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California Will Resume Enforcement of The Requirement To Electronically Submit Certified Payroll Records

On July 20, 2016, California Department of Industrial Relations (“DIR”) issued a press release stating DIR enforcement of a contractor and subcontractor’s requirement to submit Certified Payroll Records (“CPRs”) using DIR’s online system will resume on August 1. DIR clarified that the requirement to keep CPRs has not changed. Previously, DIR suspended enforcement of filing CPRs electronically because of problems with the system and improvements. However, employers should have continued to maintain CPRs and the ability to file them electronically was operational. The key difference is now DIR will enforce the filing requirement effective August 1^st. See press release

ARTICLE BY Jonathan A. Siegel of Jackson Lewis P.C.

EEOC Revises Its Proposal To Collect Pay Data Through EEO-1 Report

On July 13, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) announced that it has revised its proposal to collect pay data from employers through the Employer Information Report (EEO-1). In response to over 300 comments received during an initial public comment period earlier this year, the EEOC is now proposing to push back the due date for the first EEO-1 report with pay data from September 30, 2017 to March 31, 2018. That new deadline would allow employers to use existing W-2 pay information calculated for the previous calendar year. The public now has a new 30-day comment period in which to submit comments on the revised proposal.

Purpose of EEOC’s Pay Data Rule

The EEOC’s proposed rule would require larger employers to report the number of employees by race, gender, and ethnicity that are paid within each of 12 designated pay bands. This is the latest in numerous attempts by the EEOC and the Office of Federal Contract Compliance Programs (OFCCP) to collect pay information to identify pay disparities across industries and occupational categories. These federal agencies plan to use the pay data “to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination.”

Employers Covered By The Proposed Pay Data Rule

The reporting of pay data on the revised EEO-1 would apply to employers with 100 or more employees, including federal contractors. Federal contractors with 50-99 employees would still be required to file an EEO-1 report providing employee sex, race, and ethnicity by job category, as is currently required, but would not be required to report pay data. Employers not meeting either of those thresholds would not be covered by the new pay data rule.

Pay Bands For Proposed EEO-1 Reporting

Under the EEOC’s pay data proposal, employers would collect W-2 income and hours-worked data within twelve distinct pay bands for each job category. Under its revised proposed rule, employers then would report the number of employees whose W-2 earnings for the prior twelve-month period fell within each pay band.

The proposed pay bands are based on those used by the Bureau of Labor Statistics in the Occupation Employment Statistics survey:

(1) $19,239 and under;

(2) $19,240 – $24,439;

(3) $24,440 – $30,679;

(4) $30,680 – $38,999;

(5) $39,000 – $49,919;

(6) $49,920 – $62,919;

(7) $62,920 – $80,079;

(8) $80,080 – $101,919;

(9) $101,920 – $128,959;

(10) $128,960 – $163,799;

(11) $163,800 – $207,999; and

(12) $208,000 and over.

Stay Tuned For Final Developments

The EEOC’s announcement of the revised pay data reporting rule opens a new 30-day comment period, providing a second chance for the public to submit comments on the proposal through August 15, 2016. The EEOC is also formally submitting the proposed EEO-1 revisions to the Office of Management and Budget for consideration and decision. We will keep you posted on any further developments.

Please note that employers required to file an EEO-1 report for 2016 must do so by the normal September 30, 2016 filing date using the currently approved EEO-1 and must continue to use the July 1st through September 30th workforce snapshot period for that report.

ARTICLE BY Cecilia M. Romero of Holland & Hart LLP

SCOTUS Rejects a Rule Neither Employers nor Employees Wanted: Green v. Brennan Decision

In Monday’s Green v. Brennan ruling, the U.S. Supreme Court decided that the limitations period for constructive discharge runs from the date the employee gives notice of the intent to resign. The 7-1 outcome was not a surprise following the questioning by the justices during oral arguments. The justices held that the filing period begins when an employee resigns as a result of discriminatory behavior, not when an employer creates an environment so adversarial that an employee feels forced to resign, previously ruled in 2014 by the Tenth Circuit.

