Employers are not yet required to pay overtime in accordance with the revised FLSA regs . . . but proceed with caution.

caution

By now, employers know that on November 22, 2016, federal court Judge Amos Mazzant in Texas issued a preliminary injunction that has blocked – temporarily – the implementation of the revised white collar overtime regulations issued by the Department of Labor (DOL) earlier this year. Those regulations, which have been the focus of concern, controversy, and downright panic, were set to become effective on December 1, 2016.

The judge’s granting of the preliminary injunction, which was premised on his finding that the legal challenges to the new regulations have a substantial likelihood of success on the merits, means that pending further appeal/review and until a final ruling is entered, the existing regulations will remain in place. There is no date set for a final hearing on the issue.

Obviously, this has created a real dilemma for employers, who spent recent weeks and months getting up-to-speed on implementing the changes required by the new regulations. Where do they go from here? Here are a few of the most frequently asked questions, and the responses based on currently available information:

  1. What is the next step in the injunction process?

The injunction can (and most likely will) be appealed, and could, in addition, become the subject of an emergency motion for stay of the injunction pending that appeal. If such an emergency motion is granted, the preliminary injunction would be lifted, and the regulations would proceed, with the December 1 implementation date in place.

An additional twist is that any appeal taken now may not reach a final conclusion, because the incoming administration could drop the appeal after January 20, 2017 if the issue has not been fully decided before the inauguration. In that instance, the DOL’s rules never will be implemented . . . at least in their current form.

  1. If the injunction ultimately is vacated, will the new DOL rules be applied retroactively to overtime that was worked after December 1?

If the injunction ultimately is vacated (and the new regulations are put back on the table to be implemented, effective on the original December 1 implementation date), it is an open question whether employers can be liable for the time between December 1, 2016 and the date of that act. It is prudent to plan for claims of that nature, and therefore to keep track of overtime hours worked by individuals whose classifications would change from exempt to non-exempt under the new regulations.

  1. What are other employers doing?

Most employers who raised salaries to the new minimum threshold will leave those raises intact. Rescinding the raises now will likely create a significant morale issue. Conversely, most employers who have not yet announced such changes are putting them on hold until a determinative outcome has been reached by the courts. Many employers are in the middle. That is, changes to salary levels to assure that managers stay exempt have been announced but not yet implemented. Most employers in this category are notifying employees that the changes now are on hold. 

  1. What – and how – should we tell employees?

Any announcement will depend upon where the company is in the implementation process, including what changes have been announced to employees, and what steps have been taken to this point. Here is sample language that would be appropriate for employers putting implementation plans on “hold” for the time being:

As you know, the Department of Labor’s new regulations on who should be paid overtime and who should not were scheduled to go into effect on December 1, 2016. As a result, the company made plans to reclassify your position from exempt to non-exempt effective by that date. However, a federal district court judge recently halted enforcement of those new regulations, which may affect that re-classification. Therefore, plans regarding reclassification of jobs now are on hold pending resolution of the legal issues. In the interim and until a final resolution, you will be paid as you always have been paid. During the coming weeks, we will (with your help and input) keep track of your working hours and will determine pay revisions, if any, when a final legal determination is made by the courts. Please contact your HR manager with questions that you have.

  1. What if some workers whose jobs were planned for reclassification to non-exempt need to be reclassified anyway, regardless of the DOL’s new rules. Should we reclassify them?

Some employers have decided to make classification changes to individuals who DO NOT perform exempt duties, and are using this opportunity to assure compliance with basic FLSA classification requirements. In that instance, Meg Alli in our Detriot office has suggested language like this:

We notified you previously that you would become overtime eligible effective December 1, 2016. Despite recent legal rulings in Texas of which you may have become aware, we are writing to confirm that we have not changed our direction or course. As of December 1, you will be eligible for overtime after working over 40 hours in a week [or 8 in a day if state law requires]. You also will be expected to keep track of your working hours each day and timely report them to [the designated person in the designated way]. We value your commitment to our Company. Moving forward with our changes is the right thing to do and recognizes your extra work on behalf of the Company.

