California Supreme Court Clarifies Administrative Exemption
As a farewell to 2011, the California Supreme Court went to great lengths to spell out the parameters of the administrative overtime exemption. This is the exemption from overtime laws that seems to get employers into trouble more than any other. If you are a human resource executive in California you must read this case. Yes, there is a lot of legal mumbo jumbo…but it’s something you must understand or you will unnecessarily expose your company to overtime claims. Perhaps as here on a class action basis.
In Harris v. Liberty Mutual Insurance, the court provided much guidance. Here is some of the instructive language:
[W]ork qualifies as administrative when it is directly related to management policies or general business operations. Work qualifies as directly related if it satisfies two components. First, it must be qualitatively administrative. Second, quantitatively, it must be of substantial importance to the management or operations of the business. Both components must be satisfied before work can be considered directly related‖ to management policies or general business operations in order to meet the test of the exemption. (Fed. Regs. § 541.205(a) (2000).)….
[T]he administrative/production worker dichotomy distinguishes between administrative employees who are primarily engaged in administering the business affairs of the enterprise and production-level employees whose primary duty is producing the commodity or commodities, whether goods or services, that the enterprise exists to produce and market.
The Court understands that:
[B]ecause the dichotomy suggests a distinction between the administration of a business on the one hand, and the production end on the other, courts often strain to fit the operations of modern-day post-industrial service-oriented businesses into the analytical framework formulated in the industrial climate of the late 1940‘s.
Bottom line: The administrative exemption causes the vast majority of mis-classification headaches. According to this decision even the judges and the DIR have a hard time getting it right. Read this case. Make sure your workers are not mis-classified. If they are, take a look at the report on HR That Works So You Have a Wage Claim Exposure–What Do You Do About It?
I Protest, Thus I am Protected
It seems as if the National Labor Relations Board has lost touch with reality. In case after case, it has protected employees hell bent on complaining about everything from work assignments to tucking in their shirt or having to take their hat off. They can complain about poor marketing campaigns, curse out their bosses, wear shirts that defame the company, and do about everything else possible to not do their jobs. Whether you consider the administration to be in the pocket of the unions or not, they’ve taken a very aggressive stance at the NLRB. Consistent with recent DOL practices, the NLRB has shown their litigation muscles and paraded their record enforcement in terms of fines, penalties, and back wages recovered.
Collectively these agencies are particularly aggressive when it comes to union organizing, wage and hour, health and safety, and employee misclassification (whether exempt vs. non-exempt or employee vs. independent contractor). Critics claim that this litigious approach is nothing more than a money-making opportunity, figuring the more auditors and enforcement personnel they hire, the more revenue they can bring in that exceeds the cost of those hires. The aggressive approach of the DOL, NLRB, and OSHA has not missed attention in the press. For example, there was a great deal of media coverage when the NLRB made its effort to prevent Boeing from moving its manufacturing plant out of Washington State.
What’s an employer to do?
1) Stay on top of the law whether you have 15 employees or 1,500. Ignorance of the law is not an excuse that will garner any sympathy.
2) Where possible, purchase employment practices liability and other coverages to mitigate against these risk exposures.
3) Use the proper strategies, tools, and training to make sure you comply with today’s myriad of laws. There is a ton of great tools on HR That Works.
4) Don’t hesitate to rely on expert assistance the second you realize you don’t know what you’re doing. This is a complicated area even for the lawyers!
Obama Signs Veterans Opportunity to Work to Hire Heroes Act; Presents New Employer Risks and Opportunities
President Obama recently signed into law the “VOW to Hire Heroes Act” (H.R.674), a law that provides tax credits for employers who hire unemployed veterans and veterans with service-related disabilities. The new law allows a company to claim a tax credit of up to $2,400 if it hires veterans who have been looking for work for at least one month. The maximum credit is increased to $5,600 for hiring veterans who have been searching for work for at least six months. Additionally, employers may be granted a $9,600 tax credit for hiring out-of-work veterans with service-related disabilities.
The new legislation also amends the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”)—which was enacted to prohibit civilian employers from discriminating against employees engaged in military service—to recognize claims of “hostile work environment” on account of an individual’s military status. The law states that employees who perform military service “shall not be denied initial employment, reemployment, retention in employment, promotion, or any benefit of employment” on the basis of that service. However, courts had previously rejected the notion that the statute creates a cause of action for “hostile work environment” harassment against military service members. By clarifying that “benefit of employment” includes the “terms, conditions, or privileges of employment,” the new legislation brings the USERRA in line with Title VII and the Americans with Disabilities Act, both of which include the phrase “conditions…of employment.”
EEOC Approves Draft of Rule Amending Age Discrimination Regulations The Equal Employment Opportunity Commission (“EEOC”) has approved a draft final rule amending its Age Discrimination in Employment Act (“ADEA”) regulations in light of U.S. Supreme Court decisions addressing disparate impact claims and the “reasonable factor other than age” (“RFOA”) defense.
The proposed rule is based on the EEOC’s analysis of Smith v. City of Jackson (2005) 544 U.S. 228 (2005) (holding that an employment practice that has a disparate impact on older workers is discriminatory unless the practice is justified by a reasonable factor other than age) and Meacham v. Knolls Atomic Power Lab. (2008) 128 S. Ct. 2395 (holding that the employer bears the burden of proving the RFOA defense).
Under the proposed rule, a “reasonable” factor is one that is objectively reasonable when viewed from the position of a reasonable employer under like circumstances. The rule explains that whether a particular employment practice is based on RFOA turns on the facts and circumstances of each particular situation and whether the employer acted prudently in light of those facts. According to the EEOC, this standard is lower than Title VII’s business-necessity test but higher than the Equal Pay Act’s “any other factor” test. The standard is intended to represent a balanced approach that preserves an employer’s right to make reasonable business decisions while protecting older workers from facially neutral employment criteria that arbitrarily limit their employment opportunities.
