Checklist with checkboxes ticked by red felt tip pen.

January 18, 2017

National Origin Discrimination Checklist

west_lBy Little V. West

National origin discrimination may not be as high on your radar screen as sex, race, or disability discrimination, but it accounted for almost 11% of the total number of charges filed with the Equal Employment Opportunity Commission (EEOC) in fiscal year 2015. The numbers are even higher for states with more diverse populations – 18.1% of total charges for New Mexico were for national origin discrimination, 16.6% in California, 16.2% in Colorado, and 15.3% in Texas, to name a few.

Title VII Prohibits National Origin Discrimination

As you may know, Title VII, which applies to employers with 15 or more employees, prohibits employment discrimination on the basis of race, color, religion, sex, and national origin. Its protections extend to all employees and applicants for employment in the United States.

The EEOC defines national origin discrimination as discrimination because an individual, or his or her ancestors, is from a certain country or region, or shares the physical, cultural, or language characteristics of a national origin or ethnic group. For example, national origin discrimination would result from treating an employee adversely because he or she is from another country or former country (such as Mexico, China, or Yugoslavia), a place that is closely associated with an ethnic group but is not a country (such as Kurdistan), or belongs to a group that shares a common language, ancestry, or other social characteristics (such as Arabs or Hispanics).

While outright discrimination may be more obvious, Title VII also prohibits less straightforward forms of discrimination. For example, Title VII prohibits associational discrimination, which is when an employer treats an applicant or employee less favorably because he or she associates with (e.g., dates, marries, lives with, is the parent of, etc.) someone of a particular national origin. Employment discrimination also results when an employer treats an individual less favorably because he or she does not belong to a particular ethnic group. For example, a Hispanic business owner who refuses to hire anyone other than Hispanics would be discriminating on the basis of national origin. Moreover, discrimination based on the perception or belief that an individual (or his or her ancestors) belongs to a particular national origin group can be discriminatory, regardless of whether the individual is in fact part of that group.

In addition to prohibiting discriminatory employment decisions, Title VII also prohibits unlawful harassment and retaliation based on national origin. Harassment can include the use of ethnic slurs, intimidation, threats, mocking, and other verbal, written, or physical conduct that is directed toward an individual because of his or her birthplace, ethnicity, culture, language, dress, or accent.

EEOC Issues Updated National Origin Discrimination Guidance

In late 2016, the EEOC published an updated enforcement guidance on national origin discrimination. Intending to better explain employee rights and promote employer compliance, the EEOC guidance offers many examples and HR practices in a wide variety of employment situations that could result in Title VII national origin violations.  In addition, it addresses how national origin discrimination often intersects with other protected characteristics, such as race, color, or religion.  The updated guidance includes several noteworthy points:

  • A place of national origin may be within the United States; in other words, “[n]ational origin discrimination includes discrimination against American workers in favor of foreign workers.”
  • Title VII applies to human trafficking. The guidance explains that, in addition to criminal liability for forcing labor and/or exploiting workers, Title VII may also impose civil liability if the conduct is directed towards person(s) in a protected class, including national origin.
  • The joint employer doctrine applies in the context of staffing firms and client employers. The guidance explains that, “[i]f both a staffing firm and a client employer have the right to control the worker’s employment and have the statutory minimum number of employees,” the entities can be considered joint employers. As an example, a staffing firm can be held liable under Title VII if it were to fail to take prompt corrective action for discriminatory actions based on national origin by the client employer.
  • Recognizing that employees have a choice as to which documents to present to establish authorization to work in the U.S., and that  “newly hired employees should be allowed to work if they have applied for but not yet received a Social Security number,” the guidance states that a blanket policy not to hire candidates who lack a Social Security number can violate Title VII if it disproportionately screens out work-authorized individuals in a national origin group.
  • Preference for U.S. citizenship may be unlawful if it has the purpose or effect of discriminating on the basis of national origin.

We encourage you to review the EEOC’s guidance document.

Checklist For Avoiding National Origin Discrimination Liability

To put the EEOC’s guidance into practical terms, here is a handy checklist that highlights concrete HR policies and employment practices to help your organization avoid liability for national origin discrimination or harassment.