The case stems from an original complaint in 2008 by Green, a postmaster in Colorado. Green, who was passed over for a promotion, claimed someone less qualified received the position which caused him to file a discrimination complaint with the equal employment opportunity commission (EEOC).

The court was confronted with three alternative dates by which the limitations period that the EEOC must be contacted would begin to run:

The date Green signed a settlement agreement giving him the option to retire or take a position 300 miles away with a significant pay cut, Dec. 16, 2009, and also the date alleged to be the last act of discriminatory conduct compelling petitioner Green to resign
The date on which Green notified the respondent Postal Service of his intention to resign, Feb. 9, 2010, or,
The date Green’s resignation actually became effective, March 31, 2010.

The choice was determinative because the controlling statute of limitations required Green to contact an EEOC counselor within 45 days of the “matter alleged to be discriminatory,” a notably ambiguous requirement. Green contacted an EEOC counselor on March 22, 2010, 96 days after signing a settlement agreement and 41 days after submitting his notice of resignation. The circuits were split on whether the limitations period ran from the “last discriminatory act” or the date the employee resigns.

The rule represents both interpretive and practical considerations that should be viewed favorable to employers, including:

It places constructive discharge claims on equal footing with ordinary wrongful discharge claims that require both discrimination and notification of being fired
Nothing in the limitations regulation provided an “exception” to the ordinary rule
Practical consideration supported the rule applied because it made little sense to start the clock ticking before a plaintiff could actually file suit

Employers should welcome this outcome and breathe a sigh of relief because of the definitiveness and certainty it brings to both the accrual and repose of limitation periods applying to federal employment discrimination claims.

Article By Douglas D. Haloftis of Barnes & Thornburg LLP

U.S. Department of Labor Issues Final Rule Greatly Expanding Scope of Reportable “Persuader” Activities

DOL On March 23, 2016, the U.S. Department of Labor (DOL) issued a final rule, first proposed in June 2011, requiring employers and their labor relations consultants, including law firms, to report to DOL any agreements pursuant to which the consultant undertakes activities with “an object directly or indirectly to persuade employees concerning their rights to organize and bargain collectively.” Reports are to be filed electronically and are subject to immediate public access. Failure to report is subject to criminal sanctions.

The new rule reverses a decades-old DOL interpretation of the “advice” exception to reporting requirements. Previously, if the agreement between the employer and consultant involved nothing more than the consultant providing the employer with materials or advice that the employer had the right to accept or reject, so long as the consultant had no direct contact with employees, no report was required.

The new rule requires an employer to report on Form LM-10 and consultants to report on Form LM-20 information relating to the scope of the agreement and fees paid for the provision of both direct and indirect persuader materials or activities.

The new rule narrows the “advice” exception to oral or written recommendations from the consultant regarding a decision or course of conduct by the employer including, for example, counseling a business about its plans to undertake a particular course of action, legal vulnerabilities and how they may be minimized, identification of unsettled areas of the law and representation of the employer in disputes or negotiations that may arise.

The greatly expanded definition of reportable persuader activities, provided the object is to directly or indirectly persuade employees concerning their rights to organize and bargain collectively, includes, among many other activities:

Planning, directing or coordinating activities undertaken by supervisors or other employer representatives with employees.
Providing persuader materials or communications to the employer in oral, electronic or written form for dissemination or distribution to employees, including drafting and revising of such materials. (The sale, rental or other use of “off the shelf” persuader materials not created for the particular employer is excluded, unless the consultant assists the employer in selecting materials).
Conducting a seminar for supervisors or other employer representatives if the seminar includes development of anti-union tactics and strategies.
Developing or implementing personnel policies or actions which have a direct or indirect object of persuading employees concerning their rights to organize and bargain collectively.

