, alleging that it owed a duty to not make a negligent recommendation to the church about the employee who allegedly abused him years later. Even though no such duty had ever been recognized under Missouri law, the plaintiff invited the court to recognize a new cause of action based on policy arguments and the fact that other states (specifically, California and Texas) had arguably recognized such claims.

Luckily for employers across the state, the Southern District affirmed the lower court’s summary judgment and declined the plaintiff’s invitation to find such a duty exists. 

First, the court rejected the notion that the college somehow assumed a duty under Missouri law in making a “gratuitous provision of an employment recommendation.”  The court noted that the plaintiff did not even make such an allegation; instead, all he had alleged was that after graduation, the college assisted and guided the employee at various churches from 1998 to 2004. This, according to the court, did not support even an inference that the college intended to benefit the employer church when it gave the recommendation. As such, there was no such duty under existing Missouri law.

Second, and perhaps more consequential for Missouri employers, the court rejected the plaintiff’s policy-based arguments to create a new cause of action out of thin air. While the court noted that California and Texas arguably recognize the alleged duty the plaintiff was pushing, a majority of other states, including Kentucky, Indiana, Illinois and New York, have rejected it.  

The court sided with the latter states and declined to recognize this new cause of action.  However, the court appeared to couch its decision, at least in part, in its role as “error-correcting” court, as opposed to the Missouri Supreme Court, which is the “law-declaring” court. The plaintiff apparently read this language as an invitation because on May 2, 2019, he filed an application to transfer the matter to the Supreme Court for further review.

Also, it is important to note that in Ozark, there was no indication that the college had any knowledge or indication that the employee minister may sexually abuse someone when it made the recommendation. (The only allegation was that the employee subsequently abused the student.)  If that had been the case, the court could easily have gone the other way.  States such as Missouri’s neighbor Illinois have recognized a duty in making recommendations, where there is prior knowledge of bad acts or conduct, in this very type of circumstance.  See e.g., Doe v. McLean County Unit District No. 5, 973 N.E.2d 880 (Ill. 2012)

Obviously, how the Supreme Court rules will have a major impact on employers and human resource professionals in Missouri going forward. Potential exposure to liability for the future acts of applicants for whom someone simply responds to a request for recommendation could have a significant, chilling and stifling effect. What former employer would want to go out on a limb to make a recommendation for an applicant if they can be potentially liable based on that applicant’s potential future conduct? What incentive would they have to even respond?

And this is to say nothing of the harmful effect it could have on prospective employers, who would likely be deprived of otherwise helpful information about applicants in the hiring process. If recommendation requests go unanswered, the hiring employer has less useful information about the applicant to make its hiring and personnel decisions.

In short, a recognized cause of action for negligent recommendations could be bad news for Missouri employers and employees alike.

This blog will monitor the Supreme Court’s review and update when a final determination is made.

U.S. Citizenship and Immigration Services Policy Challenged on Third-Party Worksites

Contributed by Jacqueline Lentini McCullough, June 7, 2019

A U.S. Citizenship and Immigration Services (USCIS) memorandum-issued policy is at the heart of a court case challenging recent H-1B visa denials.

The “Contracts and Itineraries Requirements for H-1B Petitions Involving Third-Party Worksites” memo was issued on February 20, 2018 without any notice or comment period required by the Administrative Procedure Act (APA). The memo directs adjudicators to ensure a contractor has actual and exclusive “control” of the contractor’s employees at the third-party site as a criterion for visa approval. This requirement comes from a rigid interpretation of the Department of Labor’s definition of “employer” which reads: “Has an employer-employee relationship with respect to employees under this part, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee….” Instead of considering any one of these circumstances as qualifying, USCIS effectively changed the “or” to an “and,” requiring all of them.

H-1B visa denial rates skyrocketed the past two years, especially for contractors working at third-party worksites. Denial rates for initial H-1B petitions in Fiscal Year (FY) 2018 were 1 % for large technology companies but 34%-80% for companies that put H-1B visa holders at third-party sites. Third-party site work factors highly in IT consulting.

Visa Stamp

After having many H-1B visas denied or issued for short validity periods, several IT consulting firms filed lawsuits against USCIS. Those lawsuits have been consolidated into one under the aegis of the IT industry trade association ITServe Alliance.

Judge Rosemary Collyer presided over a court hearing of ITServe Alliance v. USCIS on 05/09/2019. Plaintiff attorneys produced data showing from FY 2012 to FY 2017, USCIS approved 94 % of their client’s ERP analysts’ H-1B petitions. During FY 2018 to FY 2019, the approval rate dropped to 19%.

Judge Collyer has taken issue with the disparate visa approval rates between different industries and USCIS’s requirement that contractors show three years’ worth of specific work assignments for H-1B petitioners when they are allowed “nonproductive” time as long as they are paid.

