Employment Law Changes 2013-2014

Employment Law 2014 The Fast and the Furious

Were you paying a-en.on?

•  If you blinked for very long in 2013-‐2014 you missed out on a lot of new employment law developments.

• I am going to give you a quiz to see how well you were paying a-en.on to what was going on in the world of employment law in the last year!!

I. Minimum Wage Issues

•  New Minimum Wage Laws in Many States and Ci.es

•  Status of A-empts to Raise Federal Minimum Wage

The World of Wage and Hour Law

• What is the new highest minimum wage in the country?

* Sea-le

* New York

* California

* Colorado

New Minimum Wages Set in Many Loca.ons

•  The Sea-le minimum wage is ini.ally $11.00 per hour, effec.ve April 1, 2015, followed by incremental increases according to the .melines from either 2-‐1/2 years to 4-‐1/2 years depending on the size of the employer to reach $15.00 per hour. Those that can claim a sufficient credit for .ps and/or qualifying employer-‐paid medical benefits have an addi.onal two years, and also benefit from a lower ini.al effec.ve minimum wage rate of $10.00 per hour.

•  Washington $9.32

•  Oregon $9.10

•  California $9.00 •  Vermont $8.73

•  Connec.cut $8.70

•  New Jersey, Illinois, District of Columbia $8.25

•  Rhode Island , New York, Colorado $8.00

•  26 states are above $7.25/hr. now—including Michigan, Minnesota, Delaware, West Virginia, Hawaii, Maryland

ATTEMPT TO RAISE FEDERAL MINIMUM WAGE— FAIR MINIMUM WAGE ACT OF 2013

(Bill was introduced in 2013 by Senator Tom Harkin (D-‐IA))

WHAT WOULD THIS BILL DO?

•  Bill would raise the federal minimum wage to $10.10 per hour over 2-‐1/2 years in three steps of 95 cents each.

•  Would adjust the minimum wage annually therealer to keep pace with rising cost of living-‐-‐-‐indexing”.

•  Would also raise minimum wage for .pped workers to 70% of full minimum wage instead of $2.13/hour.

WHY RAISE THE MINIMUM WAGE?

Arguments in support:

• Current minimum wage of $7.25/hr. yields just $15,080/yr. for full-‐.me worker—near poverty level.

• Federal minimum wage has lost more than 30% of its value & would be more than $10.70 per hour if it had kept pace with cost of living over past 40 years; $10.86 would be current wage if it kept up with pace of COL.

WHY RAISE THE MINIMUM WAGE? (Page Two)

•  Of Those Earning Minimum Wage: 88% are adults over the age of twenty, 55% are women, and nearly 50% are workers of color.

•  More that 14 million children have a parent who would get a raise.

•  More that 27.8 million workers would receive a raise if minimum wage raised to $10.10/hr.

•  71% of .pped workers gesng raises would be women.

WHAT IS STATUS OF FEDERAL MINIMUM WAGE RAISE?

CONGRESS IS NOT BUYING THE ARGUMENTS FOR RAISING MINIMUM WAGE

•  The Fair Minimum Wage Act of 2013 has been rejected by Congress to date

•  Businesses have fiercely opposed hike—especially those in the fast food and restaurant industries who say the raise would require them to sharply increase prices and would result in laying off employees.

WHO OPPOSES FEDERAL MINIMUM WAGE RAISE BILL?

–  The Na.onal Retail Federa.on spent $1 million in 1st 3 mos. of 2014 lobbying Congress in opposi.on to raise of minimum wage

–  The Na.onal Federa.on of Independent Business sent senators le-er asking them to vote against bill as “job killing”

WHAT IS PUBLIC OPINION ON RAISING MINIMUM WAGE?

Surprisingly, very recent CNN Money’s American Dream Poll found that 71% of people surveyed favor a hike in federal minimum wage.

•  90% were iden.fied as Democrats BUT

•  54% OF Republicans also agreed that minimum wage should be raised—how much is the issue

To What Rate do Most Think Minimum Wage Should be Raised?

• 36% to $10.10 • 19% something lower that $10.10

• 16% to higher that $10.10

SO IS HIGHER FEDERAL MINIMUM WAGE DEAD?

•  Not if you are a federal contractor or subcontractor—Obama adopted Execu.ve Order for wage to go to $10.10/hr. effec.ve Jan. 1, 2015 for employees of federal contractors, with annual COL adjustments aler 2015

•  DOL just published rule implemen.ng this Execu.ve Order

WHO DOES THIS EXECUTIVE ORDER APPLY TO?

