Category: Labor & Employment

Department of State Releases May 2017 Visa Bulletin

may visa bulletinExpect some retrogression in EB-1 and EB-2 cutoff dates in the coming months.

The US Department of State has released its May 2017 Visa Bulletin setting out per-country priority date cutoffs that regulate immigrant visa availability and the flow of status adjustments and consular immigrant visa application filings and approvals.

What Does the May 2017 Visa Bulletin Say?

The May 2017 Visa Bulletin includes both a Dates for Filing Visa Applications chart and an Application Final Action Dates chart. The former indicates when intending immigrants may file their applications for adjustments of status or immigrant visas, and the latter indicates when adjustment of status applications or immigrant visa applications may be approved and permanent residence granted.

If US Citizenship and Immigration Services (USCIS) determines that there are more immigrant visas available for a fiscal year than there are known applicants for such visas, it will state on its website that applicants may use the Dates for Filing Visa Applications chart. Otherwise, applicants should use the Application Final Action Dates chart to determine when they may file their adjustment of status applications.

It is not yet clear which chart USCIS will select for May 2017 filings. To be eligible to file an employment-based (EB) adjustment application in May 2017, a foreign national must have a priority date that is earlier than the date listed below for his or her preference category and country (changes from last month’s Visa Bulletin are shown in yellow).

Application Final Action Dates

EB All Charge-

ability 

Areas Except

Those Listed		 China

(mainland 

born)		 El Salvador,
Guatemala,
and Honduras		 India Mexico Philippines
1st C C C C C C
2nd C 08FEB13 (was 15JAN13) C 22JUN08 C C
3rd 15MAR17 (was 15FEB17) 01OCT14 (was 15AUG14) 15MAR17(was 15FEB17) 25MAR05 (was 24MAR05) 15MAR17(was 15FEB17) 01JAN13(was 15SEP12)
Other Workers 15MAR17 (was 15FEB17) 08MAR06 (was 01MAR06) 15MAR17 (was 15FEB17) 25MAR05 (was 24MAR05 ) 15MAR17 (was 15FEB17) 01JAN13 (was 15SEP12)

Dates for Filing Visa Applications

EB All Charge-

ability 

Areas Except

Those Listed		 China

(mainland 

born)		 India Mexico Philippines
1st C C C C C
2nd C 01OCT13 (was 01MAR13) 01FEB09 (was 22APR09) C C
3rd C 01SEP15 (was 01MAY14) 22APR06 (was 01JUL05) C 01JUL14 (was 01SEP13)
Other Workers C 01JUN08 (was 01AUG09) 22APR06 (was 01JUL05) C 001JUL14 (was 01SEP13)

On the Application Final Action Dates chart, the cutoff dates for EB-1 will remain “current” for all chargeable countries, including India and China.

The EB-2 cutoff dates for the worldwide allotment as well as for El Salvador, Guatemala, Honduras, Mexico, and the Philippines will also remain “current.” Cutoff dates will advance by one month for EB-2 India and by three weeks for EB-2 China.

The EB-3 cutoff dates for the worldwide allotment as well as for El Salvador, Guatemala, Honduras, and Mexico will advance by one month to March 15, 2017. The cutoff date for EB-3 China will advance by six weeks to October 1, 2014 and the cutoff date for EB-3 India will advance by one day to March 25, 2005. The cutoff date for EB-3 Philippines will advance by three and a half months to January 1, 2013.

The EB-5 China cutoff date will advance by ten days to June 1, 2014.

On the Dates for Filing chart, the cutoff dates for EB-1 will remain “current” for all chargeable countries, including India and China.

The EB-2 cutoff dates for the worldwide allotment as well as for El Salvador, Guatemala, Honduras, Mexico, and the Philippines will also remain “current.” Cutoff dates for EB-2 China will advance by seven months to October 1, 2013. Cutoff dates for EB-2 India will retrogress by three months and three weeks, to February 1, 2009.

Cutoff dates for EB-3 China will advance by 16 months to September 1, 2015, but for “other workers” the cutoff dates will retrogress by 14 months, to June 1, 2008. Cutoff dates for EB-3 India will advance by nine months and three weeks, to April 22, 2006. Finally, cutoff dates for EB-3 Philippines will advance by ten months, to July 1, 2014.

The State Department projected that a Final Action date will be established in the EB-1 category for China and India in the near future. Visa numbers would advance slowly for the remainder of this fiscal year. Additionally, the EB-2 category for the worldwide allotment, El Salvador, Guatemala, Honduras, Mexico, and the Philippines is expected to retrogress no later than July. It is anticipated that this category will also become current at the start of the FY 2018 in October.

Read the May 2017 Visa Bulletin.

ARTICLE BYA. James Vázquez-Azpiri of Morgan, Lewis & Bockius LLP
Copyright © 2017 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

What Employers Need to Know About Arizona’s New Paid Sick Time Requirements

Arizona Paid sick timeIn November 2016, Arizonans passed Proposition 206. This proposition, entitled the “Fair Wages and Healthy Families Act,” not only increased the state’s minimum wage, but also created new requirements regarding paid sick time in Arizona. This article details the changes regarding paid sick time and the steps employers should be taking before July 1, 2017.

