By Steve Shardonofsky and Kevin A. Fritz

Seyfarth Synopsis: As employers begin to pick up the pieces following Hurricane Harvey, management will likely encounter questions about employee pay, benefits, and leaves of absence during and after this disaster, and may also have questions about how to help their workers get by during this difficult time. After making sure your workers are safe, and as you start to rebuild and repair, read on for practical guidance on these pressing issues.

This past weekend Hurricane Harvey made land fall, causing unprecedented and catastrophic flooding in southeastern Texas. Our thoughts go out to our colleagues, clients, and friends affected by this natural disaster.  We are thinking of you during this difficult and trying time.

Pay for Non-Exempt Employees

The General Rule

Under the Fair Labor Standards Act (FLSA), an employer is only required to pay non-exempt employees for hours actually worked. In other words, businesses are not required to pay non-exempt employees if they are not working, including times when the employer closes its doors or reduces hours of operation, whether or not forced to do so by inclement weather.  Moreover, while some states require some minimum “reporting” or “show up” pay for employees who show up for work and are either turned away at the door or dismissed before the end of their scheduled shifts, Texas is not one of those states.

An important exception to this general rule exists for non-exempt employees who receive fixed salaries for fluctuating hours from week to week. Because these employees must be paid a “fixed” salary, employers must pay these workers their full weekly salary for any week in which any work was performed and pay not dock their pay for days when the office is closed due to inclement weather.

Even if your business is not open during inclement weather days, you always are free to pay employees for that time, and may also permit them to use their paid leave time, if applicable.

Inclement Weather Delays and Traffic

Flooding and severe weather often cause unpredictable traffic delays, and may even result in employees becoming stranded on the road. Employees who perform work while stranded—for example, by taking phone calls or answering e-mails on their way to work—must be compensated for that time even if done away from the office.  Similarly, an employee who is stranded in an employer’s vehicle on their way to work and instructed to safeguard the vehicle or other property is generally entitled to pay for time beyond their ordinary home-to-work commute (i.e., once their scheduled shift begins).

With respect to inclement weather, the general and most practical advice is to pay for any extra time spent getting to work during a scheduled shift, particularly when employees are stranded for reasons outside their control. It is likely that the Department of Labor or even a court would find that all of the time the employee was stranded within their regular shift is compensable time.  Even where reasonable minds could differ on these questions, since the costs of defending these claims often exceed the underlying payroll costs, it often makes sense to employees for this  time in the first place.

Pay for Exempt Employees

Exempt employees under the FLSA must be paid on a “salary basis” and earn a full day’s pay when they work any part of the day, regardless of the quality or quantity of the work performed. Thus, if a business is closed because of inclement weather and an exempt employee is ready, willing, and able to work, she must be paid for that day.  On the other hand, if the exempt employee does not work for an entire workweek (for personal reasons or because the business is closed), the exempt employee need not be paid for that time—that is, the employer may “dock” her salary for the full workweek.

If the business is open and an exempt employee elects to stay home to make repairs or volunteer at a local shelter, the employer may “dock” their salary in full day increments (but perhaps consider not doing so to encourage volunteerism and aid in recovery efforts). In these instances, and including situations when exempt employees elect to arrive late or leave early for personal reasons, employers may also deduct accrued leave time in full or partial day increments as long as the employee receives his or her full pay for the week.  In the event that the employee does not have any accrued time, an employer may also simply pay him or her for the day or allow the employee to take an advance on accrued paid leave and make it up at a later time. This practice is not allowed for non-exempt employees, who must be paid overtime for all hours worked over 40 in a work week.  For more information on the FLSA salary basis rules, visit our prior blog.

Safe Harbor

Remember, improper or inadvertent deductions from pay will not typically result in the loss of exemption status if the employer reimburses the employees for the improper deductions, has a clearly communicated safe harbor policy prohibiting improper deductions, and a complaint mechanism for exempt employees to use if improper deductions are made.

Telework or Working from Home

Allowing employees to work from home during this time will aid recovery efforts and help families recover faster. Regardless of exemption status, employees who work from home during inclement weather, even if only a few hours per week, must be paid for that time.  Thus, employers who will keep their businesses up and running during the aftermath of Hurricane Harvey should clearly communicate to employees who is and who is not permitted to work from home, when that work can be done, whether overtime is permitted, and how to record time worked outside of the company’s premises.  It is also important to remind employees to record all hours worked, even when the work is done away from the employer’s premises.  Employers should be sensitive to the fact that not all employees will be able to work remotely, and therefore should consider alternative arrangements like temporary or shared offices.

