Stoel Rives World of Employment's Top Predictions for 2014

As 2013 draws to a close, our Labor and Employment group put its collective head together to come up with our top predictions, from the cautious to the audacious, for what the new year will bring.  Stay tuned in 2014 to see how we do!  In the meantime, happy holidays!  Here goes:

1.                  Cost and morale pressures will lead more and more employers to adopt policies that allow (or require!) employees to use their own cell phones, tablets, and other mobile devices at work (i.e., Bring Your Own Device, or “BYOD,” policies). Implementation of these policies will require close coordination between HR and IT functions, as well as revision of policies on confidential information, time keeping, discrimination/harassment, and other policies to ensure compliance in various legal areas.

2.                  Employers will increase their use of mobile applications to engage with employees, track their attendance, manage their benefits, monitor their productivity, and help them do their jobs.  Employers will need to be sure that use of these apps complies with various laws, including the Fair Labor Standards Act (“FLSA”), the National Labor Relations Act (“NLRA”), the Genetic Information Non-Discrimination Act (“GINA”), and others. 

 

3.                  Our Seattle office predicts the Seahawks will win the Super Bowl! Employers in the Pacific Northwest will struggle with record levels of absenteeism the following day.

 

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(Plaintiff's) Paradise Found? Ninth Circuit Allows Title VII Claim, Omitted in Bankruptcy Petition, To Proceed

“Bankruptcy?” you ask. “Why are employment lawyers talking about bankruptcy?” Well, in fact, there are times when bankruptcy can provide a defense to employment discrimination claims. It involves a principle known as “judicial estoppel,” which precludes a party from taking a position in a case which is contrary to a position they have taken in earlier legal proceedings. 

Although there is no uniform definition of judicial estoppel under federal law, the U.S. Supreme Court outlined three factors that courts may consider in determining whether to apply the doctrine: (1) whether the party took “clearly inconsistent” positions, (2) whether the court accepted the party’s earlier position, and (3) whether the party would obtain an unfair advantage if not estopped. Failure to disclose a pending claim (discrimination or otherwise) in bankruptcy can establish that the party took a “clearly inconsistent” position.  As a penalty, the court can invoke judicial estoppel to dismiss the later case entirely.

Federal courts agree that judicial estoppel should not apply when the failure to reveal the claim was a result of inadvertence or mistake. Courts disagree, however, as to what constitutes ‘‘inadvertence’’ and as to what, if any, showing of bad faith is required. Last week, the Ninth Circuit weighed in and provided its view on the appropriate analysis.

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New Year's Resolutions for Employers: Stay Out of Trouble in 2013!

The holidays are over, the New Year is here and everyone is returning to work. As we turn our calendars 2013, we inevitably consider new goals for the coming year. For those of us who work in HR, one important goal is avoiding employee claims. To further that goal, here are some ideas for HR New Year’s Resolutions for 2013:

1.         Review your Employee Handbook. This is one of those tasks that you know you need to do, but you rarely get around to. Make 2013 the year that your review your employee handbook and make sure it is up-to date. Have you incorporated important changes in the law? Have you hired enough employees to cross important statutory coverage thresholds? Have you moved into to new states or countries with laws your current handbook does not address? Now is the time to make sure your handbook is still doing its job.

2.         Review Job Descriptions. As long as you are reviewing things, take a look at those job descriptions. Do they still accurately describe the essential job functions and reasonable expectations for the relevant position? Have new positions been created or old positions been eliminated? Has technology or other facts changed how a job is or can be performed?

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As the Election Nears, Employers Should be Cautious of Politics in the Workplace

From the Presidential debates to lawn signs, and TV ads to the Voters’ Pamphlet in your mailbox, there’s no denying that election season is in full swing. For employers, the home stretch to November 6 means not only around-the-clock coverage, but the potential for spirited debates—and resulting employee discord—in the workplace. Although with limited exception political activity or affiliation is not a protected status, and Oregon employers no longer have to worry about giving employees time off to vote due to mail-in ballots, the impending election still has significant potential to invoke myriad workplace issues ranging from discrimination and harassment to free speech and bullying. Here are some “dos and don’ts” to help guide employers over the next several weeks and keep polarizing political discourse from disrupting your workplace:

* Do set the tone. If you haven’t already, employers should clearly communicate their expectations to employees and foster a culture of mutual respect and understanding. Diversity—even with respect to politics—can be embraced as a positive. Employers lead the way by conveying their acceptance of varying ideologies, and encouraging employees to handle differences of opinion civilly and without letting it affect normal operations. Political conversations between employees often lead to discussion of sensitive (and protected) issues such as race, religion, immigration, and women’s rights. However, election season should not provide a license for employees to harass or bully one another by attacking contrasting political views, bragging about which ballot measures did or did not pass, or gloating over a candidate’s defeat. Employers can minimize risk by reminding employees that their policies prohibiting harassment, discrimination and retaliation apply to all political discussions, and investigating any complaints promptly. Moreover, some employers have in fact included political activity in their EEO or anti-harassment policies, so it may be prudent to dust off and review your handbook, because employees certainly will know what you have promised. Similarly, given that unions are frequently politically active, some union contracts prohibit politics-based discrimination.  

* Don’t allow bad behavior in the name of “free speech.” Contrary to popular belief, there is no blanket right of “free speech” in a private workplace. The First Amendment covers only state action, and private sector employers are therefore free to limit political discussions in the workplace. Be careful, however, that any such limitations don’t run afoul of laws such as the National Labor Relations Act (NLRA) (see next "do," below) or federal and state anti-discrimination laws.

Read on for more election "dos and don'ts" below!

 

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December 31, 2012 Deadline Looms Under Tax Code for Fixing Severance Agreements with Releases

 

Employers have until the end of the year to take advantage of relief from penalties under section 409A of the Internal Revenue Code for agreements that require employees to sign releases before severance benefits are paid. Section 409A was enacted in 2004 to regulate deferred compensation.  Internal Revenue Service ("IRS") regulations made clear that it would affect not only traditional deferred compensation arrangements, but also arrangements previously not thought of as deferred compensation. Severance and change-in-control benefits are often subject to the section 409A requirements. Employees pay most of the price for mistakes that result in violations of section 409A, including a 20 percent tax penalty.

The IRS surprised many in early 2010 when it announced that agreements that require the employee to sign a release of claims (or non-competition or non-solicitation agreement) before severance or change-in-control payments start may run afoul of section 409A because they give the employee some control over when payments will start, sometimes allowing the employee to choose which year payments will be made. Industry push-back persuaded the IRS to provide transition relief, the last of which will end on December 31, 2012. This relief allows employers to modify agreements to deal with such release requirements to specify when payments will be made and what happens if a release is not signed on time. The transition relief allows correction of agreements with these problems – even if payments have already started – something not otherwise available. In addition, the employer is not forced to notify the employee of the documentary violation of section 409A and the employee does not have to attach a notice to the employee’s personal income tax return about the violation. After December 31, 2012, this relief will no longer be available.

If you are interested in a more detailed discussion of this relief and the required changes to employee releases, check out Stoel Rives' recent Client Alert on the subject.

 

That Sniffly, Sneezy Time Of Year: Can You Require Your Employees To Get a Flu Shot?

 

Generally, employers are permitted to enforce mandatory flu vaccine policies, with some cautionary notes.

