Monthly Archives: October 2013

October 28, 2013

E-Verify – Catching Up After the Government Shutdown

By Roger Tsai 

The early October shutdown of the federal government left many employers unable to verify employment eligibility through the government’s E-Verify system.  Employees were unable to resolve Tentative Nonconfirmations (TNCs) and deadlines were missed.  What do you do now that the government has reopened?  How do you catch up and remain compliant with your E-Verify obligations?  Here are tips based on information provided by the U.S. Citizenship and Immigration Services (USCIS). 

  • November 5th deadline for creating E-Verify case for employees hired during the shutdown.  If you hired employees during the government shutdown, you need to create an E-Verify case for each such employee no later than November 5, 2013.  If the system asks why the case is late because it was not entered within three days of the hire, select “Other” from the drop-down list and enter “federal government shutdown.” 
  • Initiate referral process now for employees who decided to contest TNC during shutdown.  If an employee decided to contest his or her TNC while the E-Verify system was unavailable, initiate the referral process in E-Verify now.
  • Add 12 business days for employees to resolve TNC.  If an employee had a TNC referred during the period of September 17 – 30, 2013, the deadline for the employee to contact the Social Security Administration or the Department of Homeland Security to resolve their case fell during the government shutdown.  These employees may add 12 federal business days to the date printed on the “Referral Letter” or “Referral Date Confirmation” to resolve their cases. 
  • Start a new case for any Final Nonconfirmations (FNCs) or No Shows that resulted because of the shutdown.  If an employee received a FNC or DHS No Show because of the government shutdown, you will need to close the case and select “The employee continues to work for the employer after receiving a Final Nonconfirmation (or No Show) result.”  Then enter a new case in E-Verify for that employee so that the employee has an opportunity to contest and resolve the TNC that led to the FNC result.
  • I-9 obligation not affected by the government shutdown.  Because I-9 forms do not require government input, I-9 requirements were not affected by the government shutdown.  You should have properly completed and retained a Form I-9 for every employee, even those hired during the shutdown. 

Employees may be confused about what to do with a TNC or FNC that was due to or affected by the government shutdown. Refer them to the Employee section of the E-Verify website or to E-Verify Customer Support.   Remember that employers may not take any adverse action against an employee because of a TNC and should not take any adverse action due to a FNC or No Show result caused by the shutdown.  By catching up with E-Verify obligations now, your employment eligibility compliance procedures should get back to normal within a few weeks.


Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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October 21, 2013

Tips for Paying Wages via Payroll Cards

By Mark Wiletsky 

DebitcardOffering payroll cards for the payment of employee wages may be a viable, cost effective alternative to paper paychecks.  It also can be an attractive offering for workers who do not have a checking or savings account at a bank or other financial institution.  Employers must be aware, however, that certain federal and state laws regulate payroll card accounts.  The Consumer Financial Protection Bureau (CFPB) recently issued Bulletin 2013-10 describing the application of the Electronic Fund Transfer Act (EFTA) and Regulation E, which implements the EFTA, to payroll card accounts.  Here are some tips for keeping your payroll card program in compliance with these laws. 

  • No Mandatory Use of Payroll Cards. You may not require that employees be paid on a payroll card from a particular institution.  You may offer payroll cards as a method of wage payment as long as you offer an alternative method, such as direct deposit to an account of the employee’s choosing or paper paychecks.  Acceptable methods of paying wages typically are governed by state wage payment laws.
  • Disclosure of Fees, Transfers, and Other Payroll Card Requirements. Employees to be paid on a payroll card are entitled to be informed of any fees, limitations or requirements related to making electronic fund transfers with the card that will be imposed by the financial institution who issues the card.  Clear, understandable written disclosures must be provided to cardholders in a form that the consumer may keep.
  • Account History Must Be Accessible.  The payroll card issuer must make each cardholder’s account history available, either through periodic statements, telephone balance inquiries, internet/web-based account history, or by providing 60 days of written account history upon request of the cardholder. 
  • Cardholder Liability for Unauthorized Use Must Be Limited.  Payroll cardholders are entitled to limited liability protections for the unauthorized use of their payroll cards, however they must report any unauthorized transfers in a timely period.
  • Cardholders’ Rights to Error Resolution.  Upon the timely report of an error regarding a payroll card account, financial institutions must respond to the cardholder.  In order to ensure a response, the cardholder must report an error within 60 days of either accessing his or her payroll card account history or receiving a written account history containing the error, whichever is earlier, or within 120 days after the alleged error occurred. 

