Un-“PAID” Is a Better Option

Last week the U.S. Department of Labor’s Wage and Hour Division (WHD) unveiled its new Payroll Audit Independent Determination (PAID) program to facilitate resolution of potential overtime and minimum wage violations under the Fair Labor Standard Act (FLSA). Below you will find the highlights of the program and our advice and recommendations on compliance.

WHD will implement this “self-audit pilot program nationwide for approximately six months” to begin in April. At the end of the six month pilot period, WHD will determine whether to make the program permanent. In the meantime, as your team contemplates this opportunity, we recommend you keep WHD’s stated goal in mind: “To ensure that more employees receive the back wages they are owed – faster.”

All FLSA-covered employers are eligible to participate in the program on a voluntary basis. The program covers potential violations of the FLSA’s overtime and minimum wage requirements including, for example, violations based on alleged “off-the-clock” work; failures to pay overtime at one-and-one-half times the regular rate of pay;  misclassification of employees as exempt from the FLSA’s minimum wage; and overtime requirements.

There are some attractive elements to the program. It enables employers to expeditiously resolve inadvertent minimum wage and overtime violations without litigation (perhaps—see below), without the payment of liquidated damages, and without civil monetary penalties. That certainly sounds attractive but there is a catch or two or three… .

For many employers, the downside of this program will outweigh the upside. For example:

• This program does not require employees to surrender any rights.
• If an employee chooses not to accept back payment, the employee will not release any private right of action.
• If the employee chooses to accept the back payment, the employee will not grant a broad release of potential claims under the FLSA.
• By allowing employers to participate in the program, WHD does not waive its right to conduct any future investigations of the employer.
• The participating employer must pay 100% of the calculated back wages immediately, no exceptions.
• An employer’s DOL-supervised settlement under this program does not necessarily prevent state law wage claims.

All FLSA-covered employers nationwide confront the same critical question: Does the PAID program reduce risk or increase exposure for your company? Our experience tells us that many employers will be better off conducting their own Audit outside the PAID program and under the attorney/client protection. Certainly, it would be prudent for all employers to conduct an Audit of pay practices to assess compliance under the FLSA and state wage and hour laws. Our employment law crystal ball identified these issues a few years back and led us to develop our very popular FLSA Wage and Hour and Timekeeping Audit Service and our Exempt or Non-Exempt Positions Classification Service. You can achieve compliance without the PAID program pitfalls. Please let us know how we can help. www.foleylawpractice.com or call 508.548.4888

 

In some jurisdictions this blog post is regarded as Attorney advertisement.

New Year, New Laws, New Website

   

Hope your 2018 is off to a great start! We have a robust new website which we updated to change those awful pictures make it easier to use our resources. Please take a minute and check it out? http://www.foleylawpractice.com

Remember those laws we wrote about months ago — Pay Equity Act and the Pregnant Workers Fairness Act? They’re finally here. We break it down with action steps below, including, of course,  sexual harassment:

Massachusetts Pregnant Workers Fairness Act (MPWFA): This law will require all Massachusetts employers to update handbooks and policies; provide reasonable accommodation to pregnant and breastfeeding employees; and provide written notice to all employees about their right to be free from discrimination under this Act no later than April 1, 2018.

The law amends Massachusetts anti-discrimination laws to specifically prohibit retaliation and discrimination against pregnant employees, creating a new protected class to include:  “pregnancy or a condition related to pregnancy, including, but not limited to, lactation, or the need to express breast milk for a nursing child.” While Massachusetts and Federal laws already prohibit pregnancy discrimination, the new law creates an obligation for employers to engage in an interactive dialogue,  provide accommodations to pregnant and breastfeeding employees and provide new, existing and newly pregnant employees with notice of these new rights.  With the creation of a new  protected class comes familiar language and obligations: reasonable accommodation, interactive process and undue hardship.

