One way to avoid claims of discrimination in hiring is to use an independent contractor or recruiter to screen and interview potential employees, right? Wrong! In a decision rendered September 10, 2009, a federal court of appeals in New York ruled that an apartment complex could be held liable for violations of the Age Discrimination in Employment Act (“the ADEA”) when an independent contractor told an applicant he was “too old” for the job showing apartments. Because the apartment complex delegated the hiring process to a third party, the apartment complex could be held liable for its “agent’s” conduct, even if it had no knowledge that the discriminatory hiring practices were occurring.
The court pointed out that this ruling only applies if the outside firm or agent is hiring applicants to work directly for the employer. You will not be held liable if an independent contractor hired to perform services for your company discriminates against its own employees.
If you do decide to use an outside firm or agent to assist you in screening applicants for a position in your company, however, you should make certain they are following EEO guidelines
Monday, September 14, 2009
Thursday, July 30, 2009
EMPLOYER ALERT – ARE YOU FOLLOWING THE NEW FMLA NOTICE REQUIREMENTS?
The FMLA’s notice requirements for employers have been the subject of considerable confusion in the past. Under the Department of Labor regulations that went into effect January 2009, the notification requirements are consolidated into a single section (29 C.F.R. §825.300), and conflicting provisions and time periods in the former regulations have been eliminated.
Employers who fall under the FMLA (50 or more employees within a 75 mile radius) must provide the following notifications:
(1) General Notice to Employees. The employer must provide general information about the FMLA through a poster (available from the DOL) placed in a conspicuous place, and by including the information either in the employee handbook or in written material given to the employee at time of hire. A notice that may be used by employees is available from the DOL at:
www.dol.gov/esa/whd/fmla/index.htm.
(2) Eligibility Notice. Once an employee requests FMLA leave, or the employer has a basis to believe that the employee’s leave maybe for an FMLA-qualifying reason, the employer must provide an “Eligibility Notice” to the employee within five (5) days, absent extenuating circumstances. This notice must either advise the employee that they are eligible for FMLA leave, or explain why they are not. A form eligibility notice is available for download at the DOL website referenced above.
(3) Rights and Responsibilities Notice. The employer must also provide a “rights and responsibilities notice.” This notice can be combined with the eligibility notice, and is a single document on the DOL form described above. Part A of the form is the eligibility notice, and Part B explains the rights and responsibilities of the employee. This notice should include the following, as applicable:
a. a statement that the leave is counted against the employee’s 12-month entitlement under the FMLA, and an explanation of which method the employee uses to calculate the FMLA year (i.e. calendar, rolling, etc.);
b. any obligation for the employee to provide a certification of serious health condition, exigency (military), etc. and the consequences of failing to provide such certification. A copy of the certification form required by the employer may be included with this notice;
c. the employee’s right to substitute paid leave (consistent with the company’s leave policies), or the employer’s requirement that paid leave be substituted;
d. any requirement that the employee pay a portion of the health insurance premium during leave, and the consequence should the employee fail to do so;
e. any designation of the employee as a “key employee” under the FMLA, and the effect of that status on job restoration;
f. the employee’s right to maintain health insurance benefits during leave and restoration after leave;
g. the employee’s liability for health insurance premiums paid by the employer during leave, in the event that the employee fails to return to work after the leave;
h. any other appropriate information that should be communicated to the employee – for example, a requirement that the employee make periodic reports to the employer regarding intent to return to work.
(4) Designation Notice. The designation notice must be sent within five (5) days of the determination that in fact the leave is covered by the FMLA. This determination can be made in some cases when the initial request for leave if submitted by the employee, and in other cases will not be made until the employer receive a certification of serious health condition. This form must specify the number of hours, days and weeks that will be counted against the employee's FMLA leave entitlement (if known). If the employer requires a fitness-for-duty certificate for the employee to return to work, that requirement should be stated in this notice. A form designation notice (with boxes to check off) is also available at the DOL website.
Don’t wait until an employee requests FMLA leave - take time now to review your company’s FMLA notice procedures to make sure they are in compliance with the current regulations.
Employers who fall under the FMLA (50 or more employees within a 75 mile radius) must provide the following notifications:
(1) General Notice to Employees. The employer must provide general information about the FMLA through a poster (available from the DOL) placed in a conspicuous place, and by including the information either in the employee handbook or in written material given to the employee at time of hire. A notice that may be used by employees is available from the DOL at:
www.dol.gov/esa/whd/fmla/index.htm.
