Legal Briefs for HR

Welcome to Legal Briefs for HR, an update on employment issues sent to over 4800 HR professionals, in-house counsel and business ownersall over the U.S. to help them stay in the know about employment issues.  Anyone is welcome to join the email group . . . just let me know you’d like to be added to the list and you’re in!  Back issues are posted on my firm’s NEWLY UPDATED WEBSITE at www.munckcarter.com under Media Center/Legal Briefs.   Welcome to new subscribers who attended my session at the Physician Insurers Association of America annual conference in Austin, TX on Sept. 16!

Here’s an even dozen of tricks and treats:

1. Add It Up – When recording the time worked by nonexempt workers, the FLSA regulations allow employers to disregard certain “insubstantial or insignificant periods of time.”  See 29 CFR sec.  785.47.  One employer learned the hard way that this exception is not nearly as broad as it seems.  In order to use the de minimis exception, first consider [1] the practical difficulty of recording the time; [2] the aggregate amount of compensable time foregone; and [3] the regularity with which the exception is applied.  In the case of Las Vegas casino dealers who attended mandatory  10-15 minute pre-shift meetings, the court found such time was not de minimis and was therefore compensable under the FLSA.  The court observed it would’ve been easy enough to record that time on employee’s time cards, the lost time amounted to more than a weeks’ pay per year and the meetings occurred regularly, prior to every shift.  Daprizio v. Harrah’s Las Vegas Inc. (D. Nev. 8-10).
2. Just Dreadful? -  An applicant rejected for a security guard position because his dreadlocks violated the employer’s dress and grooming policy did not prevail on his claim of religious discrimination under Title VII.  The plaintiff argued that his adopted name (Xodus), his dreadlocks and use of the phrase “It’s against my belief!” during the interview were sufficient to put the interviewing manager on notice of his Rastafarian religion and the tenets of that religion, but the Court did not agree.  Xodus v. Wackenhut Corp. (7^th Cir. 8-10).  To avoid similar hairy situations with your managers and supervisors, be sure they’ve been briefed on  practical application of Title VII of the Civil Rights Act of 1964 and other basics of employment law.  If you don’t have a training program in place, give me a call.
3. ICE, ICE Baby – With the federal fiscal year at an end (Sept. 30), stats show it was not your imagination if you thought that ICE had upped the number of employer inspections this year.  There were more than 2000 workplace inspections with two weeks to go in FY2010, compared to prior years’ numbers of 1444 inspections (FY2009), 503 (FY2008) and 254 (FY2007).  Arrests of 170  employers in FY2009 is a new record and final penalties came in at $5.3 million compared to just over $1 million in FY2009 and around $675,000 in FY2008.
4. Laundry Liability – A couple both work at a petrochemical plant. The wife develops mesothelioma, a cancer linked to asbestos exposure, after leaving her job.  The couple sues the employer for negligence and argues that the employer should be liable because the wife has been washing her husband’s asbestos-laden work clothes for 30 years.  The employer argues that her disease may have been occupational and incurred while on the job, in which case workers’ compensation is a bar to any other claims.  In affirming a $7.5 million verdict for the couple, the appeals court found that the employer had a “dual persona” in its dealings with the wife.  While it was admittedly the wife’s employer during part of the period of exposure to asbestos, it had a separate duty to protect her as a bystander from the foreseeable effects of laundering her husband’s tainted work clothes.  Anderson v. A.J. Freidman Supply (N.J. Super. Ct. App. 8-10).
5. Stress Test – An IT  worker was unsuccessful in his bid to claim workers’ compensation benefits because the stress of a computer crashing twice aggravated a pre-existing depressive disorder.   The judge opined that a compensable injury requires “a level of stress above one’s subjective reaction to normal working conditions” and the employee’s claim that he was required to be on call 24/7 was disingenuous, since he had seniority and had opted to work the extra hours.  DeSalvo v. Workers’ Compensation Appeal Board (PA Commonwealth Ct. 8-10).
