Category Archives: Uncategorized

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.

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.

Working for Lady Gaga: It’s a Full-Time Job

towelsLast week, Lady Gaga settled an overtime lawsuit brought against her by a former assistant. The settlement is confidential (so far), but the complaint took an interesting approach. In most overtime cases, the employee claims to have worked a certain number of extra hours, such as two hours per day or ten hours per week. Or, the employee claims to have had to work through lunch, which adds up to half an hour per day for the length of the employee’s tenure.

According to the lawsuit, Gaga kept her assistant quite a bit busier than that. Her assistant, Jennifer O’Neill, requested overtime for every single hour of every single day she worked for Gaga. According to the complaint, O’Neill had to be available from “the earliest waking hour,” be “responsive to the slightest need throughout the day,” and address “spontaneous random matters in the middle of the night.”

How random and slight? Among O’Neill’s tasks were reconciling Gaga’s credit card statements, ensuring that she had a fresh towel immediately upon finishing her shower, and according to the Hollywood Reporter, sleeping in Gaga’s bed and being awakened throughout the night to change the CD.

The case settled after a judge refused to dismiss the lawsuit, finding that a jury would have to decide how many of those alleged “on call” hours were work for which O’Neill should have been compensated. According to CNN, the case was set to go to trial next week.

Lost in the Congressional Debate: The Self-Employed and Obamacare

pillsIn case you haven’t heard (!), many members of Congress seem to believe that every single member of “the American People” stands vehemently opposed to the Affordable Care Act. Various Republican politicians have compared Obamacare to a disaster, a train wreck, and yes, slavery. But here’s an interesting dilemma for the GOP: The group with whom the Republicans want to identify so often — entrepreneurs and independent business people — will benefit significantly from the law.

According to a study on the Affordable Care Act and entrepreneurship conducted by several nonpartisan groups (including the Center on Health Insurance Reforms), Obamacare is expected to swell the ranks of the unemployed. The study predicts that more than 1.5 million people will go into business for themselves as a result of the law, a more than 10% increase. Why? Because they will no longer be stuck in jobs they would prefer to leave just to get health insurance.

There are legitimate debates as to whether the coverage offered through the new health care exchanges is truly affordable, and even the law’s most fervent supporters agree that the initial rollout of the online marketplaces has been a parade of technical glitches. However, no one can dispute that Obamacare makes it possible for many people to purchase health care who were previously priced out of the market or couldn’t even find a plan that would take them at any cost. Those who stayed in unsatisfying jobs to keep their benefits (a phenomenon known as “job lock”) will now be free to move on, purchase their own benefits on the exchange, and take the plunge to start their own businesses.

Employers who are planning to cut back on employee benefits might also see a lesson here. For companies that are planning to cut employee hours to less than 30 (to avoid having to provide benefits under Obamacare) or otherwise try to get around the law, there may well be an initial cost savings. But these strategies will also remove one of the strongest incentives for employees to stay at their jobs. And, the employees most likely to leave and start their own businesses are often the very employees the company would most like to keep: the self-motivated, self-directed, business-minded cohort.

 

 

California Law Affirms that Sexual Harassment Doesn’t Have to Be Sexy

In August, California amended its sexual harassment laws to add this sentence to the state’s Fair Employment and Housing Act:

“Sexually harassing conduct need not be motivated by sexual desire.”

The legislature was responding to a decision by a California appeals court in a same-sex harassment case. The plaintiff employee in that case, Patrick Kelley, alleged that his male supervisor called him a bitch and a punk, made crude comments about having sex with him, and laughed when another employee did the same. This behavior followed Kelley to other worksites after he asked to be transferred, as the story spread among his coworkers. The Court tossed Kelley’s claim because he couldn’t prove that his supervisor acted out of genuine sexual desire or interest. In other words, the case turned on whether Kelley’s supervisor actually, in his heart, wanted to have sex with Kelley (in ways he graphically described), or just said so in front of others in order to demean him.

If all sexual harassment cases turned on the question of sexual interest, you can imagine the problems of proof. How do you show that a harasser “really” felt desire toward his victim? Would the harasser’s sexual orientation be an issue in the case? Setting that aside, sexual interest shouldn’t matter. It’s just as illegal for a supervisor to make demeaning, sexist comments as to make unwanted sexual propositions (whether or not the harasser “genuinely” wanted to follow through on them). The reason why sexual harassment is illegal is that it limits job opportunities. When all is said and done, sexual harassment is about power, not desire.

In the context of opposite-sex harassment, there are certainly some ugly cases involving sexual come-ons, groping, and even assault. But some of the ugliest situations arise when women enter traditionally male fields. In these cases, there are no expressions of “desire” or “sexual interest.” Instead, women are threatened (with rape, assault, and more), endangered, and frightened. Their tools and vehicles are sabotaged; they are called horrible names; they are stranded without support. Although some courts had trouble seeing the harassment when it was so decidedly unsexy, most have now come around.