The rule is applicable to agreements and payments made on or after July 1, 2016. Legal challenges and an attempt to block enforcement of the new persuader rules are a certainty—the outcome is not.

Article By Thomas E. Obenberger of Michael Best & Friedrich LLP

Dave & Busted? Reductions in Employee Work Schedules May Not Negate Employer’s ACA Health Coverage Mandate

Under the Affordable Care Act (ACA), employers with at least 50 full-time employees (“FTEs) must generally offer qualifying health insurance to all employees who work at least 30 hours or more per week. A company that fails to satisfy this so-called “employer mandate” faces the possibility of significant penalties under the ACA. As a result, the ACA amplifies many risks for companies with respect to their employment classifications and the delivery of health care benefits to their employees.

ACA Implications for Employers

In response to these uncertainties, some employers have gone so far as to reduce the hourly work schedules of some employees to less than 30 hours per week to avoid any additional costs under the ACA employer mandate. In what is believed to be a case of first impression, the plaintiffs in Marin v. Dave & Buster’s, Inc., S.D.N.Y., No. 1:15-cv-036081 challenged their employer over the reductions to their work schedules by filing a class action suit in federal court in May 2015. Specifically, current and former employees alleged that Dave & Buster’s, the national restaurant chain, violated the protections under Section 510 of the Employee Retirement Income Security Act (“ERISA”) by intentionally interfering with their eligibility for benefits under the company’s health plan. They also claimed damages for lost wages and demanded the restoration of their health coverage, as well as reimbursement of their out-of-pocket medical costs.

In response to the lawsuit, Dave & Buster’s filed a motion to dismiss and argued that the plaintiffs’ ERISA Section 510 claim failed as a matter of law because there was no guaranteed “accrued benefit” over future health insurance coverage for hours not yet worked. On February 9, 2016, the United States District Court for the Southern District of New York denied the company’s motion to dismiss. The court found that the complaint “sufficiently and plausibly” alleged enough facts to support a possible finding that Dave & Buster’s intentionally interfered with the plaintiffs’ rights to receive benefits under the company’s health plan. The court noted that the complaint referenced specific e-mails and other communications that the plaintiffs allegedly received when their work schedules were reduced, as well as public statements by senior executives and disclosures in the company’s securities filings, which overtly explained that the workforce management protocols were instituted to thwart the potential impact of the ACA on the company’s bottom line.

While the decision on the motion to dismiss does not necessarily mean that the employer will ultimately lose, it does signal the court’s willingness to allow the plaintiffs to develop their legal theories in subsequent court filings. One can also question the impact to the court, at least initially, of the company’s open and obvious disclosures about its reasoning for reducing the employees’ work schedules. Based on the strong wording of the court’s ruling, however, these obvious and seemingly bold statements certainly did not help the company’s request for an early exit from this case. As a result, the court may eventually allow robust discovery which could, of course, be cumbersome and expensive for the company.

Takeaways for Employers

In light of this case development, companies that are subject to the ACA employer mandate should review their compliance strategies now to address any risks with their employment classifications and the delivery of future health care benefits to their FTEs, and also take heed in the manner as to how they communicate any reductions in employees’ work schedules.

Article By W. Andrew Douglass & Brian M. Johnston of Polsinelli PC

Dave & Busted? Reductions in Employee Work Schedules May Not Negate Employer’s ACA Health Coverage Mandate

ACA Implications for Employers

Takeaways for Employers

Article By W. Andrew Douglass & Brian M. Johnston of Polsinelli PC

Lawrence of Arabia Makes Surprise Contribution to UK Holiday Pay Debate

There is a line in, I think, Lawrence of Arabia where a terrified young soldier trapped under fire with a small group of his colleagues asks Peter O’Toole as Lawrence what they are going to do. “Nothing”, drawls O’Toole languidly, “After all, it’s generally best”.

