LB4HR – October 2016
Welcome to Legal Briefs for HR, an update on employment issues sent to over 6000 individual HR professionals, in-house counsel and business owners plus HR and legal professional organizations (who have been given permission to republish content via their newsletters and websites), to help them stay in the know about employment issues. Anyone is welcome to join the email group . . . just let me know via reply email you’d like to be added to the list and you’re in! Back issues are posted at www.munckwilson.com under Media Center/Legal Briefs and you can also join the group by clicking on “Subscribe.” A big welcome to new subscribers who attended my recent presentations:
- Cement Employers Association’s Annual Meeting in Orlando, FL on September 28
- Hospitality Financial & Technology Professionals on September 29
- Texas Workforce Commission’s Texas Business Conference in Mesquite on September 30
Here’s your monthly bag of employer tricks and treats:
- Let Your People Go (to Vote) – The laws of many states provide job-protected time off (in some instances, with pay) for employees to vote on election day. A few also protect employees who serve as a precinct official on election day. The rule in Texas is that employees who do not have at least two consecutive nonworking hours on election day while the polls are open (generally, 7 a.m. to 7 p.m.) must be afforded time off to vote. To the extent that some of that time coincides with the employee’s normal work hours, that portion of the absence will be with pay. If you would like to avoid the administrative headache of voting time pay and can be somewhat flexible, it’s fine to announce that everyone’s start time on election day is 9 a.m., or that the workday will end at 5 p.m. Not sure what the law is, in your state? Check out the handy chart at http://www.findlaw.com/voting-rights-law.html. For those of you with operations in CA, here is a link to instructions about the mandatory poster you must display in your CA workplace(s) at least ten days before election day: http://www.sos.ca.gov/elections/time-vote-notices/
- Do-Over on Getting Oriented – In LB4HR #7, I summarized the Hively v. Ivy Tech Community College case in which the 7th Circuit held that Title VII provides no redress for employment discrimination based on sexual orientation. In penning their decision, the judges added they felt bound by legal precedent (a 1984 case) but made clear they did not condone discrimination based on “who they date, love or marry.” Their peers must’ve heard their plea for SCOTUS or the state legislature to change the law, since Hively has been reversed and the July 28 three-judge panel decision vacated. The case will be reheard, en banc (meaning all of the 7th Circuit robed ones get to weigh in on this one). Stay tuned.
- New EEO-1 Form – It’s here! You can take a peek at the new Standard Form 100 (aka EEO-1 Report) which will take effect next year. The form is posted at https://www.eeoc.gov/employers/eeo1survey/upload/component-1-and-2-sample-2017-eeo1-report.pdf. The agency will now collect wage data, via twelve pay bands per job category. Employers are instructed to use 2017 Form W-2 data (rather than rate of pay), so the filing deadline is moved from 9-30-17 to 3-31-18. You may use standard hours for FLSA exempt workers (40 hours for full-time and 20 hours for part-time) in completing the form, since actual hours worked are not usually recorded by these employees. Since reliance on W-2 data (vs rate of pay) and the lack of actual hours worked data for exempts has the potential to skew the data, employers may want to self-audit the results and provide an explanation of its practices as part of that submission.
- Ready or Not – Employers with FLSA exempt employees are (mostly) aware that the minimum salary needed to maintain certain exemptions is set to jump from $23,660/year to $47,476/year on December 1. Those that can’t justify that leap are preparing to re-classify some workers as non-exempt and explaining to them (and their supervisors) how to handle record-keeping and the analysis of what is and what is not “hours worked.” For those who can justify the increase in salary, some are discovering that the exemption remains at risk because the duties test of the presumed exemption is not a good fit. A few are gambling by taking the “wait and see” approach with hopes that either pending legislation or lawsuits will stop the change in its tracks over the next few weeks. Here is an update on those efforts:
- Impactful Case – Per the 11th Circuit, the Age Discrimination in Employment Act (ADEA) provides no remedy arising from a prospective employer’s hiring policy that has a disparate impact on job applicants based on their age. The short story is that the employer targeted manager candidates who were “2-3 years out of college.” A 47-year old applied repeatedly and unsuccessfully over a two-year period, before filing an age discrimination claim. Rather than saying that there was evidence of intentional discrimination (aka disparate treatment), he relied upon the disparate impact theory to make his claim. The court made short work of it, noting that the disparate impact section of the ADEA applies only to those with the status of “employee.” Further, the disparate treatment section expressly applies to both applicants and employees, making the omission of applicants in the disparate impact section more telling. Villarreal v. R.J. Reynolds Tobacco Company (11th Cir. 10-5-16).
