The National Law Forum

Winter Is Coming —Wage and Hour Considerations During Weather-Related Emergencies

With winter storms around the corner, it’s the right time to revisit employer rights and responsibilities during a weather-related emergency or other major disruption. We discuss below some typical scenarios that you are likely to face during weather-related or other emergencies, and the consequences under the wage and hour laws.

“Our office was closed for a few days because of the storm. Do we have to pay our employees for those days?”

Non-exempt (i.e., overtime-eligible) employees generally have to be paid only for hours they actually work. So if a non-exempt employee cannot work because your office is closed—or because the employee cannot make it into the office because of weather-related conditions—the wage and hour laws do not require you to pay the employee for non-working time. On the other hand, a non-exempt employee who performs work remotely (say, from home, from a temporary site, or from a coffee shop) is entitled to pay for the time worked.

An exception exists for salaried non-exempt employees, who may—depending on the terms of their agreement with the employer—expect to receive their full weekly salary regardless of how many hours they actually work that week.

Exempt employees (i.e., employees not entitled to overtime pay) generally receive their full salary for any week in which the office is closed for less than a full workweek. Employers who prorate an exempt employee’s weekly salary because of office closure risk losing the exemption for the week in question—a consequence that may or may not be material depending on how many hours the employee works that week. If your office is closed for an entire workweek, you can inform all employees of the closure and you need not pay them for that week (unless they are working remotely).

Be sure to check any agreements with exempt employees—as well as offer letters, policies, or other statements regarding the nature of their pay—which may also limit your ability to prorate salary during office closures and/or give rise to pay claims.

“Our office was open, but some of our staff could not make it in because of the weather. Do we need to pay them?

As described above, non-exempt employees generally must be paid only for hours they actually work, but salaried non-exempt employees may have a contractual right to receive their full salary for any week in which they perform any work.

Exempt employees who are absent from work for one or more full days because of inclement weather, including because of transportation difficulties, are considered to be absent for personal reasons (if the office is otherwise open). Absent a contractual right to be paid, they do not have to be paid for the days they fail to report to work, and your failure to pay them for such days will not jeopardize their exempt status. Deductions for partial-day absences under these circumstances, however, will violate the salary basis rules and jeopardize the exemption for that week.

“Because of flooding or another dangerous condition, we had to close our office after a number of employees had already reported for work. Do we have to pay them for the day?”

Exempt employees who report to work but are turned away or sent home by their employer generally must receive their salary for that day. Non-exempt employees who report to work but are turned away or sent home must be paid for all hours actually worked that day. In addition, some states have “reporting pay” or “call in” pay laws that require employers to pay non-exempt employees a minimum number of hours’ pay for any day in which they report to work.

“Our payroll records were destroyed in the storm, or are inaccessible. How do we pay our employees?”

Exempt employees paid on a salary basis should receive their normal salary payment (less any permissible full-day deductions). For hourly non-exempt employees, use a reasonable method to determine the number of hours worked, such as:

Asking the employees themselves to submit a certified time sheet indicating the number of hours they worked;
Recreating hours worked through electronic records (g., card/ID swipes or log-ins/log-outs);
Making assumptions based on an employee’s fixed or regular schedule of hours;
Asking managers to verify hours worked; or
Some combination of the above.

“Can we require our employees to use available vacation days or other paid time off during a weather-related office closure or absence?”

Yes. Under federal law and the laws of most states, employers are not required to provide vacation benefits or other paid time off to employees. Such benefits are generally a matter of agreement between employer and employee, or set forth in the employer’s handbook or policy. Under these circumstances, there is no prohibition on an employer giving PTO and requiring that it be taken on specific days. So long as it’s permitted under the applicable PTO policy or agreement, employers can reduce an employee’s accrued PTO bank for either partial or full day absences, without violating the wage and hour laws.

“Can we give our staff additional paid or unpaid time off to assist in recovery or relief efforts?”

Employers can grant their employees additional paid and unpaid time off for any reason, including assisting with storm-related recovery and relief efforts.

Employees who are assisting in relief efforts as part of the National Guard or Armed Forces Reserves may have additional rights under federal and state law.

Because of the snow, it took our employees twice as long to commute to work as opposed to most other days. Do we need to pay them for the additional commute time?”

Time spent in an employee’s normal commute from home to work at the beginning of the workday, and from work to home at the end of the workday, is not considered time worked and need not be paid.

