Employment Law Alert

Employment Law Alert

News and Updates on Employment Law

Department of Labor Final Overtime Rule

Posted in Wage & Hour

The United States Department of Labor (“the DOL”) has finally issued the long-awaited rules dramatically increasing the minimum salary level for the overtime-exempt classifications under the Fair Labor Standards Act (“the FLSA”). The new rules also incorporate mechanisms to adjust this salary level in the future. The effect of future adjustments will require an employer to pay wage increases unrelated to the employer’s financial condition or employee performance. The new rules will have the greatest impact on those employees currently classified as exempt but who will not meet the new minimum salary threshold. These rules go into effect December 1, 2016, a date later than DOL originally communicated, which gives employers an opportunity to conduct a self-analysis to prepare for these changes.

In 2014, President Obama directed the DOL to update and modernize regulations under the Fair Labor Standards Act governing overtime exemptions for “white collar” employees (i.e., executive, administrative and professional employees). On July 6, 2015, the DOL published a notice of proposed rule making to which it received more than 270,000 comments representing differing viewpoints. On May 18, 2016, the DOL issued the final rule updating the regulations. Under the final rule, the annual salary level for these exemptions will more than double from $23,660 ($455 per week) to $47,476 ($913 per week) beginning on December 1, 2016. (The increase will equal the salary level of the 40th percentile of weekly earnings for full-time salaried workers in the South, which is currently the lowest-wage Census region). These salary levels were last updated in 2004, and the DOL has stated that this new rule will “automatically extend” overtime to an estimated 4.2 million employees who are currently classified as exempt. The increase is less than that originally proposed by the DOL ($50,440 per year or $970 per week).

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Legal Issues to Consider as Intern Season Approaches

Posted in Wage & Hour

With summer around the corner, it is a good time for a refresher on legal implications when hiring interns. Specifically, when must interns be paid and what other legal protections do interns have?

Wage and Hour Issues

As has been widely publicized in recent years, a number of companies who utilize unpaid interns have found themselves the object of lawsuits. It is thus important for companies to make an informed decision on the compensation issue before the hiring process begins.

Federal Law

According to a Fact Sheet issued by the U.S. Department of Labor (DOL) under the Fair Labor Standards Act (FLSA), interns must be paid unless each of the following six conditions are present: (1) the internship benefits the intern; (2) the employer derives no immediate advantage from the intern’s activities; (3) the employer provides the intern training similar to that given in an educational environment; (4) the intern’s work does not displace the work of paid employees; (5) the intern is not entitled to a job at the conclusion of the internship; and (6) the employer and the intern understand that the internship is unpaid.

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New York State Enacts a New Paid Family Leave Law

Posted in Family Leave

New York State recently passed the Paid Family Leave Benefits Law, which is among the strongest and most comprehensive leave statutes in the country. The new law amends the State’s current disability law, and imposes obligations on employers beginning in 2018. Unlike the federal Family and Medical Leave Act (“FMLA”), the NY law will provide both protected leave and paid benefits during the leave. The new law covers employers in the for-profit sector, with at least one employee, along with certain other employers in the public and not-for-profit sectors.

Beginning on January 1, 2018, employers will be required to provide employees, who have worked for the employer for at least 26 weeks, initially with up to eight weeks of paid family leave, for the following purposes: (a) provide care (physical or psychological) to a family member (i.e., employee’s child, spouse, domestic partner, parent (including step-parent or legal guardian), parent-in-law, sibling, grandchild, or grandparent; (b) bond with a child during the first twelve months after birth or after the placement of the child for adoption or foster care with the employee; (c) to handle certain qualified exigencies arising from an employee’s spouse, domestic partner, child, or parent being on or called to active duty in the U.S. armed forces. In comparison to the eligibility requirements of the FMLA, which protects individuals who have completed at least one year of employment and 1,250 hours of work prior to taking leave, employees under the NY law would become eligible in approximately half the time.

