© 2012 Jackson Lewis LLP © 2012 Jackson Lewis LLP general information regarding its subject and explicitly may not be construed as This presentation provides This presentation provides generalconcerning information regarding its subject and explicitly may not be concerning construed as providing any individualized advice particular circumstances. Persons needing advice providing any individualized advicecounsel concerning particular circumstances. needing advice concerning 11 particular circumstances must consult concerning those circumstances.Persons www.jacksonlewis.com particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Integral part of your communications strategy Connect with your customers/clients or field offices; exchange ideas Sharing content allows you to reach new people inexpensively Expected in today’s market © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 2 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Attract Employees – through FaceBook® presence or advertising, LinkedIn® discussion board or YouTube® Source – Twitter®, LinkedIn® Engage – gather information from target employees for profiles Screen – look at profiles (be careful) Close the deal – welcome through conversations on social network © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com 3 In one survey by CareerBuilder.com, 37% of participating employers said they use social networking sites to research job candidates. – – – – Present professionally - 65% Good Fit - 51% Qualifications - 45% Why not to hire – 12% Promotion Source: CareerBuilder Survey dated April 18, 2012 © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 4 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Of this group, 34% rejected potential job candidates because of content they found on social media. – – – – Provocative/inappropriate photos – 49% Drinking or using drugs – 45% Discriminatory comments – 28% Bad mouthed previous employer – 33% © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 5 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com • Largest growth not by teenagers but by 25 to 54-year-olds • Most active users aged 18-34 © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 6 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com How many working hours are lost to social networking? Facebook has over 1 billion active users 52% of Facebook users log on every day; 36% Twitter 53 million minutes per year on FB 22% of employees visit social networking sites 5 or more times per week; many admit to logging in while at work Over 175 million Twitter registered users Texting at Work © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 7 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com • Education History • Vacation Photos • Work History • Party Photos • Career Interests • Family Information • Hobbies • Links to Profiles of Friends • Favorite Music • Favorite Movies • Links to Blogs • Political Views © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 8 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com • Negligent hiring/supervision • Legal constraints on employee discipline • Discrimination/Harassment/Retaliation • Reputational harm to employees • Reputational harm to employers • Personal privacy pitfalls • Information, trade secrets or proprietary information © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 9 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Yes, so long as the employer does not violate state or federal discrimination laws, or other state statutes which prohibit the use of certain kinds of information. There is no prohibition against using information that an applicant places in the public domain. However, use of protected demographic information such as, race, gender, national origin, age, and pregnancy among others, is prohibited in hiring decisions. Risks? © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com 10 • An employer may be held liable for an employee’s wrongful acts if the employer knew or had reason to know of the risk the employment created – Doe v. XYC Corp., N.J. Super. 122 (2005)(Court found employer held employer had duty to investigate and respond in case of alleged negligent supervision of employee who was criminally charged with child pornography using workplace computer) © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 11 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com • National Labor Relations Act- Section 7 of the NLRA guarantees employees the right to “self-organization to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for purpose of collective bargaining or other mutual aid or protection.” • Applies to both union and non-union employees © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 12 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any ind • NLRB has filed complaints in all 50 states concerning social media or electronic communications policies. • Employees fired for making disparaging remarks about managers or companies. NLRB contends the statements are protected concerted activity under labor laws. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 13 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any ind Acting General Counsel Reports – May 30, 2012 – January 24, 2012 – August 18, 2011 • Rules that are ambiguous as to their application to Section 7 activity and contain no limiting language or context that would clarify to employees that the rule does not restrict Section 7 rights, are unlawful. • Prohibiting employees from expressing their personal opinions to the public regarding the work place, work satisfaction, or dissatisfaction, wages, hours or work conditions.” • Prohibiting employees from posting photos, music, videos, and the quotes and personal information of others without obtaining the owner’s permission and ensuring that the content can be legally shared, and from using employer’s logos and trademarks. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 14 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Acting General Counsel Reports • Prohibiting offensive, demeaning, abusive or inappropriate remarks – Too ambiguous’ • No savings clause © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 15 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Some states have laws that prohibit employers from considering off-duty conduct when making adverse employment decisions – A number of states, have statutes known as “lifestyle discrimination” laws, which ban discrimination based on legal off-duty recreational behavior. An employer could arguably violate these laws by terminating an employee after discovering from social media that, for example, the employee was drinking the night before. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 16 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com • Expression of political opinions (e.g. New Jersey) • Wrongful termination in violation of public policy (arrests, convictions, bankruptcy, workers’ compensation history) • Whistleblowing • Potential discrimination/harassment/ retaliation claims © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 17 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Employer viewing of applicant’s personal information on social networking/blogging site may trigger protections of anti-discrimination laws. Sites may contain information regarding age, race, national origin, disabilities, sexual orientation religion and other protected characteristics (Genetic or Medical Information). Difficult for employer to prove it did not rely upon personal information. Even if not unlawful, risk of relying on inaccurate or outdated information. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 18 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Electronic communications provide employees with an opportunity for misuse and can be used as evidence to support a harassment or discrimination claim Knew or should have known standard applies Blakely v. Continental Airlines, Inc., 164 N.J. 38 (2000)(Company has duty to take effective measure to stop harassment via “Crew Member Forum” once it knew or should have known harassment was taking place) What about off-duty conduct? © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 19 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Ohio Police Officer disciplined for tailgating incident—Viewed over 300,000 times on YouTube © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 20 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 21 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 22 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com • Defamation - Plaintiff must prove the defendant published a false statement concerning the plaintiff that tends to harm the plaintiff’s reputation. • Employer can be liable if the employee had apparent authority to speak on its behalf – Beware of personal references!! © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 23 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com • Blogs and other electronic communications also may have dramatic negative consequences for employers: – Employees posted video/photographs harming company image – California jury awarded employer $775,000 in compensatory and punitive damages against former employees for “cybersmearing” of employer. Varian Medical Systems, Inc. v. Delfino, Santa Clara Super. Ct. No. CV780187 (Dec. 18, 2001) © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 24 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Employee Monitoring of Communication and Privacy Issues The key question: Did the employee have a reasonable expectation of privacy in the electronic communication? Employers should ensure monitoring is based on legitimate needs and limited in scope to achieve those needs. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 25 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Courts will be more inclined to rule in favor of the employer if: – Employer owns the “System” (computer, e-mail, etc.) – Employee voluntarily uses an employer’s network – Employee has consented to be monitored (usually based in written personnel policy) – Stengart v. Loving Care Agency – Quon © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 26 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Monitoring – Preventive Steps • Develop a specific, written policy: – Establish information systems are the property of the employer – BE SPECIFIC – Reserve the right to monitor – Prohibit inappropriate use – Include penalties for policy violations • Train/educate employees and others – temps, I/Cs, etc. • Keep the monitoring work-related • Permit reasonable personal use • Consider additional steps – desktop statement, posting in common area, written consent/ acknowledgement . . . © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 27 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Pietrylo v. Hillstone Rest. Group d/b/a Houston’s, 2009 U.S. Dist. LEXIS 88702 (D.N.J. 2009). – Employer viewed former employees' internet discussion group critical of the employer by coercing another employee to provide the password. – Jury found violation of Federal Stored Communications Act which prohibits intentional access of stored electronic communications without proper authorization. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 28 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com EEOC v. Simply Storage Management S.D. Indiana No. 1:09-cv-1223 (2010) – The Equal Employment Opportunity Commission brought suit on behalf of plaintiffs and other similarly situated employees who claimed their employers were liable for a supervisor’s alleged sexual harassment. The EEOC requested a discovery conference because counsel for the parties disagreed as to whether the two named plaintiffs must produce the Internet social networking site profiles, including postings, pictures, blogs, messages, personal information, lists of “friends,” and of causes joined that the user has placed or created online. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 29 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com – According to the court, limiting discovery to posts that specifically referenced the mental issues and harassment alleged by the plaintiffs would be too narrow, while admitting the full profiles would include likely irrelevantand potentially inflammatory-content. The court held, “It is reasonable to expect severe emotional or mental injury to manifest itself in some SNS content, and an examination of that content might reveal whether onset occurred, when, and the degree of distress. Further, information that evidences other stressors that could have produced the alleged emotional distress is also relevant.” © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 30 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com – Defined the relevant scope of discovery as including “any profiles, postings, or messages (including status updates, wall comments, causes joined, groups joined, activity streams, blog entries)… that reveal, refer, or relate to any emotion, feeling, or mental state, as well as communications that reveal, refer, or relate to events that could reasonably be expected to produce a significant emotion, feeling, or mental state.” – Discovery © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 31 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Develop policy on whether HR/Hiring Managers can access social networking sites for job applicants/employees. HR/IT personnel responsible for monitoring/using electronic information are properly trained to avoid improper access and to screen out information that cannot be lawfully considered in the application and/or disciplinary decision-making process Consider prohibiting access to private password social networking sites without proper authorization. Do not allow third party to “friend” an applicant to gain access to site. Ensure appropriate employment decisions are made based on lawful verified information. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 32 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Consider whether to block employee access to social networking sites through company computers or to limit access during working hours. Consider restriction on professional references via LinkedIn. Investigate complaints of discrimination/harassment stemming from posts on social networking/blogs. Ensure security of employer sponsored blogs. Provide guidelines on appropriate “Terms of Use” of employer sponsored sites/blogs. Implement a social networking/blogging policy which explains diminished right to privacy. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 33 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com • Consider Company philosophy – business. • No expectation of privacy when using company equipment. • Employees must abide by non-disclosure and confidentiality agreements/policies. • Only individuals officially designated may speak on behalf of the Company – FTC Endorsement • “Bloggers Beware” - Require a disclaimer: “The views expressed in this blog are my personal views and opinions and do not necessarily represent the views or opinions of my employer.” © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 34 concerning those circumstances. www.jacksonlewis.compresentation provides general information • Company policies governing corporate logos, branding, and identity apply to all electronic communications. – Examples! • Employees are prohibited from making defamatory comments when discussing the employer, superiors, co-workers, products, services and/or competitors. – Examples! • Employees must comply with company policies with respect to their electronic communications, such as policies prohibiting harassment and standards of conduct. • Company reserves the right to take disciplinary action if the employee's communications violate company policy. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 35 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Do not prohibit employees from discussing terms and conditions of employment --- NLRA If allowed at work, time spent social networking/blogging/texting should not interfere with job duties. Remind employees that off-duty conversations can have significant workplace affects. Avoid “Big Brother” image while protecting the Company and its employees. Get a signed acknowledgment of the policy. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 36 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Take Aways • Monitor Legal Developments • Don’t Be Left Without A Good Story to Tell! Visit our blog: http://www.workplaceprivacyreport.com © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 37 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 38 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Effective on April 25, 2012, when the EEOC published its Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964 Replaced (1) 1987 EEOC Policy Statement regarding Conviction Records and (2) 1990 Policy Guidance on the Consideration of Arrest Records © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 39 concerning those circumstances. www.jacksonlewis.compresentation provides general information What does this mean for employers? © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 40 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com In most cases, before disqualifying an individual with a criminal record from employment, employers should engage in an individualized assessment involving a dialogue with that individual. Employers should also implement a policy of targeted screening. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 41 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Employers who use criminal background checks on a regular basis and have a “one size fits all” criminal background check policy need to pay particular attention to the new Guidance. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 42 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Can lead to liability under Title VII (disparate impact - where a facially neutral policy may disproportionately impact a protected group under Title VII) © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 43 concerning those circumstances. www.jacksonlewis.compresentation provides general information Disparate Impact Refresher Burden-Shifting Framework: Plaintiff (or EEOC) must demonstrate the employer’s facially neutral policy has a statistically significant disparate impact on a protected group Burden then shifts to employer to demonstrate the policy is jobrelated and consistent with business necessity (and consistently applied) Even if the employer proves business necessity, the plaintiff (or EEOC) may prevail by showing the employer refused to adopt an alternative practice that would satisfy the employer’s legitimate interests without having a disparate impact on a protected class. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 44 concerning those circumstances. www.jacksonlewis.compresentation provides general information EEOC will seek to make out a prima facie case of disparate impact through statistical analyses of the employer’s applicant, workforce, and/or third-party background check history. Therefore, expect the EEOC to request applicant and background check data during investigations! © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 45 concerning those circumstances. www.jacksonlewis.compresentation provides general information And remember…. the EEOC can expand an individual charge into a systemic investigation even if the charge does not challenge a criminal background practice or allege hiring discrimination © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 46 concerning those circumstances. www.jacksonlewis.compresentation provides general information Under the 1987 Policy, employers could demonstrate “business necessity” by showing it considered 3 factors in making its decision: – The nature and gravity of the criminal offense – The time that has passed since the conviction and/or completion of the sentence – The nature of the job held or sought (the “Green Factors”, from Green v. Missouri Pacific Railroad, 549 F.2d 1158 (8th Cir. 1977)) © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 47 concerning those circumstances. www.jacksonlewis.compresentation provides general information Now, under the new Guidance, an employer may satisfy its Title VII obligations by showing that its internal policy on criminal background checks is “narrowly tailored”, meaning having a “demonstrably tight nexus to the position in question.” Best practice for employers now is targeted screening based on the Green factors plus individualized assessment for those people identified by the screening. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 48 concerning those circumstances. www.jacksonlewis.compresentation provides general information 9 Areas to Consider in the individualized Assessment: - The facts and circumstances surrounding the offense - The number of offenses for which the individual was convicted - Age at time of conviction or release from prison - Criminal record may be inaccurate © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 49 concerning those circumstances. www.jacksonlewis.compresentation provides general information - Evidence that the individual performed the same type of work, post-conviction, with the same or a different employer, without incidents of criminal conduct - The length and consistency of employment history before and after the offense - Risk of recidivism - Employment or character references; other information regarding the individual’s fitness - Whether the individual is bonded © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 50 concerning those circumstances. www.jacksonlewis.compresentation provides general information Guidance prefers notice to the individual under scrutiny Allow the applicant/employee to explain the circumstances of the conviction © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 51 concerning those circumstances. www.jacksonlewis.compresentation provides general information If the applicant/employee does not respond to the employer’s inquiries regarding the 9 factors, the employer may make its decision without the information. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 52 concerning those circumstances. www.jacksonlewis.compresentation provides general information EXAMPLE John (White) and Robert (African American) are both recent graduates of State University, have similar educational backgrounds, skills, and work experience. Each previously pled guilty to charges of possessing and distributing marijuana as high school students. No subsequent contact with criminal justice system. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 53 concerning those circumstances. www.jacksonlewis.compresentation provides general information EXAMPLE (continued) Both apply for employment with Office Jobs, Inc. and are interviewed. Office Jobs, Inc. obtains consent to conduct background checks on both applicants. Background checks reveal past drug convictions. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 54 concerning those circumstances. www.jacksonlewis.compresentation provides general information EXAMPLE (continued) Office Jobs, Inc. representative decides not to call back Robert for a second interview – Remarked to co-worker, “Office Jobs cannot afford to refer ‘these drug dealer types’ to client companies.” Office Jobs, Inc. representative decides to call back John for a second interview. – Remarked to co-worker that youth at the time of conviction and no subsequent contact with criminal justice system Has Title VII been violated? © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 55 concerning those circumstances. www.jacksonlewis.compresentation provides general information EXAMPLE (continued) Can Robert/EEOC establish evidence of intentional discrimination? – EEOC says YES Why? – Statement evidencing bias – Inconsistency in treatment of similarly-situated applicants – These factors evidence discriminatory intent. Look for inconsistencies in your hiring processes, and across decision makers! © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 56 concerning those circumstances. www.jacksonlewis.compresentation provides general information Arrests Distinguished From Convictions: Arrest record standing alone may not be used to deny an employment opportunity The fact an arrest occurred does not establish that criminal conduct occurred. Therefore, an exclusion based on an arrest cannot be job-related and consistent with business necessity. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 57 concerning those circumstances. www.jacksonlewis.compresentation provides general information Arrests Distinguished From Convictions (continued): However, an employer may make an employment decision based on the conduct underlying the arrest if the individual would be unfit for the position because of the conduct. Must investigate circumstances leading to arrest. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 58 concerning those circumstances. www.jacksonlewis.compresentation provides general information Persons Subject to Federal Prohibitions or Restrictions • Federal laws and regulations prohibit the employment of persons with records of certain crimes in particular positions, for example: » Child care workers » Bank employees » Port workers • Employers may obtain a waiver from these restrictions. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 59 concerning those circumstances. www.jacksonlewis.compresentation provides general information Persons Subject to State or Local Prohibitions or Restrictions • Not the case! • The EEOC’s refusal to allow employers to establish business necessity by pointing to state or local laws or regulations means that the employer must abide by the new Guidance (targeted screening plus individualized assessment). © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 60 concerning those circumstances. www.jacksonlewis.compresentation provides general information • “Ban the Box” Legislation – City of Newark & Atlantic City – Limits an employer's right to inquire into a job applicant's criminal history • “Ban the box" movement and has been gaining momentum nationwide. Similar legislation in Philadelphia, Baltimore, Chicago, Atlanta, Seattle, and Detroit. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 61 concerning those circumstances. www.jacksonlewis.compresentation provides general information Developments expected in 2013: • Federal – “Ban the Box Act of 2012” (H.R. 6220) introduced in House of Representatives and Referred to Committee • New Jersey – A2300 referred to Assembly Law and Public Safety Committee earlier this year. • Neither expected to pass this year, but new Ban the Box Bills are expected in 2013. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 62 concerning those circumstances. www.jacksonlewis.compresentation provides general information Practical Tips Document thought process if developing general disqualifications (business purpose, past experiences, etc) Use targeted screens – If possible, use different standards for different positions Adopt policy of individualized assessment – Avoid policies that include automatic exclusions – “ABC Corp. believes the following crimes are job-related, and applicants with these offenses will be subject to individualized assessment…” © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 63 concerning those circumstances. www.jacksonlewis.compresentation provides general information Practical Tips (continued) Disqualifiers mandated by state law – Crime must precisely meet state exclusion – To be safe, perform individualized assessment Train HR and decision-makers Self-Audit When responding to EEOC charges unrelated to this issue, avoid providing criminal background practice and policy information in exhibits © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 64 concerning those circumstances. www.jacksonlewis.compresentation provides general information QUESTIONS? © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 65 concerning those circumstances. www.jacksonlewis.compresentation provides general information © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.compresentation provides general information 10 million independent contractors 7% of total employment © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 67 concerning those circumstances. www.jacksonlewis.compresentation provides general information Up to 30% of employers misclassify workers. 3.4 million workers are contractors, when they should be employees. Revenue loss to U.S. Treasury is $3.4 billion, annually: – – – – Income tax. Social Security. Medicare. Unemployment Insurance Trust Fund. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 68 concerning those circumstances. www.jacksonlewis.compresentation provides general information 129 FTEs for multi-agency audit and enforcement. Wage and Hour Division hires 107 new investigators for targeted industry investigations. FY 2012 budget includes $15 million for the hiring of new personnel within DOL’s Wage and Hour Division to investigate misclassification. FY 2012 budget makes $25 million available to states to enhance their mechanisms for conducting misclassification audits. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 69 concerning those circumstances. www.jacksonlewis.compresentation provides general information OFCCP allocates $3.6 million and 11 FTEs to address misclassification in government contract operation. Office of the Solicitor allocates $1.4 million and 7 FTEs to bring multi-state litigation against large employers determined to “abuse” independent contractor status. OSHA adds 2 FTEs to train inspectors on worker classification issues. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 70 concerning those circumstances. www.jacksonlewis.compresentation provides general information Today we will be covering: Definition of independent contractor: – Understand and recognize the factors that differentiate between “contractors” and “employees;” – Review the various laws that are impacted by improper classification of workers; – Review the consequences of misclassification. Joint/co-employment issues. Practical takeaways. National Labor Relations Act initiatives regarding union organizing and quickie elections. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 71 concerning those circumstances. www.jacksonlewis.compresentation provides general information “We’ve always done so.” “Our business model requires it to remain competitive.” “That is what these workers prefer.” Reality check: The reasons are totally irrelevant to the legitimate (legal) reasons that support a valid independent contractor classification. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 72 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Common Law Right to Control Test. IRS Category Test (replaced IRS “20-Factor” Test). FLSA “Economic Realities” Test. “ABC” Test. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 73 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Hiring party’s control over details of the work Duration of the relationship Worker’s occupation and skill Method of payment Relevance of work to company’s business Taxes, employee benefits Worker’s investment, materials and tools Control of work hours Right to hire assistants Parties’ intentions Location of work Most critical issue who controls the manner and means of work. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 74 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Instructions Oral or Written Reports Training Payment by Hour, Week, Month Integration Payment of Business/Traveling Expenses Services Rendered Personally Furnishing Tools and Materials Hiring, Supervising, Paying Assistants Significant Investment Continuing Relationship Realization of Profit or Loss Set Hours of Work Working for More than One Business at a Time Full-Time Required Working on Business Premises Order or Sequence Set Making Services Available to the General Public Company’s Right to Discharge Worker’s Right to Terminate © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 75 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Behavioral control: Amount of control of where, when and how the job is done. Financial control: Worker’s pay, business expenses, and facility investment. Type of relationship of the parties: Written agreements, benefits, length of relationship. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 76 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com “Economic reality” rather than “technical concepts.” The U.S. Supreme Court has held that it is the total activity or situation that controls. Significant factors: – The extent to which the services rendered are an integral part of the principal’s business. – The permanency of the relationship. – The amount of the alleged contractor’s investment in facilities and equipment. – The nature and degree of control by the principal. – The alleged contractor’s opportunities for profit and loss. – The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor. – The degree of independent business organization and operation. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 77 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com Under the “ABC” test, used in New Jersey to determine unemployment eligibility as well as wage hour coverage, a worker is an employee unless: A. B. C. The worker is free from control and direction in performing the services (by contract and in fact); The service is performed outside the usual course of the company’s business or outside places where such service is performed; and The worker is customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 78 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com A. “Freedom from Control” “Free from control and direction in connection with the performance of the service, both under the contract for the performance of service and in fact.” Employment contract/job description indicating that individual is free from supervisory direction of control is insufficient. Look at actual activities and duties, which should be carried out with minimal instruction. © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 79 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com B. “Service Outside Usual Course of Employer’s Business” If the worker’s services form a regular and continuing part of employer’s business, then individual is considered employee. Almost impossible to meet in many cases. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 80 concerning those circumstances. www.jacksonlewis.compresentation provides general information C. Independent Trade, Occupation, Profession or Business The worker has to be engaged in independent trade or business. The worker can sell his services to a number of entities in community. Worker cannot be dedicated to one employer. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 81 concerning those circumstances. www.jacksonlewis.compresentation provides general information Irrelevant Factors Under “ABC” Test: Failure to withhold taxes; Contribute to unemployment compensation; Provide workers’ compensation; Employer’s belief/employee’s belief. – Strict liability statute. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.compresentation provides general information 82 New Jersey: – ABC Test – Unemployment (NJ Rev. Stat. Sec. 43:2119(i)(6)(A)(B)(C)) and Worker’s Compensation (NJ Rev. Stat. Sec. 34-21-25 et seq). – Presumption of Construction Workers as Employees under the Construction Industry Independent Contractor Act (N.J.S.A. 34:20-4) for purposes of: • the "New Jersey Prevailing Wage Act," P.L.1963, c.150 (C.34:11-56.25 et seq.), • the "unemployment compensation law," R.S.43:21-1 et seq., • the "Temporary Disability Benefits Law,” P.L.1948, c.110 (C.43:21-25 et seq.), • the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., • the "New Jersey State Wage and Hour Law," P.L.1966, c.113 (C.34:11-56a et seq.) © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 83 concerning those circumstances. www.jacksonlewis.compresentation provides general information NJ Assembly Bill 1578 (Trucking): – Presumption of employment relationship for work done by individuals in drayage trucking or parcel delivery trucking industries. – Subject to ABC test to overcome presumption of employment. – Violators subject to criminal penalties; employers not allowed to request or require individuals to enter into an agreement that would misclassify them. NJ Assembly Bill No. 3310: – Would require prompt full payment of independent contractors for their services, and mandate additional record keeping requirements for ALL businesses and non-profits that use certain independent contractors. – Authorizes DOL to investigate, mediate and prosecute claims. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 84 concerning those circumstances. www.jacksonlewis.compresentation provides general information Each Statute and Enforcement Agency Has Slightly Different Tests for Determining Independent Contractor Status: IRS: U.S. Tax Code (federal income tax withholding). U.S. Department of Labor: – FLSA (Fair Labor Standards Act – minimum wage and overtime); – FMLA (Family and Medical Leave Act); – ERISA (Employee Retirement Income Security Act). State Unemployment Laws/Agencies. State Workers’ Compensation Laws/Agencies. State Income Tax Withholding. Federal Anti-Discrimination Laws (Title VII, ADA). State and Local Anti-Discrimination Laws. NLRA (National Labor Relations Act). © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 85 concerning those circumstances. www.jacksonlewis.compresentation provides general information FLSA Liability: Consequences Retroactive entitlement to overtime pay by the contractor for two to three years. Employer likely has not kept accurate time records, leading to inability to defend claims. Liquidated (double) damages are applied; attorney’s fees can be awarded. DOL audits and investigations can result. Class actions can result in exorbitant costs and settlements. Liability for overtime. Joint and several liability. – If team with staffing agency, must be “completely disassociated with respect to the employment of a particular employee.” © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 86 concerning those circumstances. www.jacksonlewis.compresentation provides general information State Laws: Possibility the employee’s share of taxes, which should have been withheld, plus penalties and interest. State tax liability often will trigger investigation into unpaid workers’ compensation and unemployment benefits. This also can result conversely when contractors apply for such benefits after termination. Suspension or revocation of incorporation or limited liability status, commissioner can revoke “licenses” for repeat offenders, and business subject to subsequent audits thereafter (See S.2773) © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 87 concerning those circumstances. www.jacksonlewis.compresentation provides general information State Laws (cont’d): Criminal sanctions and administrative penalties, including debarment from public contract and stop work order under New Jersey Construction Industry Independent Contractor Act (CIICA), and significant financial penalties that are subject to increase if found to be knowing misclassification (See N.J.S.A. 34:20-5) Responsible for underpaid wages, overtime, benefits or taxes on behalf of misclassified workers under CIICA © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 88 concerning those circumstances. www.jacksonlewis.compresentation provides general information ERISA Liability: Class actions. Retroactive entitlement to benefits by the contractor. Plan may fail coverage or discrimination tests, or may be deemed to violate minimum participation standards. Plan may be liable for wrongful denial of benefits and breach of fiduciary duty claims. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 89 concerning those circumstances. www.jacksonlewis.compresentation provides general information EEOC Enforcement Guidance: Application of EEO Laws to Contingent Workers Placed by Temporary Employment Agencies and Other Staffing Firms: – Covers temporary employees, leased employees and project management. – Staffing firms must hire and make job assignments in a non-discriminatory manner. – Both staffing firms and their clients share EEO responsibilities. – Both client and staffing company are considered employers if they have the right to control the work and have the statutory minimum number of employees. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 90 concerning those circumstances. www.jacksonlewis.compresentation provides general information Litigation – FLSA/Wage & Hour. Eligibility for benefits. Unknown employment issues: – Discrimination; – Harassment; – Immigration; – Retaliation. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 91 concerning those circumstances. www.jacksonlewis.compresentation provides general information The National Labor Relations Act applies only to employees. A common tactic of labor unions seeking to organize workers is to challenge the independentcontractor status of a group of workers that perform a certain function for companies in a particular industry. The unions then seek a court determination that the workers are employees entitled to the right to organize and bargain for the terms and conditions of their work. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 92 concerning those circumstances. www.jacksonlewis.compresentation provides general information Title VII: Risk of liability based on joint employment. ADA – Inquiries and Medical Examinations: “Pre-Offer” stage or “employment” stage? EEOC: “Offer” occurs when assignment is given. Family and Medical Leave Act: “Primary employer” (staffing company): Authority to hire and fire, assign and place, make payroll, provide benefits? Responsible for notice, leave benefits, and job restoration. “Secondary employer” (on-site employer): Must accept returning employee; may not retaliate. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 93 concerning those circumstances. www.jacksonlewis.compresentation provides general information Determine who are legally independent contractors: – Do they meet the criteria of the tests? – Review written agreements. – Examine the facts on the ground – actual job duties. – Train managers in how to deal properly with contractors. – Know the legal risks. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 94 concerning those circumstances. www.jacksonlewis.compresentation provides general information Virtually any independent contractor classification could come under scrutiny if: The work is part of the company’s normal business; The company exerts significant control over the manner in which the work is performed, as opposed to the quality of the goods or service provided; The worker cannot or does not work for other clients or customers; and/or The worker cannot subcontract the work. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 95 concerning those circumstances. www.jacksonlewis.compresentation provides general information Consider whether to terminate all independent contractor agreements and rehire as employees. Consider hiring independent contractors through temporary agency or other company. Loosen restrictions and control; allow subcontracting or work for other clients. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 96 concerning those circumstances. www.jacksonlewis.compresentation provides general information 1. Do not negotiate pay rates. 