Pennsylvania Legal Update and
Unemployment
Compensation Primer
© 2012 Barley Snyder
Presented By: David J. Freedman, Esquire
© 2012 Barley Snyder
Barley Snyder LLC
126 East King Street
Lancaster, PA 17602
Tel: 717-399-1578
Fax: 717-291-4660
Email: dfreedman@barley.com
Pennsylvania Legal Update
• Slow year.
• Areas with some movement:
© 2012 Barley Snyder
– Wage & Hour
– Immigration
– Unemployment Compensation
Wage & Hour
• FLSA features “8/80” rule for health care
employers.
– 80 hour work week for determining overtime
– But anything over 8 hours in a single day must
be paid at 1.5 the regular rate.
• Turner v. Mercy Health Sys., 2010 Phila. Ct.
Com. Pl. LEXIS 146 (Pa. C.P. 2010)
© 2012 Barley Snyder
– 8/80 doesn’t apply under PMWA.
Wage & Hour
• House Bill 1820, signed into law on July 5,
2012
– Amends the PMWA to permit healthcare
institutions to use 8/80.
• If use complies with the FLSA
© 2012 Barley Snyder
– Effective immediately.
Immigration
• Chamber of Commerce v. Whiting, 131 S.
Ct. 1968 (2011)
– Legal Arizona Workers Act:
• Required employers to use E-Verify for new
employees
• Prohibited employer from knowingly hiring
unauthorized aliens
• Imposed suspension or permanent revocation of
all state licenses as sanctions.
© 2012 Barley Snyder
– Sanction puts an employer out of business in Arizona.
• Supreme Court upheld the law as valid exercise of
state licensing power.
Immigration
• Public Works Employment Verification Act of
2012
© 2012 Barley Snyder
– Requires public works contractors and
subcontractors to use E-Verify.
– Contractor must verify that it checked the status
of all new hires and that new hires are legal.
– Applies to government contracts for construction,
reconstruction, demolition, alteration, or repair
work (other than maintenance, when the total
project cost exceeds $25,000.
• Contracts paid for in any part by the Commonwealth or
any political subdivision, including county, city,
borough, town, township, or school board.
Immigration
• Public Works Employment Verification Act
of 2012
– Penalties range from warning (1st offense) to
three-year ban on public contracting.
– $1,000 fine for failure to submit verification
© 2012 Barley Snyder
– Goes into effect on January 1, 2013.
Unemployment Compensation
• Senate Bill 1310: Signed into law by
Governor Corbett on June 12, 2012
© 2012 Barley Snyder
• Second major overhaul of unemployment
compensation financing procedures and
benefits allocation in less than a year.
Unemployment Compensation
• Senate Bill 1310:
– Employers’ UC tax rate adjusted by increasing
the taxable wage base from $8,000 to
$10,000, but decreasing state adjustment
factor incrementally from 1.5% to .75% by
2018.
– Freezes maximum weekly benefit at $573
through 2019.
© 2012 Barley Snyder
• Between 2019 to 2023, maximum may increase by
no more than 8%.
Unemployment Compensation
• Senate Bill 1310:
– Claimants’ benefits will be offset by part-time
earnings if earnings exceed 30% of benefit.
– Claimants must earn at least 49.5% of their
base year earnings outside of highest grossing
quarter in order to be eligible for benefits.
© 2012 Barley Snyder
• Previously, this number was 37%.
Unemployment Compensation
© 2012 Barley Snyder
• Commonwealth’s extended
unemployment compensation benefits
(“EB”)
– Up to 13 weeks of additional benefits after
exhaustion of regular UC and federally-funded
extended UC.
– Applies only during periods of unusually high
unemployment
– EB ended effective May 12, 2012.
BRIEF PRIMER AND REVIEW
© 2012 Barley Snyder
Common misconception: Employees
terminated for poor performance or
attendance cannot receive
unemployment compensation benefits.
DEFINITION OF WILLFUL
MISCONDUCT
© 2012 Barley Snyder
• Willful misconduct:
– (1) an act of wanton or willful disregard of the
employer’s interests;
– (2) a deliberate violation of the employer’s rules;
– (3) a disregard of the standards of behavior which
the employer has a right to expect of an
employee; or
– (4) negligence indicating an intentional disregard
of the employer’s interests or of the employee’s
duties and obligations to the employer.