At least in opposite-sex cases. That the California case issued its decision in a same-sex case isn’t surprising. Courts have not known what to do with homophobic behavior on male-dominated worksites. Is it okay if none of the employees are actually gay? Or if the supervisor threatens to have sex with all the guys, not just those who are ridiculed in gendered ways? If there are no women present, is this behavior really “sex-based”? But the answer seems pretty simple. In this case, Kelley’s work environment was poisoned by a supervisor’s crude sexual comments and behavior. Those comments were sex-based, in that they were about Kelley’s masculinity and sexual orientation. The case shouldn’t have turned on whether the supervisor was sincere when he said he want to have sex with him.

State Minimum Wage Increases for 2014

Last week, California Governor Jerry Brown signed a bill that will increase the state’s minimum wage to $9 on July 1, 2014, and $10 at the beginning of 2016. (The state’s current minimum wage is $8.) So far, three other states have passed minimum wage increases that will take effect in 2014: Connecticut’s wage will increase to $8.70 for 2014, then $9 for 2015; New York’s wage will increase to $8 at the end of this year, then $8.75 at the end of 2014, then $9 at the end of 2015; and Rhode Island’s minimum will hit $8 at the beginning of 2014. (Nolo has minimum wage information for all 50 states and the District of Columbia at our Wage & Hour page.)

The federal minimum wage, currently $7.25 an hour, is now lower than the minimum wage in more than a third of the states. About half of the states have the same minimum wage as the federal government, and a handful of states either have a lower minimum wage or have no minimum wage at all. As a practical matter, this final group of states also uses the federal minimum wage. The federal wage rate is a floor, not a ceiling. States are free to adopt a higher minimum wage, and employers within the state must pay the higher rate. But in states with a lower minimum wage, employers must generally comply with the federal law unless they are so small and local as to not be subject to the Fair Labor Standards Act.

States generally adopt higher minimum wage rates to try to bring wages into line with the cost of living. But, according to the Center for Poverty Research at U.C. Davis, the federal minimum wage is not cutting the mustard. A full-time employee who works 40 hours a week for a full year, without taking a single unpaid day off, earns about $15,000 annually, just a few thousand dollars above the poverty level for a single person (and well below the poverty level for a family with one or more children).

President Obama has called for an increase in the federal minimum wage to $9; he also appointed a Secretary of Labor, Thomas Perez, who supports raising the minimum wage. However, based on the current climate in Congress (which today is on the verge of shutting the government down), it doesn’t seem likely that a federal wage increase will happen any time soon. And that means the real action will remain at the state and local level.

Controversy Over Criminal Background Checks

prisonLast year, the Equal Employment Opportunity Commission (EEOC) issued policy guidance on criminal background checks. The guidance pointed out that a blanket policy of refusing to hire anyone with an arrest record or a criminal conviction could have a disparate impact, based on our country’s racially skewed criminal justice system. The guidance cautioned against blanket or “bright line” policies that exclude everyone with any conviction, and provided three factors employers should consider in deciding whether to exclude a particular applicant based on a criminal record:

  • the nature and seriousness of the crime
  • how much time has passed since the offense, and
  • the nature of the job (how much supervision the employee will have, where the job is performed, and so on).

The EEOC also suggested that employers give applicants an opportunity to provide mitigating evidence. (See our article describing the guidance, Getting Hired With an Arrest or Conviction Record.)

Last month, the EEOC filed two lawsuits against employers alleging that their policies of excluding certain applicants with criminal records constituted disparate impact race discrimination. These lawsuits didn’t go unnoticed: Just a few days ago, the Attorneys General of nine states banded together to ask the EEOC to withdraw these lawsuits and dump its policy guidance. Among other things, the AGs argued that the EEOC was improperly intruding into state law, which in some cases require employers in certain fields to exclude applicants based on criminal history alone, and that conducting the individual inquiry into the facts behind every applicant’s record was too time-consuming and expensive. Essentially, the AGs believe it should be legal to have a blanket policy of excluding any applicant who is convicted of particular crimes. (You can read the letter through a link in this Mondaq article, State Attorney Generals Challenge EEOC Criminal Background Check Lawsuits.)

We’re a long way from knowing how this is going to play out. In the meantime, however, our country’s Attorney General, Eric Holder, has announced a policy change that could take care of some of the problem for future generations. He announced that the federal government will take steps to get out from under lengthy mandatory minimum sentences for drug offenses, to reduce the incarceration rate and to make alternatives, such as treatment programs, available to offenders. (The sentencing laws remain on the books; the administration’s strategy for avoiding them includes not listing drug quantities, which trigger the mandatory sentences, in indictments of lower level offenders.)

Employer Mandate: Headed to the Supreme Court?

supctThe past month has been chock full of developments on the employer mandate front, and there may be more to come. Last month, the federal Court of Appeals for the Fourth Circuit upheld the mandate, which requires larger employers to provide affordable healthcare coverage to full-time employees or pay a fine. (The opinion is Liberty University v. Jacob Lew et al.; there’s a nice explanatory piece about it over on SCOTUSBLOG.) The Fourth Circuit’s opinion upheld the employer mandate as a valid exercise of Congress’s powers to tax and to regulate interstate commerce.

Just a few days later, the Obama administration announced that it was postponing the employer mandate for a year, until the beginning of 2015.