Reasonable accommodation might include more frequent rest breaks; seating or modified equipment; paid or unpaid time off to recover from childbirth; a private space to express breast milk that is not a bathroom; job restructuring; or a modified work schedule. The interactive process mandate requires employers and employees (or prospective employees) to engage in a timely and good faith interactive process to determine a reasonable accommodation to perform the essential functions of the job. An employer is not required to provide and accommodation that would cause an undue hardship, defined as an accommodation “requiring significant difficulty or expense.” Finally, an employee may not be forced to take a leave of absence if a reasonable accommodation could be made to stay on the job.

Next Steps

• Update handbooks and personnel policies to reflect the increased obligations under the new law, including the adoption of a specific policy outlining and documenting the interactive process;
• Train human resources personnel and managers regarding the requirements of the Act;
• Ensure proper measures are in place to provide written notice in all instances required under the Act; and

Contact us with any questions and assistance in compliance. This law is a big deal.

 

Pay Equity–It really is on the horizon.

One of the strongest state laws in the country addressing equal pay for comparable work will take effect in Massachusetts on July 1, 2018.

The sweeping Act makes many changes including how to determine comparable work, and prohibiting salary and benefit inquiries before hire, to name a few. Employees will not be required to file a claim with MCAD as before but can go directly to court.

The silver lining of these new obligations is the Act provides an affirmative defense to employers who perform a good faith evaluation of pay practices. Over the past several months many of our clients have utilized out Pay Equity Audit  which creates a rolling affirmative defense for your company. We strongly advise employers to take advantage of this comprehensive and valuable service before July 1, 2018.

 

Sexual Harassment

The standard sexual harassment compliance advice has been to implement a well-written sexual harassment policy and invest in sexual harassment training. Yet many of the workplaces rocked by recent claims—including the Weinstein Company in California, home to the country’s strictest anti-harassment laws—had a policy and training in place. What can be done?

In response to the changes in climate and the new EEOC guidelines, we have developed a Sexual Harassment Tool Kit. For a flat fee we will provide:

1.    A digital copy of Attorney Angela Snyder’s No More #MeToos webinar that can be shared with your entire leadership team, serving as the first level of effective sexual harassment training for leadership and HR;
2.   A comprehensive outline for creating a sexual harassment strategy for your organization;
3.   A model sexual harassment policy and/or review of your existing sexual harassment policy;
4.   Sample Letter from Leadership in Word that sets forth your organization and leadership’s commitment to addressing sexual harassment in the workplace that can be modified to meet your specific needs;
5.    A sample “pulse” survey to send to employees that will help uncover underlying cultural erosions; and
6.   One hour of attorney time to uncover your unique risks based on demographics and culture. During that discussion we will provide a punch list of action items that will help you finalize a customized sexual harassment strategy.

 

We believe strongly in proactive advice and want to make this service as accessible as possible. We are offering the Tool Kit for a very reasonable flat fee. Please contact us.

 

 We can help! Reach out to us at questions@foleylawpractice.com or (508) 548-4888.

 

 

The Kids Are Alright

Millennials love information. Information means transparency. And that means pay equity cannot hide. A case in point: The EEOC prevailed where two high school friends, Jensen Walcott and Jake Reed, applied to work at Pizza Studio as “pizza artists” in 2016. After both were interviewed and offered jobs, Walcott and Reed discussed their starting wages. Upon learning that Reed–the male– was offered 25¢ more per hour, Walcott called the restaurant to complain about the unequal pay. When she did so, the company immediately withdrew its offers of employment from both Walcott and Reed. Not the best practice, maybe the worst.

The Kansas federal court ordered that compensatory, liquidated and punitive damages be paid by the store’s holding company (the store had closed). A very expensive lesson learned:

• Rectify don’t retaliate when mistakes are discovered;
• REVIEW PAY PRACTICES–we can help.  We have a comprehensive pay equity service that has already helped many clients;
• Workers, particularly millennials, will talk about pay and will publish information found online.  Keep ahead of trouble with fair pay policies.