  1. What is the overall advice being provided to companies at this point?

In summary:

  • If changes already have been implemented, it is more practical and less disruptive to leave them in place and continue to monitor the situation for possible future action.
  • If changes have not been implemented (even if previously announced), everything can be put temporarily on hold; but
  • Record hours for the employees who were going to be reclassified, in case that data is needed later; and in either instance,
  • Evaluate what to tell employees and notify them quickly, as state law pay notification requirements may come into play.

This is a circumstance in which management, legal, and human resources should work carefully and in concert to assure that actions are carefully considered and planned before being implemented.

What the FTC/DOJ’s Recent “Antitrust Guidance for HR Professionals” Means for Employers.

soccer huddle

On October 20, 2016, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) jointly issued a publication entitled “Antitrust Guidance for Human Resource Professionals” which, according to the opening paragraphs, is “intended to alert human resource (HR) professionals and others involved in hiring and compensation decisions to potential violations of the antitrust laws.”

The three bold-face headings within the guidance provide a roadmap for the messages being sent to employers by the DOJ/FTC, and the actual “take-aways” of which employers should be aware:

  1. “The antitrust laws establish the rules of a competitive employment marketplace.”
    • Message: Federal antitrust agencies plan to take enforcement action against employers who agree – expressly or implicitly – with other companies not to compete for employees.
    • Take Away: Employers should avoid communicating hiring or recruiting policies to other companies, regardless of whether the companies provide the same products or services. The effect of this guidance on non-compete agreements remains to be seen. But a hint may have come from the Obama administration’s statement, on October 26, which urged states to ban non-compete agreements in circumstances other than those proposed before a job is offered or promotion is accepted.
  2. “Agreements among employers not to recruit certain employees or not to compete on terms of compensation are illegal.”
    • Message: An HR person (and, therefore, the employer/company) risks action by the DOJ if an agreement is made between companies regarding salary or other terms of compensation; this applies regardless of whether the agreement is written or verbal, formal or informal.
    • Take Away: The DOJ views most stand-alone wage-fixing or “no poaching” agreements among employers as per se illegal under the antitrust laws. Expect the DOJ to increase its criminal prosecutions of both individuals and companies involved in such agreements.
  3. “Avoid sharing sensitive information with competitors.”
    • Message: According to the guidance, evidence of periodic exchanges of current wage information in an industry with a relatively low number of employers could establish an antitrust violation – even without an express or implicit agreement among companies.
    • Take Away: Exchanging competitively sensitive information may create implicit evidence of illegal antitrust-based agreements, and may be viewed by the DOJ as having an anticompetitive effect.

The DOJ will be stepping up its efforts in this arena, and has established a specific “business review process” to enable companies to determine how the DOJ’s Antitrust Division will respond to any proposed joint ventures or other business activity, and has provided a list of “Antitrust Red Flags” for HR professionals. The FTC has established a process for obtaining an advisory opinion on antitrust issues, as well.

The guidance also includes several Q & A scenarios, and a list of resources to assist HR in reporting “potential violations” of the antitrust laws, including a statement that:

Through the Division’s leniency program, corporations can avoid criminal conviction and fines, and individuals can avoid criminal conviction, prison terms, and fines by being the first to confess participation in a criminal antitrust violation, fully cooperating with the Division, and meeting other specific [but unspecified] conditions.

This issue underscores the importance of cooperation and interaction among legal, HR, and corporate compliance departments in companies, regardless of size, geographic location, or type of business. Expect scrutiny on this issue to continue – and consider limiting huddle time with other companies, especially regarding competition for employees.

 

December 1, 2016 implementation date for overtime regs remains unchanged. Are you ready?

starting gate

One question is being asked by employers on a nearly daily basis: “Do we really have to meet the December 1, 2016 effective deadline for the revisions to the U.S. Department of Labor (DOL) overtime regulations?” Short answer is: Yes.

