September 22, 2016

Minimum Wage For Federal Contractors Going Up In 2017

On January 1, 2017, the new minimum wage for employees working on covered federal contracts will be $10.20 per hour, up five cents from the current hourly minimum of $10.15. An even bigger increase will go into effect for tipped employees working on or in connection with covered contracts as the tipped-employee minimum cash wage goes up from $5.85 to $6.80 per hour.

Inflation-Based Increases

According to President Obama’s 2014 Executive Order establishing a minimum wage for employees working on federal contracts, and the Department of Labor’s (DOL’s) corresponding regulations, the annual minimum wage for non-tipped employees increases based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as published by the Bureau of Labor Statistics, rounded to the nearest five cents. The annual percentage increase in the CPI-W over the past year was 0.287% which would raise the minimum wage rate to $10.18. Because the hourly rate must be rounded to the nearest multiple of five cents, the new rate beginning January 1, 2017 will be $10.20.

For tipped employees, the Executive Order requires that the minimum cash wage increase by $0.95 (or a lesser amount, if necessary) until it reaches 70% of the contractor minimum wage for non-tipped employees. For 2017, the hourly cash wage for tipped employees will go up by $0.95 cents to $6.80 per hour. Employers must remember that at all times, the amount of tips received by the employee must equal at least the difference between the cash wage paid and the Executive Order minimum wage. If the employee does not receive sufficient tips, the contractor must increase the cash wage paid so that the cash wage in combination with the tips received equals the Executive Order minimum wage.

Required Minimum Wage Notice

Covered federal contractors are required to inform all workers performing on or in connection with a covered contract of the applicable minimum wage rate under the Executive Order. The required notice may be met by posting the free poster on Federal Minimum Wage for Contractors provided on the Wage and Hour Division’s website. As with all employment law posters, this notice should be displayed in a conspicuous place at the worksite.

September 20, 2016

Overtime Rule Lawsuit Seeks To Stop December 1st Changes

By Mark Wiletsky

Twenty-one states have sued the federal Department of Labor (DOL) seeking to prevent the new overtime exemption salary boost from going into effect on December 1, 2016. In a lawsuit filed in the Eastern District of Texas, the states argue that the DOL exceeded its authority when it issued its final rule increasing the salary level for exempt employees to $47,476 per year, with automatic updates to the salary threshold every three years.

Legal Challenge To The Overtime Rule

In the states’ complaint against the DOL, the states argue that the new rule is unlawful. One of their primary arguments is that enforcing the Fair Labor Standards Act (FLSA) and the new overtime rule against the states infringes upon state sovereignty in violation of the Tenth Amendment. The complaint cites the increased payroll costs to the states that would result from having to comply with the new exempt salary levels.

The states argue numerous other reasons why the new overtime rule should be stopped, including that the DOL exceeded the authority granted to it by Congress when it focused on the salary level as the litmus test for exempt status rather than on the duties of white collar workers. The states argue that exempt status should apply to any “bona fide executive, administrative, or professional” employee, even if their salary falls below the new threshold.

The states also take issue with the automatic increases in the new rule through which the DOL will index the salary thresholds every three years. The states assert that the DOL should have to go through the normal notice and comment period in order to make future changes to the salary levels. Read more >>

September 13, 2016

Colorado Hospital Targeted For Alleged Age Discrimination Against Nurses

By Steve Gutierrez

senior nurse A Chief Nursing Officer (CNO) is alleged to have stated that a younger nurse could “dance around the older nurses.” Not hard to imagine that such a statement would raise the hackles of many nurses over age 40, but do comments like that mean that the hospital discriminated against one or more nurses on the basis of their age when the nurses were discharged or resigned? That is the question facing Montrose Memorial Hospital after the Equal Employment Opportunity Commission (EEOC) filed an age discrimination lawsuit against the Western Slope hospital last Friday.