As Judge Collyer considers the case, she will rule on whether discovery is warranted to find out what has caused the different adjudications of H-1B petitions. Not only are H-1B approval rates markedly down for the IT industry, but requests for evidence and H-1B petition processing times have ballooned.

Requests for evidence (RFE) for all H-1B petitions have jumped from below 30% in first quarter FY 2017 to 60% in first quarter FY 2019. Meanwhile the number of petitions approved with a completed RFE has sunk from 80 % to just over 60 %.

Stay tuned as we will continue to provide updates as new information emerges.

Do I Have to Pay Employees to Attend Company-Sponsored Volunteer Events?

Contributed by Suzanne S. Newcomb, April 30, 2019

Volunteer Charity Helping Hands Give Concept

Company sponsored volunteer activities foster a positive corporate culture and can improve employee engagement and morale. On March 14, 2019, the U.S. Department of Labor issued an Opinion Letter that makes wage and hour compliance associated with corporate volunteer campaigns a bit easier. The Opinion Letter clarifies that employers are not required to pay non-exempt employees for volunteer time outside their normal work hours so long as participation is truly voluntary and the employer does not direct the volunteer activities. The DOL further confirmed that an employer can incentivize volunteering to a limited degree.

In general, an employer must compensate non-exempt employees for all the time they are required or allowed to work. Under federal Fair Labor Standards Act regulations, even time a non-exempt employee devotes to public and charitable causes is compensable if the employer requests the employee engage in the volunteer efforts, directs or controls the employee’s efforts, or requires the employee to be on the employer’s premises. However, time an employee voluntarily devotes to public and charitable activities outside of his or her normal working hours is not compensable. 29 C.F.R. § 785.44.

At issue in the recent opinion was a bonus paid to the group of employees whose volunteer efforts had the greatest community impact. Citing earlier opinions, the DOL said an employer may consider employee volunteer efforts as a factor in calculating bonuses without incurring wage liability for volunteer time outside of regular working hours so long as (1) volunteering is truly optional; (2) choosing not to volunteer does not adversely affect working conditions or employment prospects; and (3) volunteering does not guarantee any employee a bonus.

Of course, volunteer activities must benefit a public or charitable purpose. One cannot “volunteer” to benefit a for-profit company. Even non-profit employers must be careful not to designate any time employees devote to their regular work duties as “volunteering.” Employees of non-profit organizations can only volunteer for that organization in a capacity that is distinct from their normally assigned tasks.  

The opinion letter and this post address obligations arising under federal law only. States can and often do impose more stringent regulations so the requirements in your particular jurisdiction may dictate a different outcome. Moreover, the DOL opinion is limited to the particular circumstances presented.

So in general, under federal law, if your employees engage in company sponsored volunteer activities during work hours or time they would ordinarily be working, you must pay them for that time.  You do not need to pay employees who voluntarily choose to volunteer outside of regular work hours. However, time an employee spends volunteering, even if outside regular work hours, can become compensable if participation is required by the employer, employees suffer adverse consequences for choosing not to participate, the employer directs or controls the employees in their volunteer activities, or those who participate are provided a direct guaranteed rewarded.

Are Employment Rules Getting Hazier With Legal Marijuana?

Contributed by Noah A. Frank, April 18, 2019

the cannabis leaf and judge gavel

Like a majority of U.S. states, Illinois’ legal stance on marijuana is becoming more tolerant and liberal – with regard to both medical and recreational use (also called “adult use”). As we previously reported on November 6, 2018, the Alternatives to Opioids Act of 2018, PA 100-1114 amended Illinois’ Medical Cannabis Pilot Program to allow individual prescribed opioid medication to enroll in the Illinois Opioid Alternative Pilot Program (OAPP). The OAPP allows these individuals to seek relief through the legal use of medical cannabis, rather than opioid medications. In the first two months of the program, 1,000 patients registered (compared with 61,231 qualifying patients that have been registered under the medical cannabis pilot program since September 2, 2014). This can be attributed to the decrease in time it takes to register, as well as the decrease in requirements and restrictions for qualifying as a registered patient under the OAPP.

Additionally, like many other state legislatures, the Illinois legislature has proposed bills, including HB-0902 which would legalize recreational use of marijuana. (See our prior post on this proposed bill). Even the federal government loosened its regulations regarding marijuana products through the Agricultural Improvement Act of 2018 (AIA), which specifically addressed and legalized the research and production of industrial hemp (marijuana plants having less than .03 percent THC concentration). In particular, the AIA legalized CBD (the non-psychoactive component of marijuana) derived from industrial hemp plants. (See our prior post on this act). It is important to note that while there are legal CBD products, which are derived from industrial hemp plants, CBD derived from marijuana plants with higher THC levels are NOT legal on the federal level.

