EEOC Issues Q&A on Religious Accommodation

The Equal Employment Opportunity Commission (EEOC) recently issued the latest in its question-and-answer series, Religious Garb and Grooming Requirements in the Workplace: Rights and Responsibilities. I am a big fan of the EEOC’s Q&As on various discrimination topics, particularly the detailed examples it uses to explain what the law requires and how employees and employers can work together to come up with sensible solutions. That said, although this recent installment is similarly helpful and informative, it doesn’t break new policy ground.

As the EEOC and courts have long held, employers may be required to accommodate an employee’s religious clothing, jewelry, decorative items, and grooming requirements. The EEOC’s Q&A gives examples and details about how this requirement works, with particular focus on head coverings (such as yarmulkes, turbans, and hijab), long hair, and beards. A few things the agency emphasized:

  • Whether the underlying belief requiring accommodation is “religious” and “sincerely held” will very rarely be in question. As the EEOC points out, its definition of “religious” is so broad as to rule out most employer challenges. And, beliefs may be sincerely held even if they change over time or deviate from the tenets of the religion the employee claims to practice.
  • Customer preference and related justifications — such as the company’s “image” or “brand” — just do not cut it as employer defenses. There are a number of examples in the Q&A making this point in various ways. Customers don’t like turbans? Image requires employees to be clean-shaven? Brand requires employees to wear the latest fashions, without head scarves? These are all non-starters as defenses to a failure to accommodate claim.
  • Like accommodations for disabilities, religious accommodations must be considered on a case-by-case basis. Even if there is a legitimate safety justification for a particular requirement, the employer should look at whether the employer’s concerns can be met for that employee in other ways. The EEOC gives an example of a security guard who wears a head scarf. Even if the employer’s policy prohibits any clothing that covers the face or head, the employer might have to allow an exception if it can meet its security needs in other ways for this employee (by, for example, requiring the employee to temporarily remove the covering for identification purposes).

Supreme Court: Severance Pay is Subject to FICA Tax

supctLast week, the Supreme Court decided a case about how severance pay must be treated for tax purposes. The employer in the case (United States v. Quality Stores) had declared Chapter 11 bankruptcy. The employer provided severance pay in two programs: One paid employees who were terminated immediately, and the other paid employees who stayed with the company through its bankruptcy reorganization, until an agreed-upon termination date. Like most severance plans, the company’s program was based on length of employment and job grade.

The employer and the IRS agreed that the severance pay should be treated as income for purposes of income tax withholding. What they disagreed about was FICA taxes: the payroll taxes, split between employer and employee, that fund Social Security and Medicare. Although the employer initially paid it share of these taxes and withheld the employees’ share from their severance, it later asked the IRS for this money back, to the tune of more than a million dollars. The employer’s claim was that the severance payments didn’t count as “wages” under IRS rules.

The Supreme Court disagreed. In a unanimous decision, the Court found that severance pay is subject not only to income tax withholding, but to FICA tax withholding as well. (And, employers must pay their half of these taxes on severance.) The Court found that severance pay falls squarely within the definition of wages as “remuneration for employment,” especially where, as here, they are based on the employee’s tenure and role at the company. Not a big surprise, but at least employers can now blame the Supreme Court when terminated employees complain that their severance pay is less than they thought it would be.

Overtime Changes? Not So Fast

overtimeA couple of weeks ago, news outlets across the country were sounding the alarm — or singing Hail to the Chief — over what many of them referred to as an “order” or a “new rule” from President Obama about overtime. What actually happened is this: The President wrote a memo. Okay, to be fair, he also gave a speech. But he didn’t issue an order (not even one of his “year of action” executive orders that have been getting so much attention), he didn’t make a rule, and the Department of Labor didn’t make or change any rules either.

What the President did do is send a memo to the Secretary of Labor, directing him to “modernize and streamline” existing overtime regulations. In doing so, the President asks the Secretary to consider how the regulations can be simplified and updated to reflect “the changing nature of the workforce,” consistent with the intent of the Fair Labor Standards Act (FLSA).

Sound somewhat cryptic? There’s a clue to what the President really wants in his speech: He mentions the current salary basis requirement for the white collar exemptions (the legal exceptions that allow employers not to pay administrative, executive, and professional employees overtime, no matter how many hours they work). If these employees earn less than $455 a week, an employer may not treat them as exempt, regardless of their job duties. Instead, they must be paid overtime for all hours worked in excess of 40 per week. It seems the President would like to see this threshold raised, although he hasn’t said by how much. That’s it.

