NAAAHR Presentation - #HRandtheLaw

Christina O. Alabi, Esq., MHRIRNational Association of African

Americans in Human Resources October 1, 2016

#HRAndTheLaw

1.New Overtime Rule2.Social Media and Protected

Concerted Activity3.Quickie Election4.Independent Contractor Myths

Recent Legal Updates You Need to Know!

#HRAndTheLaw

#HRAndTheLaw

The Final Rule (December 2016)

About 4 million workers – newly eligible for overtime

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The Final Rule Strengthens overtime protections for

salaried workers and provides greater clarity

Improves work-life balance Increases employment by spreading work Improves worker’s health Increases productivity

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The Final Rule:Executive, Administrative,

Professional

What is the minimum salary threshold for administrative,

executive or professional employees?

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Minimum salary for executive, administrative or professional (“EAP”) employees increases from $455 per week to $913 a

week ($23,660 per year to $47,476 per year)

The Final Rule:Executive, Administrative,

Professional

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The Final Rule: Highly Compensated Employee

What is the minimum salary for highly compensated employees?

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The Final Rule:Highly Compensated Employee

Increases the “highly compensated employee”

(“HCE”) exemption threshold from $100,000 to $134,004

per year

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Up to 10% of the salary threshold for EAP employees

can be met by non-discretionary bonuses,

incentive pay, or commissions

Nondiscretionary Bonuses

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Department of Labor will update the salary threshold every 3 years• First update: January 1, 2020• EAP estimate = $51,168• HCE estimate = $147,524

Minimum Salary Increases

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The Final RuleStates v. Department of Labor

21 states sued the Department of Labor (“DOL”) last week (September 20)

States allege the Rule exceeds DOL’s authority in rolling out the new rule by focusing on the salary a worker makes instead of the duties performed.

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Exempt Employees:• Longer hours• More duties• Salary compression

Non-Exempt Employees (Newly Reclassified):• Less training• Less flexibility, more restrictions• Less full-time, more part-time

Employer Concerns:Potential Impacts on Workforce and Hiring

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What does it mean for HR?

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Employees earning just under the new salary threshold

Employees with substantial non-discretionary bonuses/commissions

Positions where salary compression is not an issue

Positions requiring significant number of hours over 40 per week

Employees who work inconsistent and unpredictable hours

Candidates to Maintain Exempt Status

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Candidates to Reclassify as Non-Exempt

Employees earning well below new salary threshold

Ineligible for non-discretionary bonuses/commissions

Positions where salary compression would be an issue

Employees who work consistent and predictable hours

Employees who work few, if any, hours over 40

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Implementing Reclassification Develop employee communications plan

• Be prepared for questions about pay/effects Timekeeping/record-keeping policies

• Restrictions on work outside normal work hours

Company-issued equipment use policies Update offer letters and job descriptions

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Takeaway

1. Which of the following must be present for the white-collar EAP exemption?A. Paid on a salary-basisB. Job Title – Supervisor or aboveC. Minimum Salary – $47,476D. Primary duty = executive, administrative or

professional duties

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Takeaway

1. Which of the following must be present for the white-collar EAP exemptionA. Paid on a salary-basisB. Job Title – Supervisor or aboveC. Minimum Salary – $47,476D. Primary duty = executive, administrative

or professional duties

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Takeaway

1. What is the new salary level for a highly compensated employee?

A. $100,000B. $134,004C. $123,660D. $147,524

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Takeaway

1. What is the new salary level for a highly compensated employee?

A. $100,000B. $134,004C. $123,660D. $147,524

#HRAndTheLaw

Social Media:Protected Concerted Activities

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NLRA protects the rights of employees to act together to address conditions at work, with or without a union

Protection extends to certain work-related conversations conducted on social media, such as Facebook and Twitter

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Social media is the “water cooler” of the 21st century.

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It may be “insubordinate” or “expletive” but: • Is it protected?• Is it concerted?