- Need a Job? – David Lopez, the general counsel of the Equal Employment Opportunity Commission, is leaving office this December.
- ACA Filing Sherpa – Updated guidance to assist employers in filing their Affordable Care Act reports is available at https://www.irs.gov/pub/irs-pdf/p5165.pdf. New instructions for filing 1094-B and 1095-B are at https://www.irs.gov/pub/irs-pdf/i109495b.pdf.
- Data Breach is No Day at the Beach – If you are a business located only in AL, NM or SD, you can ignore this. The rest of you, listen up. 47 states, D.C., Guam, Puerto Rico & the Virgin Islands all have laws on the books meant to protect consumers against identify theft. The target of these laws is any entity (read: you) which maintains databases of “personal information.” The PI can be that of your customers, your employees and more. Each state has its own definition of what is protected PI. And each has its own way of dealing with you, if that PI falls into the wrong hands via a data breach (e.g., lost/stolen laptop or drive, external hacking, internal theft). All of them explain who must receive notice of the breach, how quickly, what must be contained in the notice and how it must be conveyed. Quite a few add mandatory notice to the state AG so that they can look into and prosecute lax security methods. To further complicate matters, some states regularly amend their data breach laws, making compliance a moving target. CA just amended their law for the sixth time. My advice? Make sure that a person or department within your business is tasked with managing this issue and staying on top of the evolving requirements. Far too often, several administrative functions in a business (e.g., IT, HR, Legal, Accounting, Payroll, Benefits, Marketing) end up pointing fingers at each other after a breach and saying “I thought you were taking care of this!” Here is a great resource to get you started . . . the National Conference of State Legislatures does a great job of corralling state law on a particular issue, including live links to actual text of the law. Consider this an early Christmas present: http://www.ncsl.org/research/telecommunications-and-information-technology/security-breach-notification-laws.aspx. And here is stocking stuffer . . . many of the notice obligations disappear if the breached data was encrypted in a manner approved by the state.
- Longhorn Law – I’m pleased to share that I will chair the University of Texas School of Law conference faculty and planning committee for the 24th Annual Labor and Employment Law Conference, to be held May 2017 in Austin. We will be putting our heads together soon, to pick topics and speakers and I would love to hear from YOU! What topics are top of mind? Have you heard a great presenter you would like to recommend?
- Contractors’ Corner – With so much regulatory activity affecting federal contractors, they get their own space this month:
1. Paid Sick Leave – Beginning with new contracts on 1-1-17 (plus existing contracts that are modified or extended on or after that date), certain federal contractors will be required to provide their covered employees with up to seven days of paid sick leave annually. Only four types of federal contracts are covered by the rule:
1. Procurement contracts for services or construction covered by the Davis Bacon Act (if valued at $2000 or more);
2. Contracts for services covered by the Service Contract Act (if valued at $2500 or more);
3. Contracts for concessions, including any concessions contracts excluded from coverage under the SCA by DOL regulations at 29 CFR 4.133(b)(which talks about concessions contracts entered into by the National Park Service to provide food, lodging, gas, souvenirs, etc.); or
4. Contracts in connection with federal property or lands and related to offering services to federal employees, their dependent or the general public
2. Higher Minimum Wage – Under E.O. 13658, workers on certain federal contracts were to be paid at least $10.10/hour, starting on 1-1-15. The Secretary of the U.S. Department of Labor is charged with adjusting that rate, annually. Per a notice issued on 9-20-16, the rate will increase to $10.20/hour on 1-1-17. The minimum rate for tipped employees will increase from $5.85/hour to $6.80/hour at that time.