In addition to the federal payroll card laws, state wage payment laws often regulate when and how payroll cards may be used to pay employee wages.  For example, in Colorado, employers may deposit employee wages on a payroll card provided the employee may access the full amount on the card for free at least once during the pay period, or the employee is given the choice to receive their pay through other means, such as direct deposit to an account of the employee’s choosing or a paycheck.  Be certain to check the wage payment laws in the states in which you operate to ensure compliance with any state payroll card requirements.


Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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October 14, 2013

“Pretaliatory” Firing Recognized as Wrongful Discharge Claim in Utah

By Elizabeth T. Dunning 

Does an employee have to actually file a workers’ compensation claim to be protected from retaliatory termination?  No, says the Utah Court of Appeals.  In the recent Stone v. M&M Welding and Constr. Inc. decision, the Court ruled that an employee who was fired after expressing his intention to file a workers’ compensation claim could pursue a retaliatory discharge claim even though he failed to actually file his worker’s comp claim until eight months after he was fired.  

Employee Discusses Desire to File Workers’ Compensation Claim 

Terry Lee Stone was injured at a party hosted by M&M Welding and Construction in November of 2009.  Within days of the injury, Stone informed the company president that he wanted to file a workers’ compensation claim.  The president dissuaded Stone from doing so, instead holding his position open for two months until he could return to work.  Upon his return, however, Stone’s hours were reduced.  In March and April of 2010, Stone again informed the company that he intended to file a workers’ compensation claim, but failed to do so. 

In early May, a customer demanded that Stone be fired, believing that he exaggerated in reporting a spill of contaminated water at the customer’s site. A few days later, Stone contacted M&M to obtain insurance information for his workers’ compensation claim.  M&M fired him the following day.  Stone sued, alleging that M&M terminated him in retaliation for expressing his intent to file a workers’ compensation claim.  M&M argued that because Stone did not file his workers’ compensation claim until eight months after he was fired, his termination could not be in retaliation of the filing.  The trial court agreed, awarding summary judgment to M&M. 

Utah Court of Appeals Rules that Notifying Employer of Intent to File Workers’ Compensation Claim is Enough 

On appeal, the Court pointed to the Utah Supreme Court’s decision in Touchard v. La-Z-Boy Inc. which recognized that “retaliatory discharge for filing a workers’ compensation claim violates the public policy of this state; thus, an employee who has been fired or constructively discharged in retaliation for claiming workers’ compensation benefits has a wrongful discharge cause of action.”  In Stone, the Court of Appeals extended the basis for a wrongful discharge claim by concluding that conduct short of actually filing a workers’ compensation claim was protected conduct.  The Court wrote that preparing a claim, notifying the employer of the intent to file a claim or discussing his claim with coworkers could be sufficient to support a claim of retaliatory discharge.  In Stone’s case, he had repeatedly expressed to the company president and others that he intended to file a workers’ compensation claim so that conduct was sufficient to proceed with his retaliatory discharge lawsuit.

 

Policy Behind Recognizing “Pretaliatory” Discharge 

The Court recognized that a rule that protected employees only after they actually filed a workers’ compensation claim “would create a perverse incentive for an employer to discharge an injured employee as soon as the employer learns of the employee’s intention to file a claim.”  The Court found such a rule would contradict the important public policy embodied in the state’s workers’ compensation act. 

The Court’s ruling also squares with the conduct that can underlie a retaliation claim under other employment laws.  For example, retaliation claims under Title VII can be based on conduct where the employee either opposes workplace discrimination or participates in a discrimination claim, investigation or proceeding.  “Opposing” discrimination can include the threat of filing a discrimination charge as well as complaining about or reporting discrimination at work.   The Stone decision recognizing a retaliation wrongful discharge claim based on an employee’s expressed intent to file a workers’ compensation claim is analogous to the “opposition” retaliation claims recognized in such other employment laws. 

