The Labor Law Letter
On April 9, 2013 a representative from Alabama introduced the Working Family Flexibility Act of 2013. HR1406 will allow private sector workers to receive paid time off or “comp time” for overtime hours worked. However, employees who want to receive cash wages would continue to do so. No employee could be forced to take comp time instead of receiving overtime pay under the Fair Labor Standards Act (“FLSA”). The objective of the legislation is to protect employees by requiring the employer and the employee to complete a written agreement to use comp time, entered into knowingly and voluntarily by the employee. In addition, the proposed legislation would permit employees to accrue up to 160 hours of comp time each year. An employer would be required to pay cash wages for any unused time at the end of the year. In addition, workers would be free to “cash out” any accrued comp time whenever they chose to do so.
Resources to Determine Various Aspects of Employment Discrimination
The Equal Employment Opportunity Commission (“EEOC”) maintains a website at www.eeoc.gov which provides a vast amount of information regarding federal laws (Title VII, et al.) covered by that agency. Accessing the website will also enable one to find links to numerous cases that have been filed, settled or litigated which link includes the name of the organization, the status of the case and any dollar amounts involved. This will give you some insight of the exact nature of discrimination claims and how the matters are pled and ruled upon. Also this link will give you an opportunity to examine the nature of the charges and findings in these cases, many of which prove to be very costly to the organization in term of time, monies, reputation and employee morale.
What are job accommodations?
Accommodations for qualified employees under the American Disabilities Act (“ADA”) are such things as new equipment, change to existing equipment, or change of work routine such as hours worked. For a person to come within the protection of the ADA, s/he must be able to perform the essential functions of the job. The ADA does not require employers to reduce essential job functions, but you should engage the employee as to how s/he performs an essential job function. However, employers decide which job functions are essential. Also, the employee’s input as to how to accommodate him/her is not a mandate. The employer has to provide an accommodation that is reasonable and effective if available.
Essentially for an employee to be entitled to a reasonable accommodation under the ADA is: 1) they work for an ADA covered employer (15 or more employees); 2) they are “qualified” as that term is defined in the ADA to do the job; and 3) they are a person with a disability as defined by the ADA. “Qualified” to do the job means that someone has the “skills, experience, education or other requirements” of the position and “can perform the essential functions of the position with or without reasonable accommodations.” You can find a Disability Law Handbook-Equipment in the ADA from www.swdbtac.org/htm1/publications/dlh/employment.html.
The new health reform act impacts employers with fifty (50) or more employees. So the question becomes how is a company with less than fifty (50) employees impacted, even though they are not mandated to comply with the Affordable Healthcare Act provisions.
In 2013 employers with twenty-five (25) or less employees may receive tax breaks up to thirty-five percent (35%) of the cost of their employees’ insurance premiums. In 2014 it increases to fifty percent (50%). Employers with more than fifty (50) employees must insure their workers or pay a tax much like the current state-run unemployment and workers compensation programs. For the small employer with less than fifty (50) employees, and so as to not cross the threshold of fifty (50) or more employees, subjecting them to the Affordable Healthcare Act provisions, consider hiring more contract labor to stay below the fifty (50) employees minimum. The downside of engaging in more contract labor has its pitfalls such as lack of control over how an independent contractor performs the jobs. Additionally, contract labor will not likely have the best interests of the company in mind. And utilizing independent contractors may interfere with the employer’s ability to attract and retain workers.
Health Wellness Plans
Tennessee has several statutes which allows insurers to offer premium discounts and other rewards for employers who creating and offering to its employees programs which promote health and prevent disease. Insurers may also offer rewards for participation in voluntary programs (T.C.A. § 56-8-112)
These wellness programs are in addition to those programs which address Workers Compensation issues, (T.C.A. § 50-6-110 (a) (6)). This statute provides that Workers’ Compensation benefits are not allowed for an injury or death under certain circumstances when participation in the program is voluntary.