On-Call and Waiting Time

Power outages are common during natural disasters, and many employers will require their employees to wait out or work through such power failures. In most cases, any employee who is required to remain at the employer’s premises or close by and therefore unable to use that time for his own benefit (even if not working) must be compensated for that time.  For example, employees who are onsite to perform emergency repairs and who are not free to leave the company’s premises must be compensated for time even if they do not ultimately perform any work.  Similarly, if an employee is onsite and required to wait through a power outage, the time waiting for the power to resume is typically considered time worked and is therefore compensable.

Volunteer Time for Company Repairs

Employers should generally be cautious about having employees “volunteer” to assist during an emergency, particularly if those duties benefit the company and are regularly performed by employees. Exempt employees who volunteer to help will not be entitled to any additional compensation. But remember that too much time spent on manual tasks or other tasks unrelated to their regular job duties could invalidate their exempt status and allow them to claim overtime compensation.  Conversely, non-exempt employees must be paid for all time worked, even if they offer to work and help make repairs for “free,” with one exception: Employers may accept free work from employees of government or non-profit agencies who volunteer out of public-spiritedness to perform work that is not at all similar to their regular duties.

Leaves of Absence After a Natural Disaster

Otherwise eligible employees affected by a natural disaster may elect to take leave under the Family and Medical Leave Act (FMLA) for a serious health condition caused by the disaster. Additionally, employees affected by a natural disaster who must care for a child, spouse, or parent with a serious health condition may also be entitled to leave. This includes job-protected leave to care for a family member who is a current service member with a serious injury or illness. FMLA leave for this purpose is called “military caregiver leave.”

Adding to the difficulty, employers may encounter uncommon FMLA issues during and after severe storms, including absences caused by an employee’s need to care for a family member who requires refrigerated medicine or medical equipment that is not operating properly because of a power outage. What’s more, under the Americans with Disabilities Act, an employee who is physically or emotionally injured as a result of a disaster may be entitled to leave as a reasonable accommodation, so long as it would not place undue hardship on the operation of the employer’s business.

Employees who are part of an emergency services organization may also have rights under the Uniformed Services Employment and Reemployment Rights Act (USERRA). Under certain conditions, USERRA provides job-protected leave for U.S. service-members.  Although USERRA does require advance notice of military service, there are no strict time limits for notice after a natural disaster as long as it is reasonably “timely.”  Employers should be prepared to receive and assist employees giving notice under USERRA and other laws allowing for job-protected leave.

Many counties in Texas have been declared in a state of emergency following Hurricane Harvey. While this does not provide pay or other protections for Texas employees, the Texas Workforce Commission advices that “absences due to closure of the business based on bad weather or other similar disaster or emergency condition should not count toward whatever absence limit a business has” —particularly for nonessential employees.  On the other hand, if other employees are able to make it in to work (including workers from similar areas), absences for personal reasons may count toward an absence limit. On balance, however, it is always advisable to discourage the discipline of any nonessential employees who are unable to report to work during a state of emergency.

Weathering the Storm Together

While legal compliance is important, there are other practical ways employers can help workers weather the storm an get back on track. Business owners should consider relaxing the usual telecommuting rules to allow affected employees to work from home as much as possible.  To minimize financial hardship, employers should continue to process payroll in a timely manner.  Consider providing pay advances, loans, or even advances for paid time off/vacation time to help employees offset unanticipated expenses for repairs and insurance deductibles.

To the extent possible, employers may consider offering employees paid leave for time spent volunteering to assist with disaster relief efforts. Employers can also implement a leave donation/sharing policy to allow employees to donate paid leave to employees who will use it to volunteer in relief services or for those otherwise affected by this terrible disaster.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Wage and Hour Team.

By Hillary J. Massey and Craig B. Simonsen

Seyfarth Synopsis: While employees who have recently taken leave may be terminated for legitimate reasons, establishing a non-retaliatory termination can be challenging. The timing of the termination alone can support causation, and even a well thought out and justified termination may raise issues of fact that would prevent quick resolution in court. The 11th Circuit recently addressed such a case.