EEOC Cites Numerous Age-Related Comments

In its complaint, the EEOC alleges that Montrose Memorial Hospital’s CNO, Joan Napolilli, made various age-biased statements to charging party Katherine Casias and other nurses. Casias began work for the hospital in 1985 as a licensed practical nurse but then earned her degree cum laude as a registered nurse (RN). The alleged comments attributed to Napolilli include:

a younger RN could “dance around the older nurses;”
younger nurses are “easier to train” and “cheaper to employ;”
Casias was not “fresh enough” and was chastised for not smiling or saying hello enough;
referring to Casias as an “old bitch;”
older workers at the hospital were “a bunch of monkeys” and she’d “like to fill the hospital with new nurses and get rid of all the old ones;” and
telling a nurse supervisor to “work that old grey-haired bitch into the ground” and to work her “long and hard until she quit or got fired.”

The complaint also alleges that Nurse Manager Susan Smith told an RN that “you’re getting too old for this job.”

If proven to have actually been said, comments expressing an aversion to workers over 40 and a preference for younger workers can be direct evidence of age discrimination under the Age Discrimination in Employment Act (ADEA). Read more >>

September 6, 2016

Tips For Avoiding Retaliation Claims Under EEOC’s New Guidance

By Bryan Benard

In recent years, the Equal Employment Opportunity Commission (EEOC) has received more retaliation charges than any other type of discrimination claim. Last year, almost 45 percent of EEOC charges included an allegation of retaliation – yes, almost half!

Because of the alarming frequency of charges and the need for employees to report discrimination without fear of reprisal, the EEOC recently issued a new enforcement guidance on retaliation that replaces and updates its 1998 compliance manual on the subject. Even though the EEOC’s position is not necessarily the final word on these issues, as courts often disagree with the EEOC’s interpretation of federal discrimination laws, employers should know how EEOC staff, including its investigators and litigators, will approach retaliation charges. Here is a look at the new guidance with tips on how to avoid becoming another retaliation charge statistic.

Overview of Retaliation and Protected Activities

The federal discrimination laws enforced by the EEOC, such as Title VII, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA) and others, prohibit employers from taking adverse action against an employee or applicant because the individual engaged in “protected activity.” Adverse actions that can be seen as retaliatory by the EEOC include not just discipline or discharge, but also transferring the employee to a less desirable position or shift, giving a negative or lower performance evaluation, increasing scrutiny, or making the person’s work more difficult.

“Protected activity” falls into two categories: participation and opposition. Participation activity is when an individual “participates” in an EEO process, which can include filing a charge, being involved in an investigation, or testifying or serving as a witness in a proceeding or hearing. Opposition activity is when an individual complains, questions, or otherwise opposes any discriminatory practice. Employees have the right to engage in both types of protected activity without being subject to retaliation from their employer.

Harassment As Retaliation

According to the EEOC, harassing conduct can be seen as retaliation, even if it does not rise to the level of being severe or pervasive enough to alter the terms and conditions of employment. The agency states that harassment can constitute actionable retaliation so long as the conduct is sufficiently material to deter protected activity in the given context.

Evidence That May Support a Retaliation Finding

To determine whether there is a causal connection between a materially adverse action and the individual’s protected activity, the EEOC will consider different types of relevant evidence, alone or in combination. Some of the facts that may lead to a retaliation finding include:

Suspicious timing, especially when the adverse action occurs shortly after the individual engaged in protected activity;
Inconsistent or shifting explanations, such as where the employer changes its stated reasons for taking the adverse action;
Treating similarly situated employees more favorably than the individual who engaged in protected activity;
Statements or other evidence that suggest the employer’s justification for taking the adverse action is not believable, was pre-determined, or is hiding a retaliatory reason.