(2) Eligibility Notice. Once an employee requests FMLA leave, or the employer has a basis to believe that the employee’s leave maybe for an FMLA-qualifying reason, the employer must provide an “Eligibility Notice” to the employee within five (5) days, absent extenuating circumstances. This notice must either advise the employee that they are eligible for FMLA leave, or explain why they are not. A form eligibility notice is available for download at the DOL website referenced above.
(3) Rights and Responsibilities Notice. The employer must also provide a “rights and responsibilities notice.” This notice can be combined with the eligibility notice, and is a single document on the DOL form described above. Part A of the form is the eligibility notice, and Part B explains the rights and responsibilities of the employee. This notice should include the following, as applicable:
a. a statement that the leave is counted against the employee’s 12-month entitlement under the FMLA, and an explanation of which method the employee uses to calculate the FMLA year (i.e. calendar, rolling, etc.);
b. any obligation for the employee to provide a certification of serious health condition, exigency (military), etc. and the consequences of failing to provide such certification. A copy of the certification form required by the employer may be included with this notice;
c. the employee’s right to substitute paid leave (consistent with the company’s leave policies), or the employer’s requirement that paid leave be substituted;
d. any requirement that the employee pay a portion of the health insurance premium during leave, and the consequence should the employee fail to do so;
e. any designation of the employee as a “key employee” under the FMLA, and the effect of that status on job restoration;
f. the employee’s right to maintain health insurance benefits during leave and restoration after leave;
g. the employee’s liability for health insurance premiums paid by the employer during leave, in the event that the employee fails to return to work after the leave;
h. any other appropriate information that should be communicated to the employee – for example, a requirement that the employee make periodic reports to the employer regarding intent to return to work.
(4) Designation Notice. The designation notice must be sent within five (5) days of the determination that in fact the leave is covered by the FMLA. This determination can be made in some cases when the initial request for leave if submitted by the employee, and in other cases will not be made until the employer receive a certification of serious health condition. This form must specify the number of hours, days and weeks that will be counted against the employee's FMLA leave entitlement (if known). If the employer requires a fitness-for-duty certificate for the employee to return to work, that requirement should be stated in this notice. A form designation notice (with boxes to check off) is also available at the DOL website.
Don’t wait until an employee requests FMLA leave - take time now to review your company’s FMLA notice procedures to make sure they are in compliance with the current regulations.
Friday, July 10, 2009
EMPLOYER ALERT – MINIMUM WAGE INCREASES JULY 24
Effective July 24, 2009 the federal minimum wage increases to $7.25 per hour, an increase of four cents above the current Florida minimum wage of $7.21 per hour. Employers are required to pay the higher of the federal minimum wage, or the minimum wage required by state statute.
Accordingly, Florida employers should adjust their payroll practices no later than July 24 to ensure that all employees are paid a minimum of $7.25 per hour. An exception is tipped employees, whose hourly rate continues to be governed by the Florida law permitting a reduced wage of $4.19 per hour, provided that the employee's wage plus tips equals total compensation of at least $7.25 per hour.
Accordingly, Florida employers should adjust their payroll practices no later than July 24 to ensure that all employees are paid a minimum of $7.25 per hour. An exception is tipped employees, whose hourly rate continues to be governed by the Florida law permitting a reduced wage of $4.19 per hour, provided that the employee's wage plus tips equals total compensation of at least $7.25 per hour.
Monday, June 29, 2009
IN THE NEWS – WALKING THE TIGHTROPE – SUPREME COURT DECISION RAISES QUESTIONS FOR BUSINESSES ON TITLE VII COMPLIANCE
On Monday, June 29, the Supreme Court decided a hotly debated case attempting to reconcile the dual prohibition in Title VII of the Civil Rights Act against “disparate treatment” discrimination and “disparate impact” discrimination. Disparate treatment discrimination is the intentional different treatment of an individual or group of individuals in the workplace based on their race, color, religion, sex or national origin. Disparate impact discrimination occurs when a facially neutral employment practice has a disproportionally negative effect on the members of one of these protected classes. Title VII also provides, however, that liability for disparate impact discrimination does not exist if the employer can show that its practice was “job related for the position in question and consistent with business necessity.”