The Equal Employment Opportunity Commission ("EEOC") has said that employers should “consider simply encouraging employees” to get the flu vaccine rather than requiring it.  (See “Pandemic Preparedness in the Workplace and the Americans with Disabilities Act” guidance at http://www.eeoc.gov/facts/pandemic_flu.html, question 13.)  The EEOC’s concern is that any mandatory policy would have to yield to a request for a reasonable accommodation from either (1) an employee whose disability prevents him from getting a flu vaccine (e.g., someone with a severe egg allergy, as most flu vaccines are cultured using eggs), or (2) an employee whose sincerely held religious beliefs, practices, or observances prevent him from taking the vaccine.

Notwithstanding the EEOC’s concerns, so long as the employer allows for reasonable accommodations--which could include having employees wear masks during flu season instead of getting a flu shot-- there should be no problem under federal law with a mandatory policy.  However, employers should take care to ensure that there is not a state privacy law that might be implicated by a mandatory flu shot program.  And, if the employer’s work force is unionized, the result could be different; some courts have found that a mandatory vaccine policy is something that must be bargained for with the union and cannot be unilaterally imposed.

When to Pay Summer Interns: FLSA Guidance You Need to Know

It's that time of year again, here's our post from last year from Matt Durham on this perennial summer concern for employers . . .

Certain things have become the recognizable signs of spring. Budding leaves. Flowers. Chirping birds. And summer intern resumes. Especially during a slow or recovering economy, HR professionals are likely to receive many resumes from eager students or recent graduates hoping to work as interns in order to gain valuable experience and networking opportunities. Often, intern candidates offer to work for nothing in exchange for the chance to learn about a job or industry.

Of course the idea, however enticing, of free labor should raise red flags. In fact, the United States Department of Labor (“DOL”) has made it clear that, unless specific criteria are met, student “interns” working at for-profit companies are actually student “employees,” subject to the minimum wage and overtime requirements of the Fair Labor Standards Act (“FLSA”). The DOL has identified the following six criteria for determining whether an individual meets the test for an unpaid intern:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Only if an internship program meets all of these requirements can participants be considered unpaid interns. And as you can imagine, meeting all of these requirements can be challenging. For example, the internship program must be structured around classroom or academic experience rather than around the employer’s business operations. For this reason, compliant programs are often developed and overseen by colleges or universities, which then give academic credit for participation. Moreover, the more the interns perform productive work for the employer (as opposed to job shadowing or similar activities), the more likely they will be deemed employees, entitled to minimum wage and overtime under the FLSA. You can find the DOL’s fact sheet on internship programs here.

At the end of the day, private employers seeking to benefit directly from eager students or graduates willing to work for the experience will find it difficult to meet DOL requirements. On the other hand, a company willing to provide work experience in order to be a good corporate citizen or to build relationships with schools or students, can structure an unpaid student intern program to meet those goals and comply with the law.

 

Guidance on Terminations in Alaska

 

Two recent opinions from the Alaska Supreme Court offer helpful guidance to employers regarding termination processes.

 

In Barickman v. State, an employer suspected an employee of theft.  When confronted, the employee signed a letter of termination and then wrote a letter stating that he was resigning to avoid a “black mark on his record.”  The employee later sued, alleging wrongful termination based on breach of good faith and fair dealing.

 

To win a claim of wrongful discharge in Alaska, the employee must show that (1) he was discharged by his employer and (2) that the employer breached a contract or committed a tort in connection with the termination.  Here, the employee argued that his employer terminated him in bad faith, treated him differently than similarly situated employees, and failed to conduct a reasonable investigation before deciding to fire him.

 

Alaska law provides that when an employer makes a good faith determination that misconduct has occurred, there is no breach of the implied covenant of good faith and fair dealing, even if the employee can subsequently prove that the factual finding of misconduct was a mistake.  Here, the Supreme Court found that the employee did not raise any facts alleging that the employer’s determination was made in bad faith, particularly since the employer provided a spreadsheet showing instances where other employees accused of similar charges were dismissed or asked to resign.  The Court ultimately held that the employer did not breach its duty of good faith and fair dealing.  The Court likewise found that the employee failed to present enough evidence on the issues of whether the employer had treated him differently than other similarly situated employees or whether the employer’s investigation was unreasonable.

 

Boyko v. Anchorage School District  involved a teacher who sued the Anchorage School District, one of Alaska’s largest employers.  The parties had entered into a verbal resignation agreement wherein the employer promised not to release any negative information about the teacher to prospective employers.  The teacher claimed that the District had provided information that was not positive to another school district, and that these actions breached the termination agreement, violated the covenant of good faith and fair dealing, and interfered with her prospective contractual relations.  She also claimed disability discrimination, because the termination stemmed from incidents associated with the teacher’s drinking problem.  The employer won on summary judgment all counts in the lower court, where the court found that the employer was immune under an Alaska statute (see AS 09.65.160) immunizing employers who disclose job performance information in good faith.

 

The Supreme Court largely disagreed, finding that evidence the teacher produced in the trial court raised sufficient factual issues as to whether the District had breached the resignation agreement, and therefore whether the District had violated the covenant of good faith and fair dealing and interfered with the teacher’s  prospective contractual relations.  The Court also noted that statutorily-created rights can be waived where there is “direct, unequivocal conduct indicating a purpose to abandon or waive the legal right.”  Ultimately, the Court found that whether such a waiver occurred through the District’s verbal negotiation of a resignation agreement was in itself a material issue of fact, and remanded the claim to the lower court.

 

It was not all bad for the employer.  On the disability claim the court found that District had provided a legitimate, nondiscriminatory reason for the dismissal and that the teacher had not raised sufficient doubts as to whether the reason was a pretext.  Therefore, the Court affirmed the lower court’s entry of summary judgment on the claim.

 

Four Practical Tips For Terminations:

  1. Always act in good faith and deal fairly with employees.
  2. Consider whether termination of employment is consistent with applicable policies and past practices.
  3. Good documentation demonstrates process (and calm reflection).
  4. Be careful what you say at termination – it can become an oral contract.

Melanie Osborne contributed to this post.

Update - New Rule Requires Employers to Post Notice of Employee NLRA Rights

In order to allow more time for legal challenges to its notice-posting rule to be resolved, the National Labor Relations Board has again postponed the rule's effective date, this time to April 30, 2012.  Stay tuned.

For additional information regarding the NLRB's new rule and posting requirement, including links to the new rule and the poster employers must post, see our prior post on this topic by following this link.

New Rule Requires Employers to Post Notice of Employee NLRA Rights

Your bulletin board full of required workplace postings just got more crowded. The National Labor Relations Board (“NLRB”) has issued a final rule that will require nearly all private sector employers, whether unionized or not, to post a notice to their employees about certain employee rights under the National Labor Relations Act (“NLRA”). The notice must be posted by no later than November 14, 2011 (now postponed until January 31, 2012, see update below).  The new rule is one of many new developments arising from the current NLRB’s implementation of the Obama administration’s labor policy.

This new notice is a form designed by the NLRB. Among other things, it contains:

 

·         A summary of employee rights under the NLRA, including the right to discuss wages and working conditions with co-workers or a union, form or join a union, take collective action to improve working conditions, and engage in other protected activities.

·         Examples of violations of those rights, and an affirmation that unlawful conduct will not be permitted.

·         Information about the NLRB, the NLRB’s contact information, and details on how to file an unfair labor practice charge with the NLRB.