We can help.  Check out our Pay Equity Service http://www.foleyworkplacelaw.com/pay-equity-audit-service.htm

I feel the Earth move, under my feet

New Overtime Rules are Delayed – Will Not Go in to Effect on December 1 To the shock and relief of employers across the country, a federal judge in Texas has issued a nationwide injunction blocking the Department of Labor’s new overtime rule set to go into effect on December 1. In a 20-page decision, U.S. District Judge Amos L. Mazzant ruled that the 21 states and more than 50 business groups that sued to block the rule stood a significant chance of success and will suffer serious financial harm if the new overtime rules go into effect as scheduled on 12/1. He further held that the DOL overstepped its authority by raising the salary cap for the white collar exemptions from $455 a week to $921 a week or $47,892 a year, a point where the minimum salary supplanted the duties test, which was not the intent of Congress when it created the statutory exemption. What Happens Now? For employers that planned to reclassify previously exempt employees on December 1, solely because employees do not meet the new salary threshold, reclassification can be delayed until further notice. The injunction halts enforcement of the rule unless or until the government can win a countermanding order from the conservative Fifth Circuit court of appeals, where there is a reasonable chance no such order will be forthcoming. In other words, the new overtime rule will now face a full trial on its merits. As we have stated repeatedly over the last 9 months, the white collar exemption to the FLSA is a three part test, including not just a two part salary test, but a duties test as well. The proposed amendment to the FLSA prompted many employers to revisit the duties tests and to reassess old job descriptions for compliance. We remain confident this was time well spent. This ruling has no impact on the existing duties test, and Judge Mazzant’s order solidifies the importance of the duties test. The Department of Labor will continue audits, and employees will continue to file wage and hour claims. Because this injunction has no impact on the duties tests for the executive, administrative, professional, computer and outside sales exemptions, any job descriptions modified to better comply with those duties tests should still be rolled out at your earliest opportunity. Remember: if these positions were reclassified because they failed the duties test – they were incorrectly classified to begin with. To avoid fines and fees, it is important to proceed with those changes. The issue of communicating this change will now be more complex. However, the fact remains that this area of law remains a highly litigated one, and as evidenced by the court’s decision, it can change on a dime. Ultimately, this is why we advised all of our clients to examine job descriptions, and revise exempt classifications, and it remains a strong argument for reclassifying your employees now. Until the court rules one way or the other, or Congress takes a definitive action to update the rules, the new overtime rule will not take effect; but it has not gone away. Please contact our office with questions and concerns about this new development, we are here to help.

© 2016 FOLEY & FOLEY, PC, ALL RIGHTS RESERVED

 

Now what?

by Attorney Angela Snyder

What Happens Now?

Change comes with every Presidential election and this one could be seismic.  Naturally, when we heard the outcome, we began questioning, what does this mean for employment laws?  What will happen to the Affordable Care Act?  What will happen with the new overtime rules?  Should businesses ignore the December 1 deadline and just wait to see what happens next? For Massachusetts, California, Maine and Nevada employers, and 25% of the country, employees will now have access to legal recreational marijuana.  How will the workplace be affected?

While we cannot read the future, we spend much of our day watching laws change and examining legal trends.  Here are our predictions  and advice for weathering the coming changes.

The Overtime Rules

As a threshold matter, Donald Trump will become the President on January 20, 2017, after the new overtime rule takes effect. Although Trump’s Secretary of Labor will likely roll back many of President Obama’s employment-related initiatives, the breadth of these changes remains to be seen. Trump has not released a specific policy or position, although he has said he favors “a delay or a carve-out of sorts,” but only for small businesses. This is far from a guarantee.

Additionally, as we have advised over the last year, the FLSA White Collar exemptions require a 3 part test.  Employees must receive a salary of at least $455 per week (rising to $913) per week; they must receive the same salary no matter how many hours they work; and they must pass a strict duties test.  The new FLSA rule set to take effect December 1, 2016, addresses only the minimum salary level portion of the test.  Many employers audited all of their exempt positions in preparation of these new rules.  To the extent employees were reclassified because their duties did not meet the requirements of one of the White Collar exemptions, a rollback of the new salary levels will be irrelevant.