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Social Media: Protected Speech

Speech via Facebook, Twitter, LinkedIn, Snapchat, YouTube, Instagram, Tumblr, Pinterest, etc. is protected if: • It regards terms and conditions

of employment

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Social Media: Non-Protected Speech

Individual gripes that don’t impact others Spreading false information that harms the

company’s business or defames their products/services

Threats of violence Unlawful harassment Publishing trade secret information

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Social Media: Protected Speech Losing its Protection

High standard Harsh language, obscenities and

expletives are insufficient Statement must be made with either

• Knowledge of its falsity• Reckless disregard for their truth or

falsity#HRAndTheLaw

Social Media: Concerted Activity Engaged in, with or on the authority of

other employees, (and not solely by and on behalf of the employee himself)• 2 or more active employees• Actions that precede or attempt to initiate,

induce or prepare for group action, including preliminary discussion of shared concerns

• Appeals to third partiesFacebook statuses, tweets

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Social Media: Monitoring

Company can review employee activities while online using company issued equipment• Company must notify employee that employee has no

expectation of privacy Can monitor activities in public postings Can monitor activities if employee voluntarily

connects with a supervisor or manager• But note: surveillance of employees violates the

National Labor Relations Act

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Lawful or Unlawful? Discipline for dishonesty if revealed by social

media Discipline for violation of company policy

revealed by social media Discipline for off-duty conduct unrelated to

the business revealed by social media Discipline for protected, concerted activities

on social media sites using expletives

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Lawful or Unlawful Lawful: discipline for dishonesty if revealed by

social media Lawful: discipline for violation of company

policy revealed by social media Unlawful: discipline for off duty conduct

unrelated to the business revealed by social media

Unlawful: discipline for protected, concerted activities on social media sites using expletives

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Chipotle Servs. LLC (August 2016)

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Chipotle Servs. LLC (August 2016)

ALJ ruled a Chipotle worker had the right to answer a customer’s tweet about the restaurant chain with a comment about wages

Employer committed an unfair labor practice when it asked the employee to remove work-related messages from his Twitter account

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Social Media: Overbroad Policies

The mere existence of an overly broad social media policy exposes the employer to an unfair labor practice charge even if no disciplinary action is taken against an employee

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Prohibiting offensive demeaning, disrespectful, damaging, disparaging, or malicious content

Restricting the right to communicate regarding terms and conditions of employment, especially including pay

Requiring employees to avoid harming the image and integrity of the company

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Google & Nest Labs (May 2016) Employee fired for posting memes critical of his

employer on a private Facebook group

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Google & Nest Labs (May 2016) Employee filed charge against Google,

Inc. and Nest Labs, Inc. • Charge alleges Nest employees are being

mistreated or fired for exercising their protected rights to social sites – (charge is pending)

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Restricting contact with third parties including the media, customers, clients or government agencies

Prohibiting comments on any legal matters, including pending litigation or disputes

Requiring employees to “report any inappropriate social media activity”

Requiring employees to provide a disclaimer and refrain from mentioning guests, vendors or clients or fellow employees without approval

#HRAndTheLaw

Casino Pauma (July 2016) Casino Pauma’s social media policy required

employees to use a disclaimer for any employment-related concerns; identify themselves/position and refrain from mentioning others without approval• Could reasonably be read by employees to restrict the

free exercise of their Section 7 right to comment to fellow employees and others, including union representatives, about their work-related complaints concerning wages, hours and working conditions

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Creating an overbroad definition of “confidential information” and prohibiting disclosure of confidential information

Prohibiting use of company’s trademarks or logos on social media sites

Requiring permission to post on social media from HR or Legal

Prohibiting use of camera phones and posting photos of coworkers, the facility or the company

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Whole Foods Market, Inc. Whole Foods prohibited recording in the

workplace without prior management approval • Board found this rule would reasonably be construed

as prohibiting Section 7 activity (December 2015) “Photography and audio or video recording in

the workplace, as well as the posting of photographs and recording on social media, are protected by Section 7 if employees are acting in concert for their mutual aid and protection and no overriding employer interest is present.”