To assess whether an employment practice is based on RFOA, the proposed rule provides a non-exhaustive list of factors to be considered:
- whether the employment practice and the manner of its implementation are common business practices;
- the extent to which the factor is related to the employer’s stated business goals;
- the extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);
- the extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;
- the extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps; and
- the existence of a lesser discriminatory alternative and the reasons why the employer selected the option it did.
The proposed rule also emphasizes that in order for the RFOA defense to apply, the challenged practice must be based on an objective, non age-related factor (e.g., salary, seniority, etc.).
The EEOC’s final draft regulations now go to the White House Office of Management and Budget for a review period that takes approximately 90 days. If the draft regulations are approved, they will return to the EEOC for a final vote before taking effect.
To learn more go to http://www.whitehouse.gov/blog/2011/11/21/president-obama-hire-veteran.
Article courtesy of Pettit Kohn (www.pettitkohn.com).
January 2012 Compliance and Culture Newsletter
“You’ve got to find what you love – and that’s as true for your work as it is for your lovers. Your work is going to fill a large art of your life, and the only way to be truly satisfied is to do what you believe is great work. The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle!” —Steve Jobs
This issue discusses:
- Editor’s Column: Yesterday’s Over With, So Don’t Be a Dinosaur
- HR Wisdom
- Desperate Times Create Desperate Employees
- The End of the NLRB’S Reign?
- EEOC Sues Employers for Accommodation Violations
- EEOC Charges Hit Record Highs
- Making Your Next Hire
- The Ultimate in Religious Accommodation
- NLRB Poster Requirement … One More Time
We have also provided you with the Form of the Month.
Please click here to view the newsletter in PDF.
Editor’s Column: Yesterday’s Over With, So Don’t Be a Dinosaur
The past is gone. Poof. No mas! The challenge is that most of us are deeply rooted in the past and find a great deal of comfort in it – whether it was good or bad. We hear ourselves saying to both loved ones and people in the workplace, “When I was young…”
It’s frightening to go through today’s rapid change. As Buckminister Fuller stated, we’re going through a period of “accelerating acceleration” in which things are happening faster and faster — at a faster rate. Today’s rate of change is generating a significant amount of dislocation, uncertainty, and fear — and that doesn’t feel good.
For the first time in generations, we’re looking to those younger than us for advice — primarily in technology. We’re living in a technological age. It’s not just about production and information, but how technology affects every aspect of our lives.
What are you or your company doing to drive past this fear of change? Have you set out to learn from younger workers? Have you invited them to educate and enlighten you on today’s technologies? Will you and your company embrace the need for this invitation or will lose out to competitors who do?
Change makes us uncertain about what we can contribute and how this contribution can create job security and personal growth. If we can’t do things the “old school” way, then what are we going to do? For example, many employees somehow feel affronted when their company decides to offshore everything, from data management to customer service. What’s left for us to do?
How do we drive past this fear? How do we choose not to play victim to the great change? Fundamentalist religion has blossomed worldwide as one answer. In a sense, we’ve decided to prohibit change. I’ve seen bosses and employees take a fundamentalist view about their work too, doing everything they can to block, sabotage, and resist change. The problem is that when we look backward hoping for a sense of security, we can turn into pillars of salt. Although we might not die physically, we’ve surrendered in our minds. Now all you have to look forward to is retirement — and it can’t come fast enough.
I remember speaking to a top executive at a billion-dollar organization about an opportunity in her business. Her entire conversation was about the lack of support she received from other corporate departments and the retirement she’s looking forward to with her husband. When I asked, “what’s your edge?” she didn’t have one. I can tell you that her department will be going in only one direction — and it’s not one that will please shareholders.
It’s very difficult to break up a relationship with another person, especially when this person is the “former me.” The past provides a false sense of strength in the familiar.
I was speaking with a 63-year-old human resource executive who was laid off from a major corporation and then hired by one of my business partners to help implement our program. This man called our customer support service because he didn’t know how to download and open a Word document. Two days later, he called me to ask a question he could have easily found the answer to on the HR That Works web site. When I began to try to show him where he could get the information, he cut me off and told me that he didn’t “like all this new technology” and wasn’t very interested in using it. He actually asked me if I could send him a three-ring binder with the materials from the web site!
The role of Wisdom within all of this change is to understand and communicate what is continuous or cyclical. For example, long-term investors warned novice dot-com and real estate investors about the rule that cuts across investing: “If it’s too good to be true, it probably is.” If these novices listened to the wisdom of the Warren Buffets, they wouldn’t be in a financial mess today. We need to listen to the wisdom that things will always change. Then we have to project our will firmly into the future. We must be open and invite new ideas. We have only begun our life’s story — and many exciting chapters lie ahead.
Here are some steps you can take to reach this goal:
- Identify those things that you wish could have remained the same. You might wish there were no cell phones or electric cars, then recognize the past is over with, give it its proper funeral, and run like heck to embrace what has replaced it.
- Invite an Innovation and Wisdom Dialogue among your workforce. What timeless lessons and cutting-edge technologies can be shared? How can we allow the people in our organization whose strength is wisdom to utilize this ability? How do we empower those whose strength is technology to make full use of those abilities?
- Realize that if you don’t embrace change, you will — or should be — be let go. I’ve seen too many employers face paralysis in letting employees go because they were once productive in the old way of doing things.
We need to force the hand of change. You can create your own game plan for embracing change and moving forward, have your managers do it for you, or start planning an early and unfulfilling retirement. The choice is yours!
HR Wisdom
In light of the discussion about change and enduring wisdom, here’s what I consider the wisdom available to HR
managers:
- Great HR practices generate a competitive advantage, whether you have five or 5,000 employees.
- The “tipping point” in human resources is the hiring process, which has a greater impact on productivity, teamwork, constant improvement, profitability, and compliance than any other factor.
- According to the HR That Works Cost Calculator, there’s at least a 10% cost or variance of payroll in your human resource practices. For example, if you have a $1 million payroll, your cost or variance is at least $100,000. You’ll need to bring in, at a minimum, $400,000 to put that $100,000 back to the bottom line.