Overview of the Paid Sick Time Requirements

Before the passage of Proposition 206, Arizona did not require employers to provide paid sick time to employees. However, Proposition 206 establishes new requirements regarding (1) paid sick time accrual, (2) permissible uses of paid sick time, (3) how to handle unused paid sick time, and (4) notice to employees regarding paid sick time. These requirements apply to private employers and political subdivisions of the state and become effective July 1, 2017.

Accrual. Under Proposition 206, employers must provide employees with paid sick time. Employees must accrue at least one hour of paid sick time per 30 hours worked. Employers with 15 or more employees must allow employees to accrue, and use, up to 40 hours of paid sick time per year. Employers with less than 15 employees must allow employees to accrue, and use, up to 24 hours of paid sick time per year.

Permissible Uses. Employers must allow employees to use paid sick time for the following purposes:

  • mental or physical illness;

  •  care for a family member who has a mental or physical illness;

  • a public health emergency; and

  • to address issues related to domestic violence.

Employees do not need to provide prior notice to the employer if the leave is “not foreseeable” unless the employer has implemented a written policy setting forth how notice should be provided. If the leave is foreseeable, then employees must “make a good faith effort” to provide notice. If possible, employees must make a “reasonable effort” to avoid “unduly disrupting the operation of the employer” when scheduling paid sick time. Employers may not require an employee to find a replacement as a condition of using paid sick time, retaliate against an employee for use of paid sick time, or count paid sick time absences against an employee.

Unused Paid Sick Time. Proposition 206 provides employers two options regarding unused paid sick time. First, employers may allow unused paid sick time to carry over. If an employer allows paid sick time to carry over, employees are still only entitled to use the amount of time required by the statute unless the employer sets a higher limit. Second, if an employer does not allow for paid sick time to be carried over, then the employer must pay employees for unused paid sick time at the end of the year and provide the employee with an amount of paid sick time that is available for the employee’s immediate use at the beginning of the subsequent year. Employers are not required to pay out the unused paid sick time of employees who have been terminated, have resigned, or have retired, unless the employer has a policy or practice of doing so.

Notice to Employees. Proposition 206 requires employers to provide certain notices to employees. Among other things, employers must provide a summary of each employee’s paid sick time on or with each regular paycheck. The summary must include (1) the amount of earned paid sick time available for the employee, (2) the amount of earned paid sick time taken by the employee to date that year, and (3) the amount of pay the employee has received as earned paid sick time.

Next Steps for Employers

Employers should immediately take steps to ensure compliance with Arizona’s new law. To comply with this law, employers should consider taking the following steps.

  • Revise Policies. Employers should review current policies to determine whether they are adequate.  Many existing policies, including “use it or lose it” policies or policies that do not permit accrual of paid sick time until an employee has been employed for a specified period of time, will not comply with the new law.  If current policies are inadequate, employers and/or their legal counsel should revise existing policies or draft new policies to be implemented by July 1.

  • Provide Notice. Employers should become familiar with the notice requirements. Among other requirements, the Industrial Commission will require a new posting to accompany other required workplace posters.

  • Payroll and Recordkeeping Requirements. Employers should coordinate with their payroll companies or internal payroll personnel about how paid sick time will be tracked and reported, and be prepared for the additional recordkeeping requirements imposed by the law.

ARTICLE BY Andrea G. Lovell & Ellen Joy Glass of Ryley Carlock & Applewhite, A Professional Corporation

Copyright © 2017 Ryley Carlock & Applewhite. A Professional Association. All Rights Reserved.

Puerto Rico Legislation May Require Changes to Retirement Plans

Puerto Rico retirement plansPuerto Rico enacted new legislation in February that will require changes to tax-qualified retirement plans covering Puerto Rico employees, including both Puerto Rico-only and dual-qualified (US and Puerto Rico) retirement plans. Act No. 9-2017 revises a number of Puerto Rico qualified retirement plan rules including contribution limits, rules related to nondiscrimination testing and employer deductions for retirement plan contributions. Questions remain about how and when to implement these changes, but the 2017 Act became effective immediate upon enactment, so plan sponsors should be prepared for the possibility of mid-year 2017 changes to their retirement plans.

In February, Puerto Rico enacted new legislation that will require changes to tax-qualified retirement plans covering Puerto Rico employees, including both Puerto Rico-only and dual-qualified (US and Puerto Rico) retirement plans. Act No. 9-2017 (the 2017 Act) revises a number of Puerto Rico qualified retirement plan rules including contribution limits, rules related to nondiscrimination testing and employer deductions for retirement plan contributions. Questions remain about how and when to implement these changes, but the 2017 Act became effective immediate upon enactment, so plan sponsors should be prepared for the possibility of mid-year 2017 changes to their retirement plans.

