By Joshua D. Seidman and Tracy M. Billows

Seyfarth Synopsis: As expected, on November 8, 2016, residents in Washington and Arizona voted on and passed the nation’s sixth and seventh statewide mandatory paid sick leave laws.

The 2016 election will go down as one of the most memorable elections in our lifetime. As the country scrambles to prepare for the seemingly inevitable wave of change that will mark at least the next four years, one understated winner last Tuesday was the nation’s recent mandatory paid sick leave wave.

As highlighted in last week’s post, two statewide mandatory paid sick leave (“PSL”) laws were poised for passage during the November 8 election. And pass they did. Voters in both Washington and Arizona passed separate ballot measures on election night that will extend mandatory PSL obligations to employers across both states. Washington and Arizona are now the sixth and seventh states in the country to pass such a law, following Connecticut, California, Massachusetts, Oregon, and Vermont.

The Washington and Arizona laws are currently slated to go into effect on January 1, 2018 and July 1, 2017, respectively. While administrative guidance and state regulations could clarify and adjust employers’ compliance obligations in the coming months, below are some highlights of these two impending laws as of today.

Washington PSL Law

Employers covered by the Washington PSL law must allow employees to accrue one hour of PSL for every 40 hours worked. Employers also must allow 40 hours of earned, unused PSL to carry over at year-end. The approved initiative currently is silent on whether there is any cap on how much PSL employees can ultimately accrue and use in a single year. Employers should keep close watch on whether any such requirements are imposed before January 1, 2018.

Relatedly, the Washington PSL law expressly permits frontloading PSL at the start of a benefit year. However and significantly, frontloading PSL may not get rid of an employer’s year-end carryover obligations. The approved initiative states that frontloading is allowed if it “meets or exceeds the requirements of this section for accrual, use, and carryover of paid sick leave.”

Employees eligible can use Washington PSL for a number of reasons, including (a) their own injury, illness, or health condition, (b) the injury, illness, or health condition of a covered family member, (c) closure of the employee’s place of business or employee’s child’s school or place of care by order of a public official, and (d) certain absences related to domestic violence. Covered family members include, among other relationships, the employee’s children, parents, spouse, registered domestic partner, grandparents, grandchildren, and siblings.

The Washington law also contains a number of other substantive, technical components. These include, among other provisions, (a) employers can mandate that employees provide reasonable notice of a PSL absence, (b) a 90 calendar day usage waiting period for new hires, (c) employers may require employees to verify that PSL was used for an authorized purpose only after an absence exceeding three days, and (d) unused PSL does not need to be cashed out upon separation of employment.

Arizona PSL Law

Unlike the Washington law, the Arizona PSL law determines covered employers’ accrual and usage obligations based on the size of their workforce. Employers with 15 or more employees must allow employees to accrue and use at least 40 hours of PSL per year. The accrual and usage duties drop to 24 hours of PSL per year for smaller employers. The law requires that PSL accrue at least as fast as one hour for every 30 hours worked, regardless of employer size.

The Arizona law notes that earned PSL shall carry over from one year to the next, subject to the above usage cap limitations. However, the law does not clarify whether employers can cap how much unused PSL carries over at year-end. Importantly, Arizona employers can eliminate their year-end carryover obligations if they (a) pay employees for unused PSL at year-end, and (b) provide employees with a lump grant of PSL that is equal to the above amounts (depending on employer size).

Among the protected reasons for using Arizona PSL are (a) employees’ own injury, illness, or health condition, (b) the injury, illness, or health condition of a covered family member, (c) certain public health absences, and (d) certain absences related to domestic violence, sexual violence, abuse, or stalking of the employee or the employee’s covered family member. Covered family members include, among other relationships, any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.

Other substantive components of the Arizona PSL law include (a) PSL begins accruing on the later of July 1, 2017 or an employee’s start of employment, (b) there is a 90-day PSL usage waiting period for employees hired after July 1, 2017, (c) PSL must be provided upon employee request, which can be done orally, in writing, electronically, or by other means acceptable to the company, and (d) unused PSL need not be cashed out upon separation of employment.