In Jones v. Gulf Coast Health Care of Delaware, LLC, No. 16-11142 (11th Cir. Apr. 19, 2017), Rodney Jones brought suit against his former employer, Accentia Health and Rehabilitation Center of Tampa Bay (Accentia), a long-term-care nursing facility, in Florida state court.  Jones alleged that in suspending and later terminating him, Accentia interfered with the exercise of his rights under the Family Medical Leave Act (FMLA) and retaliated against him for asserting those rights. Accentia removed the action to the United States District Court for the Middle District of Florida, and moved for summary judgment on both of Jones’s claims.

FMLA Leave

Jones, who was Activities Director for Accentia until he was fired in 2015, initially was approved for 12 weeks of FMLA leave for shoulder surgery. The day before Jones was scheduled to return to work, his doctor reported that he would not be able to return to work and resume regular physical activity for an additional 7 weeks. The doctor’s report also stated that Jones needed to continue physical therapy.

Jones wished to return to his job and asked his supervisor to allow him to return on light duty. His supervisor, however, refused to reinstate Jones until he submitted an unqualified fitness-for-duty certification.  Thus, Jones did not ask his doctor for a light-duty certification and instead requested additional time off from Accentia.  He was granted another 30 days of non-FMLA medical leave in order to complete his physical therapy.

Facebook Posts

While on non-FMLA medical leave, Jones twice visited Busch Gardens and went on a trip to St. Martin. Jones sent pictures of the trip to colleagues at Accentia and posted some on Facebook, including pictures of himself on the beach and in the ocean.

Jones returned to work two weeks before the date estimated by his doctor and met with his supervisor at the beginning of the day.  During the meeting, Jones presented his supervisor with a fitness-for-duty certification confirming that he could immediately resume his job.  His supervisor responded by showing Jones the photos from his Facebook page.

Termination

The supervisor then informed Jones that “corporate” believed, based on these Facebook posts, that Jones had been well enough to return to work at an earlier point. Jones was subsequently suspended and given an opportunity to respond to the charges in a letter, but he failed to do so and his employment was terminated.

District Court Judgment

Jones brought suit against Accentia, claiming that Accentia interfered with the exercise of his FMLA rights and retaliated against him for asserting those rights. In February 2016, the district court granted Accentia’s motion for summary judgment, holding that Jones had failed to establish a prima facie case of either interference or retaliation under the FMLA.  Jones appealed.

Appeal

The 11th Cir. affirmed the judgment of the district court with respect to Jones’s interference claim, but reversed the judgment with respect to his retaliation claim.

The 11th Cir. concluded there was no interference because Jones “likely” waived his FMLA right to reinstatement by taking an additional 30 days of leave, he should have submitted a fitness-for-duty certification by the end of his FMLA leave and there was no evidence that Accentia did not implement its FMLA certification policy in a uniform fashion.

As to retaliation, the 11th Cir. reversed, ruling that the short amount of time between Jones’ return from leave and his termination created a genuine issue of fact as to causation. The court also concluded there was a factual issue concerning pretext because Accentia offered shifting reasons for the termination.  Jones was told that he was being fired because he engaged in activities that demonstrated he could have returned to work earlier.  However, during litigation, Accentia offered additional and inconsistent reasons for the termination.

Employer Take-Away

Retaliation claims continue to permeate employment litigation, and often are difficult to defeat with a pretrial motion. When employees go out on medical leave, employers often uncover inefficiencies and performance issues that were not obvious before the leave.  Employers facing such circumstances may want to consider:

  • Waiting a period of time after the employee’s return in order to avoid an inference of causation
  • Placing an employee on a performance improvement plan or other interim step before termination
  • When providing reasons for a termination, using broad terms that encompass various issues
  • Documenting the reasons for a termination in an internal document that is not shared with the employee (if you are working with counsel, mark this document privileged)
  • Training managers, HR individuals and other employees who handle leave issues not to make any comments about the timing of a leave or whether a leave will be difficult for the employer to manage.

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 Louisa Johnson and Salomon Laguerre

Synopsis:  The Fourth Circuit Court of Appeals recently ruled that an employer had done nothing wrong when it (i) filled the plaintiff’s position during his leave, (ii) restored the plaintiff to a different, but equivalent, position upon his return, and (iii) separated the plaintiff six weeks later as part of a reduction in force.