An example of the type of policy that has been upheld in prior cases under the disparate impact analysis would be weight and height requirements for firefighters – although those minimum requirements have a disparate impact on female job applicants, they are job related and consistent with business necessity, as the job requires the physical ability to carry an unconscious person out of a burning building. An example of a policy that failed the disparate impact analysis was a particular employer’s requirement that all job applicants have a high school diploma. This policy disproportionately eliminated minority applicants, but there was no evidence that having graduated high school bore any relationship to the ability to perform the job duties.
The case decided today, Ricci v. DeStefano, involved the use of a written and oral test to determine the eligibility of firefighters in the city of New Haven, Connecticut, for promotion. Under the City’s rules, an available promotion to captain or lieutenant could only be offered to individuals with the top three highest scores. The City and the consulting firm it hired to develop the test apparently went to great lengths to design a test that had content relevant to the job, and was nondiscriminatory. Nonetheless, when the test results were in, a disproportionate percentage of black and Hispanic employees taking the test scored lower than white employees taking the test. A public debate ensued and, ultimately, the City threw out the test results to avoid violating the disparate impact prohibitions of Title VII. A group of white and Hispanic employees who received high scores on the test and would likely have been eligible for promotion filed suit, claiming that discarding the test results based solely on a statistical analysis of the racial outcome constituted disparate treatment discrimination against them.
The U.S. Supreme Count (in a narrow 5-4 decision) held that by throwing out the test results the City failed to correctly apply Title VII’s disparate impact analysis – specifically, whether the test was job related and consistent with business necessity. After reviewing the testimony and other evidence presented at trial as to the content of the test and the steps undertaken by the consulting company to create it, the Court concluded that the test was job related and that there was no equally valid, less discriminatory alternative that the City had refused to adopt. Accordingly, in the words of the Court, there was no “strong basis in the evidence” to conclude that the City would have been liable for disparate impact discrimination if it had allowed the test results to stand. Therefore, the City’s conduct amounted to disparate treatment discrimination against the firefighters whose high scores were disregarded.
The challenge for employers in the aftermath of this decision is to find a balance between eliminating facially neutral policies that have a disparate impact on minority workers without inviting allegations that the very act of removing such policies itself discriminates against nonminority workers based on race. Great care should be taken to avoid implementing any employment practices that could have a disparate impact in the first place. Of course, as the City of New Haven discovered, it’s not always possible to predict whether a disparate impact will occur.
The financial consequences of a misstep can be devastating to a business. The New Haven firefighters test at issue in the case was administered to employees in 2003. The results were thrown out shortly thereafter, and six years of costly litigation ensued.
An example of the type of policy that has been upheld in prior cases under the disparate impact analysis would be weight and height requirements for firefighters – although those minimum requirements have a disparate impact on female job applicants, they are job related and consistent with business necessity, as the job requires the physical ability to carry an unconscious person out of a burning building. An example of a policy that failed the disparate impact analysis was a particular employer’s requirement that all job applicants have a high school diploma. This policy disproportionately eliminated minority applicants, but there was no evidence that having graduated high school bore any relationship to the ability to perform the job duties.
The case decided today, Ricci v. DeStefano, involved the use of a written and oral test to determine the eligibility of firefighters in the city of New Haven, Connecticut, for promotion. Under the City’s rules, an available promotion to captain or lieutenant could only be offered to individuals with the top three highest scores. The City and the consulting firm it hired to develop the test apparently went to great lengths to design a test that had content relevant to the job, and was nondiscriminatory. Nonetheless, when the test results were in, a disproportionate percentage of black and Hispanic employees taking the test scored lower than white employees taking the test. A public debate ensued and, ultimately, the City threw out the test results to avoid violating the disparate impact prohibitions of Title VII. A group of white and Hispanic employees who received high scores on the test and would likely have been eligible for promotion filed suit, claiming that discarding the test results based solely on a statistical analysis of the racial outcome constituted disparate treatment discrimination against them.
The U.S. Supreme Count (in a narrow 5-4 decision) held that by throwing out the test results the City failed to correctly apply Title VII’s disparate impact analysis – specifically, whether the test was job related and consistent with business necessity. After reviewing the testimony and other evidence presented at trial as to the content of the test and the steps undertaken by the consulting company to create it, the Court concluded that the test was job related and that there was no equally valid, less discriminatory alternative that the City had refused to adopt. Accordingly, in the words of the Court, there was no “strong basis in the evidence” to conclude that the City would have been liable for disparate impact discrimination if it had allowed the test results to stand. Therefore, the City’s conduct amounted to disparate treatment discrimination against the firefighters whose high scores were disregarded.