Employers in Washington and Arizona should continue to monitor developments involving their state’s respective PSL laws, including looking for possible regulations, FAQs, or notices and begin taking steps as soon as possible to ensure that they will be able to achieve full compliance by the July 1, 2017 (Arizona) and January 1, 2018 (Washington) effective dates.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Absence Management & Accommodations Team or the Workplace Policies and Handbooks Team.

By Annette Tyman, Lawrence Z. Lorber, Jaclyn W. Hamlin, and Brent I. Clark

 

Seyfarth Synopsis: The first of several anticipated challenges to Executive Order 13673, “Fair Pay and Safe Workplaces,” has resulted in a preliminary injunction staying the implementation of some – but not all – aspects of the Executive Order and its implementing regulations. In a significant victory for the government contracting community, the Associated Builders and Contractors of Southeast Texas won an injunction staying the application of the reporting and disclosure requirements, as well as the prohibition on entering into mandatory pre-dispute arbitration agreements.  The Judge left the paycheck transparency provisions in effect, however, and as a result, government contractors must still plan for compliance with those requirements.

Introduction

For our readers that are interested in occupational safety and health topics, we are blogging our colleagues “Management Alert” below, with this introductory note. OSHA citations are covered among the labor laws covered by the Executive Order 13673 (Blacklisting Order). The way the Blacklisting Order reads is that the covered violations include citations which are not final, which are being contested by the employer, and which may ultimately be withdrawn through settlement or by a Judge once the employer has had a chance to present its defense.  The Blacklisting Order is another example of the government’s “guilty until proven innocent” approach to regulating businesses and employers.

Note also that the Blacklisting Order will be applicable under:

  • The Fair Labor Standards Act
  • The Occupational Safety and Health Act of 1970 (including OSHA-approved State Plans equivalent to State Laws)
  • The Migrant and Seasonal Agricultural Worker Protection Act
  • The National Labor Relations Act
  • 40 U.S.C. chapter 31, subchapter IV, also known as the Davis-Bacon Act
  • 41 U.S.C. chapter 67, also known as the Service Contract Act
  • Executive Order 11246 of September 24, 1965 (Equal Employment Opportunity)
  • Section 503 of the Rehabilitation Act of 1973
  • The Vietnam Era Veterans’ Readjustment Assistance Act of 1972 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974
  • The Family and Medical Leave Act
  • Title VII of the Civil Rights Act of 1964
  • The Americans with Disabilities Act of 1990
  • The Age Discrimination in Employment Act of 1967
  • Executive Order 13658 of February 12, 2014 (Establishing a Minimum Wage for Contractors)

In a significant victory for the government contracting community, a federal judge sitting in the U.S. District Court for the Eastern District of Texas partially stayed the implementation of Executive Order 13673, “Fair Pay and Safe Workplaces,” referred to in the government contracting community as the “Blacklisting Order.”  As discussed in more detail here, the Blacklisting Order would:

  1. Require government contractors to disclose “labor law violations” under fourteen different statutes and Executive Orders when bidding for or modifying contracts;
  2. Prohibit employers from entering into mandatory pre-dispute arbitration agreements with employees; and
  3. Require certain disclosures to independent contractors and employees concerning their employment status and information related to wages and hours worked.

When the White House issued the Executive Order, the government contracting community expressed concerns about the substantial burdens it would impose on businesses and noted that the Order seemed to exceed the limits of Executive power.  Judge Marcia Crone, a federal judge in Texas, agreed.  Late on October 24, 2016, Judge Crone issued a preliminary injunction blocking: (1) the labor law violations disclosure requirements and (2) the prohibition against entering into mandatory pre-dispute arbitration agreements.  The preliminary injunction applies to all federal contractors subject to the Executive Order and it blocks all aspects of the requirements and the implementing regulations, except the paycheck transparency provision.

The Plaintiffs, an association of government contractors in Texas, argued that the Executive Order and its implementing regulations and guidance exceeded Executive power and would impose irreparable harm on their businesses.  Judge Crone found the Plaintiffs’ arguments compelling with regard to the reporting and disclosure requirements and arbitration clause prohibitions, and stayed the implementation of those requirements.