•  “Federal contractors and subcontractors” •  The obliga.on to pay the new minimum wage will be imposed by requiring all federal contracts to contain a clause that requires a cer.fica.on as a condi.on of payment that workers have been paid the new minimum wage.

EXECUTIVE ORDER WILL APPLY TO THE FOLLOWING TYPE OF FEDERAL SERVICE CONTRACTS:

•  Procurement contracts for services and construc.on

•  Contracts or contract-‐like instruments for concessions to furnish food, lodging, souvenirs, etc., on federal property; and

•  Contracts to provide services, such as child care or dry cleaning, in federal buildings for federal employees or the general public

II. Con.nued Prevalence of FLSA Lawsuits and Enforcement Ac.ons

•  Sta.s.cs on cases filed •  Prime issues in Recent Cases and Trouble Areas for Employers

STATISTICS ON CASES FILED HOW MANY CASES WERE FILED IN LAST YEAR?

FEDERAL JUDICIAL CENTER (WHICH MAINTAINS STATISTICS ON FILING OF FEDERAL LAWSUITS) RELEASED FIGURES ON FLSA LAWSUITS FILED IN 2013 shows: • Total of 7,700 FLSA lawsuits filed in 2013-‐-‐Up 10% na.onwide from

2012; 8,216 filed from March 2013—March 2014

• This is 4X number of FLSA lawsuits filed in 2000

• Almost 1/3 were filed in the Eleventh Circuit (Florida, Georgia and Alabama)

• And this is only federal lawsuits—no #’s are available on suits filed under state laws such as California’s private a-orney general ac.ons (of which there are many)

• Many employment a-orneys think we are s.ll seeing only the .p of the iceberg!!

WHAT ARE THE BIG $ CASE WINNERS FOR THE LAST YEAR?

•  Walgreen’s Collec.ve ac.on for California-‐-‐$29 million (including $6 million a-orney’s fees, costs)—For not paying for .me in mandatory security checks and not paying for breaks which were not free from work properly, among other things

•  Tyson Foods—Almost $19 million—”Donning & doffing .me” not paid

WHAT ARE THE TOTAL $ BEING PAID OUT ON FLSA CLAIMS?

Seyfarth Shaw’s Annual Workplace Class Ac.on Li.ga.on Report examined 51 cases se-led in the first three quarters of 2013-‐-‐ for total of approximately $215 million (and 497 cases that se-led for $2.95 billion total since January 2007)

• On average, employers paid $4.5 million to resolve a case in 2013; slightly below the 2012 average and well below the average for 2007 – 2012 ($7.5 million)

HOW MUCH IS AVERAGE RECOVERY PER EMPLOYEE? HOW LARGE ARE CLASSES?

•  Despite lower overall average se-lements, the per-‐claimant average se-lement value was up to about $7,000 in 2013 (compared to $5,800 for 2007-‐2012).

•  The propor.on of cases involving large classes declined for 2013 – a trend that has held steady each year since 2007; in 2013 more that half of the cases had fewer than 1,000 plain.ffs.

WHERE ARE THE MOST SUITS FILED AND ON WHAT GROUNDS?

•  California is s.ll fer.le ground for wage and hour li.ga.on (accoun.ng for 48.5% of se-lement dollars; up from 38.4% in 2012). New York is the next contender, even with a sharp decline (17.2% in 2013, versus 40.6% in 2012).

•  Unpaid over.me remains the most common allega.on (45% of cases).

WHICH INDUSTRIES DREW MOST FLSA CLAIMS?

•  The financial services and retail industries remain at the top (accoun.ng for 19% and 29% of cases, respec.vely).

•  The propor.on of healthcare and healthcare services defendants is on the rise with 12% of the se-led cases in 2013 versus only 6% in 2012.

•  Restaurants are being looked at closely for minimum wage/.pping issues.

Breaking News—Big Texan Restaurant DOL Inves.ga.on Shows Focus on Restaurant Tipping & Minimum Wage

Issues

•  Big Texan agreed to pay $650,000 in back minimum wages and $150,000 liquidated damages for illegal .p pooling arrangements

•  Restaurant withheld from .ps for business costs such as menus, glassware, trays, and contest prizes, and uniform and disciplinary deduc.ons brought total pay below minimum wage

•  Tips plus $2.13 .p credit must equal minimum wage of $7.25/hr. for .me worked or employer has to make up the difference

•  Recordkeeping issues too

WHAT ARE THE PRIME ISSUES IN FLSA SUITS AND TROUBLE AREAS FOR

EMPLOYERS?