3. Whoa! – The Associated Builders and Contractors and the National Association of Security Companies have sued to enjoin enforcement of the Fair Pay and Safe Workplace Executive Order (E.O. 13673)(aka the blacklisting EO) which is set to take effect on 10-25-16. The EO was summarized for you in last month’s LB4HR. The parties to the suit filed in E.D. Texas and claim that the Obama administration, the FAR Council and the U.S. Department of Labor have exceeded their authority by issuing the E.O. and its implementing regs.
- Stated Differently – Here are some hot topics for you multi-state employers:
1. California – Effective 1-1-17, employers with employees residing/working in CA are prohibited from mandating a choice of law via its employment agreements which would require adjudication of the employee’s claims outside of CA. Such provision is voidable, if the employee so chooses, and disputes related to the voided clause must be adjudicated in CA and under CA law. There is an exception if the employee was represented by his or her own legal counsel when the employment agreement was negotiated. The law applies to new agreements and to existing agreements upon modification or renewal.
2. California – The annual reset of the minimum salary or hourly rate employers must pay in CA to maintain the computer professional exemption takes effect on 1-1-17. The minimum salary will increase to $88,318.55/year or $42.93/hour. This is a 1.3% increase over the 2016 rates.
3. Illinois (Cook County) – Effective 7-1-17, a paid sick leave ordinance very similar to the one affecting employees in Chicago (also as of 7-1-17) will provide the same benefit for employees in Cook County, IL. The paid sick leave accrue at a rate of one hour of leave per each 40 hours worked, capped at 40 hours in a 12-month period. Covered employees are those who work at least 80 hours for the employer in any 120-day period. Covered employers are those who employ at one covered employee at its principal place of business in Cook County.
4. Massachusetts – Effective 10-1-16, MA law prohibits discrimination based on gender identity in places of public accommodation. A five-page guidance is available at http://www.mass.gov/ago/docs/policy/2016/ag-healey-gender-identity-guidance-for-public-accommodations-9-1-16.pdf to help businesses understand and comply with the law. The law protects the right of all individuals, including trans-gender individuals, to use sex-segregated facilities that are consistent with their sincerely held gender identity.
5. Minnesota – The 8th Circuit upheld summary judgment for an employer in an age discrimination case under the MN Human Rights Act. The plaintiff, age 63, was one of two individuals’ whose jobs were eliminated at the Minneapolis-St. Paul International Airport based on a consultant’s study of operations. Plaintiff’s supervisor tried to identify open positions for both employees but found nothing suitable and available. Plaintiff claimed the airport was “obliged” to find her another job and her supervisor’s cessation of job search efforts when notified that she had retained counsel was discrimination. The court noted that the airport/supervisor were under no obligation to find another job for her and the “seemingly defensive reaction” of curtailing search efforts on plaintiff’s behalf, without more, do not establish discrimination. Haggenmiller v. ABM Parking Services, Inc. (11th Cir. 9-14-16).
6. Ohio – Summary judgment granted to the employer where an Mexican-American employee who was born in Texas claimed employment discrimination based on “perceived national origin.” The court noted the lack of Ohio case law applying or even discussing this theory and opined that Ohio courts would not recognize the theory due to “its widespread failure in the federal district courts.” Longoria v. Autoneum North America, Inc. et al (N.D. Ohio 9-13-16).
- For the Birds – If you like being tweeted and want breaking news on employment law changes (and the occasional random cheer for K-State), follow me on Twitter. I’m at @amross.
Until next time,
Audrey E. Mross
Labor & Employment Attorney
Munck Wilson Mandala LLP
600 Banner Place
12770 Coit Road
Dallas, TX 75251
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