In her decision, the Judge addressed several of the arguments raised by the contracting community Plaintiffs and the government Defendants.

  • The Judge found that the Executive Order and its implementing regulations and guidance likely exceeded the limits of Executive power.
  • She noted that fourteen statutes and Executive Orders of which the Blacklisting Order requires contractors to publicly disclose “violations” all have their own detailed enforcement mechanisms and penalties.
  • The Judge noted that under the Blacklisting Order, a contractor could face debarment or disqualification even if it was contesting a violation or over nothing more than the issuance of a citation by an individual government agency official.
  • Judge Crone also found persuasive the Plaintiffs’ arguments that the provisions of the Executive Order and Final Rule which restrict or prohibit certain mandatory pre-dispute arbitration agreements are in violation of the Federal Arbitration Act and the government’s general policy in favor of arbitration.
  • The Judge found the reporting and disclosure requirements to be “compelled speech” that likely violates the contractors’ First Amendment rights and also agreed that the Executive Order likely violates contractors’ Due Process rights by “compelling them to report and defend against non-final agency allegations of labor law violations without being entitled to a hearing at which to contest such allegations.”
  • Judge Crone found that the Executive Order is likely arbitrary and capricious “in view of the complex, cumbersome, and costly requirements . . . which hamper efficiency without quantifiable benefits.”

Although the contracting community’s victory is substantial, it was not complete, as Judge Crone left the paycheck transparency provisions to take effect on their regular schedule (starting on January 1, 2017).  The paycheck transparency provisions require that contractors with procurement contracts of $500,000 provide their employees with a document disclosing “the individual’s hours worked,  overtime hours, pay, and any additions made to or deductions made from pay.” For exempt employees, the document may omit information concerning overtime hours worked so long as the individual has been informed of his or her exempt status.  Covered contractors in states with equivalent paycheck transparency laws, such as New York and California, are deemed to be in compliance with the Executive Order’s requirements so long as they comply with their state’s paycheck transparency law.  Contractors should also be aware that there is always a possibility that the preliminary injunction may be lifted – whether by the Fifth Circuit or another federal court – and in that event, the reporting and disclosure requirements could be reinstated.  For that reason, covered contractors may wish to continue to collect data in case they find themselves once again subject to the reporting and disclosure obligations.

The request for – and subsequent partial granting of – a preliminary injunction staying the implementation of certain provisions of the Blacklisting Order is only the opening salvo in what is likely to be a long fight between the contracting community and the federal government.  As we discussed in our previous alert on the topic, multiple court challenges are possible, and the Blacklisting Order’s provisions may appear before Congress at some point.

Meanwhile, thanks to Judge Crone’s preliminary injunction, the reporting and disclosure requirements and the prohibition on mandatory pre-dispute arbitration agreements are enjoined until further notice, while we continue to closely monitor developments.  Preliminary injunctions typically remain in effect at least until the conclusion of the underlying litigation.  The Plaintiffs may petition the court for the preliminary injunction to become permanent, blocking the government from enforcing the reporting and disclosure requirements and the prohibition on mandatory pre-dispute arbitration agreements (unless the injunction is overturned).  Or the government Defendants may appeal to the U.S. Court of Appeals for the Fifth Circuit, perhaps paving the way for an ultimate ruling by the U.S. Supreme Court.  The ultimate resolution of the contracting community’s concerns about the Blacklisting Order remains to be seen.  One thing is clear, however: while government contractors should be pleased with their victory in Texas, they must still plan to comply with the paycheck transparency provisions.  The contracting community has won the first battle, but the war over blacklisting continues.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the OFCCP & Affirmative Action Compliance Team, the OSHA Compliance, Enforcement & Litigation Team, or the Workplace Policies and Handbooks Team.

By Joshua D. Seidman and Tracy M. Billows

Seyfarth Synopsis: On November 8, 2016, two states — Washington and Arizona — are poised to become the sixth and seventh states in the country to pass a statewide mandatory paid sick leave law.