“Some of my employees are members of a union. Do these rules apply to them as well?”

Collective bargaining agreements generally cannot waive or reduce the protections available to employees under federal, state, or local wage and hour laws. Collective bargaining agreements can, however—and often do—impose different and additional pay, time off, and other obligations on employers. Employers with unionized employees should consider all applicable agreements when analyzing their rights and responsibilities in the context of a weather-related emergency or other “force majeure” event.

“We want to do more for our employees, to go above and beyond what the law requires. What are some things we can do?”

There are many options available to an employer who wants to do more for its employees, including:

Granting additional paid or unpaid time off
Allowing employees to donate accrued paid time off to other employees (i.e., leave-sharing plans)
Allowing affected employees to work remotely for some period of time
Making emergency advances of salary or loans
Setting up disaster-relief programs or payments
Making certain payments to assist disaster victims that can be excluded from their taxable income
Setting up food and clothing drives

Final Thoughts

Employers making decisions about scheduling, pay, and time off during weather-related emergencies and disruptions should bear in mind the potential implications on employee morale. Flexibility and support in times of need—or the absence of them—are likely to be remembered long after the storm passes.

As always, check state and local laws—as well as your contracts and policies—before making any final decisions regarding wages, hours, or time off.

ARTICLE BY Allan S Bloom & Arielle E. Kobetz of Proskauer Rose LLP

Employment Based Immigration: New Form I-9, Employment Eligibility Verification

On November 14, 2016, U.S. Citizenship and Immigration Services (USCIS) published a revised version of Form I-9, Employment Eligibility Verification (“Form I-9”). Employers can continue to use the most recent version dated March 8, 2013 until January 22, 2017. By January 22, 2017, employers must use only the new version or face serious fines.

Form I-9 requirements were established in November 1986 when Congress passed the Immigration Reform and Control Act (IRCA). IRCA prohibits employers from hiring people, including U.S. citizens, for employment in the United States without verifying their identity and employment authorization using Form I-9.

Among the changes in the new version, Section 1 asks for “other last names used” rather than “other names used,” and streamlines certification for certain foreign nationals. The revised Form I-9 is easier to complete using a computer. Enhancements include drop-down lists and calendars for filling in dates, on-screen instructions for each blank item, easy access to the full instructions, and an option to clear the form and start over.

Additionally, prompts have been added to ensure the information is entered correctly, and now employers can enter multiple preparers and translators. There is a dedicated area for including all additional information rather than having to add it in the margins. There is also a supplemental page for the preparer/translator. When the employer prints the completed form, a quick response (QR) code is automatically generated, which can be read by most QR readers and may be used to streamline audit processes.

The instructions have been separated from the form, consistent with other USCIS forms, and include specific instructions for completing each field.

ARTICLE BY Elise S. Levasseur of Dickinson Wright PLLC

Supreme Court Punts Design Patent Damages Back to Federal Circuit

The Supreme Court issued a rare decision on the issue of damages for design patent infringement in the Apple v. Samsung smartphone case. The result could mean significant changes in the calculation of damages for infringement of design patents.

The decision is one more step in the ongoing battle between Apple and Samsung that originally included claims of patent infringement, design patent infringement and trade dress infringement. Samsung’s phones were found to infringe the ornamental designs in each of the three design patents shown below and Apple was awarded Samsung’s entire profit from the sale of its infringing smartphones, which amounted to nearly $400 million. The only issue on appeal was the basis for the damages award.

Generally, a design patent holder may seek damages under the standard patent damages statute 35 U.S.C. §284 that sets a floor for damages as “a reasonable royalty for the use made of the invention by the infringer.” As an alternative, the patentee can collect damages under the design-patent-damages provision in 35 U.S.C. §289. Section 289 provides for the significant remedy of profit disgorgement based upon a defendant’s use of the patented “article of manufacture.” The infringer “shall be liable to the owner to the extent of his total profit.”

The Federal Circuit affirmed the damages award, rejecting Samsung’s argument that damages should be limited because the relevant articles of manufacture on which damages are based were the front face or screen as opposed to the entire smartphone. The Federal Circuit’s reasoning was that such a limit was not required because the components of Samsung’s smartphones were not distinct articles of manufacture.