·         A statement about the employer's obligation to bargain in good faith if a union has been selected by employees.

 

This new rule applies to almost all employers except public sector employers, very small employers below the NLRB’s jurisdictional standard for impacting interstate commerce, and other limited classes of employers outside of the NLRA’s jurisdiction. The NLRB may find that an employer’s failure to post the notice constitutes an unfair labor practice. The remedy for a violation may not be severe because the NLRB cannot impose fines – but much worse, a violation can be evidence of unlawful motive and prevent the running of the statute of limitations.

 

The full text of the actual required notice is available here. Private sector employers will be required to post this notice in conspicuous places, including where they customarily post other workplace notices. In addition, employers who customarily post personnel policies and rules on an internet or intranet site must include this new notice there or provide a link to the NLRB’s website section containing the notice. If an employer has employees working at another employer’s site, it will also need to determine whether it can post notices at that site if the other employer does not already have the notice posted. If 20 percent or more of an employer’s employees are not proficient in English and speak the same foreign language, the notice must also be posted in that language. The NLRB will provide translations in such circumstances. Copies of the required 11x17 posters will be available at no cost from the NLRB upon request, and will also be downloadable from the NLRB’s website, www.nlrb.gov. A federal contractor will be regarded as complying with the NLRB’s new posting requirement if it already posts the notice required of federal contractors by the U.S. Department of Labor. See our earlier discussion of those posting requirements here. 

 

The NLRB fact sheet with further information about the rule is available here. There are likely to be legal challenges to the NLRB’s new notice posting rule, and at least one bill has already been introduced in Congress seeking to invalidate it. For now, employers will need to be prepared to comply with the new posting requirement. While already unionized employers will likely see little impact from the new rule other than the actual posting requirement itself, non-unionized employers may be faced with employees raising questions about their rights under the NLRA. Because such questions will invariably be directed toward their immediate supervisors, it is important for non-unionized employers to make sure that supervisors are properly trained regarding how to maintain a union-free environment without violating the NLRA. Non-unionized employers might also be tempted to post their own notice alongside the new NLRB poster, advising employees why a union is not needed. As with all such efforts, missteps can lead to challenges before the NLRB, so employers should consult with their Stoel Rives labor attorney.

 

UPDATE:  On September 14, 2011, the NLRB made available the poster that employers must post.  The link to that poster is here.  The NLRB recently postponed the implementation date for its new notice-posting rule by more than two months in order to allow for enhanced education and outreach to employers.  See here.  The new effective date of the rule, and the date by which the new notice must be posted, is January 31, 2012.

The EEOC Reiterates the Importance of the Interactive Process

A recent decision from the federal Equal Employment Opportunity Commission (EEOC) reminds employers of their affirmative duty to engage in an interactive process once an employee raises a medical condition and requests some change to their work environment to accommodate it. The Americans with Disabilities Act (ADA), and the Rehabilitation Act at issue in Harden v. Social Security Administration, protect an employee from discrimination based on a disability, where the employee can otherwise perform his or her job with a reasonable accommodation. Tips for the interactive process are provided below, and next week we will go through a “hypothetical.”

In Harden, a claims assistant who was frequently late notified the SSA about her depression and general anxiety which were causing her problems sleeping and functioning early in the morning. She requested approval to arrive between 9:00 and 9:30 a.m., rather than between 7:00 and 9:00 a.m. like other employees, or else to use leave rather than leave without pay or discipline. The claims assistant supplied the SSA some medical documentation, but the SSA found that the documentation did not show that her medical condition kept her from getting to work before 9:00 a.m. The SSA denied the employee’s request for a modified schedule, and disciplined her when she was again tardy.

Based on information about the employee’s medical condition that came out during the EEOC complaint process, the EEOC found that the SSA engaged in discrimination. The claims assistant had a disability that could have been reasonably accommodated with a modified schedule. The EEOC disagreed with the SSA’s argument that medical documentation provided during the complaint process was irrelevant to the SSA’s decision to deny the modified schedule and discipline the employee.

What does Harden teach us? Disability discrimination laws place affirmative duties on employers to engage in a meaningful process after an employee raises a medical condition. Do not cut short the interactive process because the facts will come out eventually. This 4-step process provides a helpful framework for an ADA request.

 

1.        Get the facts: What is the medical condition? Get documentation from the employee’s doctor if necessary (with an appropriate release), including any limitations and potential accommodations. Allow the employee or doctor to provide additional information if you are not satisfied. What is this employee’s job? Identify the essential functions of her position. Is the employee performing the job, except for reasons related to her disability?

 

2.         Decide whether the employee is eligible for an accommodation: Based on the facts, is the employee qualified for the job? Can he or she perform the essential functions of the job, with or without an accommodation? Determine whether the individual has a physical or mental impairment that substantially limits a major life activity. Is the employee regarded as having such impairment?

 

3.         Have an interactive dialogue with the employee about an accommodation: Ask the employee what he or she wants. Quite frequently, this simple communication can result in a practical, cost-effective solution that works for everyone involved. Can the employee do the essential functions of the job with the employee’s proposed accommodation? Identify other accommodations that may work, and consider the effectiveness of each proposed accommodation. Discuss the cost and burden of each effective accommodation and assess whether it would be an “undue hardship.”

 

4.        Put the accommodation into action: Document the dialogue with employee. Choose and implement an accommodation. Document the expectations on all sides. Inform others of the accommodation, only to the limited extent they must know (such as a supervisor). Ensure confidentiality at all times, and maintain a separate confidential file for the employee’s medical documentation. Reassess the effectiveness of the accommodation after a time.

Lawmakers Aim to Take the "Spice" out of Synthetic Drug Use.

Meghan M. Kelly also contributed to this post.

Alaska has joined the growing list of states that have outlawed the sale or possession of “synthetic cannabinoids.” These so-called designer drugs are sold under trade names like “Spice” and “K2”, and are essentially chemicals sprayed on dried weeds then rolled and smoked like marijuana. 

Alaska’s new law, that you can see here, criminalizes certain chemical combinations used to create synthetic cannabinoids, in effect banning the substance.   Possession of these chemicals is punishable as a Class C felony down to a misdemeanor, depending on quantity. The ban became effective July 1, 2011.

 

At least thirty states have banned synthetic cannabinoids and several others are currently considering such legislation.   In March, the federal government issued an “emergency listing” under the Controlled Substances Act of five compounds used to produce synthetic cannabinoids.

 

What does this mean for employers?

 

Synthetic cannabiniods may look like marijuana, but their affect on users more closely resembles methamphetamine or PCP. It is reported that the drug can cause paranoia and severe anxiety, hallucinations, nausea, suicidal thoughts, and combative behavior, among other symptoms. Poison centers across the country had nearly 5400 calls related to synthetic cannabinoid use between January 2010 and May 2011. Employers need to understand these symptoms and their impact on productivity and workplace safety.

 

Drug Free Workplace policies that ban use of illegal substances or “controlled substances” as defined by the Controlled Substance Act now have the backing of Alaska’s law and the federal government’s listing. Designer drugs are a rapidly evolving market, and employer drug testing programs must continue to evolve as well. While drug testing companies can test for synthetic cannabiniods, few employers in Alaska have taken this step. Presently, testing for synthetic drugs requires a separate test from the ordinary panel and it is expensive.

