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CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
2011 Labor & Employment Hot Issues
Tina Syring-PetrocchiBarnes & Thornburg LLP
225 South Sixth Street, Suite 2800Minneapolis, MN 55402
(612) 333-2111www.btlaw.com
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #1: So Many Changes
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #1: So Many Changes
• Changes to the Laws:– Americans with Disabilities Act
Amendments of 2008 (ADA)– Genetic Information Non-
discrimination Act (GINA)– Family and Medical Leave Act (FMLA)– American Recovery and Reinvestment Act
of 2009– Lilly Ledbetter Fair Pay Act of 2007
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #1: So Many Changes. . .
• Changes in Regulations: – ADA Regulations released this week– FMLA Regulations– GINA Regulations– Workers with Caregiver
Responsibilities– E-Verification– Proposed regulations
• Age Discrimination in Employment Act (“ADEA”)
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #1: So Many Changes. . .
• Expansion of Whistleblower Protections:– OSHA– Food Safety Modernization Act– Healthcare Reform
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #1: So Many Changes. . .
• Expansion of Government Agencies– More investigators and attorneys
• EEOC• DOL• DOJ
– Defending a charge involves more time and money
– More on-site inspections and interviews– OFCCP audits increasing
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #2: The U.S. Supreme Court
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #2: U.S. Supreme Court
• Changes in the Court:– Appointment of Sonia Sotomayar
• Considered to be judicially active• Wrote majority opinion in controversial white firefighters’
racial discrimination case• Supporter of Unions
– Appointment of Elena Kagan• No prior judicial experience• Considered liberal• Refused to allow military recruiters on Harvard’s campus
because of “Don’t Ask, Don’t Tell” policy
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #2: U.S. Supreme Court
• 2011 Decisions and Cases:– FLSA Retaliation Expansion
• Kasten v. Saint-Gobin Performance Plastics
– 3rd Party Retaliation• Thompson v. Northern American Stainless
– Class Action• Dukes v. Wal-Mart Stores
– 500,000 female employees in the proposed class– Gender discrimination
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #3: Unions and
National Labor Relations Board
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #3: Unions & NLRB
• Employee Free Choice Act is not gone– Through the NLRB decisions, most of the provisions of
EFCA are being implemented.
• Radical changes to Railway Labor Act– Elections now based on the majority who actually vote.
• Previously had been based on the majority of employees eligible to vote.
• Change makes it easier to organize.
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #3: Unions & NLRB
• Technology is seen as a tool for unions– Facebook– Blogs– “Cyber organizing” – Emails– Text messages
• Challenging for employers on the extent they can monitor employer-issued computers.
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #3: Unions & NLRB
• Focusing on non-union employers– Currently only 7.2% of private sector employers
are unionized.– But . . . changes to public sector unions are
forcing unions to look to the private sector.
• Challenging independent contractor classifications
• “Salting”• Filing charges on behalf of non-union
employees
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #3: Unions & NLRB
• NLRB Activism:– Current make-up of the Board
• 3 of the 4 members are strongly connected to unions
– Facebook Case– Mandatory language in
settlement agreements
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #3: Unions & NLRB
• Recommendations:– Adopt and enforce electronic-media use and social
networking policies to limit unions’ increased reliance on technology
– Conduct union-avoidance training• Managers• Employees
– Conduct “labor audit” to determine vulnerability
– Create a code of conduct– Evaluate independent contractor relationships
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #4: Independent Contractors
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #4: Independent Contractors
• Issues for . . . .– Unions (as a mechanism for organizing)– Department of Labor (as an overtime
issue)– Internal Revenue Service (as a tax and
benefits issue)
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #4: Independent Contractors
• Comprehensive Report Done In August 2009• Found Misclassification of Workers To Be A
Significant and Increasing Problem.– 1984: IRS estimated 3.4 million workers were
misclassified as independent contractors (IC).– 2000: DOL found up to 30% of the companies
audited in 9 states had misclassified workers.– 2007: IRS estimated 15% of U.S. workers were
misclassified as IC.
