The beginning of the new year often brings fresh resolve, brightened attitudes, and a renewed sense of hope for the coming year.  Savvy employers harness those emotions in their workforce and engage their employees to reach new goals and achievements.  But behind the scenes, employers also need to be aware of new laws and regulations that must be implemented to keep things on track.

One of the best ways to capture critical updates is to conduct an annual review of your company handbook and employment practices.  Many states and localities have adopted regulations that require certain procedures and information be included in a company handbook.  Employers should review those updates for each location where employees work, paying special attention to the following:

  • Minimum Wage: Alaska, Arizona, California, Colorado, Florida, Hawaii, Maine, Michigan, Minnesota, Missouri, Montana, New Jersey, New York, Ohio, Rhode Island, South Dakota, Vermont, and Washington have all implemented an increase of the minimum wage for 2018.
  • Ban the Box: California and other states have also prohibited questions regarding an applicant’s criminal history from being included on an application for employment.  While employers may still check an applicant’s or employee’s criminal background, these laws specify when it may be done and what may be considered.
  • Equal Pay and Salary History: Joining Massachusetts, Delaware, California and other states and some cities (Philadelphia, for one) have recently enacted various statutes to prohibit questions regarding an applicant’s salary history on an employment application.  While confirmation of prior salary may be done in certain circumstances, basing an employee’s salary on prior compensation is generally prohibited by these laws.  Recruiting managers and their teams need to be trained to avoid such inquiries unless and until the point in the process where they may lawfully ask about prior salary.
  • Anti-Harassment Policies and Training: Ensure that your non-harassment policy is compliant with applicable federal, state and local laws by including at least two methods to report complaints and checking to be sure that your policy covers all forms of potential harassment and discrimination against protected classes.  Employers should also check their training records to be sure that trainings are being conducted with appropriate frequency and that all required persons have timely completed them.
  • Update Labor Law Postings: Many of the new laws enacted for 2018 require updated labor law postings.  California and New York both have new poster requirements, as do cities including New York City and San Francisco.  Employers should consult with counsel regarding these new requirements and be sure that their postings are up to date.  A government agency conducting an on-site inspection of a workplace will look for updated posters, and out-of-date posters can lead to fines under some laws, or at least signal that an employer does not focus on compliant employment practices.
  • New Mileage Rate: As of January 1, 2018, the IRS mileage reimbursement rate for the use of a car for business travel has been raised to 54.5 cents per mile.

With up-to-date policies and practices in place, employers can focus on building great teams and achieving business success in the new year.

For those who missed it while getting an early start to their Labor Day weekend, late last week a federal judge closed the door on regulations that would have significantly changed overtime exemptions after previously leaving that door ajar.

Most employers became very familiar — and concerned — with the proposed regulations over the past two years. The regulations would have increased the minimum salaries required for executive, administrative and professional employees to remain exempt from overtime pay under the Fair Labor Standards Act (FLSA). We wrote about the regulations and their effects in detail here. They were set to become effective December 1, 2016, and would have more than doubled those salary minimums from $455 per week, or $23,660 annually, to $913 a week, or $47,476 annually. The regulations would also have increased the salary threshold for the “highly compensated employee” exemption from $100,000 to $134,000. However, a lawsuit was filed in the Eastern District of Texas and the judge who was assigned the case granted an emergency, nation-wide injunction in November of last year which preliminarily (and temporarily) prohibited the Department of Labor from implementing the new rules.

On Thursday of last week, that same court entered a final judgment against implementing the higher salary thresholds. In doing so, the court found Congress intended that both the salary levels and the duties of executive, administrative and professional employees be considered in determining whether they are exempt from overtime requirements of the FLSA. The court concluded that the high minimum salaries proposed by the regulations placed too much emphasis on only one factor and effectively eliminated consideration of what duties are performed by those employees. The ruling can be found here.