The Supreme Court held unanimously that the Federal Circuit incorrectly interpreted §289 in holding that the “article of manufacture” for the purpose of calculating damages must be the entire smartphone and remanded the case back to the Federal Circuit for additional briefing on what constitutes an “article of manufacture” in the context of the design patents at issue.

Although the Supreme Court did not completely resolve the issue, this decision will be significant in future design patent cases when the design patent protection is directed solely to a component or element of a product as compared to the entirety of the product.

ARTICLE BY Patrick M. Bergin of von Briesen & Roper, S.C.

Obama Bans Drilling Offshore Atlantic, Arctic – But For How Long?

With a new President on the White House doorstep, President Obama has announced a ban – ostensibly permanent – on offshore oil and gas drilling in federal waters along the Eastern seaboard and offshore Alaska. President Obama appears to be relying upon a seldom-used provision of the 1953 Outer Continental Shelf Lands Act (“OCSLA”) 43 U.S.C. §§ 1331 et seq.), which allows the President to withdraw any “unleased lands of the outer Continental Shelf.” Whether the ban proves permanent is likely to be tested politically and legally, as the Trump Administration takes office alongside a Republican-controlled Congress.

OCSLA and the Authority to Ban

OCSLA mandates that the Secretary of the Interior expeditiously develop the resources on the submerged lands three or more nautical miles offshore the coast of the United States. The purpose of OCSLA is “to assert the exclusive jurisdiction and control of the Federal Government of the United States over the seabed and subsoil of the outer Continental Shelf, and to provide for the development of its vast mineral resources.” See S. Rep. No. 411 (June 15, 1953) (the “1953 Senate Report”). The Secretary implements the mandate through a leasing program that involves auctions in which developers compete to acquire OCS leases. The program is administered and enforced by the Bureau of Ocean Energy Management (“BOEM”), the Bureau of Safety and Environmental Enforcement (“BSEE”), and the Office of Natural Resources Revenue (“ONRR”).

Section 12(a) of OCSLA provides that “the President of the United States may, from time to time, withdraw from disposition any of the unleased lands of the outer Continental Shelf.” 43 U.S.C.A. § 1341(a). In his announcement on December 20, President Obama indicated his intention to remove federal submerged lands in the Atlantic and Arctic from future leasing. Shortly after the November 2016 election, the Obama Administration had already removed any Atlantic and almost all Arctic lease sales from the auction schedule through 2022, but this announcement appeared to go further by triggering the President’s authority under Section 12(a) to withdraw certain OCS lands from the leasing program indefinitely.

Prior Leasing Moratoria

Historically, Congress has been the one to bar certain regions on the OCS from leasing, but Presidential withdrawals under Section 12(a) have also occurred. Congress first enacted a moratorium in 1982 as part of an appropriations bill, removing three-quarters of a million acres offshore California from federal leasing. Because appropriations bills only cover one fiscal year, the moratorium lasted only a year, but Congress passed new moratoria in subsequent years, generally for areas offshore California, but also in the North Atlantic and the Eastern Gulf of Mexico.

In 1990, President George H.W. Bush issued a Presidential statement – not expressly relying upon OCSLA Section 12(a) – to state his support for a moratorium on new leasing offshore most of California, Oregon, Washington, the North Atlantic, and the Eastern Gulf of Mexico. But the President limited the duration of the ban, setting it to expire in 2000 (or 1996 in the case of certain subareas offshore California). In 1998, President Clinton announced similar withdrawals through 2012, expressly on the basis of Section 12(a).

In January 2007, President George W. Bush modified President Clinton’s withdrawal by narrowing it, and in July 2008 he modified his own 2007 withdrawal and two prior withdrawals by President George H.W. Bush and President Clinton. He also threatened to veto any appropriations bill that sought to renew the Congressional ban. Without the votes to override the veto, Congress stopped banning offshore leasing, until Congress passed the Gulf of Mexico Security Act in 2006, which locked up most of the Eastern Gulf of Mexico until 2022.

As this history indicates, both Democratic and Republican Presidents have used Section 12(a) to ban leasing for periods of time that encroached on future Administrations (even before knowing the political persuasion of those later Administrations). Likewise, later Presidents have modified (in particular, narrowed) the withdrawals made by prior Presidents and have done so under the authority of Section 12(a).