 

Certain workforces may be more prone to use of synthetic cannabinoids, and it is important for employers to determine the needs of their company and workforce. The Air Force began using urinalysis to screen for Spice in February 2011 and other branches of the armed services, some of the largest employers in the country, have started moving in the same direction.

Why Employers Should Exercise Restraint and Objectivity

Retaliation claims are increasing at an alarming pace. Not only have these claims tripled in number within the last two decades, they now exceed race discrimination as the leading claim filed with the U.S. Equal Employment Opportunity Commission.  Click here to see EEOC statistics.

Why the startling trend? First, Congress has gone to great lengths to protect employees’ rights to speak out against unlawful employment practices. Protections are regularly included in new laws, such as the American Recovery and Reinvestment Act of 2009, the Patient Protection and Affordable Health Care Act of 2010, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Second, courts have adopted a broad definition of what constitutes retaliation and who should be protected. An employee must prove she engaged in a protected activity (like reporting harassment) and suffered an adverse employment action as a result (like being passed over for a promotion). An employer may ultimately defeat the harassment claim, but still face liability for retaliation. Third parties also may be protected from retaliation. For instance, in a recent United States Supreme Court decision the court found that the fiance of an employee who files a discrimination complaint is protected from retaliation under Title VII.

Third, jurors understand retaliation claims because they involve natural reactions to being accused of something awful, like sexual harassment. Jurors know how natural it is for the accused to have negative feelings after such an accusation, and at the same time jurors will sympathize with an employee who allegedly suffers for rocking the boat by making a complaint.

So what’s an employer to do?

  • Start with a clear anti-retaliation policy and train employees on it. Include an outlet for employees to raise retaliation concerns.
  • Counsel supervisors to be vigilant in their efforts to be objective, to exercise restraint, and to avoid knee-jerk reactions, and educate supervisors on how to spot situations where retaliation among co-workers is a risk.
  • Limit retaliatory behavior between employees by limiting the number of people who know about employee complaints.
  • Establish consistent processes that will catch subtle or unintended retaliation, so that employment decisions are based on legitimate business-related factors.
  • Timely investigate and address any appearance or allegation of retaliation.

DOL Demonstrates Commitment to Wage and Hour Violations with Launch of New "DOL-Timesheet" App

In a highly visual public expression of its commitment to wage-and-hour violations, and to encouraging employees to file wage and hour complaints, the Department of Labor’s Wage and Hour Division entered the world of Smartphone apps when it recently launched its own “DOL-Timesheet” app for the iPad and iPhone. At first glance, the DOL-Timesheet App may not appear to be much more than the contemporary technological equivalent of a pad of paper, pencil, and some simple math. But not only does the DOL-Timesheet app track an employee’s hours and wages, it also: (1) contains a glossary of wage and hour terms; (2) informs workers about their rights under the Fair Labor Standards Act (FLSA); (3) contains easy to use links to contact the DOL’s Wage and Hour Division via phone or email; and (4) specifically instructs employees on how to file a wage violation complaint.

 

With all it does, there are still significant shortcomings and problems with the DOL-Timesheet app. The DOL candidly admits that the app does not address tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials and pay for regular days of rest. Additionally, the potential for human error or abuse creates inherent problems with reliability which may call into question the apps utility in a court of law. For example, it is unclear whether the DOL-Timesheet app includes metadata that would allow an employer to determine the time and date employees entered their time which in turn creates the potential that employees might overinflate their hours to seek benefits and compensation to which they may not be entitled.

Despite its shortcomings, the DOL left little question that it hopes and intends to use the information an employee tracks through its new app in its enforcement efforts when it stated the following in its press release announcing the app:

 

“This new technology is significant because, instead of relying on their employers’ records, worker now can keep their own records. This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.”

 

For employers, the key phrase in the DOL’s statement is the last. An employee’s personal time records are unlikely to supplant or surpass an employer’s properly maintained time records. But in the absence of a well maintained and effective time-tracking system, an employee’s personal time records will quickly rise in value in the court’s eyes.

 

It remains to be seen whether the DOL-Timesheet will garner much attention and use from employees. However, regardless of its ultimate popularity, the DOL-Timesheet app serves as a clarion call to employers to get their proverbial wage-and-hour houses in order. If you are uncertain whether your wage and hour practices hold water under the FLSA, now is as good a time as any to take a good hard look at them.

New IRS Guidance for Health Care Reform: More News You Can Use

Editor's Note: Today we are pleased to post the following health care reform update on new IRS guidance that came out last week.  Many thanks to our Seattle employee benefits colleagues, authors Howard Bye, Melanie Curtice and Erin Lennon, for sharing this timely content with World of Employment.

Health care reform requires employers to report the cost of health coverage on employees’ W-2 forms.  Last week, the IRS released additional information on this requirement, Notice 2011-28.  Below is a summary of the additional information, including the effective date, how to calculate the cost of coverage, which benefits (e.g., vision, dental, FSA, HSA, HRA)  to include in the calculation, and certain exceptions.  The cost of health coverage is reported in Box 12 of the W-2 form, under code DD.

  • Please note: The requirement to report the cost of the health coverage on an employee’s W-2 does not mean the value of the health coverage is included in the employee’s taxable income.  The reporting requirement is for informational purposes only and the cost of the health coverage is not included in the employee’s taxable income.

Effective Date

As previously announced, the W-2 requirement was waived for 2011.  The new guidance confirms that large employers (250+ employees) are not required to report the cost of health coverage on W-2 forms issued for 2011 (typically issued in January 2012).  Large employers will need to report the cost of coverage on W-2 forms issued for 2012 (those issued in January 2013).  Notably, the new guidance indicates that employers will not have to report the cost of coverage on interim W-2 forms requested by employees before the end of the calendar year.  Therefore, the first time that employers are required to report the cost of health coverage is on the W-2 forms issued in January 2013 (for 2012 wages).

Calculating the Cost of Coverage

Employee Contributions Included: The reported cost of coverage includes both the amount paid by the employer and the amount paid by the employee.  So, if an employer contributes $900/month for the employee’s coverage and the employee contributes $100/month for each month in a calendar year, the amount reported on the W-2 for the year is $12,000.

Cost of Dependent Coverage Included: The reported cost of coverage includes the cost of coverage for any other persons covered under the plan as a result of the relationship with the employee (e.g., spouse, children, domestic partner, etc.).  So, if an employee elects family health coverage that costs a total of $2,000/month, the annual cost reported on the employee’s W-2 will be $24,000.  If an employee changes coverage during the year (for example, adding a new dependent), the reported cost of coverage should reflect those changes.  So, if an employee had self-only coverage for January through March, and then had a baby and switched to family coverage for April through December, the reported cost of coverage is the cost of the self-only coverage for three months plus the cost of family coverage for nine months.

Three Methods for Calculating Cost of Coverage: The guidance offers employers three options for calculating the cost of coverage.  First, employers can simply use the same method used to calculate the COBRA premium (without including the additional two percent allowed under COBRA).  Second, employers with insured plans can choose to use the premium charged by the insurer.  The third option clarifies that employers who subsidize COBRA coverage must use the full, unsubsidized COBRA premium amount to calculate the cost.

  • Note for self-funded plans:  the guidance does not provide any additional guidance on how to properly compute COBRA premiums for self-funded plans.  The Notice merely states that employers must continue to calculate the COBRA premiums “in good faith compliance with a reasonable interpretation” of COBRA.