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #4: Independent Contractors
• Independent Contractor (“IC”):– Not an employee.– Company is not responsible for the IC’s SSI,
Workers’ Compensation, retirement benefits, ADA, FMLA, Title VII, Whistleblower, FLSA
– Cannot sue Company as an employee for wrongful act or injury on jobsite
– The best candidates for IC status are workers who:
• Have special skills• Can work without close supervision
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #4: Independent Contractors
• Potential Legal Issues:– A contract does not necessarily make an individual
an IC.• Courts look to the “reality” of the relationship• If there is a discrepancy between contract and
actual relationship, look to relationship
– Law varies as to the “test” to determine if an individual is an IC.
• “Right to Control” test• The IRS 20 Factor Test• DOL “Economic Realities Test”
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #4: Independent Contractors
• Each Test Focuses On:– Behavioral Controls
• How do the parties act?
– Financial Controls • Risk
• How are services paid?
– Type of Relationship • What can each do?
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #4: Independent Contractors
• Consequences If You Get It Wrong . . . – Payment of payroll taxes
• Employers incorrectly classifying workers may be held liable by the IRS for all or part of the uncollected payroll and income taxes, even if the contractor has already been paid.
– Lost management time– Legal fees– Back “taxes” of many kinds– Minimum wage and overtime pay– Interest and penalties– Jail time
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #5: Social Media And Privacy
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #5: Social Media and Privacy
• Email (not so new)• “Blogs”• Social networking sites
– Facebook (Feb. 2004)– MySpace (Aug. 2003)
– Twitter (Mar. 2006)
• Professional networking sites– Linkedin (May 2003)
• Text Messages
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #5: Social Media and Privacy
• 83% of employers are likely to use social networking sites for hiring.
• Potential Discrimination Issues:– US Working Population:
• 13% African-American, 15% Hispanic• Linkedin Users: 5% African-American, 4% Hispanic
» Fortune (Mar. 2, 2011)
– Pictures on Facebook– Involvement in groups related to protected categories– Disclosure of family and medical issues
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #5: Social Media and Privacy
• Lawful Conduct Outside of Work: 33 States Provide Protection– Political activity (All states but AL, AR, GA, HI, IA, ID, IL, KS,
ME, MT, NC, ND, NH, OK, VT, WI)
– Consumption of lawful products (IL, MN, MT, NC, NV, NY, WI)
– Smoking/tobacco use (CT, DC, IN, KY, LA, ME, MS, NH, NJ, NM, OK, OR, RI, SC,SD, TN, WV, WY)
– Lawful off-duty conduct (CA, CO, ND, NY)
– First amendment (CT)
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #5: Social Media and Privacy
• Monitoring Issues:– Accessing Protected Sites
• Invasion of privacy
• Violation of website terms and conditions
• Violation of Stored Communications Act (Hacking)
• Violation of Electronic Communications Privacy Act
• Violation of Fair Credit Reporting Act
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #5: Social Media and Privacy
• Recommendations:– “No expectation of privacy” language in handbook
• Written consent
• Ordinary course of business
• Access is by the entity providing the communication service
– Internet monitoring policy • Provide specifics
• Apply uniformly
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #5: Social Media and Privacy
• Recommendations (cont.):– Social Media Policy
• Written policy, disseminated,
acknowledged
• Disclaimer: my views, not my employer’s
• No confidential or trade secret information
• Don’t defame or disparage (with Section 7
disclaimer language)
• Offensive behavior policy applies on-line
– Caution in issuing discipline• Treat everyone the same
• Beware of protected activity
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #6:Who Hired This Person?
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #6: Who Hired This Person?
• Hiring the Wrong Person:– Right skills, wrong personality– Right personality, wrong skills (if any)– Wrong skills, wrong personality
• How does this happen?– Rush to hire
• No assessment of needs
– No pre-screening– Bad interview questions/bad interviewers
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #6: Who Hired This Person?
• “Need to hire right now!” BUT for what?– New or Existing Position?
– Job Description Updated and Accurate?
– Recruitment Sources?
– Employment Application Helpful
or Hurtful?
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #6: Who Hired This Person?
• Getting in the Door Without Any Screening!- Need to pre-screen all candidates!- Telephone interviews- Verify information before in-person interview
• 34% of job applicants lie about educational and work experience.
• 11% of job applicants misrepresent the reason for leaving their prior employer.
• 30% of job applicants exaggerate their accomplishments.
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #6: Who Hired This Person?
