Category: Labor & Employment

Franchisors Beware: McDonald's Workers Sue for Alleged Wage and Hour Violations by Franchisees

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Seven class action lawsuits were recently filed against McDonald’s Corp. and several McDonald’s franchisees in California, Michigan and New York. The lawsuits are a direct result of the coordinated effort by plaintiffs’ attorneys and the Service Employees International Union to pressure fast-food restaurants to pay their employees at least $15.00 per hour. The lawsuits are also part of a new strategy from the plaintiffs’ bar to sue fast-food and pizza franchisors (i.e., the “deep pocket”) for the conduct of independently owned franchisees.

The Michigan and New York class actions were filed in federal court and primarily allege that McDonald’s Corp. and the franchisees violated federal law by shaving hours from employees’ time cards, requiring employees to work off the clock and failing to pay overtime for hours worked in excess of 40 in a workweek. The California class actions were filed in state court and allege a variety of state labor law violations, including minimum wage and overtime violations and missed meal and rest breaks.

The lawsuits allege that McDonald’s Corp. is not only culpable for the suits relating to its corporate-owned stores, but also for its franchisees because of McDonald’s Corp.’s alleged heavy hand in monitoring and guiding the franchisees’ timekeeping, scheduling and other policies. In particular, the Michigan lawsuits allege that McDonald’s Corp. is a “joint employer” and thus also liable because it provides financial tracking computer software to franchisees, which allegedly guides when individual store managers may permit employees to be clocked in or on the clock. The software purportedly sends alerts to the manager when labor costs exceed a certain level of sales. As a result, the plaintiffs allege that managers prevented employees from clocking in (even though the employees were working) until the restaurant experienced a certain level of sales.

Generally, when determining whether a “joint employer” relationship exists, courts examine the totality of the circumstances, focusing on the economic realities of the particular relationship. A joint employment relationship may exist where two companies are deemed to share control of the employee, or one company is controlled by another company. Courts have considered a variety of factors when making this determination, including the ability to hire or fire the employees, supervision of the employees’ schedules and working conditions, determination of wages and the maintenance of employment records.

These McDonald’s lawsuits will need to overcome some very high hurdles before they may be certified as class actions due to the individualized nature of the plaintiffs’ claims and circumstances in the various stores. For example, certification may be inappropriate on a multi-store basis if McDonald’s can show that individual store managers implemented their own procedures and practices for scheduling and timekeeping. Nevertheless, these cases are a good reminder for franchisors to review the policies, training materials, software, etc., that they share with franchisees to ensure that the materials are lawful and will not inevitably lead to employees working off the clock. Lastly, franchisors should review their relationships and interactions with franchisees to ensure that they are not exercising control in a manner that could support a joint employer relationship.

Article By:

Joseph K. Mulherin
 
Of:
Vedder Price

Mind Regulations When It Is Time To Mine

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The Department of Labor recently issued a reminder to employers involved in themining industry. As spring (slowly) approaches, surface mines will reopen. As miners head back to the job site and prepare equipment for the new season, potential for injury is high.

Of the 12,000 metal and nonmetal mines overseen by the Mine Safety and Health Administration (“MSHA”), almost half are operated on a seasonal basis, closing for winter when conditions make operations too difficult. According to MSHA information, injuries at seasonal mines climb sharply in the spring. MSHA is vested with the power to enforce compliance with mandatory safety and health standards as a means to eliminate fatal accidents; to reduce the frequency and severity of nonfatal accidents; to minimize health hazards; and to promote improved safety and health conditions in the Nation’s mines.

Miner operators and managers should review safety information available at http://www.msha.gov and take the time to educate employees on the numerous hazards associated with the job. Always keep in mind that employers are responsible for providing a safe workplace; employee injuries are not only detrimental to operations, but can be costly – both financially and reputation-wise.