It must be kept in mind that employees are not just restricted to filing workers compensation claims or law suits under federal discrimination, labor and leave laws. There are many state law employment torts that employees and even non employees can pursue when they believe an employer has wrong them. This is an ever evolving area of law in Tennessee especially because Tennessee, unlike some of its neighboring states, recognizes a wider variety of employment torts. For example when an employee has filed a workers compensation claim at or about the time that cause exists to terminate that employee. Also in every situation it is important to determine whether the employee is really in hand a real employee or does s/he have an employment contract. This inquiry has become mandatory because plaintiffs are exploring employment torts as claims in addition to the more typical harassment or discrimination claims.
Among the most notable state torts is Retaliatory Discharge. Tennessee has two (2) distinct causes of action for Retaliatory Discharge: 1) a common law tort remedy and 2) a statutory remedy under the Tennessee Protection Act more commonly known as “whistle blowing.” Another tort is Fraudulent Misrepresentation and Promissory Fraud. This often arises in a situation where an employer extends, but later rescinds an offer of employment and the prospective employee has relied upon the offer to his or her determent.
However there are situations where this tort may arise after the employment relations has begun. For example employers often communicate with their employees through newsletters, bulletin board postings, mass emails and office memorandum. At other times the communications is orally through supervisors and managers. What this suggests is that communication whether in writing or orally must be consistent with one another and consistent with any written policies in a handbook.
Another tort is by Vicarious Liability-for Battery. Vicarious Liability or respondent superior is a theory used to impute liability for the actions of an employee upon his employer. Vicarious Liability opens employers to a wide variety of claims but most often it is in connection with physical injuries resulting from employee’s battery or assault. However this tort is limited to claims of injury caused by an employee while engaged in his employers business and acting within the scope of his employment.
Another tort is Negligent Hiring Supervision Retention and Training. Negligence difference from a Vicarious Liability because an employer can be independently liable for the intentional acts of its employees even when those acts occur outside the scope of employment. This liability can come from the employer’s “negligent” decision to hire, retain or properly supervise an employee after the employer has notice of the employee’s propensity for injury causing behavior.
Another tort is Emotional Distress. Under this tort employees and non-employees can sue for emotional injuries as well as physical ones. Tennessee recognizes two (2) forms of emotional distress injuries: 1) the intentional infliction of emotional distress; and 2) the negligent infliction of emotional distress. In reference to both these forms, there must be a serious mental injury.
Another tort is Civil Malicious Harassment. Discrimination claims based on race, color, creed religion or national origin maybe refashioned as “Civil Malicious Harassment.” However claims based upon “Civil Malicious Harassment” is based on the state’s criminal malicious harassment or “hate crime” statute. (Tenn. Code Ann. Section 39-17-309.) Such claims may be a part of a discrimination suit or may be brought where the plaintiff cannot bring a traditional title VII claim.
Another tort is the tort of Invasion of Privacy. Here an employer can invade another’s privacy either by its own actions or by those of its employees and thus so when it is physically or otherwise intrudes on the solitude or seclusion of an employee. However the intrusion must be highly offensive to a reasonable person. These sorts of claims most often arise when medical personal information is somehow disclose in the work place.
Another tort is False Imprisonment and Malicious Prosecution. These two torts often go hand in hand. The circumstances leading to these suits typically involve retail clients and either customers or employees who are accused of shoplifting (Tenn. Code Ann. § 40-7-116.) a merchant can determine and detain and individual for suspected shoplifting. Those susceptible to shoplifting should carefully design their loss prevention policies around the statute.
Another tort is Defamation which can be based on most normal everyday interactions such as comments made in a staff meeting, gossip in the break room, or statements made when giving an employment reference or during a termination session.
Another tort is The Procurement of Breach of Contract. This tort usually arises in a situation when an employee leaves an employer for a competitor and is subject to a non-compete agreement. This cause of action requires a three (3) party relationship 1) the employer; 2) the employee; and 3) “third party” who induces the breach of contract and becomes a defendant in the employee’s suit. The suit is essentially aimed at the employer but however if the third party is a corporate office, liability may be found if the termination was motivated by interest other than the corporations i.e. in other words for reasons outside of the corporate office duties.