The New Ban

President Obama has not yet publicly released the language by which he apparently intends to invoke Section 12(a), but his announcement leaves little doubt that it will cover much of the OCS offshore the Atlantic seaboard and Alaska. Moreover, it is clear that he intends the ban to be indefinite – that is, without a sunset date. Some proponents of the ban argue that the decision is irrevocable because Section 12(a) only works ‘one way,’ authorizing withdrawals but remaining silent about the rescission of withdrawals. Others may argue that Section 12(a) itself contemplates change, as it refers to decisions made “from time to time,” and in any event prior withdrawals have been modified numerous times in the past. Moreover, they may argue, an irrevocable ban would flout OCSLA’s imperative to develop the offshore for the nation’s benefit subject to balancing considerations of the environment, competition, and national defense. Inherent in this balancing mandate is that the balance must be struck anew from time to time, as the weight of the statutory considerations changes in the balance.

As with many of President Obama’s environmental and energy initiatives, we anticipate this latest move will be challenged in federal court and through political efforts in Congress, which penned the withdrawal authority in Section 12(a). As the recent presidential election has shown, the balance of power and policy can shift, from time to time.

ARTICLE BY Kevin A. Ewing & Michael Weller of Bracewell LLP
© 2016 Bracewell LLP

Attend the NAMWOLF 2017 Business Meeting – February 12-14 in Fort Lauderdale

The National Association of Minority & Women Owned Law Firms (NAMWOLF), founded in 2001, is a nonprofit trade association comprised of minority and women-owned law firms and other interested parties throughout the United States. Join them for their 2017 Business Meeting in Fort Lauderdale, February 12-14.

The NAMWOLF Business Meeting is a great opportunity to increase your participation and relationships with NAMWOLF Law Firm Members. All attendees further benefit by attending CLE sessions specific to NAMWOLF Member Law Firms’ practice areas, which provides greater insight into each Member Law Firm’s experience and capability to handle complex legal matters. The Business Meeting also provides the opportunity to network with NAMWOLF Leadership, such as the Advisory Council and NAMWOLF Board of Directors. If you have never been to a NAMWOLF event, the Business Meeting is the place to start!

Where: Marriott Harbor Beach, Fort Lauderdale, FL

When: February 12-14, 2017

Alaska Minimum Wage, Tip Credit, and Overtime Rights Ruling: Gallo’s and Taco Kings

On Dec. 12, 2016 the Alaska Wage and Hour Division announced a settlement with a small chain of restaurants local to Alaska in the amount of $835,000.00.^[1] Considering this is a small locally owned business this a staggering amount. To put this in perspective there are a total of only 9 eating establishments involved, three Gallo’s and six Taco Kings. Gallo’s are traditional sit down restaurants with full service. Taco Kings are small walk up and order off a menu board establishments with self-serve soda fountains and condiments and no wait staff.

In conversations with persons at both Gallo’s and the Alaska Wage and Hour Division it became clear that the overtime issues had been ongoing for several years. The current settlement was related to an audit conducted by the Alaska Wage and Hour Division and covered the period of Nov. 2013 to Dec. 2015.^[2] Prior to the recent settlement, dating back to 2011, Gallo’s/Taco King had settled six previous complaints for a total of $50,000.^[3] It was this systemic abuse of the Alaska overtime law that led to the audit which revealed overtime being owed to 159 employees.^[4]

Alaska law requires workers be paid minimum wage (currently $9.75/hr. and increasing to $9.80/hr. on Jan.1, 2017) with time and a half paid for overtime over 40 hours in a week.^[5] Alaska does not allow for a tip credit^[6] and as such this was a straight overtime case.^[7]

Despite this being an overtime violation case, a settlement of this significance will tend to catch the attention of restaurant workers around the country. Add to that the recent nationwide injunction issued by Judge Mazzant with respect to the Final Rule,^[8] there is likely to be heightened awareness of minimum wage and overtime rights among workers in general. As such it is probably worthwhile for practitioners to remind their clients and perhaps update policies with respect to tipped employees.