Then yesterday, the Fourth Circuit issued a stay in the mandate case, to give Liberty University time to file a petition for certiorari asking the Supreme Court to hear the dispute. No tea leaves yet on whether the Court will agree to hear the case or how they will decide it if they take it up. Still, what a difference a month makes in the life of a new government program.

Employers Win Retaliation Case in Supreme Court

supctThere were plenty of blockbuster decisions issued in the final week of the Supreme Court term that ended in June: Cases on affirmative action, voting rights, and of course same-sex marriage garnered most of the attention. But the Court also issued a couple of major employment decisions, which will have a significant effect on cases headed to trial.

In the first case, Vance v. Ball University, the Court limited the definition of “supervisor” in harassment cases to include only those who are authorized to take tangible employment actions (such as firing, demotion, promotion, or job reassignment) against employees. This case  immediately changed the burdens of proof in harassment cases going to trial across the nation, making it more difficult for employees to hold their employers liable for hostile environment harassment. (You can find out why in my post about the decision, Big Win for Employers in Supreme Court Harassment Case.)

In the second case, University of Texas Southwestern Medical Center v. Nassar, the Court ruled that employees who claim that they were retaliated against for complaining about discrimination have a higher burden of proof than employees who only raise discrimination claims. Although the current Supreme Court is generally considered very favorable to business interests, this pro-business decision is something of a surprise. Employees haven’t had much luck in other types of cases, but they had an unbroken win streak in retaliation cases, until a few weeks ago. (Don’t believe me? See Another Supreme Court Win for Employees in Retaliation Case, Oral Complaints Trigger Retaliation Protection, and Supreme Court Issues Another Retaliation Decision, for starters.)

In the Nassar case, the Court had to decide who has to prove what in a “mixed motive” retaliation case. A little background: To win a Title VII discrimination case, an employee has to prove that the employer took action (typically, firing the employee) because of the employee’s race, religion, or other protected characteristic. In 1989, the Court had to decide how to handle cases in which the employer had discriminatory intent, but also had other, nondiscriminatory reasons for its decision. The Court came up with this rule for these mixed motive cases: If the employee can show that his or her protected characteristic was a motivating factor in the decision, the employer could escape liability if it could prove that it would have taken the same action absent any discriminatory motive.

Congress tweaked the mixed motive rule in the Civil Rights Act of 1991, in favor of employees. Congress reasoned that discrimination is always wrong, and should subject the employer to penalties even if the employer had other reasons for its actions. On the other hand, if the employer really would have taken the same action for legitimate reasons, the employee can’t prove any out-of-pocket losses. For example, if an employee claims that he was fired because of his race, but the employer says “we would have fired him on the same day because of his billing errors,” the employee can’t show that his lost wages were caused by discrimination. So, Congress refined the rule to hold that an employee who proves that discrimination was a motivating factor can be awarded attorney fees, costs, and declaratory relief (a finding by the court that the employer discriminated). However, if the employer can prove that it would have taken the same action for legitimate reasons, the court will not order money damages or reinstatement.

The Nassar case turned on a retaliation claim. Nassar, a doctor who worked at the hospital and was on the faculty at the University, claimed that a supervisor (Dr. Levine) harassed him based on his national origin and religion. Nassar complained to his immediate supervisor (Dr. Fitz) about the harassment, and also tried to arrange to leave the faculty while still working at the hospital (an arrangement not usually allowed). After the hospital indicated that it would hire him, Nassar quit his teaching position and wrote a letter to Fitz, stating that he had resigned because of the harassment. Fitz was angry about Nassar’s allegations, stating that he had “publicly humiliated” Levine, who should be “publicly exonerated.” He contacted the hospital and asked them to retract their job offer; he pointed out that the rules required all physicians at the hospital to also be faculty members. The hospital obliged, which led to Nassar’s retaliation claim and a very clear mixed motives case. The facts demonstrate both that Fitz had a retaliatory motive and that the same action would have been taken anyway, for other reasons. So, the Court of Appeals applied the mixed motive framework explained above.

The Supreme Court said that was incorrect. The Court decided that Congress’s mixed motive framework applies only to claims of discrimination, not claims of retaliation. In a retaliation case, the employee always has the burden of proof, and must show that the employer took action “because of” a retaliatory motive. If the employer would have taken the same action for other reasons, the employee loses.

Why did the employee winning streak end in retaliation cases? The majority decision states that it’s simply a matter of reading the statute. Congress laid out the mixed motive framework only for discrimination cases, not retaliation cases. As the dissent points out, however, the Court has recently allowed retaliation claims under statutes that don’t mention retaliation at all. And, because vindicating the right to work free of discrimination necessarily requires that employees not be penalized for coming forward with these claims, it’s odd to adopt different standards for these two allegations that are so closely linked. Perhaps the real reason is revealed when the majority opinion points out the huge rise in retaliation charges in recent years: Allowing employees to proceed under the easier burden of proof for mixed motive cases would “contribute to the filing of frivolous claims, which would siphon resources from efforts by employer, administrative agencies, and courts to combat workplace harassment.”