If we are willing to read the tea leaves and bet that the Secretary of Labor will propose raising that $455 a week figure, it won’t happen overnight. Nor will it happen in a month, or two, or several. To make any changes, the Labor Department will have to revise its regulations. This can happen only through the federal government’s official rulemaking process, which has plenty of steps. The Department first announces its plan to consider changes (no word that this has happened on overtime yet), then issues a proposed rule, then must wait at least a month or two for the public to comment on the proposed rule. The agency then has to review the comments, decide whether to make any changes to the rule before it becomes final, and explain its thought process in the final rule. And — spoiler alert! — there are going to be plenty of comments on this particular change.

Maybe the rules will actually change, and maybe they won’t. But we’ll all have plenty of time to discuss it when there’s an actual proposal on the table.

Fired for Jury Duty

gavelOne New York employer thought it had a bright idea: Lay off an employee who is called to serve on a jury, allow her to collect unemployment, then decide, once the trial is over, whether to offer her job back. That’s how the New York Times described an employer’s response when its employee gave notice that she had been selected to serve on a jury in a criminal case against Osama Bin Laden’s son-in-law (“Juror Loses Job for Serving in Terror Trial“).

Apparently it wasn’t bad enough to be called for jury duty, then actually selected for a case that will undoubtedly be lengthy and difficult, then apparently told that the trial is so “sensitive” that all jurors will be referred to only as numbers. No, poor Juror 21 had to suffer the additional indignity of hearing from her employer that she would be paid for only three days, then demoted, and finally laid off.

The judge in the case pointed out that this violates federal law, and it does. It’s a federal case, so perhaps the judge can be forgiven for not pointing out that it violates New York law as well. Most states prohibit employers from coercing an employee to avoid jury duty, or from disciplining or firing employees called to serve. (See Taking Time Off for Jury Duty for a list of every state’s rules.)

So far, so good. But the real problem is getting paid. Only a few states require employers to pay their employees for the time they spend serving on a jury. State laws may provide for nominal juror fees paid by the court, but these amounts are quite small. In fact, Juror 21′s employer offered more than New York law requires. Although state law requires employers to pay for three days (only) of service, the amount they have to pay is capped at the princely sum of 40 bucks a day.

The judge has appointed a lawyer to represent Juror 21 in contacting her employer and trying to work things out.

Another Delay for the Employer Mandate

pillsAnother day, another delay in implementing the Affordable Care Act (also known as Obamacare). Originally, the employer mandate — the part of the law requiring employers with at least 50 employees to provide affordable coverage to their full-time employees or pay a fine — was supposed to kick in weeks ago, at the beginning of 2014. Last year, the Obama administration delayed the mandate for a year, until the beginning of 2015.

This week’s further delay comes in two parts:

  • Mid-range employers (those with at least 50 but fewer than 100 employees) will have another year to provide coverage. For these employers, the mandate will now kick in on January 1, 2016.
  • Larger employers (those with at least 100 employees) won’t have to cover everyone right away. For 2015, these employers will have to offer coverage to only 70% of their full-time employees (Remember, “full-time” under the law means employees who work at least 30 hours a week.) For 2016, 95% of full-time employees will have to be offered coverage.

These delays (or “transition relief,” as a Treasury Department official described them in an article in the New York Times) appear in final regulations from the IRS interpreting the employer mandate portion of the law.

 

President Pledges Help to Long-Term Unemployed

unemployedPresident Obama’s State of the Union message last week got lots of attention, mostly because of his pledge to work around Congress if necessary to achieve his policy goals. Among the President’s aims is to reduce unemployment and boost employee earning power. To that end, he announced in his speech that he would require federal contractors to pay their employees a minimum wage of $10.10 an hour. That figure didn’t come out of thin air: It’s the same minimum wage Democrats in the Senate are seeking for all employees.