Federal wage law as it relates to wait staff allows for a tip credit, but still requires that wait staff earn at least minimum wage when the hourly wage and tips are added up for the hours worked.^[9]

One of the requirements of the tip credit often overlooked is the requirement that the employer inform the employee of the tip credit. According to DOL Wage and Hour Division Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act, employers must inform tipped employees of the following before the tip credit can be applied:

1) The amount of cash wage the employer is paying a tipped employee, which must be at least $2.13 per hour;

2) The additional amount claimed by the employer as a tip credit, which cannot exceed $5.12 (the difference between the minimum required cash wage of $2.13 and the current minimum wage of $7.25);

3) That the tip credit claimed by the employer cannot exceed the amount of tips actually received by the tipped employee;

4) That all tips received by the tipped employee are to be retained by the employee except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips; and

5) That the tip credit will not apply to any tipped employee unless the employee has been informed of these tip credit provisions.

Failure to properly inform the tipped employee of the credit entitles the worker to receive both the Federal Minimum Wage of $7.75 and all of the tips received.^[10] Although the notification can be either verbal or written, it is advisable that employers have their employees sign a formal notification that the tip credit allowed under Federal law is being utilized by the employer to ensure minimum wage requirements are being met.

Cases like Gallos/Taco King are becoming more frequent as workers become more educated about their rights. While many employers are taking advantage of employees’ ignorance of employment laws, in particular minimum wage/overtime, many more are making innocent mistakes which could result in significant violations. Now is the perfect time to be proactive to make sure employers who have tipped employees are not hit with significant wage violations for not having informed their employees of the tip credit.

ARTICLE BY Jim Arkell of University of Alaska Fairbanks

_{^[1] Press Release No. 16-45 – State of Alaska Dept. of Labor and Workforce Dev., Heidi Drygas, Commissioner http://labor.alaska.gov/news/2016/news16-45.pdf}

_{^[2] Conversation with Commissioners office of the Alaska Wage and Hour Division on Dec. 14, 2016.}

_{^[3] Id}

_{^[4] Above Note i}

_{^[5] Alaska Statute Sec. 23.10.065.}

_{^[6] Id. According to the DOL 6 other states (California, Minnesota, Montana, Nevada, Oregon and Washington) and Guam also do not allow for a tip credit. https://www.dol.gov/whd/state/tipped.htm#Alaska}

_{^[7] Above Note ii}

_{^[8] Nevada et al. v. U.S. Department of Labor et al., —F.3d—, 2016 WL 6879615 (Civil Action No.4:16-CV-00731) U.S.D.C (E.D. Tex. Nov.22, 2016).}

_{^[9] 29 U.S. Code Sec. 3(m)}

_{^[10] DOL Wage and Hour Division Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (Revised July 2013)}

Six Reasons Why Wholesale Repeal of Dodd-Frank is Unlikely

In the days following the November elections, U.S. President-elect Donald J. Trump promised that his Financial Services Policy Implementation team would be working to “dismantle” the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). However, a more recent account in the Wall Street Journal reported Mr. Trump’s transition team as tempering his promise in favor of rescinding or scaling back the individual provisions Republicans find most objectionable.

In light of the current political and macro-economic environment, here are six reasons why a wholesale repeal of Dodd-Frank is unlikely to occur:

Congressional Resistance – A wholesale repeal of Dodd-Frank would have to be effectuated through congressional action and would likely face a democratic filibuster. This would require opponents of Dodd-Frank to muster a 60-vote block in the Senate in order to advance the proposal. Legislative horse-trading to achieve specific objectives that are key to the Republican majority may ultimately prove to be more strategically advantageous.
Public Perception – Actions of the new administration which could be perceived as advocating for easing the burden on the financial services industry may alienate the middle-class constituency who were significantly impacted by the great recession and who ultimately propelled Mr. Trump to the Presidency.
Balance of Cost – Following massive investments in infrastructure and processes, the industry may perceive the costs of undoing the compliance programs put in place subsequent to Dodd-Frank as outweighing the benefits to be derived from decreased regulation.
Accepted Expectations – Counterparties have come to accept the safeguards and reporting requirements put in place by Dodd-Frank as constituting baseline expectations in business transactions. A repeal of Dodd-Frank would leave industry participants to reconstruct by contract what may have been previously mandated under law.
International Developments – In the wake of the Brexit vote, international financial organizations may be evaluating the relocation of their operational centers to locations in the U.S. The possibility of significant financial regulatory overhauls and the accompanying specter of an unknown business environment may dissuade consideration of the U.S. by such organizations.
Absence of a Perceptible Problem – Dodd-Frank was passed on July 21, 2010 with the wake of the great recession providing momentum and popular support for its enactment. Conversely, there is no corresponding economic situation presently existing that critics can point to for its repeal. The DJIA is up approximately 90% since July 2010. The real estate market has remained strong and, even with the recent increase by the Fed, interest rates remain low, allowing consumers access to both homeownership and financing on attractive terms.