The noise surrounding the 2016 election’s major party candidates has left the American public full of both tension and hope heading into Election Day.  While many have been focusing on Tweets, video recordings, and alleged scandals, the paid sick leave epidemic that has spread throughout the nation in recent years has quietly infected this year’s election as well.  In particular, both Washington and Arizona have proposed statewide paid sick leave bills on their respective ballots.  When the Election Day dust settles, the country will not only know its Commander in Chief for the next four years, but also whether the number of statewide paid sick leave laws has increased from five to either six or seven.

The 2016 election would not be the first time a statewide paid sick leave law was passed through a ballot initiative.  In 2014, Massachusetts residents voted on and passed the state’s Earned Sick Time Law.

Washington Paid Sick Leave – Initiative Measure No. 1433

  • Paid Sick Leave Accrual, Usage, and Carryover:
    • Accrual Rate:  One hour of paid sick leave for every forty hours worked.
    • Accrual and Usage Caps:  The proposal currently is silent on whether there is any cap on how much paid sick leave employees can ultimately accrue and use in a single year.  Barring any further clarification from the state, if passed, the Washington proposal would be the first paid sick leave law in the country that does not set at least an accrual or usage cap.
    • Frontloading:  While frontloading paid sick time is expressly permitted under the proposed law, it may not get rid of an employer’s year-end carryover obligations.  The proposal states that providing paid sick leave in advance of accrual is permitted if the frontloading “meets or exceeds the requirements of this section for accrual, use, and carryover of paid sick leave.”
    • Carryover of Unused Paid Sick Leave:  Employers would only be required to allow 40 hours of earned, unused paid sick leave to carry over at year-end.
  • Reasons for Use:  Employees would be able to use earned paid sick leave for a number of reasons, including (a) their own injury, illness, or health condition, (b) the injury, illness, or health condition of a covered family member, (c) closure of the employee’s place of business or employee’s child’s school or place of care by order of a public official, and (d) certain absences related to domestic violence as set forth under the state’s Domestic Violence Leave law.  Covered family members would include, among other relationships, the employee’s children, parents, spouse, registered domestic partner, grandparents, grandchildren, and siblings.

Arizona Proposed Fair Wages and Health Families Act – Proposition 206

  • Paid Sick Leave Accrual, Usage, and Carryover:
    • Accrual Rate and Cap:  (a) Employers with 15 or more employees would be required to allow paid sick leave to accrue at least as fast as one hour for every 30 hours worked, up to 40 hours per year; (b) While the accrual rate remains the same for smaller employers, such employers would only be obligated to allow employees to accrue up to 24 hours of paid sick leave per year.
    • Usage Cap:  (a) Employers with 15 or more employees – 40 hours per year; (b) Employers with fewer than 15 employees – 24 hours per year.
    • Carryover:  The proposal states that earned paid sick time shall carry over from one year to the next, subject to the above usage cap limitations.  It is unclear from the current proposal if employers would be allowed to set a cap on how much unused sick time carries over at year-end.
    • Frontloading:  Employers would be able to get rid of their year-end carryover obligations if they (a) pay employees for unused paid sick leave at year-end, and (b) provide employees with a lump grant of sick time that is equal to the above amounts (depending on employer size).
  • Reasons for Use:  Employees would be able to use earned paid sick leave for a number of reasons, including (a) their own injury, illness, or health condition, (b) the injury, illness, or health condition of a covered family member, (c) closure of the employee’s place of business or employee’s child’s school or place of care by order of a public official, (d) care of the employee or a covered family member when it has been determined by health authorities that the individual’s presence in the community may jeopardize the health of others due to exposure to a communicable disease, and (e) certain absences related to domestic violence, sexual violence, abuse, or stalking of the employee or the employee’s covered family member.
  • Covered family members would include, among other relationships, an employee’s child (regardless of age), parent, spouse or registered domestic partner, grandparent, grandchild, and sibling, and any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.