Attempts are being made to delay, change, soften, and eliminate the December 1 implementation date, but so far, without success. Here is a summary of some of the legal and legislative actions that have taken place since the May 18, 2016 publication of the new regulations:

  • In June, Senator Lamar Alexander (R-Tenn.) and 43 other Senate Republicans filed a “motion of disapproval” under the Congressional Review Act (CRA), an Act that allows lawmakers to vote to roll back controversial regulations. Under the CRA, Republicans would need only a simple majority in both chambers to block the overtime rule. But President Obama could veto their attempt to block it, and Republicans do not have enough support on their own to override a veto. To date, no further action has been taken on that motion.
  • On July 14, 2016, in an attempt to soften the impact of the new regulations, Congressman Kurt Schrader (D-Ore.) introduced a bill – the Overtime Reform and Enhancement Act (OREA) – to add to the regulations a phase-in provision which would phase in the increase in the salary threshold in steps over the next three years, and remove a current provision that increases the threshold salary automatically every three years. After its introduction in the House, the Bill was referred to the House Committee on Education and the Workforce; no further action has been taken.
  • On September 20, with less than 80 days left before the effective date for the revisions to the new regulations, two federal court lawsuits were filed in Texas to put off or halt the implementation of the revisions. On October 14, motions were filed by both plaintiff groups, asking for expedited resolution. To date, neither has resulted in any concrete change in the trajectory of the implementation of the new rules.
  • On September 28, 2016, the U.S. House of Representatives passed H.R. 6094 Regulatory Relief for Small Businesses, Schools, and Nonprofits Act by a vote of 246 to 177. This bill would delay the December 1, 2016 effective date of the new salary level test in the final overtime rule for six months until June 1, 2017. While H.R. 6094 passed the House, it is not clear whether the Senate will vote on its parallel Senate bill (S. 3462).  Even if the Senate were to vote on that and pass it, the White House has made it clear in a Statement of Administration Policy dated September 27 that the president will veto it.
  • On September 29, 2016, another bill (S. 3464) was introduced by Senator Lamar Alexander, along with four other senators. That bill is similar to the House bill introduced in July by Rep. Schrader (D-OR) to phase in the overtime rule incrementally. The Senate bill includes a five-year phase-in (as opposed to Rep. Schrader’s 3-year period), but also a provision requiring an independent study of the rule after the first year of implementation, which – should the rule be found to negatively impact American workers and the economy – exempt nonprofit groups (including colleges and universities), state and local governments, and many Medicaid and Medicare-eligible facilities from any further increases under the rule.

Before recessing for the November elections, Congress signaled that the overtime rule will merit Congressional  attention when it returns to work for its lame-duck session beginning in mid-November.  In the meantime, business and industry groups, including the Society for Human Resource Management (SHRM) will continue to develop strategies for use when Congress returns to Washington following the elections.

However, because of the number of steps that must be taken prior to an change in the December 1 effective date (which actually is earlier, since the rule requires the changes to be in place for the pay period that includes December 1), that date is unlikely to change. Be prepared.

 

P.S. This blog has been nominated as a “best blog” by The Expert Institute.  If you like what you’ve been reading, please favor me with a vote, here:  https://www.theexpertinstitute.com/blog-category/amlaw/ (click on Employment Law Matters). Thanks.

 

Photo from 2012 London Olympics at daily mail.com.

 

September Surprise? Two Federal Lawsuits Attack the Validity of the New FLSA Overtime Rule.

off the clock

The effective date for the revisions to the U.S. Department of Labor (DOL) overtime regulations is less than 80 days away, and employers continue to struggle with the challenges created by changes to the existing rule.  On September 20, 2016, federal court lawsuits were filed by two disparate groups, each attempting to put off or halt the implementation of the revisions.

Declaratory Judgment Action Filed by 21 States:

First, a group of 21 states, led by Nevada and Texas through their Attorneys General, filed a “Complaint for Declaratory and Injunctive Relief” in federal court in Texas. The complaint, filed against the DOL, its wage-and-hour division, Secretary of Labor Thomas Perez, and David Weil and Mary Zeigler, as Administrator and an Assistant Administrator of the Wage & Hour Division, respectively, challenges the revised regulations on three bases, alleging that:

  1. The DOL “disregarded the actual requirements” of the Fair Labor Standards Act and instead simply increased the minimum salary threshold without regard to employees’ actual duties;
  2. The final rule’s automatic indexing mechanism (which automatically increases the threshold salary every three years) evades statutory language requiring notice and comment before such changes; and
  3. The new rule exceed Constitutional authorization by effectively “imposing the federal Executive’s policy wishes on State and local governments.”