Article by:
Brandon K. Johnson
 
Of:
McBrayer, McGinnis, Leslie and Kirkland, PLLC

U.S. Supreme Court Clarifies That Severance Pay is Taxable—in Most Cases

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On Tuesday, March 25, 2014, the U.S. Supreme Court, in an 8-0 decision, ruled that severance payments made to employees who are involuntarily terminated are taxable wages under the Federal Insurance Contributions Act (FICA).  Quality Stores, Inc., et al., 12-1408.  The Court reversed the Sixth Circuit Court of Appeals ruling in favor of Quality Stores, which was seeking a $1 million tax refund based on its argument that severance payments were not covered by FICA and were excluded from taxation based on the Internal Revenue Code.  The Court’s ruling resolved a split between the Sixth Circuit and the Federal Circuit, and ended a legal battle with more than $1 billion at stake in potential tax refunds to employers involved in 11 separate cases with more than 2,400 refund claims.

Quality argued that its severance payments to terminated employees were actually supplemental unemployment compensation benefits (SUB), which are not considered “wages” under the Internal Revenue Code.  According to the company, “a SUB payment is a type of payment that—although made by an employer to [its] former employee—nonetheless does not meet the statutory definition of ‘wages’ because it is not remuneration for services.”  The Court noted that the severance payments were made only to employees and were based on employment-driven criteria including the position held, the employee’s length of service with the company and salary at the time of termination.  Relying on the “broad definition of wages under FICA,” the Court ruled that severance payments to employees who are terminated involuntarily are taxable under FICA.

However, in its decision the Court noted IRS revenue rulings that severance payments tied to the receipt of unemployment compensation benefits “are exempt not only from income tax withholding but also FICA taxation.”  Thus, employers appear to continue to be able to make severance payments not taxable through a carefully crafted structure linking the severance payments to the employee’s receipt of unemployment compensation benefits.

Article By:

Mark D. Nelson
Alejandra Lara
Of:
Drinker Biddle & Reath LLP

Northwestern Scholarship Football Players Found to be Employees Eligible for Union Representation

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Peter Sung Ohr, the Regional Director for Region 13 of the National Labor Relations Board issued a Decision and Direction of Election pertaining to the effort of the Northwestern University football players to unionize. The Regional Director found that scholarship football players at Northwestern University are “employees” within the meaning of the National Labor Relations Act and eligible for union representation. The Regional Director found appropriate a bargaining unit composed of “all football players receiving a grant-in-aid football scholarship and not having exhausted their playing eligibility.”

The Regional Director used the common law definition of employee in reaching his decision. Under the common law test, a person is an employee if he performs a service for another, under a contract of hire, for compensation, and is subject to the other’s right of control. He found the following:

  • The scholarship football players perform a service (playing football) for compensation (a scholarship)
  • The scholarship players’ commitments to play football in exchange for the scholarship constitutes a contract for hire
  • The scholarship players are under the control of the University for the entire year, including in-season and out-of-season workouts, restrictions on their entire personal life and detailed regulations players must follow at the risk of losing their scholarship

The Regional Director decided the NLRB’s 2004 Brown University decision, in which the NLRB found graduate assistants not to be employees of the university, to be inapplicable here because playing football is not part of the players’ academic degree program. However, he wrote that even if the Brown University test was applied, the scholarship football players would be found to be employees. He noted:

  • The scholarship players are not primarily students due to the 50-60 hours a week during the season that they devote to football
  • The scholarship players’ football “duties” do not constitute a part of their academic degree requirements
  • The academic faculty does not supervise the players’ football duties; rather, coaches who are not part of the faculty do so
  • The grant-in-aid football scholarship is not need-based like the financial aid other students receive but is given solely in exchange for playing football

The Regional Director rejected two additional arguments made by the University:

  • He decided the scholarship football players are not “temporary employees” (who are generally ineligible to participate in collective bargaining) because they work more than 40 hours a week during the season, work year round, expect to work for 4-5 years and play football as their prime consideration
  • He did not include the “walk-on” players in the bargaining unit. He found that they are not employees within the meaning of the NLRA because they do not receive a scholarship and are not subject to the conditions for its receipt

The University now has until April 9, 2014 to file a Request for Review to appeal the Regional Director’s ruling to the NLRB in Washington, D.C.

Article By:

Gregg E. Clifton
Paul V. Kelly
Of: 
Jackson Lewis P.C.