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Supreme Court Accepts Use of Representative Sample To Prove Classwide Liability

Posted in Labor

In Tyson Foods, Inc. v. Bouaphakeo, the Supreme Court of the United States definitively answered the question of whether statistical “representative evidence” may be used in class actions to establish that “questions of law or fact common to class members predominate over any questions affecting only individual members” pursuant to Rule 23(b)(3). According to the Court’s much-anticipated opinion, the answer is yes: “Its permissibility turns not on the form a proceeding takes – be it a class or individual action – but on the degree to which the evidence is reliable in proving or disproving the elements of the relevant cause of action.”

In Tyson, employees had filed a class action suit against their employer, Tyson Foods, Inc., alleging violations of the Fair Labor Standards Act of 1938 based on the failure to pay required overtime compensation for the donning and doffing of protective gear necessary for their hazardous work. Because Tyson Foods did not maintain records of donning and doffing time, the employees relied on representative evidence, which included testimony, video recordings, and an expert study, to show the average amount of donning and doffing time for each employee. The jury awarded the class approximately $2.9 million for unpaid wages, and the judgment and award was affirmed by the Court of Appeals for the Eighth Circuit.

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EEOC to Release Respondent Position Statement to Charging Party Upon Request

Posted in Policies/Handbooks

The Equal Employment Opportunity Commission (“EEOC”) has issued new, nationwide procedures allowing a Charging Party or his/her representative to request copies of Respondent employer’s position statement and non-confidential attachments during the investigation of his/her charge of discrimination. The new procedures apply to all position statements submitted after January 1, 2016. Employers must be cognizant of this new rule and strategically craft positions statements with an eye towards disclosure. Specifically, employers need to carefully separate confidential information into separately labeled attachments to avoid inadvertent disclosure to the Charging Party.

Procedure
The EEOC has prepared a “Questions and Answers for Respondents on EEOC’s New Position Statement Procedures” which explains the new procedures. To summarize, in order to comply with the new rules, Respondents must submit a position statement within thirty (30) days that explains its “version of the facts” and identifies the “specific documents and evidence supporting its position.” If the Respondent refers to confidential information in the position statement, it should note the exhibit as “confidential.” For instance, “Confidential Exhibit A.” It must then create separate labeled attachments titled, as applicable, either: “Sensitive Medical Information,” “Confidential Commercial Information,” “Confidential Financial Information,” or “Trade Secret Information.”

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Department of Labor’s New “Persuader” Rule Requires Employers and Labor Relations Consultants to Publicly Disclose Arrangements

Posted in Labor

On March 24, the United States Department of Labor (“DOL”) published a final rule imposing new reporting requirements under the Labor-Management Reporting and Disclosure Act (“LMRDA”) that could impede employers’ communications with their workers about unions. The rule will take effect on April 25, and will cover arrangements, agreements, and payments between employers and their labor relations consultants – including their attorneys – beginning July 1, 2016.

The law already requires employers and labor relations consultants to file reports with the government detailing expenditures, activities, agreements, and arrangements undertaken to persuade employees regarding their rights to join or refrain from joining unions, but the reporting requirement is waived if the consultants do nothing more than “giv[e] or agree[] to give advice to [the] employer.” Accordingly, businesses and their consultants are not required to publicly disclose their arrangements unless a consultant makes direct contact with company employees under the existing rule.

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Republicans Propose Bill Invalidating DOL’s Proposed Final Rule Regarding Overtime Exemptions

Posted in Wage & Hour

Senate and House Republicans pushed back on the DOL’s proposed final rule on the “white-collar” overtime exemptions by proposing a new bill, the Protecting Workplace Advancement and Opportunity Act, seeking to invalidate the DOL rule.