Employers in Washington and Arizona should continue to track whether their states’ respective paid sick leave initiatives have passed.  And, if either initiative is approved, employers should begin taking steps as soon as possible to ensure that they will be able to achieve full compliance by the July 1, 2017 (Arizona) and January 1, 2018 (Washington) effective dates.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Absence Management & Accommodations Team or the Workplace Policies and Handbooks Team.

By Lucas Deloach

Seyfarth Synopsis: Recent research suggests employers will manage an increasing number of employee requests for caregiving leave.

The U.S. Department of Labor’s Chief Evaluation Office has issued research briefs discussing two commissioned studies that examined paid family leave programs in California, New Jersey, and Rhode Island. Those studies reveal trend lines in paid family leave and may assist employers in anticipating future compliance challenges.

Currently, requests for leave to care for infirm relatives (“caregiving leave”) pale in comparison to requests for leave to care for newborn children (“bonding leave”), but that could change. In one of the studies examining the use of paid family leave in caregiver and parental groups, the researchers found that “[u]tilization of paid family leave programs in both California and New Jersey has grown steadily since implementation,” but claims for bonding leave far outweighed claims for caregiving leave.  Russell Tisinger et al., L&M Policy Research, LLC, Understanding Attitudes on Paid Family Leave: Discussions with Parents and Caregivers in California, New Jersey and Rhode Island 8 (July 2016). For example, in 2014, 88 percent of claims in California were for bonding leave. Id. at 9.  However, in summarizing the second study — focused exclusively on the effect of paid family leave benefits on adult child caregivers — the researchers noted that one in five individuals will be 65 or older by 2030, foretelling an upswing in the percentage of workers who may find it necessary to take leave and care for an aging relative.  Brant Morefield et al., L&M Policy Research, LLC, Leaving it to the Family: the Effects of Paid Leave on Adult Child Caregivers 3 (July 2016).  Of course, any increase in such requests could be mitigated by employees who choose to forego or limit leave and request the services of paid caregivers.  In fact, the Bureau of Labor Statistics projects employment of home health aides will grow of 38 percent from 2014 to 2024 and notes “[a]s the baby-boom population ages and the elderly population grows, demand for the services of home health aides to provide assistance will continue to increase.”

Demographic shifts are not the only driver of the potential increase in requests for caregiving leave. Legislative and administrative action may also influence caregiving leave utilization rates, as well.  As we have discussed, California recently decided to increase the level of benefits provided to individuals in its Paid Family Leave program, and only days later, New York passed a Paid Family Leave law that will go into effect on January 1, 2018.  As paid family leave benefits expand into other jurisdictions, so may employees’ willingness to take leave and care for an infirm relative.  As the researchers note, “the most commonly cited reason for unmet leave was an inability to afford it.” Morefield et al., at 3.

Many employers, in jurisdictions with paid family leave or otherwise, have developed robust bonding leave policies and/or policies addressing unpaid leave pursuant to the Family and Medical Leave Act. However, due to its comparative infrequency, employers may not have devoted particular attention to caregiving leave.  For the reasons above, employers should scrutinize their policies related to paid time off, leaves of absence, and family and medical leave.  As noted in the aforementioned studies, there may be important practical differences between requests for bonding leave and leave for adult caregiving purposes, insofar as “[e]ldercare givers typically hold a different place in the earnings life cycle than new parents and face leave spells that likely differ from a maternity- or paternity-type leave.” Id. at 4.  Thus, caregiving leave requests likely require individualized attention and employers should evaluate their related procedures to ensure they reflect that reality.  Of course, policies and procedures should also be crafted in harmony with other employee benefits, should address the interplay between paid and unpaid leave, where applicable, and should satisfy the particular requirements of state or local law.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Workplace Policies and Handbooks Team.

By Megan P. Toth

Seyfarth Synopsis: Illinois enacts child bereavement leave, requiring employers provide paid leave should an employee experience the loss of a child.

On July 29, 2016, Illinois became one of only two states (the other being Oregon) to require certain employers provide unpaid leave to employees who suffer the loss of a child. Under the Illinois Child Bereavement Leave Act (CBLA), Illinois employers with 50 or more employees must provide covered employees with up to two weeks (10 work days) of unpaid leave.