Mid-Year COBRA Election

For employees that terminate mid-year and elect COBRA (or other continuation) coverage, the new guidance allows the employer to use “any reasonable method” of reporting the cost of coverage while the employee is on COBRA, as long as the method is used consistently for all employees on COBRA.   The guidance gives two examples of reasonable methods: the employer can choose to report the cost of health coverage only when the employee was an active employee, or the employer can choose to also report the cost of health coverage when the employee was on COBRA. 

Which Benefits to Include

  • Vision/Dental: Vision and dental benefits should be included in the reported cost of coverage if they are “integrated” into the group health plan.  Vision and dental benefits should not be included in the reported cost of coverage if they are provided under a separate policy, certificate or contract of insurance.
  •  Health Flexible Spending Accounts (FSAs): The amount contributed by an employee to a health FSA should not be included in the reported cost of coverage reported on the W-2.  However, if an employer contributes money to the employee’s health FSA, the amount of the employer’s contributionshould be included.  For employers offering flex credit or flex dollar programs, the reported cost of coverage is amount of employer flex dollars which the employee allocates to the health FSA (the total amount in the employee’s health FSA for the calendar year, minus the amount contributed by the employee through the employee’s payroll deduction). 
  • Health Savings Accounts (HSAs) and Archer MSAs: Amounts contributed to an HSA should not be included in the reported cost of coverage reported on the W-2.
  •  Health Reimbursement Arrangements (HRAs): Amounts contributed to an HRA should not be included in the reported cost of coverage reported on the W-2.
  • Specific Disease Policies/Hospital or Other Fixed Indemnity Policies:  These benefits (such as a cancer policy) are not included in the reported cost of coverage in most instances. 

Current Exceptions

  • Retirees:  Employers do not have to report the cost of health care coverage for any individual for whom the employer does not have to issue a W-2.  Therefore, employers do not have report health care coverage costs for retirees.
  • Small Employers: Employers that are required to file fewer than 250 2011 Forms W-2 are exempt from the reporting requirement for 2011 and 2012 wages.  Thus, the soonest a small employer could be subject to the reporting requirement is January 2014 (for 2013 wages).
  • Multiemployer Plans: Employers that provide coverage to their employees through a multiemployer plan are not subject to the W-2 reporting requirement.

The IRS indicates that future guidance may change these requirements and exceptions, but no future guidance will take effect until the calendar year beginning at least six months after the new guidance is issued.

 

EEOC's Final Regulations on the ADAAA: News You Will Certainly Use

At long last the EEOC has issued its final regulations for the Americans With Disabilities Amendments Act.  In so doing, the EEOC has taken Congress’ words contained in the Act and declared (repeatedly) that the definition of “disability” is to be read very broadly and that employers should instead focus on whether discrimination has occurred or an accommodation is needed. As we've noted in our prior ADAAA coverage, we think that many more disability lawsuits will be filed and far fewer of them will be dismissed on summary judgment. As the EEOC sees it, “many more ADA claims will focus on the merits of the case.” 

What Hasn’t Changed

Most of the terms used in the original ADA haven’t changed. The Final Regulations do not alter the definitions of “qualified,” “reasonable accommodation,” “direct threat,” and “undue hardship.” And there are still three ways to come within the scope of the statute: “Actual” disability; “record of” disability; and “perceived as” disabled. The “perceived as” category has some substantial changes, as discussed below. 

What Has Changed

1.         Mitigating measures can no longer be taken into account when determining whether a person is disabled. (Except, individuals with with regular vision correction such as eyeglasses or contact lenses are still considered in their mitigated state for purposes of determining whether they have a disability.)  This means that if the employee’s condition is entirely treated (heart disease is kept under control by medication, for example), the employee’s “disability” is evaluated without consideration of the treatment. Of course, if a person’s condition is controlled entirely by medicine or an assistive device or some other measure, it may mean that no accommodation is needed.

2.         A “regarded as” claimant need no longer prove that he or she is perceived as a “disabled” person (i.e., a person with a physical or mental impairment that substantially limits a major life activity). Instead, a “regarded as” claimant need only show that the employer discriminated against him or her based on a belief that the employee (or applicant) had an impairment. However, if the employer can show that that the employee’s (or applicant’s) condition is actually just “transitory [i.e., lasting six months or less] and minor,” then the employee can’t be “regarded as” disabled. The six month time limit does not apply to evaluation of an actual disability or a record of a disability. And, in fact, the “rules of construction” contained in the Final Regulations specify that a disability may last less than six months. 

3.         The list of examples of “major life activities” is expanded and now includes “major bodily functions.” The rules make it clear that this is not a demanding standard. The major life activity need not be central to daily living, and it doesn’t have to severely or significantly limit the person’s ability. The final rule provides non-exhaustive lists of what constitutes a major life activity. Such activities include caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, working and performing major bodily functions. Bodily functions include the immune system, special sense organs and skin, normal cell growth, digestive, genitourinary, bowel, bladder, neurological, brain, respiratory, circulatory, cardiovascular, endocrine, hemic, lymphatic, musculoskeletal, and reproductive functions.

4.         Given the new lists, some conditions will almost always be deemed to substantially limit a major life activity. The ones mentioned in the Final Regulations are: Deafness, blindness, intellectual disability (formerly known as mental retardation), partial or completely missing limbs, mobility impairments requiring use of a wheelchair, autism, cancer, cerebral palsy, diabetes, epilepsy, HIV infection, multiple sclerosis, muscular dystrophy, major depressive disorder, bipolar disorder, post-traumatic stress disorder, obsessive-compulsive disorder, and schizophrenia. Of these, perhaps the most troubling are autism and PTSD since both are ill-defined in the medical literature and exist on very broad spectrums of impairment. 

5.         The changed definition of “disability” applies to Title II of the ADA (State and local governments) and Title III (private places of public accommodation).

6.         The phrase “qualified individual with a disability” has disappeared and instead the Final Regulations refer to “individual with a disability” and “qualified individual” separately. Again, these changes are intended to focus the inquiry on whether discrimination has occurred, and away from whether the individual meets the definition of “disability.”

More Lawsuits to Follow

In our experience, the vast majority of employers do try to fully comply with the ADA. Unfortunately, the ADAAA and these new Final Regulations assume just the opposite; by removing practically any burden on the employee to show that he or she is disabled, Congress and the EEOC have clearly shifted the burden to employers.

 

For more ADAAA information, check out:

 

Fred Has a Very Bad Day (Termination Checklist and Guide)

Unless your life’s ambition is to reprise George Clooney’s role in Up In The Air, Part II, you probably don’t like having to fire people. But someone’s got to do it . . . and it has to be done right. Here are some things to consider before you step into that room to do the dirty deed. (Pronouns are a nuisance, so our terminated employee will be known as Fred .)