• Bad Interviews– Deciding Who Will Conduct The Interview
• Training
– Preparing Interview Questions• Consistency
• Do the questions relate to the position?
• Writing on the application or résumé
– Bad Questions Will Create Problems!• Illegal Questions
• EEOC “Tester” Applicants
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #6: Who Hired This Person?
• Testing of Candidates• Be Careful!• Measures the applicant’s
abilities and skills needed to do the job.
• Measures the applicant’s general knowledge of the subject matter of the job (i.e., accounting, legal, business, etc.)
• Must be required of all applicants for the same position!
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #6: Who Hired This Person?
• Final Steps Before Hiring:– Background Checks:
• Verify employment skills/experience• Verify what you learned in the
interview• Verify right person for your business
culture• Compliance with Fair Credit Reporting
Act– Non-Compete Obligations
• Any restrictions on joining your organization?
• Steps to ensure compliance?• Potential litigation/litigation costly
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #7: Time Is Money and
Other Wage and Hour Challenges
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #7: Time Is Money
• Misclassification of Employees: – Salaried Does Not Mean Exempt!
– Title Does Not Mean Exempt!
– Education or Experience Does Not Mean Exempt!
• Exemptions are based on duties – not title, education or “salary”– Executive, administrative and professional exemption
tests must be strictly adhered to.
– If the employee’s duties do not meet each element of the test, he or she must be classified as non-exempt and paid overtime for any hours worked over 40
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #7: Time Is Money
• It’s Okay to Interrupt Lunch . . . WRONG!– Break periods under the FLSA may or may not be
compensable for non-exempt employees, depending on whether the employee is relieved from duty and the amount of time given for such activity
– Meal periods must be counted as hours worked unless:• The meal period is at least 30 minutes
• The employee is completely relieved from all duties during the period
• The employee is free to leave the duty post
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #7: Time Is Money
• “I Didn’t Authorize Overtime So I’m Not Paying It” . . . WRONG!– Employees who work after their shift are engaged
in compensable time and whether they had authority is immaterial.
– As long as the employer “suffers or permits” employees to work on its behalf, proper compensation must be paid.
– Mere promulgation of a rule prohibitingovertime or unauthorized work is not sufficient to avoid compensation for additional hours worked under the DOL regulations—management must make sure that no work is performed!
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #7: Time Is Money
• Docking Exempt Employees:– An exempt employee’s salary cannot be reduced
based on variations in the quality or quantity of the work performed.
– An exempt employee must receive his or her full salary for any week in which he or she performs work, without regard to the number of hours worked.
– The DOL regulations provide that an employer that makes improper deductions may lose the exemption status.
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #7: Time Is Money
• Permissible Deductions for Exempt Employees:– The employee is absent from work for one or more full
days for personal reasons, other than sickness or disability.
– The employee is absent for one or more full days because of sickness or disability and the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary.
– The employer imposes penalties in good faith for infractions of safety rules of major significance
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #7: Time Is Money
• Permissible Deductions of Exempt Employees (Cont.):– The employee takes leave under the FMLA
(including deductions for partial day absences occasioned by the FMLA).
– The employee is absent the entire workweek or performs no work during an entire workweek.
– The employer suspends the employee for one or more full days imposed in good faith for infractions of workplace conduct rules.
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #8: When An Employee Asks To Take “Some Time Off” – What Does This Mean Under the ADAAA and FMLA?
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #8: ADAAA and FMLA
• ADAAA – Why Did This Happen?– Purpose of ADAAA is to “restore the intent and
protections” of the ADA.– Amendments specifically reject U.S. Supreme
Court decisions limiting the definition of “disability.”
– Congress believed Supreme Court eliminated protection under ADA for individuals that Congress intended to protect.
CONFIDENTIAL
© 2011 Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter.
Hot Issue #8: ADAAA and FMLA
• What Do The Amendments Mean?– Congress specifically disavowed a narrow
interpretation of the ADA and directs that ADA should provide “a broad scope of protection.”
– Requires broader interpretation of the term “disability” and may expand employers’ obligations to more employees.
– Still applies to employers with 15 or more employees.