- The greatest risks in employment practices are uninsurable. Despite all the noise of the legal community, poor hires, high turnover, and lack of productivity left on the table every day have the greatest impact to the bottom line. Every company should cap its employment practices liabilities by purchasing Employment Practices Liability Insurance (EPLI).
- You need to find HR exciting to be any good at it — even if it’s only one of three hats you’re wearing.
Desperate Times Create Desperate Employees
At a recent HR presentation for CEOs, three of the 15 executives present reported that an employee had embezzled from them or engaged in other financially destructive activity during the past few months. We’re getting similar questions on Hotline calls from Members. Here’s the reality: If you don’t have significant checks and balances around your money, you’re conducting a social experiment and making your business easy prey for the desperate, greedy and villainous.
In one of these cases, a new HR director told the payroll company that she was given a substantial raise only days after joining the company, the payroll company never questioned it, and she made off with thousands of dollars. As the Russian proverb states, “Trust, but verify.”
The End of the NLRB’S Reign?
Many employers, including Boeing (which the National Labor Relations Board blocked from moving to an aircraft assembly facility in Charleston, South Carolina), have been upset with the NLRB for the past few years. In this newsletter and our Webinars, we’ve discussed the Board’s efforts to make unionization far easier, as well as to expand the National Labor Relations Act to social media postings. The NLRB has not had a full complement of five board members for five years. When Craig Becker’s term expires this year, the Board won’t have enough board members to rule on labor disputes. Republican lawmakers will surely try to block any nominations President Obama appoints to the Board. Many employers feel that the NLRB is trying to do through administrative pressure what Congress would not do through legislation.
Expect the Board and Administration to push right up to Election Day.
EEOC Sues Employers for Accommodation Violations
According to a SHRM article, the EEOC has filed disability lawsuits against:
Ford Motor Company for failure to allow an employee with a gastrointestinal condition to telecommute.- Kohl’s Department Stores for refusing to accommodate a diabetic employee’s request for a regular schedule.
- SITA for rescinding a job offer when it found that an applicant who needed surgery for cancer asked to delay her start date.
- The Scooter Store for refusing to accommodate an employee’s request for a temporary leave of absence due to a knee injury and then firing him.
Here’s the point: The EEOC is on the warpath when it comes to disability accommodation. Go through the process. Take a checklist approach. Treat your people the way you would want to be treated. Get professional help if you need it. The HR That Works Hotline is a good place to a start for Members as is the Job Accommodation Network: http://askjan.org/.
EEOC Charges Hit Record Highs
The EEOC received a record 99,947 charges of discrimination in fiscal year 2011, which ended Sept. 30 — the highest number of charges in the agency’s 46-year history. EEOC staff also delivered more than $364.6 million in monetary benefits for victims of workplace discrimination. This is also the highest level obtained in the Commission’s history. The fiscal year ended with 78,136 pending charges — a decrease of 8,202 charges, or 10%. In previous years, the pending inventory had increased as staffing declined 30% between fiscal years 2000 and 2008. Comprehensive enforcement and litigation statistics for fiscal 2011 will be available in early 2012.
Making Your Next Hire
In this tight economy, many employers are reluctant to make any new hires. This is a big mistake. The first thing to consider is who it is that you should get “off the bus.” Our test has always been this: If the employee quit today, would you be relieved or upset? If the answer is “relieved,” then do what you have to do: Let this employee go or put them on some type of performance plan that guarantees their success or departure. One of the problems with trying to resurrect poor employees is that they tend to look for job security by filing claims, hoarding knowledge, or other conduct which will make their staying on board even more costly. In our experience, when you let these people go you really learn the truth about them.
Now that you’ve “culled the herd,” don’t replace them immediately with the same level of employee. Instead, take away the lowest value work of the existing team and hire an entry-level employee who you can groom in your way of doing business. How much $10, $15, or $20 an hour work can you take away from the existing team? Do they want it taken away from them or not? Instead of hiring an entry-level employee, many companies outsource administrative tasks to consultants and other third parties.
Taking this approach will increase workforce productivity and revenue per employee. You’ll also be able to give existing employees a raise because they’re adding more value to your organization.
Remember, when recruiting entry-level employees, provide them with a career map so they can see the opportunity in your business. HR That Works has sample “career ladders” to consider.
The Ultimate in Religious Accommodation
This summer, New York City enacted the most “progressive” statute on religious accommodation in the workplace. Follow these guidelines, and you’ll be “safe” in any jurisdiction.
According to the new law, the term “reasonable accommodation” means, “such accommodation that can be made that shall not cause undue hardship in the conduct of the covered entity’s business. The covered entity shall have the burden of proving undue hardship. In making a determination of undue hardship … the factors which might be considered include but shall not be limited to:
(a) the nature and cost of the accommodation;
(b) the overall financial resources of the facility or the facilities involved in the provision of the
reasonable accommodation; the number of persons employed at such facility; the effect on expenses and resources, or the impact otherwise of such accommodation upon the operation of the facility;
(c) overall financial resources of the covered entity; the overall size of the business of a covered entity with respect to the number of its employees, the number, type, and location of its facilities; and
(d) the type of operation or operations of the covered entity, including the composition, structure, and functions of the workforce of such entity; the geographic separateness, administrative, or fiscal relationship of the facility or facilities in question to the covered entity.
“In making a determination of undue hardship with respect to claims for reasonable accommodation to an employee’s or prospective employee’s religious observance … the definition of ‘undue hardship’ set forth in paragraph (b) of such subdivision shall apply.
“(b) ‘Reasonable accommodation,’ as used in this subdivision, shall mean such accommodation to an employee’s or prospective employee’s religious observance or practice as shall not cause undue hardship in the conduct of the employer’s business. The employer shall have the burden of proof to show such hardship.