•  Not paying for .me employees spent checking into work, changing clothes, or on breaks during which they are s.ll doing work

•  24/7 nature of work where employees respond to e-‐mails, texts, social media, etc.—”Off the clock” work

•  Misclassifica.on as exempt—s.ll!! (employers need to be con.nuously audi.ng exemp.ons)

•  Healthcare ins.tu.ons not including shil incen.ve pay in over.me rate ($4 million DOL se-lement with Harris Health System in Houston)

Efforts in Congress to Revise FLSA Regula.ons on Exemp.ons

WHAT IS GOING ON HERE?

•  First Proposed Revision-‐-‐Salary Basis Test

One issue raised is that the $455/wk. salary is too low to jus.fy exemp.ng many workers from receiving over.me for many so-‐called “white collar” workers. This wage amounts to $23,600.00 per year. This baseline figure has not been updated since 2004.

President Obama issued a direc.ve to the Secretary of Labor to modernize and simplify over.me regula.ons. This legisla.on goes hand-‐in-‐hand with the Obama administra.on’s efforts to raise the basic pay for many Americans by raising the minimum wage. DOL says it hopes to have new proposed rules by November, 2014.

WHAT ARE NEW SALARY BASIS TEST LEVELS BEING PROPOSED?

Numerous state’s wage and hour laws already have in place a higher minimum salary requirement.

•  For example, California’s minimum salary requirement is currently $640/wk. and will increase to $800/wk. in 2016. New York’s minimum salary requirement is currently $600/wk. and will increase to $675/wk. in 2016.

•  DOL would likely use these states’ minimum salary requirements as a star.ng point in any revisions it makes to the current salary basis requirement.

WHAT IS THE JUSTIFICATION FOR REVISED SALARY BASIS TEST?

President Obama stated his administra.on’s view that the exemp.ons’ $455/wk. salary threshold means that “millions of Americans aren’t gesng the extra pay they deserve“ because “an excep.on that was originally meant for high-‐paid, white-‐collar employees now covers workers earning as li-le as $23,660 a year.”

WHAT IS THE AIM OF DOL IN NEW SALARY BASIS?

•  DOL’s aim is that the salary be sufficiently large to ensure that the employee’s salary provides at least minimum wage (or some other minimum regular rate of pay) for all hours worked in a workweek.

•  President Obama remarked that the current salary basis rule “actually makes it possible for salaried workers to be paid less than the minimum wage” because “if you’re working 50 or 60 or 70 hours – your employer doesn’t have to pay you a single extra dime.”

WHAT OTHER REVISIONS TO THE EXEMPTIONS ARE BEING PROPOSED?

•  Another an.cipated change is likely to include more of a bright-‐line test for the du.es por.on of the white collar exemp.ons, especially the execu.ve exemp.on that applies to managers and supervisors. The current “primary duty” test may be re-‐defined.

•  The Secretary of Labor has said that under the current primary duty test, “somebody can work 1 percent of their .me on management issues, 99 percent stacking the shelves and doing other work that has nothing to do with management, and you’re considered a manager, and you are no longer en.tled to over.me.”

IS GOING BACK TO OLD % OF TIME STANDARDS FOR PRIMARY DUTY THE SOLUTION?

•  DOL likely will a-empt to make the “primary duty” test for each of the exemp.ons more black and white and will likely require that employees spend certain percentages of their weekly .me engaged in certain exempt du.es in order to be exempt.

•  This is the % of .me spent in ac.vi.es approach the DOL took prior to the 2004 revisions!

WHAT IS THE LIKELY IMPACT OF THESE CHANGES?

•  All of these an.cipated changes are likely to have a significant impact on employers across all industries, par.cularly those employers with a lot of front-‐line managers and assistant managers classified as exempt and those employers that use the professional and administra.ve exemp.on for many of their entry-‐level posi.ons.

•  The an.cipated increase in the minimum salary requirement for exemp.on could mean that employees making as much as $40,000 to $45,000 may fall below the new minimum salary requirement.

III. Con.nued Intrusion by NLRB into Non-‐Unionized Employer’s Workplace and

Policies

NOW WHAT IS THE NLRB PURSUING? The NLRB con.nues to come down on anything an employer does that it construes as interfering with exercise of Sec.on 7 of the NLRA’s “Protected Ac.vi.es”. No end is in sight.

