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UPDATED SEPTEMBER 2017
DACA: The Deferred Action for Childhood Arrivals (DACA) program is being rescinded. The DACA program was implemented in 2012 by an executive order signed by President Obama. Under the program, certain individuals who arrived in the United States as children are eligible for CACA protection and corresponding employment authorization. The Department of Homeland Security issued preliminary guidance and also FAQs describing how DACA cases will be handled. You can read more regarding the impact for employers here: http://www.jacksonlewis.com/publication/deferred-action-childhood-arrivals-program-rescinded-ag-sessions-announces
Wage and Hour: The United States Court of Appeals for the Ninth Circuit ruled this month issued a significant decision on the viability of the 80/20 rule. These are claims where the employee alleges an employer loses the tip credit when employees spend more than 20% of their time engaged in related or unrelated non-tip generating work such as rolling silverware, brewing tea or coffee and wiping down tables. The 9th Circuit ruled that the DOL’s 20% rule is owed no deference as it is inconsistent with the statute and the regulation it purports to interpret. This decision comes as welcome news to the hospitality employers located in the 9th Circuit. However, the decision expressly parts ways with an 8th Circuit decision which held the guidance from the DOL was owed deference. If you are in the hospitality industry and interested in learning more regarding this decision, I have provided a link to a more in-depth article: http://www.jacksonlewis.com/publication/dol-s-8020-tip-credit-rule-entitled-no-deference-ninth-circuit-holds-creating-circuit-split
EEO: The Office of Management and Budget’s Office of Information Regulatory Affairs has directed the Acting Chair of the EEOC to suspend implementation of the EEOC’s revised EEO-1 report, which included detailed pay reporting obligations. Prior to this directive earlier this month, employers were scheduled to make their first pay disclosures under the revised EEO-1 report by March 31, 2018. Now, no pay disclosures will be required. Employers will use the previous version of the EEO-1 form for Fiscal Year 2017 reporting.
NLRB: NLRB Chair Philip Miscimara announced that he would not seek reappointment once his term expires in December. Currently the Board consists of two Republicans and two Democrats with one vacancy on the Board. Given that Philip Miscimarra’s term will expire and he is not seeking another term, the Board will once again have two Democrats and one Republican at the end of December assuming the President’s nominee William Emmanuel is not confirmed by the Senate as of that date and the President has not nominated with the consent of the Senate an additional Board nominee.
NLRB: According to a recent Gallup poll conducted from August 2 to August 6, 61% of adults answered that they approved when asked “do you approve or disapprove of unions?” This is the highest percentage since 2003, when 65% said they approve. While only 22% of respondents believe unions will become stronger in the future, 46% believe they will become weaker, 39% of respondents would like unions in the United States to have more influence. This is the highest figure recorded in the 18 years Gallup has asked the question. Currently, only 6.6% of employees in the private sector are unionized.
EEOC: Employers should engage in the interactive process even if they believe the employee is not qualified. A recent Maryland case drove home this point. Please see the following link for a summary of the case entitled Van Rossum v. Baltimore County Maryland: http://www.disabilityleavelaw.com/2017/09/articles/uncategorized/employers-should-engage-in-the-interactive-process-even-if-they-believe-the-employee-is-not-qualified/
UPDATED AUGUST 2017
As we prepare for a long Labor Day weekend, I wanted to provide you with a brief update:
DOL Overtime Rule: Yesterday, the district court in Texas issued an order granting summary judgment to the State and Business Plaintiffs, holding the overtime rule is invalid. The Court previously granted the State Plaintiffs’ motion for preliminary injunction in November 2016, invalidating the rule. So this ruling gives both parties what they wanted: DOL wanted confirmation that it has the right to set a salary level, which the court confirmed; and the Plaintiffs wanted confirmation that the level was set too high, which the Court also confirmed (and which the DOL agrees). So the decision actually satisfies both parties. So where does that leave us?: (1) the current salary level remains in place; (2) the final rule has been held invalid; (3) the appeal will likely become moot; (4) neither the Plaintiffs nor the DOL will likely not appeal the order as both largely got what they wanted—DOL, confirmation of its right to set a salary level, and the Plaintiffs, an Order stating the Rule was invalid; (5) the AFL-CIO could appeal the denial of their motion to intervene, but that could take months; and (6) the DOL will likely be issuing a new rule next year with a lower salary level (possibly in the $30K range).
