February 2015

While the year is still young, here are 15 resolutions that employers may want to make:

Make sure your “independent contractors” are really independent contractors. “Independent contractors” are under scrutiny by the Internal Revenue Service, the U.S. Department of Labor, the National Labor Relations Board, state and local agencies, plaintiffs’ lawyers, and union organizers. A misclassification can cost you back taxes, back pay (including overtime), and back benefits, as well as penalties and interest.

2. Review your email policies. The NLRB recently found that employees generally have a right to use employer email systems during non-working time in support of union organizing and concerted activity. The Board’s decision means that many employer email use policies, as currently drafted, would probably be found to violate the National Labor Relations Act if an unfair labor practice charge were filed or a union tried to organize employees and argued that the employer’s email policy interfered with the organizing efforts. In light of the new “quickie election” rule that the NLRB issued last month, both union and non-union employers would be well advised to review their email policies and revise as needed. (The “quickie election” rule is scheduled to take effect on April 14, but the U.S. Chamber of Commerce and other employer groups, including the Society for Human Resources Management, filed suit on Monday seeking to block the rule.)

3. Review your policies on social media, confidentiality, and “courtesy.” The NLRB is going after garden-variety employer policies, taking the position that the policies interfere with and have a chilling effect on employees’ rights to engage in concerted activity. Among the commonplace policies under attack are those requiring that information about the company or employees be kept confidential; policies requiring that employees treat each other with courtesy, respect, and civility; and even some policies requiring that employees not disclose confidential and proprietary information. As with the email policies, a non-compliant policy could result in an unfair labor practice charge or the setting aside of an employer victory in a union election.

4. Review your severance agreements. The U.S. Equal Employment Opportunity Commission has taken the position that certain standard provisions in employee separation agreements unlawfully interfere with employee rights to bring or cooperate in the investigation of discrimination charges before the EEOC, and has filed suit against some employers using agreements with terms that the EEOC doesn’t like. One of the lawsuits has already been dismissed, but the court in that case did not make a ruling as to whether the EEOC’s position had merit. Even if you decide to take your chances with your current agreement, it’s not a bad idea to consider toning down provisions that you know the EEOC will find objectionable.

5. Review your leave policies and their administration. It’s not just the Family and Medical Leave Act anymore, although that’s enough in itself. You’ve probably seen that a number of states – most recently, Massachusetts – have enacted paid sick leave laws. Do your leave policies comply with the laws of the all the jurisdictions where you operate? And what do you do when an employee reaches the end of a sick leave or disability leave period? If you automatically terminate, then you could be in violation of the Americans with Disabilities Act as well as state or local disability rights laws.

6. Audit your wage-hour compliance. Unintentional overtime and wage-hour law violations have a new name in many quarters: “wage theft.” Federal and state agencies and plaintiff’s lawyers, sometimes encouraged by labor unions and their affiliate groups, are saying “show me the money” and finding it. In addition, the U.S. Department of Labor has said that it will attempt to narrow the white-collar exemptions this year. (Although the DOL says the changes will not be drastic, they are expected to be drastic.) Among other things, a good wage-hour audit will include ensuring that lower-wage employees are getting at least the applicable minimum wage; that employees are not being required or “pressured” to work off the clock, or “winked at” when they do so; that the employees classified as “exempt” really are; and that any “independent contractors” really are (see also Resolution No. 1). Be sure that the review includes compliance with applicable state and local minimum wage laws, too. Many states now have a higher minimum wage than the Fair Labor Standards Act rate.

7. Update your EEO/no-harassment policies, and get that training done! In just the past year, the EEOC has taken the position that pregnancy and related conditions (including lactation) must be reasonably accommodated. The EEOC and the Office of Federal Contract Compliance Programs, which enforces the affirmative action laws that apply to federal contractors, both agree that “gender identity” is a protected category and that discrimination based on sexual orientation or gender identity violates Title VII. Do your policies reflect this? Do your employees know the new rules? Do victims of harassment and discrimination know that they have recourse?