What To Look For Down The Road: France

Sheppard Mullin 2012

There is some legislation being debated in the French Parliament.  One piece of legislation would encourage fathers to take leave to care for their children.  The goal would be to curb the systemic disadvantages that women experience in their careers due to motherhood.

Another bill has been introduced with the goal of reforming the system of continuing vocational training, which could have major financial implications.  The bill provides for the creation of a so-called “individual learning account” in which rights to training hours earned each year would accumulate, within a total limit of 150 hours.  The account would not be related to the company: it would be personal and “follow” the employee throughout his/her entire working life.

 Article by:

Terese M. Connolly

Of:

Sheppard, Mullin, Richter & Hampton LLP

 

EEOC Sues Wal-Mart Stores East for Disability Discrimination – Equal Opportunity Employment Commission

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Cockeysville Store Refused to Accommodate Applicant With End-Stage Renal Disease, Federal Agency Says

Wal-Mart Stores East, LP violated federal law when it refused to employ an individual with end-stage renal disease as a store associate because she needed a reasonable accommodation during the hiring process, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a federal lawsuit it announced today.

The EEOC charges that following a successful interview, the assistant store manager at the Walmart store in Cockeysville, Md., offered Laura Jones a job as an evening sales associate, contingent on passing a urinalysis test for illegal drugs.  When Jones said that she cannot produce urine because she has end-stage renal disease, the assistant store manager told her to ask the designated drug testing company about alternate tests.

That day, Jones went to the drug testing facility as directed and was told that while the facility did offer other drug tests, such as a mouth swab/saliva test, the employer had to order the alternate drug test.  Jones then called the assistant store manager, relayed this information and even offered to pay for an alternate test if Wal-Mart would order it.  Instead of ordering an alternative drug test as a reasonable accommodation to Jones’s disability, the EEOC charges that the assistant store manager replied that she had “called the corporate office” and that Jones could not be hired if she did not pass a urinalysis test.  Jones’s application was closed for failing to take a urinalysis within 24 hours.

Such alleged conduct violates the Americans with Disabilities Act, which requires employers to provide a reasonable accommodation, including during the application and hiring process, unless it can show it would be an undue hardship.  The ADA also prohibits employers from refusing to hire individuals because of their disability.

The EEOC filed suit (EEOC v. Wal-Mart Stores East, LP, Civil Action No. 1:14-cv-00862-JKB) in U.S. District Court for the District of Maryland, Baltimore Division, after first attempting to reach a voluntary pre-litigation settlement through its conciliation process.  The EEOC seeks injunctive relief prohibiting Wal-Mart from discriminating based on disability, equitable relief that provides equal employment opportunities for individuals with disabilities, and lost wages, compensatory and punitive damages and other affirmative relief for Jones.

EEOC Philadelphia Regional Attorney Debra M. Lawrence pointed out that this is the third lawsuit the EEOC has filed in the last year against employers who refused to provide alternative drug tests, such as a saliva test or blood test, to applicants who requested and needed that reasonable accommodation.  The other lawsuits involving this issue are EEOC v. Kmart Corporation; Sears Holdings Management Corporation; Sears Holding Corporation, filed in U.S. District Court for the District of Maryland (Civil Action No. 13-cv-02576) and EEOC v. Fort Worth Center of Rehabilitation, filed in U.S. District Court for the Northern District of Texas (Civil Action No. 3:13-cv-1736).

“While an employer may require applicants to undergo a drug test, these lawsuits should send a strong message to all employers that they simply cannot have a blanket, inflexible policy or practice of requiring only a urinalysis test, regardless of the circumstances,” said Lawrence.  “Paying attention to federal disability law and making a minimal effort to accommodate this applicant would have saved everyone a lot of trouble.”

EEOC Philadelphia District Director Spencer H. Lewis, Jr. added, “Wal-Mart evidently thought Ms. Jones was qualified for the position because it made her a job offer.  When it refused to permit her to take an alternative drug screening test and revoked the job offer, the company lost the talent and services of a qualified employee as well as violating federal law.”