It is likely that 2019 will see continued and increasing tolerance of medical and recreational marijuana on federal, state, and local levels. Employers should implement the following steps now to protect their businesses.

  • Determine corporate tolerance for marijuana use (at least off-duty), and how that will impact drug testing.  For example, if off-duty use is a non-issue, then consider the type of drug test used for testing marijuana or removing marijuana from the drug panel for certain tests (e.g. applicants) – which can only indicate the presence of the drug in the system and not actual impairment, or how you will treat positive tests for marijuana depending on the type of test and positions. However, be aware that making exceptions for particular candidates or employees could leave the company susceptible to discrimination claims (such as, but not limited to, disability claims).
  • Update policies to comply with the laws (disability, medical leave, registered user protections), company tolerance, and external pressures (e.g., contracts). 
  • Review and update job descriptions – especially for safety sensitive positions. 
  • Implement appropriate management training – including identifying impairment and mandating substance testing, how and when to involve human resources, medical nature of information and company’s policies on marijuana.
  • Understand that disability laws, which never protect at-work impairment, may protect an underlying medical condition, and as such companies should be prepared to engage in the ADA interactive process. 
  • Similarly, understand the implications of and interactions with other laws – like the FMLA, Workers’ Compensation, and equal employment opportunity laws.
  • Enforce policies consistently to avoid discrimination claims.
  • Seek the advice of experienced employment counsel to deal with difficult employees or potentially risky discipline/termination situations.

While these steps are useful for protecting businesses in light of developing marijuana legalization trends, they are also practical audit and compliance reminders under other laws, including but not limited to the Americans with Disabilities Act and mandated leave laws.

Social Security “No Match” Letters Are Back!

Contributed by Sara Zorich, April 5, 2019

The Social Security Administration (SSA) announced in late 2018 that they would begin issuing SSA No Match letters again beginning in the Spring of 2019. Employers must be aware that the process has begun and the SSA No Match letters they could receive in 2019 look different from prior years. The letters will state “Employer Correction Request Notice” at the top and will not provide any employee names on the notice.  A sample of the notice can be found on the Social Security website

In order for the employer to determine what employees were identified as “mis-matches” by SSA, the employer will be required to register for the Business Services Online (BSO). Note, do NOT assume the notice conveys information regarding the employee’s immigration status or actual work authority. The receipt of the notice does not in and of itself mean the employee is not authorized to work in the United States. The employer must attempt to resolve the no-match by taking consistent and not-discriminatory steps for each identified employee. SSA has provided a sample letter for employers to use when contacting the employees and steps to resolve the error.

However, SSA is not the only agency that these new letters may affect. For example, during a Form I-9 audit from the Department of Homeland Security, you may be requested to provide copies of any “no-match” letters you have received from SSA. Also, the Immigrant and Employee Rights section (IER) of the Department of Justice (previously known as the Office of Special Counsel for Immigration-Related Unfair Employment Practices) previously provided employers with a guideline for what to do and not do when an employer receives a no-match letter and some FAQ’s.  

Because this issue impacts not only an employer’s wage reporting requirements but could also impact the company’s Form I-9’s and immigration anti-discrimination statutes, employers will need to create a plan of action and protocols on how they are going to address these new SSA Employer Correction Request Notices (aka No-Match letters). 

Illinois Hotel & Casino Employee Safety Act on Way to Passage

Contributed by Brian Wacker, April 2, 2019

Croupier behind gambling table in a casino.

More than two dozen Illinois State Senators have signed on to co-sponsor SB0075, a bill to enact the Illinois Hotel and Casino Safety Act (the “Act”). Likely to pass in the coming weeks, the Act will impose new requirements on hotels and casinos operating in Illinois to provide “panic buttons” to certain employees and adopt specific anti-sexual harassment policies.

What Does The Act Require?

The Panic Button

The panic button requirement is directed at hotel or casino employees placed in certain positions that may involve interacting with guests alone. 

Under the Act, hotels and casinos will be required to provide any employee who works in a guest room, restroom or casino floor “under circumstances where no other employee is present in the room or area, with a safety device or notification device.”  The device is to be provided to employees to use to summon help if they reasonably believe there is an ongoing crime, sexual harassment or assault or other emergency occurring in their presence. 

The Act will require the device to be provided to hotel or casino employees at no cost to them.

