Think S.P.R.I.N.G. – Regulatory And Legal Developments Impacting Your Business
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowTo help celebrate spring’s arrival, the letters of “spring” will guide our discussion of current hot topics in employment law. Though not exactly a walk through the daffodils, knowledge of the following topics will help employers avoid the distraction and expense of investigations and lawsuits so they can focus on improving and growing their businesses.
S is for Salary Basis. The U.S. Department of Labor (“DOL”) announced last year that it intends to revise its regulation setting the minimum amount of salary that must be paid to “white collar” employees if they are to qualify as exempt from the Fair Labor Standards Act’s overtime requirements. The new regulation will more than double the minimum salary level for the executive, administrative, professional, and computer-related classifications. The DOL has not yet announced when the new regulation will take effect, but some expect that it will happen in the next few months. In preparation for this far-reaching and costly change, employers should be making plans to increase the salaries of their exempt employees (if necessary), reclassify them as hourly, non-exempt staff, or look to other options such as day rates or fixed-salary for fluctuating hours arrangements.
P is for Paid Meal Breaks. The DOL takes the position that employees on unpaid meal breaks must be permitted uninterrupted time to use as they see fit. Despite this, yet another federal circuit court recently joined the majority of circuits that instead analyze meal period claims by asking who benefits more from the meal period despite interruptions or restrictions enforced by the employer. In applying the “predominant benefit test,” the Court of Appeals for the Third Circuit decided in Babcock v. Butler County that restricting prison guards from leaving the premises at meal time without permission and requiring them to remain in uniform close to emergency response equipment did not render the unpaid meal time compensable. In short, if interruptions that occur during meal breaks and/or limitations on how the employees may spend their time do not result in the employee performing his or her primary work duties, then the employee, not the employer, benefits more, thereby relieving the employer of liability.
R is for Retaliation. Botched handling of post-complaint discipline issues are the surest path to claims of retaliation. Finding the right balance between preserving confidentiality and communicating with the complaining employee remains a challenge that many employers do not navigate well, often to their detriment. Indeed, some employers struggle to properly conduct investigations of employee complaints in the first place. Meanwhile, the number of retaliation cases filed with the Equal Employment Opportunity Commission (“EEOC”) and in federal courts continues to rise each year. In recognition of this trend, in late January the EEOC released a proposed enforcement guidance on retaliation designed to replace the agency’s 1998 Compliance Manual on Retaliation. The final guidance is expected to be released later this year. Based on this recent development, there is no reason to believe that the EEOC’s and plaintiff lawyers’ focus on retaliation will subside any time soon. Employers would be well-served to make sure their policies expressly prohibit retaliation, to undertake to train supervisory staff on retaliation avoidance, and to consult legal counsel regarding appropriate handling of post-complaint disciplinary issues.
I is for Independent Contractor. Businesses that are found to have misclassified a worker as an independent contractor may be liable for significant amounts of unpaid overtime and liquidated damages, as well as other penalties. Last July, the DOL issued an Administrator’s Interpretation in which the agency stated that when it examines worker status for enforcement purposes, it will review the economic realities of the relationship between the worker and the hiring company. If the examination reveals the worker’s economic dependence on the company, the DOL will take the position that the worker is actually an employee and should have been treated as such. Among other factors, the DOL will assess whether the worker operates his or her own business, whether the worker has other customers, and whether the worker brings independent skill to the task he or she performs for the company. Worker status misclassification remains a hot issue on the DOL’s agenda and employers must carefully examine whether they are correctly classifying workers as independent contractors.
N is for No Knowledge. In December, a federal district court judge in Chicago handed down a verdict in a closely-watched case involving the compensability of time that police officers spent reading and responding to texts and emails on their department-issued Blackberry devices after their shifts. In Allen v. City of Chicago, the judge determined that, in answering the texts and emails, the officers had, indeed, performed off-the-clock work for purposes of the FLSA. However, the plaintiff class members failed to prove that the department knew that the officers were performing the work but not submitting the time for payment. Thus, the employer’s lack of knowledge can be a defense to unpaid wage claims. Even so, the Allen case stands as a warning to all employers whose hourly employees access electronic mail and otherwise engage in after-hours communications with supervisors and coworkers via cell phones and other devices that you could be on the hook for this time.
G is for Get Help! Might it be time for a little “spring cleaning” in your business? As spring approaches, consider reviewing your business’ practices and procedures and making adjustments as needed to stay within the law. Keeping up on hot topics in employment law is half the battle. Winning the battle, however, often requires analysis of the facts of your particular situation with the applicable legal standards, and then deciding on a course of action that complies with the law. If necessary, seek help. Whether by an audit of your employee classifications, a review of your policies, or advice about a real-time employment matter, obtaining legal counsel can make the difference between legal compliance and unlawful conduct.
Germaine Winnick Willett is a member of Ice Miller’s Labor, Employment and Immigration Group.