2. Do not provide training. 3. Do not negotiate vacation days or personal days off. 4. Do not provide performance evaluations or career guidance. 5. Do not issue business cards with firm name or logo. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 97 concerning those circumstances. www.jacksonlewis.compresentation provides general information 6. Do not permit use of facilities or recreational activities. 7. Do not regularly include in departmental social functions. 8. Do not directly investigate allegations of harassment, discrimination, or related issues. 9. Do not discipline or terminate. 10. Do not provide severance payments or employee benefits. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 98 concerning those circumstances. www.jacksonlewis.compresentation provides general information 11. Do not provide tools, equipment, uniforms. 12. 13. 14. 15. Do not pay business expenses of contractors. Do not allow contractors to perform the same functions of the company’s business. Do not enter into non-compete and exclusivity arrangements that limit the control of work for other clients. Do not enter into unlimited engagements with no regular end to the term of the contract. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 99 concerning those circumstances. www.jacksonlewis.compresentation provides general information Make the agreement with the staffing company, not the contingent worker. Clearly designate the responsibilities and services of each party — hiring, firing, training, assigning work, making work rules, etc. Specify job descriptions. Indicate situations under which employer may terminate the contract. Delineate all confidentiality requirements. Source: U.S. Chamber of Commerce Small Business Nation © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 100 concerning those circumstances. www.jacksonlewis.compresentation provides general information Stipulate which party is responsible for payroll, withholding, and payment of taxes for the individuals. Clarify who has primary responsibility for paying and providing workers’ compensation insurance. Indicate the extent to which employee benefits will be provided by the staffing company and the employees’ level of contribution. Source: U.S. Chamber of Commerce Small Business Nation © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 101 concerning those circumstances. www.jacksonlewis.compresentation provides general information Rich Cino Jackson Lewis LLP Managing Partner – Morristown Office (973) 538-6890 cinor@jacksonlewis.com © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 102 concerning those circumstances. www.jacksonlewis.compresentation provides general information © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.compresentation provides general information Patricia Smith was confirmed as Solicitor on February 4, 2010 (by 60-37 vote). So far, there have been two nominees for Administrator of the Wage and Hour Division: Lorelei Boylan and Leon Rodriguez. Both nominations have been withdrawn, and there is currently no nominee. Since 2008, WHD has been run by a political Deputy Administrator, Nancy Leppink. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.compresentation provides general information 104 The Wage and Hour Division has received significant increases in funding and personnel under this Administration. Fiscal Year Appropriations Authorized FTE 2008 $175,658,000 1,208 2009 $193,092,000 1,283 2010 $227,606,000 1,538 2011 $227,491,000 1,658 2012 $227,061,000 1,759 2013 (requested) $237,730,000 1,839 © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 105 concerning those circumstances. www.jacksonlewis.compresentation provides general information These figures represent increases of > 35% in appropriations and > 52% in agency headcount in just five years. Investigator headcount has already risen from around 750 at the start of 2009 to between 1,000 and 1,100 now. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 106 concerning those circumstances. www.jacksonlewis.compresentation provides general information FY2013 DOL budget request: – Seeks $10.2 million to fund 72 new FTE for WHD to focus on FLSA and FMLA issues, as well as independent contractor misclassification. – Proposes cutting $2.0 million and 12 FTE devoted to toll-free call center, including for employer compliance assistance. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.compresentation provides general information 107 March 2010: Announcement that WHD is abandoning opinion letters in favor of Administrator Interpretations: – “Guidance in this form will be useful in clarifying the law as it relates to an entire industry, a category of employees, or to all employees.” – First two AIs overturned recent opinion letters from the Bush era regarding the administrative exemption in the financial services industry and the status of PPE as clothing under FLSA section 3(o). – No new AIs since June 2010. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 108 concerning those circumstances. www.jacksonlewis.compresentation provides general information Solicitor’s office far more active in trying to change the law and to affect pending litigation: – Amicus briefs regarding pharmaceutical sales representatives, definition of “commissions” under FLSA section 7(i), tipped employees, and hybrid opt-in / opt-out cases. – Amicus briefs have been uniformly pro-worker. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.compresentation provides general information 109 December 2010: “Bridge to Justice” program: – WHD and the American Bar Association announced “an unprecedented collaboration providing for an Attorney Referral System” to pursue litigation against employers. – When FLSA or FMLA complainants receive a section 16(b) letter, they also receive a toll-free number to contact the ABA’s referral hotline. – It remains unclear what information WHD will provide to claimants and their attorneys and when. This raises the stakes for cooperating in an ordinary WHD investigation. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 110 concerning those circumstances. www.jacksonlewis.compresentation provides general information May 2011: WHD announces release of timekeeping application for smartphones: – Encourages workers to keep their own records of hours worked. – Allows workers to forward their time records directly to WHD in electronic form. – Investigators may approach investigations with a presumption that workers’ time records are accurate if there are discrepancies between those records and the employer’s records. – Employers need to understand this and to address the possibility of multiple sets of time records. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 111 concerning those circumstances. www.jacksonlewis.compresentation provides general information September 2011: DOL signs MOU with IRS regarding misclassification issues. Throughout 2011 and 2012: DOL signs MOU with 13 states regarding misclassification: – California Colorado, Connecticut, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah, and Washington. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 112 concerning those circumstances. www.jacksonlewis.compresentation provides general information April 2011 FLSA Final Rule: – States in preamble that additional non-salary and non-overtime compensation is inconsistent with payment on a fluctuating workweek basis. – Clarifies that there is no limit on the amount of allowable mandatory employee tip pool contributions. – Embodies in regulations WHD’s enforcement position since 1974 that tips are the property of employees and thus that regardless of tip credit, employers cannot retain employee tips. – Imposes significant new record-keeping obligations in connection with tipped employees. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 113 concerning those circumstances. www.jacksonlewis.compresentation provides general information The Fall 2011 semi-annual Regulatory Agenda, published on January 20, 2012, lists several contemplated rulemakings for WHD: – FLSA Child Labor Hazardous Occupations Order No. 7 (operation of power-driver hoisting apparatus) anticipates a request for information in February 2012 (not yet issued). – FMLA anticipates an NPRM in January 2012 (issued January 30, 2012, and comment period closed on April 30). – FLSA Domestic Service exemption NPRM published December 27, 2011 (comment period closed on March 21). © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 114 concerning those circumstances. www.jacksonlewis.compresentation provides general information Fall 2011 semi-annual Regulatory Agenda (cont’d): – FLSA Child Labor regulations involving agricultural employment NPRM published on September 2, 2011; comment period closed on December 1, 2011; and final rule expected in August 2012 (NPRM withdrawn on April 26, 2012). – FLSA Right to Know regulation DOL has gone from anticipating an NPRM in April 2011 to now listing the status as “Next Action Undetermined” and providing no date at all. – SCA Nondisplacement of Qualified Workers final rule issued on August 29, 2011. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 115 concerning those circumstances. www.jacksonlewis.compresentation provides general information First year of wage and hour enforcement under the Obama Administration: all about the American Recovery and Reinvestment Act (i.e., stimulus money and prevailing wages on government contracts). Since then: focus has been on looking more broadly at the notion of the employment relationship: – Independent contractor versus employee classification. – “Fissured” industries: sub-contracting, third-party management, franchising, and independent contracting. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 116 concerning those circumstances. www.jacksonlewis.compresentation provides general information Main targets of current enforcement efforts: o Construction; o Meat and poultry processing; o Janitorial (FY2013 national initiative); o Hotel / motel (FY2012 national initiative); o Home health care; o Restaurants; o Child care; o Personnel services; o Transportation and warehousing; o Agriculture; o Car washes. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 117 concerning those circumstances. www.jacksonlewis.compresentation provides general information “Liquidated damages are the new normal.” Expansion of donning / doffing beyond poultry and meatpacking industries. Heavy focus on pre-shift and post-shift activities such as computer boot-up and power-down, shift exchanges, and safety meetings. WHD is instructing investigators to impose CMPs in first investigations if criteria for willful violation can be established, as well as in virtually all “repeat” violation scenarios. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 118 concerning those circumstances. www.jacksonlewis.compresentation provides general information Investigators are insisting on retroactive tolling agreements. – Be very careful about the tolling language. – SOL has been unwilling to negotiate a single word in the tolling agreements. Much more aggressive use of the MODO procedure to press for company-wide self-audits, even for non-systemic violations. DOL now wants remedies and relief on an enterprise-wide basis whenever possible. Investigations are increasingly non establishment-focused. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 119 concerning those circumstances. www.jacksonlewis.compresentation provides general information Patient Protection and Affordable Care Act, signed on March 23, 2010, creates FLSA section 7(r)(1) requiring reasonable unpaid breaks for mothers to express breast milk for infants up to one year old. Employee Misclassification Prevention Act, reintroduced October 13, 2011: – Requires records reflecting accurate classification of employees versus independent contractors. – Double liquidated damages. – Penalties of up to $5,000 per employee. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 120 concerning those circumstances. www.jacksonlewis.compresentation provides general information Includes: 1. 2. 3. 4. Time spent in primary work activities; Idle or stand-by time controlled or requested by employer; Time spent by an employee outside normal hours “suffered or permitted” by employer that benefits the employer. Work we know or have reason to know was performed is work “suffered or permitted.” © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 121 concerning those circumstances. www.jacksonlewis.compresentation provides general information Unauthorized Working Time 1. 2. 3. Employers must compensate employees for unauthorized work when an employer “suffers or permits” employee to work; An employer suffers or permits an employee to work where the employer knew or had reason to believe the employee was performing work; Employers are free to discipline employees for unauthorized work. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 122 concerning those circumstances. www.jacksonlewis.compresentation provides general information Rest Periods and Diet Coke Breaks 1. 2. Rest periods/coffee breaks up to 20 minutes are compensable working time. Employers are not required by federal law to provide rest periods or coffee breaks, but © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 123 concerning those circumstances. www.jacksonlewis.compresentation provides general information Meal Periods 1. Meal periods are considered non-working time only if: a. They are at least 30 minutes in duration; and b. The employee is completely relieved of duties – ensure the employee DOES NOT WORK. 2. Generally, the employee must be allowed to leave the premises. 3. Meal periods are compensable, if the employee is frequently interrupted to perform work. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 124 concerning those circumstances. www.jacksonlewis.compresentation provides general information Rest and Meal Periods: Rest periods of short duration, usually 20 minutes or less, are common in industry (and promote the efficiency of the employee) and are customarily paid for as working time. These short periods must be counted as hours worked. Unauthorized extensions of authorized work breaks need not be counted as hours worked when the employer has expressly and unambiguously communicated to the employee that the authorized break may only last for a specific length of time, that any extension of the break is contrary to the employer's rules, and any extension of the break will be punished. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 125 concerning those circumstances. www.jacksonlewis.compresentation provides general information Bona fide meal periods (typically 30 minutes or more) generally need not be compensated as work time. The employee must be completely relieved from duty for the purpose of eating regular meals. The employee is not relieved if he/she is required to perform any duties, whether active or inactive, while eating. – Rest period between 20 and 30 minutes © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 126 concerning those circumstances. www.jacksonlewis.compresentation provides general information Compensable Working Time Travel Travel between home and work is not work time, even if the employee has no fixed work location. - Travel to first job site locally is not work time Travel to first job site in a distant market is work time after deducting average travel time from home to sites in local market area (generally up to an hour’s travel) Travel between job sites during the normal work day is work time. © 2012 Jackson Lewis LLP This regarding presentation its subject provides and general explicitly information may not be regarding construed itsassubject providing andany explicitly individualized may notadvice be construed concerning as providing any particular circumstances. individualized Persons advice needing concerning advice particular concerning circumstances. particular circumstances Persons needing must advice consult concerning counsel 127 particular circumstances concerning those circumstances. must consult www.jacksonlewis.compresentation counsel concerning those circumstances. provides general www.jacksonlewis.com information Compensable Working Time Business Travel Travel for overnight trip: compensable for portion during employee’s normal working hours, even on days the employee does not ordinarily work Actual work performed while traveling is compensable © 2012 Jackson Lewis LLP This regarding presentation its subject provides and general explicitly information may not be regarding construed itsassubject providing andany explicitly individualized may notadvice be construed concerning as providing any particular circumstances. individualized Persons advice needing concerning advice particular concerning circumstances. particular circumstances Persons needing must advice consult concerning counsel 128 particular circumstances concerning those circumstances. must consult www.jacksonlewis.compresentation counsel concerning those circumstances. provides general www.jacksonlewis.com information Travel Time Example A construction company requires its crews to report to the main office before the shift begins to pick up tools and to drive in a company vehicle to the first job site. The employees then travel to two other job sites during the day. At the end of the day, the employer requires that they return to the main office to drop off their tools. The employer pays for all time spent at the job sites. The employer failed to compensate employees for the time spent traveling from the office to the first job site and from the last job site to the office © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 129 129 concerning those circumstances. www.jacksonlewis.compresentation provides general information Compensable Working Time Training and Meeting Time On-the job training is work time Meeting and training programs are not work time if: - Meetings are held outside of regular work hours - Attendance is truly voluntary - Training is not directly related to the employee’s job, AND - The employee does not perform any productive work while attending the course or meeting Voluntary attendance at an educational facility after hours is not work time © 2012 Jackson Lewis LLPeven if related to employee’s job © 2012 Jackson Lewis LLP general information regarding its subject and explicitly may not be construed as This presentation provides This regarding its subject andadvice explicitly may not particular be construed as providing any individualized adviceconcerning concerning providing any individualized concerning circumstances. Persons needing advice particular circumstances. Persons needing advice concerning particular circumstances must consult particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com counsel 130 concerning those circumstances. www.jacksonlewis.compresentation provides general information Compensable Working Time “On Call” Time Time spent answering work-related phone calls in response to “trouble” calls is work time Time that employees spend “waiting to be engaged” is not work time as long as: Employee can effectively use on-call time for his/her own purposes © 2012 Jackson Lewis LLP This regarding presentation its subject provides and general explicitly information may not be regarding construed itsassubject providing andany explicitly individualized may notadvice be construed concerning as providing any particular circumstances. individualized Persons advice needing concerning advice particular concerning circumstances. particular circumstances Persons needing must advice consult concerning counsel 131 particular circumstances concerning those circumstances. must consult www.jacksonlewis.compresentation counsel concerning those circumstances. provides general www.jacksonlewis.com information On-Call Time Factors Include: Requirement to remain on the employer’s premises Excessive geographical restrictions on the employer’s premises Frequency of calls is unduly restrictive Fixed response time is unduly restrictive Employee ability to easily trade his or her on-call responsibilities with another employee Extent to which employee is able to engage in personal activities © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 132132 concerning those circumstances. www.jacksonlewis.compresentation provides general information Non-exempt Employees No FLSA problem. Employees only paid for time worked. Exempt Employees Subject to the Salary Basis Test Where Employer Closes the Office Can force employees to use PTO. Cannot deduct from pay if no PTO available © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 133 concerning those circumstances. www.jacksonlewis.compresentation provides general information SNOW DAYS/STATE OF EMERGENCY Q. Am I required to pay employees for "snow days" or other days when they are unable to work due to "State of Emergencies" declared by municipal, county or state officials? A. No. Employers are not required to pay employees for time not actually worked. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 134 concerning those circumstances. www.jacksonlewis.compresentation provides general information Decide whether you want to pay – Full days – Partial days Decide whether to allow employees to use PTO – Sick days – Vacation days Reserve the right to decide on an ad hoc basis © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 135 concerning those circumstances. www.jacksonlewis.compresentation provides general information INCLEMENT WEATHER If you are a non-exempt employee and are late or absent from work due to adverse weather conditions, and the Company has not closed the office or announced a delayed opening, you will not receive compensation [you may not use paid time off] for time lost. In the event of a delayed opening, closure or early closure, the Company will decide whether employees will be paid for lost time depending upon the circumstances. If an employee is already out on authorized paid absences, such as vacation or personal days, you will not receive an additional day of pay or time off if opening is delayed or the office is officially closed due to inclement weather. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 136 concerning those circumstances. www.jacksonlewis.compresentation provides general information Relatively recent changes: New Rounding Regulations Adoption of Federal White Collar Exemptions New Posting Requirement Bill to Increase Minimum Wage © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 137 concerning those circumstances. www.jacksonlewis.compresentation provides general information History of Rounding: Prior to 2010, general assumption--rounding is permissible under NJ as long as practice follows federal regulations on rounding. Beginning of 2010 – NJDOL takes position that rounding is not permissible under NJ wage and hour law. December 2010 – New Regulations issued by NJDOL adopting federal regulations on permissible rounding policies. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 138 concerning those circumstances. www.jacksonlewis.compresentation provides general information New Regulation Adopted by NJDOL: 12:56-5.8 Use of time clocks (a) Differences between clock records and actual hours worked. Time clocks are not required. In those cases where time clocks are used, employees who voluntarily come in before their regular starting time or remain after their closing time, do not have to be paid for such periods provided, of course, that they do not engage in any work. Their early or late clock punching may be disregarded. Minor differences between the clock records and actual hours worked cannot ordinarily be avoided, but major discrepancies should be discouraged since they raise a doubt as to the accuracy of the records of the hours actually worked. (b) "Rounding" practices. It has been found that in some industries, particularly where time clocks are used, there has been the practice for many years of recording the employees' starting time and stopping time to the nearest 5 minutes, or to the nearest 1/10 or quarter of an hour. Presumably, this arrangement averages out, so that the employees are fully compensated for all the time they actually work. For enforcement purposes this practice of computing working time will be accepted, provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 139 concerning those circumstances. www.jacksonlewis.compresentation provides general information Permissible Rounding Practices Under Federal/New Jersey Law – Appropriate timeframe (nearest 5, 6 or 15 minutes) – Over period of time employees should be compensated for all time actually worked. – Give and take – no policy/practice which skews results for the benefit of the employer © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 140 concerning those circumstances. www.jacksonlewis.compresentation provides general information History of Exemptions: New Jersey regulations on exemptions initially modeled after federal overtime exemptions. August 2004 – Federal overtime exemptions revised. New Jersey does not change regulations. March 2011 – NJDOL issues regulations proposing to repeal existing rules on exemptions (executive, administrative, professional and outside sales employees) and replace with federal overtime exemptions under 29 CFR Part 541. September 2011 – NJDOL issues final regulation adopting by reference most provisions in 20 CFR Part 541. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 141 concerning those circumstances. www.jacksonlewis.compresentation provides general information Impact of New Regulations: Eliminates 20% Rule (40% for retail employees) Eliminates differences between federal and State exemption requirements Employers can now look to federal decisions for guidance/persuasive authority Inadvertent exclusion of exemption under NJ law regarding Administrative/Inside Sales Exemption © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 142 concerning those circumstances. www.jacksonlewis.compresentation provides general information “Inside Sales” Exemption: The DLWD has corrected its error, and on February 21, 2012, the exemption was fully restored. The regulation now defines “administrative” employee to include an employee whose: (1) primary duty is sales; (2) total compensation is comprised of at least 50% commissions; and (3) total compensation is $400 or more per week. Notably, the restored New Jersey “inside sales” exemption differs from the exemptions available under federal law. As a result, employers should carefully analyze whether their commissioned sales employees qualify as exempt under both state and federal law. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 143 concerning those circumstances. www.jacksonlewis.compresentation provides general information July 13, 2010 – new law enacted regarding employers’ obligation to maintain and report every record regarding wages, benefits and taxes, including requirement to post and distribute notice to employees. July 18, 2011 – NJDOL issues proposed regulations including a sample notice. November 4, 2011 – NJDOL issues final regulations and notice. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 144 concerning those circumstances. www.jacksonlewis.compresentation provides general information Employers must: 1. Ensure the notice is posted in workplace 2. Provide new hires a written copy of the notice at the time of hire. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 145 concerning those circumstances. www.jacksonlewis.compresentation provides general information Legal and Practical Impact of Law: Need more space to post notices. Possible NJDOL audits for failing to maintain and report records and failing to pay employees in accordance with such laws. Suspension or revocation of license(s) held by employers. Punitive Damages (2x lost wages and benefits) for discharging or discriminating against employee for making inquiry or complaint or cooperating in an investigation. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 146 concerning those circumstances. www.jacksonlewis.compresentation provides general information New Jersey’s minimum wage rate is $7.25/hour, the same as the federal standard. However, in May 2012, the New Jersey Assembly voted to give the state's minimum wage employees a $1.25-per-hour raise to $8.50/hour, which would increase their weekly wage by $50 to $340, for full-time workers. The 46-33 vote occurred along party lines, with Democrats supporting the bill and Republicans opposing it. The Senate has a similar bill pending in its budget committee. Republican Gov. Chris Christie has voiced skepticism, but has not taken a position on the measure. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 147 concerning those circumstances. www.jacksonlewis.compresentation provides general information © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.compresentation provides general information FMLA Basics. Intermittent Leave Basics and “Triggers.” Common Intermittent Leave Challenges. Strategies for Managing Intermittent Leave. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 149 concerning those circumstances. www.jacksonlewis.compresentation provides general information © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 150 concerning those circumstances. www.jacksonlewis.compresentation provides general information The Family and Medical Leave Act (FMLA) of 1993 allows employees to take job-protected leave for certain family and medical reasons. It also allows leave in conjunction with the military service of family members. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.compresentation provides general information 151 “Eligible” employees may take 12 weeks of unpaid leave in a 12-month period. Continuation of health insurance benefits for the employee during the leave period. Restoration of the employee to the same or equivalent position upon timely return from the leave. – State Law equivalents (e.g. District of Columbia FMLA). © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 152 concerning those circumstances. www.jacksonlewis.compresentation provides general information An employee must be employed by a covered employer: – For at least 12 months (can include prior service); – For at least 1,250 hours in the 12 months immediately preceding the leave; – At a worksite having 50 or more employees within 75 miles of that worksite. • Special rules for joint employers. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 153 concerning those circumstances. www.jacksonlewis.compresentation provides general information The birth of a child and in order to care for such child. The placement of a child with the employee for adoption or foster care and to care for the newly placed child. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 154 concerning those circumstances. www.jacksonlewis.compresentation provides general information To care for a spouse, son, daughter, or parent with a serious health condition. Employee’s own serious health condition which renders the employee unable to perform the functions of his/her job. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 155 concerning those circumstances. www.jacksonlewis.compresentation provides general information Employees must request or put employer on notice of need for leave, but need not say “magic words,” such as “FMLA.” Situations that may indicate a need for FMLA leave include: – Time off due to surgery or hospitalization; – Any absence due to pregnancy, including morning sickness, prenatal visits; – Frequent absences or tardiness due to employee’s or family member’s health issues; – Absences due to a family-member’s call-up to active duty or service-related injury; and – Any health-related absence lasting more than three calendar days. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 156 concerning those circumstances. www.jacksonlewis.compresentation provides general information Medical leave need not be taken in a large or continuous block. FMLA can be taken intermittently in days, hourly increments or fractions of hours. FMLA can also be taken on a “reduced schedule” basis. Frequent absenteeism for medical reasons can be legally protected. Intermittent leave may be taken for a serious health condition of the employee or for care of a family member. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 157 concerning those circumstances. www.jacksonlewis.compresentation provides general information “A central defining theme in the comments involves an area that may not have been fully anticipated: the prevalence with which unscheduled intermittent FMLA leave would be taken in certain workplaces or work settings by individuals who have chronic health conditions. This is the single most serious area of friction between employers and employees seeking to use FMLA leave.” Family and Medical Leave Act Regulations: A Report on the Department of Labor’s Request for Information -- 2007 Update © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 158 concerning those circumstances. www.jacksonlewis.compresentation provides general information Obligations Also May Exist under the Americans with Disabilities Act (ADA) even if FMLA is Unavailable or Exhausted. – Under the ADA, leave, medical leave, flexible schedules and parttime work arrangements may be a reasonable accommodation (if they do not pose undue hardship). – Use “interactive process” to explore potential accommodations. – The ADA Amendments Act (ADAAA) dramatically expanded the ADA’s definition of “disability.” Many temporary conditions will now trigger accommodation obligations. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 159 concerning those circumstances. www.jacksonlewis.compresentation provides general information General notice: Poster, handbook policy. Specific notice: send “Eligibility and Notice of Rights and Responsibilities” form within five business days of learning of the need for leave. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 160 concerning those circumstances. www.jacksonlewis.compresentation provides general information Employees must provide medical information to support ADA or FMLA medical leave within fifteen calendar days of an employer’s request. The information that can be requested is strictly limited. Use the DOL’s forms. When the information provided is incomplete, the law provides strict protocols for obtaining complete, unambiguous medical information. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 161 concerning those circumstances. www.jacksonlewis.compresentation provides general information Review medical certifications carefully. – Insist on complete and sufficient medical certifications. – Request clarification and authentication if necessary. – Request second or third opinions if necessary. Send written notice to employee, communicating what employee must do to obtain FMLA protections, as well as consequences for failing to timely comply. Extend time reasonably for employee to return complete and sufficient medical certifications. Deny FMLA leave if medical certifications are not returned without sufficient reason for delay. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 162 concerning those circumstances. www.jacksonlewis.compresentation provides general information Managers should have little or no contact with an employee’s physician’s office. This should be handled by HR. All communications should be in writing, except in extraordinary circumstances. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 163 concerning those circumstances. www.jacksonlewis.compresentation provides general information Intermittent leave must be medically necessary. Initial medical certifications should support the medical necessity of intermittent FMLA leave. Verify that the anticipated frequency and duration of the episodes of incapacity also are medically necessary. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 164 concerning those circumstances. www.jacksonlewis.compresentation provides general information Once appropriate medical certification is received, the leave must be “designated” as FMLA leave within five business days. Failing to properly designate the leave as FMLA leave can result in the employee taking more leave than he/she is entitled to. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 165 concerning those circumstances. www.jacksonlewis.compresentation provides general information Objectives: – Administer FMLA leave with precision while respecting FMLA rights. – Curb potential abuses, BUT – Do not discourage individuals from exercising FMLA rights. – All communications and interactions should be professional, respectful. Avoid hostility, frustration. – To administer FMLA leave aggressively, we must be error-free in fulfilling the employer’s FMLA requirements. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.compresentation provides general information 166 Carefully Review Eligibility—Be sure the employee: – Has worked for at least one year (including non-consecutive periods of employment occurring within the past seven years); – Has worked 1250 hours during the previous 12 months, and – Works at a location where 50 or more employees are employed within a 75-mile radius. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 167 concerning those circumstances. www.jacksonlewis.compresentation provides general information Consider retroactive designation: – Permissible if no harm or injury to employee, or if it was not employer’s “fault;” – Employer and employee also can mutually agree to retroactive designation; – Employer’s failure to comply with the notice requirements could support an interference claim. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 168 concerning those circumstances. www.jacksonlewis.compresentation provides general information Properly record all FMLA leave: – Ask reasons for leave and record all FMLA leave against the employee’s 12-week entitlement; – “Dock” paid leave bank as appropriate; – “Dock” pay if paid leave is exhausted. During FMLA leave, partial-day docking is ok for exempt employees. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 169 concerning those circumstances. www.jacksonlewis.compresentation provides general information Consider shifting employee’s hours: – Consider whether the employee’s hours might be shifted to minimize the amount of FMLA intermittent absences needed. – This issue should always be approached diplomatically – an employee should never feel forced, intimidated, or coerced to take more or less FMLA leave than he/she needs. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 170 concerning those circumstances. www.jacksonlewis.compresentation provides general information Consider whether to allow “make up” time: – Employers need not allow an employee taking FMLA intermittent leave to "make up" the time if this does not serve the organization’s needs. – Treat the employee the same as others. – If you have allowed employees to make up time in the past, any change in this practice could be viewed as retaliatory. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 171 concerning those circumstances. www.jacksonlewis.compresentation provides general information Usual and Customary Notice Requirements; Scheduling: – An employee must comply with the employer’s usual and customary notice and procedural requirements for requesting leave, absent unusual circumstances. – An employee absent for doctor's appointments or other treatment is required, whenever possible, to schedule these treatments in a manner so as not to unduly disrupt the employer's operations. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 172 concerning those circumstances. www.jacksonlewis.compresentation provides general information Enforce Paid Leave Requirements: – Employer can place restrictions on use of paid leave, including notice, certification, increments. – Employees can be required to comply with these requirements if they want the benefit of paid leave. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 173 concerning those circumstances. www.jacksonlewis.compresentation provides general information Transfer to Alternative Position that Better Accommodates Need for Leave: – For planned medical treatment only. – Same hourly pay and benefits (including health benefits) – The position can have different duties. – The employee must be restored to his or her original position when the need for intermittent leave is over. – An employee cannot be transferred to another position in order to discourage the employee from taking FMLA or to work a hardship on the employee. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 174 concerning those circumstances. www.jacksonlewis.compresentation provides general information Adopt effective call-in procedures: – Require employees to confirm the reasons they are absent, and document/memorialize those statements. – Compare the reasons and anticipated leave frequency/duration with leave documentation on file. – Request new certification and/or recertification if intermittent leave requests are not supported by existing leave certifications. – It is no longer a best practice not to ask why employees are absent from work. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 175 concerning those circumstances. www.jacksonlewis.compresentation provides general information Consider New Technologies: – Most leave management systems focus on whether leave is paid or unpaid. – Consider integrated systems showing whether leave is protected or unprotected to track FMLA. – More vendors are offering leave administration using new technologies. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 176 concerning those circumstances. www.jacksonlewis.compresentation provides general information Leave under NJ FLA only available for an employee to care for a covered relation with a serious health condition or to bond with a newborn or a child placed with the employee in adoption. Leave not available for the employee’s own serious health condition. Because leave is not available for the employee’s own serious health condition, the issue of intermittent leave rarely is raised under NJ FLA. © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 177 concerning those circumstances. www.jacksonlewis.compresentation provides general information However, intermittent and reduced schedule leave is available under the NJ FLA to employees caring for covered relations with a serious health condition. Under NJFLA, employees requesting intermittent leave must take intermittent leave in increments of at least one workweek within a consecutive 12 month period. Employees requesting reduced leave must take such leave in increments of at least one workday but less than one workweek at a time unless otherwise agreed to by the employer and the employee. Employees may not take a reduced leave schedule for a period exceeding 24 consecutive weeks © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 178 concerning those circumstances. www.jacksonlewis.compresentation provides general information © 2012 Jackson Lewis LLP This regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning particular circumstances must consult counsel 179 concerning those circumstances. www.jacksonlewis.compresentation provides general information © 2012 Jackson Lewis LLP This presentation provides general information regarding its subject and explicitly may not be construed as providing any individualized advice concerning particular circumstances. Persons needing advice concerning 180 particular circumstances must consult counsel concerning those circumstances. www.jacksonlewis.com