Anti-Sexual Harassment Policies

The Act will also require hotel and casino employers to develop or modify their anti-sexual harassment policies “to protect employees against sexual assault and sexual harassment by guests.”  Specifically, those policies will be required to contain provisions that:

  • Encourage employees to immediately report sexual assault or sexual harassment by guests;
  • Describe procedures that the employee and hotel or casino employer are to follow in cases of sexual assault or sexual harassment by guests;
  • Instruct employees to cease work and leave the immediate area where the danger is perceived until hotel or casino personnel or law enforcement arrive to assist;
  • Offer temporary work assignments to complaining employees during the duration of the offending guest’s stay at the hotel or casino (this could include assigning the employee to a different floor, station or work area);
  • Provide employees with necessary paid time off to sign police complaints against the offending guest and to testify in any legal proceedings which may ensue as a result of the sexual assault or harassment;
  • Inform employees that the Illinois Human Rights Act and Title VII of the Civil Rights Act provide them additional protections against harassment in the workplace; and
  • Inform employees that it is illegal for the hotel or casino employer to retaliate against employees who reasonably use the panic button device or otherwise avail themselves of the Act’s protections.

These new policies will need to be provided to all employees in English, Spanish and any other language predominant among the employer’s workforce.  The policies must also be posted in conspicuous places in the areas of the hotel or casino where employees can reasonably be expected to see them.

Employee Remedies for Violation of the Act

The Act will make it unlawful for a hotel or casino employer to retaliate against any employee who “reasonably uses” the panic button device, avails himself or herself of the protections of the Act, or who discloses, reports or testifies about any violation of the Act.  The Act also creates a private right of action for employees who allege violations of the Act. 

Remedies for violation of the Act are significant. In addition to injunctive relief to cease violations of the Act, it authorizes an employee to recover up to $350 per violation, with each day that a violation continues constituting a separate violation. The Act will also permit employees to seek equitable remedies such as reinstatement, and require that a hotel or casino employer pay reasonable attorneys’ fees and costs to successful employee claimants.  Note: this is a one-way street. The Act does not permit employers to recover attorneys’ fees and costs from unsuccessful claimants.

Employer Opportunity To Cure

Employees will, however, have to exhaust certain non-litigation remedies first.  Before bringing a claim under the Act, employees must (1) notify the hotel or casino employer, in writing, of the alleged violation and (2) allow the hotel or casino employer fifteen days to remedy the alleged violation. 

Effective Date

The Act will give hotel and casino operators in Illinois time to get into compliance. As currently drafted, the Act would not go into effect until July 1, 2020.

Illinois Mandatory Retirement Program Enrollment Deadlines Coming Later this Year

Contributed by Kelly Haab-Tallitsch, March 27, 2019

money plant growing

Illinois employers that have 25 or more employees and have been in business at least two years will be required to participate in the state-run retirement savings program or offer another qualifying retirement plan later this year.

The status of the Illinois Secure Choice Program was uncertain last fall following an amendatory veto issued by former Governor Bruce Rauner making the program optional, instead of mandatory, as discussed in a previous blog post. The Illinois legislature generally opposed making the program optional, and chose not to act on the amendment, effectively overriding the veto. As a result, the Secure Choice Program remains mandatory for covered employers that do not offer another retirement program. 

Employers with 100 – 499 employees must register for the Illinois Secure Choice Savings Program by July 1, 2019 and employers with 25 – 99 employees must register by November 1, 2019 (employers with 500+ employees were required to register in late 2018). The Illinois State Treasurer’s office will notify employers directly (by mail or email) when they are required to register. Employers will receive two notifications – an early registration notice 120 days prior to the required registration date and a second notice 30 days prior to the registration date. 

During the registration process, employers will provide basic information for the state to determine if the employer must participate in the Secure Choice Program (e.g., number of employees, and whether another retirement plan is offered). Participating employers will be required to automatically enroll employees in the savings program, withhold five percent of an employee’s compensation (up to an annual IRS maximum), and remit employees’ contributions to the state-run savings program, unless the employee elects a different amount or opts out of the program. Employer contributions to the plan are not permitted.

After registration, employers will be given instructions on how to enroll employees and remit payroll contributions, and provided enrollment forms and communication materials to give to employees. Employees will have 30 days to opt out or make adjustments to their savings rate or investment choices. At the end of this 30 day period, the employer must record employees’ elections in an online employer portal. Payroll deductions must begin within the following 30 days. Employers can remit employee contributions to the Secure Choice Program by ACH, wire transfer or check.

Employee contributions will be deposited into Roth Individual Retirement Accounts (IRAs) for each participant and invested at the participant’s direction among a menu of investment alternatives.

An Illinois employer that offers another qualifying retirement plan is exempt from the Secure Choice Program. This includes a 401(k) plan, 403(b) tax-sheltered annuity plan, 403(a) qualified annuity plan, Simplified Employee Pension plan, SIMPLE IRA plan, governmental 457(b) plan, or any other plan qualified under Internal Revenue Code section 401(a) (payroll deduction IRAs are not included). As such, employers required to participate in the Secure Choice Program should examine the options available to determine whether implementing a qualified retirement plan may be a better alternative. 

Employers can find additional information on the Illinois Secure Choice website.