In addition to the issues identified above, the incoming Presidential administration and congressional delegation may face additional hurdles in advancing comprehensive legislative initiatives to pare back Dodd-Frank. As the post-election environment cools and the country marches towards inauguration day, the financial services industry can only hope that clarity on the direction of the U.S. regulatory environment begins to emerge.

ARTICLE BY Anthony M. Drenzek of Proskauer Rose LLP

NY State Prepared to Increase Salary Level for Certain Overtime Exceptions

Proposed amendments to the New York State Wage Orders significantly increase the salary levels needed for employers to qualify for the executive and administrative exceptions under the New York Labor Law.

Last month, a US district court in Texas enjoined the US Department of Labor’s proposed revisions to regulations regarding exemption status under the Fair Labor Standards Act, which were scheduled to go into effect on December 1, 2016. In light of this injunction, there is no federal legal requirement at this time to increase the weekly salary for individuals to be exempt from overtime to the $913 per week that the new Regulations would have required under federal law. This injunction is being appealed, and employers should be prepared to act quickly in case the district court’s decision is overturned and the injunction lifted.

However, for New York employers, that is only half of the issue.

Employers in New York must also simultaneously comply with the state’s salary basis floor for the executive and administrative exceptions under the New York Labor Law (NYLL). That minimum is presently $675 per week or $35,100 per year. If that amount is not paid, employers cannot claim executive and administrative exception status under the NYLL regardless of the duties the individual performs, and such individuals will be eligible for additional compensation for hours worked over 40 per workweek even if they are exempt under federal law. The New York salary minimum is a mandatory pre-condition to be completely excepted from the state overtime requirements.

Moreover, proposed amendments will very likely increase these salary basis minimums for the executive and administrative exceptions effective December 31, 2016, with scheduled increases in subsequent years. Specifically, the New York State Department of Labor (NYSDOL) has amended the state’s Wage Orders to increase the salary threshold for the executive and administrative exceptions to $825 per week for large employers in New York City. If adopted, these regulations would amend the salary basis threshold in the NYSDOL’s Wage Orders covering the building services industry (12 N.Y.C.R.R. 141), miscellaneous industries and occupations (12 N.Y.C.R.R. 142), nonprofitmaking institutions (12 N.Y.C.R.R. 143), and hospitality industry (12 N.Y.C.R.R. 146). The inclusion of the miscellaneous industries Wage Order will extend these amendments to nearly all employers.

The public comment period on these proposed changes closed on December 3, 2016. If the proposed amendments are finalized by the NYSDOL, they would become effective on December 31, 2016.

Proposed Amendments to Salary Threshold for Executive and Administrative Exceptions

The proposed salary basis amendments contain different salary requirements based on an employer’s size and geographic location within New York State. Specifically, there are different salary requirements for “large employers” in New York City (employers with 11 or more employees), for “small employers” in New York City (employers with 10 or fewer employees), “downstate” employers (employers in Nassau, Suffolk, and Westchester counties), and employers in the “remainder of state” (employers outside of New York City, Nassau, Suffolk, and Westchester counties).

The below chart provides an overview of the proposed changes:

	NYC Large Employers (11 or more employees)	NYC Small Employers (10 or fewer employees)	Employers in Nassau, Suffolk, and Westchester Counties	Remainder of NY State Employers
Current (as of December 31, 2015)	$675.00 per week	$675.00 per week	$675.00 per week	$675.00 per week
On and after December 31, 2016	$825.00 per week	$787.50 per week	$750.00 per week	$727.50 per week
On and after December 31, 2017	$975.00 per week	$900.00 per week	$825.00 per week	$780.00 per week
On and after December 31, 2018	$1,125.00 per week	$1,012.50 per week	$900.00 per week	$832.00 per week
On and after December 31, 2019	–	$1,125.00 per week	$975.00 per week	$885.00 per week
On and after December 31, 2020	–	–	$1,050.00 per week	$937.50 per week
On and after December 31, 2021	–	–	$1,125.00 per week	–

Effective Date

The effective date of the proposed amendments is December 31, 2016. While it is possible that the NYSDOL will withdraw or change the amendments before this date, it is more likely that they will be adopted without alterations and become effective on December 31, 2016.