8. Review your use of criminal background and credit information in hiring decisions. Many state and local laws prohibit employers from asking about criminal history on employment applications, and the EEOC has taken an aggressive position on the use of criminal or credit information in making employment decisions. You can still get this information, but are you getting it properly? If you find that an individual has a criminal or credit problem, are you making the required “individualized analysis” that takes into account, among other things, the nature of the conviction, the years that have passed, and the particular position for which the individual is applying? Did you grab some “canned” rules from a website, or are your rules customized to fit your industry, your workforce, and the people you serve?

9. If you’re a federal contractor, make sure you are up to date on all of the OFCCP’s new requirements. For example, the new requirement that you prohibit discrimination or harassment based on gender identity. The new minimum wage (applicable to some, but not all, federal contractors). The new scheduling letter and itemized listing. The proposed rule prohibiting employers from requiring that employees avoid discussing their pay. The rule requiring employers to “air their dirty linen” by disclosing certain violations of federal labor and employment laws. The new rule on disability discrimination/accommodation and veterans. (“Perform compensation analysis” is another good resolution if you haven’t done one lately.)

10. Make sure you’re in compliance with the new injury and illness reporting requirements under the Occupational Safety and Health Act, which took effect on January 1. We reported on this new rule back in September.

11. Are your non-competes enforceable? And are you using them judiciously? Laws on the enforceability of non-compete agreements vary from state to state. If your agreements have not been reviewed in a while, this would be a good time to have them reviewed to ensure that they’ll do you any good if you need them. You may also need to review your territorial or customer restrictions to ensure that they are serving your current business needs, as opposed to the needs you had 10 years ago. It’s also a good idea to take into account how your non-competes are being used, even if they are generally in compliance with the law. A national sandwich chain recently had a public relations nightmare after it came to light that some restaurants were requiring hourly, minimum wage delivery employees to sign non-competes.

12. Keep on monitoring the “legal pot” issue. A patchwork of state and local laws is developing that permits medical or recreational use of marijuana. Right now, it’s still all right under federal law for employers to ban marijuana use, even in states where it’s legal, because use of marijuana violates federal law. But that doesn’t mean you couldn’t run afoul of state law. This issue is developing quickly, so keep watching, and be ready to make appropriate adjustments to your substance abuse policy depending on what happens.

13. Make sure you’re ready for the Affordable Care Act. Review your current compliance with your benefits counsel and consultants. If you have collective bargaining agreements coming up for re-negotiation or renewal, consider building in some sort of “flexibility mechanism” to deal with the huge uncertainty that the ACA is generating. As examples of the moving target that the ACA has become, the Supreme Court agreed in November to hear a case challenging the subsidies to states that did not set up their own insurance exchanges. (A decision is expected this summer.) And just this week, the Republicans in Congress introduced two bills designed to mitigate parts of the employer mandate.

14. Review your contracts with staffing services and true independent contractors. This is a good time to examine your contracts with staffing providers and genuine independent contractors to be as certain as possible that you have properly allocated risks and responsibilities, including insurance obligations, indemnification rights and obligations, compliance with wage and hour and other recordkeeping obligations, employee supervision, employee safety, discrimination or other required training, benefits compliance, anti-discrimination compliance, and recordkeeping obligations and procedures. (If you aren’t sure whether your “independent contractors” are true independent contractors, then go back to Resolution Nos. 1 and 6.)

15. Review your alternative dispute resolution policy, or consider adopting one. If you already have an arbitration agreement, is it drafted, published, and executed through agreements with employees in a manner to be enforced by a court? The NLRB still refuses to recognize arbitration agreements that eliminate the possibility of class or collective arbitration, but the Board’s position has been rejected in three federal circuits. The courts generally favor arbitration agreements, so if you do not have one, it might be worth consideration. For employers with collective bargaining agreements, consider whether you should negotiate to obtain grievance and arbitration provisions that would help to meet the NLRB’s new standard for post-arbitration deferral.

Courtesy of David Phippen, Esq. Metro Washington D.C. Office of Constangy, Brooks & Smith, LLP

Employers of companionship and domestic employees can breathe a little easier, now that a court has set aside major portions of a rule that may have required that such employees receive the minimum wage and overtime under the federal Fair Labor Standards Act.