“‘Undue hardship,’ as used in this subdivision shall mean an accommodation requiring significant expense or difficulty (including a significant interference with the safe or efficient operation of the workplace or a violation of a bona fide seniority system). Factors to be considered in determining whether the accommodation constitutes an undue economic hardship shall include, but not be limited to:
(i) the identifiable cost of the accommodation, including the costs of loss of productivity and of retaining or hiring employees or transferring employees from one facility to another, in relation to the size and operating cost of the employer;
(ii) the number of individuals who will need the particular accommodation to a sincerely held religious observance or practice; and
(iii) for an employer with multiple facilities, the degree to which the geographic separateness or administrative or fiscal relationship of the facilities will make the accommodation more difficult or expensive.
“Provided, however, an accommodation shall be considered to constitute an undue hardship, for purposes of this subdivision, if it will result in the inability of an employee who is seeking a religious accommodation to perform the essential functions of the position in which he or she is employed.”
This language should seem familiar because it matches that of disability accommodation. Of course, the definition of “reasonable accommodation” under the ADA is litigated on a case-by-case (Don’t you just love the uncertainty of it all?). To learn more, go to http://www.nyc.gov/html/cchr/home.html.
NLRB Poster Requirement … One More Time
With so many employers taken by surprise, the NLRB extended its poster requirement to April 30. As of April 30, 2012, most private sector employers are required to post a notice advising employees of their rights under the
National Labor Relations Act. As a practical matter, the Board’s jurisdiction is very broad and covers the great majority of non-government employers with a workplace in the United States, including non-profits, employee-owned businesses, labor organizations, non-union businesses, and businesses in states with “Right to Work” laws. The notice should be posted in a conspicuous place, where other notifications of workplace rights and employer rules and policies are posted. Employers also should publish a link to the notice on an internal or external website if other personnel policies or workplace notices are posted there. You can get the poster, read a FAQ and learn more by going to https://www.nlrb.gov/poster.
This poster is an invitation for disgruntled employees to organize and otherwise complain about work conditions. The only defense is good personnel practices and readily available legal help if you need it. HR That Works Members should watch or listen to the recorded Webinars we did on NRLA requirements. You are also encouraged to post your literature on the wall. Let employees know the company vision, mission, goals and values. Share employee success stories. Remember, the workforce needs a drama. You have a choice of who will write the script.
Here is the poster language that employers should be concerned with:
Under the NLRA, you have the right to:
- Organize a union to negotiate with your employer concerning your wages, hours, and other terms and conditions of employment.
- Form, join or assist a union.
- Bargain collectively through representatives of employees’ own choosing for a contract with your employer setting your wages, benefits, hours, and other working conditions.
- Discuss your wages and benefits and other terms and conditions of employment or union organizing with your co-workers or a union.
- Take action with one or more co-workers to improve your working conditions by, among other means, raising work-related complaints directly with your employer or with a government agency, and seeking help from a union.
- Strike and picket, depending on the purpose or means of the strike or the picketing.
- Choose not to do any of these activities, including joining or remaining a member of a union.
Under the NLRA, it is illegal for your employer to:
- Prohibit you from talking about or soliciting for a union during non-work time, such as before or after work or during break times; or from distributing union literature during non-work time, in non-work areas, such as parking lots or break rooms.
- Question you about your union support or activities in a manner that discourages you from engaging in that activity.
- Fire, demote, or transfer you, or reduce your hours or change your shift, or otherwise take adverse action against you, or threaten to take any of these actions, because you join or support a union, or because you engage in concerted activity for mutual aid and protection, or because you choose not to engage in any such activity.
- Threaten to close your workplace if workers choose a union to represent them.
- Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support.
- Prohibit you from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances.
- Spy on or videotape peaceful union activities and gatherings or pretend to do so.
Under the NLRA, it is illegal for a union or for the union that represents you in bargaining with your employer to:
- Threaten or coerce you in order to gain your support for the union.
- Refuse to process a grievance because you have criticized union officials or because you are not a member of the union.
- Use or maintain discriminatory standards or procedures in making job referrals from a hiring hall.
- Cause or attempt to cause an employer to discriminate against you because of your union-related activity.
- Take adverse action against you because you have not joined or do not support the union.
If you and your co-workers select a union to act as your collective bargaining representative, your employer and the union are required to bargain in good faith in a genuine effort to reach a written, binding agreement setting your terms and conditions of employment. The union is required to fairly represent you in bargaining and enforcing the agreement.
Form of the Month
I-9 Compliance Frequently Asked Questions (PDF) – There were so many questions after our I-9 Webinar that we created this FAQ to help.
Podcast
Click here to to listen to this month’s newsletter podcast.
Looks Like the NLRB is Having a Hard Time Getting Its Way!
The National Labor Relations Board has agreed to postpone the effective date of its employee rights notice-posting rule at the request of the federal court in Washington, DC hearing a legal challenge regarding the rule. The Board’s ruling states that it has determined that postponing the effective date of the rule would facilitate the resolution of the legal challenges that have been filed with respect to the rule. The new implementation date is April 30, 2012.
Most private sector employers will be required to post the 11-by-17-inch notice on the new implementation date of April 30. The notice is available at no cost from the NLRB through its website, www.nlrb.gov, which has additional information on posting requirements and NLRB jurisdiction.
NLRB Adopts Amendments to Election Case Procedures
The National Labor Relations Board has adopted a final rule amending its election case procedures to reduce unnecessary litigation and delays. The rule will be published in the Federal Register on Thursday, December 22, and is due to take effect on April 30, 2012.
The rule is primarily focused on procedures followed by the NLRB in the minority of cases in which parties can’t agree on issues such as whether the employees covered by the election petition are an appropriate voting group. In such cases, the matter goes to a hearing in a regional office and the NLRB Regional Director decides the question and sets the election.
Going forward, the regional hearings will be expressly limited to issues relevant to the question of whether an election should be conducted. The hearing officer will have the authority to limit testimony to relevant issues, and to decide whether or not to accept post-hearing briefs.
