Earlier this month, the Department of Labor issued an opinion letter ending the “80/20 rule” for whether employers could take a tip credit on employees who performed both tipped and non-tipped work. (FLSA2018-27.) The rule prohibited employers from taking a tip credit on the minimum wage if the employee’s non-tipped work consumed more than 20 percent of the employee’s work. In the opinion letter, the DOL stated that it would not “place a limitation on the amount of duties related to a tip-producing occupation that may be performed, so long as they are performed contemporaneously with direct customer-service duties and all other requirements of the [Fair Labor Standards] Act are met.”
Two recent settlements between employers and the U.S. Department of Justice (DOJ) highlight the complex interplay between U.S. immigration and export control laws in the hiring process. The settlements provide a reminder to employers of the potential employment discrimination pitfalls for companies trying to comply with export control laws.
In late August 2018, the DOJ’s Immigration and Employee Rights Section (IER) reached a settlement agreement with international law firm Clifford Chance US LLP, which the DOJ accused of violating the Immigration and Nationality Act (INA) by refusing to consider employment-authorized non-US citizens and dual citizens for a document review project. Just two months earlier, the DOJ found that engineering company Setpoint Systems, Inc. violated the INA by limiting certain positions to U.S. citizens only. In both cases, the unlawful employment practices stemmed from a mistaken understanding of the requirements of the International Traffic in Arms Regulations (ITAR).
In this blog, we provide an overview of the overlapping laws and summary of key compliance practices for employers.
On September 25, 2018, the Ninth Circuit granted Uber’s motion to compel arbitration and decertified a class of 160,000 drivers alleging violations of California state law, including misclassification of the drivers as independent contractors. The decision does not come as a great surprise given the court’s 2016 ruling compelling arbitration in a related case, but it serves as a reminder to companies everywhere to re-examine their independent contractor agreements.
On August 28, 2018, the U.S. Department of Labor’s Wage Hour Division issued six new advisory opinion letters offering employers guidance on a range of leave and wage issues under federal law, including the application of the Family Medical Leave Act to organ donors and a no-fault attendance policy.
Today, the United States Supreme Court ruled in Epic Systems Corp. v. Lewis, No. 16-285 that employers could lawfully require employees to waive their rights to pursue employment-related class actions through arbitration agreements providing for individualized proceedings. In a 5-4 decision, the Court ruled that such waivers do not violate the National Labor Relations Act.
Human Resource and Labor Relations professionals (HR/LR) normally take the lead on workplace investigations of employee misconduct. Given that, they may also bear the blame for investigations that result in adverse employment actions that do not withstand litigation scrutiny. If a current or former employee challenges an adverse employment action via an EEOC or NLRB charge, a DOL complaint, a CBA grievance, or court action, the employer incurs significant expense and disruption simply defending the action. The employer’s exposure increases exponentially if the employer loses the case on the merits before a regulator or court. Consequently, HR/LR should devote sufficient time and attention to workplace investigations to avoid challenge in the first place, where possible, and to ensure the best chance of winning on the merits if a challenge does take place. But where to look for guidance? This blog answers that question and provides a checklist for HR/LR to follow to conduct employee misconduct investigations that will withstand litigation scrutiny.
On April 30, 2018, the California Supreme Court substantially narrowed the class of individuals who qualify as independent contractors under California wage-hour law and paved the way for a new wave of class actions. In Dynamex Operations West, Inc., the Court adopted the restrictive “ABC test” used in other jurisdictions for determining when a worker qualifies as an independent contractor under California’s Industrial Wage Orders.
Under that test, the court presumes all workers qualify as employees. A hiring entity can prove that the worker qualifies as an independent contractor only if it can show that the worker:
A) is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
B) performs work that is outside the usual course of the hiring entity’s business; and
C) is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
On Monday, April 2, 2018, the Supreme Court of the United States ruled that car dealerships do not have to pay service advisors overtime under federal law. In a 5-4 decision, the Supreme Court held that service advisors, like auto salespersons, partspersons, and mechanics, are exempt from the Fair Labor Standards Act’s overtime requirements.
In Part 1 of the series reexamining harassment policies and procedures, we looked at common harassment investigation missteps and how to correct them. In Part 2, we examine confidentiality policies.
Employers often defend Title VII harassment claims by showing that they exercised reasonable care to prevent and correct harassing behavior. A key aspect of reasonable care requires an employer to have an anti-harassment policy that, according to the EEOC, “should contain, at a minimum” six elements including an “assurance that the employer will protect the confidentiality of harassment complaints to the extent possible.”
At the same time, the NLRA prohibits employers from maintaining blanket confidentiality rules that prohibit employees from discussing workplace investigations. In Banner Estrella Medical Center, 358 NLRB 809 (2012), the NLRB found that an HR consultant violated the NLRA by routinely asking employees not discuss ongoing investigations with their coworkers. To lawfully require confidentiality of employees, an employer must show a legitimate business justification specific to the investigation at issue, such as the need to protect witnesses or prevent tampering with evidence. That remains the law today, despite the NLRB’s recent shift on employer policies.
So how’s an employer to reconcile those seemingly conflicting laws? Continue Reading Confidentiality Policies that Survive EEOC and NLRB Scrutiny: Reexamining Harassment Investigation Protocol Part 2
On March 5, 2018, the California Supreme Court changed the test for factoring flat sum bonuses into the overtime rate in Alvarado v. Dart Container Corporation of California, ordering a calculation that will increase the costs of overtime for employers who pay such bonuses. Under the federal formula, an employer must divide an employee’s total weekly pay (including non-discretionary bonuses) by the total number of hours the employee worked in a week to get the regular rate; the employer then must pay time-and-a-half that rate for all overtime hours. But under the Alvarado court’s formula, the employer must divide the total weekly pay by only “the number of nonovertime hours the employee [actually] worked during the pay period.” That smaller divisor will lead to higher overtime rates.