A couple of days ago, the President announced another initiative in his “Year of Action.” He will require the federal government to take steps to avoid discriminating against the long-term unemployed in hiring. The White House had already released a “Best Practices” guide for companies seeking to avoid this type of discrimination; according to the White House’s press release, more than 300 companies have signed on. Now, by the President’s Executive Order, federal agencies will also have to comply with these practices, which include screening job ads for language that discourages the unemployed, reviewing interviewing and hiring practices to make sure current employment isn’t weighted unfairly, and casting a wide net in recruitment and hiring efforts. The President also announced a new grant program for partnerships between employers and nonprofit groups that seek to prepare the long-term unemployed to return to the workforce and help them find jobs.

A few states prohibit discrimination against the unemployed. Once New Jersey, Oregon, and the District of Columbia passed these laws, it started to look like momentum was building in the states. However, subsequent efforts have stalled out or — in California — faced a veto. (Find current state law information at the Discrimination Against the Unemployed page at the website of the National Conference of State Legislators.)

Currently, federal law doesn’t prohibit this type of discrimination by private employers, but the Equal Employment Opportunity Commission held hearings a couple of years ago on the topic. Might the President’s move rekindle some interest?

 

Will Congress Change the Tip Credit?

waiterThe federal minimum wage law has a special exception for servers, bartenders, and other employees who receive tips: These tipped employees can be paid much less than the minimum wage per hour (in most states), as long as they earn enough in tips to bring their hourly total up to at least the full minimum. Right now, the federal minimum wage is $7.25 an hour. But federal law allows employers to pay tipped employees as little as $2.13 an hour!

This practice of paying tipped employees less is called taking a “tip credit,” meaning the employer gets to credit part of the employee’s tips against its minimum wage obligation. Not all states allow a tip credit: California, for example, requires employers to pay tipped employees the full state minimum wage. And some states allow a lower tip credit, requiring employers to pay more per hour than federal law would mandate. (The more protective law governs in wage and hour matters.)

That measly $2.13 took effect back when the minimum wage was $4.25 an hour. In other words, the tip credit was supposed to be half of the minimum wage. But as the minimum wage increased, the wage for tipped employees stayed the same, part of a compromise to get the wage hikes passed. Now, Congress is contemplating raising both the minimum wage and the amount tipped employees must be paid. According to an article in today’s New York Times (“Proposal to Raise Tip Wages Resisted“), Senator Tom Harkin has introduced a bill that would raise the minimum wage to $10.10 and the tipped employee wage by 95 cents per year until it reaches $7.10. Further increases would be tied to inflation.

As is perhaps evident from the title of the article, this proposal is facing plenty of pushback, primarily from restaurant owners. And of course, it’s unclear how Congress would agree on a minimum wage and tipped employees wage increase when they can’t pass a farm bill or extend unemployment benefits. But at least this problem has hit the radar of the U.S. Senate and the nation’s paper of record.

Want to know more about your state’s law on tips, including tip credits, tip pooling, and who gets to keep those mandatory service charges the house tacks on to the bill? We’ve got a set of articles — one for each state and the District of Columbia — on this very topic; select your state from the list at State Laws for Tipped Employees.

Smells Like a Lawsuit

Sexual harassment, like so many other experiences, is in the eye of the beholder. What feels like offensive misconduct to one person might seem like harmless workplace antics to another. That’s why the law imposes both an objective and a subjective standard in harassment cases. Courts and juries must look both at whether the behavior was objectively hostile, offensive, or abusive, and at whether the victim actually perceived it that way. And, when applying the objective test, it isn’t enough to ask whether we, as judges or members of a jury, would find the conduct offensive. We must ask whether a reasonable person in the victim’s situation would feel harassed. Because sexual harassment is still overwhelmingly an offense men perpetrate against women, this standard is in most cases referred to as the “reasonable woman” standard.

A recent case from Texas makes clear how important this distinction can be. A federal appeals court reinstated a lawsuit that had been thrown out, finding that the female plaintiff deserved a trial on her allegations of sexual harassment and retaliation. At the most general level, she claimed that she was fired after four days on the job as a leasing manager in an apartment complex, after she complained that two coworkers sniffed her. The district (trial) court found that she hadn’t shown that this was objectively offensive, in part because neither coworker had physically touched her.

What do you think so far? If you’re thinking the trial court might have been right, consider these additional facts: She worked in a small office. The two men would come in, sometimes together, crowd and hover over her as she sat at her desk, and sniff her in a sexually suggestive manner. They did it 12 times over the course of a few days. They also sniffed her as she left the bathroom. One of the men sat across from her and stared at her for several minutes, wearing shorts and visibly aroused. When she complained in a staff meeting, one of the men claimed to have a medical condition and the other said he “needed to get a release.” When she complained to a manager, she was told, “you know how men are like when they get out of prison”; one of the men had a prison record. Then she was fired.