  • ˜Your job application and posts should include an equal employment opportunity statement.
  • When recruiting applicants and posting job openings, do not:
    • state a preference for (or against) a particular national origin (e.g., “looking for U.S.-born candidates” or “must not speak with a foreign accent,” etc.);
    • ˜rely only on word-of-mouth referrals from existing employees (keeps applicant pool too homogenous); or
    • ˜send job postings only to non-diverse outlets or communities.
  • ˜Be careful not to reject applicants based on an ethnically sounding name; consider redacting or hiding names on your initial review of applications and resumes so you are not inadvertently influenced by an ethnic name.
  • ˜During interviews, do not ask candidates about their ethnic heritage, ancestry, accent, or any other direct or indirect questions about national origin, even if you are just trying to be friendly or curious.
  • If you conduct background checks or pre-employment testing, conduct it on all candidates/employees in a particular job category – do not single out only those individuals with foreign-sounding names, accents, etc. for such tests.
  • ˜Refrain from segregating or isolating employees based on their national origin (e.g., do not assign all Hispanic workers to lower-paying positions, or keep all Filipino employees away from the public, etc.).
  • ˜Be careful imposing an English-only language rule – any restriction on language spoken at work must be job related and consistent with business necessity, and should not be imposed during employee breaks or other employee personal time while on the employer’s premises.
  • Make sure your harassment policy prohibits harassment based on national origin, and that you train your employees to avoid using ethnic slurs, stereotypes, name calling, mocking tones, etc.
  • ˜Remember that customer and coworker preferences or prejudices do not justify discriminatory hiring, firing, promotion, or discipline decisions.

A culturally diverse workplace can present unique issues for management but can also help employers remain relevant in our increasingly diverse society. Use this checklist to help avoid potential liability for national origin discrimination in your workplace. Additional information on national origin discrimination may be found on the EEOC’s question-and-answer publication and small business fact sheet.

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January 12, 2017

Dealing With The Decline In Wyoming Jobs

Cave_BradBy Bradley T. Cave 

Recent jobs numbers reflect what many Wyoming employers already know – large job losses have hit the state, pushing down wages and possible tax revenues. Our look at the practical implications of this job environment should help you expect the best while preparing for the worst. 

First Quarter Jobs Numbers 

The numbers are rather grim. According to a November report from the Research & Planning section of the Wyoming Department of Workforce Services (DWS), 9,367 jobs were lost in Wyoming from first quarter 2015 to first quarter 2016. The average monthly employment numbers decreased from 277,691 in the first quarter of 2015 to 268,324 in the same quarter of 2016, reflecting a 3.4% drop statewide.

The largest job losses occurred in the mining sector, which includes oil and gas extraction jobs, which saw a 23% loss of jobs from the first quarter 2015 to 2016. The next highest loss was in transportation and warehousing with a 9.4% decrease, followed by company management which experienced an 8% decrease.

The decline in the total unemployment insurance (UI) covered payroll for the same period was $243.5 million, or a 7.6% drop. Average weekly wages for private sector jobs was down from $890 to $834, a drop of 6.3% which means workers received an average of $56 less in their paychecks each week.

Second Quarter Numbers Continue To Fall

In its preliminary data for the second quarter (April through June), Wyoming employment continued to decline from 2015 to 2016 by approximately 10,500 jobs, or 3.7%. Approximately 5,500 of those job losses were in the mining/oil and gas sector, with about 1,700 jobs lost in construction, and another 1,100 job losses in transportation and warehousing.

Not All Bad News

In its county-by-county breakdown, the DWS reported that employment rose in seven Wyoming counties and total payroll increased in eight counties for the first quarter comparison. Teton County saw a 3.7% increase in jobs while employment in Lincoln County grew by 3.4%. Other counties that experienced a modest increase in jobs year over year were Albany, Crook, Niobrara, Sheridan, and Weston.

Practical Effects Of Declining Job Numbers 

Job statistics can provide an interesting and telling view of the overall health of the state’s economy. But more than that, the numbers suggest that many Wyoming employers have faced, or soon may face, difficult decisions about whether to layoff or terminate workers. Read more >>

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January 10, 2017

Tips For Accommodating Depression, PTSD, and Other Employee Mental Illnesses

6a013486823d73970c01b8d1dc5d4a970c-120wiBy Mark Wiletsky

An estimated 16.1 million adults in the United States had at least one major depressive episode in 2015, according to the National Institute of Mental Health. This number represents 6.7% of all adults age 18 or older in the U.S. About 7 or 8 out of every 100 people will have posttraumatic stress disorder (PTSD) at some point in their lives, says the U.S. Department of Veteran Affairs, National Center for PTSD. That number goes up to about 11 to 20 out of every 100 for veterans who served in Operations Iraqi Freedom and Enduring Freedom.