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Lawful Limitations

Limiting social media activities during non-work time if conduct would violate company policies

Harassment, bullying, discrimination or retaliation that would not be permissible in the workplace is not permissible between coworkers online

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Takeaway Avoid blanket prohibitions Avoid vague, ambiguous, overbroad definitions

• If language is vague, ambitious, or overbroad it likely will be found to have a chilling effect on employees Section 7 rights

Be very clear, detailed and specific• Give examples of specific activity prohibited that does

not violate federal labor law Policies are not one-size fits all

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Quickie Election (April 2015) Shortened time between petition and

election Hearing held 8 days after petition filed 25-day waiting period for Decision and

Direction of Election is eliminated Post-election objections are expedited Review of post-election issues are limited

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Election Calendar

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Quickie Election: Employer Provide union with employees’ personal

contact information including emails (Excelsior List)

Post notice or provide electronic notice within 2 business days

Statement of Position = 7 days

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Quickie Election: UnionElectronically file petitionsMust provide proof of support

at the time petition is filedMust serve a copy of the

petition on the employer

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Quickie Election: Employer Tips

HR training of company management

Supervisor assessment

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Independent Contractor v.

Employee

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Independent Contractor Employee OR

Myth #1 MYTH #1: An independent contractor

under one law, makes the individual an independent contractor under other laws.

FACT #1: Even though an individual is a legitimate independent contractor under one law, the individual may still be an employee under other laws.

#HRAndTheLaw

Myth #2 MYTH #2: If an individual is classified as

an independent contractor, he or she is not eligible for unemployment insurance (UI).

FACT #2: An individual may still qualify for UI even if he/she is classified as an independent contractor.

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Myth #3 MYTH #3: An individual receives a 1099

tax form from my employer, and this makes the individual an independent contractor.

FACT #3: Receiving a 1099 does not make one an independent contractor.

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Myth #4 MYTH #4: It does not make a difference if

an individual is classified as an independent contractor or an employee.

FACT #4: If someone is misclassified as an independent contractor, companies can incur hefty back taxes and penalties

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Myth #5 MYTH #5: An individual is an independent

contractor because he/she signed an independent contractor agreement.

FACT #5: Signing an independent contractor agreement does not make an individual an independent contractor.

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Myth #6 MYTH #6: An individual is not an

employee because he or she is not on the payroll.

FACT #6: Even if an individual is not on the payroll, he/she may still be an employee.

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Myth #7 MYTH #7: An individual has his or her own

employer identification number (EIN) or paperwork stating that he/she is performing services as a Limited Liability Corporation (LLC) or other business entity. This means that he or she is an independent contractor.

FACT #7: An EIN or paperwork stating that the individual performing services as an LLC or other business entity does not make the individual an independent contractor.

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Myth #8 MYTH #8: The Company can decide

whether someone will be an independent contractor or employee (and performing the same tasks) at any given time.

FACT #8: A business cannot misclassify an individual for any reason.

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Myth #9 MYTH #9: An individual teleworks or work

off-site, so that person is an independent contractor.

FACT #9: Simply because an individual works off-site or from home does not make them an independent contractor.

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Myth #10 MYTH #10: An individual has been an

independent contractor for years; this means the person can/will/must continue to be an independent contractor.

FACT #10: Being a bona fide independent contractor in the past does not mean the individual will always be an independent contractor.

#HRAndTheLaw

Myth #11 MYTH #11: An individual operates a

franchise. Thus, the individual is an independent business.

FACT #11: Operating a franchise does not make one an independent contractor.

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Myth #12 MYTH #12: It is the common industry

practice to classify similar individuals as independent contractors so one must be an independent contract.

FACT #12: “Common industry practice” is not an excuse to misclassify under the FLSA.

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QUESTIONS?

Contact Us

Gould & Ratner LLP

222 North LaSalle StreetSuite 800Chicago, Illinois 60601

Tel: 312-236-3003Fax: 312-236-3241

www.gouldratner.com

Christina O. [email protected]

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