At issue was a Final Rule issued by the U.S. Department of Labor in 2013, which was to take effect January 1, 2015. Companionship workers have historically been exempt from the FLSA’s minimum wage and overtime requirements. But under the Final Rule, the definition of “companionship services” not only was substantially narrowed, but also employees of third-party home health-care agencies (as opposed to employees who were employed directly by the individuals needing care or their family members) were excluded from the exemptions. If the Final Rule had not been vacated, many more companionship workers would be entitled to the FLSA minimum wage and, if applicable, overtime.

Even though the 2013 Final Rule was scheduled to take effect on January 1 of this year, the DOL announced that it would not begin taking enforcement action until June 30. However, as we previously reported, the delay in DOL enforcement action would not have prevented individuals from bringing private lawsuits starting January 1.

This has all become a moot point, though, because of the two court rulings that came about in late December and early January.
On December 22, Judge Richard Leon of the District of Columbia vacated the part of the Final Rule that excluded employees of third-party providers from the minimum wage and overtime exemptions.

Judge Leon noted that the statutory language supporting the use of the exemptions by third-party employers had been in place since 1974, and specifically upheld by the U.S. Supreme Court. In addition, despite “efforts by legislators in the majority party in both the House and the Senate in three consecutive Congresses” to change the law, Judge Leon said, no bill excluding third-party employers had ever made it out of committee. On this basis, he rejected the DOL’s attempt to substantively change the law through the administrative process:

Undaunted by the Supreme Court’s decision . . ., and the utter lack of Congressional support to withdraw the exemption, the Department of Labor amazingly decided to try to do administratively what others had failed to achieve in either the Judiciary or the Congress.
Then, on January 14, Judge Leon vacated the DOL’s narrow definition of “companionship services,” granting a motion for emergency injunctive relief filed by a number of home care providers.

Under the Final Rule, “the term companionship services also includes the provision of care if the care is provided attendant to and in conjunction with the provision of fellowship and protection and if it does not exceed 20% of the total hours worked per person and per workweek.” Once again, Judge Leon found that the DOL had overstepped its bounds by trying to administratively change longstanding interpretations:

Home care workers have been providing care to the elderly and disabled, under the umbrella of the companionship services exemption, since the enactment of the 1974 amendments. Here, I am once again faced with a long-standing regulation left untouched by Congress for 40 years…Congress has not shown one iota of interest in cabining the definition of companionship services which has been interpreted by the Department in the same way for 40 years…

Thus, the judge found that there was no indication that Congress had intended to impose a “20-percent limit” on caregiving services to elderly and disabled individuals.

As a result of Judge Leon’s two orders, the DOL’s Final Rule, as it applies to third-party employers and companionship services, will not go into effect. It remains to be seen whether the DOL will appeal. It should be noted that there are some other provisions of the DOL’s Final Rule that were not addressed in the Court’s ruling and will therefore remain in effect unless stayed or vacated by a future court order. These involve certain definitions and recordkeeping requirements.
Courtesy of Tony McGrath, Esq. Madison Office of Constangy, Brooks & Smith, LLP

Dress codes may entail something simple like a requirement that employees wear a specific type of clothing because of the environment or because of the type of business. In a medical facility, for example, registered nurses might be required to wear a certain color and type of medical scrub. In a manufacturing facility, managers may have to wear shirts with their names on them and a different color hat. A transportation company may require a specific uniform or type of shoes. Dress codes may also forbid any jeans or sneakers while requiring business formal attire. Or, dress codes could forbid the wearing of hats, sunglasses, or open-toed shoes. Dress codes establish guidelines for the workplace, but they can vary among industries, regions, and even based on whether the facility is open to the public. According to the Equal Employment Opportunity Commission (EEOC) (2011):

Employers may require employees to wear certain articles of clothing to protect themselves, coworkers, or the public (e.g., construction workers are required to wear certain head gear to prevent injury; health care workers wear gloves to prevent transmission of disease from or to patients). Sometimes employers impose dress codes to make employees easily identifiable to customers and clients, or to promote a certain image (e.g., a movie theater requires its staff to wear a uniform; a store requires all sales associates to dress in black). A dress code also may prohibit employees from wearing certain items either as a form of protection or to promote a certain image (e.g., prohibitions on wearing jewelry or baseball caps, or requirements that workers wear business attire).