And so by a tenuous little link to the question of amending your holiday pay calculations to reflect the new jurisprudence around including an allowance for overtime and/or commission. Have you been sitting in your office wondering why no one seems able to tell you exactly what you need to do? Have you been approached for a deal by your union on the basis that everyone else has sorted it out and only your company still has its head over the parapet?

You are not as alone as you may feel. A survey of over 1,000 companies of a wide variety of sizes, sectors and employee representation structures provides the answers and a number of interesting statistics:-

Of all respondents, a full 73% have yet to take any steps to amend their holiday pay calculations. Those union claims may perhaps be taken with a pinch of salt.
Of the 27% who have changed their holiday pay arrangements, only a small majority (less than 60%) have unionised workforces.
Where changes to holiday pay include use of a reference period, the period invariably picked has been twelve weeks. That is even though that period has yet to be enshrined in law and even though those responses came from sectors as diverse as construction, aviation, retail and banking. Employee numbers in those businesses ranged from less than 100 to over 45,000. It therefore appears that for all the uncertainties and injustices both ways which such a reference period can generate (and despite the enormous spread of overtime and commission schemes in use over that population) twelve weeks will likely be the default position for voluntary holiday pay agreements.
Where respondents have reached agreements with their workforces about alterations to holiday pay calculations, these have all been forward-looking. None of respondents refer to any accommodation being reached in relation to any notional arrears.
The principal factors leading to changes in those 27% of employers were (i) awareness of the case law (i.e. the perceived inevitability of having to do something at some stage) followed by (ii) union/employee pressure (though of the 73% who had made no change, only one admitted to receipt of a Tribunal claim), and (iii) brand/reputational factors.
Where changes have been made, half had applied them to the full UK 5.6 week holiday entitlement. About a quarter of respondents had limited the changes to the Working Time Directive four week minimum and a further quarter did not specify which.
Of those cases where changes had not been made, nearly 85% of employers had also taken no steps to amend their commission/overtime structures to minimise the scope for employee claims.

So in other words, whether or not it is generally best, doing nothing does seem thus far to be the principal employer response to the holiday pay question. There are good objective reasons to support such a stance at this point, including in particular the absence of Government guidance, the uncertain direction (in matters of detail, at any rate) of the case law, and the relatively limited number of unions willing to undertake the colossal logistical exercise of collective Tribunal claims. There is no reason to expect much change in the first two factors in the near future, but whether that last point will remain valid if employer indifference persists at such a high rate is an open question.

Article By David Whincup of Squire Patton Boggs (US) LLP

EEOC Defends “Mark of The Beast” Ruling – Religious Beliefs Don’t Have To Make Sense To Be Protected

In August 2015, the EEOC prevailed in a religious discrimination lawsuit against Consol Energy and was awarded in excess of $500,000.00. Former Consol mine worker Beverly Butcher, who had been with the company for over 35 years, refused to use Consol’s new biometric hand scanners that were installed to track employee time and attendance. He explained that he believed that scanners would leave the “mark of the beast” and would be a sign for the antichrist. Consol required Butcher to use the scanners and refused to consider alternate means of tracking Butcher’s time, and Butcher believed he had no choice other than to retire.

Consol recently moved for judgment as a matter of law or for a new trial, arguing that Butcher had admitted that he did not actually believe the scanner would give him the mark of the beast (or any mark at all), but instead believed that future versions of the device would be capable of doing so. Butcher further admitted that his pastor did not agree with him that the hand scanners had any relationship to the mark of the beast.

The EEOC has responded to Consol’s motion and stated that although Butcher admitted that the current version hand scanner left no mark, he testified that these scanners “are being used as part of a system of identification being put into place that will be used to serve the antichrist as foretold in the New Testament Book of Revelation and which creates an identifier for followers of the antichrist known as ‘The Mark of the Beast,’” and that “[t]he fact that a believer draws a line at the first step in what he sincerely believes to be an immoral process rather than the last step of that process does not alter the employer’s accommodation duty.”