The lawsuit claims that the new rule could force state and local governments, as well as private businesses, to increase employment costs and cut services or lay off employees, and asks the U.S. District Court to declare that the “new overtime rules and regulations are unlawful” because they exceed statutory rights, were enacted “without observance of procedure required by law,” are arbitrary and capricious, and are unlawful as applied to the States and their employees.

While the lawsuit asks for this declaratory relief, it also goes further and asks for a “permanent injunction preventing the defendants from implementing, applying, or enforcing the new overtime rules and regulations.” However, the potential impact that the lawsuit may have on private employers is unclear. The arguments made in the Complaint focus primarily on states’ rights and state employees; there are no private employers named as plaintiffs in the lawsuit.

Business Groups Jump into the Fray:

Within hours, a similarly focused lawsuit was filed in the same federal court, this time by a coalition of over 50 business groups, including the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Retail Federation, National Automobile Dealers Association, and the National Federation of Independent Business. That action is brought under the Administrative Procedure Act (APA) and alleges that:

The new Overtime Rule defies the mandate of Congress to exempt executive, administrative, professional, and computer employees from the overtime requirements of the FLSA. The [new] rule raises the minimum salary threshold so high, that the new salary threshold is no longer a plausible proxy for the categories exempted by Congress. As a result, the exemption is effectively lost for entire categories of salaried executive, administrative, professional, and computer employees whose job duties qualify them to be treated as exempt . . . .

The Complaint spells out the effects of the new rule on businesses:

The costs of compliance will force many smaller employers and non-profits operating on fixed budgets to cut critical programming, staffing, and services to the public. Many employers will lose the ability to effectively and flexibly manage their workforces upon losing the exemption for frontline executives, administrators and professionals. Millions of employees across the country will have to be reclassified from salaried to hourly workers, resulting in restrictions on their work hours that will deny them opportunities for advancement and hinder performance of their jobs – to the detriment of their employers, their customers, and their own careers.

This lawsuit specifically asks the court to “vacate” the Overtime Rule; but importantly, it specifically asks the court to “postpone the effective date of the Overtime Rule and to maintain the status quo pending the Court’s review of this case . . . .”

The DOL’s response:

Secretary Perez issued a statement in response to what he has labeled as “partisan” lawsuits, expressing his confidence in the legality of the final rule which, as he stated, was the result of “a comprehensive, inclusive rule-making process.” He criticized the “obstructionist tactics” used by the two groups of plaintiffs and said that he will “look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by.”

Now what?

While it is impossible to determine what the federal courts will do with these parallel cases, the choices are fairly black-and-white. The DOL can immediately assert either a vigorous defense and justification to convince these courts not to postpone or enjoin the implementation of the rule – which will lead to prolonged disruptive and expensive litigation, all the while leaving employers in complete confusion about the validity of the December 1 implementation date – or it can work with these two groups of plaintiffs to come to a negotiated “stand-still” agreement and postponement of the December 1 kick-off to a later date certain, allowing the substantive issues to be heard and decided by the court in the interim.

Of course, either of those paths creates difficulties for various employer groups. While many employers have not taken the final steps toward reclassification or re-setting wages of employees affected by the new rule, many employers already have done so, and now face the question of whether to inform their employees that the promised higher wages or re-evaluated job duties will be delivered or delayed.

We’ll be following developments in these cases closely, and will continue to provide details as they become available.

Recent Enforcement Guidance provides insight into EEOC’s assessment of retaliation claims.