As these number show, depression, PTSD, and other mental illnesses are relatively prevalent in our society. At some point, you will be faced with an employee who suffers from a mental condition and you need to know your obligations related to potential accommodations for such employees. The Equal Employment Opportunity Commission (EEOC) recently released information to help explain workplace rights for employees with mental health conditions under the Americans With Disabilities Act (ADA). Incorporating the EEOC’s guidance, here are our top practical tips for accommodating individuals with mental impairments.

Tip #1 – Don’t Get Hung Up On Disability Definition

Following the 2008 enactment of the Americans With Disabilities Amendments Act (ADAAA), it is easier for an individual seeking protection under the ADA to establish that he or she has a disability within the meaning of the statute. In fact, the ADAAA states that the definition of disability should be interpreted in favor of broad coverage of individuals.

Mental conditions, such as depression, PTSD, bipolar disorder, schizophrenia, and obsessive compulsive disorder (OCD), need not be permanent or severe to be deemed a disability. Instead, as long as the condition substantially limits a major limit activity, such as the individual’s ability to concentrate, interact with others, communicate, sleep, eat, learn, think, or regulate emotions, it will be considered a disability. Even if the employee’s symptoms are sporadic or episodic, if they limit a major life activity when active, the condition will likely qualify. This means that in most cases, you should focus on whether you can accommodate the individual, rather than whether the individual meets the legal definition of having a “disability.”

Tip #2 – Accommodate “Known” Mental Impairments

You have an obligation to reasonably accommodate “known” impairments for otherwise qualified individuals. Generally, this means that an applicant or employee must ask for a reasonable accommodation. But remember that the disabled individual need not use any special words to trigger your accommodation obligation. In other words, the person does not need to specifically say he or she needs a reasonable accommodation or mention the ADA. The individual instead may simply say that they need a change at work, such as needing to arrive late on certain days in order to attend therapy sessions, and your accommodation responsibility begins.

Generally, however, you are not obligated to provide an accommodation when one has not been requested or no work-related change has been mentioned. But, if you have knowledge of an employee’s mental condition (perhaps from prior conversations or medical documentation) and that “known” disability impairs the employee’s ability to know of, or effectively communicate a need for, an accommodation that is obvious, you should engage in a discussion with the employee about potential accommodations.

Tip #3 – Ask For Documentation

When an employee requests a reasonable accommodation due to a disabling condition, ask the employee to put the request in writing, describing the condition and how it affects his or her work. You may also request a letter from the employee’s health care provider documenting the mental condition and that the employee needs a work accommodation because of it.  However, even if the employee declines to provide a request for accommodation in writing, you still have an obligation to engage in the interactive process and potentially accommodate that individual.

Be careful not to discriminate in your requests for documentation. It is best to have a uniform practice of requesting this written information for all accommodation requests, for both physical and mental disabilities, so that you cannot be charged with singling out a particular employee based on a mental illness.

Tip #4 – Keep An Open Mind About Accommodations

Don’t jump to the conclusion that an accommodation will necessarily be burdensome or costly. Some reasonable accommodations for mental disabilities may be relatively benign. Examples may include allowing the employee to wear headphones to drown out excessive noise, writing down work instructions rather than verbal instructions, changing shifts or start/end times to allow for doctor or therapy appointments, or working in a private room.

Of course, if an accommodation will result in significant expense or disruption to your business, you may be able to decline it due to undue hardship. But don’t assume that upon first request. Instead, engage in an interactive process with the employee, including input from his or her health care provider, to consider possible accommodations. A brainstorming session can often produce a variety of workable solutions, and you can choose the one that best suits your business, as long as it permits the employee to perform his or her job.  Be sure to confirm those discussions in writing with the employee to avoid disputes down the road about what was discussed and/or agreed upon. Read more >>

A medical malpractice concept. A close up of a gavel surrounded by a stethoscope.