A recurring issue for employers is whether to fill an employee’s position while that employee is absent on a leave covered by the Family and Medical Leave Act (“FMLA”) and, if so, what position can be offered to the employee upon return to work that will satisfy the “equivalent position” alternative requirement under the FMLA. In a recently published opinion, the Fourth Circuit Court of Appeals has provided some helpful guidance.

In Gary Waag v. Sotera Defense Solutions, Inc., No. 15-2521 (4th Cir. May 16, 2017),  the employer, a defense contractor, was selected by the U.S. Army as one of several non-exclusive prime contractors that could bid on task orders for a software solutions program.  When it was selected but before it won any task orders, the employer made the plaintiff the program manager.  Because there were no immediate task orders to bid on, the plaintiff’s first job was not program management but instead business development—building relationships with the government to best position the company to win work when there were tasks orders to bid on.

A few weeks after the plaintiff began his new role, he injured his hand and notified his employer that he would need to be absent from work for two to three months. The employer notified the plaintiff that it needed to make another employee the program manager in the plaintiff’s absence.  When the plaintiff asked what that would mean for his role upon return to work, the employer was careful to say that it was important to have someone in the program manager role in the interim to get the team up and running, and that it would “figure out what roles work best for all involved” once the plaintiff returned from leave.

The program never left the business development stage during the plaintiff’s leave because there were no task orders to bid upon at the time. Upon the plaintiff’s return, the employer placed the plaintiff in a new role to help grow a different government contract program where there were actually task orders to be bid upon.  Unfortunately, the employer did not win those bids.  Six weeks after the plaintiff’s return to work, the plaintiff’s was fired as part of a reduction in force caused by a federal budget sequestration that drastically decreased the employer’s government work and its revenue.  The program manager who had filled the plaintiff’s role during his leave was not part of the reduction in force not because he held the plaintiff’s former program manager role but because he was a critical member of other programs that were generating revenue.

The plaintiff sued for purported interference with his FMLA rights because he was not restored to his original position after his leave, he did not believe his post-leave job was an equivalent position, and he believed his new job had been a sham role that was pre-selected for the lay-offs. He also argued that his termination was in retaliation for taking leave.  The trial court ruled in the employer’s favor on all counts, and the plaintiff appealed.

In upholding the trial court’s ruling, the Fourth Circuit noted that, under the FMLA, the employer can restore an employee either to his original position or to an equivalent position. The FMLA does not indicate a preference for one option over the other, “and it does not require an employer to hold open an employee’s original position while that employee is on leave.”

The Fourth Circuit also agreed with the trial court that the plaintiff’s new position was “equivalent” to his pre-leave position because the plaintiff continued to receive his same salary of $189,000.00 and was still eligible for bonuses; continued to enjoy the same health benefits; had the same worksite; held the same job title (Senior Director); still reported to a Vice President; and had the same primary duty of business development in both roles.

The plaintiff pointed to differences in job duties of the two positions that would have existed had the employer won a task order. The Fourth Circuit did not find such differences to be material because no task orders were won before or after plaintiff’s leave that would have necessitated the plaintiff performing these additional, conditional duties. In addition, while the plaintiff contended that he was no longer part of the “core management group” as he had been before leave, the Court found that a “loss of prestige” was a “de minimis” difference that did not prevent the pre- and post-leave jobs from being equivalent.

Finally, the Fourth Circuit agreed that a mere six weeks between the plaintiff’s return from leave and employment termination may be sufficient temporal proximity to show causation for a retaliation claim. Nonetheless, the plaintiff had failed to present any evidence that the employer’s reason for the plaintiff’s separation—the disastrous effect of the federal budget sequestration on the programs on which the plaintiff had worked—was a pretext for retaliation.  In so ruling, the Fourth Circuit noted that the plaintiff had the burden of proving pretext, rather than the employer having the burden of proving that the plaintiff would have been fired even if he had not taken leave, because the employer did not fire the plaintiff while on leave.  Instead, the employer returned the plaintiff to an equivalent position after leave that the employer had shown was not slated for lay-offs at the time of the plaintiff’s return from leave.