Magnificent Seven

Retaliation claims are asserted in nearly half of the charges received by the Equal Employment Opportunity Commission (EEOC), according to its Chair, Jenny Yang, and now comprise the most frequently alleged basis of discrimination. On August 25, 2016, the EEOC issued its Enforcement Guidance on Retaliation and Related Issues. The guidance, which replaces the EEOC’s 1998 Compliance Manual section on retaliation, addresses retaliation issues under the federal statutes enforced by the EEOC, which include:

  • Title VII of the Civil Rights Act of 1964;
  • Age Discrimination in Employment Act (ADEA);
  • Americans with Disabilities Act (ADA);
  • Section 501 of the Rehabilitation Act;
  • Equal Pay Act (EPA); and
  • Genetic Information Nondiscrimination Act (GINA).

The guidance goes into detail on these issues:

  • A broad definition of “retaliation,” with specific examples as clarification;
  • Employee activity protected by the law;
  • Legal analysis to be used to determine if evidence supports a claim of retaliation;
  • Available remedies for retaliation; and
  • Detailed examples of employer actions that may constitute retaliation.

While most of the examples used by the EEOC to illustrate its guidance are straightforward, there are a few that may create come confusion. For instance, the guidance explains that “opposing” a perceived unlawful EEOC practice could include “refusing to obey an order reasonably believed to be discriminatory.” Because most employers have policies against insubordination, such refusal by an employee who believes an order to be discriminatory will require clarification or discussion prior to any disciplinary action being taken, in order to avoid the risk of a subsequent retaliation claim.

Besides the guidance, the Commission has issued on-line resource documents, comprising a question-and-answer page that summarizes the guidance, and a short Small Business Fact Sheet that condenses the major points in the guidance in non-legal language.

The guidance also provides, as an additional resource, a link to a document which it says includes “suggestions for reducing incidences of retaliation” – the document is entitled Retaliation – Making it Personal .

While the guidance is not new information, it is a compilation of information with which employers should make themselves familiar. The guidance does not have the force of law, but it is certain to be used by the courts to interpret anti-discrimination statutes and related regulations and therefore, employers should add this document to its training toolbox for managers and supervisors to minimize the risk of retaliation claims related to disciplinary actions or employee complaints.

 

Photo is from a movie poster for the 1960 United Artists version of The Magnificent Seven. (While it’s a stretch to interpret the Seven’s actions against the marauding bandits as “retaliation,” it’s close enough for me to use this poster.)  In 2013, the film was selected for preservation in the United States National Film Registry by the Library of Congress as being “culturally, historically, or aesthetically significant”.

PA and DOL Collaborate in Employee Misclassification Enforcement Efforts.

US+Department+of+Labor

This post was written by Jennifer G. Betts of Ogletree Deakins’ Pittsburgh Office.

 

On August 4, 2016, the Pennsylvania Department of Labor and Industry signed a three-year Memorandum of Understanding (“MOU”) with the U.S. Department of Labor’s Wage and Hour Division (“DOL”). The MOU was designed to prevent the misclassification of employees as independent contractors, and to preclude other wage-and-hour violations. The agreement contemplates the following collaborative enforcement activities between the two agencies:

  • joint investigations of misclassification and other wage & hour issues within the Commonwealth of Pennsylvania;
  • coordination with and assistance from the DOL regarding enforcement activities within the Commonwealth; and
  • referrals of potential violations of each other’s statutes.

Pennsylvania is the 32nd state to enter into such an arrangement with the DOL. The other states are: Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Florida, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New Mexico, New York, Oregon, Rhode Island, South Dakota, Texas, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming.

The DOL believes these collaborations are “making a difference,” citing more than $74 million in back wages collected for over 102,000 workers in fiscal year 2015 alone. To support the MOU, the PA Department of Labor and Industry announced that it would launch a statewide misclassified workers public awareness campaign to begin in fall 2016.

Coupling Pennsylvania’s awareness campaign with the new federal overtime threshold regulations that go into effect December 1, 2016 could lead to wage-and-hour headaches for Pennsylvania employers. Companies with employees in Pennsylvania should expect heightened scrutiny over misclassification issues beginning this fall and lasting well into 2017, and also should recognize that such investigations will include both state and federal agencies.

To avoid these costly, time-consuming, and distracting investigations, employers who do business in Pennsylvania (or states with other similar agreements) should look carefully at all of the workers they have classified as overtime exempt and/or as independent contractors and evaluate whether the classification is appropriate.