The EEOC enforces federal laws prohibiting employment discrimination.  Further information about the Commission is available at its website, www.eeoc.gov.  The Philadelphia District Office of the EEOC oversees Pennsylvania, Maryland, Delaware, West Virginia and parts of New Jersey and Ohio.

Article by:

U.S. EEOC

 

EEOC & FTC Issue Joint Background Check Guidance

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The U.S. Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) issued joint informal guidance concerning the legal pitfalls employers may face when consulting background checks into a worker’s criminal record, financial history, medical history or use of social media.  The FTC enforces the Fair Credit Reporting Act, the law that protects the privacy and accuracy of the information in credit reports. The EEOC enforces laws against employment discrimination.

The two short guides, Background Checks: What Employers Need to Know andBackground Checks: What Job Applicants and Employees Should Know, explain the rights and responsibilities of both employers and employees.

The agency press releases state that the FTC and the EEOC want employers to know that they need written permission from job applicants before getting background reports about them from a company in the business of compiling background information. Employers also should know that it’s illegal to discriminate based on a person’s race, national origin, sex, religion, disability, or age (40 or older) when requesting or using background information for employment.

Additionally, the agencies want job applicants to know that it’s not illegal for potential employers to ask someone about their background as long as the employer does not unlawfully discriminate. Job applicants also should know that if they’ve been turned down for a job or denied a promotion based on information in a background report, they have a right to review the report for accuracy.

According to EEOC Legal Counsel Peggy Mastroianni, “The No. 1 goal here is to ensure that people on both sides of the desk understand their rights and responsibilities.”

Article by:

Jason C. Gavejian

Of:

Jackson Lewis P.C.

Does March Madness = Workplace Madness? Some Thoughts on the Legality of NCAA Bracket Pools and the Tournament’s Effect on the Workplace

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With the Olympics now behind us (were they ever in front of us?), this time of year usually marks the sports netherworld between the Super Bowl and the NCAA Men’s Division I Basketball Tournament, which is better known as March Madness. This lull provides employers with an excellent opportunity to contemplate the issues that March Madness creates in their workplace. We explore some of those issues below.

Participating in a NCAA Bracket Pool: Everyone Else Does It, So Why Can’t We?

Nothing presages the coming of spring like the NCAA Tournament, and concurrently, perhaps nothing is as ubiquitous in the American workplace during this time period as NCAA bracket pools. Estimates of participating Americans are in the 50-60 million range and we can totally understand why. Even President Obama completes a bracket each year (he even picked last year’s winner correctly). And we expect those numbers to go up because of contests like these: Quicken Loans is offering a $1 billion prize to anyone who completes the perfect bracket. The chances of doing that: 1 in 9.2 quintillion (9 with about eighteen zeroes after it, or the same odds of the Knicks winning the NBA Championship this year. Please come to New York Phil Jackson. Please.).

The typical workplace bracket pool scenario involves an email attaching a bracket or an embedded link to a website that requires you to sign up for and complete an online bracket; think: ESPN.com or cbsports.com (whose home page even promotes “co-worker” participation). Sometimes these e-mails are sent office-wide, other times they are limited to a select group of employees. The typical entry fee can range from $5 to $20 per bracket, with the winner collecting the biggest payout and the second and third place finishers collecting more moderate sums. Some brackets also return the last place “winner” his or her entry fee (see: probably you at least once in the last 10 years). The pool “manager” may also take a cut for dealing with the administrative burden (including having to stop by your cubicle at least twice a day for your entry fee). Of course, all this varies from pool to pool. We’ve heard of pools where the winner gets to donate the collected entry fees to the charity of his or her choice (awwww). We’ve heard of pools going in the opposing direction: $1,000 per entry, winner takes all (grrrrrr). Overall, close to $2.5 billion is wagered on the tournament.

