Tag Archives: employee compensation

Court Lays Out Guidance for Ensuring Hourly Workers Are Paid for Off-Duty Work

Contributed by Steven Jados, October 11, 2017

Wage-Hour2

Addressing an employment issue of interest in an increasingly digital world, the Seventh Circuit Court of Appeals (which has jurisdiction over lower federal courts in Illinois, Indiana, and Wisconsin­­) recently upheld a prior ruling that the City of Chicago was not liable for paying wages for certain employees’ off-duty work time.

In the case of Allen v. City of Chicago, employees who alleged they were not compensated for off-duty work performed on their mobile devices were not entitled to recovery for that unscheduled, overtime work. Agreeing with the trial court’s decision that the City was not aware of the overtime work, and that the employees were not prevented or discouraged from reporting off-duty work time and seeking pay, the court ruled that the City should not be held liable.

In the decision, the court stated that the City would have been liable for unpaid wages it knew or should have known about the work at issue through the exercise of “reasonable diligence.” Under the Fair Labor Standards Act, an employer must pay for all work it knew or should have known was being performed. Moreover, an employer is considered to have knowledge of the work if it should have known about it through the exercise of reasonable diligence. The court’s decision further illustrates and offers guidance on how employers can exercise such reasonable diligence:

For instance, it is important that employers institute a method by which any time worked outside of the normal business day can be reported in order to be compensated. In this case, the court found that the City of Chicago exercised diligence by allowing employees to submit “time due slips” on which they listed their off-duty hours worked along with a brief, albeit vague, description of the work performed.

Employers should also establish a reasonable policy and process for employees to report uncompensated work time after noticing a shortfall in pay. Such a process might involve an employee handbook provision that instructs employees to carefully review their paychecks, every pay period, to ensure that the paycheck accurately reflects all time actually worked. The handbook should also instruct employees to contact human resources or another appropriate member of management if a paycheck is short.

Lastly, in order to avoid landing on the wrong side of a legal decision, employers must take employee complaints under such a policy seriously by thoroughly investigating and adjusting compensation due when it is determined that there is a shortfall in the employee’s pay.

Bottom Line: Bearing all of this in mind, especially in the modern workplace, employers that have hourly employees who check e-mail, make calls, or conduct any other work outside of normal business hours on their cell phones, must heed the Seventh Circuit’s guidance by implementing and enforcing strong and clear policies that meet the “reasonable diligence” standard to ensure that employees are properly compensated for all hours worked.

Salary History Inquiry Bill Down But Far From Out

Contributed by Noah A. Frank, September 19, 2017

wage

On June 28, 2017, HB 2462, an amendment to the Illinois Equal Pay Act, passed both chambers of Illinois General Assembly. The bill would have made an employer’s inquiry into an applicants’ wage, benefits, and other compensation history an unlawful form of discrimination. Even worse for Illinois employers, the bill would allow for compensatory damages, special damages of up to $10,000, injunctive relief, and attorney fees through a private cause of action with a five (5) year statute of limitations.

On August 25, 2017, Governor Rauner vetoed the bill with a special message to the legislature that, while the gender wage gap must be eliminated, Illinois’ new law should be modeled after Massachusetts’s “best-in-the-country” law on the topic, and that he would support a bill that more closely resembled Massachusetts’ law.

The bill, which passed 91 to 24 in the House, and 35 to 18 in the Senate, could be reintroduced as new or amended legislation following the Governor’s statement, or the General Assembly could override the veto (71 votes are needed in the House, and 36 in the Senate, so this is possible) with the current language.

Why is this important?

With the Trump Administration, we have seen an increase in local regulation of labor and employment law. This means that employers located in multiple states, counties, and cities must carefully pay attention to the various laws impacting their workforces. Examples of this type of “piecemeal legislation” we have already seen in Illinois and across the country include local ordinances impacting minimum wage, paid sick leave, and other mandated leaves. Additionally, laws that go into effect in other jurisdictions may foreshadow changes at home as well (e.g., Illinois’s governor pointing towards Massachusetts’s exemplary statue).