CONFIDENTIAL
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Hot Issue #8: ADAAA and FMLA
• Things To Be Mindful Under The ADAA:– EEOC Regulations: Directed to revise
definition of “substantially limits.”– Major Life Activity: New language that
specifically states that operation of “major bodily functions” is a major life activity
• Term includes functions of immune system, normal cell growth, digestive, bowel, bladder, brain, respiratory, circulatory, endocrine, etc.
• Most significant change in the statute for extending scope of ADA
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Hot Issue #8: ADAAA and FMLA
• Things To Be Mindful Under The ADAA (Cont.):– Inactive Impairments: Impairments or conditions that
are episodic or in remission still constitute disability if would substantially limit a major life activity when active.
– Mitigating Measures: Reversed Supreme Court’s finding that determination of whether an impairment is “substantially limiting” to major life activity must consider mitigating measures.
– Perceived Disabilities: Person qualifies as being “regarded” as disabled if person establishes that he or she was subjected to a prohibited action because of an actual or perceived mental or physical impairment; individual does not have to show that employer perceived the condition to limit a major life activity.
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Hot Issue #8: ADAAA and FMLA
• The ADAAA’s Impact On Requests For Accommodations, Including Time Off?– Must consider how they currently analyze requests for
accommodation of employees with medical conditions. • But probably will not change your day to day life that
dramatically!!
– Some conditions that were outside ADA are now considered disabilities under the ADAAA (including multiple sclerosis and diabetes).
– Increased litigation likely with increased risk because of the unavailability of key legal arguments.
– Increased scrutiny of HR decisions affecting employees with medical conditions.
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Hot Issue #8: ADAAA and FMLA
• What About The FMLA?– Still applies to employers with 50 or more
employees.– Eligibility for FMLA Leave remains the same:
• Employed at least 12 months• Worked at least 1250 hours over previous 12
months (USERRA exception).
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Hot Issue #8: ADAAA and FMLA
• But, There Are Changes To The FMLA . . . – National Defense Authorization Act
• Qualifying Exigency Leave – Eligible employees are entitled to 12 weeks of leave
because of any qualifying “exigency” arising out of the fact that a covered military member is on active duty or called to active duty status in support of a contingency operation.
– A military operation qualifies as a “contingency operation” if it:
» Is designated by the Secretary of Defense as an operation in which members of the Armed Forces are or may become involved in military actions, operations or hostilities, or
» Results in a call or order to active duty during a war or national emergency declared by the President or Congress.
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Hot Issue #8: ADAAA and FMLA
• But, There Are Changes To The FMLA . . . – Qualifying “exigency” includes the following
categories:• Short-notice deployment• Military events and related activities• Child care and school activities• Financial and legal arrangements• Counseling• Rest and recuperation• Post-deployment activities• Additional activities agreed to
between the employer and employee
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Hot Issue #8: ADAAA and FMLA
• But, There Are Changes To The FMLA . . . – Military Caregiver Leave
• Eligible employees are entitled to 26 workweeks of leave in a single 12-month period to care for a covered service member with a serious injury or illness incurred in the line of active duty.
• Extends FMLA protection to:– Spouse
– Son or daughter
– Parent
– “Next of kin” of the service member (new category)
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Hot Issue #8: ADAAA and FMLA
• But, There Are Changes To The FMLA . . . – New Regulations:
• 12 months of employment for eligibility need not be consecutive.
• Breaks in service of 7 years or more need not be counted.
• A general notice must be:– Posted where it can be readily seen by
employees and applicants;– Included in employee handbooks or other
materials distributed at time of hiring.
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Hot Issue #8: ADAAA and FMLA
• But, There Are Changes To The FMLA . . . – New Regulations (Cont.)
• Time to notify employee whether he or she is eligible to take FMLA leave is now 5 business days (absent extenuating circumstances).
• Notice Designating Leave:– Must notify the employee whether the leave will
be designated and counted as FMLA leave within 5 business days when the employer has sufficient information.
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Hot Issue #8: ADAAA and FMLA
• But, There Are Changes To The FMLA . . . – New Regulations (Cont.)
• Time to notify employee whether he or she is eligible to take FMLA leave is now 5 business days (absent extenuating circumstances).
• Notice Designating Leave:– Must notify the employee whether the leave will
be designated and counted as FMLA leave within 5 business days when the employer has sufficient information.