December 22, 2016

Small Employers Permitted To Reinstate Health Premium Reimbursement Arrangements

selzer_kBy Kevin Selzer

With the health and welfare benefit plan industry eyeing potential regulatory changes under a Trump administration, President Barack Obama signed into law a new rule that partially restores health plan flexibility restricted by the Affordable Care Act (ACA). The 21st Century Cures Act (Act) allows small employers to establish arrangements that reimburse employees for premiums on health coverage that is not maintained by the employer (e.g., coverage obtained by an employee on a state exchange/marketplace).

Background On HRAs and the ACA

In 2013, the IRS released guidance stating that an employer arrangement designed to reimburse premiums for non-employer maintained health coverage (on a pre-tax or after-tax basis) is a group health plan that violates certain ACA reforms. This guidance was widely viewed to prevent employers from using a health reimbursement arrangement (HRA), integrated with non-employer maintained health coverage, as a way of circumventing the ACA employer mandate (for large employers). However, the guidance applied to all employers, much to the ire of small employers, many of whom relied on these arrangements to provide a pre-tax cost-effective health benefit. Certain transition relief was provided for small employers, but the relief ended in mid-2015. As a result, many small employers were left out in the cold.

Small employers responded in different ways. Some adopted stipend or similar programs, whereby employees would be paid additional taxable compensation without strings attached (i.e., the employee could decide to use the amounts for health coverage or not). The end-result, however, was that tax-favored health benefits were generally limited to employers capable of sponsoring a major medical health plan.

21st Century Cures Act Permits Certain HRAs

The Act permits certain small employers to sponsor arrangements that will reimburse employees on a pre-tax basis (if certain conditions are met) for amounts incurred for independent (non-employer maintained) health coverage, including health insurance premiums. These arrangements, called qualified small employer health reimbursement arrangements (QSEHRAs), must meet the following requirements:

  • permitted only for small employers, defined as those who did not have an average of 50 full-time employees, including full-time equivalents, in the prior year;
  • the employer may not otherwise offer a group health plan to any employees;
  • the employer must offer the QSEHRA to all employees (with certain limited exceptions);
  • the maximum annual benefit is $4,950 for reimbursements of employee-only coverage and $10,000 for reimbursements of family coverage;
  • the reimbursement will be nontaxable if the eligible employee demonstrates that he or she has minimum essential coverage; and
  • the employer must provide eligible employees with notice containing required disclosures.

The rule changes are intended to be effective January 1, 2017.

Restaurant bill with dollar bills (tips) on a plate and receipt close up

December 21, 2016

No Such Thing As A Free Lunch!

Cave_BradBy Brad Cave

Hundreds of hourly employees sued their former employer alleging that they were due additional overtime pay. They asserted that the company failed to include their $35 daily travel meal reimbursement in their regular rate of pay when calculating time-and-one-half, meaning they were paid less overtime than they were due. The Tenth Circuit Court of Appeals, whose decisions apply to Wyoming, Colorado, Oklahoma, Kansas, New Mexico, and Utah, recently analyzed their claim.

Calculating Regular of Pay

The Fair Labor Standards Act (FLSA) requires employers to pay employees at one and one-half times the employee’s “regular rate” of pay for all hours worked in excess of 40 per workweek. An employee’s regular rate of pay includes all remuneration paid to the employee, subject to certain exceptions. If a part of an employee’s pay is left out of the “regular rate” calculation, the employee’s overtime rate will be undervalued.

A large group of former hourly employees for a nationwide seismic-mapping services company filed a lawsuit claiming that the company violated the FLSA by failing to include an established meal allowance, which was paid to employees while traveling, in the employees’ regular rate of pay.  In their collective action, the parties asserted that the company required employees to travel away from home and stay in hotels near remote job sites for four to eight weeks at a time. Employees then typically returned home for about two to four weeks before traveling to another remote location. They often worked more than 40 hours per week while at the remote location, triggering overtime pay.

Per Diem For Meals

The company provided its employees with a $35 per diem for meals for all days at the remote location as well as the days spent traveling to and from the remote job location. The company did not pay the $35 meal reimbursement on days that employees worked from their home location or when food was provided at the remote job site.

Exception To “Regular Rate” For Traveling Expenses

The regular rate of pay generally must be calculated to include all remuneration for services paid to the employee.   One exception to this rule is that employers can exclude from the regular rate all reasonable payments for traveling expenses incurred by an employee in the furtherance of his employer’s interests and properly reimbursable by the employer. The regulations state that this exemption includes the “reasonably approximate amount expended by an employee, who is traveling ‘over the road’ on his employer’s business, for . . . living expenses away from home . . . .” 29 C.F.R. § 778.217(b)(3). The company argued that the $35 meal payments were exempt travel expenses and therefore, need not be included in the calculation of the employees’ regular rate.