In a much anticipated move, the Office of Management and Budget’s Office of Information Regulatory Affairs (OIRA) has directed the Acting Chair of the EEOC to suspend implementation of the EEOC’s revised EEO-1 report, which included detailed pay reporting obligations. Prior to this directive issued on 8/29/2017, employers were scheduled to make their first pay disclosures under the revised EEO-1 report by March 31, 2018. Now, no pay disclosures will be required. Employers will use the previous version of the EEO-1 form for Fiscal Year 2017 reporting. You can read more and obtain details about the EEO-1 form here: http://www.jacksonlewis.com/publication/eeoc-pay-reporting-obligations-suspended
Weather and Compensation
In light of the Hurricane in south Texas, it may be a good opportunity to revisit an employer’s pay obligation when an employer must close its doors as a result of natural forces. This may be a good refresher if you have operations outside of Nebraska and/or as we prepare for potential bad weather over the next couple of seasons. You can revisit your obligations here: http://www.jacksonlewis.com/publication/paying-employees-when-weather-closes-doors-refresher-employer-obligations
Wage and Hour
A nice case from the Seventh Circuit was recently issued regarding employer liability for employee use of smart phones. The Court affirmed a district court order finding, after trial, that the City of Chicago is not liable under the FLSA for the time spent by police officers using their blackberry after normal work hours because the City had no knowledge, either actual or constructive, that the work was being performed and not recorded because the employees did not report the time, despite the employer’s policies permitting them to do so. And there was no evidence the employer prevented or discouraged them from reporting it. So this is a good example demonstrating that it is not enough for a plaintiff to provide he or she did “work;” the FLSA also requires the employee to prove the employer had actual or constructive knowledge of the work. And the inquiry is not whether the employer “could have” discovered the work was performed and not paid, but “should have” discovered it. Policies requiring employees to report all hours worked, including work performed off site, are helpful in defending these cases, but not determinative, of course. (Allen v City of Chicago (August 2017)) (Just an FYI, a Blackberry is the device that replaced the flip phone but before the iPhone J)
• Recently introduced legislation in Congress:
• S 1652 The Wage Theft Prevention and Wage Recovery Act (introduced 7/27/17)
• S 1716 The Strong Families Act, Sen. Deb Fischer (R-NE) (introduced 8/2/17)
• H.R. 3467 The Wage Theft Prevention and Wage Recovery Act (introduced 7/27/17)
• H.R. 3629 A bill to amend the Fair Labor Standards Act of 1938 to ensure that employees are not misclassified as non-employees, and for other purposes (introduced 7/28/17)
UPDATED JULY 20, 2017
· The USCIS announced the release of a revised version of the I-9, Employment Eligibility Verification. The revised version may be used immediately but must be used no later than September 18, 2017. Employers must continue following existing storage and retention rules for any previously completed I-9. You can read more and access the revised version here:http://www.jacksonlewis.com/publication/uscis-releases-new-form-i-9-and-new-handbook-employers
· The U.S. Supreme Court term that ended June 2017 included a number of decisions involving workplace law. The Court managed to achieve a strong consensus in each of its employment-related rulings. To review a summary of the recent employment law rulings issued by the Supreme Court this term, you can access a summary here: http://www.jacksonlewis.com/publication/us-supreme-court-round-2016-2017
· An employee fired after she tested positive for marijuana on a test administered in the hiring process should be able to proceed with her “handicap discrimination” claim under the Massachusetts’ antidiscrimination statute, the Massachusetts Supreme Judicial Court has ruled on July 17th. The state high court decision means the search continues for clarity in balancing safety in the workplace with the ever-growing number of workers seeking to continue use of medicinal marijuana in accordance with state laws. You can read more here: http://www.jacksonlewis.com/publication/claim-massachusetts-employee-fired-medical-marijuana-use-may-proceed-state-high-court-rules
· A Senate committee approved the nominations of William Emanuel and Marvin Kaplan to the National Labor Relations Board earlier today. The next step is a full vote on the Senate floor. However, given the August recess and the pending health-care bill, it is hard to determine when a vote by the full Senate to confirm the nominees will be scheduled.
· To review the top 5 labor law developments in June, 2017, you can review a summary here: http://www.jacksonlewis.com/publication/top-five-labor-law-developments-june-2017
· On June 26, 2017, the U.S. Supreme Court agreed to review whether the Dodd Frank Act’s whistleblower anti-retaliation provisions protect employees who only complain internally to their employer but do not complain directly to the U.S. Securities and Exchange Commission. In doing so, the Court may resolve a split among the circuit courts over what actions an employee must take in order to be considered a “whistleblower” for purposes of Dodd-Frank’s whistleblower protections. You can read more here: http://www.jacksonlewis.com/publication/supreme-court-set-decide-whether-dodd-frank-protects-internal-whistleblow
UPDATED JUNE 2017
OVERTIME EXEMPTION UPDATE
DOL Will Issue New Rule to Set Salary for White Collar Exemptions, But Asks Fifth Circuit to Reverse District Court Order Granting Nationwide Preliminary Injunction
By Jeffrey W. Brecher, Paul DeCamp, Eric R. Magnus and Noel P. Tripp
The government has asked the Fifth Circuit Court of Appeals to reverse a Texas District Court Judge who issued a nationwide preliminary injunction blocking the Department of Labor’s Final Rule which would have more than doubled the required salary level for the “white collar” overtime exemptions under the Fair Labor Standards Act.