In late September, two lawsuits were filed in federal court in Texas, and legislation that would delay the effective date of the rule until June 2017 passed the U.S. House of Representatives.  None of the legislation will pass into law before the new rules go into effect.  As for the lawsuits, there is a hearing this week in an action to challenge the rule; and it is possible the presiding judge will issue an injunction at that time.  However, the judge hearing the case is an Obama appointee, which means it is more than likely that on December 1, 2016, by law, all exempt positions must receive a salary of at least $913 per week.

Why comply, when there is a chance the new rules will be rolled back? As a quick reminder, under the FLSA, non-exempt employees who are improperly classified will be owed back wages and liquidated damages (equal to the back wages owed), and the auditing agency or court will look back two years to determine the overtime and wages owed.  If they believe the employer intentionally misclassified employees, that period extends to three years.  Under Massachusetts law, employees are entitled to treble damages.  These are not small penalties and often result in fines in the tens or hundreds of thousands of dollars.

For this reason, we advise all of our clients to comply with the new overtime rules on December 1.  If the new administration changes the rules, these employees can always be reclassified as exempt at a later date.  

Affordable Care Act

Trump and Republicans in Congress have stated that they will seek to repeal ObamaCare within Trump’s first hundred days in office. There are roughly 1,000 pages of the ACA and its related provisions.  A full repeal will be incredibly difficult, but it is possible.  It does look like Trump’s intention is to replace the ACA with some other program, which means 2017 should be interesting for employers. Trump has also stated he would keep the pre-existing condition mandate and the availability of insurance for children until the age of 26, which sounds a lot like…ObamaCare.

Marijuana Use

With the advent of the edible marijuana industry, a gummy bear is no longer a gummy bear.  Recreational pot shops are coming to Massachusetts in 2018.  Wondering how to prepare your workplace? Here are some things to know when it comes to creating policies on marijuana use:

1. There is not an accurate test for marijuana intoxication.  An employee who uses marijuana outside of work (even the day before) will likely fail a blood test, even if the use was totally outside of work, and he or she was not intoxicated at the time of testing.  Given the legalization of medical marijuana in particular, this has resulted in a number of lawsuits.
2. Although marijuana has now been legalized in a number of states, it is still considered a ‘controlled substance’ under federal law.  As such, at least for the time being, marijuana use remains illegal under federal law. Thus, any federal employer or private employer that receives federal monies may have to conduct testing under federal guidelines.
3. Finally, only New Hampshire and Arizona have laws protecting medicinal marijuana use and preventing employers from discriminating against marijuana users.  This will likely change now that Massachusetts and California have legalized marijuana.

So, what does all of this mean?  In the states that legalized marijuana in 2012, there have been lawsuits filed by employees who have been terminated after a positive drug test.  The outcome of these cases has been surprisingly consistent, and offered employers a fair amount of latitude when it comes to drug testing and terminating employees for marijuana use.  This has been true even in states where recreational marijuana use is legal.  However, the courts up to this point have relied on the fact that marijuana remains illegal under federal law as a major justification for their decisions.

Now that legal access to recreational marijuana exists in several states, it is likely the federal government will have to look seriously at declassifying marijuana as a Schedule I drug.  This, in turn, will likely influence legal decisions.

Although the Massachusetts recreational marijuana law does not directly alter the state laws governing employer drug testing, it definitely makes sense to review your drug testing policies in light of the new law. At a minimum, policies that call for termination or other discipline for an employee’s use of “illegal” drugs may need to be revised, given that it is no longer illegal for adults to use marijuana in Massachusetts.