Also, all appeals of regional director decisions to the Board will be consolidated into a single post-election request for review. Parties can currently appeal regional director decisions to the Board at multiple stages in the process.
In addition, the rule makes all Board review of Regional Directors’ decisions discretionary, leaving more final decisions in the hands of career civil servants with long experience supervising elections.
Chairman Mark Gaston Pearce and Member Craig Becker voted in favor of the rule (Democrat appointees), which was prepared following a public meeting in late November. Member Brian Hayes (Republican Appointee) dissented from the Notice of Proposed Rulemaking and voted at the November 30 public meeting against proceeding with publication of a final rule. The final rule provides the opportunity for publication of a separate dissenting statement prior to the effective date of the rule.
In recent years, only about 10 percent of NLRB election cases have gone through the hearing process. Such elections have been held on average 101 days after the election petition was filed with a regional office.
“This rule is about giving all employees who have petitioned for an election the right to vote in a timely manner and without the impediment of needless litigation,” said Chairman Pearce. In other words, accelerate the unionization process.
The amendments to the election case procedures in the new rule were drawn from a more comprehensive proposal put forward by the Board in June. More than 65,000 comments were submitted following publication of the broader proposal in the Federal Register. In a discussion introducing the new rule, the Board majority explained that it was holding for further deliberation parts of that proposal that had generated the most debate while moving ahead with parts considered relatively “less controversial.”
Click here to read the final rule and introduction, and here to read a description of the amendments.
Click here for website version.
NLRB Votes In Favor of Modified Ambush
Over 65,000 written comments were received by the NLRB in response to its proposed ambush election rules, which would result in holding elections as quickly as ten days after the filing of a petition. The Board had open hearings for two days in July to hear comments from business and labor about the proposed rules. In our July issue of the Employment Law Bulletin, we predicted that while the Board would be very hospitable and act like it truly cared about concerns expressed by the business community, it would move forward with establishing the rules in the manner they were proposed.
In an effort to issue the final rule before the Board has only two members and therefore would be unable to do so, Board Chair Mark Pearce held a vote among the three Board members–himself, Craig Becker and Brian Hayes–yesterday, November 30, 2011, to approve a scaled-back version of the original ambush election rules. (Becker’s term expires at the end of December. Hayes, a Republican and former Senate staffer, has aggressively and publicly opposed the Board’s notice posting rule and these proposed rules.)
As a result of yesterday’s 2-1 vote in favor of changing the Board’s election rules, some but not all of the rules in the original proposal are now slated for a final vote, some time before Becker’s term expires and after the final rules are circulated to all three Board members.
Yesterday’s vote represented at least a brief retreat from the original rules, which would have resulted in union elections being held as quickly as ten days after the filing of a petition. Instead, the new rules narrow the scope of pre-election hearings, virtually eliminate pre-election appeals, and strike down the current rule providing that a vote cannot be held sooner than 25 days after the Board’s Regional Director issues a Direction of Election. Although the final rule is a significant step back from forcing a union vote within ten days of a petition, it certainly opens the door for Regional Directors to schedule union votes much sooner after the petition is filed. Indeed, the clear intent of the rule is to encourage elections within the first 25 days after the filing of a petition, much sooner than the current average of 38 days between the filing of a petition and a union vote.
Member Hayes has spoken out against the Board’s attempt to implement these rules without a clear quorum and has even hinted that he may resign prior to the final approval of these rules, which would prevent a two member Board from implementing what’s left of the ambush rules.
As we have stated previously, we expect ambush election rules–in some form–to become effective, whether it’s a result of this Board’s action or actions by the Board after new appointees are seated. Either way, whatever action this Board takes is likely to be challenged in court.
Article courtesy of Worklaw® Network firm Lehr, Middlebrooks & Vreeland, P.C.
Holiday Pay
We’ve been getting a lot of Hotline queries regarding holiday pay. Here’s the basic Federal law on it:
The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations or holidays (federal or otherwise). These benefits are generally a matter of agreement between an employer and an employee (or the employee’s representative).
On a government contract to which the labor standards of the McNamara O’Hara Service Contract Act (SCA) apply, holiday and/or vacation fringe benefit requirements are stated in the SCA wage determinations in contracts that exceed $2,500.
On a government contract to which the labor standards of the Davis-Bacon and Related Acts apply, holiday pay and/or vacation pay is required for specific classifications of workers only if the Davis-Bacon wage determination in the covered contract specifies such requirements for workers employed in those classifications.
There is no requirement that employers have to pay overtime to eligible employees for holiday work, unless the employees work more than 40 hours in the same workweek, or 8 hours that day in California. Also paid holidays don’t count towards the 40-hour overtime rule.
Remember, exempt employees always get paid for holidays if they worked any portion of the week.
Here’s California FAQ on it: www.dir.ca.gov/dlse/FAQ_Holidays.htm. The theme is the same in the other states as well. Many state regulations don’t mention it at all.
Colorado
Colorado wage law does not require nor prohibit any paid holidays, and does not require nor prohibit any extra pay for working on holidays. When an employee is paid for a non-work holiday, the holiday hours do not count towards overtime unless actual work was performed on the holiday.
Illinois
Q: Am I entitled to holiday pay in Illinois?
A: No, unless by employment contract or agreement.
New York
Q: Must an employer pay workers for holidays, sick time and/or vacations?
A: Under the New York State Labor Law, payment for time not actually worked is not required unless the employer has established a policy to grant such pay. Holidays, sick time and/or vacations fall under ‘time not worked.’ When an employer does decide to create a benefit policy, that employer is free to impose any conditions they choose.
Hope that helps!
California Supreme Court Grants Review of Important Immigration/Discrimination Law Case
The Case of Salas v. Sierra Chemical (2011) caused quite a stir because the appellate court dismissed a disability discrimination claim of undocumented alien based on unclean hands. Now the California Supreme Court will decide this far ranging issue. The appellate court essential took much of the teeth out of a legislative amendment to protect illegal aliens against discriminatory and other illegal workplace conduct…regardless of their status. We’ll be keeping an eye out for this one!