But is any of this legal? The results are mixed. On the federal level, probably not; on the state level, it depends on the state. Participation in a bracket pool may violate at least two federal laws. NCAA bracket pools that are conducted across state lines (i.e. a company pool involving offices from several states) or which are managed online (the vast majority), could violate the Interstate Wire Act of 1961. There is a “fantasy sports” exception to that law, but bracket pools don’t seem to fit within that exception since they require the individual to bet on the outcomes of the games. Participation in these bracket pools may also violate the Professional and Amateur Sports Protection Act, which prohibits wagers on sports anywhere, except in certain grandfathered states (Nevada, Delaware, Oregon and Montana).

On the state level, while most states ban gambling, their gaming laws provide exceptions for so-called “social” or “recreational” gambling. While the particulars vary, to qualify for these exceptions: (1) all of the money in a pool must go to a winner or a charitable organization (i.e. the “house” does not receive any of the proceeds); (2) there must be a maximum amount a person can wager (like a $20 entry fee), and (3) the pool must be limited to a certain number of people with pre-existing relationships (like co-workers). Thus, in certain states, NCAA bracket pools that meet these requirements may be permissible. In Wisconsin, by contrast, NCAA bracket pools are illegal without exception. Sad, considering the Badgers are set to make a serious run at the NCAA Championship this year.

Based on the above, especially because of the Professional and Amateur Sports Protection Act, the simplest and safest approach for (non-Nevada, Delaware, Oregon and Montana) employers would be to prohibit NCAA bracket pools in the office. But realizing that this will likely not be the majority approach, if you are an employer comfortable enough to allow your employees to run an NCAA bracket pool, we would recommend setting certain parameters, including: (1) requiring employees to complete paper brackets instead of participating online, (2) prohibiting bracket pools that will result in employees participating in offices located across multiple states; (3) prohibiting employees from using company e-mail or printers to administer the pool; (4) limiting the entry fees (i.e. $20 or less), (5) ensuring that the collected entry fees are distributed to the winner(s) (or charitable organization) and no portion goes to the house; and (6) threatening discipline if any employee pressures any other employee to participate in a bracket pool. Another option altogether is to allow your workers to participate in a bracket pool for free, with the winner collecting a prize.

Watching the Games: Everybody Else is Watching, So Why Can’t We?

Completing a bracket is one thing, but watching the games is where the fun really begins. You wake up Thursday morning annoyed that there’s still five hours before the first game tips off. Wait, this is 2014, not 2000; the tournament now boasts of 68 teams and starts on Tuesday with the “First Four” play-in games. But in reality, the tournament “starts” on Thursday, and in anticipation, your employees (and maybe even you) have probably done the following:

(a) downloaded the CBS Sports app onto their computer, tablet or mobile device that will allow them to stream the games into their workspaces

(b) arranged to watch some games at an “extended” lunch with some co-workers

(c) called in “sick” (or did the honorable thing and took a preapproved vacation/PTO day) so they can watch games

(d) All of the Above

(e) None of the Above (because, instead, they are busy binge-watching the first three seasons of Game of Thrones before the April 6 Season 4 premier)

Regardless of how your employees (or you) would answer that question, the point is that come Thursday (and Friday) they will probably be focused on something unrelated to their job. And when their focus is elsewhere, job productivity suffers. And boy does it suffer. According Challenger Gray & Christmas, an outplacement firm, this equates to $134 million in lost productivity on just the first two days of the Tournament alone where at least 3 million employees will spend between 1-3 hours watching games at work and2/3rds of all workers will track games during the workday. We wouldn’t be surprised if this number climbs again this year as CBS continues to make it easier to stream games live. (And if it really wants that number to climb, it needs to offer a better “boss button” than the one it offered last year. And on that front, when are we going to see a lawyer-friendly boss button – maybe one that clicks away to a draft brief or a redlined employment agreement? C’mon already. But we digress.)

So we know that lost productivity is an issue. But what about the related issue of employee morale? A survey conducted last year by OfficeTeam found that 20% of managers believe that the NCAA tournament has a positive effect on employee morale. Only 4% believed it had a negative effect and 1% didn’t know what effect it had. Perhaps the most shocking statistic is that 75% of the managers surveyed believed that it had no effect whatsoever.