So, may an employer require that an employee with a disability follow the dress code imposed on all workers in the same job? Most agencies treat dress codes as “conduct rules,” but classify them as the type of conduct rule that must be justified as “job-related and consistent with business necessity” before being enforced. So, if a person with a disability requests modification to a dress code as a reasonable accommodation, an employer must consider allowing the modification unless the employer can show that the dress code is required for the job in question.

The EEOC (2011) provides several examples of modification to a dress code as guidance.

An employee is undergoing radiation therapy for cancer which has caused sores to develop. The employee cannot wear her usual uniform because it is causing severe irritation as it constantly rubs against the sores. The employee seeks an exemption from the uniform requirement until the radiation treatment ends and the sores have disappeared or are less irritating. The employer agrees, and working with the employee, decides on acceptable clothes that the employee can wear as a reasonable accommodation that meet the medical needs of the employee, easily identify the individual as an employee, and enable the individual to present a professional appearance.

A professional office requires that its employees wear business dress at all times. Due to diabetes, Carlos has developed foot ulcers making it very painful to wear dress shoes. Also, dress shoes make the ulcers worse. Carlos asks to wear sneakers instead. The supervisor is concerned about Carlos’s appearance when meeting with clients. These meetings usually occur once a week and last about an hour or two. Carlos and his doctor agree that Carlos can probably manage to wear dress shoes for this limited time. Carlos also tells his supervisor that he will purchase black leather sneakers to wear at all other times. The supervisor permits Carlos to wear black sneakers except when he meets with clients.

If the employee cannot meet the dress code because of a disability, the employer may still require compliance if the dress code is job-related and consistent with business necessity. An employer also may require that an employee with a disability meet dress standards required by federal law. If an individual with a disability cannot comply with a dress code that meets the “business necessity” standard or is mandated by federal law, even with a reasonable accommodation, he will not be considered “qualified.”

Courtesy of Beth Loy, Ph.D., Principal Consultant, Job Accommodation Network

The flow state allows for massively accelerated learning, creativity and motivation.

According to Stephen Kotler, author of The Rise of Superman, researchers have found seventeen flow triggers: three environmental, three psychological, ten social and one creative.

Adventure sports athletes who survive climbing big mountains, riding big waves and paddling wild rivers do so because they are in the flow state at the time of the activity.

Which all sounds great…question is how can you do that from your desk?

Let’s look at these triggers further and consider them in the context of the HR profession:

Intensely focused attention, clear goals, immediate feedback, and a real challenge are the psychological triggers for the flow state. How focused are your daily efforts? Do you work with a specific plan for the day’s activities or do you just show up? Do have an HR and career game plan? If not, what are you waiting for?

Environmental triggers include high consequences (danger), a rich environment (novelty, unpredictability and complexity) and deep embodiment. Challenge here is that most HR executives I coached are uncomfortable with novelty, preferring structure and rules. You can have both. Read Gordon MacKenzie’s Orbiting the Giant Hairball and you‘ll understand how to manage the tension between these two extremes. (Hint: it has to do with staying in alignment with vision, values, mission, etc.)

Social triggers include concentration, shared goals, good communication, familiarity, equal participation, and risk. How tight are you with the management team? Are you even a part of the team? How would you rate your level of communication with them? Have you made yourself an invaluable partner by helping them to address their greatest needs?

The final trigger is creativity which involves pattern recognition and risk-taking. Again, the challenge with taking risk is a mistake may be made and harm and/or judgment may come your way. So instead you sit in comfortable silence hoping to somehow protect yourself.

What can stop HR from getting into flow? Only HR can. Flow is a choice. I am sure you’ve da times where you were on top of your game and everything seemed to just “flow” right. The goal is to make that the norm, not the exception.

Last note: you can’t be super HR all the time. Being in flow uses up much energy and rest is needed afterwards. Make sure to schedule some “you time” so you can regenerate and be at the top of your game when the bell rings.