Who is Covered? The CBLA defines “employer” and “employee” in the same manner as the Family Medical Leave Act (FMLA). Therefore, any employer subject to the FMLA is covered by the CBLA and any employee eligible to take leave under the FMLA is eligible to take leave under the CBLA.

How Can Employees Use Bereavement Used? Employees must use CBLA leave within 60 days after the employee receives notice of the death of a child. “Child” is defined as “an employee’s son or daughter who is a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis.”

Employees may use child bereavement leave for the following purposes: (1) to attend the funeral, or an alternative to a funeral, of a child; (2) to make arrangements necessitated by the death of the child; or (3) to grieve the death of the child.

Employees may elect to substitute paid leave for unpaid leave under the CBLA, but unlike the FMLA, employers may not require employees to do so. Employees are not entitled to more unpaid leave beyond what is available under the FMLA.  In other words, once an employee exhausts their 12 weeks of leave under the FMLA, they are not permitted to take an additional 10 days for the loss of a child (unless the employer opts to provide such additional leave).

If an employee loses more than one child in any 12-month period they are entitled to take up to six weeks of unpaid bereavement leave in that 12-month period.

What are the Employees’ Obligations? For leave under the CBLA, an employee must provide at least 48 hours’ notice of their intention to take leave under the CBLA, unless it is not reasonable and practicable.  An employer may require the employee requesting leave provide reasonable documentation, including a death certificate, a published obituary, or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution, or government agency.

What Should You Do if You Are a Covered Employer?

  • Review and revise your employee handbooks and/or leave policies as necessary to ensure a child bereavement leave policy is included.
  • Notify employees that Illinois has enacted the Child Bereavement Leave Act, inform them of their rights and obligations under the CBLA, and tell them that if they lose a child that they should contact Human Resources for more information regarding the company’s child bereavement leave policy.
  • Ensure management-level employees should understand employees’ rights and obligations under the CBLA, as well as the company’s obligations, including the CBLA’s no-retaliation provision.

For more information on this or any related topic please contact the author, your Seyfarth attorney, or any member of the Workplace Policies and Handbooks Team.

By Megan P. Toth and Joshua D. Seidman

Seyfarth Synopsis: In case you missed it, on June 22, 2016, Chicago added itself to the growing roster of many major U.S. cities to pass a Paid Sick Leave Ordinance.  

The Council’s Committee on Workforce Development and Audit passed the Chicago Minimum Wage and Paid Sick Leave Ordinance (“PSLO”), which amends the Chicago Minimum Wage Ordinance e (2-25-050).

The new ordinance is effective July 1, 2017.  Thus, employers with employees in Chicago must be aware of the major provisions and requirements of the PSLO, which are summarized below and more thoroughly explained by our colleagues here.

Summary of Major Provisions

  • Effective Date: July 1, 2017
  • Covered Employers: Any individual or entity with one or more employee that maintains a business facility within the city of Chicago or that is subject to city licensing requirements.
  • Covered Employees[1]: Employees working 80 hours within any 120-day period.
  • Eligibility: Employees must be eligible to use paid sick leave (“PSL”) no later than 180 days after the first calendar day of their continuous employment, unless the employer sets an earlier date.
  • Accrual: Employees must begin accruing PSL on the first calendar day after the commencement of their employment, or on the effective date of the PSLO (July 1, 2017) if already employed, at a minimum rate of one hour for every 40 hours worked.[2]
  • PSL Caps: Employers may cap accrual and use of PSL at 40 hours per 12-month period, but are free to set a higher limit.
  • Qualifying Usage: An employee may use paid sick leave for the following purposes: (1) employee or a covered family member is ill or injured, or is receiving medical diagnosis, care, or treatment, or preventive medical or health care;(2) absence of employee or the employee’s family member related to domestic violence or “a sex offense”; and (3) closure of employee’s place of business or the employee’s child’s school or place of care by order of a public official due to a public health emergency.
  • Unused PSL: Employees must be permitted to carry over half of any unused accrued PSL from year to year, up to a max of 20 hours. In addition, if the employer is subject to the Family and Medical Leave Act (FMLA), employees can carry over up to 40 hours exclusively for FMLA-eligible purposes. However, if an employee carries over and uses the additional 40 FMLA hours, they cannot use more than an additional 20 hours of PSL in that 12-month period. Employers are not required to pay out unused PSL from year to year or upon termination.
  • Notice to Employer: If an employee’s need for PSL is reasonably foreseeable, an employer may require up to seven days’ notice. If an employee’s need for PSL is not reasonably foreseeable, an employer may only require notice as soon as practicable on the day intended for PSL.
  • Medical Certification: If an employee is absent for more than three consecutive work days, an employer may require certification that the PSL was in fact used for covered purposes.
  • No Retaliation, Discipline or Coverage: Employers cannot retaliate against or discipline employees for use of PSL and cannot require  employees to find coverage for hours missed due to use of PSL.
  • Notice of the PSLO to Employees: Every covered employer must (1) post notice of the PSLO at each facility where covered employees work (with in the City of Chicago) and (2) provide notice advising covered employees of the PSLO with their first paycheck issues after the PSLO is passed.