December 2011 Compliance and Culture Newsletter
“All anyone asks for is a chance to work with pride.” —Dr. W. Edwards Deming
This issue discusses:
- Editor’s Column: Human Resource Information Systems (HRIS) – New and Improved
- Can You Cut Benefits Costs by Moving Employees to Medicare?
- Quantum HR
- Disability Employment Statistics
- Medical Documentation: Think About What’s Needed and Stop There
- ‘Bad Haircut’ and Unequal Policy Enforcement Lead to Trouble for Employer
- Leave as a Reasonable Accommodation
We have also provided you with the Form of the Month.
Please click here to view the newsletter in PDF.
Editor’s Column: Human Resource Information Systems (HRIS) – New and Improved
I see Human Resource Information Systems (HRIS) as the equivalent of “QuickBooks for managing the workforce.” They can handle employee data beginning with payroll right through to COBRA administration. Along the way, HRIS systems offer bells and whistles to help manage this data, including payroll, benefits administration, leave management, learning management, and more.
As a rule, companies with 100 employees or more have dominated the HRIS market, because these systems require a significant investment in time and money – with little short-term return. However, increasing competition in the upscale market means that HRIS providers are beginning to target smaller employers.
Here are some of the trends with these systems:
- Integration with social media platforms, including everything from Facebook to Twitter, et al.
- An improved interface that makes the system easier to use and more inviting for employees.
- Tie-ins to insurance billing (real time Workers Comp billing, benefits billing, etc.)
- Mobile access, including for time-keeping purposes, as well as integration with tablet accessibility (iPads, etc.)
- Greater assistance with online recruiting and link to recruiting portals.
- Increased use of “talent analytics” that help with recruitment, workforce planning, and succession planning, together with improved analysis of workforce facts, trends, etc.
- The “gamification” of these systems.
- Influence of “the cloud” — the storage of data maintained on secure third-party Web sites, rather than your own site (like HR That Works). Of course, you’ll have to make sure that these third-party sites are, in fact, secure.
- Integration of career planning “dashboards.”
- Increased usage of paperless technology for everything from submitting resumes to electronic signatures on documents.
- Integration with employee wellness programs.
The main advantage of an HRIS system, as with a QuickBooks program, is having well managed data. HRIS advertising stresses the time saved in pulling reports on such topics as turnover. However, most smaller companies already know their turnover level.
Second, bear in mind that companies using HRIS are already running at 75 mph. Where will they get more time to use the system? When analyzed properly, do these systems really save time? Are HRIS bells and whistles truly related to corporate strategy or are they nothing more than distracting shiny objects?
Can You Cut Benefits Costs by Moving Employees to Medicare?
Many employers are doing everything they can to reduce benefit costs. One of our HR That Works Members posed this question to Alan Levy, a benefits law expert in our network.
“Q: If an employee is eligible for Medicare, can we state/insist that they must leave our company plan and accept Medicare?”
“A: We had this question from a client recently. There are serious penalties for forcing an active employee to give up the employer’s plan and go to Medicare, and offering a personal incentive might pose a problem. However, an employee can change to Medicare voluntarily, without restrictions or charges for pre-existing conditions, etc. This also applies to Medicare supplements and advantage problems. Some employees make the change voluntarily to use the current rule’s automatic unqualified acceptance, as well as to assure any “grandfathered” rights if Congress reduces or alters the program in the future. (Every “reform” proposal seems to exempt anyone already on Medicare.) A bigger problem is what happens to an employee’s spouse who isn’t old enough for Medicare if the employee leaves the company plan and goes to Medicare. Although COBRA works for a while, extension of this period is problematic.
“Finally, an employer offering a Medicare supplement or advantage plan to all who could qualify is not considered an improper incentive; the danger comes when the employer offers an individual some extra amount. The only exception I know of in this regard is the Third Circuit rule (applicable only in PA, NJ, and DE), Erie County, which treats certain variations of this scenario as age discrimination under the ADEA. EEOC says it will not apply the Third Circuit rule anywhere else in the nation, which seems to support the idea that employers offering the supplement, etc. is permissible.”
This advice is limited to the facts of the situation. As Alan points out, the EEOC has not drawn a black and white line on permissible supplements. The Social Security Administration provides an excellent publication on the interplay between private insurance and Medicare payments. (See pages 13-14)
Quantum HR
Our understanding of the physical world grows ever deeper. Quantum physicists have taught us that simply observing matter can affect its activity. We know that bits of matter once bonded together remain “entangled” even when separated by great distances. We should remember from Physics 101 that matter likes to settle into its least active state (entropy).
What do these facts have to do with HR? It’s simple: How people think about doing their jobs has implications that might be far broader than realized. If we accept the teachings of quantum physics at face value, then:
- Due to entanglement, how you go through your day will have an invisible, but perceptible impact on how the people you bond with feel every day. If you’re having a bad day, at some point, many of your co-workers and loved ones will feel this fact.
- Much of our existence depends on what we choose it to be. The very concept of “making your day” has scientific backing. As the proverb says, “As you believe, so shall you achieve.”
- Finally, unless you’re excited, it’s natural to use the least amount of energy possible to do a job. If you want to move yourself to a higher frequency, you have to get excited. Although some of us do this naturally, most people need a little motivation to get going. Don’t underestimate the power of this motivation in your business and personal life.
Because any organization is a collection of individuals, these concepts apply to the group as a whole. A positive company culture means that there’s a positive vibration among the workforce.
Disability Employment Statistics
The Institute on Disability at the University of New Hampshire has just issued its Annual Disability Statistics 
Compendium. Here are some of the stats related to employment in 2010. Click here to see the entire report.