Meal Reimbursement Was Exempt Travel Expense

The employees countered by arguing that the $35 payments were not exempt travel expenses because the employees were no longer traveling while they worked at the remote job sites for four to eight weeks at a time. They also argued that the phrase “living expenses” did not include the cost of food. The Tenth Circuit disagreed on both arguments.

The Court reasoned that the employees’ position that they were no longer “traveling over the road” when they reached their remote job site was a “hyper-literal interpretation.” The Court instead read “traveling” more broadly to include not just time in transit, but also time away from home. On the employees’ argument that the cost of food did not qualify as a “living expense,” the Court agreed with prior determinations by the U.S. Department of Labor to find that the cost of food away from home is an additional expense that the employee incurs while traveling for the employer’s benefit and therefore, is a living expense. The Court ruled that the $35 per diem meal reimbursements were exempt travel expenses and need not be included in the employees’ regular rate when determining overtime pay. The Court upheld summary judgment in favor of the company. Sharp v. CGG Land Inc., No. 15-5113 (10th Cir. Nov. 4, 2016). Read more >>

marijuana

December 14, 2016

Working Through The Haze: What Legal Marijuana Means For Nevada Employers

6a013486823d73970c01b7c85cd538970bBy Dora Lane and Anthony Hall
One in eight adults in the United States smokes marijuana, according to a 2016 Gallup poll. That means about 13% of the adult population in this country smokes pot, nearly double the percentage that reported such use in Gallup’s 2013 survey. In fact, about 22 million Americans reported they had used marijuana in the past month, according to 2014 data collected by the Substance Abuse and Mental hall_aHealth Services Administration.

It is unclear whether the increase in the number of Americans reporting they use marijuana is due to an actual increase in use of the drug, or if it simply represents an increase in the willingness of survey respondents to admit to using marijuana. What is clear, however, is that more states are legalizing marijuana for both medical and recreational use. This past November, nine states had marijuana initiatives on the ballot. Voters in four states – California, Maine, Massachusetts, and Nevada – passed recreational marijuana use while voters in four other states – Florida, Montana, North Dakota, and Arkansas – passed medical marijuana initiatives. The undeniable result is that marijuana is becoming more acceptable, and more marijuana-related issues are likely to arise in the workplace.

Nevada Legalizes Recreational Marijuana Use 

In November 2016, Nevada voters approved a ballot question that legalizes the recreational use of marijuana by adults. The ballot measure amends the Nevada Revised Statutes to make it lawful for a person who is 21 years of age or older to purchase, possess, and consume up to one ounce of marijuana and to grow a limited number of marijuana plants for personal use. Questions have arisen how the legalization of marijuana will impact employers.

No Marijuana Use Or Possession At Work

Under the recently passed recreational marijuana initiative, public and private employers may maintain, enact, and enforce a workplace policy prohibiting or restricting actions or conduct otherwise permitted under the new law. In other words, although the initiative provides that marijuana may be consumed without criminal prosecution by the State of Nevada, it does not affect an employer’s right to implement policies prohibiting marijuana consumption or possession. Nevada employers may, therefore, prohibit the possession and use of recreational marijuana at work.

This provision is consistent with the state’s medical marijuana law which also does not require any employer to allow the use of medical marijuana in the workplace. Consequently, even though use of marijuana may be legal in the state, employers may restrict such use and possession on its premises and while employees are on duty. And, although not specifically stated, Nevada’s marijuana laws appear to allow employers to terminate or discipline employees who violate workplace policies that prohibit using, possessing, or being impaired by marijuana while at work.

So Must Employers Tolerate Off-Duty Marijuana Use, So Long as It Is Not Done While on Duty or on Company Premises? 

The short answer in our opinion is generally no, with some caveats for medical marijuana users described below, but employees’ off-duty consumption raises some difficult practical issues. First, many employers have policies prohibiting employees from being “under the influence” or “impaired” by prohibited substances while at work. It is often challenging, however, to determine when an employee is “under the influence” or “impaired” while at work. If the employee is visibly affected or slow to react, impairment may be easier to demonstrate. However, not everyone experiences side effects from marijuana consumption and even if they do, the timeframe within which the side effects can be observed may vary by individual. Accordingly, employers who prohibit employees from working while being impaired or “under the influence” should not jump to conclusions that someone was “under the influence” just because their drug screen comes back positive for Tetrahydrocannabinol (THC).