Retirement Plan Changes

Following are some of the significant amendments the 2017 Act makes to the requirements applicable to tax-qualified retirement plans under the Puerto Rico Internal Revenue Code of 2011 (the PR Code):

  • Contribution Limits for Defined Contribution Plans. The PR Code previously provided for an annual contribution limit tied to Section 415 of the US Internal Revenue Code of 1986, as amended (the US Code), which limits a participant’s annual allocations, including both employee and employer contributions, to the lesser of the annual limit for the year published by the IRS under U.S. Code section 415(c) ($54,000 for 2017) or 100 percent of the participant’s annual compensation. The 2017 Act replaces this limit with a new formula limiting total annual allocations (other than rollover contributions) on behalf of a participant to the lesser of $75,000 (which does not appear to have a cost of living adjustment), or 25 percent of Net Income (“Net Income” is not defined, so it is not clear what types of income are included).

  • Definition of Highly Compensated Employees. Prior to the 2017 Act, the PR Code’s definition of highly compensated employees included officers, shareholders holding more than 5 percent of the voting shares or total value of all classes of employer stock as well as employees with compensation from the employer in excess of $110,000 (or, for dual-qualified plans, the dollar amount under US Code Section 414(q)(1)(b)). The 2017 Act (1) removes officers from the definition of highly compensated employee, (2) expands the 5 percent ownership rule to include ownership of the capital or interest in the gains of an employer that is not a corporation, and (3) revises the compensation threshold to $150,000 (which does not appear to be subject to a cost of living adjustment). The new definition of highly compensated employees applies to both Puerto Rico-only and dual-qualified retirement plans, which means that dual-qualified plans are no longer permitted to use the applicable dollar threshold under US Code Section 414.

  • Small Employer ADP Safe Harbor. The 2017 Act implements a new type of average deferral percentage (ADP) safe harbor, which exempts eligible plans from the requirement to satisfy the usual ADP nondiscrimination rules. Certain employers whose businesses generate less than $10 million per year in gross income, and who sponsor defined contribution retirement plans with fewer than 100 participants, may be exempt from ADP nondiscrimination testing if the plan sponsor provides all eligible participating employees with a contribution equal to at least 3 percent of their compensation. It is not clear how “businesses” or “gross income” are defined for purposes of evaluating eligibility for the safe harbor; more guidance is needed before plan sponsors should implement this safe harbor arrangement.

  • Employer Deductions for Retirement Plan Contributions: Prior to the 2017 Act, the PR Code provided that the maximum deduction for employer contributions to a defined contribution plan could not exceed 25 percent of the compensation paid or accrued to all employees under the plan during the applicable tax year (similar to the rules under US Code Section 404(a)). The 2017 Act retains this 25 percent limit, but also provides that, notwithstanding such limit, all contributions that do not exceed the amended annual contribution limit (described above) are deductible.

The 2017 Act also adds a new chapter to the Puerto Rico Trust Act titled “Retirement Plan Trusts,” which clarifies the rules regarding beneficiaries under retirement plans. Plans qualified in Puerto Rico that are subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA), must provide that the beneficiary of a married participant is the participant’s spouse, and the participant can only designate a non-spouse beneficiary with spousal consent (which is similar to the rules applicable to US qualified retirement plans). In addition, the 2017 Act clarifies that all assets belonging to a retirement plan trust will be exempt from the estate and inheritance provisions of the Puerto Rico Civil Code, and their disposition will be determined under the terms of the documents governing the retirement plan trust. This is a helpful clarification for plan sponsors who previously were concerned about reconciling the ERISA rules with the Puerto Rico Civil Code rules.

Next Steps for Plan Sponsors

The 2017 Act states that its intent is to increase the flexibility of retirement plans and make their establishment and administration less onerous on plan sponsors. For now, however, the 2017 Act raises a number of questions and adds potential complications for plan sponsors to administer their plans. Specifically:

  • It is not clear how and when the new rules will apply. Since the 2017 Act became effective when it was signed on February 8, 2017, do plan sponsors need to ensure they comply with the new contribution limits in 2017? If so, how do plan sponsors determine what constitutes an employee’s “Net Income”? In addition, do plan sponsors need to amend their plans in 2017 to reflect the revised definitions of highly compensated employees and new annual contribution limits? More guidance is needed to understand how the contribution limit will be measured and how the nondiscrimination rules incorporating the new highly compensated employee definition will apply.

  • Will eligible plan sponsors want to use the new ADP safe harbor? Unlike the US Code, the PR Code did not previously provide a safe harbor exempting eligible plans from ADP nondiscrimination rules. More guidance is needed to determine how “businesses” or “gross income” are defined for purposes of evaluating eligibility for the safe harbor.

We expect to see guidance and further clarification on these issues from the Puerto Rico Treasury Department. For now, plan sponsors should wait for additional guidance. However, since the 2017 Act is effective immediately, plan sponsors should be prepared to consider action in 2017, both with respect to plan administration and the adoption of plan amendments. Further, since the changes to be implemented make significant changes to the rules impacting Puerto Rico employees, plan sponsors should expect that the amendments will be qualification amendments, which will likely require plan sponsors to seek updated qualification letters from the Puerto Rico Treasury.