The key takeaways from this case are as follows: (1) while employers should, when possible, keep an employee’s position open during his or her leave, employers do not have an obligation to do so under the FMLA, although the analysis may be different when the Americans with Disabilities Act (“ADA”) applies as well; (2) if an employer reinstates an employee to an equivalent position, the FMLA requires the post-leave position to be “virtually identical” to the prior position in terms of pay, benefits, status, privileges, and working conditions and substantially equivalent in terms of skill, effort, responsibility, and authority; (3) even if communications with an employee during leave do not have the intended effect of managing the employee’s expectations about post-leave employment, such communications can help in the defense of litigation; and (4) restoring an employee post-leave to an equivalent position when his or her job has been filled in the interim will usually be a more defensible approach than firing the employee while on leave.

By Erin Dougherty FoleyAdam R. Young, and Craig B. Simonsen

Seyfarth Synopsis: The Minnesota Supreme Court found that a job applicant need only prove that the employee’s interest in a 12-week maternity leave was the “substantial causative factor” that “actually motivated” the employer’s decision to rescind her job offer and did not need to show anger or hostility about pregnancy under the Minnesota Human Rights Act.

In a recent Minnesota Supreme Court case, LaPoint v Family Orthodontics, P.A., A15-0396 (Apr. 5, 2017), a plaintiff challenged an orthodontist’s decision to rescind her job offer after learning she was pregnant and would take maternity leave.  The plaintiff argued that she had been discriminated against on the basis of her pregnancy because her pregnancy played a role in the employer’s  decision to rescind her job offer.  The district court ruled for the employer at a bench trial!

In setting the standard of proof, the Court relied on Goins v. West Grp., 635 N.W.2d 717 (Minn. 2001) and Anderson v. Hunter, Keith, Marshall & Co., 417 N.W.2d 619 (Minn. 1988). Goins required that a plaintiff prove that the pregnancy “actually motivated” the employer’s decision not to hire. Anderson required that plaintiff demonstrate that the pregnancy was “a substantial causative factor” in the employment decision.

The Court rejected the notion that the pregnancy must be a “but-for” cause of the employer’s conduct. As such, the plaintiff need not prove that the employer would have hired her absent unlawful discrimination in order to establish liability, and “proof by the employer that it would have made the same decision absent a discriminatory motive is no defense.”

According to the Court, the employer stated, on three separate occasions, that the plaintiff’s failure to disclose her pregnancy (1) was one of the “two things [that] really kept [her] from sleeping well”; (2) was one of her “concerns”; and (3) left her “confused,” one of “two concerns” that together constituted “[t]he reason why [she] withdrew the job offer.” Further, the plaintiff argued that “rescinding a job offer because a person fails to disclose a pregnancy is illegitimate discrimination on the basis of sex.” More so, the district court found that the defendant “questioned why plaintiff did not bring [her pregnancy] up initially so they could discuss leave of absence issues at that time,” but that “[h]er concern was the [effect of the] length of the leave sought by plaintiff on the practice.”

The Court recited that the defendant “did not demonstrate any animus toward plaintiff because of her pregnancy. Her overriding concern was the disruption a twelve week maternity leave would have on her practice and the impact upon her employees should she deviate from the Clinic’s longstanding policy of six weeks.”

Finally, the Court concluded that it was unable to determine whether the district court, if it had applied the correct law regarding animus, would have made the same findings of fact. Accordingly, the Supreme Court remanded the case.

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 Christopher W. Kelleher, Tracy M. Billows, and Joshua D. Seidman

Seyfarth Synopsis: The Illinois General Assembly will consider the proposed Healthy Workplace Act which, if passed into law, will require most Illinois employers to provide paid sick leave to their employees.

Illinois legislators have caught the paid sick leave bug that has been going around the Country. Sponsors from both chambers of the Illinois legislature have introduced a bill called the Healthy Workplace Act which, if adopted, will mandate paid sick leave for Illinois workers.

Under the proposed law (House Bill 2771/Senate Bill 1296), employees would be entitled to a minimum of five “paid sick days” each year to: (1) care for their own physical or mental illness, injury, or health condition, or seek medical diagnosis or care; (2) care for family member for the same reasons; (3) attend a medical appointment for themselves or family members; (4) miss work due to a public health emergency; or (5) miss work because the employee or a family member has experienced domestic violence abuse.

Employees would accrue one hour of paid sick time for every 40 hours worked. This includes FLSA-exempt employees, who would be deemed to work 40 hours each week for accrual purposes in most cases.

There is some potential for tension if and when the new law is passed.

