Banning Salary History Questions, Subway Restaurant Partners with DOL, Non-Competes: Employment Law This Week – August 15, 2016 [VIDEO]
Massachusetts Bans Salary History Question
Our top story: Beginning in 2018, pay history will be off limits for Massachusetts job applications and interviews. In a unique attempt to close the gender wage gap, the state has passed a pay equity law that will bar employers from asking applicants about their previous salaries. Employers will also be prohibited from seeking that information from an applicant’s prior employers. While this provision is the first of its kind in the country, the new law also contains more common equal pay protections, broadens the definition of “equal work,” and prevents employers from banning the discussion of salary among employees. Mickey Neuhauser, from Epstein Becker Green, has more.
“The hope is that by taking the salary history question off the table, employers will rely only on relevant factors and won’t even unconsciously rely upon an irrelevant factor, such as the employee’s prior salary. . . . The law does not prohibit applicants from disclosing their current salaries or salary history, and it doesn’t prevent applicants and employers from negotiating over salary. However, the law does not protect employers from paying a salary lower than what would otherwise be permitted under the act simply because an individual has agreed to accept that salary. In other words, an employee cannot agree to be illegally underpaid.”
Subway Partners with the DOL
The U.S. Department of Labor (DOL) and Subway teamed up to break new ground. The world’s largest fast-food franchisor has reached a voluntary agreement with the DOL to provide wage and hour compliance training to franchisees. The agency conducted more 800 investigations into underpayment of workers at Subway franchises in recent years. This partnership will focus on helping the franchises comply with federal wage and hour laws moving forward. While the DOL hopes to enter into more agreements like this one, franchisors are hesitant, noting that the deal could make them joint employers under the National Labor Relations Board’s standard.
New York Attorney General Cracks Down on Non-Competes
New York’s crackdown on non-compete agreements continues. An investigation by New York Attorney General Eric Schneiderman revealed that Examination Management Services Inc. required all of its workers, even those who had no access to trade secrets or sensitive information, to sign non-compete agreements. Non-compete agreements in the state are usually permissible only for employees with a high level of access to trade secrets or sensitive information. Under the agreement, the company will stop using the non-competes for most employees in New York.
Citigroup Unit Pays Misclassified Workers After DOL Probe
A Citigroup affiliate shells out a hefty sum for misclassifying workers. A subsidiary of Citigroup in Florida recently paid almost $2 million to workers whom it had misclassified as exempt from overtime pay. An investigation by the DOL’s Wage and Hour Division found that the company mistakenly applied the Fair Labor Standards Act’s exemption to a group of 882 employees. This case serves as a reminder that salaried workers are not necessarily exempt from overtime.
Tip of the Week
Lisa Glass, Chief Human Resources Officer for The Child Center of NY, is here with advice on how to create an effective onboarding program.
“An important way organizations can help combat employee turnover and help employees adjust to the new organization is through an effective onboarding program. An onboarding program allows employees to understand the expectations of their role in terms of performance as well as social expectations. . . . Effective onboarding is key in creating employee expectations and sharing organization values. The goals must align with the goals of the organization, and the program initiative must be driven by senior management, and not solely driven by human resources.”
©2016 Epstein Becker & Green, P.C. All rights reserved.
What Does Subway’s “Voluntary Agreement” with the US Department of Labor Mean for Joint Employer Status?
This past week, Doctor’s Associates Inc., which is the owner and franchisor for the Subway sandwich restaurant chain entered into aVoluntary Agreement (the “Agreement”) with the US Department of Labor’s (DOL) Wage and Hour Division “as part of [Subway’s] broader efforts to make its franchised restaurants and overall business operationssocially responsible,” and as part of Subway’s “effort to promote and achieve compliance with labor standards to protect and enhance the welfare” of Subway’s own workforce and that of its franchisees.
While the Agreement appears intended to help reduce the number of wage and hour law claims arising at both Subway’s company owned stores and those operated by its franchisee across the country, the Agreement appears to add further support to efforts by unions, plaintiffs’ lawyers and other federal and state agencies such as the National Labor Relations Board (NLRB or Board), DOL’s own Occupational Safety and Health Administration (OSHA) and the EEOC to treat franchisors as joint employers with their franchisees.
What Is in the Agreement?