ARTICLE BY Nancy S. Gerrie, Jeffrey M. Holdvogt & Maggie McTigue of McDermott Will & Emery

© 2017 McDermott Will & Emery

Encrypted Messaging Apps Create New Data Privacy Headaches for Employers

encrypted messagingBusinesses have largely benefitted from the proliferation of mobile devices and text messaging apps that facilitate quick, round-the-clock communications. However, such technologies also make it increasingly difficult to monitor and control the unauthorized distribution of confidential data. On March 30, UK regulators fined a former managing director of Jeffries Group for divulging confidential client information. The banker, Christopher Niehaus, shared confidential information with two friends using WhatsApp, a popular text messaging app. The exposed information included the identity of a Jeffries Group client, the details of a deal involving the client, and the bank’s fee for the transaction. Perhaps the most surprising aspect of this story is that the leak was discovered at all. Because data sent on WhatsApp are encrypted and Mr. Niehaus used his personal mobile phone to send the messages, Jeffries Group only viewed the communications—and subsequently informed regulators—after Mr. Niehaus turned his device over to the bank in connection with an unrelated investigation.

Many employers use tools to monitor data sent to and from company-owned devices and e-mail accounts. However, companies cannot read messages delivered on programs offering end-to-end encryption, like WhatsApp or Apple’s iMessage, even if the information is sent on a company-owned device or network. Therefore, policies and tools intended to protect confidential information can be circumvented by employees using common texting apps. These technologies, which are typically free and easy to obtain, are causing headaches for employers across the country. For instance, recent media reports suggested that employees at the Environmental Protection Agency used Signal, an encrypted texting app, to surreptitiously strategize to undermine the current administration. According to other reports, White House press secretary Sean Spicer suspected his aides of using encrypted texting apps to leak information to the media.

Companies utilizing “bring your own device” practices face even greater risks. Even though end-to-end encryption may safeguard data from hackers, confidential information is often exposed when a device is lost or stolen. In fact, more data breaches are caused by lost devices and employee errors than third-party attacks. Employers can crack down on unauthorized communications by taking steps like disabling the installation of third-party texting apps on mobile devices. However, such measures may be extremely unpopular with employees who use their phones and tablets for both work-related and personal communications.

Given the growing popularity of encrypted texting apps, employers need to accept that they are not able to monitor each and every one of their employees’ electronic communications. Businesses should not over rely on data monitoring tools to secure sensitive information. Instead, it is more important than ever to enact and enforce up-to-date confidentiality policies. Employees may not understand that workplace confidentiality policies extend to communications on personal devices. Employees should be reminded to treat text messages like public in-person conversations and refrain from discussing confidential information on text message apps—even when conversing with clients or business associates. Employees should also be informed of the extensive damage a data breach can cause. Additionally, while employees may prefer using encrypted texting apps like WhatsApp and iMessage, businesses should consider offering internal messaging programs and encouraging their use for all work-related communications. Now more than ever, training employees to maintain confidentiality and make smart decisions is the most effective method of preventing leaks.

© 2017 Vedder Price

Tip Credit Does Not Apply to Delivery Drivers Declares Connecticut Supreme Court

delivery drivers pizza tip creditIn a decision released on April 4, 2017, the Connecticut Supreme Court found that employers cannot take advantage of a “tip credit” for delivery drivers in order to meet the state minimum wage.

The case, Amaral Brothers, Inc. v. Department of Labor, addressed the issue of whether delivery drivers (in this case, drivers for a pizza chain) fall within the scope of employees who are eligible for a “tip credit.” Under Conn. Gen. Stat. § 31-60(b), a tip credit may be taken for “persons, other than bartenders, who are employed in the hotel and restaurant industry . . . who customarily and regularly receive gratuities.”

A tip credit allows businesses—namely, hotels and restaurants—to pay “service employees” salaries below the state minimum wage. This is because employees in some positions, on account of their service to customers, normally receive gratuities in addition to their base wages, making up any difference between their salaries and the minimum wage rate. Specifically, a “service employee” has been defined as “any employee whose duties relate solely to the serving of food and/or beverages to patrons seated at tables or booths, and to the performance of duties incidental to such service, and who customarily receive gratuities.”

The Connecticut Department of Labor (CT DOL), the agency responsible for enforcing the minimum wage requirement, determined that delivery drivers were not tip-credit eligible, primarily because it found their “service” was limited to passing food to customers at their door. The CT DOL rejected the plaintiff’s argument that a driver transporting pizza to a customer’s home in a car is comparable to a waiter carrying food to a customer at a table.

Upon appeal by the pizza restauranteur, the Connecticut Supreme Court affirmed that delivery drivers do not fall within the scope of the tip credit. The court held that it was “reasonable for the department to conclude that the legislature did not intend that employees such as delivery drivers, who have the potential to earn gratuities during only a small portion of their workday, would be subject to a reduction in their minimum wage with respect to time spent traveling to a customer’s home and other duties for which they do not earn gratuities.”