 

  • Has the decision been properly vetted by everyone who should participate? You may simply be the “implementer,” not the “decider,” so make sure you have buy-in from all the relevant stakeholders.
  • Particularly when the decision is prompted by misconduct, poor performance or something else Fred did,  have you gotten his side of the story? Even if you end up finding Fred’s version a little less than credible, wouldn’t you rather know now what he has to say for himself, rather than read it for the first time in a Summons and Complaint?
  • Has the basis for the decision been properly documented? Most, if not all, employment lawsuits could be avoided if the employer took the time to properly document the performance faults, the efforts made to remedy performance (i.e., notice to Fred of his poor performance), and the legitimate business reasons for the termination decision.
  • Have you reviewed Fred’s file to determine whether he has any post-employment obligations such as a covenant to not compete, or to not solicit your customers or your employees, or a confidentiality agreement? If such agreements exist, be sure to give Fred another copy of the document and remind him of his continuing obligations. 
  • Will you offer severance? If so, more often than not, you will want to have an appropriate release to give Fred to consider. There are occasions when you will want to offer severance but not require a release of claims, but that rarely happens these days.
  • If you are going to have a written separation agreement (and you don’t have to have one), have you considered other provisions that might induce Fred to sign the release, like:
    • A letter of recommendation;
    • An agreement to not oppose an unemployment benefits application;
    • An agreement to reimburse Fred for a certain amount of COBRA expenses, etc?
  • Similarly, if you are going to have a written agreement, have you included all the provisions you need, in addition to the release of claims, like:
    • A non-disparagement clause;
    • An agreement to not reapply (watch out – these clauses can be tricky);
    • An acknowledgement of continuing confidentiality duties;
    • A promise to return all company property;
    • If Fred is over forty, all of the provisions necessary to comply with OWBPA?   
  • Will you conduct the termination meeting alone or with a witness? The advantage of having a witness there is that he or she can take notes and be the corroborating witness should things go south. The disadvantage is that the presence of the silent witness may irritate Fred. Nine times out of 10, you’ll want the witness.
  • Have you advised your trusted IT person to sever Fred’s computer access (including remote access) during the time that you will be meeting with him? Rarely will you want the employee to work at all after the termination meeting. If the meeting is delayed, be sure to tell the IT person.
  • Have you considered when to schedule the meeting? Best is near or at the end of the day. Your office or Fred’s office is fine, but it might be easier to meet in Fred’s office or a conference room so that you can leave if Fred wants to argue and you need to end the meeting. It is easier to leave Fred’s office than to try to make him leave your office. Wherever you choose, make sure it is private.
  • During the meeting: Don’t beat around the bush. Be direct, but gentle. Give a reason, but don’t go into detail. Resist being drawn into an argument. State that the decision has been made, is final, and won’t be reconsidered. Acknowledge Fred’s pain. Sensitive, caring companies get sued less often than cold, heartless ones.
  • If Fred claims he is being or has been discriminated or retaliated against for some unlawful reason, (as opposed to just complaining that the decision isn’t right or isn’t fair) ask him to tell you very specifically why he says that, make careful notes of what he says, tell him that you will investigate the claim and get back to him, but that the decision stands. Call your lawyer.
  • Tell Fred that his computer access has been cut off. Explain that you will work with him to get any personal information off his computer.
  • Ask for Fred’s keys, card access, phone, laptop, thumb drive, or whatever other company property he has. Ask him if he has any company property or documents at home. Ask him if he ever emailed himself company documents. If he has materials at home, arrange a time to pick those things up. If he sent himself documents at home, get his assurance that he will delete those emails. You may need to take more serious steps than these if you suspect that Fred is not being straight with you.
  • Decide in advance how Fred will collect his personal items. Will you walk him back to his desk and watch him pack? Will you agree to meet him at the office on the weekend?
  • Regardless of whether you offer benefits in exchange for a release, give Fred a letter that says he has been terminated and reminds him of any post-termination obligations, if any. (Some states require that you state the reason for the termination.)
  • Know what final pay is due and when it is due. State rules vary a lot. Do you have to pay out unused vacation upon termination? Depends. Do you have to pay out unused sick leave? Depends. When is the final paycheck due? Depends on whether Fred quits with or without notice or is fired or leaves by mutual agreement. In Oregon, because he was fired, Fred is entitled to receive his final pay no later than the end of the first business day following his termination. During the termination meeting, you should ask Fred whether he will come in to pick up his check or whether he wants you to mail it to him.
  • Do your final paperwork or take steps to see that it gets done.
  • Go home. Have a drink. 

 

The Do's and Don'ts of Employee Handbooks

Employee handbooks can operate as a useful management tool to ensure fairness and consistency in employment practices which in turn may limit an employer’s exposure to unwanted and costly litigation. But if not carefully drafted an employee handbook may unwittingly supply a disgruntled employee with greater ammunition on the legal battlefield. A couple of Utah employers recently saw this play out with different results.

In Hoko v. Huish Detergents, Inc., a 2010 Utah District Court decision, an employee sued his employer alleging disparate treatment and wrongful termination after he was discharged for abuse of the internet policy set forth in his employee handbook. The handbook, however, disclaimed any intent to create an employment contract and the employee signed an acknowledgement of receipt of the handbook indicating he understood his at-will status. Further, there was no evidence his employer had enforced the internet policy differently with other employees holding similar positions. The Court ultimately dismissed both of the employee’s claims.

In Cabaness v. Thomas, a 2010 Supreme Court of Utah case, things went down much differently. In that case, the employee brought suit against his employer alleging breach of an implied contract created by promises made in the employment manual. As in Hoko, the employer argued that a disclaimer precluded a finding of intent to contract. But unlike in Hoko, the disclaimer only indicated that the handbook did not create a contract “with respect to” certain aspects of the employment relationship. The Court ruled that the limited disclaimer in conjunction with the promise like provisions set forth in the employment manual evinced the employer’s intent to undertake additional duties and accordingly held for the employee.

The Hoko and Cabaness cases provide examples of two opposite ends of the spectrum. Both provide useful insights into the do’s and don’ts of drafting employee handbooks. What follows is a short list of points an employer might glean from these cases as well as some additional thoughts to consider when drafting or reviewing employee handbooks.

1.         Make sure your employee handbook contains a broad “clear and conspicuous” disclaimer indicating that neither the handbook, any provisions therein, nor other similar materials are intended to create a contract or alter the at-will employment status of an employee.

2.         Use language that is easy to understand and not susceptible to various reasonable interpretations. This avoids confusion on the part of your employee and potential legal battles over whose interpretation is correct.

3.         Avoid using language that could be read as a definitive promise. This includes avoiding word such as “must,” “shall,” “will,” “required,” or other words and phrases that imply an employer has made a definitive promise.

4.         If your employee handbook includes specific grounds for disciplinary action or termination, make sure it also indicates the list is demonstrative and not exhaustive.

5.         Once your policies and procedures are established, stick to them and apply them uniformly to avoid claims of disparate treatment.

6.         Include and ask each employee to sign an acknowledgment provision that indicates the employee’s receipt of the employee handbook and documents their understanding that it does not create a contract.      

7.         Review and update employee handbooks regularly. Workplace conditions change rapidly. For example, the internet and social media continually demand greater attention within the work place. If you do not have any policies regarding internet usage in your handbook, it’s probably time to think about some revisions.

8.         Consider having your employee manual reviewed by your legal team. State and federal laws are continually evolving and you want to make sure that your employee handbook is up to date with the latest changes in employment law.

Stoel Rives/SHRM Ninth Annual Labor and Employment Conference!

Please join us for our Ninth Annual Stoel Rives/SHRM Labor and Employment Law Conference on March 10 at the Oregon Convention Center!  This year's theme is "HR Horror Show."

We have an all star lineup this year, including keynote speaker David Rabiner, lunchtime speaker Ed Reeves, and a variety of presentations by Stoel Rives attorneys on the hot labor and employment issues that are currently affecting all employers.