Employer Take-Aways 

Employers should be careful when making adverse employment decisions related to an employee who has either filed a workers’ compensation claim or is preparing to do so. Decisions should be unrelated to the claim or threat of claim and should be based on a reason that can be clearly articulated and is supported by thorough documentation.  Anything less may lead the affected employee to conclude that the adverse action was in retaliation for the workers’ compensation claim and make it difficult to defend a retaliation lawsuit.


Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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October 9, 2013

Idaho Supreme Court Changes Tack and Applies McDonnell Douglas Burden Shifting Analysis at Summary Judgment Stage

By A. Dean Bennett 

Since 2008, employers defending employment claims in Idaho have faced a higher burden of proof, thanks to the Curlee v. Kootenai County Fire & Rescue decision of the Idaho Supreme Court.  In that case, the Court decided that the well-known McDonnell Douglas burden shifting analysis used in employment cases did not apply at the summary judgment stage, making it more difficult for employers to get a favorable outcome without going to trial.  Recently, however, the Idaho Supreme Court changed its position, deciding that the McDonnell Douglas burden shifting analysis did apply at the summary judgment stage, resolving a five-year debacle in which Idaho employers faced different burdens of proof depending on whether employment claims were litigated in state or federal court.  See Hatheway v. Bd. of Regents of the Univ. of Idaho, No. 39507 (Idaho Sept. 6, 2013). 

Federal Framework Applied to Age Discrimination Claim Under the Idaho Human Rights Act (IHRA) 

The McDonnell Douglas burden shifting analysis has been widely used to resolve a variety of federal employment law claims since 1973.  The analysis allows a plaintiff to put forth indirect evidence of discrimination to establish a prima facie case.  The burden of production then shifts to the employer to articulate a legitimate, nondiscriminatory reason for the employer’s actions.  If the employer provides such reason, the burden of production then swings back to the plaintiff to show that the proffered reason is in fact pretext for unlawful discrimination. At all times, the plaintiff bears the burden of persuasion, meaning the plaintiff must convince the judge or jury that his or her position is correct. 

Many state courts have adopted the McDonnell Douglas burden shifting analysis when adjudicating employment claims brought under analogous state laws.  In Curlee, the Idaho Supreme Court appeared to adopt the McDonnell Douglas analysis, but went on to rule that the analysis explicitly governed the burden of persuasion at tria, and did not apply at the summary judgment stage. 

The Hatheway decision appears to change that.  Without specifically mentioning or overruling its Curlee decision, the Court applied the McDonnell Douglas burden shifting analysis at the summary judgment stage of Hatheway’s IHRA discrimination claims against the University of Idaho.  The Court reiterated that federal law guides the interpretation of the IHRA and applied the same degree of proof and standards to an IHRA age discrimination claim as is used to analyze discrimination claims under the federal Age Discrimination in Employment Act.  

Why Employers Should Care 

If this all sounds like legal mumbo-jumbo, let’s put it in practical, real-life terms.  Employers want to get employment claims dismissed at the earliest possible stage for numerous reasons, including avoiding expensive litigation, disruption to their operations and unfavorable publicity.  Following the 2008 Curlee decision, Idaho employers had to prove more of their case early on, making it difficult to get a favorable judgment prior to trial.  This prolonged meritless cases and cost employers more in legal fees and litigation-related expenses.  Now, with the application of the traditional burden shifting analysis at the summary judgment stage, employers facing employment claims in Idaho state courts will have a better chance of getting employment claims dismissed earlier in the legal process with fewer cases proceeding to trial.


Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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October 7, 2013

Home Health Care Workers to Receive Minimum Wage and Overtime Protections

By Mark Wiletsky 

Health care workerIf your organization is in the home health field, be aware that the rules for how to pay home care workers is going to significantly change.  Under a recently issued Final Rule, the U.S. Department of Labor (DOL) will extend FLSA pay protections to an estimated 1.9 million home care workers in the U.S. who currently are treated as exempt under the companionship exemption.  As a result, workers who provide in-home care to ill, elderly, or disabled individuals through a third party employer will be covered by the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA) beginning January 1, 2015.   

Companionship Services Exemption Narrowed 

The so-called “companionship exemption,” implemented in 1975, allowed organizations employing workers who provide home care assistance to elderly, ill, injured or disabled persons to treat these workers as exempt from the federal minimum wage and overtime pay provisions.  The new Final Rule narrows the exemption for companionship services in two key ways. 

First, the Final Rule prohibits third party employers of health care workers, such as home care staffing agencies, from claiming the exemption for companionship services.  The rule makes clear that only an individual, family or household employing a home health worker may claim the companionship exemption.  This means that home care workers employed by a company that provides home health services must be paid minimum wage for hours worked and receive overtime pay as provided under the FLSA. 

Second, the definition of “companionship services” is limited to only fellowship and protection services, with attendant care limited to only 20 percent of the total hours worked with that person each week.  Examples of fellowship and protection services include reading, playing games, accompanying the person on walks, taking the person to appointments or social events and conversing.  If the worker provides more than 20 percent of their time on activities of daily living, such as dressing, feeding, bathing, toileting, housework, managing finances and arranging medical care, the worker is not exempt under the companionship exemption. 

Medically Related Services Not Included in Companionship Exemption 

A direct care worker who provides medically related services is ineligible for the companionship exemption.  Under the Final Rule, tasks will be considered medically related when they typically are performed by trained personnel, such as registered nurses, licensed practical nurses or certified nursing assistants, regardless of the training or occupational title of the worker actually performing the services.  This means that even if a worker normally meets the companionship exemption by providing only fellowship and protection services, the worker loses the exemption for any workweek in which he or she provides medically related services and therefore, is entitled to minimum wage and overtime pay, if applicable, for that week. 

Home Health Employers Should Review Pay Policies 

With approximately fifteen months to prepare for the January 1, 2015 effective date of this Final Rule, employers of home health care workers should take time now to review compensation and recordkeeping practices.  In particular, determine how you will track worker hours to ensure that you pay minimum wage for all hours worked and an overtime premium for all hours in excess of 40 per workweek.  Learn the rules for paying in-home workers for time spent waiting, sleeping and traveling, as summarized on the DOL’s Fact Sheet 79D – “Hours Worked Applicable to Domestic Service Employment Under the FLSA.”  Finally, prepare to update and communicate new pay policies to employees through your employee handbook, intranet policy portal and/or in-person training.


Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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October 4, 2013

EEOC’s Religious Accommodation Claim Fails Despite Retailer’s Assumption that a Female Job Applicant Wore a Headscarf for Religious Reasons

By John M. Husband 

US-CourtOfAppeals-10thCircuit-SealDoes an employer have to engage in an interactive discussion about reasonably accommodating the wearing of a headscarf (i.e., hijab) in contravention of its dress code simply because a job applicant wears a headscarf to the job interview?  No, according to a recent decision by the Tenth Circuit Court of Appeals.  The Court ruled that to establish a religious accommodation claim under Title VII, the plaintiff must establish that he/she informed the employer that he/she adheres to a particular practice for religious reasons and that the plaintiff needs an accommodation for that practice, due to a conflict between the practice and the employer’s neutral work rule.  EEOC v. Abercrombie & Fitch Stores, Inc., No. 11-5110 (10th Cir. October 1, 2013). 

In the Abercrombie case, an assistant manager named Heather Cooke interviewed Samantha Elauf, a seventeen-year old applicant for an in-store sales position. Ms. Elauf wore a headscarf to the interview.  Though they did not discuss religion, Ms. Cooke assumed that Ms. Elauf was Muslim and that her Muslim religion was the reason she wore a headscarf.  During the interview, Ms. Cooke described some of the dress requirements expected of Abercrombie employees but neither she nor Ms. Elauf specifically referred to or discussed the wearing of a headscarf.   After the interview, Ms. Cooke believed Ms. Elauf was a good candidate for the job but was unsure whether it would be a problem for her to wear a headscarf since Abercrombie has a strict “Look Policy” that forbids wearing of “caps” and black clothing.  Ms. Cooke consulted with her district manager who rejected Ms. Elauf for hire because she wore a headscarf which was inconsistent with the Look Policy.  

