Trump Appoints Former Management Attorneys at EEOC and NLRB
On January 25, 2017, it was announced that President Trump has appointed Victoria Lipnic as Acting Chair of the Equal Employment Opportunity Commission (EEOC). Ms. Lipnic first became a commissioner at the EEOC in March 2010, when she received a recess appointment from President Obama. In 2015, she was nominated and confirmed for a second term, which is set to expire in July 2020. Prior to joining the EEOC, Ms. Lipnic was an Assistant Secretary of Labor for the U.S. Department of Labor from 2002 until 2009, at which time she joined the labor and employment department at a large national firm that primarily represents employers.
President Trump also appointed another former management attorney, Philip A. Miscimarra, as Acting Chair of the National Labor Relations Board (NLRB). Prior to becoming a NLRB Board Member in 2013, Mr. Miscimarra worked at several private firms that focus their labor and employment practices on the representation of management.
These two appointments are expected to bring more balance to the approach of their respective agencies with regard to efforts to enforce various labor and employment laws.
Read MoreAre You Prepared for the Revised EEO-1 Reporting Requirements?
Have you thought about what changes you may need to make to your payroll system and/or human resources information system (HRIS) in order to comply with the recently revised EEO-1 reporting requirements? If you have 100 or more employees (or if your company is affiliated with other entities in which there are a total of 100 or more employees), you may be subject to these new reporting obligations.
Private employers who are subject to Title VII of the Civil Rights Act of 1964 and have 100 or more employees have long been required to file annual EEO-1 Reports, reporting on the race, ethnicity and gender of the employees in their workforce, grouped together by ten (10) job categories established by the EEOC (the “EEO job categories”).
Starting with the 2017 EEO-1 Report, those employers now will need to include information regarding annual employee pay and work hours, aggregated by race, ethnicity, gender, and EEO job category. Fortunately, the filing deadline for the EEO-1 Report has been changed from September 30th of each year to March 31st of the succeeding year, so the 2017 EEO-1 Report will not be due until March 31, 2018. However, if these revised requirements apply to your company, you should start now to make sure your payroll and/or HRIS systems are set up to capture all the information that must be included in the revised EEO-1 Report.
The previous EEO-1 Report required employers to select a pay period between July 1 and September 30 of each year and report on the number of males and females of each race/ethnicity the employer had in each of the 10 EEO job categories. The new EEO-1 Report will require employers to break this information down further into twelve (12) pay bands, starting with the lowest pay band of $19,239 and under, and going to the highest band of $208,800 and over. The number of employees will be based upon a pay period between October 1 and December 31, but the salary information must include pay information for the full calendar year, using information reported in Box 1 of the employee’s W-2.
Employers also will be required to provide aggregated annual work hours for employees broken out by race, ethnicity, gender, EEO job category, and pay band, using total hours worked during the calendar year. “Hours worked” is defined consistent with the Fair Labor Standards Act (FLSA). For employees who are non-exempt under the FLSA, employers are already required to maintain records regarding each employee’s work hours under the FLSA. For exempt employees, an employer may report actual hours worked if the employer accurately maintains such information; alternatively, the employer may report a “proxy” of 40 hours per week for full-time exempt employees and 20 hours per week for part-time exempt employees multiplied by the number of weeks the individuals were employed during the year.
Read MoreNew DOL Overtime Rule Blocked by Federal Court in Texas
A federal court in Texas has put on hold (for now) nationwide implementation of the new rule by the U.S. Department of Labor (DOL) raising the salary requirement for certain types of employees to be exempt from federal overtime requirements.
The New DOL Overtime Rule
Earlier this year, the DOL issued a new rule that changed the requirements for overtime exemptions under the federal Fair Labor Standards Act (FLSA) for executive, administrative, and professional employees by raising the required salary level from about $23,660 per year to $47,476 per year. Under the new rule, the salary threshold would automatically reset (presumably increase) every three years. There has been a large outcry among employers and business groups since the new rule was announced. It was scheduled to take effect on December 1, 2016.
The injunction means that the DOL’s new rule will not go into effect as of December 1 unless the court takes additional action or an appeals court issues a decision before then, there likely will be an appeal, and it is unclear whether the new rule ultimately will be invalidated in whole or in part.
The Court’s Ruling
On November 22, 2016, US. District Judge Amos Mazzant issued an order enjoining nationwide implementation of the DOL’s new rule “pending further order of this Court.” This means that thousands of employers will not be required to meet the heightened salary threshold for FLSA overtime
Exemptions for executive, administrative, and professional employees.