Among the 19,048,426 individuals with disabilities ages 18 to 64 years living in the community, 6,368,644 were employed — an employment rate of 33.4%. In contrast, among the 172,089,634 individuals without disabilities ages 18 to 64 years living in the community, 125,358,735 were employed — an employment rate of 72.8%. The employment rate for people with disabilities was highest in North Dakota (54%) and lowest in Kentucky (25.7%).
The employment rate for individuals with disabilities ages 18 to 64 years living in the community was 33.4% while the rate for individuals without disabilities ages 18 to 64 years living in the community was 72.8% — an “employment gap” of 39.4%. The employment gap was greatest in Maine (48.9%) and smallest in Wyoming (27.7%).
The employment gap between individuals with and without disabilities ages 18 to 64 years living in the community was 39.4%, compared with 39.1% in 2009.
Among the 19,048,426 individuals with disabilities ages 16 to 64 years living in the community, 3,834,727 were employed fulltime, year-round — a full-time, year-round employment rate of 20.1%. In contrast, of the 172,089,634 individuals without disabilities ages 16 to 64 years living in the community, 88,683,091 were employed full-time, year-round — a full-time, year-round employment rate of 51.5%. The full-time, year-round employment rate for people with disabilities was highest in North Dakota (32.1%) and lowest in Maine (15.2%).
Finally, the full-time, year-round employment rate for individuals with disabilities ages 18 to 64 years living in the community was 20.1%, while the full-time, year-round employment rate for individuals without disabilities ages 18 to 64 years living in the community was 51.5% — a full-time, year-round employment gap of 31.4. The full-time, year-round employment gap was greatest in Maine (38.8%) and smallest in Utah (24.1%).
What can an employer take away from this?
- Obtaining gainful employment can be a real struggle for people with disabilities.
- Some communities are more “open” to employing the disabled. Some of this difference has to do with the types of jobs available, employment programs, and incentives.
- As “good people” we can rise above any perceived limitations and employ those with disabilities based on the results they are capable of producing.
To help with accommodation ideas go to http://askjan.org/.
Medical Documentation: Think About What’s Needed and Stop There
In our experience at JAN, there seems to be a great deal of confusion about medical documentation under the ADA. Employers aren’t sure what they can ask for, when they can ask for it, or whether the ADA Amendments Act has changed the rules for medical documentation. Employees aren’t sure what medical information they have to provide or how much to disclose. Medical professionals aren’t sure what documentation will be most helpful in getting their patients the workplace accommodations they need. Most of these questions come up when an employee requests an accommodation.
The good news: The medical inquiry rules that apply when an employee requests an accommodation are less complicated when they might seem. The general rule is that when the disability or need for accommodation is not obvious, an employer may require an employee to provide documentation that can substantiate that s/he has an ADA disability and needs the reasonable accommodation requested, but can’t ask for unrelated documentation. So when thinking about what medical information to request or to provide, think about what is needed and stop there!
Let’s start with the documentation needed to substantiate that the employee has a disability. The definition of disability for accommodation purposes is “a physical or mental impairment that substantially limits a major life activity or a record of such an impairment.” To determine whether an employee has a disability, the employer can ask whether the employee has (or had) an impairment. If yes, you can ask whether the impairment affects (or affected) a major life activity. You can also ask whether the impairment substantially limits (or limited) the major life activity.
This is where the ADA Amendments Act has made some changes. Although the definition of “disability” remained unchanged, the threshold for showing substantial limitation is much lower than before. This means that the documentation needed to show that an employee has a disability should be far less extensive.
What about the documentation needed to substantiate the need for an accommodation? The ADA Amendments Act did not change the reasonable accommodation provisions of the ADA, so the rules for medical documentation likewise remained unchanged. An employer may verify that the accommodation is needed, ask questions about the employee’s limitations that are causing the problem, and get other relevant information about the request to help determine effective accommodations.
For more information, see recently updated JAN publications related to medical documentation, including:
- How to Determine Whether a Person Has a Disability under the Americans with Disabilities Act Amendments Act (ADAAA)
- Medical Inquiry in Response to an Accommodation Request
- Sample Medical Inquiry Form
- Practical Guidance for Medical Professionals: Providing Sufficient Medical Documentation in Support of a Patient’s Accommodation Request and Sample Accommodation Support Letter
- Linda Carter Batiste, J.D., Principal Consultant
‘Bad Haircut’ and Unequal Policy Enforcement Lead to Trouble for Employer
I
n NLRB v. White Oak Manor, the Fourth Circuit Court of Appeals enforced a decision by the National Labor Relations Board finding that an employer violated the National Labor Relations Act when it discharged an employee for allegedly photographing employees at work without permission. The Court agreed with the Board’s findings that the employee was actually discharged because of protected concerted activity and that the employer had not enforced its photography and dress code policies consistently.
Nichole Wright-Gore worked as a supply clerk for White Oak Manor. White Oak’s policies prohibited employees from wearing hats and taking photographs inside the long-term care facility. Wright-Gore was embarrassed about a bad haircut and started to wear a hat to work, without comment from any supervisor. After a week, however, when supervisors told her to remove the hat, she refused and was sent home. The next day, White Oak employees dressed up in costumes for Halloween. Wright-Gore’s costume included a hat, but her supervisor made her remove the hat pursuant to company policy. Wright-Gore complained that White Oak was enforcing the hat policy unequally, but her supervisor told her to worry only about herself and gave her a written warning for insubordination because she had refused to remove her hat the day before.
During the next few weeks, Wright-Gore photographed several employees wearing hats to work and violating other White Oak dress policies, such as failing to cover up their tattoos. She photographed some employees with their consent, but also took photographs of employees without their consent. She also shared the photographs with other employees and discussed the unequal treatment with them in an attempt to build support for her argument. White Oak eventually discharged Wright-Gore for violating the photography policy.