August 24, 2016

NLRB Reverses Position on Grad Student Assistants, Allowing Them To Unionize

By Steven Gutierrez

Overruling its 2004 Brown University decision, the National Labor Relations Board (NLRB or Board) decided that graduate student assistants at private colleges and universities can be considered statutory employees under the National Labor Relations Act (NLRA), permitting them to organize and form a union. Columbia University, 364 NLRB 90 (August 23, 2016). The Board concluded that student assistants who perform paid work at the direction of their university have a common-law employment relationship with the university and therefore, are entitled to the protections of the NLRA.

Why Brown University Was Wrong

The 2004 Board that decided this issue in Brown University ruled that graduate assistants could not be statutory employees under the NLRA because they are primarily students and have a primarily educational relationship with the university, not an economic one. The current Board rejected that view, finding that because student assistants perform work, at the direction of the university, for which they are compensated, they are statutory employees and the fact that there may be another relationship not covered by the NLRA, namely an educational relationship, did not foreclose their coverage as employees.

The current Board also disagreed with the Brown University Board’s “fundamental belief that the imposition of collective bargaining on graduate students would improperly intrude into the educational process and would be inconsistent with the purposes and policies of the [NLRA].” Instead, this Board believes that allowing grad assistants to be covered employees meets the “unequivocal policy” of the NLRA to encourage the practice and procedure of collective bargaining, and will make sure that an entire category of workers are not deprived of the protections of the law.

Multiple Flip-Flops On Graduate Assistants

In overruling Brown University, the Board’s position returns to the position held in the 2000 New York University (NYU) ruling, which itself was overruled in Brown University. Prior to the NYU ruling, however, the Board had long held that various student assistants could not be included in petitioned-for bargaining units.

This new flip-flop on the issue of coverage for graduate student assistants is not surprising given the leanings and make-up of the majority of the current Board, which has favored the extension of coverage and its jurisdiction, when possible. Board member Philip Miscimarra dissented in this case, writing that he agreed with the Brown University reasoning that graduate student assistants have a predominately academic, rather than economic, relationship with their school. He would not have overruled Brown University, or permitted the petitioned-for bargaining unit to proceed. Read more >>

August 23, 2016

Employer Violates NLRA By Barring Employees From Bringing Class or Collective Actions, Says Ninth Circuit

By Brian Mumaugh

Bad news for employers in the ongoing saga of whether an employer violates the National Labor Relations Act (NLRA) by requiring that employees pursue any legal dispute against the company on an individual basis, rather than in a class or collective action with other employees. The Ninth Circuit Court of Appeals recently ruled that the NLRA precludes employees from waiving their right to have disputes heard collectively and an employer that requires employees to waive that right as a condition of employment commits an unfair labor practice. Morris v. Ernst & Young, LLP, No. 13-16599 (9^th Cir. August 22, 2016).

Broad Ruling Extends To Any “Separate Proceedings” Requirement

Accounting firm Ernst & Young required its employees to sign agreements mandating that all legal claims against the firm be pursued exclusively through arbitration and only as individuals in “separate proceedings.” When employee Stephen Morris brought a class and collective action in federal court alleging that the firm misclassified employees denying them overtime pay under the Fair Labor Standards Act, Ernst & Young sought to compel arbitration on an individual basis pursuant to its arbitration agreement. The district court agreed, dismissing the federal court case and ordering arbitration.

Morris appealed, arguing, among other things, that the “separate proceedings” clause violated the NLRA. Morris relied on determinations by the National Labor Relations Board (the Board) in the D.R. Horton and Murphy Oil cases in which the Board ruled that concerted action waivers violate the NLRA. The Ninth Circuit agreed. It ruled that when an employer requires employees to sign an agreement precluding them from bringing a concerted legal claim regarding wages, hours, and terms and conditions of employment, the employer violates the NLRA.