As to what amount of marijuana use should result in a termination, Colorado and Washington, where recreational use of marijuana is legal, set the level of impairment at 5 nanograms of active tetrahydrocannabinol (THC) based on a set amount of blood. Pennsylvania set a 1 nanogram threshold; Nevada and Ohio opted for 2 nanograms.  States are all over the map because setting a specific impairment threshold with THC is not as clear-cut as it is with alcohol. THC can remain in a person’s system for days and weeks. That means blood tests alone are unreliable.

In 2014, after marijuana was legalized in Washington, fatal crashes where the driver was found to have THC in his/her blood doubled from around 8% to 17%.  Now that so many states have legalized marijuana, the U.S. is going to be forced to find a national standard for sobriety that is based on real science.  However, until that happens, testing for marijuana use will continue to be problematic.

Recommendations

Private employers have latitude in terms of behavior they can prevent in the workplace.  Just as you can prohibit employees from having alcohol in the workplace, you can prohibit them from possessing or being under the influence of marijuana in the workplace.

Where your testing is limited to reasonable suspicion testing, your risk of an employee claim of wrongful termination based on a positive drug test is much lower than if you conduct random tests.  Although an employee may dispute the validity of your test, if you also have documented reasonable suspicion that an employee was under the influence while at work, you will be able to show that your action as an employer was based on a reasonable and good faith belief that the employee was a danger to him/herself or others.

As for smoking, you can continue to prohibit smoking marijuana and/or ingesting marijuana just as you can prohibit smoking cigarettes or drinking alcohol.

What About the Rest?

Without question our clients should expect some change in the employment law landscape with the new administration, and it will likely be more employer friendly. However, as we observed during the election, Mr. Trump has shifted positions on many issues, many times.  Trump’s appointments to the DOL, the EEOC, NLRB, and OSHA, not to mention the Supreme Court, will be far more telling of the direction of employment related laws in the coming years.

We can help: info@foleylawpractice.com or 508-548-4888

 

 

The EEOC Jumps on the Employee Classification Bandwagon

 

The Equal Employment Opportunity Commission (EEOC) has issued updates to its Strategic Enforcement Plan for 2017-2021 .   At first glance it looks a lot like the current plan.  Then, like many government statements, there is a hidden line that gives a clue to where the EEOC is going:

The Commission adds a new priority to address issues related to complex employment relationships and structures in the 21^st century workplace, focusing specifically on temporary workers, staffing agencies, independent contractor relationships, and the on-demand economy.

The US government is playing catch up to the gig economy—Uber, Lyft, etc.  Yet this priority has noteworthy implications for all employers.  Misclassification of employees is a complicated and expensive issue. The EEOC is joining the chorus of the  Department of Labor (DOL) Misclassification Initiative.

 

If you have not reviewed your employee classification to comply with the December 1, 2016 DOL deadline on the “White Collar” Overtime mandate  you might reconsider an audit or position classification service. The message from the Feds is clear: misclassify employees at your peril (and you thought I was going to write: we just keep coming up with new regs to make it harder to do business!).

 

We can help. Call 508.548.4888 or email  Mike@foleylawpractice.com

DOL OT Rule Going Away? Don’t count your chickens… .

In a new development, 21 states and many business groups are requesting that the Texas court enjoin implementation of the new DOL overtime exemption rules.  As far as their chance of success, at least in the near term, it is not good.

Reports are that both cases have been assigned to Judge Amos Mazzant, who was nominated by President Barack Obama in 2014. It has been suggested that this assignment may not bode well for the plaintiffs.  Theoretically, prospects may improve if the lower court decision is taken up on appeal to the Fifth Circuit.

The states are claiming that the DOL overstepped by raising the salary level for what should be exempt duties–regardless of salary. Moreover, the plaintiffs allege that the automatic indexing that raises the threshold salary over three years is an overreach of authority and should include provisions for economic conditions or the effect on resources.

Our view is that we all stay the course, and continue compliance efforts. With the compliance date of December 1 so close, it would be risky to leave the fate your workplace with the courts. In the meantime we will closely monitor this case and if the courts stop implementation, that will be a wonderful surprise.