The challenge for employers in the aftermath of this decision is to find a balance between eliminating facially neutral policies that have a disparate impact on minority workers without inviting allegations that the very act of removing such policies itself discriminates against nonminority workers based on race. Great care should be taken to avoid implementing any employment practices that could have a disparate impact in the first place. Of course, as the City of New Haven discovered, it’s not always possible to predict whether a disparate impact will occur.
The financial consequences of a misstep can be devastating to a business. The New Haven firefighters test at issue in the case was administered to employees in 2003. The results were thrown out shortly thereafter, and six years of costly litigation ensued.
Wednesday, May 27, 2009
EMPLOYER ALERT - 10 TIPS FOR AVOIDING LIABILITY IN LAYOFFS
The downturn in the economy has forced many businesses to take serious steps to reduce overhead, including payroll costs. In some cases, costs can be reduced or at least contained by adopting hiring freezes, reducing staff by attrition, temporarily discontinuing pay increases, cutting back on hours, starting a job-sharing program, or offering unpaid leave while maintaining health benefits. Sometimes, however, the only alternative is to implement layoffs.
While layoffs are on the rise, so are employment discrimination claims filed through the EEOC and other administrative agencies, and in the courts. You should be aware that despite obvious economic reasons for reducing staffing, these claims continue to be filed, and defending them can be expensive. Terminated employees who have difficulty finding a new position in this economic climate are even more likely to seek legal advice regarding their termination, and raise claims alleging a discriminatory motive in their selection for layoff.
The following strategies will help you avoid those claims, and significantly reduce the costs of those that are filed.
1. Don’t give false assurances to employees about their job security. It’s fine to be optimistic about the future of your business, but you should avoid making promises that employees may rely on in turning down other job opportunities, only to find themselves out of work a few months later.
2. Consider other options first. Can you accomplish the necessary cost-cutting by less drastic measures? Some of the strategies mentioned above may work for your company. You can also consider changing the manner of paying employees – moving, for example to a higher commission rate and a lower base pay for sales staff, or utilizing another type of incentive-based compensation. (Make sure, however, that your pay practices remain in compliance with the federal wage and hour laws.)
3. Use selection criteria you can defend. Although it is legal to factor in performance in determining which employees to include in a layoff, you do so at your own risk. A safer approach is to first determine which job functions you can eliminate or consolidate, then terminate employees based on seniority (i.e. last in, first out). Resist the temptation to discard an older employee in favor of a newer employee who is more promising – especially if the “older” employee is over 40.
4. Once you’ve identified certain employees for layoff, don’t dredge up performance issues you failed to deal with in the past as a way to try to avoid an unemployment compensation claim. Employees who are laid off are entitled to receive unemployment benefits, and by contesting their claim you are opening the door for other claims against your company. Keep it simple.
5. Before implementing the layoff, look at the list of selected employees to see if there appear to be any patterns or “red flags” in your selections. Are all employees selected for termination over age 40? Have you included anyone who recently returned from a medical leave under the FMLA? Has an employee selected for layoff recently complained about any type of discrimination or harassment in the workplace, or objected to a company practice on the grounds that it violates a statute? If any of the foregoing is true, you may want to discuss your situation with an employment law attorney before making a final decision. Remember, even if your decision was made fairly and impartially, you need to be careful about giving the appearance of discriminatory or retaliatory employment action. Even a completely baseless wrongful discharge complaint can be costly to defend. If you cut $50,000 from your payroll but end up spending $50,000 in legal fees and costs defending your firing decisions, you really haven’t accomplished anything.
6. If your business employs more than 100 employees, you may have notice obligations under the federal WARN Act. Check with an employment law attorney to see if this applies to your situation.
7. Employees who are laid off are entitled to continuing group health insurance coverage under federal COBRA or Florida’s Mini-COBRA, which applies to small employers. Make sure former employees receive all required notices, and be careful not to provide inaccurate information about their rights.