 

BUG OFF! Six tips for dealing with Zika questions and concerns.

zika_protect_yourself_from_mosquito_bites

As of August 17, 2016, and according to the Center for Disease Control (CDC), there are 2260 cases of Zika virus in the United States, 14 of which were “locally acquired mosquito-borne cases” (all 14 of those are in Florida), and the remainder of which are “travel associated.” The CDC also reports 8035 cases of the virus in U.S. Territories; of those, 8000 are locally acquired, with the remaining 35 labeled as travel associated.

Clearly, it is time for employers to become more fully educated on this situation, both to protect employees and to be able to answer questions and concerns that those employees raise about working in an environment in which mosquitos might be present. Here at six tips, in an easy-to-remember format (BUG OFF!), for dealing with Zika:

  • Become knowledgeable about available resources and pass that information along to employees on a regular basis. The primary information source currently is the CDC’s website, which is updated frequently and includes factual information, posters for easy reference, and links to other useful sites.
  • Use mosquito repellent that includes an FDA-approved repellent ingredient, such as DEET, and make sure that such repellent is available for employees who work outside, especially in areas which have been designated as high risk.
  • Get rid of standing water on work sites, as such areas frequently are breeding grounds for mosquitos. Mosquitoes breed in standing water, not just in puddles, cans, bottles, and flower pots, but any still water that is not made inhospitable to breeding. This makes it critically important to maintain appropriate chlorine levels in pools and water storage tanks, as mosquitos will not breed in chlorinated water.
  • Offer information and guidance to allow employees to make informed decisions about travel to areas in which Zika is prevalent. Both the CDC’s website and the website and blog of OSHA contain helpful and easy-to-understand information.
  • Form a team to monitor workplace areas for instances of potential exposure, and to minimize those possibilities. Instruct team members that questions related to absenteeism for Zika-related reasons (real or perceived) should be directed to Human Resources in order to avoid complaints of lack-of-accommodation for health-related reasons.
  • Find alternatives, when necessary and possible, for outdoor work in mosquito-infected areas. Some possible alternative might be switching work from daylight to night-time hours (when mosquitos are less aggressive), supplying mosquito repellent (both in individual form and in broader work areas), and allowing pregnant woman to temporarily move into other open positions (if such a move is requested) to avoid mother-to-fetus infection.

Employers who implement the above six steps will be able to avoid or control much of the potential exposure to employees.

In addition, OSHA/NIOSH has suggested – but not yet mandated – that employers consider delaying employee travel to Zika-affected areas, especially for workers who are or may become pregnant or whose sexual partners may become pregnant. (CDC is recommending that pregnant women in any trimester not travel to an area in which active Zika virus transmission has been reported.)

CDC has published Zika Travel Information by region, which provides information in making travel-related decisions or implementing precautions when traveling.

OSHA suggests that all travelers – whether feeling sick or not – returning to the United States from an area in which Zika has been reported should take steps to prevent mosquito bites for three weeks so they do not pass Zika to mosquitoes that could spread the virus to other people.

Title VII’s pre-requisite that employee meet employer’s legitimate expectations may not be set in stone.

deep-snow-mailbox-1

In an unpublished decision, one federal appellate court has penned an opinion that goes to the heart of how discrimination cases are analyzed under Title VII by re-interpreting the prima facie case requirements set by the U.S. Supreme Court in the McDonnell Douglas Corp. v. Green case in 1973.

Elements of a prima facie case under Title VII:

To support a discrimination claim under Title VII, an employee must show he or she is meeting the employer’s legitimate business expectations. Earlier this year, the 7th U.S. Circuit Court of Appeals held that test to be “flexible” and unnecessary where the issue is whether the employee was “singled out” for discipline based on a prohibited factor. Ismail v. Brennan, 7th Circ., No. 15-2701, June 28, 2016 (unpubl.).

Procedural background:

Yousef Ismail, a postal worker born in Israel and who grew up in Jordan, was suspended without pay for walking on a snowy sidewalk to deliver mail after the local postmaster told him to walk on the street instead.