EEOC Files Lawsuit Alleging Retailer Failed to Accommodate Applicant’s Religious Practice 

In 2009, the Equal Employment Opportunity Commission (EEOC) filed a lawsuit in federal court in Oklahoma alleging that Abercrombie violated Title VII by refusing to hire Ms. Elauf because she wore a headscarf and failing to accommodate her religious beliefs because it failed to make an exception to its Look Policy.  The Oklahoma court ruled in favor of the EEOC on summary judgment, reasoning that Abercrombie had enough information to make it aware that there was a conflict between the applicant’s religious practice and its Look Policy that would require an accommodation.  It emphasized that Abercrombie had made numerous exceptions to its Look Policy over the past decade or so, including eight or nine headscarf exceptions.  The parties went to trial on the issue of damages where a jury awarded the EEOC $20,000 in compensatory damages. 

Religious Accommodation Claim Requires Plaintiff to Inform Employer of Conflict between Religious Practice and Employer Policy 

On appeal to the Tenth Circuit, Abercrombie argued that it was entitled to summary judgment because there was no dispute that Ms. Elauf never informed the company that her practice of wearing a headscarf was based on her religious beliefs and that she would need an accommodation for the practice based on the conflict between it and the Look Policy.  A divided Tenth Circuit agreed.  Two of the three judges on the panel ruled that the plaintiff in a religious accommodation case must establish that he or she informedthe employer of his/her religious belief that contradicts with an employment requirement and the plaintiff must request an accommodation.  Because Ms. Elauf never informed Abercrombie that she wore a headscarf for religious reasons and never requested an exception from the dress code, the court reversed the grant of summary judgment to the EEOC and vacated the jury award with instructions to enter judgment in favor of Abercrombie.  The majority stated that it is only after an employer is put on notice of the need for a religious accommodation that it must actively engage in a dialogue with applicants or employees concerning their conflicting religious practices and possible accommodations.  

Dissenting Opinion and Conflicting Circuit Court Decisions Set Up Possible Appeal to Supreme Court 

The dissenting judge strongly disagreed with his two colleagues on the panel, believing that Abercrombie should not be permitted to avoid discussing reasonable accommodations for Ms. Elauf’s religious practice when it knew that she wore a headscarf, assumed she was Muslim and wore the headscarf for religious reasons and knew that its Look Policy prohibited its sales models from wearing headwear.  The dissent noted that Ms. Elauf could not inform Abercrombie of a conflict between her religious practice and its dress code because she did not know the details of the Look Policy or that headwear, including a headscarf, was prohibited.  The dissenting judge would have sent the entire matter to a jury to decide if Abercrombie was liable for religious discrimination. 

The dissenting opinion points out that other circuit courts of appeal have held that a job applicant or employee can establish a religious failure-to-accommodate claim if he/she can show that the employer knew of a conflict between the plaintiff’s religious beliefs and a job requirement, regardless of how the employer acquired knowledge of that conflict.  Unlike the Tenth Circuit, these other circuits do not require that the plaintiff actually inform the employer of the conflict. The stage is set for the EEOC to ask the U.S. Supreme Court to resolve the disagreement between the courts to ultimately decide whether a plaintiff must actually inform the employer of the conflict between his/her religious practice and a job requirement before the duty to discuss reasonable accommodations kicks in.   

Employer Lessons 

This opinion is favorable for employers in the states within the Tenth Circuit’s jurisdiction, namely Colorado, Oklahoma, Kansas, Utah, Wyoming and New Mexico.  That said, employers should always be cautious about making adverse employment decisions when it has knowledge or information that relates to an applicant/employee’s religious beliefs or practices.


Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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