8. Consider paying severance to terminated employees in exchange for them signing a release. The upfront cost of paying severance is a small price compared to the costs of defending frivolous claims. If you do decide to pay severance, either set a flat number of weeks that applies to all employees who have worked for the company for one year or longer, or establish a formula based on position and/or years of service. For example, you might pay line employees one week’s severance for every year of service, and pay supervisory personnel two weeks. Most companies also apply a cap on the total number of weeks of severance that will be paid to any employee. Make sure any release signed by an employee over age 40 complies with the requirements in the Older Workers Benefits Protection Act (“OWBPA”) for release of claims under the Age Discrimination in Employment Act (“ADEA”), and do not make signing the release of condition for receiving amounts that would otherwise be due under established company policy (for example, a policy of paying accrued and unused PTO to anyone terminated without cause).
9. Do not hold the employee’s last paycheck “hostage” pending return of company-owned equipment, etc. An employee who does not receive his or her last paycheck can file suit in federal court under the Fair Labor Standards Act (“FLSA”). Many plaintiffs’ lawyers representing individuals in “last paycheck” cases provide no notice or demand to the employer before filing suit. Under the FLSA, you will be liable not only for payment of wages due to the employee, but also for the attorney’s fees of the plaintiff’s lawyer. As a result of withholding a last paycheck of a few hundred dollars, you could end up owing thousands of dollars to the employee’s attorney, plus paying your own legal fees as well.
10. Provide references and any other “outplacement services” you can to employees who are being laid off. An employee who is able to move on successfully is less likely to harbor ill will against the company.
While layoffs are on the rise, so are employment discrimination claims filed through the EEOC and other administrative agencies, and in the courts. You should be aware that despite obvious economic reasons for reducing staffing, these claims continue to be filed, and defending them can be expensive. Terminated employees who have difficulty finding a new position in this economic climate are even more likely to seek legal advice regarding their termination, and raise claims alleging a discriminatory motive in their selection for layoff.
The following strategies will help you avoid those claims, and significantly reduce the costs of those that are filed.
1. Don’t give false assurances to employees about their job security. It’s fine to be optimistic about the future of your business, but you should avoid making promises that employees may rely on in turning down other job opportunities, only to find themselves out of work a few months later.
2. Consider other options first. Can you accomplish the necessary cost-cutting by less drastic measures? Some of the strategies mentioned above may work for your company. You can also consider changing the manner of paying employees – moving, for example to a higher commission rate and a lower base pay for sales staff, or utilizing another type of incentive-based compensation. (Make sure, however, that your pay practices remain in compliance with the federal wage and hour laws.)
3. Use selection criteria you can defend. Although it is legal to factor in performance in determining which employees to include in a layoff, you do so at your own risk. A safer approach is to first determine which job functions you can eliminate or consolidate, then terminate employees based on seniority (i.e. last in, first out). Resist the temptation to discard an older employee in favor of a newer employee who is more promising – especially if the “older” employee is over 40.
4. Once you’ve identified certain employees for layoff, don’t dredge up performance issues you failed to deal with in the past as a way to try to avoid an unemployment compensation claim. Employees who are laid off are entitled to receive unemployment benefits, and by contesting their claim you are opening the door for other claims against your company. Keep it simple.
5. Before implementing the layoff, look at the list of selected employees to see if there appear to be any patterns or “red flags” in your selections. Are all employees selected for termination over age 40? Have you included anyone who recently returned from a medical leave under the FMLA? Has an employee selected for layoff recently complained about any type of discrimination or harassment in the workplace, or objected to a company practice on the grounds that it violates a statute? If any of the foregoing is true, you may want to discuss your situation with an employment law attorney before making a final decision. Remember, even if your decision was made fairly and impartially, you need to be careful about giving the appearance of discriminatory or retaliatory employment action. Even a completely baseless wrongful discharge complaint can be costly to defend. If you cut $50,000 from your payroll but end up spending $50,000 in legal fees and costs defending your firing decisions, you really haven’t accomplished anything.
6. If your business employs more than 100 employees, you may have notice obligations under the federal WARN Act. Check with an employment law attorney to see if this applies to your situation.
7. Employees who are laid off are entitled to continuing group health insurance coverage under federal COBRA or Florida’s Mini-COBRA, which applies to small employers. Make sure former employees receive all required notices, and be careful not to provide inaccurate information about their rights.