On June 30, 2017, the government argued the district court erred in finding the DOL may not set a minimum salary as a requirement of the exemptions and asked the Fifth Circuit to “reaffirm the Department’s statutory authority to establish a salary level test.” The district court had held the Final Rule was invalid because Congress intended the exemptions to turn on the duties performed by employees, not the salary level.
The government also stated, however, that the DOL “has decided not to advocate for the specific salary level ($913 per week) set in the final rule at this time” and that it “intends to undertake further rulemaking to determine what the salary level should be.” The government thus asked the Court to “address only the threshold legal questions of the Department’s statutory authority to set a salary level, without addressing the specific salary level set by the 2016 final rule.” It further noted that a proposed rule would not be issued until its authority to set a salary level has been confirmed, but that it will publish a “request for information” seeking public comment that would “aid in the development of a proposal.”
The government’s latest filing confirms the DOL intends to repeal and replace the Final Rule with a new, trimmed down version, likely setting the required salary level somewhere in the low- to mid-$30,000 range, based on earlier comments from Secretary of Labor Alexander Acosta. That move would undo one of the Obama Administration’s signature achievements and unravel more than two years of rulemaking.
Consistent with that plan, as noted in the filing, the DOL had announced it would issue a “Request for Information” seeking comments from the public on the overtime rule, which will be its first step before a new proposed rule is issued. The Request for Information will be published in the Federal Register after it is reviewed by the Office of Management and Budget.
Background Regarding Final Rule
In May 2016, the Department of Labor issued its long-awaited Final Rule more than doubling the required salary for the white collar exemptions (those individuals employed in an executive, administrative, or professional capacity) from $23,660 to $47,476. The Final Rule also raised the required salary level for the “highly compensated” exemption, from $100,000 to $134,004, and established rules for automatic increases to those levels every three years. Issued after more than 270,000 comments were received by the DOL, the Final Rule was set to take effect on December 1, 2016.
Employers, including state governments and non-profits, however, balked after the Final Rule was issued. They argued the drastic increase to the salary level requirements for the exemptions would result in unacceptable increases in labor costs, loss of flexibility in the workplace, or lower wages and benefits to previously non-exempt employees, whose hours now would be reduced to avoid payment of overtime.
Lawsuit Filed Challenging Final Rule
In September 2016, 21 States and various business groups filed lawsuits in the Eastern District of Texas seeking to block the Final Rule, and the State Plaintiffs sought a preliminary injunction barring the DOL from implementing the Final Rule. While employers were gearing up to implement the Final Rule, either reclassifying workers as non-exempt, raising salary levels to satisfy the new requirements, or restructuring jobs to ensure employees did not work more than 40 hours a week, the court in Texas was mulling over the request for an injunction.
On November 22, 2016, days before the effective date of the Final Rule, District Court Judge Amos Mazzant (an Obama appointee) gave the State Plaintiffs what they asked for — a nationwide injunction barring the Department of Labor from implementing or enforcing the Final Rule. In granting the preliminary injunction, the court found that nowhere in the text of the FLSA was any indication that Congress intended the exemptions for white collar workers to include a salary level requirement. The exemptions, the court found, were intended to be dependent on the duties of the employees. The Final Rule essentially created a “de facto salary-only test,” making approximately 4.2 million workers eligible for overtime even though their duties might qualify them for the exemption, the court held in granting the injunction.
Government Files Appeal to Fifth Circuit
With the inauguration date of Donald Trump looming, the government quickly appealed to the Fifth Circuit Court of Appeals on December 1, 2016, asking for expedited briefing on the appeal. Following the inauguration of a new administration, however, the government no longer sought an expedited appeal, but instead more time. The government asked for three extensions of time in which to submit its final reply brief in support of the appeal in order to give the new administration time to consider the issues. The delayed nomination of a Secretary of Labor, following the withdrawal of Andrew Puzder from consideration, was cited as a reason for the request for more time.