The Court focused on the Board’s interpretation of the NLRA’s statutory right of employees “to engage in . . . concerted activities for the purpose of . . . mutual aid or protection” to include a right to join together to pursue workplace grievances, including through litigation. It characterized this as a labor law case, not an arbitration case. It stated that the problem with the contract was not that it required arbitration, but that it excluded all concerted employee legal claims. The Court explained that the same problem would exist “if the contract required disputes to be resolved through casting lots, coin toss, duel, trial by ordeal, or any other dispute resolution mechanism, if the contract (1) limited resolution to that mechanism and (2) required separate individual proceedings.” Read more >>

July 21, 2016

Wyoming’s New Workplace Safety Division: What Employers Need to Know

By Trey Overdyke

In early May, the Wyoming Department of Workforce Services (DWS) announced the launch of a new unit of safety advisers offering free health and safety consultations to Wyoming employers upon request. Does the launch mean Wyoming employers will soon have an additional layer of occupational safety and health staff to worry about? In this article, I will try to read the tea leaves and offer my perspective.

Focus on Injury Prevention, Workers’ Comp Trends

The DWS’s standards and compliance staff, in consultation with Governor Matt Mead, recently created the Workers’ Compensation Safety and Risk Unit (WCSRU). According to DWS Director John Cox, the new unit represents a “reorganization” that is designed to provide more employers safety consultations and offer the potential for lower workers’ compensation premiums.

The WCSRU is composed of nine recommissioned Wyoming Occupational Safety and Health Administration (WOSHA) consultation staff members. The WCSRU will focus on conducting workplace health and safety surveys without the risk of fines or penalties. The unit is also expected to offer detailed analysis of workers’ comp data to assist in identifying injury trends and developing best practices for preventing workplace injuries and illnesses.

Wyoming Has Highest Worker Death Rate in Nation

According to the U.S. Bureau of Labor Statistics (BLS), Wyoming had 37 workplace fatalities in 2014, the latest year for which statistics are available. With 13.1 fatalities per 100,000 workers, Wyoming has the highest worker death rate in the country. The national average for 2014 was 3.3 deaths per 100,000 workers. In Wyoming, transportation incidents accounted for the largest number of workplace deaths. Workplace violence, other injuries caused by persons or animals, and falls, slips, and trips caused deaths as well.

Because of the high fatality numbers, in 2015, legislators introduced bills designed to strengthen workplace safety regulations in Wyoming. Two of the bills would have increased penalties for violations of safety rules, including raising the maximum fine for a violation that causes a worker’s death to $250,000. Another bill would have allowed Wyoming to implement workplace safety rules that are stricter than similar federal safety rules, a practice that is currently barred. None of the bills passed.

WCSRU’s Role

As you know, WOSHA is responsible for enforcing occupational safety and health standards in Wyoming. WOSHA plans to adopt all federal Occupational Safety and Health Administration (OSHA) standards. WOSHA is permitted to adopt its own standards only if there are no corresponding OSHA standards. Wyoming has unique health and safety standards covering oil and gas well drilling, servicing, and special servicing as well as a standard for anchoring drilling rigs. WOSHA imposes the same record-keeping and reporting standards required by OSHA.

So the question is, how will the WCSRU interact with and affect the work of WOSHA staff? The new unit is expected to overlap with WOSHA in some ways. Both organizations’ staff will conduct health and safety surveys for employers to identify and remedy safety hazards in the workplace. However, according to the DWS’s news release, the WCSRU will bypass “time-consuming federal requirements, which add an extra layer of reporting and operational constraints . . . and limit the services [the] DWS is able to provide.”

Bottom Line

Several Wyoming agencies will be paying close attention to the WCSRU for the next few years. We expect to hear a number of success stories from Wyoming employers in many industries. However, read the fine print before initiating a consultation. If an employer and the WCSRU disagree on a hazard abatement, there does not appear to be a clear procedure to resolve the dispute. Further, if there is a dispute, you cannot eliminate the possibility that the WCSRU will refer the issue to WOSHA for enforcement.

We will share our experiences with the WCSRU as the unit works its way across Wyoming.