Under current regulations, employees must satisfy certain tests regarding the job duties they perform and be paid at least $23,660 per year, on a salary basis to be considered exempt under the FLSA’s “white-collar exemptions.” The DOL’s proposed final rule, however, seeks to more than double the minimum salary level from $23,660 to $50,440 per year and provides for automatic annual increases to the minimum salary threshold. Although the proposed final DOL rule does not include any specific changes to the “job duties” component of the exemptions, such changes may be included in the final rule.

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Plainfield Becomes 12th New Jersey Municipality to Approve Paid Sick Leave

Posted in Policies/Handbooks

On March 14, 2016, Plainfield became the 12th New Jersey municipality to approve paid sick leave. The Plainfield ordinance, which will take effect on July 14, 2016, requires that, with certain exceptions, employees working in Plainfield for at least 80 hours per year accrue at least one hour of paid sick time for every 30 hours worked. Employers with ten or more paid employees must provide employees with up to 40 hours of paid sick time per calendar year, and employers with less than ten paid employees must provide sick time up to 24 hours, except for employees who are child care workers, home health care workers and food service workers who are entitled to up to 40 hours of paid sick time. Employees begin to accrue sick time on the first day of their employment and are entitled to begin using their accrued time on the 100th calendar day of their employment. Additionally, employees are permitted to carry over up to 40 hours of paid sick leave to the next calendar year, but employers are not required to carry over more than 40 hours. Employees may use paid sick time for the following reasons:

  • The employee’s own mental or physical illness, injury, or health condition or the employee’s need for medical diagnosis, care, or treatment of his/her own health condition; the employee’s need for preventative care;
  • The employee’s need to care for a family member with a mental or physical illness, injury, or health condition; care of a family member who needs medical diagnosis, care, or treatment of a health condition; or care of a family member who needs preventive medical care;
  • The employee’s place of business is closed due to a public health emergency; or an employee’s child’s school or place of care has been closed due to a public health emergency; or to care for a family member who may have been exposed to a communicable disease.

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Ban the Box Law Amendments Are Now Effective in Philadelphia

Posted in Policies/Handbooks

On March 14, 2016, the amendments to Philadelphia’s “ban the box” law went into effect. The amendments to the city’s Fair Criminal Record Screenings Standards Ordinance (the “Ordinance”), signed into law by Philadelphia’s then Mayor, Michael Nutter, on December 15, 2015, create additional restrictions under the Ordinance on how and when an employer may consider a prospective employee’s criminal background during the application process (beginning when an applicant makes an employment inquiry and ending when the employer has extended a conditional offer of employment).

The amendments make several notable changes to the Ordinance, including those changes listed below:

  • Application: The Ordinance now applies to private employers which employ “any persons within the City of Philadelphia.”
  • No Criminal Inquiry Until Conditional Offer: Employers are prohibited from inquiring or requiring applicants to disclose or reveal their conviction histories during the application process. However, employers may discuss any criminal convictions voluntarily disclosed by applicants.

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Wellness Programs for a Healthy Workplace

Posted in Employee Benefits

At the Fifth Annual Gibbons Employment & Labor Law Conference for clients of the firm, we presented a program entitled “Wellness Programs for a Healthy Workplace.” Cathy Kenworthy, President and CEO of Interactive Health, discussed the business case for implementing wellness programs in our workplaces, while I addressed the numerous laws impacting such programs. Below are some top takeaways from our presentation:

  • Implementing a wellness program can result in soft dollar and hard dollar benefits, as well as improve workplace culture. Lowering the cost of health care is just one of the tangible benefits of a wellness program. Employers also see improvements in productivity and work quality and an increased ability to recruit and retain employees. Interactive Health’s data illustrates health improvements in all risk levels by year two of a wellness program.
  • The business principles associated with what makes for an effective wellness program are the very same principles that are reinforced with emerging case law, rules and the regulatory environment. Interactive Health’s data showed that 95% of the programs implemented among their client base both achieve significant impact and are “green” with regard to legal risk, i.e., they do not cross into any of the issues recently pursued in courts.

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