The Court’s Memorandum Opinion and Order concludes that the DOL did not have authority to set a heightened salary threshold and effectively supplant the “duties test” for these exemptions. The Court reasoned that Congress intended these exemptions to depend on the employees’ duties, not on their salary levels.
The Court also noted, but did not address, an argument that the new rule’s mechanism for automatically resetting the required salary level every three years is invalid because it would not include a separate public notice and comment process required for new administrative regulations.
What This Ruling Means For Employers
The Court’s injunction means that employers are not required to comply with the DOL’s new rule pending further ruling from the Court, which means that salary increases are not necessary at this time. Thus, employers may decide to postpone implementing or announcing any salary increases that are being planned solely to comply with the new rule. (If employers already have increased salaries in contemplation of the new rule, they should consider employee relations issues changes.)
Employers also may decide to postpone reclassifying salaried employees who are currently deemed exempt to non-exempt, to the extent such changes are being planned solely because of the DOL’s new rule. However, to the extent employers have salaried employees who do not meet the duties test for an exemption (regardless of the new salary level requirement), employers should not necessarily delay reclassifying them as non-exempt (hourly or salaried) to comply with existing law, given that the new rule only relates to the salary level and not the duties requirement.
We will be glad to discuss your Company’s specific situation and how the recent ruling may affect its plans. Please do not hesitate to contact us.
Read MoreOnly 30 Days Until OSHA’s New Recordkeeping Rules Go Into Effect
Employers will face a number of new obligations under OSHA’s revised recordkeeping rules as of August 10, 2016. These include (1) a new anti-retaliation provision; (2) new employee notification requirements; and (3) a new requirement to implement and maintain a “reasonable” injury and illness reporting procedure. For employers required to record injuries and illnesses under OSHA’s Recordkeeping Standard, the new rules may require some immediate action.
New Anti-Retaliation Provision.
The new regulation prohibits retaliation against an employee for reporting a work-related injury or illness. Although OSHA already prohibits retaliation against employees for participating in agency proceedings, currently the employee must initiate a complaint within 30 days of the alleged retaliatory action. Under the new rules, OSHA can issue a Citation, with penalties and abatement requirements, on its own initiative. Thus, rather than simply defending against an employee complaint, the employer will be contesting a Citation issued by a government agency.
“Reasonable Procedures” to Report Work-Related Injuries and Illnesses.
The new rules also require employers to implement “reasonable procedures” for the reporting of work-related injuries and illnesses. There is no specific definition of “reasonable,” but the procedures must not deter or discourage employees from reporting injuries or illnesses. For example, it must not impose unreasonable deadlines for reporting.
New Notification Requirements.
The new rules also require employers to provide specific notice to their employees of each of the following: (1) the procedure for reporting an injury or illness; (2) the employee’s right to report an injury or illness; and (3) the prohibition against retaliation for such reports.
Electronic Submission of Injury and Illness Records.
Starting on January 1, 2017, certain employers that are not otherwise exempt from the recordkeeping rules will be required to submit their annual OSHA injury and illness records (e.g., OSHA 300, 300A, 301) electronically. The electronic submission requirement will apply to: (1) large employers (establishments with 250 or more employees); (2) “high risk” employers (establishments with 20-249 employees in certain “high-risk” industries listed in Appendix A to the rule (e.g., manufacturing, hospitals, nursing care facilities, construction, etc.)); and (3) any employer that receives “notification” from OSHA.
Previously, OSHA obtained injury and illness records only if it asked for them during inspections or as part of its annual sampling of certain employers. Under the new program, we can expect to see more inspections focused on those companies that report high incident rates.
OSHA Will Provide Public Access to Injury and Illness Records.
Perhaps the most significant change to the regulation is that OSHA plans to make Injury and Illness Reports publicly available. Employees’ personal information will be redacted to protect their privacy, but all other data will be viewable—and searchable—on OSHA’s website. This new requirement is consistent with OSHA’s expressly stated policy of “regulation by shaming” – OSHA believes that the public disclosure of unfavorable injury and illness data to “the public, including investors and job seekers” will incentivize employers to improve worker safety.
What to Do Before August 10, 2016?
First, make sure your company procedure for reporting workplace injuries and illnesses is reasonable. If you have no policy, it is time to create one.