EMPLOYMENT LAW ALERT: Less than 3 months to comply with overtime rules

Why all the hype The long-awaited and much-debated “White Collar” regulations issued on May 18, 2016, become effective December 1, 2016 – your compliance deadline. The DOL has already set up field offices in every state and is conducting random audits. The fines associated with these audits are high. In addition to unpaid overtime, misclassification of employees can result in liquidated damages, equitable relief, and reimbursement of attorneys’ fees. The risk is not limited to the FLSA. Each state has its own unique employment laws. Some of these laws are consistent with the FLSA, others are not. State agencies and Attorney Generals’ Offices also conduct audits and initiate lawsuits, compounding the risk to employers. The new overtime regulations have given every employer the perfect opportunity to not only reclassify positions impacted by the new salary levels, but to correct positions that were improperly classified as exempt from the start. This is a unique and limited opportunity. Do I need a lawyer? In the event of a lawsuit, internal audits of exempt/non-exempt classifications can be used as evidence of a willful violation of the FLSA, which lengthens the statute of limitations from two to three years. The strongest protection is the careful use of the attorney-client privilege to protect the audit itself. Engaging human resources staff or consultants or even in-house counsel to conduct the audit will not allow the company to avail itself of the attorney-client privilege. By retaining outside counsel to perform this service, all findings are protected by Attorney-Client privilege. This is an exceptional chance to obtain an indemnified legal opinion that all the jobs in your workplace are accurately classified as exempt or non-exempt, under both state and federal law. We Get It! That is why we developed our 2016 Positions Classification Service and charge a fixed/flat fee for that service. Getting started is very easy. We provide your team the forms, checklists and worksheets that will carefully guide you through the classification process. We will review the forms, checklists and documents that you provide us to insure exempt positions comply with state and federal law. You can relax knowing that you have well-written job descriptions and that each employee is correctly classified and being compensated under the pertinent state and federal laws. Introducing Our Service: 2016 Positions Classification Service Overview 2016 Position Classification Process Flow Chart 2016 ADA Element Checklist 2016 Essential Functions Determination Form Introducing Our New Lawyer Speaking of help, we are very proud and excited to introduce Attorney Julie Fletcher to our practice. Prior to joining Foley & Foley, Julie worked in the areas of immigration and employment law for several years at national law firms in Boston. Check out her bio. Closing Thoughts The United States Department of Labor has been on a roll, impacting wages, job classifications, the FMLA and Affirmative Action Compliance for Federal Contractors, just to name a few of their recent initiatives. Please let us know how we can help your team better manage employment law compliance and HR-related risk. CONTACT US 508-548-4888 or mike@foleylawpractice.com We can help.

© 2016 FOLEY & FOLEY, PC, ALL RIGHTS RESERVED

Help is on the way! Implementing the new DOL mandates.

As you know, the final version of the Department of Labor’s (DOL) updated overtime rules have been issued.  In a nutshell, these overtime rules will raise the salary threshold for “white collar” workers from $455 per week to $913 per week starting December 1, 2016.

Our clients and the groups we have presented to have expressed a great deal of anxiety about these new overtime rules.  Many are totally overwhelmed.  Who will be impacted?  How do we handle this? What does compliance even look like?

In response to these concerns, we created a Position Classification Service to help our clients and the groups in which we are involved.  We recognize the incredible vulnerability employers are feeling, and we want to help.  We believe this service provides two vital benefits:

• Clear, step by step checklists that allow your business to create legally compliant employment classifications and job descriptions.  The resource documents we provide and the classification process will train your employees so that they are better able to create accurate job descriptions and employee classifications going forward.

• Legal counsel at a flat fee.  We will review your job descriptions and job classifications, edit them, and provide you with clear guidance regarding compliance with these new laws.  Because this review is conducted by outside counsel, it is protected by attorney client privilege.  In other words, if we discover a mistake, that knowledge is protected.

Position Classification Process

 

Please let us know how we can help.