To avoid exposure to this large variety of torts, an employer should; 1) Run back ground checks before and during employment. While there are legal issues associated with running a proper back ground check, it is still a good idea to do one before a job offer is extended. Back ground checks may also on employees after they have been hired and particularly when there is a suspicion that the employee is involve in criminal misconduct. There are both Federal State Laws on back ground checks, including the fair credit reporting act which has numerous procedures and which may deviate among states The Tennessee Lawful Employment Act (“TLEA”).
(Tenn. Code Ann. § 66-13-101.) This statute grants that all employees and laborers of any Corporation or firm shall have “… a lien upon the corporate and firm property … for any sums due them for labor and services performed for the corporation.” A corporation’s “managing officers” are not “employees” as defined by this statute.
The USCIS issued a revised Employment Verification form on March 8, 2013. This new form took effect upon publication in the Federal Register and will become the only acceptable version of the form as of May 7, 2013. In the interim the USCIS has provided for a sixty (60) day grace period during which the current version will be acceptable. New forms need not be completed for current employees.
Reminder, under Tennessee Law the THRA extends liability to individual supervisors or co-workers.
Social Media Policy
To withstand a challenge by the NLRB to the Employers’ Social Media Policy:
- Advise employees that there is no expectation of privacy.
- Refine terms, use approved language.
- Protect confidential information and trade secrets.
- Do not use language restricting the employees’ rights to discuss wages and other terms and condition of employment.
October 10, 2012
This is the October letter to bring to you helpful, recent labor and employment information so you can stay abreast of day to day requirements.
1. The Tennessee Lawful Employment Act
On June 7, 2011, Tennessee enacted the Tennessee Lawful Employment Act (TLEA) which modified existing Tennessee Immigration Law. The TLEA imposes eligibility verification requirements and becomes effective on staggered dates during 2012 and 2013.
Tennessee Law provides additional requirements to those embodied in applicable Federal statutes (IRCA). In addition to the requirement of verification of employment eligibility, a Tennessee employer must continue verification of employment eligibility through the completion of the I-9 Form.
The TLEA requires employers to verify the employment eligibility of all new employees. For employees, the employer may do this by using one of two methods i.e.: 1) verify each new hire in the Federal E-Verify System; or 2) obtain and maintain a copy of an acceptable identification document for each new hire. However, an employer must select the same method of compliance for all new employees i.e., it cannot E-Verify a portion of its employees and obtain an acceptable identification document for others. For guidance in enrolling in E-Verify, the Tennessee Department of Labor and Workforce Development can provide assistance. You may also access its website at www.tn.gov/labor-wfd.
Of particular note is that the employer must verify the employment eligibility for such nonemployees as independent contractors. Such individuals cannot be confirmed using E-Verify and therefore the employer must obtain and maintain an identification document for those independent contractors. In contrast, Federal I-9 Regulations do not require employment verification of independent contractors. Should an employer contract for services from an outside entity, such as, a corporation or a limited liability company, as opposed to an individual, then no action is required to verify that company’s employees. Many of the acceptable documents under TLEA are those documents that are acceptable for compliance with I-9 requirements; however, an employer should not assume a document collected for compliance with the TLEA will also satisfy I-9 requirements.
The timeline for obtaining documents is 3 work days within which to verify the employee, much as it does under Federal E-Verify Regulations.
The TLEA becomes applicable in phases depending upon the size of the employer. Employers with five or fewer employees are exempt. Other employers must comply by: 1) January 1, 2012- government (state and local) employers and employers with 500 or more employees; 2) July 1, 2012- employers with 200 to 499 employees; and 3) January 1, 2013- employers with 6 to 199 employees. A note of caution: It is undetermined at this time whether employers total number of employees includes not only those employees working in Tennessee, but also those employees employed at the employers operations in other states, if any.
The TLEA mandates that the Tennessee Department of Labor and Workforce Development oversee compliance with the TLEA through inquiry investigation and inspection. In other words, this is much like the Fair Labor Standards Act and does not require a specific complaint. However, when so requested by the Tennessee Department of Workforce Development, employers must submit documented proof of compliance. Failure to respond within 30 days will result in the issuance of an initial order of non-compliance.