To us, the result of the productivity-morale equation is employer-specific and depends on the nature of your workplace and your business goals. For example, we can certainly see how management at an accounting firm may grow uneasy at a lack of focus from its employees as their clients’ tax filing deadline nears. At the same time, we can also see how management at this firm (perhaps if it’s located by Syracuse or Kentucky) may want to convert this into an employee appreciation moment, gather its employees in a conference room for an extended lunch and game-viewing session and take a breather from their overwhelming workloads (and maybe be lucky enough to catch a top-5 all time buzzer beater.)

Employees in downtown Richmond, Viriginia probably had trouble focusing on their work in 2011.Only you can best gauge what will motivate your workforce against how it will affect your bottom line. If you could care less about employee morale or don’t think it’s a factor, then consider blocking access to the streaming site or mobile app, remind employees of your acceptable computer use policy, and threaten disciplinary action as necessary. If you are concerned about lost productivity, but want to maintain or enhance employee morale, consider allowing employees to wear or display items related to their favorite college teams that day (whether it is Villanova, Wichita St. or “Anyone but Duke”). Consider designating certain times where employees are “free” to check scores, or consider going further and allowing employees a time and place to watch games. By tuning break-room television sets to the NCAA tournament and possibly adding pizza or popcorn to the mix, it represents a cheap investment that may boost employee morale and reduce some of the short-term productivity losses while producing long-term productivity gains.

All right, that is all. We hope this helps you prepare your workplace for the upcoming NCAA tournament so that when it’s over you can proudly belt out One Shining Moment, including…

And when it’s done

win or lose

you always did your best

cuz inside you knew…

(that) ONE SHINING MOMENT, YOU REACHED FOR THE SKY

ONE SHINING MOMENT, YOU KNEW

ONE SHINING MOMENT, YOU WERE WILLING TO TRY

ONE SHINING MOMENT….

Article by:

Of:

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

EEOC Sues Wal-Mart for Age and Disability Discrimination – Equal Employment Opportunity Commission

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Keller Store Manager Harassed and Then Fired Because of His Age; Also Denied a Reasonable Accommodation for His Diabetes, Federal Agency Charges

Wal-Mart Stores of Texas, LLC discriminated against a store manager by subjecting him to harassment, unequal treatment and discharge because of his age, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed in federal court today. The EEOC’s suit also alleges that Wal-Mart violated federal anti-discrimination law when it refused the manager’s request for a reasonable accommodation for his disability.

The EEOC charges in its suit that David Moorman, the manager of a Keller, Texas Walmart store, who was 54 at the time, was ridiculed with frequent taunts from his direct supervisor including “old man” and the “old food guy.” The supervisor also derided Moorman with ageist comments such as, “You can’t teach an old dog new tricks.” The EEOC further alleges that, after enduring the abusive behavior for several months, Moorman reported the harassment to Wal-Mart’s human resources department. The EEOC contends that not only did Wal-Mart fail to take any corrective action, but the harassment, in fact, increased, and the store ultimately fired Moorman because of his age.

The suit also alleges that Wal-Mart unlawfully refused Moorman’s request for a reasonable accommodation for his disability. Following his diagnosis and on the advice of his doctor, Moorman, a diabetic, requested reassignment to a store co-manager or assistant manager position. Wal-Mart refused to consider his request for reassignment, eventually rejecting his request without any dialogue or consideration.

Such alleged conduct violates the Age Discrimination in Employment Act (ADEA) which prohibits discrimination on the basis of age 40 or older, including age-based harassment. It also violates the Americans with Disabilities Act (ADA), which protects employees from discrimination based on their disabilities and requires employers to provide disabled employees with reasonable accommodations. The EEOC filed suit, Case No. 3:14-CV-00908-M, in U.S. District Court for the Northern District of Texas after first attempting to reach a pre-litigation settlement through its conciliation process.

The EEOC seeks injunctive relief, including the formulation of policies to prevent and correct age and disability discrimination. The suit also seeks damages for Moorman, including lost wages and an equal amount of liquidated damages for Wal-Mart’s willful conduct. The EEOC will also seek damages for harms suffered as a result of the non-accommodation.