Second, employers should be mindful of NRS 613.333, which makes it an unlawful employment practice for an employer to refuse to hire a prospective employee, or to discharge or discriminate against an employee because the employee engages in the lawful use of any product outside the premises of the employer during the employee’s nonworking hours, as long as the use does not adversely affect the employee’s ability to perform his or her job or the safety of other employees. Although the statute was initially enacted to protect tobacco smokers, the recent legalization of marijuana makes the statute also potentially applicable to marijuana users.

Unlike tobacco, however, marijuana remains illegal under federal law, which begs the question whether its off-duty use is “lawful.” Currently, no Nevada cases have considered or decided this issue, but a key case involving Colorado’s lawful activities statute, C.R.S. § 24-34-402.5, was decided by the Colorado Supreme Court last year. In that case, a quadriplegic employee who used medical marijuana during non-working hours to help control his pain was terminated after a random drug test showed a positive result for marijuana in his system. He sued his employer alleging that his termination violated the Colorado lawful activities statute. The Colorado Supreme Court ruled that his termination did not violate the statute because marijuana use was unlawful under federal law. Coats v. Dish Network, LLC, 350 P.3d 970 (Colo. 2015).

Even though the Colorado case is not binding on Nevada courts, its reliance on the illegality of marijuana under federal law may be persuasive. Still, it is unclear how a Nevada court would rule if asked to decide whether an employer violates the Nevada lawful product statute by terminating or disciplining an employee due to his or her off-duty marijuana use. The risk of such a claim should be considered when making adverse employment decisions involving positive marijuana drug tests or other marijuana-related issues. Employers should also be mindful of potential developments in federal law with respect to the legalization of marijuana. Such legalization will transform marijuana into a “lawful” product under both federal and state law, and the above analysis will change greatly.

Finally, an employee who is terminated for marijuana use may attempt to argue wrongful termination in violation of public policy, given the recent marijuana legalization. Because the Nevada Supreme Court has been traditionally conservative in creating new exceptions to the at-will employment doctrine and marijuana remains illegal under federal law, such claims do not bear high likelihood of success. As mentioned above, however, legalization of marijuana under federal law will substantially affect this analysis. Read more >>

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December 1, 2016

DOL Appeals Overtime Rule Injunction: Webinar At Noon (MT) Today

6a013486823d73970c01b8d1dc5d4a970c-120wiBy Mark Wiletsky

On the very day that its final overtime rule was supposed to go into effect, the U.S. Department of Labor filed an appeal of last week’s preliminary injunction that temporarily halted the rule. The appeal will be heard by the Fifth Circuit Court of Appeals, which is located in New Orleans, Louisiana.

Will Appeal Be Expedited?

Appellate rules for the Fifth Circuit permit parties to file a motion for an expedited appeal, which means the appeal would be heard and ruled upon in a much shorter timeframe than normal, e.g., the normal timeframe for an appeal can be a year to 18 months. The court will grant such motion only for good cause. We expect that the DOL might try to expedite its appeal, especially given the change in administration coming in late January. As of this morning, however, there is no indication that the DOL has moved for an expedited appeal, but it is possible that it hasn’t been listed on the docket or otherwise been made public yet.

The DOL could also ask the district court to stay the preliminary injunction pending the appeal – in other words, to allow the new overtime rules to go into effect pending the outcome of the appeal. It is unlikely that the district court judge would grant a stay, but it would be a logical next step. Again, no motion to stay the injunction is yet listed on the court’s docket.

Webinar At Noon To Discuss Injunction and Appeal

Please join our free webinar at noon (MT) today (December 1, 2016) as I discuss what the preliminary injunction of the DOL’s overtime rule and the pending appeal mean for employers. I’ll also discuss options for employers who have been considering, or may even have implemented pay practices in anticipation of the overtime rule changes. Register for the webinar here. We will record the webinar for those unable to attend.