The EEOC responded to Consol’s efforts to poke holes in the logic of Butcher’s beliefs, stating that it is unconstitutional for Consol to demand theological accuracy or consistency. “[A]s EEOC has previously pointed out, and as the Court instructed the jury, religious beliefs need not be seen as rational, doctrinally consistent, or accurate in order to be protected under Title VII.”

The takeaway of this is that if an employee seeks an accommodation based on religion, an employer should not subjectively evaluate the logic or wisdom of the employee’s beliefs, but instead should only consider whether the employee sincerely believes.

The case is EEOC v. Consol Energy, Inc., 1:13-cv-00215 in the United States District Court for the Northern District of West Virginia.

Article By Douglas M. Oldham of Barnes & Thornburg LLP

Medical Cannabis in Illinois: What Employers Need to Know

THE MEDICAL CANNABIS PILOT PROGRAM IN ILLINOIS

Is Illinois allowing recreational cannabis use, as is currently the case in Colorado and Washington?
No. The Illinois medical cannabis program is one of the most restrictive regulatory programs in the country, limiting individual usage and industry operations much more than a recreational cannabis state such as Colorado. The Illinois medical cannabis program is a four-year experiment. Illinois government leaders will evaluate a variety of outcomes before deciding whether to restrict, expand or modify the approved uses of cannabis.

How many patients in Illinois will be participating in the pilot program?
Currently, just over 3,000 patients have been approved by the Illinois Department of Public Health to participate in the program. Thousands more are expected to register once the program begins full operations.

How will I know if an employee is approved to participate as a patient in the pilot program?
Employees approved to participate in the program will be issued a State of Illinois identification card verifying registration with the Illinois Department of Public Health.

EMPLOYER CONCERNS

Are employers required to allow patients to use medical cannabis in the workplace?
No. The Illinois medical cannabis law does not require employers to permit employee use of cannabis in the workplace, even when the employee is registered as a patient in the pilot program.

Is permission to use medical cannabis required as a “reasonable accommodation” under the Americans with Disabilities Act?
Although some states have specific language in their laws that answer this question, Illinois law does not appear to include the use of medical cannabis as a required reasonable accommodation under the ADA. Although the underlying debilitating medical condition may qualify an individual for protections under the ADA, whether an employer decides to allow an employee to use medical cannabis as a reasonable accommodation under the ADA will be an individualized determination for the employer to undertake.

Am I required to tolerate medical cannabis use by an employee who works in a safety-sensitive position (i.e., a position in which the employee’s cannabis use could increase the risk of harm to the employee or others)?
No. An employer can enforce a zero-tolerance policy that disallows cannabis use by any employee, such as a physician, who works in a safety-sensitive position.

EMPLOYEE AND CANDIDATE DRUG TESTING

Can I require a medical cannabis patient who is in my employ or a candidate who I am considering hiring to undergo drug testing? What can or should I do if the employee or candidate tests positive?
In Illinois, an employer has discretion to require job candidates (as part of a conditional job offer) and employees to undergo drug testing, as long as the drug testing is conducted in a non-discriminatory manner. The employer also has the option of taking disciplinary action against a current employee who tests positive for a controlled substance (including cannabis), withdrawing an offer of employment issued to a job candidate who tests positive, or taking no action. However, the employer should be consistent in its policies and practices.

If I have contracts with the federal government, am I required to conduct drug tests for medical cannabis for job candidates and/or employees? If so, what am I required or permitted to do if a candidate or employee tests positive for cannabis use?
Some federal government contractors are required to conduct tests for drugs, including cannabis use, for employees and job candidates who are or will be performing certain safety-sensitive or security duties (e.g., owners of nuclear power plants, gas or oil pipelines, airlines and railroads). Action to be taken as a result of a positive drug test will depend on the pertinent circumstances. To ensure compliance with such requirements, employers should consult with an experienced employment law attorney for additional guidance.