Second, complete the employee notification requirement (i.e., inform employees about your reporting procedure and their right to report without fear of retaliation).
Third, train your managers on the new anti-retaliation protections, and make sure these protections are explained in employee handbooks and similar materials.
Finally, get started on a plan for the electronic reporting of injury and illness records in 2017 – which is only six months away.
A copy of the Final Rule implementing these changes is available here.
If you have questions about any of the above, please contact us.
Read MoreDOL Issues New Final Rule on FLSA Exemptions Vastly Increasing the Number of Employees Eligible for Overtime Pay
Yesterday, the U.S. Department of Labor Wage and Hour Division announced its Final Rule updating the salary requirements for exemptions from overtime pay requirements under the Fair Labor Standards Act (FLSA).
The Final Rule more than doubles the salary threshold needed to satisfy the most common exemptions, raising it from $23,660 to $47,476 annually ($455 to $913 weekly), and increases the total annual compensation threshold for the “highly-compensated employee” exemption from $100,000 to $134,004. (Note that employees still must perform job duties that meet the substantive requirements of these exemptions.)
There will be additional, automatic increases in the compensation levels every three years, with the next increase occurring on January 1, 2020. The Final Rule also amends the salary basis test to allow employers to use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.
The Final Rule goes into effect December 1, 2016.
The new requirements do not have to result in drastically higher expenses or exposure. What can employers do to minimize the impact? NOW is the time to get your house in order. Start by considering the many legal and business implications of the new Final Rule:
- Identify both sets of employees affected by this change. But also understand that the new Final Rule does not apply to all exemptions.
- How will you evaluate you evaluate the financial impact of the new Final Rule on your business? What are the unique challenges to this analysis?
- There are at least six options available to you for each impacted employee to minimize the financial impact of the new Final Rule. Are you considering all of the options? How do you know which option is best for you?
- Also consider the impact on your company’s administrative functions. Are you thinking about your timekeeping and attendance systems? The way you train your managers and employees? The policies in your handbook? Your benefits packages?
- The new regulations will bring new scrutiny to your employee classifications across the board, not just to the specific employees impacted by the new regulations. Are you ready for that? If there is a silver lining to the new Final Rule, it’s the hidden opportunity to review your entire employee classification system and make appropriate changes without drawing undue attention.
Again, the new salary requirements do not have to mean drastically higher expenses for your business. And, perhaps this presents an opportunity for an overdue examination of your exempt classifications. Please do not hesitate to contact us for guidance to remain in compliance and keep costs in check.
Read MoreAre You Ready for the New Overtime Exemption Rules?
The new salary requirements for overtime exemptions are expected to take effect in 2016. As reported in a previous legal update, the proposed final rule would more than double the salary level required for exemptions applicable to executive, administrative, or professional employees, from $455 per week ($23,660 per year) to $970 per week ($50,440 per year).
Employers are urged to review their payrolls with qualified employment counsel now, and to consider strategies to remain in compliance and keep costs in check. The new salary requirements do not have to result in drastically higher expenses or exposure, but could if appropriate steps are not taken. Please do not hesitate to contact one of our attorneys for guidance.
Read MoreNew Federal Trade Secrets Law Features “Civil Seizure” Remedy
The “Defend Trade Secrets Act” has passed through Congress and is awaiting signature by President Obama, which is expected any day now. Up to now, trade secrets have been the exclusive province of state law. Although the new law will not displace state laws, it will provide an overlapping set of procedures to protect trade secrets and allow for enforcement of misappropriation claims in federal court.
One key feature of the statute is a “civil seizure” remedy, which under some circumstances would allow a trade secret’s owner to obtain a court order to seize a defendant’s property (such as computers or files) without providing advance notice to the defendant. This remedy would be only temporary and would be appropriate only to the extent the owner can show it is necessary to prevent “propagation or dissemination” of the trade secret leading to irreparable harm. Such an order would require a hearing within seven days after the order (unless otherwise agreed between the parties). The defendant can challenge an improper seizure and potentially recover attorneys’ fees, but the civil seizure remedy still constitutes a powerful tool for protecting trade secrets.
The new law cannot be used simply to prevent a person from entering into an employment relationship, but it gives courts substantial discretion to enjoin acts that could result in use or disclosure of trade secrets. Further, the law provides for immunity and whistleblower protection for an employee who reports a suspected violation of the law to a government agency or officer or an attorney, and employers are required to provide notice of such immunity in contracts governing the use of trade secrets or confidential information.