Takeaway for Employers:

Employers with employees in the City of Chicago must ensure their leave policies are in compliance. We will continue to monitor news related to the ordinance and will provide any updates here. In the meantime, please contact the author or your Seyfarth attorney if you a have any questions regarding the PSLO, or if you would like help reviewing your paid sick leave policies for compliance with state and local laws.

________________________________________________________________

[1] Specifically excluded employees: (1) certain employees employed in agriculture or aquaculture, (2) outside salesmen, (3) members of a religious corporation or organization, (4) an individual permitted to work “[a]t an accredited Illinois college or university employed by the college or university at which he is a student who is covered under the provisions of the Fair Labor Standards Act,” (5) certain motor carriers, and (6) any employee working in the construction industry who is covered by a bona fide collective bargaining agreement.

[2] Employees who are exempt from overtime requirements are assumed to work 40 hours each week, unless their normal workweek is less than 40 hours, in which case paid sick leave accrues based on the employee’s normal work week.

By Lawrence Postol

In Seyfarth’s continuing effort to stay on top of all topics relevant and interesting, several colleagues have started “The Blunt Truth” blog, which will address the legal and practical implications of cannabis laws across the U.S. and their impacts on the business community. Check out this week’s blog piece HERE.  And if you like what you see – don’t forget to subscribe to that blog as well!

By Erin Dougherty Foley and Craig B. Simonsen

In an opinion last week, the Second Circuit ruled that a company’s human resources (HR) director could be held individually liable for Family and Medical Leave Act violations.

The Court said that the HR director had enough control over an employee’s job and enough input into her firing to qualify her as an “employer” under the statute!  Graziadio v. Culinary Institute of America, Shaynan Garrioch, and Loreen Gardella, No. 15-888-cv (March 17, 2016).

We have blogged previously on other important FMLA policy and case law, including Employer Beware: The FMLA Can Reach Further Than You May Think, New Guidance From The EEOC Requires Employers To Provide Reasonable Accommodations Under The Pregnancy Discrimination Act, Employer Intent Is Immaterial In FMLA Interference Claims, and The Family and Medical Leave Act: 10 Years Later.

In the facts of this case, as explained by the Court, the plaintiff took FMLA leave to care for her son, and then took additional leave a few weeks later when her second son broke his leg. During the plaintiff’s second term of absence, the employer took issue with the paperwork supporting the leave request, and refused to allow her to return until she provided new documentation. Communication between the plaintiff and the employer broke down, and ultimately the employer fired the plaintiff for abandoning her job. The plaintiff subsequently sued the employer and two of her supervisors alleging interference and retaliation under the FMLA, and discrimination under the Americans with Disabilities Act (ADA).

At the District Court, summary judgment was granted to the employer. The District Court found that the plaintiff could not establish that she was wrongfully denied FMLA leave, or that the employer’s actions were retaliatory or discriminatory. Importantly in this case, the District Court dismissed the plaintiff’s individual FMLA claims against the HR employees, finding that neither employee qualified as an “employer” subject to liability under the FMLA. Graziadio v. Culinary Inst. of Am., No. 13 Civ. 1082 (NSR), 2015 WL 1344327 (S.D.N.Y. Mar. 20, 2015).

