Proposed Overtime Rules May Change How Employers do Business

As we blogged earlier this month, the DOL’s proposed rules on overtime exemptions will significantly narrow the number of employees who can be classified as exempt from overtime.  One result, as pointed out by Society for Human Resource Management, is that employers will have to strictly monitor after-hours use of email, text messaging and other remote communications by employees.  Previously exempt employees, who were not paid for time spent after work responding to emails or answering business related phone calls or text messages, will now have to be paid for that time (and paid overtime if the work sends them over 40 hours of work each week). Employers who continue to permit non-exempt employees to answer emails and text messages after work will also have to come up with a way to keep track of the time worked.  Accordingly, employers need to carefully evaluate whether re-classified employees should have 24 hour access to work email/voice mail (and, if so, which ones) and whether to automatically limit access.  Employers should also update written policies to make clear when after-hours use of electronic devices is permitted/prohibited, and consider educating supervisors about when they can/cannot contact non-exempt employees after hours.

For subscribers, SHRM’s article on Email Curfew is here: http://www.shrm.org/legalissues/federalresources/pages/e-mail-curfew.aspx

New DOL Guidance on Independent Contractors

As part of the DOL’s efforts to combat misclassification of workers, the DOL recently issued Administrator’s Interpretation 2015-1. The Interpretation analyzes in detail the factors in the “economic realities test” currently applied to whether a worker is an employee or a contractor with the goal “not simply to tally which factors are met, but to determine whether the worker is economically dependent on the employer (and thus its employee) or is really in business for him or herself (and thus its independent contractor).  The Interpretation is a must read for any business that uses frequently uses contractors to provide services. http://hr.cch.com/ELD/AdministratorInterpretationonMisclassification.pdf

A Headscarf is not a Hoodie

The EEOC recently sued Rotten Ralph’s Restaurant for firing an employee for wearing a headscarf.  The employee notified the general manager that she covered her hair for religious reasons during the application process, was hired, and worked wearing a headscarf without incident.  However, when the general manager actually saw the employee wearing a headscarf at work, he allegedly told her she could not wear a “hoodie” and, when she reminded him that she wore it for religious reasons, terminated her employment.

In EEOC v. Abercrombie and Fitch, the Supreme Court held that an employer cannot refuse to hire an employee to avoid accommodating a religious practice (in that case, the employee’s headscarf would have violated Abercrombie’s appearance policy).  Here, there is no information from the EEOC about whether Rotten Ralph’s dress code prohibited hoodies.  Regardless, employers need to remember that the law requires reasonable accommodation of dress or grooming practices that arise from an employee’s religious beliefs, and that establishing an undue hardship as a basis to refuse to accommodate religious dress or grooming practices is often an uphill battle.

http://www.eeoc.gov/eeoc/newsroom/release/7-9-15.cfm

Chair for Disabled Employee vs. EEOC Lawsuit

Most employers would rather provide a chair to an employee as a reasonable accommodation than get sued by the EEOC.  In a recent EEOC lawsuit against Walmart, the EEOC alleged that after providing a chair and a modified schedule to an employee undergoing treatment for bone cancer, Walmart revoked the accommodation, began requiring the employee to “haul” a chair from another department if she wanted to sit, and then reassigned the employee to a position that required standing.  In addition, Walmart allowed a co-worker to, among other wrongful actions, imitate the employee’s limp, hide her chair, and call her “cripple” and “chemo brain.” http://www.eeoc.gov/eeoc/newsroom/release/7-1-15d.cfm

It is not clear what defenses, if any, Walmart has to the EEOC’s claims.  However, employers need to remember that the threshold to prove that an accommodation creates an undue hardship is high (and even higher when the accommodation has previously been provided and is being revoked).  Employers also need to remind supervisors to respond appropriately to complaints about teasing, especially where the subject matter of the teasing is an employee’s membership in a protected class.

New Overtime Rules will Reclassify Many Exempt Employees

Yesterday, the DOL and President Obama announced sweeping changes to the FLSA exemptions from overtime.  Generally, under current law, an employee may be exempt from overtime if the employee meets the duties test for the administrative or executive exemption and makes a salary of at least $455 per week ($23,660 annually).  The proposed rule would increase the minimum salary for exemptions to $970 per week ($50,440 annually).  That means that employees who earn less than $970 per week, regardless of their duties, will be entitled to overtime if they work more than 40 hours per week. It also means that, in anticipation of the final issuance of the new DOL regulations (expected in 2016), employers need to take a close look at how their management/supervisory employees are currently classified and make some preliminary decisions to re-classify exempt employees as non-exempt.

We will continue to follow developments of the new rules.

FAQs are here: http://www.dol.gov/whd/overtime/NPRM2015/faq.htm#9

DOL fact sheet is here: http://www.dol.gov/whd/overtime/NPRM2015/factsheet.htm

Updated Pregnancy Discrimination Guidance from the EEOC

As a result of the Supreme Court’s decision in Young v. UPS, the EEOC has issued updated guidelines on the Pregnancy discrimination Act and ADA as those laws apply to pregnant workers.

The updated guidelines are here: http://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm

The Supreme Court’s decision in Young v. UPS is here: http://www.supremecourt.gov/opinions/14pdf/12-1226_k5fl.pdf

Governor Signs Oregon “Ban the Box” Law

This morning, Governor Kate Brown signed House Bill 3025, which makes it an unlawful employment practice to require job applicants: to disclose criminal convictions on employment applications; to exclude an applicant from an initial interview solely because of a past criminal conviction; or to require disclosure of past criminal convictions prior to an initial interview, or if no interview is conducted, to require an applicant to disclose a criminal conviction prior to a conditional offer of employment.  Employers may still consider criminal convictions when making hiring decisions (as opposed to during earlier stages of the hiring process).  Further, employers in certain regulated industries or where required by law, may still consider criminal convictions during the application process.

BOLI is charged with enforcement of the new law.

https://olis.leg.state.or.us/liz/2015R1/Measures/Overview/HB3025?pubDate=2015-06-26-09-42

Oregon Passes State-Wide Sick Leave Law

On June 22, 2015, the Governor signed Senate Bill 454 which requires private employers in Oregon to provide paid sick leave to employees.  The law goes into effect on January 1, 2016.   Generally, employers outside the City of Portland with 10 or more employees will have to provide up to 40 hours of paid sick leave per year.  Employers within the City of Portland will have to comply with the City of Portland Paid Sick Time Ordinance (the “Ordinance”).  Statewide employers with fewer than 10 employees will be required to provide up to 40 hours of unpaid sick leave (just like employers with 6 or fewer employees under the Ordinance).  Use, accrual and carry over will mirror the Ordinance.  We will provide more details on the new law shortly.

CA Labor Commissioner Uber Ruling a Reminder to Evaluate Independent Contractor Status

The California Labor Commissioner has ruled that an Uber driver is an employee, not an independent contractor, despite the driver’s signing an independent contractor agreement.  (Click here to read the ruling.)  Like Oregon, California law employs a multi-factor test to determine whether a worker is properly classified as an independent contractor — even if the worker agrees he or she is an independent contractor.  Uber plans to appeal the ruling.  In the interim, the ruling is a reminder to businesses to ensure that their workers are properly classified.  Indeed, local attention to the California ruling (article available here) could signal increased focus on Oregon businesses.