For all practical purposes, the court’s ruling means that the door is now shut on those higher salary thresholds. The Department of Labor has even stated in filings that it no longer seeks to increase the salary minimums to the levels called for by the regulations it fought to implement last year. Rather, the DOL seeks now only to clarify with the courts whether it has any legal authority to increase those minimums at all. When that clarification comes, the DOL may well again implement increases, though not like the ones just struck down.

Employers should keep their eyes open for requests for information and comments from the DOL in anticipation of possible increases to minimum salary thresholds in the near future. Fortunately, those increases will likely be substantially smaller than those which would have been implemented late last year. In addition, many employers, having already prepared their workforces and compensation schemes to allow for the possibility of higher minimum salaries, will likely have less cause for concern with the smaller increases to come.

Earlier this month, a widely-recognized Fortune 50 company reached a $1.7 million agreement with the Equal Employment Opportunity Commission to resolve nearly a decade of litigation over the company’s nation-wide policy of discharging workers who do not return from medical leave after 12 months.

While this settlement still requires approval by a federal judge, the litigation itself (and the size and scope of the settlement, which also includes changes to the company’s policy, notice-posting, record-keeping, reporting, and other requirements) should be instructive for employers dealing with a common issue: what to do with employees who are granted a medical leave but cannot return to duty at the end of a set time period.

Continue Reading Could The EEOC Sue Over Your “Maximum Leave” Policy?

One of President Trump’s chief agenda items has been immigration enforcement.  While the President’s intent may be to keep out terrorists, remove undocumented foreign nationals, and eliminate fraudulent visa practices, these efforts can also have a tremendous impact on U.S. employers.  One of the ways this administration has ramped up its immigration enforcement efforts has been through an increase in I-9 Employment Eligibility Verification Form audits to ensure companies and organizations are engaging in fair, non-discriminatory hiring practices and only hiring individuals who have proper work authorization.

While the Form I-9 requirement originates from Section 274A of the Immigration and Nationality Act, all employers are required by law to complete and retain a Form I-9 for each employee, regardless of the employee’s immigration status in the U.S.  So, even a company or organization with only U.S. citizen employees is not necessarily safe from a government-conducted site visit.  For instance, the Immigrant and Employee Rights (IER) Section of the Department of Justice exists to investigate 1) citizenship status discrimination in hiring, firing, or recruitment or referral for a fee, 2) national origin discrimination in hiring, firing, or recruitment or referral for a fee, 3) unfair documentary practices during the employment eligibility verification, Form I-9 and E-Verify, and 4) allegations of unlawful  retaliation or intimidation.  Note that discrimination can be consider action both for or against U.S. workers or workers of a particular national origin, so if the IER receives a complaint about your company’s hiring or employment practices regardless of who it supposedly helps or harms, it can open a case against your company and investigate the allegation(s) made.  Even if your company has not engaged in prohibited discriminatory practices, your company could still face severe penalties and fines for documentation/paperwork violations that may be found in such an investigation.

In the event that your company is selected for an audit and you have never inspected your Forms I-9 with an experienced counsel, it is possible that there will be numerous I-9 violations per form. These violations can be either civil or criminal.  For example, in a recent I-9 case settlement, a national Chinese fast-food chain was fined $400,000 in civil penalties and was ordered to pay $200,000 in back wages for its unlawful practices.  One of its primary violations was carrying on the practice of re-verifying lawful permanent residents when their green cards expired.  In another case, a Florida staffing company was ordered to pay a fine of $120,000 for requiring non-U.S. citizens to present specific documents, among other violations.  Without proper training in completing the Form I-9, it is not difficult to make sixty-plus violations per form—the average number of I-9 violations a government officer finds on a single I-9 form!

When the government is assessing monetary fines, one of the mitigating factors considered is good faith on the part of the employer.  By proactively taking the first step to have an experienced counsel review your company’s Forms I-9 and making adjustments and corrections before the government pays your company a visit, you may be able to significantly reduce the amount of total fines or even avoid any penalties altogether.