Recommended Next Steps

In light of the increase in the salary threshold for the executive and administrative exceptions, employers should quickly identify and evaluate positions compensated below the new threshold and decide whether to reclassify employees as eligible for overtime under state and/or federal law, or raise their salaries. Employers should consider the hours worked for these employees to estimate the potential cost of paying overtime.

For those employees who will be reclassified as overtime eligible, employers should prepare talking points for managers and employees about the change, the reason for the change, and how the change will impact their compensation, benefits, and opportunities for advancement, if at all. Employers should also develop training and robust time reporting policies for reclassified workers who will not be accustomed to recording hours worked.

To the extent that reclassified employees previously were receiving bonuses, commissions, or other incentive compensation, employers will need to reevaluate those forms of compensation or carefully consider how to factor them into the regular rate of now-hourly workers. Employers should also be prepared to follow up and audit timekeeping practices for newly reclassified employees to ensure that they are following proper processes and procedures.

ARTICLE BY Samuel S. Shaulson & Christopher A. Parlo of Morgan, Lewis & Bockius LLP

Los Angeles Enacts ‘Ban the Box’ Legislation

Los Angeles is the latest in a growing list of jurisdictions to adopt an ordinance restricting employers from asking a job applicant about his or her criminal history during the application process also known as “Ban the Box”. Under the Ordinance, private employers with at least 10 employees will be barred from inquiring about a job applicant’s criminal history until a conditional offer of employment has been made.

The “Los Angeles Fair Chance Initiative for Hiring (Ban the Box),” signed by Mayor Eric Garcetti on December 9, 2016, goes into effect on January 22, 2017.

Los Angeles has taken a different approach than San Francisco, the other California city to have adopted a “ban the box” ordinance affecting private employers. For example, the San Francisco ordinance, enacted in 2014, restricts questions about applicants’ criminal records on applications for employment and generally prohibits any type of criminal history inquiry until after the initial job interview. (For details, see our article, San Francisco Enacts ‘Ban the Box’ Law.) The Los Angeles ordinance prohibits employers from inquiring about criminal histories until a conditional job offer has been made.

Applicant

An applicant for employment is broadly construed to include any individual who submits an application or other documentation for employment for work performed in the City, whether for full- or part-time work, contracted work, contingent work, work on commission, temporary or seasonal work, or work through an employment agency. It also includes any form of vocational or educational training, with or without pay.

Employer

An employer is defined as any individual, firm, corporation, partnership, labor organization, group of persons, association, or other organization that is located or doing business in the City and employs at least 10 employees.

The Ordinance does not apply to the City of Los Angeles or another local, state, or federal government unit.

Prohibitions

Under the Ordinance, employers are prohibited specifically from inquiring into or seeking a job applicant’s criminal history before a conditional offer has been made. This broadly precludes employers from:

asking any question on a job application about an applicant’s criminal history;
asking about or requiring disclosure of the applicant’s criminal history during a job interview; or
independently searching the internet for criminal conviction information or running a criminal background check before a conditional offer of employment has been made.

Criminal history is defined as information regarding any felony or misdemeanor conviction from any jurisdiction for which the person was placed on probation, fined, imprisoned, or paroled.

Exceptions

The four common-sense exceptions to the prohibitions are where:

an employer is required by law to run a criminal background check on an applicant to obtain information on an applicant’s conviction;
the job sought requires the possession or use of a gun;
a person who has been convicted of a crime is prohibited by law from holding the position sought; and
an employer is prohibited by law from hiring an applicant who has been convicted of a crime.

Fair Chance Process

If, after a conditional offer of employment has been made, an employer enquires into an applicant’s criminal history and determines the information warrants an adverse action, it must follow a “Fair Chance Process.”