Should I review and modify my personnel policies pertaining to drug use and testing? If so, what types of issues should I consider?
Yes, now is an ideal time to review personnel policies involving drug testing and protocols for responding to employee drug use and abuse. Management should carefully consider the company’s approach to drug testing of employees and develop a consistent and transparent plan for responding to drug test results.

Article By Bob Morgan of Much Shelist, P.C.

New Texas Open Carry Law Has Significant Implications for Employers

On June 13, 2015, Texas Governor Greg Abbott signed into law HB 910, the Texas Open Carry Bill for Concealed Handgun Holders (“Open Carry Law”). The Open Carry Law becomes effective on January 1, 2016. The Open Carry Law expands the scope of a concealed handgun license and authorizes an individual carrying such a license to carry a handgun in plain view in a public place as long as the handgun is carried in a shoulder or belt holster.

The Open Carry Law also adds Penal Code Section 30.07 to establish a new offense for trespassing with an openly carried handgun if a license holder enters another’s property without effective consent and: (a) had notice that entry was forbidden, or (b) received notice that remaining on the property was forbidden and failed to depart. A license holder receives notice if an owner or someone with apparent authority to act on the owner’s behalf provides notice by verbal or written communication. However, the compliance requirements for a sufficient “written communication” are strict and detailed. The “written communication” may be a card, document or sign posted on the owner’s premises. Such a sign would be required to: (a) include Penal Code Section 30.07 language in English and Spanish, (b) have contrasting colors with block letters at least one inch in height, and (c) be conspicuously displayed and clearly visible at each entrance to the property.

The Open Carry Law additionally permits individuals with concealed handgun licenses to carry handguns in plain view in a motor vehicle or watercraft owned by the person as long as the gun is carried in a shoulder or belt holster.

Implications for Texas Employers

This new legislation raises several implications for Texas employers, as it expands individuals’ rights from parking lots to company property. Currently, employers may not prohibit employees from storing lawfully possessed firearms and ammunition in vehicles parked in the employer’s parking lot (or garage or other lot provided by the employer). Specifically, the 2011 Texas concealed handgun law permits the possessor of a firearm or ammunition to store those items in a locked, privately owned car, as long as the possessor holds a concealed handgun license.

The Open Carry Law, while permitting concealed handgun licensees to openly carry a holstered firearm, also allows public and private employers to prohibit licensees from carrying their firearms onto the “premises” of the business. Under the definition set forth in the Texas Penal Code, “premises” includes “the building or a portion of the building.” The term, however, “does not include any public or private driveway, street, sidewalk or walkway, parking lot, parking garage, or other parking area.”

One significant omission from the Open Carry Law is that it does not grant employers immunity from civil actions resulting from an occurrence involving the employee and his or her openly carried firearm. The 2011 Texas concealed handgun law expressly included a provision providing employers with such immunity, except in cases of gross negligence. That immunity, however, applied only to firearms and ammunition stored or transported in an employee’s vehicle and does not address an occurrence involving an employee who is openly carrying a firearm.

The Open Carry Law, similar to the 2011 legislation, does not create a private cause of action for employees against their employer if the employee contends that his or her right to openly carry has been infringed. Thus, it seems that an employee’s only remedy would be to report the employer’s alleged violation (e.g., a policy banning firearms from being openly carried) to the Attorney General’s office.

In light of this new legislation, employers must decide: (1) whether to allow employees with concealed handgun licenses to openly carry handguns on company premises, and (2) whether to permit visitors, vendors, guests and other third parties to openly carry handguns on company premises. Implementing and enforcing these decisions will require considerable planning, including a determination as to whether any existing company policies need to be updated to comply with the new law.

Article By Micala R. Bernardo & Marc D. Katz of Andrews Kurth

Tag: employers

California Will Resume Enforcement of The Requirement To Electronically Submit Certified Payroll Records

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