With this ruling by the Supreme Court affirming the position of the CT DOL, it can be expected that the agency will pay close attention to how delivery drivers are paid in Connecticut. Accordingly, those in the restaurant and hotel industries should take time to review how their delivery drivers are paid. In addition, if waitstaff are also utilized as delivery drivers, it is best practice to break out the time spent on each of those duties if the tip credit is being utilized, so as to have adequate records if challenged.

ARTICLE BY Ashley Totorica of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

© 2017, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

USCIS Issues Guidance on H-1B Petition Adjudication, Announces ‘Targeted’ Site Visits

H-1b petitionUSCIS issued a policy memorandum to increase scrutiny of H-1B petitions for computer-related positions and an announcement regarding increased H-1B employer site visits—what will these changes mean for foreign worker visa programs?

In a policy memorandum dated March 31, United States Citizenship and Immigration Services (USCIS) announced that it is formally rescinding the 2000 Immigration and Naturalization Guidance Memo on H-1B Computer Related Positions issued to Nebraska Service Center employees adjudicating H-1B petitions. USCIS considers the 2000 memo to adopt an “obsolete” view of the types of computer-related occupations that qualify as specialty occupations for H-1B purposes (based on the memo’s inaccurate reading of the Occupational Outlook Handbook) and also to not “properly” apply the regulatory criteria that govern qualification for H-1B status. Specifically, the policy memorandum calls attention to the fact that the rescinded memo, while observing that “most” computer programmers hold bachelor’s degrees, did not note in which “specific specialties” such degrees were held. The rescinded memo is also criticized for not mentioning that only “some” computer programmers hold degrees in computer science or information systems, and for inaccurately presenting the fact that some jobs held by computer programmers require only two-year or associate’s degrees. The memo is further criticized for not clarifying that entry-level computer programmers will generally not qualify for H-1B status. Thus, the policy memorandum concludes that an H-1B petitioner cannot rely on the Occupational Outlook Handbook to establish that a computer programmer position is a specialty occupation and that “other evidence” must be provided to establish the specialty occupation.

Several immigration lawyer groups have raised concerns that this new policy memorandum may constitute a first step by the Department of Homeland Security (DHS) to carry out the previously announced intentions of the presidential administration to make foreign worker visa eligibility more restrictive. The new memorandum, by withdrawing a little-known memo, may well make it more difficult for H-1B petitions filed for persons working in computer-related positions to be approved. Its practical effect is that companies in the IT industry seeking H-1B status for their employees will likely have to prove that the positions at issue are not entry-level computer programming positions and that the employees’ degrees and education are specifically related to such positions. Extensive Requests for Evidence (RFEs) seeking such proof are expected to become commonplace, as are denials for failure to offer such proof. As an indication of the scrutiny and limited focus that H-1B petitions for persons working in computer-related positions are now receiving, apparently a number of RFEs questioning the relevance of a degree in electrical engineering to a computer engineer position have been issued recently.

Since the policy memorandum took effect immediately, all H-1B petitions subject to the 2018 fiscal cap will be adjudicated under its provisions, even though no advance notice of its publication was provided.

USCIS Announces ‘More Targeted’ H-1B Site Visits

In a separate announcement issued April 4, USCIS stated that, effective immediately, it will embark upon a “more targeted” campaign of site visits to the worksites where H-1B beneficiaries are employed. Such site visits have been conducted by officers of the USCIS Office of Fraud Detection and National Security since 2009. Under the new initiative, H-1B site visits will focus on three categories of employers:

  • H-1B dependent employers (generally, employers with 51 or more employees with at least 15% of their workforce composed of H-1B beneficiaries)
  • Employers filing petitions for employees who will be assigned to work at the worksites of different companies
  • Employers whose business information cannot be verified through commercially available data (including, primarily, the Validation Instrument for Business Enterprises (VIBE) tool, which is based on a Dun & Bradstreet database

In addition, the announcement notes that “random” site visits will continue to occur.

The practical effect of this announcement may be that site visits to the workplaces of employers that do not fall into one of these categories will diminish, while site visits to employers that do fall into one of these categories will spike sharply and possibly be all but certain. All employers of H-1B beneficiaries are encouraged to adequately prepare for such site visits by ensuring that

  • information contained in H-1B petitions is at all times accurate and up to date, and
  • thorough site visit protocols that govern in detail how such visits will be handled are in place.

The announcement notes that the targeted site visit program is intended to identify employers engaging in fraud and abuse of the H-1B category, not to punish individual H-1B employees. To serve this purpose, USCIS has established an email address, reportH1Babuse@uscis.dhs.gov, that will allow both American and H-1B workers to notify the agency, presumably anonymously, of instances of such fraud and abuse.

What Do These Changes Mean?