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July 13, 2016

EEOC Revises Its Proposal To Collect Pay Data Through EEO-1 Report

By Cecilia Romero

6a013486823d73970c01b8d204e441970c-320wi On July 13, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) announced that it has revised its proposal to collect pay data from employers through the Employer Information Report (EEO-1). In response to over 300 comments received during an initial public comment period earlier this year, the EEOC is now proposing to push back the due date for the first EEO-1 report with pay data from September 30, 2017 to March 31, 2018. That new deadline would allow employers to use existing W-2 pay information calculated for the previous calendar year. The public now has a new 30-day comment period in which to submit comments on the revised proposal.

Purpose of EEOC’s Pay Data Rule

The EEOC’s proposed rule would require larger employers to report the number of employees by race, gender, and ethnicity that are paid within each of 12 designated pay bands. This is the latest in numerous attempts by the EEOC and the Office of Federal Contract Compliance Programs (OFCCP) to collect pay information to identify pay disparities across industries and occupational categories. These federal agencies plan to use the pay data “to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination.”

Employers Covered By The Proposed Pay Data Rule

The reporting of pay data on the revised EEO-1 would apply to employers with 100 or more employees, including federal contractors. Federal contractors with 50-99 employees would still be required to file an EEO-1 report providing employee sex, race, and ethnicity by job category, as is currently required, but would not be required to report pay data. Employers not meeting either of those thresholds would not be covered by the new pay data rule.

Pay Bands For Proposed EEO-1 Reporting

Under the EEOC’s pay data proposal, employers would collect W-2 income and hours-worked data within twelve distinct pay bands for each job category. Under its revised proposed rule, employers then would report the number of employees whose W-2 earnings for the prior twelve-month period fell within each pay band.

The proposed pay bands are based on those used by the Bureau of Labor Statistics in the Occupation Employment Statistics survey:

(1) $19,239 and under;

(2) $19,240 – $24,439;

(3) $24,440 – $30,679;

(4) $30,680 – $38,999;

(5) $39,000 – $49,919;

(6) $49,920 – $62,919;

(7) $62,920 – $80,079;

(8) $80,080 – $101,919;

(9) $101,920 – $128,959;

(10) $128,960 – $163,799;

(11) $163,800 – $207,999; and

(12) $208,000 and over.

July 6, 2016

Union Remains Active In Health Care Industry Despite Withdrawing Initiative To Cap California Health Care Executive Salaries

By Steve Gutierrez

The Service Employees International Union (SEIU) – United Healthcare Workers West (UHW) has twice tried to get an initiative on the California ballot to cap the salaries of executives at nonprofit hospitals. The union recently withdrew its latest ballot initiative, ensuring that it will not appear on this November’s ballot.

SEIU Sought To Cap Private Executive Salaries

Called the “Charitable Hospital Executive Compensation Act of 2016,” SEIU’s initiative sought to limit the annual compensation packages paid to chief executive officers, executives, managers, and administrators of nonprofit hospitals and affiliated medical entities in California. The cap would be set at the annual salary of the U.S. President, currently $450,000. All executive compensation would be included in the cap, including salary, bonuses, stock options, paid time off, housing payments, loan forgiveness, and reimbursement for transportation, parking, entertainment or similar benefits. It would not include the cost of health or disability insurance or contributions to health reimbursement accounts.

The measure called for penalties for hospitals and covered physicians groups who violated the salary cap. Such penalties would include fines, revocation of tax-exempt status, and having an additional person sit on the nonprofit’s board of directors to represent the state Attorney General.

Protect Taxpayers or Organizing Tactic?

Filed in October of 2015, SEIU’s latest initiative stated that its purpose was to ensure that assets held for charitable purposes were not used to enrich executives, managers, and administrators of nonprofit hospitals. SEIU also stated that the total compensation packages for hospital executives should be reasonable and not excessive “in light of the substantial public benefit that the State tax exemption for nonprofit organizations conveys.” In essence, the union touted that taxpayers should not have to subsidize the multi-million dollar paychecks of administrators at tax-exempt healthcare entities.