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Hot Issue #9: Implementing Layoffs
Without Triggering Lawsuits
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Hot Issue #9: Layoffs
• Reductions In Force Require Advance Planning:– Consideration of potential
discriminatory impact– Legitimate business rationale– Consideration of alternatives– Consideration of severance
plans– Development of
communication strategy
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Hot Issue #9: Layoffs
Before Each Termination Decision is Final,
Must Be Able To:
JUSTIFY
EXPLAIN
DEFEND
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Hot Issue #9: Layoffs
• Factors To Consider When Implementing A Layoff:– Make sure the RIF does not have a disparate impact on protected
classes.• If a protected class is disproportionately affected, consider alternatives
to reaching business goals.
– Objective Methods for Selecting Employees:• Length of service
• Absenteeism (But Beware of FMLA, ADAAA, and Worker’s Compensation)
• Quality and quantity of work
• Education and experience
• Ability, skills, versatility, know-how
• Promotability
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Hot Issue #9: Layoffs
• Be Mindful of the Worker Adjustment and Retraining Notification Act (“WARN”)– Coverage Requirements:
• 100 or more employees, excluding part-time; or
• 100 or more employees, including part-time, who in the aggregate work at least 4,000 hours per week (exclusive of OT)
• This includes employees on layoff with a reasonable expectation of recall
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Hot Issue #9: Layoffs
• Notice Requirements Under WARN:– 60-days’ advance notice of “mass
layoffs” and “plant closings”• To affected workers,
• To their representatives (i.e., a union),
• To the state dislocated worker unit, and
• To the appropriate local government
– Specific Contents
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Hot Issue #9: Layoffs
• “Mass Layoffs”– Layoff of 6 months or longer affects –
• 500 or more workers, or• At least 50 workers, provided that the total number of
workers affected accounts for 33% or more of the workforce
– Occurs within a 30- or 90-day period may be aggregated to meet these requirements.
• “Plant Closings”– A covered plant closing occurs when a facility or “operating
unit” is shut down for more than 6 months, and 50 or more workers lose their jobs as a result during a 30-day period
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Hot Issue #9: Layoffs
• Penalties Under WARN (Currently):– Back pay and benefits for the
period of the violation, up to 60 days
• May be reduced by period for which notice was given, and by any voluntary payments to the employee
– Civil penalty not to exceed $500 for each day of the violation
– Employees, their representatives, and units of local government may bring individual or class actions to enforce WARN
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Hot Issue #9: Layoffs
• What About Furloughs?- Instead of implementing layoffs, a common approach has been
reducing salaries by 20% and then reducing the workweek by one day per week.
- Issues to be mindful of:• Approach may threaten the salary-basis test for exempt employees
(since FLSA does not allow salary to be reduced because of variations in quantity of work performed or available).
• DOL has recently weighed-in on the question and opined that reducing exempt employees' work schedules with a corresponding reduction in salary because of lack of work violated the salary basis test.
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Hot Issue #9: Layoffs
• Furloughs (Cont.):- Whether a pay reduction plan based on lack of work violates
salary basis test depends on permanence of reduction.
- DOL permits permanent changes to compensation based on reduced workweek schedule, so long as not an attempt to evade requirements of FLSA.
- Better approach is to either furlough employees in full-week increments or simply reduce pay without a corresponding reduction in the workweek.
- Permissible under WARN
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Hot Issue #10: Prescription Drugs And Employee
Usage
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Hot Issue #10: Prescription Drugs . . . .
• The Problem:– According to the Drug Enforcement Administration,
the abuse of prescription drugs ranks second only to cocaine usage.
– Almost 30% of drug abusers rely on prescription drugs to satisfy their habits.
– The abuse and misuse of prescription drugs in the workplace is commonplace, and often overlooked as a source of problems on the job.
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Hot Issue #10: Prescription Drugs . . . .
• The Problem:– 14 millions employed drug and alcohol abusers– 10% of adult workers
• Impact:– Take more sick days
– Send health costs skyrocketing
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Hot Issue #10: Prescription Drugs . . . .
• Drug Testing in the Workplace: Minnesota employers beware!– Written policy – separate from employee
handbook– Types of Testing:
• Random (46% for FY 2009) • Reasonable suspicion (80% for FY 2009)• Post-accident (69% for FY 2009)
– Confirmatory test required– Counseling
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Questions?
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Thank You!