We would be glad to discuss how this new federal law may affect your business and how you can best comply and make use of its protections.
Read MoreUntimely Discrimination Claims Could Be Revived
A recent decision by the Eleventh Circuit Court of Appeals (covering Georgia, Florida, and Alabama) may have opened the door for countless otherwise-expired claims of age discrimination with no evidence of intentional basis.
In Villareal v. R.J. Reynolds Tobacco Co., the Court ruled that an unsuccessful job applicant could pursue a claim of age discrimination under the federal Age Discrimination in Employment Act based on a “disparate impact” theory. Under this approach, the claimant does not have to prove (or even allege) intentional discrimination, but instead that a neutral policy or practice resulted in adverse actions (e.g., non-hire) that are statistically disproportionate against older individuals.
Perhaps the most disturbing thing about the decision was the Court’s ruling that the running of the 180-day statute of limitations did not necessarily preclude the filing of a claim. The Court held the statute could be “equitably tolled” as long as the claimant did not know and could not reasonably have known about any discriminatory practices or statistical disparities.
The Court’s rulings on both the “disparate impact” and the “equitable tolling” claims could have substantial repercussions for employers. This case highlights the importance of ensuring that employment-related policies do not have a discriminatory impact. The best way to guard against such a policy is to have a qualified employment attorney conduct a privileged employment practices audit. For more, please do not hesitate to call any of our attorneys.
Read MoreDOL Continues Expansion of “Joint Employer” Coverage
The US Labor Department’s Wage and Hour Division (WHD) recently issued an Administrative Interpretation that greatly expands the possibility that two or more businesses are “joint employers” of one employee. Joint employment status means two or more employers may be held jointly and severally responsible for fulfilling minimum wage, overtime, and other obligations under the Fair Labor Standards Act.
The WHD’s guidance discusses two types of relationships: (i) “horizontal,” in which the employee is potentially employed by two related companies, and (ii) “vertical,” in which the employee is directly employed by a staffing company or contractor but is dependent upon (and thus employed by) a second business. If joint employment exists under either analysis, both employers could be liable for overtime and other wage and hour violations.
When viewed alongside last summer’s DOL guidance on classification of independent contractor/employees, the imminent increase on salary level required for white collar exemptions, and the National Labor Relations Board’s recent decisions on joint employment, it is clear that today’s labor and business models face a rapidly changing legal landscape.
While these Administrative Interpretations are not binding law, they are persuasive to courts and are used by DOL agents in compliance investigations. The WHD has made clear that it intends to influence how companies do business. This opinion specifically highlights a few industries, but all businesses should be mindful of these issues when considering alternative staffing models and labor related contracts. Having a qualified employment law attorney review the arrangement can go a long way to addressing joint employer risks.
For more information, contact a Hall, Arbery, Gilligan, Roberts & Shanlever attorney in Atlanta or Savannah.
Read MoreNLRB Widens the Goalposts for Labor Union Organizers
A recent decision by the National Labor Relations Board could have a major impact on tens of thousands of employees who never thought that they would have to worry about labor unions. In Browning Ferris Industries of California, Inc. et al., NLRB Case No. 32-RC-109684 (August 27, 2015), a majority of the five member Board held that a company was required to recognize and bargain with a union that was elected not by its own employees but instead by the employees of a services contractor. In so deciding (over vehement dissent by two members), the Board overturned longstanding precedent and applied a new standard for determining “joint employer” status.
For decades, joint employer status and obligations applied only to entities that exercised “direct and immediate” control over workers, which generally excluded employees of outside contractors or franchisees. Under the Board’s new interpretation, an entity could be deemed a joint employer of a contractor’s employees — and be required to recognize and bargain with a union — if it has only indirect control over working conditions or has the right to control such conditions, even if it does not actually exercise that right.
By expanding joint employer status to include entities who merely have the right to control some aspects of the workplace indirectly, it is conceivable that collective bargaining obligations could apply to entities that have no actual employees at a particular location, such as general contractors, franchisors, or even property owners who engage outside contractors for cleaning or landscaping services. The Board’s new interpretation potentially could even restrict such an entity’s rights to terminate a service contract if such a termination could be deemed to discriminate against workers for whom the entity is deemed to be a joint employer.
To discuss how to prepare for the possibility that your business could be targeted for union organizing activity, please contact one of our attorneys.
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