November 28, 2016

Dora Lane and Steve Gutierrez Discuss Impacts of Hold on Proposed Overtime Rule

pay-stub-and-money-shutterstock_373813009Holland & Hart labor and employment attorneys Dora Lane and Steve Gutierrez discuss potential impacts on employers and employees of the hold on the proposed Overtime Rule. Dora Lane was interviewed on Reno’s Channel 2 News.  Steve Gutierrez talked with KDVR Fox 31 in Denver.

Watch the Reno interview 

Watch the Denver interview

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November 23, 2016

DOL’s Overtime Salary Threshold Increase Is On Hold – Now What?

6a013486823d73970c01b8d1dc5d4a970cBy Mark Wiletsky

Many human resource professionals got into the office today not knowing whether to laugh or cry. Most are happy that the Department of Labor’s (DOL’s) new overtime salary requirement will not go into effect next Thursday, December 1, 2016, due to a federal judge’s grant of a nationwide preliminary injunction which prevents the DOL from implementing and enforcing the new rule. (See our post yesterday reporting on the injunction.) Yet, many organizations have already spent countless hours preparing for the new rule to go into effect next week and are wondering what to do now. Let’s review where things stand and your best options going forward.

Nationwide Injunction Delays Final Overtime Rule 

In September, twenty-one states sued the DOL in federal court in Texas seeking to stop the DOL’s final rule that more than doubles the salary threshold for the so-called white collar exemptions and calls for automatic increases every three years. Business groups and industry associations also filed suit in the same Texas court seeking a similar outcome. The state-plaintiffs filed an emergency motion for a preliminary injunction. Shortly thereafter, the business-plaintiffs filed an expedited motion for summary judgment. The two cases were consolidated under Judge Amos L. Mazzant, III.

On November 16, 2016, Judge Mazzant heard oral argument on the state-plaintiffs’ emergency preliminary injunction motion. He issued his ruling yesterday, granting the preliminary injunction on a nationwide basis.

To prevail on their preliminary injunction motion, the states needed to show, among other things, that they would have a substantial likelihood of success on the merits of their case. The court ruled that the states met that burden, finding that the plain meaning of the executive, administrative, and professional exemptions in the Fair Labor Standards Act (FLSA) focused only on the duties of such positions, without a minimum salary level. The court stated that although the FLSA delegated authority to the DOL to establish the types of duties that might qualify an employee for these exemptions, it did not authorize the Department to disqualify employees who meet the duties requirements but do not meet the salary level established in the DOL’s final rule. The court concluded that the DOL exceeded its delegated authority and ignored Congress’s intent by raising the minimum salary level so that it “supplants the duties test.”

Anticipating The Next Legal Move

The preliminary injunction is only the first step in this legal challenge to the DOL’s final overtime rule, but it provides a huge blow to the Obama administration’s efforts to raise wages for U.S. workers. The DOL could appeal the court’s ruling to the Fifth Circuit Court of Appeals, but according to a DOL statement, the agency is still “considering all of [its] legal options.” Whether an appeal would be successful is unknown. Absent an appeal, the Texas lawsuits continue, with a permanent resolution still to be decided. Read more >>

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November 22, 2016

Overtime Rule Put On Hold: Court Grants Nationwide Injunction

6a013486823d73970c01b8d1dc5d4a970cBy Mark Wiletsky

The new overtime salary requirement will not go into effect on December 1, 2016. A federal judge in Texas today issued a preliminary injunction in a challenge to the U.S. Department of Labor’s (DOL’s) new overtime salary threshold. Judge Amos L. Mazzant, III, of the U.S. District Court for the Eastern District of Texas, Sherman division, ruled that the DOL does not have the authority to utilize a salary-level test or an automatic updating mechanism under the final rule.

The nationwide injunction means that the DOL rule which doubled the salary requirement for the white collar exemptions from $455 to $913 per week will not go into effect on December 1, 2016, as scheduled.

OT Changes Are Delayed, Not Necessarily Dead

Two lawsuits were filed in the Texas court seeking to stop the new overtime rule from becoming effective. The first one was brought by twenty-one states and the second by numerous business associations. The two cases were consolidated and will proceed before Judge Mazzant.

By granting the preliminary injunction, the judge has delayed the rule from becoming effective until further legal proceedings may occur. The court will need to rule on whether the injunction becomes permanent. The business parties’ motion for summary judgment, which seeks to throw out the final rule for good, has already been briefed and may be decided on an expedited basis.

Stay tuned as we will provide further analysis of the court’s ruling.