She then filed an unfair labor practice charge alleging that White Oak interfered with her right to engage in protective concerted activity. The Administrative Law Judge (ALJ) found that Wright-Gore’s complaints became protected concerted activity when they evolved into an effort to have White Oak enforce its dress code policies fairly. Another important issue was whether she lost protection of the Act by taking pictures of other employees without permission, in violation of White Oak policy. The ALJ held that she did not, in part, because there was evidence that other employees took pictures of each other without permission, and even displayed the pictures around the facility, without repercussion. The Board affirmed the ALJ findings.
On appeal, White Oak argued that Wright-Gore could not have engaged in protected concerted activity because she initially acted out of pure self- interest, and did not intend to act on behalf of a broader group. The Fourth Circuit rejected this argument and enforced the Board’s decision. As the court noted, “[t]hat an employee’s self-interest catalyzed her decision to complain about working conditions does not inexorably bar a determination that her actions were protected and concerted.” Thus, the fact that Wright initially acted out of her own self- interest did not remove her actions from the protections of the Act. Moreover, the court’s decision emphasized the fact that White Oak had not enforced its photography or dress code policies consistently.
This case reinforces the importance of employers enforcing workplace policies consistently and the reality that seemingly individualized complaints can lead to employer decisions which conflict with the National Labor Relations Act.
Courtesy of Worklaw® Network firm Franczek Radelet.
Leave as a Reasonable Accommodation
One of the more vexing issues facing both employers and employees involves leave time related to a medical condition, especially when the period of leave exceeds an employer’s permitted leave allowance or otherwise violates an established attendance policy. Although such situations might be challenging and confusing, employers must confront them directly because using leave necessitated by an employee’s disability constitutes a “reasonable accommodation” under the ADA.
The U.S. Equal Employment Opportunity Commission’s (EEOC) Reasonable Accommodation Guidance provides examples of some of the reasons an employee with a disability might require leave:
- Obtaining medical treatment or rehabilitation services related to the disability.
- Recuperating from an illness or an episodic manifestation of the disability.
- Obtaining repairs on prosthetic device or other equipment such as a wheelchair.
- Avoiding temporary adverse conditions in the work environment (for example, an air-conditioning breakdown causing unusually warm temperatures that could seriously harm an employee with multiple sclerosis).
- Training in the use of a service animal or assistive device.
- Training in the use of Braille or sign language.
Here’s a discussion of some frequent and confusing leave-related issues that employers and employee have presented to JAN.
How Much Leave Is Reasonable? The ADA does not set a specific amount of time relative to the use of leave as a reasonable accommodation. As with any accommodation situation, you should consider a period of leave for an employee with a disability on a case-by-case analysis. If an employee needs a leave of absence that exceeds his or her accrued paid leave, the employer should permit the employee to exhaust the paid leave and then allow the use of unpaid leave absent undue hardship.
Although there’s no limit on the amount of leave used as a reasonable accommodation under the ADA, the EEOC has held that employers need not grant indefinite leave as a reasonable accommodation (see the EEOC Guidance on Applying Performance and Conduct Standards, Question 21). However, the employee need not provide a specific, fixed date of return. A request for leave is acceptable with an approximate date of return (e.g., around the end of August) or a range of dates for a return to work (e.g., sometime between August 24 and September 23).
ADA and the Family and Medical Leave Act (FMLA). An employee’s rights under the ADA and the FMLA are separate and distinct. The EEOC has ruled that when an employee is entitled to leave under both laws, the employer should allow leave under the law providing the employee with the greater rights (see the EEOC Fact Sheet on the FMLA, ADA, and Title VII). Additionally, employers should note that the ADA might require them to grant leave beyond the 12 weeks allowed under the FMLA as a reasonable accommodation. In this case, an employer can consider the FMLA leave taken in determining whether the requested leave time poses an undue hardship.
Erratic or Unreliable Attendance. The ADA can require employers to modify attendance policies as a reasonable accommodation in the absence of undue hardship. This does not mean that employers must exempt an employee from time and attendance requirements completely or accept irregular and unreliable attendance unquestionably. Frequent occurrences of tardiness or absenteeism, particularly during an extended period and without adequate notice, could certainly impose an undue hardship in many situations. See the Commission’s Guidance on Applying Performance and Conduct Standards for a detailed discussion with examples of specific scenarios.
Alternative Accommodations. Although it makes sense for employers to give an employee’s choice of accommodation primary consideration when more than one reasonable accommodation is possible, they can ultimately choose the accommodation to be implemented, assuming that it’s equally effective. Accordingly, under the ADA an employer can offer a reasonable accommodation that requires an employee to remain on the job, as long as it’s effective and doesn’t interfere with the employee’s medical needs.
Holding the Employee’s Position. The ADA requires an employer to consider returning the employee to his or her same position in the absence of undue hardship. If undue hardship applies, the employer must consider reassignment to a vacant, equivalent position for which the employee is qualified.
Undue Hardship. As with any other reasonable accommodations, whether an employer should allow the use of leave as an accommodation will sometimes come down to an undue hardship analysis. In the case of leave, undue hardship will generally relate to a possible disruption in operations of the entity. For instance, the absence of an employee who performs highly specialized duties might create legitimate undue hardship issues, as might leave that occurs in a frequent and unpredictable manner. Generalized assessments are not adequate, because undue hardship must be determined based on individual and specific circumstances. Additionally, the EEOC has ruled that an employer cannot base an undue hardship claim on the argument that a reasonable accommodation might affect the morale of other employees negatively or that other employees might have to cover for the employee who is on leave.
What to Remember. Ultimately, much of the confusion involving leave as an accommodation occurs when there are no clear and open lines of communication. Lack of communication is usually the major obstacle to executing an effective accommodation solution. All parties need to be aware of any relevant updates or concerns, and everyone should make an effort to keep the information flowing. If you need ideas on how to encourage ongoing communication during the accommodation process, contact JAN.
- Bill McCollum, MPA, Consultant
Form of the Month
I-9 Guidelines Audit (PDF) – Use this form for auditing your I-9 Forms, which verify the citizenship status of employees.
Podcast
Click here to to listen to this month’s newsletter podcast.