For instance:

  • Employees will be entitled to determine how much sick time they need to use, but employers will be allowed to set a “reasonable minimum increment” which cannot exceed four hours per day;
  • Employers will also be able to ask for “certification” of the illness, injury, or health condition when employees take paid sick leave for three consecutive workdays. However, “[a]ny reasonable documentation” will suffice if it meets certain criteria;
  • Employers must treat the health information of both employees and their family members confidentially, and cannot disclose this information without the employee’s permission;
  • Paid sick days must be provided at the employee’s oral request, but if need for a sick day is foreseeable, the employee must give at least seven days’ notice before leave begins. If need for a sick day is not foreseeable, however, then employees should provide notice “as soon as is practicable”;
  • And finally, while employers must not discriminate or retaliate against employees for using paid sick leave, they may discipline employees for abusing paid sick leave.

The Bill, which has accumulated dozens of co-sponsors in both houses, was presented for a second reading on March 29, 2017. Stay tuned for further developments.

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 Anne S. Bider, Robert A. Fisher, and James M. Hlawek

Seyfarth Synopsis: On February 5, 2017, in M.C.A.D. v. Country Bank for Savings, the Massachusetts Commission Against Discrimination (“MCAD”) held that an employer engaged in unlawful disability discrimination when it terminated an employee whose medical leave had ended and who could not provide a definite return to work date. The MCAD found that the employer had an obligation to engage in the interactive process to determine if extending the requested leave was a reasonable accommodation for the employee’s disability.

What should an employer do when an employee whose medical leave has ended cannot provide a return to work date? Fire the employee?  Not so fast.  The MCAD recently found that it was unlawful for an employer to terminate such an employee without engaging in the interactive process to determine if an extension of the employee’s leave would be reasonable.

The Facts

The Complainant was a loan coordinator for Country Bank for Savings. In September 2009, she went on an approved 12-week FMLA leave to give birth.  The leave was scheduled to end on November 30, 2009.  In October, following delivery of her child, Complainant was diagnosed with post-partum depression and notified the Bank that she would not be able to return to work on November 30, as planned.  She provided the Bank with documentation from her medical providers stating that, due to her condition, she would be out of work indefinitely.

On December 11, the Bank advised Complainant that, because her latest documentation did not provide a return date, her employment would be terminated if she did not return to work by December 21. In response, on December 17, Complainant called the Bank and told her supervisor that she hoped to return to work by mid-January.  The same day, Plaintiff’s attorney addressed a letter to the Bank requesting a short extension of Complainant’s leave as an accommodation to her post-partum depression, pending upcoming evaluations from Complainant’s medical providers in mid-January.  The letter stated that after Complainant’s mid-January appointments, she would advise the Bank whether a definite return date could be set.

On December 22, the Bank terminated the Complainant’s employment without further discussion with Complainant because she had not returned to work by December 21 and had not provided a return to work date.

The MCAD’s Decision

The MCAD held that in terminating Complainant’s employment without engaging in dialogue about her return to work date, the Bank discriminated against Complainant on the basis of disability in violation of state law. The MCAD found that once Complainant identified her disability and requested an extended leave, the Bank was obligated to engage in a dialogue with Complainant to determine if the extended leave was a reasonable accommodation.  Here, the Bank mistakenly relied on the 12-week period required by the FMLA as a measure of reasonableness and assumed that all requests for leave beyond the 12-week period were automatically unreasonable.  In addition, the Bank failed to produce any evidence that an extension of Complainant’s leave until mid-January would impose an undue burden on its operations or finances.

What This Decision Means For Employers

This decision reminds employers not to be rigid in administering medical leave. In some circumstances, an extended leave — even beyond the FMLA’s 12-week limit — may be a reasonable accommodation.

Further, the decision demonstrates the importance of the interactive process. Even when an employee is unable to provide a return to work date following exhaustion of medical leave, employers have an obligation to continue the interactive process to determine if a reasonable accommodation is possible.  In this case, the employer should have extended the Complainant’s medical leave for a couple of weeks because there was at least a suggestion that she could have provided a return date by then, unless doing so would have imposed an undue burden.  As the MCAD acknowledged, if the Complainant could not provide a return date by then and had no prognosis for improvement, the obligation to extend her leave likely would have ended.

In short, the decision shows the importance of flexibility, reasonableness, and interaction in dealing with employees who are unable to return from medical leave.

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 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.