“Employers should be diligent about preventing and correcting conduct that can amount to bullying at the workplace,” said EEOC Senior Trial Attorney Joel Clark. “They have an obligation to stop ageist harassment after it is reported. The company’s failure to take remedial action to stop the harassment, as well as the denial of a reasonable accommodation for a disability, and the ultimate termination of the discrimination victim demonstrate a disregard for equal opportunity laws. The EEOC is here to fight for the rights of people like Mr. Moorman.”

Robert A. Canino, regional attorney for the EEOC’s Dallas District Office, added, “The open mockery and insulting of experienced employees who have committed themselves to work for a company are totally unacceptable. It’s unfortunate when supervisors and managers lose sight of the importance of valuing employees. But we are hopeful that a constructive resolution which promotes the common goal of achieving a respectful work environment will emerge from this process.”

Article by:

U.S. Equal Employment Opportunity Commission

Of:

U.S. Equal Employment Opportunity Commission

Keeping Current – Recent Changes in Employment Laws

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Is your FMLA policy up to date?

The federal Family Medical Leave Act regulations were revised in 2013, primarily to expand the circumstances under which employees can take military leaves. For example, leave is now available to care for covered veterans and for service members or veterans who aggravated an existing illness or injury while on active duty (as opposed to suffering a new injury while on duty). Qualifying exigency leave is now also available to care for a covered service member’s parent.

The Department of Labor is increasing the number of complaint-driven on-site audits it conducts under the FMLA. Auditors will come in with a checklist of updates they expect to see in an employer’s FMLA policy to comply with the 2008 and 2013 regulatory changes, as well as the DOL’s informal guidance. Having updated policies will show an auditor or investigator that you are up to speed on the latest changes in the law and may lend credibility to your FMLA practices.

If you are a federal contractor, are you preparing to comply with the new OFCCP regulations regarding veterans and individuals with disabilities?

The Office of Federal Contract Compliance (“OFCCP”) issued regulations in 2013 substantially increasing the obligations of federal contractors relating to veterans and individuals with disabilities. Many of these new requirements, including language to be included in all job postings and subcontracts, go into effect March 24, 2014. Additional requirements go into effect at the start of an employer’s next plan year after March 24, 2014, but may require substantial planning in advance. For example, federal contractors will now be required to conduct statistical analysis of the number of veterans and disabled individuals in their workforce, much like what was already required for race and gender. This requires inviting individuals to self-identify as a veteran or disabled. The regulations require this invitation be made to all applicants and again to those offered jobs. It also requires that an employer’s existing work force be invited to self-identify as disabled every five years. Tracking this information can be complicated, as it must be kept separate from general personnel files and treated as confidential. This is not only required by the regulations but is also essential to avoid increased risk of discrimination claims on the basis of disability.

Companies that provide products or services under contracts with the federal government should review their obligations to ensure they are complying with these new OFCCP regulations.

Was your employee terminated for misconduct or “substantial fault” on the job?

Wisconsin’s 2013 Budget Bill made changes to the statutes governing unemployment insurance, which took effect January 5, 2014. Even before these changes, employees would be ineligible for unemployment insurance benefits if they were terminated for misconduct. The definition of misconduct previously came from case law. The new statute defines misconduct and includes examples, which include:

  • Two or more absences (without notice or without valid reason) in 120 days, unless employer policy is more generous
  • Falsifying business records

The statute also adds a second basis under which employees may be disqualified for benefits, if they are terminated for “substantial fault” in their performance. This still does not disqualify an employee from unemployment benefits for minor infractions or inadvertent errors, but on its face it would disqualify an employee who was terminated for major failures. This basis is largely undefined and untested, so we will have to monitor the decisions of administrative law judges and the courts to determine how it will be defined in practice. The updated statutes also narrow the circumstances in which an employee can quit his/her job and still qualify for unemployment benefits.

These changes may mean that employers are more likely to prevail if they challenge a former employee’s unemployment compensation claims. This may be of particular benefit to non-profit employers who participate in the unemployment insurance system as reimbursing employers, and therefore pay dollar-for-dollar on each unemployment claim.

Article by:

Sarah J. Platt

Of:

von Briesen & Roper, S.C.