Does this sound more menacing now? To me, this case illustrates how important it is to apply the objective standard in a manner that captures the entirety of the victim’s experience. “Two coworkers sniffed me” sounds like the beginning of a comedy routine. But when you widen the frame to include the physical surroundings, sexual comments, air of menace, and complete lack of concern for her complaints, it looks a lot more like harassment.

It’s Evaluation Season! Don’t Forget the Maternity Projection Chart

storkManagers, do you enjoy giving employee evaluations? Many managers  don’t: They find it difficult to give constructive criticism, fit employee accomplishments and areas for improvements into their company’s evaluation form, or make time to sort back through their documentation for the year, complete the form, and meet with employees about it. But imagine how you would feel if the company’s evaluation form also included questions about the employee’s “maternity plans.” And then you had to use that information to help generate a “maternity projection chart,” purporting to calculate the likelihood that a particular female employee would have a child soon based on her age, marital status, and maternal status.

According to a complaint filed in a federal district court in New York, that’s what happened at the Institute for Integrative Nutrition. (Hat tip to the Employment Law Daily; they have also posted a copy of the court’s decision in favor of the employees.) The employees alleged not only that the chart was created, and that it included information only on female employees, but also that the employer used it in making employment decisions.

This is one of the stranger allegations in the case, but by no means the only allegations the employees made about discrimination, retaliation, and violation of FMLA rights at the Institute. Each of the named plaintiffs (they are bringing a class action) had quite a tale to tell, including comments by the company’s owner that “women’s priorities shift when they become mothers,” that one expecting employee should speak to her partner about whether it was “worth it,” because he “had never met a new mom that didn’t underestimate the sleep, time, exhaustion from a new baby,” and that he wouldn’t consider another woman for a promotion because she was “getting married, and her head was in another place.” Once they revealed their pregnancies or went out on leave, the women claimed that they faced different treatment, demotion, and ultimately discharge.

No judge or jury has determined whether these allegations are correct, because the case came up on a motion to dismiss. In other words, the employer was arguing that some of the employees’ claims were so weak that it should not even have to respond to them, right out of the gates. In fairness, the court tossed one allegation by one employee. (Her retaliation claim was thrown out because she didn’t allege that she had complained of discrimination before being mistreated.)  Otherwise, though, the employees won. Based on the allegations, it’s no surprise. What surprised me is that the employer found it worth arguing about, given the strength of the allegations.

 

Will Emergency Unemployment Compensation Benefits Expire?

unemployedThere was a sobering article in the New York Times this morning, “Extension of Benefits for Jobless Set to End.” Since the economy tanked in 2008, the federal government has made additional unemployment benefits available through the Emergency Unemployment Compensation (EUC) program. This program supplements the benefits available in each state to provide additional weeks of compensation.

Today, most states provide a maximum of 26 weeks of unemployment benefits to those who lose their jobs through no fault of their own. (A few states — including Florida, Georgia, and North Carolina — have cut back and offer fewer than 26 weeks.) A permanent federal program, in place since 1970, offers extended benefits in states where the unemployment rate is both high and increasing. Although a number of states still have relatively high unemployment rates, those rates have been high for a while now. As a result, these states don’t have increasing unemployment rates. Therefore, according to the Center on Budget and Policy Priorities (CBPP), no state currently provides benefits under the extended benefit program.

That leaves the EUC program as the only source of extended benefits for the long-term unemployed. The EUC program offers 14 to 47 additional weeks of benefits. (The number of weeks depends on the state’s unemployment rate; there’s an up-to-date chart of each state’s benefit offerings at “How Many Weeks of Unemployment Compensation Are Available?” at the CBPP’s website.) However, the entire EUC program is set to expire at the end of the year.

Congress has had to vote on this program a number of times in the past five years, and each time it has extended the program. As you may recall, however, this has been a particularly rough year for partisan fights over government funding. Congress still has to come up with a budget, as it agreed to do in ending the shutdown. As a result, the Times predicts that Congress is unlikely to continue the EUC program past the end of the year, with the result that 1.3 million people will immediately lose access to these additional benefits.