8. Consider paying severance to terminated employees in exchange for them signing a release. The upfront cost of paying severance is a small price compared to the costs of defending frivolous claims. If you do decide to pay severance, either set a flat number of weeks that applies to all employees who have worked for the company for one year or longer, or establish a formula based on position and/or years of service. For example, you might pay line employees one week’s severance for every year of service, and pay supervisory personnel two weeks. Most companies also apply a cap on the total number of weeks of severance that will be paid to any employee. Make sure any release signed by an employee over age 40 complies with the requirements in the Older Workers Benefits Protection Act (“OWBPA”) for release of claims under the Age Discrimination in Employment Act (“ADEA”), and do not make signing the release of condition for receiving amounts that would otherwise be due under established company policy (for example, a policy of paying accrued and unused PTO to anyone terminated without cause).
9. Do not hold the employee’s last paycheck “hostage” pending return of company-owned equipment, etc. An employee who does not receive his or her last paycheck can file suit in federal court under the Fair Labor Standards Act (“FLSA”). Many plaintiffs’ lawyers representing individuals in “last paycheck” cases provide no notice or demand to the employer before filing suit. Under the FLSA, you will be liable not only for payment of wages due to the employee, but also for the attorney’s fees of the plaintiff’s lawyer. As a result of withholding a last paycheck of a few hundred dollars, you could end up owing thousands of dollars to the employee’s attorney, plus paying your own legal fees as well.
10. Provide references and any other “outplacement services” you can to employees who are being laid off. An employee who is able to move on successfully is less likely to harbor ill will against the company.
Friday, January 30, 2009
IN THE NEWS – FAIR PAY ACT EXTENDS TIME FOR CLAIMS
President Obama signed into law on January 29, 2009 the Lilly Ledbetter Fair Pay Act, extending the time period for filing of wage discrimination claims. This legislation was passed specifically in response to a 2007 decision of the U.S. Supreme Court dismissing as untimely an employee’s Title VII sex discrimination claim that for many years she was paid significantly less than her male counterparts for performing the same job.
Most discrimination claims require timely filing with the EEOC or applicable state agency. In Florida, claims under Title VII and/or the Florida Civil Rights Act must be filed with the EEOC within 300 days, and with the Florida Commission on Human Relations (the FCHR) within 365 days, of the incident giving rise to the claim.
While this rule makes sense with respect to discreet acts of discrimination, such as termination of employment, many critics of the U.S. Supreme Court’s decision in the Ledbetter case (including Justice Ruth Bader Ginsburg, who wrote a strong dissenting opinion in the 5-4 decision), have pointed out that because workers generally treat salary information as confidential, an employee may be unaware for years that a pay disparity exists. In the Ledbetter case the plaintiff, who had worked as a supervisor at a Goodyear Tire and Rubber Company plant for 19 years, started out at the same salary as her male counterparts. By the time she discovered the pay difference as she neared retirement, her salary was 40% lower than male supervisors, who had received significantly higher raises over the years.
Under the new law, the statute of limitations period is restarted every time the employee receives a paycheck.
As a practical matter, this decision means that more employees will have the opportunity to file wage claims under the sex discrimination prohibition in Title VII (which provides higher damages), and will no longer be limited to the remedies under the Equal Pay Act (which has a lower cap on damage awards and no provision for punitive damages).
Most discrimination claims require timely filing with the EEOC or applicable state agency. In Florida, claims under Title VII and/or the Florida Civil Rights Act must be filed with the EEOC within 300 days, and with the Florida Commission on Human Relations (the FCHR) within 365 days, of the incident giving rise to the claim.
While this rule makes sense with respect to discreet acts of discrimination, such as termination of employment, many critics of the U.S. Supreme Court’s decision in the Ledbetter case (including Justice Ruth Bader Ginsburg, who wrote a strong dissenting opinion in the 5-4 decision), have pointed out that because workers generally treat salary information as confidential, an employee may be unaware for years that a pay disparity exists. In the Ledbetter case the plaintiff, who had worked as a supervisor at a Goodyear Tire and Rubber Company plant for 19 years, started out at the same salary as her male counterparts. By the time she discovered the pay difference as she neared retirement, her salary was 40% lower than male supervisors, who had received significantly higher raises over the years.
Under the new law, the statute of limitations period is restarted every time the employee receives a paycheck.
As a practical matter, this decision means that more employees will have the opportunity to file wage claims under the sex discrimination prohibition in Title VII (which provides higher damages), and will no longer be limited to the remedies under the Equal Pay Act (which has a lower cap on damage awards and no provision for punitive damages).