In the past, the SEIU filed other California initiatives, including one to limit hospital prices and another to put more rules around charity care that could be provided by nonprofit hospitals. In exchange for the SEIU withdrawing those initiatives, the California Hospital Association (CHA) agreed to a contract with the SEIU in 2014 called the Code of Conduct which was intended to put obligations and restrictions on the conduct of each party. The Code expired by its terms on December 31, 2015, but not before the CHA filed a complaint against the SEIU alleging that its initiative to cap executive salaries violated the Code.

As revealed in the arbitration order, in which the arbitrator found that the SEIU did in fact violate the Code, the goals of the SEIU in pushing its healthcare industry initiatives were to increase its membership by reaching agreements with hospitals that provide them access to healthcare workers, and by working together with the hospitals to get Medi-Cal fully funded, which would support more jobs for union members. The initiatives therefore appear to be intended to pressure the hospitals into helping the SEIU organize workers and expand its membership.

Even though this specific salary cap initiative has been withdrawn, we can expect that the SEIU-UHW will continue its pressure tactics in organizing workers in the healthcare industry.

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June 21, 2016

Supreme Court Avoids Deciding Whether Car Dealership Service Advisors Are Exempt From Overtime Pay

By Brian Mumaugh

The U.S. Supreme Court rejected the Department of Labor’s (DOL’s) 2011 rule that stated that “service advisors” at car dealerships are not exempt under the Fair Labor Standards Act (FLSA), but declined to take the final step by declaring them exempt under the FLSA. Instead, the Court sent the case back to the Ninth Circuit Court of Appeals to analyze whether service advisors are exempt under the applicable FLSA provision without regard to the DOL’s 2011 regulation. Encino Motorcars, LLC v. Navarro, 579 U.S. ___ (2016).

Duties of Service Advisors

At issue are the “service advisors” in a car dealership’s service department. These advisors typically greet the car owners who enter the service area, evaluate the service and repair needs of the vehicle owner, recommend services and repairs that should be done on the vehicle, and write up estimates for the cost of repairs and services before the vehicle is taken to the mechanics for service.

While service advisors do not sell cars, and they do not repair or service cars, they are essential in the sale of services to be performed on cars in the Service Department. Consequently, the issue is whether they fall within the FLSA exemption for salesmen, partsmen, or mechanics. The case before the Court involved numerous service advisors who sued their employer alleging, among other things, that the dealership failed to pay them overtime wages.

DOL Had Flip-Flopped On Exempt Status

In 1970, the DOL took the view that service advisors did not fall within the salesman/mechanic exemption and should receive overtime pay. Numerous courts deciding cases challenging the DOL’s earlier interpretation, however, rejected the DOL’s view and found service advisors exempt. After the contradictory rulings, the DOL changed its position, acquiescing to the view that service advisors were exempt from overtime pay. In a 1978 opinion letter, as confirmed in a 1987 amendment to its Field Operations Handbook, the DOL clarified that service advisors should be treated as exempt.

After more than 30 years operating under that interpretation, the DOL flip-flopped again in 2011. After going through a notice-and-comment period, the DOL adopted a final rule that reverted to its original position that service advisors were not exempt and were entitled to overtime. It stated that it interpreted the statutory term “salesman” to mean only an employee who sells automobiles, trucks, or farm implements, not one who sells services for automobiles and trucks, as service advisors do.

Dealerships were understandably unhappy with the final rule and continued to challenge the DOL’s position in court. As cases went up on appeal, the Fourth and Fifth Circuit Courts of Appeals ruled that the DOL’s interpretation was incorrect. The Ninth Circuit disagreed, ruling instead to uphold the agency’s interpretation. Those contradictory decisions led the Supreme Court to take on the issue in the Encino Motorcars case. Read more >>