The penalties upon a Tennessee Department of Workforce Development issuance of an order of non-compliance are as follows: 1) First offense- $500.00 penalty, plus $500.00 per employee or non-employee not verified, or for whom a copy of identification of documents is not maintained; 2) Second offense- $1,000.00 penalty, plus $1,000.00 per employee or non-employee not verified, or for whom a copy of identification documents is not maintained; and 3) Third offense- $2,500.00 penalty, plus $2,500.00 per employee or non-employee not verified, or for whom a copy of identification documentation is not maintained.
An employer’s failure to submit evidence of compliance to the Tennessee Department of Workforce Development within 60 days of the final order of non-compliance could result in suspension of the employer’s business license until it remedies the violations.
The paying of overtime hours and the recording of same continues to be a hot issue because “smart phones” and Blackberries enable work to be performed anytime and anywhere. Why? Because the line between work and personal life is bleeding into one which raises the issue of when overtime is owed to non-exempt employees. What the effect is of employers giving hourly employees Blackberries or access through I-connect, for example, is the implicit message the employee is to work. What is the bottom line? Aside from having a strong clear policy as to the use of cell phones in general is not to allow hourly employee and others who qualify for overtime to use Blackberries or remote access to their work computers unless they are instructed to record time when using the devices and the employer has a system in place to record the hours.
For policy verbiage, do not hesitate to contact us.
May 13, 2011
Welcome to The Biller Law Firm’s Newsletter! This page is dedicated to our continuing series of Labor Law Letters, which serve to update you on the ever-changing world of labor and employment.
We are pleased to present to you our first Labor Law Letter to be available online!*
1. Making and Documenting Employment Decisions.
A recent decision by the Sixth Circuit Court of Appeals (covers Michigan, Ohio, Kentucky and Tennessee) may make it more difficult for employers to obtain dismissal of employment discrimination cases before trial.
Basically, the Sixth Circuit ruled that certain aspects of a discrimination claim are now subject only to the plaintiff producing “some evidence” that his/her race was a motivating factor of the dismissal, as opposed to the plaintiff being required to show the decision was pretextual.
2. Cat’s Paw Theory of Liability.
Talk about reliance on legitimate non-discriminatory factors, what if the final decision maker has no knowledge of a lower ranking superior’s discriminatory recommendation, i.e., influenced the decision but did not make the employment decision?
The Supreme Court of the Unites States held that even when the company official who makes the decision has no discriminatory animus but is influenced by previous company action that is a result of a like animus in someone else, the company will be held liable. The lesson to be learned is the same lesson hopefully learned in the past, i.e., implement clear and effective policies prohibiting discrimination; train all employees, especially supervisors; establish internal procedures for reporting all instances of discrimination AND investigate timely. It goes without saying, all rules must be applied consistently, regardless of the impact on “good employees”.
3. Fair Labor Standards Act (FLSA).
Contained within the FLSA is an anti-retaliation provision. Over the years, the question has arisen whether the complaining employee must put his or her complaint in writing to be protected by this provision.
The United States Supreme Court, on March 22, 2011, answered that question by ruling that the anti-retaliation provision applies to oral complaints.
What does this mean?
It means employers must investigate all complaints, written or oral, and not assume an employee is not seriously complaining about a wage hour issue. Once again, timely investigation is a must, as is written documentation of that investigation.
4. Discrimination – Sex – Under the Fair Labor Standards Act – NOT Title VII.
Under Title VII, an aggrieved employee may bring an action under the gender discrimination provisions of Title VII. The usual charge is based on alleged discrimination in terms and conditions of employment based on that persons “gender”.
Likewise, under the FLSA, an aggrieved employee can bring suit alleging a violation of the Equal Pay Act (EPA) for paying less compensation to a female, for example, than a similarly situated male in a similar position. There are multiple defenses available to the employer, one of which is education and experience as it relates to the essential functions of the particular job, so as to justify any pay disparity.
There is an interesting ruling out of the Federal Court in South Dakota. That Federal Court ruled that a reasonable jury could discount the “education” defense where most of the skills were acquired on the job. What this means, again, is that it is becoming more difficult for employers to obtain dismissal of employment discrimination cases before trial.