Oral argument. The Fifth Circuit will schedule oral argument on the appeal. But the filing raises several important questions. For example, if the Fifth Circuit reverses the lower court, does the Final Rule become effective immediately (or effective retroactively to the original effective date), or is there an alternative basis for the district court to continue the injunction?
The brief filed by the government on June 30 noted that the district court had not ruled on whether the Final Rule is unenforceable because it was arbitrary and capricious or “unsupported by the administrative record,” which may form the basis to continue the injunction.
Employers faced with this dizzying path of events are justifiably confused. Nonetheless, as it stands now, the preliminary injunction is in place and no new rule has been proposed yet.
We will continue to follow this case. Please contact the Jackson Lewis attorney with whom you work regarding any questions about the decision and compliance with the Final Rule.
©2017 Jackson Lewis P.C. This Update is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between Jackson Lewis and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Reproduction in whole or in part is prohibited without the express written consent of Jackson Lewis.
This Update may be considered attorney advertising in some states. Furthermore, prior results do not guarantee a similar outcome. Jackson Lewis P.C. represents management exclusively in workplace law and related litigation. Our attorneys are available to assist employers in their compliance efforts and to represent employers in matters before state and federal courts and administrative agencies. For more information, please contact the attorney(s) listed or the Jackson Lewis attorney with whom you regularly work.
· Immigration: New guidance explaining the criteria for visa applicants was issued by the Department of State to U.S. Embassies and consulates on June 28, 2017. The guidance will go into effect on June 29th at 8:00 p.m. EDT. The guidance is in response to the U.S. Supreme Court’s June 26, 2017 partial reinstatement of President Donald Trump’s revised Executive Order. You can read more here: http://www.jacksonlewis.com/publication/new-guidance-trump-s-revised-travel-ban-effective-june-29 · EEOC: President Trump plans to nominate Janet Dhillon as the next chair of the EEOC. Dhillon has served as general counsel for three major U.S. Corporations. Dhillon, executive vice president and general counsel of Burlington Stores, Inc., will be appointed to a 5 year term on the EEOC and would become chair upon confirmation by the Senate. Democrats currently hold a 3-1 majority on the commission. · Labor: President Trump nominated a management side labor law attorney, William Emanual, to the NLRB. Within the past week, President Trump also nominated Roger Kaplan to the NLRB. Both nominations are awaiting Senate confirmation. However, given the August recess and other pressing matters, it is unlikely that we will see a Senate confirmation on both nominations very soon. · Wage and Hour: The Department of Labor announced that it is bringing back Wage and Hour Division opinion letters. As you may recall, opinion letters allow employers and workers to ask the department to weigh in on the legal issues in a particular factual situation. Employers can then use those letters in court as a good-faith defense in federal minimum wage, overtime and FMLA cases. · Wage and Hour: As you may recall, the Obama Administration issued a Final Rule raising the salary level for the White Collar exemptions from $23,660 to $47,476 that was to become effective 12/1/16. In November, a federal district court judge in Texas issued an injunction blocking the rule. The Obama Department of Labor appealed the decision to the 5th Circuit, but after the election, instead of pushing the appeal, the Trump DOL asked for several extensions to submit its final reply brief so the new administration could consider (reconsider) the issue, which is now due tomorrow. No request for an additional extension has been filed this week, so it is likely the government will file the brief on Friday and stake out its position. Also, on Tuesday of this week, the DOL submitted a proposed “Request for Information” to the OMB for review. This is likely the first step in issuing a new rule, but the Request for Information has not been published yet. Thus, the brief filed on Friday may provide the first clear statement of what the DOL’s intention is regarding the Final Rule. We will continue to keep you updated. · Wage and Hour: The Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors were withdrawn effective June 7, 2017. · Labor: The House Education and Workforce Committee approved two bills that would dismantle the NLRB’s so-called Quickie Election Rule. The Workforce Democracy and Fairness Act would require a 35 day waiting period after a petition is filed before an election can take place. There is also a bill that would make it easier for employers to file legal challenges to organizing drives before an election would take place. We will keep you updated on any advancements to these bills. · Labor: To read the top 5 Labor Law Developments in May of 2017, please click here: http://www.jacksonlewis.com/publication/top-five-labor-law-developments-may-2017 · Public Sector: The Department of Education regional directors have been given new instructions on sex discrimination protections for transgender students under Title IX of the Education Act of 1972. Two updated internal Office of Civil Rights guidance documents outline changes to the appropriate scope of the OCR investigations and to the Department’s interpretation of Title IX. You can read more here: http://www.jacksonlewis.com/publication/investigating-transgender-student-discrimination-under-new-education-department-directives