Had it become law, this amendment would have effective required employers to keep applications and interview records (even for those they did not hire) for five years to comply with the statute of limitations for an unlawful wage inquiry (the Illinois Equal Pay Act already imposes a five year status of limitations for other discriminatory pay practices). By contrast, under Federal law, application records must be kept for only one year from the date of making the record or the personnel action involved (2 years for educational institutions and state and local governments).

What do you do now?

While the law has not gone into effect as of the date of this blog, it is likely that some form of the salary history amendment will ultimately become law in Illinois. Businesses should carefully review their job applications, interview questions, and related policies to avoid inquiries that may lead to challenges in the hiring process.

Additionally, record retention (and destruction!) policies should be reviewed for compliance with these and other statutes – as well as to ensure data integrity and security.

Finally, seek the advice of experienced employment counsel for best practices in light of national trends to remain proactive with an ounce of prevention

EEOC Offers Guidance on Protected Activity Preceding Retaliation Claims

Contributed by Allison Sues, September 16, 2016

Last month, the EEOC issued its Enforcement Guidance on Retaliation and Related Issues.  Having last issued guidance on retaliation claims in 1998, the agency stated that an updated publication was necessary in light of the significant court rulings on these claims, as well as the increasing frequency of retaliation claims in administrative charges and lawsuits. Retaliation is now the most commonly alleged basis of discrimination.

Of particular interest, the EEOC discusses at length its position on various issues that arise in determining whether an employee has engaged in protected activity:

41191023_s“Participation” Protected Activity: “Participation” protected activity includes making a charge, testifying, assisting, or participating in any investigation or proceeding under anti-discrimination law. As compared with “opposition” protected activity, “participation” protected activity does not require a good faith, reasonable belief that the underlying alleged discrimination or harassment constitutes unlawful conduct.

“Opposition” Protected Activity: “Opposition” protected activity includes any report, complaint, or other communication that an employee makes opposing what he or she reasonably and in good faith perceives to be discrimination or harassment. The EEOC takes a broad view of this type of protected activity, stating that it may encompass complaints that employees make to people outside of human resources and management, including reports made to coworkers, union officials, or even people outside of the company, such as an attorney. The EEOC also notes that employees may engage in protected activity by raising complaints publicly or informing management of the intent to make a complaint (rather than actually making one).

Reasonableness of the Complaint:  Despite the EEOC’s expansive view of protected activity, it does recognize some limitations.  For example, the EEOC clarifies that the manner in which the employee opposes the alleged unlawful conduct must be reasonable.  Determining whether the employee acted reasonably is a “context- and fact-specific inquiry.”  However, the EEOC provides some clarification, noting that complaints including threats of violence and complaints made in an overly disruptive and excessive manner are not reasonable and, therefore, not protected activity. Further, the EEOC notes that engaging in protected activity does not immunize employees from discipline if the protected activity causes them to neglect their job duties.

Protected Activity Regarding Harassment:  The EEOC also offers guidance on protected activity relating specifically to complaints of harassment. An employee can complain of harassment in good faith even if the complained-of conduct is not yet severe or pervasive.  While one isolated inappropriate comment in the workplace may not rise to an actionable harassment claim, the EEOC takes the position that complaining about that one comment can create the basis for an actionable retaliation claim. Also, an employee engages in protected activity by resisting sexual advances of a superior, even if he or she does not separately report the advance.

Compensation:  An employee’s inquiry about others’ compensation rates, even when made to coworkers, may constitute protected activity if the context of the inquiry shows that the employee was trying to gather information in support of a potential discrimination claim.  Therefore, employers with a policy that prohibits employees from discussing their pay should reevaluate in light of the EEOC’s position on compensation inquiries, especially if the company issues discipline for violations of any type of pay secrecy policy.

For further information on the EEOC’s Guidance on Retaliation Claims, click here.