6. Ax This Tax– The Telecommuter Tax Fairness Act (H.R. 2600), if passed, will remove the potential for double taxation on income earned by a telecommuter, in both the state of the worker’s residence and the state where the employer is located.  A second benefit would be to nix the mini-trend of states levying a business income tax on an employer due to the presence of even a single telecommuter in the state.  Supporters of the bill cite benefits of telework as [1] providing new jobs; [2] lessening dependence on foreign oil; [3] relieving traffic congestion; [4] slowing the rate of crumbling infrastructure (e.g., roads, bridges); [5] alleviating strain on public transportation; [6] reducing carbon emissions; [7] facilitating employees’ work/life balance; and [8] allowing work to continue when commuting to work is not possible (e.g., extreme weather) or not a good idea (e.g., pandemic).  If you are interested in following the progress of this bill, check it out http://thomas.loc.gov.
7. Fun with Form I-9– Puerto Rico began issuing a new version of birth certificates on July 1, 2010.  The upshot is that effective October 31, 2010 the “old” version (i.e., a PR birth certificate dated prior to July 1, 2010) cannot be accepted as a Form I-9 List C document, to prove the applicant’s authorization to work in the U.S.  I-9s already on file using the “old” birth certificate do not need to be updated.
8. Another Form – A revised Form 941-X  and instructions for use of the form are now available at www.irs.gov to be used by employers who are seeking a HIRE Act tax exemption on wages already paid to a qualified employee during a prior quarter or to make adjustments to the payroll tax reported on those prior wages.  There is a separate form and set of instructions for use by employers in Puerto Rico.
9. Risky Business – The FDIC issued guidance (FIL-56-2010) for financial institutions, warning of the risk posed by sensitive personal information which is copied, transmitted or stored on copiers, fax machines and printers that have a hard drive or flash memory.  Often the equipment is leased and later returned to a provider to be re-leased or sold, with the sensitive data still on the drive.  The guidance suggests mitigation of the risk by having written policies and procedures to identify the devices that store digital data and ensure that such data is erased, encrypted or destroyed before being returned to a leasing company, sold to a third party or otherwise disposed of (including charitable donations).  While the guidance is directed at financial institutions, sounds like good advice for all of us, no? 
10. R U Nutz?- Texting while driving is now banned in 30 states and DC.  And new rules announced during the recent U.S. Dep’t of Transportation’s National Distracted Driving Summit will prohibit bus and truck drivers from texting while driving and also ban train operators from using cell phones and other electronic communications devices while on the job.  For a map showing the scope of state laws, check out www.iihs.org/laws/maptextingbans.aspx.
11. Stated Differently– Here are some morsels for you multi-state employers:
    1. California – Employees’ earned vacation and personal leave is treated as a type of vested wages which cannot be subject to the kind of “use it or lose it” approach which is lawful in other states.  One employer learned this lesson from a judge who found it liable for $8.3 million in damages.  With the statute of limitations tolled, those employed from 1991 to date can collect.  Molina v. Lexmark Int’l Inc. (Cal. Super. Ct. 8-10).
    2. Connecticut – Effective May 5, 2010, employees who lose their group health insurance for certain reasons may continue their coverage up to 30 months after employment ends (vs. the 18-month period offered under federal COBRA).
    3. Kentucky – Effective July 15, employers in KY can offer discounted health insurance coverage to non-smokers, without running afoul of the KY law that prohibits employment-related discrimination against smokers, but be sure to comply with federal HIPAA non-discrimination rules.  For a good refresher on those rules and related issues, check out a new publication offered by the Congressional Research Service called “Wellness Programs: Selected Legal Issues.”  You can find a copy of the 19-page study at www.nahu.org/legislative/resources/CRS%20-%20Wellness%20Programs%20-%20Selected%20Legal%20Issues.pdf.
12. For the Birds – If you like being tweeted and want breaking news on employment law changes, follow me on Twitter.  I’m at @amross.

Until next time,

Audrey E. Mross
Labor & Employment Attorney
Munck Carter LLP
600 Banner Place
12770 Coit Road
Dallas, TX  75251

972.628.3661 (direct)
972.628.3616 (fax)
214.868.3033 (iPhone)
amross@munckcarter.com
www.munckcarter.com

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