Upon initial review of Ismail’s subsequent lawsuit, a district court concluded that Ismail could not bring discrimination or retaliation claims because he was fired for disobeying a direct order. That insubordination meant that Ismail was not meeting the legitimate expectations of his employer and, therefore, could not support a prima facie case under Title VII.

On appeal, the Seventh Circuit reversed that dismissal, noting that although an employee usually must show he or she was meeting the employer’s legitimate expectations in order to support a Title VII claim of discrimination, that standard is “flexible” and need not be applied if the issue is whether the employee was “singled out for discipline” because of a protected characteristic – in this case, Ismail’s Middle Eastern national origin. The court also implied that the test may be unnecessary where the person judging the employee’s performance is the same individual accused of discrimination.

Factual background:

Ismail began working for the US Postal Service (USPS) in 2001 as a letter carrier. In 2003, Ismail filed a lawsuit against the USPS, alleging that the local postmaster harassed and disciplined him because of his race and ethnicity. That lawsuit ended when summary judgment was granted in favor of the USPS by a district court.

Ismail claimed that the postmaster “became emboldened” after that decision and that the harassment and discrimination continued. In December 2010, events came to a head when the postmaster conducted an observation of Ismail on his mail route. During that observation, the postmaster saw that Ismail was about to walk on a snow-covered sidewalk and “began screaming at” Ismail that he should walk on the street where there was less snow. Ismail “believed that walking in the street was dangerous, so he took a couple of steps on the sidewalk” to avoid some snow-covered bushes and then walked back into the yard of the customer to whom he was delivering the mail. For that incident, Ismail was put on “emergency placement” and sent him home for 17 days of unpaid leave.

Ismail filed an EEOC charge based on that incident, alleging race and national origin discrimination. In June 2012, Ismail filed another EEOC charge after the postmaster issued a “letter of removal” to Ismail for a confrontation with a coworker, although Ismail grieved the letter and ultimately was reinstated to employment.

In July 2012, after the second EEOC charge, Ismail was approached by the postmaster, who said “good morning” to him multiple times. When Ismail failed to reply, the postmaster confronted Ismail with the workplace rules handbook and pointed out a section that required “courteousness in the workplace.” After that exchange, the postmaster then called the police, claiming that Ismail threatened to kill him. A police officer interviewed both men, as well as Ismail’s immediate supervisor, who stated that although he had been in the immediate vicinity, he had heard no threat. The police determined there was insufficient evidence to arrest Ismail. The postmaster then put Ismail on administrative leave and the police officer escorted Ismail from the building.

In December 2012, Ismail amended his EEOC charge to include those incidents and to add a claim of retaliation. He ultimately filed a lawsuit, which was dismissed by the district court. The basis for that dismissal was that Ismail could not show he was meeting the USPS’ legitimate business expectations because he had disobeyed the postmaster’s directive in 2010. The district court held that Ismail could not support a prima facie case of discrimination, and that USPS was entitled to summary judgment.

The Seventh Circuit reversed that decision and reinstated Ismail’s claims, finding that the lower court erred in requiring Ismail to establish that he was meeting his employer’s legitimate expectations. It determined that ordinarily, that factor must be established by an employee seeking to state a prima facie case of discrimination. However, the fact that the postmaster was judging Ismail’s performance, but also was the same person accused of discrimination weighed against applying that test inflexibly. Ismail’s lawsuit was allowed to continue.

Take-away for employers:

While this decision should not stop employers from disciplining or firing employees for performance-related issues, it adds a level of review, suggesting that such discipline should be conducted or corroborated by managers unrelated to any prior claims of discrimination made by the employee in order to avoid being linked to allegedly discriminatory behavior.

 

 

 

Photo of mailbox in Anchorage, Alaska from March 26, 2012 blog entry re: Life in Alaska (http://www.homesinanchorage.net/blog/category/life-in-anchorage)

Is proposed legislation likely to slow the implementation of the new overtime regulations? Probably not.