Prior to taking any adverse action against an applicant, the employer must:

perform a “written assessment” that links the specific aspects of the applicant’s criminal history with the risks inherent in the duties of the position sought. In performing the assessment, an employer must “at a minimum,” consider the factors identified by the Equal Employment Opportunity Commission (e.g., conduct an individualized assessment) and follow any rules and regulations that may be issued by the Designated Administrative Agency (“DAA”) responsible for enforcement;
provide the applicant with written notification of the proposed action, a copy of the written assessment, and any other information or documentation supporting the employer’s proposed adverse action;
wait at least five business days after the applicant is informed of the proposed adverse action before taking any adverse action or filling the employment position; and
if the applicant provides the employer with any information or documentation pursuant to the Fair Chance Process, the employer must consider that information and perform a “written reassessment” of the proposed adverse action. If the employer still elects to take the adverse action after such reassessment, it must notify the applicant of the decision and provide the applicant with a copy of the written reassessment.

Employers using a consumer reporting agency to conduct their criminal background checks, should proceed with the Fair Chance Process concurrently with the pre-adverse and adverse action requirements of both federal and state Fair Credit Reporting Act laws.

Recordkeeping, Notice

Employers must retain documents related to applicants’ employment applications and any written assessment and reassessment performed for three years.

The Ordinance’s notice and posting requirements provide that employers must state in all job advertisements and solicitations for employment that they will consider for employment qualified applicants with criminal histories “in a manner consistent with the requirements of this [Ordinance].”

To notify applicants of the Ordinance, an employer must post a notice about the law in a conspicuous place at every workplace, job site, or other City location under the employer’s control and visited by applicants. In addition, a copy of the notice must be sent to the appropriate labor unions.

Retaliation

The Ordinance makes it unlawful for an employer to take any adverse employment action against any employee for complaining to the City about the employer’s compliance or anticipated compliance with the Ordinance, for opposing any practice made unlawful by the Ordinance, for participating in proceedings related to this Ordinance, or for seeking to enforce or assert his or her rights under the Ordinance.

Civil and Administrative Enforcement

The law allows an individual to bring a civil action for violation of the Ordinance. However, as a prerequisite to pursuing a civil action against an employer, the individual first must report an administrative complaint to the DAA (Department of Public Works, Bureau of Contract Administration) within one year of the alleged violation.

Beginning July 1, 2017, the DAA may fine employers up to $500 for the first violation, up to $1,000 for the second, and up to $2,000 for the third and subsequent violations of the law. However, fines for violations of the record-retention and notice and posting requirements are capped at $500 for each violation. Prior to July 1, 2017, the DAA will not issue any monetary penalties. Instead, it will issue written warnings to employers that violate the Ordinance.

A civil lawsuit may be brought against the employer, but only after the alleged violation has been reported to the designated administrative agency and the administrative enforcement process has been completed or a hearing officer’s decision has been rendered, whichever is later. The DAA still needs to establish rules governing the administrative process for investigation and enforcement of alleged violations.

All covered Los Angeles employers should communicate and train their managers who are involved in the hiring process about the Los Angeles Fair Chance Initiative for Hiring (Ban the Box) ordinance and take steps to ensure compliance with its restrictions

ARTICLE BY Jamerson C. Allen, Susan M. Corcoran, Richard Greenberg &Alexandra Gilinsky of Jackson Lewis P.C.

January 25-27: 24th Annual Marketing Partner Forum – Client Collaboration & the New Rules of Engagement

In January 2017, Marketing Partner Forum returns to Terranea Resort in Rancho Palos Verdes, CA for a three day summit on law firm marketing and business development set against the breathtaking Southern California shoreline. Marketing Partner Forum will welcome law firm marketing partners, rainmakers, practice group heads, business development leaders and esteemed corporate counsel for a dynamic and vibrant conference designed for the industry’s most experienced professionals.

Call to register: 1-800-308-1700

Or click here to email and we will contact you.

For more information, click here.

Why You Should Attend

Marketing Partner Forum is designed for client development partners, rainmakers, and the senior-most legal marketing and business development professionals across the legal industry. Our content reflects the experience and sophistication of our international audience in terms of rigor, ambition and scope. Attendees can expect to hear from venerable thought leaders both within and outside of the legal industry. Enjoy ample networking opportunities and the stunning scenery, golf course, spa and hiking trails at one of California’s most picturesque resorts. Take advantage of our brand new Marketing Partner Conference Track consisting of several compelling sessions designed specifically for the law firm partnership. Interact directly with senior clients and network for new business. Explore the brand new Marketing Partner Forum Technology Fair. Bring your family to our Thursday night reception and Friday Bloody Mary Brunch. Depart the event with practical takeaways to share with peers and firm leadership.

The National Law Forum

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