For a full agenda and registration information, please click the image below.  You don't want to miss it!

GINA Compliance?

As Stoel Rives World of Employment has previously reported, Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers from discriminating against employees and applicants based on their genetic information and regulates employers’ acquisition and use of genetic information.   

GINA applies to private employers with 15 or more employees, employment agencies, labor unions, and some other entities. Laws in 34 states also prohibit employment discrimination on the basis of genetic information and some of them may apply to employers with fewer than 15 employees.  On November 9, 2010, the Equal Employment Opportunity Commission (EEOC) issued final regulations to Title II of GINA.  

While many employers don’t think they collect genetic information covered by the law, its definition of “genetic information” is quite broad and includes family medical history.  “Genetic tests” which come under the law are becoming more common, such as tests which detect the gene thought responsible for a predisposition to breast cancer.  (The regulations helpfully specify that some tests, like a cholesterol test or a drug and alcohol test, are not “genetic tests.”)  The regulations broadly prohibit an employer’s efforts to obtain an applicant’s or employee’s genetic information, but do provide a safe harbor for “inadvertent acquisition.”  This safe harbor will protect an employer, for example, who gains genetic information by innocently inquiring about an employee’s well-being. 

But employers commonly make requests for medical information such as when asking an employee to provide a medical certification for a FMLA leave or as part of the ADA interactive process.  The regulations specify that employers must tell employees – using specific language – to not disclose protected genetic information when the employer requests medical information.  Not surprisingly, the regulations require employers to maintain any genetic information obtained in a separate confidential medical file. Genetic information may be kept in the same file as other medical information.

 

The EEOC’s helpful FAQs on GINA are here.  (Question 17 contains the suggested safe harbor language.) 

 

What should employers do?

 

  • Revise the EEO statement to include a prohibition on discrimination based on genetic information or ensure that the EEO statement includes broad language like “and as provided by law.”
  • Check to ensure that application forms or on-boarding forms don’t seek family medical history information.
  • Update template communications to employees when requesting medical information to include the approved safe harbor language.  

 

How To Avoid Holiday Party Pitfalls (and Liability)

According to recent poll by the Society of Human Managers (SHRM), fewer employers are foregoing holiday parties this year than in 2009. Although the economy continues to sputter, many employers likely see the traditional holiday party as a relatively inexpensive way of boosting morale and creating good will among their employees. 

Some employers approach party planning with trepidation, fearful that too much holiday cheer will lead to problems. Here are some tips for planning a successful employer-sponsored event while avoiding some common holiday party pitfalls:

  • Remind employees, and especially supervisors, that the holiday party is a work event, and policies regarding appropriate workplace conduct are in effect 
  • Enlist supervisors in maintaining appropriate conduct standards
  • Recognize diversity by celebrating the season or the end of the year, without reference to specific holidays or religious traditions
  • Choose a venue at which all employees will be comfortable (i.e., probably not the sports bar with the skimpy server outfits), and that will be accessible to employees with disabilities
  • Invite spouses or partners to attend
  • If alcohol will be served, limit its consumption through tickets or a cash bar and have a third party, not employees or supervisors, serve the drinks
  • Make arrangements for taxi service to get impaired employees home and be proactive in assessing those who should not drive
  • Clearly conclude the party when it is over to avoid lingering or post-party activities where control will be difficult
  • If complaints about conduct at the party surface, address them promptly

With a little planning, the workplace holiday party can be a success. Even the HR department will be able to relax and have a good time!  

Oregon Supreme Court: Employers Are Not Required to Accommodate Medical Marijuana

Yesterday the Oregon Supreme Court conclusively ruled that employers are not required to accommodate the use of medical marijuana in the workplace, ending years of doubt and confusion on this critical issue. Click here to read the Court’s opinion in Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries.

In Emerald Steel, a drill press operator was terminated after his employer learned he was using medical marijuana to treat a medical condition that qualified as a disability under Oregon law. The employee filed a claim with the Oregon Bureau of Labor and Industries, alleging that the employer’s refusal to accommodate his use of medical marijuana violated Oregon law requiring employers to reasonably accommodate an employee’s disability. A judge ruled that the employer did not properly engage in the interactive process to determine whether other reasonable accommodations were possible.

The employer appealed that decision, arguing that neither federal nor state disability law requires employers to engage in the interactive process with users of medical marijuana, given that their use of marijuana is prohibited by federal law. The Oregon Court of Appeals ruled in favor of the employee on the basis that the employer failed to preserve that argument in the case below. Further, a prior Oregon Court of Appeals case—Washburn v. Columbia Forest Products—had held that employers do have a duty to accommodate the use of medical marijuana by a disabled employee.

On appeal, the Oregon Supreme Court reversed the decisions of the trial judge and the Court of Appeals, and reversed the Oregon Court of Appeals’ decision in Washburn. The Supreme Court held that employers do not have to accommodate employees’ use of illegal drugs. Because marijuana—medical or otherwise—is illegal under federal law, employers are not required to accommodate its use under any circumstance.

Since the original Washburn decision, many Oregon employers have assumed they were obligated to accommodate the use of medical marijuana by disabled employees. The Emerald Steel decision should give all Oregon employers comfort in knowing that, until or unless federal law changes, they are definitely not required to accommodate medical marijuana use. A similar ruling from the Washington Court of Appeals is being reviewed by that state’s supreme court.  Stoel Rives represents the employer in that case. Click here to read the World of Employment's coverage of that case.

How Does the Heath Care Reform Package Impact Employers?

The health care reform legislation passed by Congress places significant new responsibilities on employers, group health plans, insurers, and individuals. The Stoel Rives Employee Benefits team has developed the following overview of the most significant issues affecting employers and group health plans, in order of effective date. (click on CONTINUE READING" for the full text of the overview).

Effective Immediately

  • Qualifying small businesses that have fewer than 25 full-time employees and whose employees have average annual wages less than $50,000 may be eligible for tax credits to purchase health insurance for their employees.
  • Coverage for dependent children may qualify for tax-free status through the taxable year in which the child turns age 26.

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Our Festivus Present to Oregon Employers: Ten Things You Should Know for 2010

Wow, it's Festivus already, which means that in just a few short days it will be a brand new year!  We have a Festivus present for Oregon employers to help you get ready:  Ten things you need to know for 2010!  (click on each blue hotlink for more information)

  1. All Oregon employers are required to post the SB 519 (Mandatory Meeting Ban) Notice to Employees.
  2. The H1N1 (or "swine:) flu is slowing down, but it's not gone. If you have concerns for you or your employees, Oregon has a great Flu Hotline.
  3. As if we needed another reason to investigate complaints of unlawful harassment, the Oregon Court of Appeals recognized a claim for negligent failure to investigate
  4. Leave for Military Spouses:  Employers with 25 or more employees in Oregon must provide leave to spouses of service members prior to deployment and during leave from active duty. 
  5. In 2010, you might have a greater duty to accommodate employees' religious dress and practices
  6. Domestic Violence Leave and Accommodations:  Employers may not discriminate against victims of actual or threatened stalking, sexual assault or domestic violence, and must  make reasonable accommodations for such employees.
  7. In 2010, you (and your employees!) may no longer talk on the phone while driving (unless it's with a hands-free device).
  8. Oregon's minimum wage will remain $8.40/hour.
  9. Oregon kept its disability discrimination law in tune with the federal Americans with Disabilities Act
  10. Oregon has new rest and meal break regulations.