Test Ques.on One:

• Can employer fire employee for outburst in which employee used profanity and personally a-acked the owner of the business? (I’ll read you the specifics—too graphic to print, but you need to hear them to get the full flavor.) (Hint—the outburst was preceded by employee’s complaint about pay prac.ces, aler which he was called into mee.ng with owner.)

ANSWER: BIZARRE RULING

•  The NLRB sued the employer saying it violated the NLRA. The test for such conduct is whether it was so “egregious” to lose protec.on under Sec. 7.

•  The NLRB in Plaza Auto Center, Inc., recently held employer violated the NLRA by firing the employee. It found the outburst was protected because, in part, the subject ma-er concerned the employee’s protected conduct; and the employee’s conduct was provoked by the employer’s unfair labor prac.ce of invi.ng the employee to quit if he did not like the employer’s policies.

Test Ques.on No. 2: Can having an at-‐will employment policy violate the NLRA?

This is the language: (1) “ I acknowledge that no oral or wri8en statements or representa<ons regarding my employment can alter my at-‐will employment status, except for a wri8en statement signed by me and either Hya8’s Execu<ve VP/Chief Opera<on Officer or Hya8’s President.”

(2) “The at-‐will employment rela<onship cannot be changed without the signature of both the employee and either the execu<ve VP/president or chief opera<ng officer of the Red Cross.”

•  Answer: •  The NLRB said language in the at-‐will policy of two different employers

violated Sec.on 7 because it “could dampen converted ac.vi.es if employees believe that union representa.on could not alter their at-‐will status.”

BUT, WHAT ABOUT THIS LANGUAGE?

• “No representa<ve of the company has authority to enter into any agreement contrary to the foregoing ‘employment at will’ rela<onship”.

This “At Will” Policy Was Approved By the NLRB

IV. EEOC’S Most Recent Areas of Focus and Hot Topics

•  What is the EEOC Looking at Now?

Test Ques.on One: Is Allowing Employee to Telecommute a Reasonable Accommoda.on Under the ADA?

The facts: The employee, Jane Harris, began missing work frequently because of irritable bowel syndrome. This, in turn, affected her job performance. Ford Motor Co., her employer, said this was not reasonable because her job required group mee.ngs and problem-‐solving, at which she needed to be physically present for face-‐to-‐face mee.ngs. Ford offered to move her cubicle closer to the bathroom or to let her apply for another job that might be suitable for telecommu.ng. Harris rejected these offered accommoda.ons. Ford fired her. Did Ford need to allow her to telecommute?

Answer to Ques.on No. One

•  Recent case seems to say “Yes” under the facts in that case.

•  The 6th Circuit sided with Harris that Ford Motor Co. should have been required to seriously consider whether her physical presence was essen.al to the job and that telecommu.ng may have been a reasonable accommoda.on given today’s technology.

•  Bo-om line—Physical presence at job loca.on may not be a necessary job requirement.

So, How Do You Decide If Telecommu.ng a Reasonable Accommoda.on?

● Conduct a serious, non-‐biased analysis of whether the employee’s actual physical presence truly is an essen.al requirement of the job. If the employee can perform the essen.al func.ons of the job from somewhere else, refusal of telecommu.ng will probably be improper. • With Skype or Face-‐.me, and all the other technology available today, actual physical presence at the job loca.on may be less and less important, even in work “groups” where face-‐to-‐face exchange is a job component. Telecommu.ng may have to be considered as a means of accommoda.ng many disabled employees.

Test Ques.on Two: Is A Six-‐month Addi.onal Leave Of Absence A Reasonable Accommoda.on?

The Facts: During her employment, the plain.ff was a well-‐regarded professor. When she fell ill prior to beginning the school’s fall term, she sought and received a six-‐month paid leave of absence. At the end of that period, her doctor advised her to seek more .me off. The school denied her second request and terminated her employment, based on a policy allowing no more than six months’ sick leave under any circumstances. The plain.ff then filed suit contending that this effec.vely terminated her employment in viola.on of the Rehabilita.on Act. The district court dismissed her complaint, and the plain.ff appealed. Was employer required to grant addi.onal six-‐month leave?

Answer to Ques.on Two: No Tenth Circuit in Hwang v. Kansas State Univ., No.

12-‐3070, 2014 WL 2212071,*1 (10th Cir. May 29, 2014)

•  This court reasoned that in nearly all cases, an employee who cannot return to work within six months (and poten.ally sooner) is not capable of performing the essen.al func.ons with a reasonable accommoda.on and, therefore, cannot sustain a claim for discrimina.on.