ATTENDANCE/TARDINESS
• Absenteeism or tardiness alone does not
constitute willful misconduct.
– Employee must prove “good cause.”
•
•
•
•
Illness
Sick Child
Family Emergency
Child Care Problems
© 2012 Barley Snyder
– Employee must prove that he/she reported absences
properly.
• In compliance with Employer’s policy.
TERMINATION FOR ABSENCES WHICH IMPLICATE
FMLA
• Eshbach v. UCBR: Commonwealth Court held that
where the employer discharges a claimant for
absences which claimant reasonably believed were
protected under the FMLA, employer cannot prove
willful misconduct.
© 2012 Barley Snyder
– Claimant failed to report her absence for three consecutive
days.
– Claimant testified that she did not think she needed to
report the absences because they were under approved
FMLA leave.
– The leave involved taking care of her sick daughter who
was due to give birth.
UNSATISFACTORY WORK
PERFORMANCE
• Not willful misconduct if employee is
working to the best of his/her ability.
• Employer must prove either:
– (1) Deliberate refusal to perform; or
– (2) Some additional factor demonstrating
willful disregard:
© 2012 Barley Snyder
• Simplicity of task
• Past satisfactory performance
SUBSTANCE ABUSE ISSUES AND UNEMPLOYMENT
COMPENSATION
• Benefits may be denied when claimant is terminated for failing
to submit to and/or pass a drug or alcohol test.
– Requires established substance abuse policy.
• May not violate a labor agreement.
• Policy should prohibit reporting to work with the presence of
alcohol in one’s bodily systems, rather than being “under the
influence”.
– If policy is being “under the influence,” employer must prove actual
impairment of abilities due to substance abuse.
• Employer must present testimony from the medical
review officer or custodian of drug test results
© 2012 Barley Snyder
– Report was made in the regular course of business;
– Report was made at or near the time of event; and
– Chain of custody.
• Always ask employee, and document what he/she told
you.
WHAT IF I DON’T APPEAL OR SHOW UP AT THE
REFEREE’S HEARING?
•
A UC finding is not binding in any legal action in
another forum.
–
© 2012 Barley Snyder
–
Failure to contest benefits does not prejudice the
employer in another forum.
BUT Testimony taken under oath at a referee’s
hearing may be admissible.
•
Beware of overly aggressive hearing defenses.
•
Lawyer representation is not required at a
referee’s hearing, but may be advisable in
certain cases.
–
Contributory vs. Reimburseable Employer
RESIGNATIONS
•
A forced resignation is treated as a termination.
© 2012 Barley Snyder
•
•
Employer must demonstrate willful misconduct.
Termination must be imminent, mere possibility is not
sufficient.
•
If employee revokes his/her voluntary resignation
before the effective date, and the employer has not
taken substantial steps to replace the employee, the
employee is eligible for benefits.
•
If the employee postpones the resignation and the
employer accelerates the resignation to the original
date, the employee can receive benefits between the
original and the accelerated date ,if the employer has
not taken substantial steps to replace the employee.
© 2012 Barley Snyder
UNEMPLOYMENT COMPENSATION ELIGIBLITY
DURING PREGNANCY AND OTHER MEDICAL LEAVES
•
Implicates “Able and Available” requirement.
•
Pregnancy does not create a presumption of
unavailability.
•
Employee must show that she/he is
available to do some work and a reasonable
opportunity for such work exists.
SEVERANCE PAY AND UNEMPLOYMENT
COMPENSATION OFFSETS
•
In June 2011, Senate Bill 1030 made
significant changes to the way
unemployment benefits are administered
and calculated.
•
Now, severance over $17,853 (40% of the
“average annual wage” under the UC Law, so
the exact number will change periodically) is
offset from benefits on a weekly basis.
© 2012 Barley Snyder
•
Does not affect vacation or retirement pay.