5. Genetic Information Non-Discrimination Act of 2008 (GINA) Regulations.
On November 9, 2010, the EEOC published its final regulations on GINA. (29 C.F.R. Pt. 1635) These regulations apply specifically to employers with fifteen (15) or more employees and fundamentally prohibit discrimination in employment on the basis of genetic information. The EEOC regulations reflect that GINA is intended to operate in much the same way as other anti-discrimination statutes, such as Title VII and the ADA.
The GINA regulations incorporate many definitions from other anti-discrimination statutes, such as the definition of “employee” and “covered entity” drawn from the definitions found in Title VII. “Employer” also derives from the definition set forth in Title VII- this is particularly important because, just as there is no individual liability under Title VII and the ADA, the EEOC specifically states that it does not interpret GINA to impose individual liability for supervisors and managers.
What is new in GINA is the term “family member”, which refers to an individual’s family out to the fourth degree. This includes family members as distant as great-great-grandparents and children of first cousins. Under GINA, employers may not discriminate on the basis of genetic information of an employee or of an employee’s family members. “Genetic information” does not include information about an individual’s age or sex or other disease or illness that does not have genetic implications. However, that information may implicate ADA concerns, even if not covered by GINA.
N.B. – Title II of GINA is a blanket prohibition on discrimination in employment on the basis of genetic information. This may take many forms, such as an employer may not make adverse employment decisions or create a hostile work environment on the basis of an individual’s genetic information, which includes family genetic information. This includes failing or refusing to hire an applicant based on genetic information or in some way discriminating against former employees, such as causing future employers not to hire based on that information. As discussed above in connection with Title VII and FLSA, GINA contains an anti-retaliation provision that prohibits employers from discriminating on the basis of an individual’s complaint about potential discriminatory behavior under GINA or because of that individual’s participation in an EEOC investigation.
N.B. – Employers are prohibited from deliberately acquiring or requesting genetic information, which includes conducting an internet search on an individual in a way that is likely to yield results that contain genetic information, looking through an individual’s personal effects to uncover genetic information or making requests for information about an individual’s current health status in such a way that is likely to result in the disclosure of such genetic information. However, there are exceptions to the aforementioned rules. Employers are not prohibited from inadvertently obtaining genetic information; employers may still conduct lawful medical exams or otherwise lawfully request medical information, but when requesting information from an individual or a healthcare provider, there should be an instruction to that provider not to include genetic or genetic-related information to ensure that the receipt of any genetic information is truly inadvertent.
6. Recent Amendments to FLSA.
a. Tip Credit Provisions.
b. Tip Pooling Provisions.
7. Recent Decisions by the National Labor Relations Board (NLRB).
a. The NLRB has modified it current notice posting language to expressly include electronic communications.
b. The NLRB will compound interest on a daily basis for backpay awards.
c. The NLRB has under consideration alteration of composition of bargaining units in long-term care facilities.
8. Significant State of Tennessee Labor Decisions.
On September 20, 2010, in Gossett v. Tractor Supply Company, Inc., found at 320 S.W.3d 777 (Tenn. 2010), the Tennessee Supreme Court rejected the use of the federal McDonald-Douglass burden shifting framework at the summary judgment stage.
What this means is that the opportunity to obtain dismissal of a case before trial in a Tennessee state court places a different burden on the employer than in a pending labor case in federal court and vice versa.
9. IRS Alert.
In addition to the legal implications under the FLSA when an employer shifts (minimum wage/overtime) from employees to independent contractors to perform essentially the same work, there are serious consequences under the tax code as it relates to unemployment, Social Security and Medicare/taxes, which, if the worker is found to be misclassified, will lead to additional taxes, penalties and interest.
Accordingly, in today’s world of recession, the employer may expect audit requests from both the Department of Labor (DOL) and the IRS. It is important that an employer, among other steps, be certain that only a Form W-2 be issued or a Form 1099, but not both to the same worker.
There is a twenty (20) factor IRS test which offers guidance when classifying workers. If misclassification occurs, Section 520 of the Revenue Act of 1978 provides a “safe harbor”.
As always, if you have any questions or would like more information regarding any of the topics in this Labor Law Letter, please do not hesitate to contact me.