Back in April 2015, we told you about a new player in the world of employee whistleblower enforcement:  the Securities and Exchange Commission (SEC).  The SEC grabbed everyone’s attention in 2015 by issuing its first administrative order finding that a public company violated SEC rules based solely on language in an employment agreement. Continue Reading Employment Agreements Under the Bright Light of the SEC’s Enforcement Efforts

Summary

A nationwide junction was issued Tuesday evening blocking implementation of the U.S. Department of Labor’s new rules increasing the minimum salary levels required for most white collar exemptions. These new rules had been scheduled to go into effect on December 1, and would have raised the minimum annual salary level for most exemptions from $23,660 to $47,476. The injunction halts enforcement of the rule until the Department of Labor receives a contrary order from the issuing court or an appellate court. But, since Texas is in the Fifth Circuit, which is a traditionally conservative court, the Department of Labor faces an uphill climb and it is unlikely that the new rules will go into effect in the foreseeable future. Continue Reading Nationwide Injunction Prohibits Implementation of the Department of Labor’s New Overtime Rules

As we all learned in school, the First Amendment to the U.S. Constitution prohibits Congress from making laws that “abridge the freedom of speech.”  Employer-created rules and decisions are not acts of Congress, of course, and are not subject to the First Amendment.  So, employers can terminate their at-will employees (all employees without an employment contract) for a good or even a bad reason, including having a bad attitude, right?  Wrong, according to the National Labor Relations Board, at least when that bad attitude expresses itself in voicing concerns about their job.

In another example of the National Labor Relations Board (“the Board”) reaching into a non-union employer’s workplace, it ordered dance production companies that run two Las Vegas shows (Vegas! The Show and The BeatleShow) to reinstate several dancers whose employment was terminated for performance and attitude problems that spanned several years of time.  David Saxe Prods., LLC, 364 NLRB No. 100 (Aug. 26, 2016).  In a letter to one of these employees, the owner of the production companies stated: Continue Reading Are Employees Entitled to Free Speech?

Yesterday, the National Labor Relations Board issued yet another decision that makes it easier to unionize workers deemed “joint employees” of a staffing agency and its business customer.  In its July 11, 2016 decision in a case called Miller & Anderson, Inc. and Tradesmen International and Sheet Metal Workers International Association, Local Union No. 19, AFL-CIO, the Board overturned a 2004 ruling known as Oakwood Care Center that required a business customer and a staffing agency to consent before a union election covering both jointly employed temporary workers and solely employed regular employees of the customer can occur.  Yesterday’s ruling reverses the consent requirement and takes us back to a prior ruling where consent was not required.  Now (as before 2004) a union election by regular and temporary workers together can occur simply where the Board finds that an employer’s workers and staffing agency employees working with it have an adequate “community of interest” to be part of one unit for unionization. Continue Reading NLRB Continues Focus on Unionization of Temp Workers, Joint Employers

The Labor-Management Reporting and Disclosure Act requires labor organizations, consultants, and employers to file reports and disclose expenditures on labor-management activities. For over fifty years, the DOL has interpreted the provisions of the Act to require reporting only for what are known as “direct” persuasive activities, such as when employers hire consultants or attorneys to personally and directly deliver counter-union messages to employees. Under the Act, mere “advice” pertaining to persuasive activities is not reportable. The advice exemption permitted law firms and employers to avoid the reporting obligations since the law firms were not actually engaged in direct persuasion, but only in advice. However, in March of this year, the DOL set forth a Final Rule significantly broadening what is reportable by employers and consultants in an effort to require reporting on activities that have been viewed as “advice.” Significantly, the Northern District of Texas today issued an order preliminary enjoining the Department of Labor from enforcing its Final Rule until a lawsuit challenging the Final Rule can be fully litigated. Unless that preliminary ruling or other pending challenges to the Final Rule are successful and upheld on appeal, the Final Rule will apply to agreements entered into on or after July 1, 2016. Two important updates concerning the Final Rule are covered in this alert, one of which necessitates an employer taking action before July 1, 2016. Continue Reading Persuader Rule Update: Agreements before July 1 Not Subject to Disclosure; Ruling on Lawfulness of Persuader Rule Issued