On January 24, 2017, a draft executive order titled “Executive Order on Protecting American Jobs and Workers by Strengthening the Integrity of Foreign Worker Visa Programs” was publicly circulated. This draft executive order essentially mandates a top-to-bottom review of all foreign worker visa programs to make certain that such programs are not administered in a way that creates a disadvantage to US workers. Although the order has not been finalized to date, it would appear that the presidential administration has started the process of reviewing certain visa classifications, and it is likely that DHS will issue further guidance on other visa classifications in the near future.

ARTICLE BY A. James Vázquez-Azpiri of Morgan, Lewis & Bockius LLP
Copyright © 2017 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

EEOC Orientation-Bias Guidance Stirs Controversy among Commentators

EEOC Supreme CourtThe public comment period for the U.S. Equal Employment Opportunity Commission’s (EEOC) proposed workplace harassment guidance closed last week. The EEOC’s broad definition of sexual orientation bias drew attention from practitioners and advocacy groups alike. Amidst the uncertain legal landscape surrounding harassment based on sex, the EEOC’s proposed guidance takes a progressive stance on the scope of what constitutes sex-based harassment. Under the proposed guidance, the EEOC’s definition of harassment based on sex, protected by Title VII, includes an “individual’s transgender status or the individual’s intent to transition,” “gender identity,” and “sexual orientation.” The guidance went further, stating that “using a name or pronoun inconsistent with the individual’s gender identity in a persistent or offensive manner” is sex-based harassment.

The proposed guidance follows a June 2016 report issued by the EEOC’s Task Force on Workplace Harassment, describing strategies to prevent harassment at work. According to the report, almost one-third of claims filed with the EEOC are harassment-based, with sexual harassment constituting over 40% of the claims in the private sector. Issued this past January, the EEOC’s proposed guidance’s purpose is to guide practitioners, employers, and employees alike on the agency’s position toward different types of harassment protected by Title VII. The new guidance updates nearly three-decades-old EEOC direction on workplace harassment and expands the scope of harassment in several areas, including sexual orientation and gender identity. The public comment period, which ended this past week, drew 154 comments. The wide array of those comments highlights the controversial nature of what is and is not be protected under Title VII when it comes to sex-based harassment.

Most critics of the proposed guidance called the EEOC’s definition of sex-based harassment premature and unsupported by case law. Three federal appellate courts are currently deciding cases based on whether sexual orientation is protected under Title VII, but no appellate court to date has found that it is indeed protected. Opponents of the guidance argued that, without certainty at the Congressional or Supreme Court level, the EEOC is improperly “legislating from below” and is in danger of diminishing its credibility.

On the other hand, supporters of the guidance commended the EEOC for its broad definition of sex-based harassment, and some even urged the EEOC to further broaden the definition to include those who do not identify with the gender binary or who are unable or choose not to transition fully. There was also some concern among proponents that the current phrase “intent to transition” would encourage the court to draft intent-based tests that would exclude certain individuals from protection under Title VII.

Commentators took particular notice of the improper pronoun usage example, which states that using a pronoun inconsistent with an individual’s gender can constitute Title VII-prohibited harassment. Some criticized this as an improper classification of hate speech that went beyond the scope of Title VII protection. Others lobbied for an adjustment period for employees and employers to adopt the new standard or, alternatively, add an intent element to the act. Proponents applauded the example’s inclusion as a type of harassment often experienced by employees.

As the government agencies and courts grapple with what is protected under Title VII, it would be prudent for all employers (including those who are not in states or localities that have explicitly broadened these protections) to include both sexual orientation and gender identity in their policies and trainings. The EEOC’s guidance may signal what is to come in the ever-changing area of sex-based harassment as courts and agencies trend toward a more inclusive definition of sex-based harassment. In addition to the possible legal ramifications, getting ahead of the curve and creating a harassment-free workplace promotes a healthier and happier work environment for all and, in the end, makes good business sense.

ARTICLE BY Taylor E. Whitten of Foley & Lardner LLP
© 2017 Foley & Lardner LLP

NLRB Will Not Hack Into Prior Decision Regarding Employee Email Use During Non-Work Time

NLRB employee email national labor relations boardNetwork security and protection of confidential information are among the reasons many companies place limits on how and when employees may use company-provided email.  However, the National Labor Relations Board (NLRB or Board) has largely ignored if not outright rejected these legitimate concerns, finding that under certain circumstances, they are outweighed by employees’ right to use email as a means to engage in concerted activity protected by Section 7 of the National Labor Relations Act (NLRA), which includes union organizing.  The NLRB’s March 24, 2017 decision in Purple Communications, Inc.reconfirmed the Board’s position, first announced in an earlier 2014 decision, that an employer that provides its employees with access to company email systems must presumptively allow employees to use those systems during non-work time to engage in NLRA-protected activity.  Accordingly, under this standard, an employer who maintains a policy prohibiting employees from all use of company email during non-work time presumptively violates the NLRA.