•  Opinion includes strong pro-‐employer language, “[R]easonable accommoda.ons…are all about enabling employees to work, not to not work.”

So When Must Employer Grant Extended Leave As an Accommoda.on?

Employers should con.nue to take the following steps when an employee seeks leave under a policy:

•  Review the essen.al func.ons of the employee’s posi.on;

•  Assess whether a temporary leave of absence will allow the employee to return to work and also to perform the essen.al func.ons of the posi.on, with or without a reasonable accommoda.on;

•  Assess whether other accommoda.ons might shorten the dura.on of the requested leave

Extended Leave?

•  Assess whether the proposed dura.on of the leave is reasonable in the light of the employee’s specific posi.on (i.e., conduct an individualized assessment under the ADA as to the reasonableness of the length of the leave); and

•  Document with department management, the impact that the employee’s leave of absence will have on the department, if granted, (e.g., who will take over certain essen.al func.ons, are temporary employees needed, etc.) in order to have this informa.on should the employee request addi.onal leave.

Test Ques.on Three: Can Fast Food Franchise Pay Lower Wages To Female Workers?

The facts: Checkers fast food restaurant franchise paid female workers a lower hourly wage that male workers who held the same jobs. In addi.on, the employer reportedly gave women unfavorable job assignments and fewer hours than men. Answer: A “No-‐Brainer”

• EEOC gender discrimina.on claim was se-led for $1,000,000 paid to current and former female workers as part of se-lement, and the franchise agreed to increase the wages of the female employees and to provide an.discrimina.on training.

Follow Up On Unequal Wages for Employers

•  Because the NLRB clearly prohibits employers from preven.ng employees from discussing wages, employees may becoming more aware of gender-‐based pay inequity.

•  Employers should review their pay structures to assure there is not gender-‐based pay discrimina.on.

Test Ques.on Four: Can An Employee Who Is Denied Lacta.on Breaks And Space Pursue Sex Or Pregnancy

Discrimina.on Claims? The facts: Houston employer rejected an employee’s request for lacta.on space and suggest the employee stay at home. When the employee complied, the company terminated her for job abandonment.

The Answer:

•  Prior cases have held that the employee would have no claim under Title VII because lacta.on was not a medical condi.on related to pregnancy and that pregnancy-‐related medical condi.ons ended the day the employee gave birth.

The Filh Circuit Says “Lacta.on” Issues Clearly Related to Sex and Pregnancy Discrimina.on

•  The Filh Circuit Court of Appeals (which covers Texas), in EEOC v. Houston Funding II, Ltd., ruled that the employee’s request was clearly related to her physiological needs as a lacta.ng employee, not to a paren.ng decision, and thus was hormonally related to pregnancy and child birth and she was en.tled to Title VII protec.on.

•  Even in states without clear laws requiring lacta.on breaks and private lacta.on space, Title VII may require that they be offered. The cost is likely to be minimal in rela.on to poten.al risk of an adverse discrimina.on claim.

V. Expansion of Defini.on of “Spouse” for Employment Law Compliance—What’s

Employer to Do?

•  The U. S. Supreme Court ruled in 2013 in United States v. Windsor that the por.on of the Defense of Marriage Act (DOMA) which denied recogni.on of marital status to couples of the same sex under federal law was uncons.tu.onal.

•  This ruling expands poten.al FMLA coverage as a result to same sex spouses. Employers will have to fine tune administra.on of FMLA leave to determine whether leave related to a same sex spouse issue should be granted. The employer will have to grant FMLA leave to an employee for legi.mate, covered requests for a same sex spouse, if the affected employee resides in a state that recognizes same sex marriage.

•  For Texas employers, it may not be an issue unless you have employees who reside in a state that allows same sex marriages, but an Execu.ve Order may change this too.

Supreme Court Ruling Also Will Widely Affect Tax Issues and Benefits for Same-‐Sex Spouses

•  Aler this ruling, employees can claim a income tax status as a married couple and this may affect how benefits such as employer sponsored health care insurance are reported by employers and how taxes are paid on them

•  Qualified re.rement plans must treat same-‐sex spouse as spouse for all purposes under the plan if married in a state that authorizes legal same-‐sex marriage, even if the marriage is not recognized in the state where employee resides.

STAY ON YOUR TOES!!

Employment Law Changes 2013-2014

Law

Transcript of Employment Law Changes 2013-2014