Formal clocking in

On May 18, 2016, the Department of Labor (DOL) announced the publication of a final rule, updating its existing overtime regulations. The updated regulations are scheduled to become effective on December 1 of this year and are predicted to extend overtime pay protections to over 4 million workers within the first year of implementation. The updates include a provision under which employees are eligible for overtime compensation if they work over 40 hours in a week and earn less than $47,476 per year – an over 100% increase from the current salary threshold of $23,660.

To soften the impact of those new regulations, State Representative Kurt Schrader (D-Ore.) introduced a bill – the “Overtime Reform and Enhancement Act (“OREA”) – that would add to the regulations a “phase-in” provision which would increase the salary threshold in steps over the next three-years, and would remove a current provision that increases the threshold salary automatically every 3 years without going through the normal rulemaking process specified under the Fair Labor Standards Act (FLSA).

If Representative Schrader’s proposed bill succeeds, the threshold salary number would be increased only to $35,984 on December 1, 2016. The threshold would increase incrementally each year until reaching the $47,476 amount on December 1, 2019, which then would be the ceiling until a formal rulemaking process was engaged in to revise it further.

This proposed bill has the support of, among other groups, the National Retail Federation, the American Bankers Association, the Society for Human Resource Management, the U.S Chamber of Commerce, the National Restaurant Association, and numerous non-profit organizations that have stated that the new regs will force them to serve a reduce number of recipients by causing labor costs to rise so dramatically and precipitously.

To become law, the OREA would have to be approved by both houses of Congress, and would then have to survive a presidential veto (or garner enough support to override such a probable veto). None of that is likely to proceed quickly. Congress now is on recess until after Labor Day, so any action on this issue cannot take place for at least 6 weeks.

Even if OREA were to be signed into law after that, it would not automatically overturn the rule scheduled to take effect in December. Instead, it would require the Secretary of Labor to further rewrite the existing regulation, which could take a substantial period of time (the last rewrite took nearly a year), which would not be finalized before the final rule’s current effective date of December 1, 2016.

Therefore, employers should continue planning for the existing rule change. They should be aware of the change in threshold salary (to $47,476), and should plan to pay overtime wages to employees who fall under that threshold. They should work closely with human resources departments and legal counsel to effectively reclassify workers where necessary or revise wage levels to maintain current classifications.

 

Photo taken from the AHS (Antiquarian Horological Society) website.

 

Wellness Programs’ Notice Form Provided by the EEOC.

Joe crack-climbing 2010

New rules were published by the Equal Employment Opportunity Commission (EEOC) on May 17, 2016, under the Americans with Disabilities Act (ADA) for employers that have instituted “wellness programs.” Under the rules, employers must make sure participation in those programs is voluntary, and that the programs are reasonably designed to promote employee health.

The rule requires employers to provide to covered employees a notice describing what information will be collected as part of a wellness program, who will receive it, and how it will be used. Importantly, the rules require that employee medical information solicited for such programs is kept confidential.

The required notice must be provided on the first day of a covered health plan year that begins on or after Jan. 1, 2017. Once the notice requirement becomes effective, the EEOC’s rule does not require that employees get the notice at a particular time, but mandates that employees must receive the notice before providing any health information, and with enough time to decide whether to participate in the program. Waiting until after an employee has completed a wellness program’s health risk assessment (HRA) or medical examination to provide the notice is illegal.

On June 16, 2016, the Equal Employment Opportunity Commission (EEOC) posted a sample employee notice to assist employers with wellness programs to comply with those rules, by offering a specific notice form for use by such employers, and which includes all of the required provisions, along with non-retaliation language.

The Notice is written in a fill-in-the-blank format so any employer can use it by simply adding the specific information into the form provided, and providing it to employees. Employers should note that employees with disabilities may need to have the notice provided in an alternative format (large print version, electronically formatted for screen readers, etc).

The EEOC also has posted a question-and-answer document that describes the ADA rule’s notice requirement and how employers should use the sample notice.

For more information, including EEOC guidance regarding which plan to use in calculating wellness program incentives, refer to EEOC’s questions and answers on the ADA rule and the Genetic Information Nondiscrimination Act (GINA) rule.

 

 

Photo of Joe G getting healthy in the Adirondacks.

 

LexBlog