It was precisely this type of non-work time email restriction that landed Purple Communications, Inc. in hot water with the NLRB.  At the initial hearing in this case, an administrative law judge (ALJ) found that Purple’s total ban on non-work time use of company email did not violate the NLRA, relying on the NLRB’s decision from 2007 in Register Guard, which held that employees have no statutory right to use employer-provided email systems for Section 7 purposes, and thus allowed employers to prohibit non-work time use of company email systems, so long as the policy or practice did not discriminate against NLRA-protected activity.  The parties on both sides in the Purple matter appealed the ALJ’s decision on this and other grounds, and the matter was taken up for consideration by the Board. After review of the record, a Board majority (in a three-to-two member decision) promulgated a new standard under the NLRA for employer regulation of its own email systems during non-work time (Purple I).  The Board majority expressly overruled Register Guard, and held that under its new standard, employees are presumptively entitled to use their employers’ email systems during non-work time in order to engage in statutorily-protected communications.  The Board announced that this presumption can only be overcome in rare cases where “special circumstances” exist to allow employers to maintain “production or discipline.”  Notably, special circumstances cannot be established through the ordinary (yet entirely legitimate) concerns that affect all employers, such as those mentioned above concerning security or confidentiality of information.  In its order setting forth this standard, the Board also remanded the matter back to the ALJ to enter an order consistent with the new standard.  On remand, the ALJ predictably found Purple’s policy violated the NLRA under the Purple I standard.  Purple once again appealed, asking the Board to reconsider the standard it announced in the Purple I decision.

On March 24, 2017, a majority of the three-member Board panel assigned to review the matter confirmed the standard announced in Purple I, without significant comment except to refer back to the original 2014 majority decision.  Acting Board Chairman Philip Miscimarra dissented from the majority’s Purple II decision, as he did in Purple I, calling the standard it set forth “incorrect and unworkable,” and pointing out many of its practical flaws.  Among them, Acting Chairman Miscimarra explained that the Purple standard fails to properly balance an employer’s right to control its technology resources, which are a significant expense to employers to maintain and secure, with employees’ NLRA rights.  The dissent also pointed out that the decision limits employers’ ability to control work-time behavior, because an email sent by one employee during his or her non-work time often will be received and read by another employee during his or her own work time.  In addition, the dissent noted the tension created by the majority’s decision between an employer’s legitimate right to monitor use of its technology, including email (allowing it to appropriately intercept improper communications, such as harassing or discriminatory communications for which it could be liable under other laws), with the NLRA’s prohibition of employer surveillance of NLRA protected activity. These and other concerns are likely now once again going through many employers’ minds when considering the Purple standard.

There is a silver lining for employers, at least for now.  First, the Purple standard does not apply to employer regulation of email during working time, only non-work time.  Second, the Purple standard only applies to employers who already grant employees access to company email systems in the course of their work; employers are not required to provide employees with email access they do not otherwise have.  Third, the Purple decision only applies to company email, and not other forms of company technology.  However, the latter restriction may only be temporary.  Although the composition of the NLRB is expected to become more employer-friendly with the change in presidential administration, it is possible that the NLRB could use the same or similar reasoning from Purple to broaden the non-work time use requirement to other forms of company technology (cell phones and social network platforms, to name a couple).

Because of this, employers would be well-served to review their technology policies.  Absent truly unique circumstances, employers generally should avoid policies that state a total ban on non-work time use of company-provided email.  Bolstering other company policies, such as those that relate to confidentiality and time keeping, may help alleviate some of the problems meant to be addressed by a broad non-work time email ban. And, to avoid becoming the next name on a new NLRB standard, consider whether any non-work time use restrictions on other forms of technology might be overbroad under the reasoning in Purple.

ARTICLE BY Daniel B. Pasternak of Squire Patton Boggs (US) LLP

© Copyright 2017 Squire Patton Boggs (US) LLP

Religious Dress at UK Workplaces Revisited – is the fuss justified?

Religious Dress UK Workplace“Bosses can ban burkas, scarves, crosses” shouts the front page of last Tuesday’s Metro, followed by a commentary far too short to explain that this is almost always untrue.

This is the resurrection of an old debate concerning the extent of your right to manifest your religion at work through how you dress. When last seen, the European Court of Justice had decided in a Eweida v. British Airways that it would be religious discrimination to ban an employee from wearing a visible crucifix at work unless there was a good reason for it, for example health and safety. The two cases which led to yesterday’s headline (one of which – spoiler alert – said that bosses couldn’t ban religious dress) were considering slightly separate points. Bougnaoui v. ADDH considered whether it would be discriminatory for the employer to react to a customer complaint by banning the wearing of a Muslim head scarf, while Achbita v. G4S asked whether it would still be discriminatory if the employer banned all outward signs of religious or political belief.

In Bougnaoui the ECJ was clear – if you use the potentially discriminatory views of your customers as a ground for imposing dress restrictions on your employees, that will be unlawful.  Ms Bougnaoui wore a headscarf at work but was asked to remove it after a customer complained.  That was just visiting the customer’s views on the employer’s staff and so was unlawful.