While on its face this may sound like a good idea and one that should not be controversial, in reality by entering into this Agreement, which among other things commits Subway to working with both the DOL and Subway’s franchisees, to develop and disseminate wage and hour compliance assistance materials and to work directly with the DOL to “explore ways to use technology to support franchisee compliance, such as building alerts into a payroll and scheduling platform that SUBWAY offers as a service to its franchisees,” and although the Agreement is notable for its silence on the question of whether the DOL considers Subway to be a joint employer with its franchisees, the Agreement is likely to be cited, by unions, plaintiffs’ lawyers and other government agencies such as the NLRB as evidence of the fact that Subway as franchisor possesses the ability, whether exercised or not, to directly or indirectly affect the terms and conditions of employment of its franchisees’ employees, and as such should be found to be a joint employer with them.
Notably, while the Agreement does not specifically address the exercise of any such authority on a day to day basis, it does suggest an ongoing monitoring, investigation and compliance role in franchisee operations and employment practices by Subway and a commitment by Subway as franchisor to take action and provide data to the DOL concerning Fair Labor Standards Act compliance. In the past, courts have in reliance on similar factors held that a franchisor could be liable with its franchisees for overtime, minimum wage and similar wage and hour violations.
Of particular interest to many will be the final section of the Agreement, titled “Emphasizing consequences for FLSA noncompliance.” This section not only notes that “SUBWAY requires franchisees to comply with all applicable laws, including the FLSA, as part of its franchise agreement,” but also what action it may take where it finds a franchisee has a “history of FLSA violations”:
SUBWAY may exercise its business judgment to terminate an existing franchise, deny a franchisee the opportunity to purchase additional franchises, or otherwise discipline a franchisee based on a franchisee’s history of FLSA violations.
Will Subway’s “Voluntary Agreement” with the DOL Have Any Impact Beyond Wage and Hour Matters?
As we approach the one year anniversary of the NLRB’s decision in Browning Ferris Industries, it is abundantly clear that not only the Board itself but unions and others seeking to represent and act on behalf of employees are continuing to push the boundaries and expand the application of Browning Ferris. In fact the Board has been asked to find that policies and standards such as those evidencing a business’s commitment to “socially responsible” employment practices, the very phrase used in the Subway-DOL Agreement, should be evidence of indirect control sufficient to support a finding of a joint employer relationship between a business and its suppliers.
Moreover, the NLRB and unions such as UNITE HERE and the Service Employees International Union continue to aggressively pursue their argument that the terms of a franchise agreement and a franchisor’s efforts to ensure that its franchisees, who conduct business under its brand, can also be sufficient to support a finding of joint employer status. No doubt they will also point to the Subway Agreement with the DOL as also being evidence of such direct or indirect control affecting franchisees’ employees’ terms and conditions.
What Should Employers Do Now?
Employers are well advised to review the full range of their operations and personnel decisions, including their use of contingent and temporaries and personnel supplied by temporary and other staffing agencies to assess their vulnerability to such action and to determine what steps they make take to better position themselves for the challenges that are surely coming.
Equally critical employers should carefully evaluate their relationships with suppliers, licensees, and others they do business with to ensure that their relationships, and the agreements, both written and verbal, governing those relationships do not create additional and avoidable risks.
©2016 Epstein Becker & Green, P.C. All rights reserved.
DOE Releases $7 Million Funding Opportunity Announcment For Co-Optimization Of Fuels And Engines Initiative
On August 1, 2016, DOE released a Funding Opportunity Announcement (FOA) for $7 million to research fuel and engine co-optimization technologies. Funding will be provided through the Co-Optimization of Fuels and Engines (Co-Optima) initiative, a collaboration between DOE’s Bioenergy Technologies Office (BETO) and Vehicle Technologies Office (VTO), bringing together national laboratories and industry to conduct tandem fuel and engine research, development, and deployment assessments. This initiative works to improve near-term conventional spark-ignition engine efficiency and enable full operability of advanced compression ignition engines. Research cycles include identifying fuel candidates, understanding their characteristics, and determining market transformation requirements. This FOA is restricted to U.S. Institutions of Higher Education and nonprofit research institutions operating under U.S. Institutions of Higher Education. Proposals should address one or more of the following sub-topics:
- Fuel characterization and fuel property prediction;
- Kinetic measurement and mechanism development;
- Emissions and environmental impact analysis;
- Impact of fuel chemistry and fuel properties on particulate emissions;
- Small-volume, high-throughput fuel testing; and
- Additional barriers.
Hacking was once again prominently in the news when it was announced right before the Democratic National Convention that Democratic Party emails had been compromised. This comes after an incident earlier this year when it was announced that hackers broke into the computer networks at a number of well-known law firms, including Cravath Swaine & Moore LLP and Weil Gotshal & Manges LLP, which represent Wall Street banks and Fortune 500 companies.
Sadly, we have grown accustomed to, and possibly numb, from the almost weekly announcements that major corporations, organizations and government agencies have been victims of cyberattacks. The potential vulnerability of law firms is raising concerns among their clients, who are conducting their own assessments of the firms they hire.