SEVERANCE PAY AND
UNEMPLOYMENT COMPENSATION
OFFSETS
© 2012 Barley Snyder
• Practice Tip:
– The cost of severance agreements may go up as
plaintiffs’ lawyers filter into any settlement the
offset. The Commonwealth’s gain may be at the
employer’s expense.
– Do not state or suggest that severance will not
affect unemployment. It may.
– Consider including in your standard severance
agreement a statement that the denial or
reduction in unemployment will have no effect on
the general release.
PARTIAL BENEFITS
© 2012 Barley Snyder
• Employees can receive partial benefits if (1) their regular
hours are reduced because of lack of work, (2) if they are
terminated and get a job with fewer hours, and (3) the
employee is separated from his/her job but has part-time
employment with another employer.
• An employee can earn up to 30% of the weekly benefit
rate without a reduction in benefits. This is known as the
partial benefit credit. For example, if the benefit rate is
$200, the partial benefit credit is $60 ($200 x .3). If the
employee earns $100 during a benefit claim week, the
weekly benefit would be reduced to $160 ($200 + partial
benefit credit of $60 = $260 - $100 = $160).
Relief from Charges
• Base-year employers whose former
employees are receiving benefits must file
a “Relief from Charges” form to avoid
being charged.
© 2012 Barley Snyder
• Employers are eligible for relief only in
cases where employee would be ineligible
(willful misconduct, voluntary quit, etc.).
Relief from Charges
• Relief from Charges forms should be filed
immediately, even if you believe the
Claimant will be ineligible.
© 2012 Barley Snyder
– Employee has ability to “purge” eligibility
determination with future employer, and you
would be charged if the employee later
becomes eligible and you did not file for relief.
– Relief from charges will only apply to periods
after the forms are filed.
Relief from Charges
• Senate Bill 1030 Reform:
• Automatic Relief from Charges where a
claimant is ultimately deemed ineligible for
benefits
© 2012 Barley Snyder
• Automatic Relief from Charges for part-time
employers where the employee has been laid
off from a contemporaneous employer
Further Reforms of
Senate Bill 1030
© 2012 Barley Snyder
• Claimants must prove they are actively
searching for work by registering for the PA
CareerLink system, posting a resume, and
applying for similar positions within a 45minute commuting distance.
• Beginning in 2015, claimants eligible for
one week of unemployment for every
week they have worked, up to 26.
RECENT DECISIONS OF NOTE—Off
Duty Misconduct
© 2012 Barley Snyder
• Maskerines, Petitioner v. Unemployment Compensation
Board of Review (Commonwealth Court-January 3, 2011):
Employee admitted to possession of marijuana off-duty.
Employer had strict “no drugs” work rule of which the
employee was aware, and the employee was under a
“last-chance agreement” with respect to the no drugs
policy. The Court affirmed the denial of eligibility on
grounds of “willful misconduct” and held that the
employer did not need to show that the drugs affected
the workplace.
RECENT DECISIONS OF NOTE-PLEADING NO
CONTEST TO CRIMINAL CHARGES
• Green v. Unemployment Compensation
Board of Review (Commonwealth Court:
July 13, 2011): Employee pled nolo
contendere (no contest) to endangering
the welfare of a child in connection with
alleged sexual activity.
© 2012 Barley Snyder
• Plea establishes that he engaged in criminal conduct.
• But Board reversed because employer failed to prove
how conduct related to his job.
• Employee deemed eligible.
RECENT DECISIONS OF NOTE-INDEPENDENT
CONTRACTORS
• Osborne Assocs. v. Unemployment Compensation Board
of Review (Commonwealth Court-January 10, 2012):
Who is an “employee” under the Unemployment
Compensation Law.
• Licensed cosmetologist who substituted at a salon on eight
occasions over the course of a year was determined by the
Board to be an “employee.”
• Anyone paid wages is presumed to be an employee.
• But employer can overcome presumption by proving
© 2012 Barley Snyder
• (1) The claimant was free from control or direction; and
• (2) the service was customarily performed by an independent contractor.
• The parties conceded that the second prong.
• With respect to “control or direction,” the court held that, since
the claimant provided some of her own tools, worked on only
eight occasions with no fixed schedule, and worked for other
salons, she was an independent contractor.
© 2012 Barley Snyder
THE END.
(Questions?)