And on that note, we're off to put up our festivus pole (aluminum, high strength-to-weight ratio), air our grievances, and commit feats of strength.  Happy festivus, and see you in 2010!

New TSA Regulations Potential "Gotcha" For Employers Interviewing Out-of-Town Candidates

As the economy rebounds (we hope) and hiring begins again, employers flying out-of-town job candidates in for interviews will need to be wary of new Transportation Security Administration ("TSA") regulations that require anyone booking air travel to provide the passenger’s date of birth and gender.  Employers who are not careful about how they implement this rule may increase their exposure to possible discrimination claims from rejected and disgruntled candidates.

49 C.F.R. § 1540.107(b), part of TSA's Secure Flight program, requires an individual to provide name (as it appears on the ID to be used at the airport), date of birth (DOB), and gender when “the individual, or a person on the individual’s behalf, makes a reservation for a covered flight.”  The purpose of the rule is to reduce the number of 4-year old girls and other "false matches" who accidentally end up on TSA “no fly” lists.  While the regulation was enacted in December 2008, airlines have been slow to implement the necessary upgrades to their reservation systems.  Some airlines may not be asking for the name, DOB and gender information now, but TSA expects all airlines to be in compliance by early 2010.

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GINA Requires Employers to Post Notice, Review Policies and Procedures

The Genetic Information Nondiscrimination Act (GINA) takes effect November 21, 2009.  Is your workplace ready?  Employers will soon be required to post a notice stating that they do not discriminate on the basis of genetic information, under proposed regulations interpreting GINA.

If you don't already have one, click here to download the full "EEO is the Law" poster, which describes all of the Federal laws prohibiting job discrimination based on race, color, sex, national origin, religion, age, equal pay, disability and genetic information.  If you already have a copy of "EEO is the Law," then you can download and print the "EEO is the Law Supplement," which contains GINA information.  (If you don't want to print it yourself, or if you need the poster in Arabic, Chinese or Spanish, click here to order a copy from the EEOC.)

What else should employers do to prepare for GINA?  Here's a short, non-exhaustive list of things you can do to get ready:

  • Add appropriate language to your EEO and anti-discrimination policies stating that you do not discriminate on the basis of genetic information;
  • Review your employment applications and employee questionnaires to make sure you are not intentionally or inadvertently requesting information about an applicant’s/employee’s family medical history;
  • If you need to get information about a family member’s illness for purposes of determining whether a request for leave qualifies for Family and Medical Leave Act or state law leave coverage, make sure it is limited to only what you need to know to make the determination;
  • Determine whether incoming medical information you receive on an employee contains genetic information (defined as: genetic tests of an individual or his/her family members; the manifestation of a disease or disorder in family members of an individual, genetic services and participation in genetic research by an individual or his/her family member) and if so, maintain and treat the information as you would a confidential medical record for ADA purposes – i.e., maintained in a separate confidential medical file with proper limitations on disclosure.
  • Make sure appropriate policies and procedures are in place to prevent inadvertent disclosure of genetic information when responding to a litigation discovery request, like a subpoena. If you require a court order compelling disclosure before releasing the information, this should protect you.
  • If you are a self-insured entity, make sure that you do not request or require or use purchased genetic testing or information for purposes of underwriting or to determine an individual’s contribution/premium amounts. Note that you can use genetic test results for purposes of making a determination regarding payment, though.
  • Also note that genetic information is included as “protected health information” for HIPAA purposes and should be treated accordingly.

Fake Job Reference Site Highlights Importance of Verifying Applicant References

As if navigating the world of employment issues was not hard enough already, today's Consumerist highlighted a new service that purports to provide, among other things, fake job references. While I have not formed a conclusion as to whether the site is real or a sham (many of the internal links on the site don't work, but there is an actual recording identifying the company when you call the number), such services--the sole function of which is to perpetrate a fraud--highlight the importance of verifying the authenticity and experience of applicant references.

If you are suspicious about an applicant's job history or references, there are several steps you can take decrease your chances of being duped.

  • First, if the company name is unfamiliar to you, look it up online. Is there a website? Can you find a phone number? If so, call it and ask to speak to someone who covers the human resources function. It is, of course, possible to fake all of these things (and a service like the one linked to above is paid to cover them), but chances are that someone who is lazy enough to fake a job reference isn't going to cover all of his or her bases.
  • Second, don't rely on the information provided. If the applicant states that he or she worked at a major corporation and provides the number for someone to contact at the corporation, don't call the number. Instead, go to the website, call the main number, and ask to speak to the person in the reference. If that person doesn't exist, it's a good sign that the reference is not legitimate.
  • Third, as the Consumerist post notes, make use of services provided by the phone company such as reverse lookup. The number may not show up for a legitimate reason (such as it's a direct dial line), but the failure to authenticate should still be considered a reason to proceed with caution.
  • Fourth, if you are instructed to contact a reference at home that's fine, but try to otherwise authenticate the reference as discussed above.
  • Fifth, you may want to include a policy in your handbook indicating that subsequent discovery of false information on an employee's application is grounds for immediate termination.

Once you verify that the reference is legitimate, be mindful that all references were not created equal. Make sure to establish that the reference interacted with the applicant in significant ways or over a substantial period of time. Many applicants provide otherwise legitimate references who, for example, left the prior employment long before the applicant did. Those references are less likely to have any useful information, and won't be able to discuss why the applicant left the prior employer.

Many employers don’t check references at all, or just do a cursory review. The lesson here is that due diligence checking references can go a long way toward avoiding significant problems down the road.

LinkedIn Debate Highlights Broader Issue of Inflated Performance Evaluations

Recently, an interesting debate has erupted in the employment law blogosphere over this National Law Journal piece cautioning employers about the risks posed by making recommendations on LinkedIn -- a social networking website for professionals.  The perceived danger scenario is where a manager “recommends” the work of a subordinate, who is later terminated for poor performance.  The former employee then sues, and uses the manager’s “recommendation” as evidence that the stated reason for the termination (poor performance) is a pretext.  The debate over this issue centers on the true risk to employers of LinkedIn recommendations—some say the risk is real; others that it is overblown.

Our good friends Molly DiBianca of the Delaware Employment Law Blog and Daniel Schwartz of the Connecticut Employment Law Blog argue that the risk is overblown.  First, they point out that this scenario has played out in exactly zero cases to date.  Second, because managers are extremely unlikely to recommend poor performers, this scenario is unlikely to occur frequently.  Jon Hyman of the Ohio Employment Law Blog and Patrick Smith of the Iowa Employment Law Blog disagree and argue that employers should be concerned about such recommendations because people tend to be careless on the internet, and a LinkedIn recommendation can provide a crushing blow to the employer’s chances of prevailing on summary judgment in litigation.

So who’s right?

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How Employers Can Reduce Litigation Costs

Employment litigation dominates court dockets around the country. And the swing to the left in the political arena is not likely to put a damper on the number of filings. Everyone knows that litigation is expensive. So . . . what can the employer do to reduce its expenses if it finds itself on the receiving end of an administrative charge or a lawsuit? 

1. Early Case Assessment

 

            Ask your attorney to provide you with an early comprehensive analysis of the case after he or she has interviewed key witnesses, reviewed key documents and researched legal issues. Doing so will give you important information about whether an early settlement is likely to save you money in the long run and give you a good idea of what you are in for if you don’t settle.

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