Law Firms in the Crosshairs
Law firms now recognize that cybercriminals are constantly looking for easy targets and sources of potentially valuable data that can be used to steal identities. Since law firms act as warehouses of extremely sensitive client and employee data, they are prime targets for cyberattacks. In the new, highly connected reality we operate in, law firms must consider the risks these cyberthreats pose and take the data protection steps necessary to reduce those risks. Otherwise, the oversight may prove costly.
It should be noted that, historically, most data breaches experienced by law firms are related to the loss or theft of a laptop, thumb drive, smartphone, tablet or other mobile device that contains sensitive client information. Such theft can be an open door for cybercriminals to gain easy access to a firm’s corporate network and steal confidential information. All that said, cybercriminals are much more savvy than ever before and have developed means of hacking into protected networks without using a piece of the organization’s hardware.
For example, according to a March 19 article in the Wall Street Journal, in February of this year, “a posting appeared on an underground Russian website called DarkMoney.cc, in which the person offered to sell his phishing services to other would-be cyberthieves and identified specific law firms as potential targets. In phishing attacks, criminals send emails to employees, masked as legitimate messages, in an effort to learn sensitive information like passwords or account information. As a result, security firm Flashpoint issued alerts to law firms in January and February about the threats and has acquired a copy of a phishing email that is aimed at law firms, according to a person familiar with the alerts.”
Communicating a Data Breach
Since no one can fully prevent the risk of a data breach, it’s important to have a crisis communication plan in place to inform stakeholders in case one occurs, and the media should they cover the story. The goal of the plan should be to address the situation as quickly as possible and restore trust with stakeholders. Tactics should include:
Identify a spokesperson for the firm.
Prepare written statements for employees, clients and media.
Craft message points for any media interviews.
Call key clients to inform them personally of the breach.
Post a statement on the firm’s website where it can be found easily.
As for the media, law firms should avoid the instinct to take a “head in the sand” approach. The conversation in the media, especially over social media, will take place whether you participate or not. It’s important to be honest and direct when telling your story. This will allow the law firm to better control the narrative.
The risk of your law firm’s computer network being hacked can never be completely eliminated. As the threats continue to increase, it’s critical to create a crisis communications plan to mitigate the fallout and reduce the likelihood that it will have a long-term negative impact on your firm’s reputation or bottom line.
© Copyright 2008-2016, Jaffe Associates
The change will go into effect on July 1, 2017, and expands benefits already provided under the Family Medical Leave Act (FMLA). The FMLA grants covered employees up to 12 weeks of unpaid time off to attend to the serious health condition of the employee or a covered family member. In contrast, the Chicago ordinance requires businesses to provide eligible employees one hour of paid sick leave for every 40 hours worked, up to 40 hours of total paid sick leave in each 12-month period.
The ordinance, which is technically an amendment to Chicago’s minimum wage law, covers all employees who perform at least two hours of work within the City in any two-week period and who work at least 80 hours during any 120-day period. The ordinance applies to all employers, regardless of the number of employees, that maintain a business facility within the geographic boundaries of the City or who are subject to one of the City’s licensing requirements. The law permits employees to carry up to 2.5 paid sick days over to the following year, but does not require employers to pay employees for unused sick days.
New employees will be eligible to use paid sick days after an initial six-month probationary period. Employers who already offer paid time off that satisfies the requirements of
the ordinance will not be required to provide additional benefits.
Under the ordinance, employees will be able to use paid sick leave for their own illnesses, injuries, medical care or preventative care, or for the illnesses, injuries, medical care or preventative care of covered family members. Pursuant to the law, “family members” is construed broadly to include a child, legal guardian, spouse, domestic partner, parent, the parent of a spouse or domestic partner, sibling, grandparent, grandchild or any other individual related by blood whose close association with the employee is the equivalent of a family relationship. Employees also can use paid sick leave if they or their family members are victims of domestic violence or if their place of business or child care facility has been closed due to a public health emergency.
In passing the amendment, Chicago has added another potential landmine in the already tough- to-navigate employer/employee relationship. The ordinance allows employers to require that employees who use paid sick leave for more than three consecutive days provide certification that the leave was for a qualifying purpose. However, the ordinance prohibits employers from inquiring as to the specific nature of the medical issue. As such, employers should tread carefully when addressing employees’ health issues and corresponding requests for time off.
Currently, four states have laws requiring employers to issue paid sick leave benefits. Connecticut passed the first such law in 2011, followed by Massachusetts and California in 2014 and Oregon in 2015. Likewise, roughly 20 cities across the country have enacted similar regulations, including San Francisco, Washington D.C., Seattle and Philadelphia.