The District Court also determined that the plaintiff could not sustain her claims of FMLA interference because she had “not been denied any leave to care for [her son] and, having failed to submit a medical certification form, had no entitlement to leave to care for [her second son].” In addition it rejected the plaintiff’s FMLA retaliation and ADA discrimination claims, finding that the employer had proffered legitimate reasons for the termination—namely, plaintiff’s failure to comply with FMLA certification requirements and her failure to contact her supervisor to return to work, and she had not shown these employer reasons to be pretextual.

Opposite, the Second Circuit concluded that the plaintiff had presented genuine disputes as to material fact with respect to her claims of FMLA interference and FMLA retaliation, but it agreed with the District Court that the plaintiff failed to provide evidence supporting a claim of discrimination under the ADA.

As to individual employee liability for the HR director, the Circuit Court noted that:

An individual may be held liable under the FMLA only if she is an “employer,” which is defined as encompassing “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer,” 29 U.S.C. § 19 2611(4)(A)(ii)(I); see also 29 C.F.R. § 825.104(d).

The Court indicated that the Second Circuit had not yet tested the “contours of this provision,” but that several of other circuits, as well as district courts within the Second Circuit, had observed that the “FMLA’s definition of ‘employer’ largely tracks the definition of ‘employer’ used in the Fair Labor Standards Act (FLSA), 29 U.S.C. § 203(d), and have come to the reasoned conclusion that the standards used to evaluate ‘employers’ under the FLSA should therefore be applied to govern the FMLA as well.” The Court cited to Haybarger v. Lawrence Cty. Adult Prob. & Parole, 667 F.3d 408 (3d Cir. 2012), Modica v. Taylor, 465 F.3d 174 (5th Cir. 2006), Wascura v. Carver, 169 F.3d 683 (11th Cir. 1999), and Santiago v. Dep’t. of Transp., 50 F. Supp. 3d 136 (D. Conn. 2014), and agreed “with these courts and apply the economic-reality test used to analyze individual liability in the FLSA to the FMLA case before us.”

While the employer’s Vice President of Administration and Shared Services (VP) retained “ultimate termination authority,” the Court found that the VP had merely “directed th[e] issue to [his subordinate] for handling.” In testimony the subordinate HR director described her role in the “termination as a joint ‘decision that was made between myself and [the VP].” Additionally, the HR director had exercised control over the plaintiff’s schedule and conditions of employment relating to her return from FMLA leave.

Specifically, the Court found that the HR director: (a) reviewed plaintiff’s FMLA paperwork; (b) determined its adequacy; (c) controlled plaintiff’s ability to return to work and under what conditions; and (d) sent nearly every communication regarding her leave and employment (including the letter that ultimately communicated her termination). As such, a “rational jury could find, under the totality of the circumstances, that [the HR director] exercised sufficient control over [plaintiff’s] employment to be subject to liability under the FMLA.”

As to the FMLA violation, the Court noted that “we cannot help but note, however, that in making this still rather oblique request, [the HR director] studiously avoided responding to any of [the plaintiff’s] pleas for clarification on ‘what [paperwork] you would specifically like me to obtain’ and for transmission of any 6 specific desired FMLA forms. And such unresponsiveness may itself run afoul of the FMLA’s explicit requirement that employers ‘responsively answer questions from employees concerning their rights and responsibilities under the FMLA’.”

The Court concluded that “in light of our conclusion that a jury can find that [the employer] interfered with [the plaintiff’s] leave, the first of the district court’s grounds no longer supports a grant of summary judgment.”

In light of this startling Circuit Court opinion, employers may wish to consider the ramifications of this case as they analyze their organizational structure, chain-of-command, policy, procedures, and training systems. It’s one thing to deliberately decide as a business to subject lower level managers to individual employer liability, but something quite else for it to happen accidentally.