However, in Achbita the employer maintained a written, comprehensive and consistent ban on the wearing of all religious and political symbols, regardless of the faith or political affiliation in question.  It did this because it wished to present a picture of overt neutrality among its workforce.  This was in turn a result of the nature of its business, supplying security and reception staff to a variety of Government and private sector clients, some in highly confidential and security-critical environments.  It did not want those customers to have any reason, real or (particularly) perceived, to doubt the commitment, loyalty or intentions of the people G4S supplied to them.

The ECJ had to find that there was no direct discrimination on religious grounds since all religions and beliefs were treated exactly the same. Ms Achbita’s headscarf was no more or less welcome than would have been Ms Eweida’s little crucifix.  It then asked whether G4S’s stance could constitute unlawful indirect discrimination, i.e. whether it was the imposition of a provision, criteria or practice (the ban on religious indicators in what you wear at work) which prejudiced more people with a particular characteristic than not (religion), affected the individual employee (Achbita’s headscarf) and wasn’t justifiable.

The question here therefore revolved around whether G4S’s ban was justifiable, i.e. a proportionate means of achieving a legitimate aim. The objective of overt neutrality was accepted as a legitimate aim given the very particular circumstances of the services G4S provided and to whom.  This will obviously be very much the exception as corporate objectives go, hence the misleading nature of the Metro’s headline.  But even given the legitimacy of the objective, was a blanket ban on religious or political wear a proportionate means of achieving it?

Reluctantly the ECJ decided that it was, largely since there was no other means of achieving that objective. Nonetheless, to satisfy that test G4S had to show that the policy was enforced regardless of religion and no matter how mainstream (and so probably uncontroversial) the political belief.  That meant not just the items in the title but also what the employee manifested through badges worn and bags carried, etc.   It meant showing there was rigorous enforcement of the rule – obviously you could not claim it as necessary if breaches were ignored.  It meant also that G4S had to show that it had considered means by which the adverse impact of the rule had been minimised as far as practicable, for example by applying the rule only to those in sensitive public/client-facing roles and looking at the possibility of transferring affected staff out of those jobs where possible.

The ECJ’s decision has been greeted with predictable dismay by religious leaders. “It will lead to an increase in hate crime”, says one, and “shows that faith communities are no longer welcome”, says another, both equally without supporting evidence.  The issue here however is not supressing religious belief at all, but in allowing businesses where it really matters (a tiny minority only) to provide a service where its customers do not have grounds to push back against individuals on perceived political or religious grounds.  At one level, professional opportunity could thereby be said to be increased, not limited.

But I repeat – the businesses in which overt neutrality will be a legitimate aim will be very few in number indeed. These cases do not alter for a moment the basic rule that limiting religious manifestation in the workplace will be unlawful discrimination unless you have an exceptionally good reason to do so.  But then you are left with the headline: “Bosses Can’t Generally Ban Burkas”, etc. and that somehow lacks the same punch.

ARTICLE BY David Whincup of Squire Patton Boggs (US) LLP

© Copyright 2017 Squire Patton Boggs (US) LLP

Does Same Sex Harassment Support Gender Discrimination Claims? Texas Supreme Court to Decide

Same Sex harassmentThe Texas Supreme Court agreed to determine whether a school teacher’s allegations of a hostile work environment by her same-sex superiors can support a claim of gender discrimination in violation of the Texas Commission on Human Rights Act (TCHRA). The court will also decide whether the circumstantial evidence presented to prove the teacher’s retaliation claim is sufficient to support a violation of the TCHRA.

The teacher alleged that a fellow coach began to sexually harass by allegedly making comments about the teacher’s body and physical appearance. When the teacher reported the harassment to her direct supervisor, the supervisor did nothing to put a stop to it and, shockingly, joined in the harassment. The teacher subsequently reported the harassment to the school principal and submitted a written complaint. The principal failed to file a formal complaint and, rather, conducted her own investigation. The principal’s underwhelming reaction pushed the school teacher to file charges of discrimination and harassment with the EEOC, at which point the principal informed her that there would be “consequences” for her complaints.

The teacher quickly found that there would, in fact, be consequences to her complaints. Within a few days of learning of the EEOC charges, the principal placed the teacher on a remedial plan and claimed it was necessary to assist in the teacher’s ineffective communication with co-workers and failure to report the alleged harassment within 10 days of its occurrence. The principal placed the teacher on administrative leave soon thereafter and eventually terminated her employment.

The school’s petition to the Texas Supreme Court asked it to determine whether the teacher’s allegations of same-sex hostile work environment—woman to woman harassment, in this case—can constitute gender-based discrimination under the TCHRA. The school argued in its petition that the appeals court failed to consider a U.S. Supreme Court standard that requires harassment to be “discriminatory at its core” in order to be actionable. The school also asked the court to determine whether the teacher’s circumstantial evidence used to support her retaliation claim was sufficient to support a TCHRA violation, giving special consideration to the teacher’s failure to submit any evidence regarding the but-for causation analysis required in such cases. The case will likely be placed on the court’s calendar in late 2017. Click here to view full briefing on the issue.

ARTICLE BY Laura Luisi of Barnes & Thornburg LLP

© 2017 BARNES & THORNBURG LLP