Is everyone who calls your law firm ready to hire you right away? If someone downloads a free report from your website, does that mean they are ready to commit to hiring you? Not likely. In fact, research shows that more than half of leads are not ready to buy at the time of first contact, which is why you need to nurture those leads along a specific path to becoming a client using email drip campaigns.
We have used drip campaigns for years for our clients for one simple reason: they work! Research shows that companies that are good at nurturing leads enjoy 50% more sales at a 33% lower cost than companies that put no effort into lead nurturing.
Since email is a one-to-one communication, it can be personalized for whatever stage your lead is in the buying cycle. It is much more effective than blast email campaigns that don’t take your prospect’s buying journey into account. In fact, personalized emails generate up tosix times higher revenue than non-personalized (blast) emails.
This infographic from Eliv8 provides five different email drip campaign opportunities to help you increase your lead conversion rate:
© The Rainmaker Institute, All Rights Reserved
Despite being well and truly busted, the employee (who worked night shifts as WAN’s newspaper machinist) denied having any affiliation with Uber, saying that his wife had the Uber business and he just occasionally drove her car to the petrol station or car wash. He also initially denied picking up the WAN manager, but in a classic case of #absolutelysprung, quickly reneged from this position when shown the receipt identifying him by name and picture as the Uber driver.
It was clear from the employee’s employment contract that he was required to seek WAN’s permission before working a second job. It was also clear from WAN’s codes and procedures, as well as discussion at toolbox meetings (which the employee attended), that WAN had a duty of care to manage the safety risk of fatigue arising from night shift work.
When WAN investigated the matter, the employee refused to answer its questions or produce documents and conducted himself in an obstructive manner causing the employment relationship to become untenable. The employee was subsequently dismissed and claimed unfair dismissal on the basis he was confused as to the meaning of having a ‘second job’ (#goodtry)
Amid the cobweb of lies (including that his wife must have completed his Uber registration without his knowledge), it was revealed that the employee had driven as an Uber driver on at least 15 occasions. The Fair Work Commission upheld the dismissal stating that the employee deliberately provided misleading information to WAN and ultimately, was the “architect of his own demise” (#nowafulltimeUberdriver)
© Copyright 2016 Squire Patton Boggs (US) LLP
This week, the Department of State released the September 2016 Visa Bulletin. Given that visa numbers are issued based on the government fiscal year, we expect to see significant movement again in October 2016; for September 2016, the last month of FY2016, there were only minor changes with regard to movement of final action dates in most of the employment-based categories from the August 2016 Visa Bulletin:
The Worldwide EB-1 category remains current, but for individuals born in India and Mainland China, there continues to be a cutoff date in the EB-1 category of Jan. 1, 2010 (a change implemented in the August 2016 Visa Bulletin).
The cutoff date for Worldwide chargeability in the EB-2 category is still Feb. 1, 2014, but it is likely to return to current in October 2016 at the start of FY2017. The cutoff date for Mainland China remained constant at Jan. 1, 2010. However, there was significant movement in the EB-2 category for India, which moved forward from Nov. 15, 2004, to Feb. 22, 2005.
In the EB-3 category, the cutoff date for Worldwide chargeability, as well as El Salvador, Guatemala, Honduras, and Mexico moved more than a year (from March 15, 2016 to May 1, 2016). The cutoff date for Mainland China stayed constant at Jan. 1, 2010. However, the cutoff date for India in the EB-3 category advanced several months from Nov. 8, 2004, to Feb. 15, 2005, and the cutoff date for the Philippines moved over a year from May 15, 2009, to July 1, 2010.
For those in the EB-5 category, the priority date remains current for all applicants other than those born in Mainland China, which maintains a cutoff date of Feb. 15, 2014.
With regards to those seeking to file applications for adjustment of status, the U.S. Citizenship & Immigration Service (USCIS) website indicates that the “Final Action Dates” chart for employment-based applications must be used in determining when an applicant is eligible to file Form I-485.
The September 2016 Final Action Dates for Employment-Based Preference Categories are as follows:
Finally, the Department of State also determined the Family and Employment preference numerical limits for FY2016, as outlined in Section 201(c) and (d) of the Immigration and Nationality Act (INA) as follows:
Worldwide Family-Sponsored preference limit: 226,000
Worldwide Employment-Based preference limit: 140,338
The per-country limit is fixed at 7 percent of the combined annual limits or 25,644 for FY2016. The dependent area annual limit is fixed at 2 percent of the combined annual limits or 7,327 for FY2016.