Wednesday, January 21, 2009
EMPLOYER ALERT – PITFALLS OF EMPLOYEE FREE CHOICE ACT
Touted by organized labor as the solution to a struggling economy, the Employee Free Choice Act, if passed by Congress, will pave the way for rapid unionization of many workforces, large and small. For employers, there are some very troubling aspects of this legislation to consider.
Currently, in order for a workforce (or category of employees) to join a union, 30% of the employees must sign an authorization card. The National Labor Relations Board (“the NLRB”) then schedules an election and, after a reasonable period of time has passed for discussion and consideration by the workers, the election is held by secret ballot.
Under the new proposed law, however, there is no period for discussion, and no secret ballot election is held. Instead, once a majority (51%) of the employees signs an authorization card, the union is put in place. And stiff monetary penalties will be levied against an employer who “interferes” with the process.
Under the current system, once a union is established in a business, collective bargaining begins and continues until an agreement is reached. If negotiations break down, workers can strike. The company can then either negotiate further to bring them back, or permanently replace the striking employees. The employer cannot be forced to sign an agreement with terms it objects to, and the union cannot be forced to sign an agreement it objects to. Under the new legislation, however, if a collective bargaining agreement is not reached within 90 days, either party can request mediation. If mediation does not result in an agreement within the next 30 days, the issues are decided by an arbitration panel, whose decisions are mandatory for both the employer and the workers for up to two years. The issues decided by the arbitration panel can include wages, work hours, benefits, and other terms of employment. The employer is bound by that “agreement,” notwithstanding the inclusion of terms it never agreed to.
Another problem with the legislation is the total elimination of employee privacy. Under the current system, a worker who feels pressured by colleagues to sign an authorization card can still vote “no” in the secret ballot election. Under the “card check” mechanism of the proposed bill, once that worker signs the authorization card, his “vote” is cast.
This bill was passed by the House of Representatives last year, but died in the Senate under threat of veto by President Bush. President Obama has already indicated he will readily sign this bill into law if it is placed before him. In light of the support the legislation has received, it is likely it will be passed this year.
Although historically Florida has not been a union state and, for the most part, only large employers have had a unionized workforce, the prerequisite of “concerted action” to form a union requires only two employees in a place of business. Accordingly, this legislation poses concerns for all Florida employers, regardless of size.
Because Florida is a “right to work” state, an employee can get a job regardless of whether they have a union card. Once employed, they are not required to join the existing union at their worksite – the payment of union dues is not mandatory. But the terms and conditions of their employment will still be subject to whatever collective bargaining agreement is in place.
Currently, in order for a workforce (or category of employees) to join a union, 30% of the employees must sign an authorization card. The National Labor Relations Board (“the NLRB”) then schedules an election and, after a reasonable period of time has passed for discussion and consideration by the workers, the election is held by secret ballot.
Under the new proposed law, however, there is no period for discussion, and no secret ballot election is held. Instead, once a majority (51%) of the employees signs an authorization card, the union is put in place. And stiff monetary penalties will be levied against an employer who “interferes” with the process.
Under the current system, once a union is established in a business, collective bargaining begins and continues until an agreement is reached. If negotiations break down, workers can strike. The company can then either negotiate further to bring them back, or permanently replace the striking employees. The employer cannot be forced to sign an agreement with terms it objects to, and the union cannot be forced to sign an agreement it objects to. Under the new legislation, however, if a collective bargaining agreement is not reached within 90 days, either party can request mediation. If mediation does not result in an agreement within the next 30 days, the issues are decided by an arbitration panel, whose decisions are mandatory for both the employer and the workers for up to two years. The issues decided by the arbitration panel can include wages, work hours, benefits, and other terms of employment. The employer is bound by that “agreement,” notwithstanding the inclusion of terms it never agreed to.
Another problem with the legislation is the total elimination of employee privacy. Under the current system, a worker who feels pressured by colleagues to sign an authorization card can still vote “no” in the secret ballot election. Under the “card check” mechanism of the proposed bill, once that worker signs the authorization card, his “vote” is cast.
This bill was passed by the House of Representatives last year, but died in the Senate under threat of veto by President Bush. President Obama has already indicated he will readily sign this bill into law if it is placed before him. In light of the support the legislation has received, it is likely it will be passed this year.
Although historically Florida has not been a union state and, for the most part, only large employers have had a unionized workforce, the prerequisite of “concerted action” to form a union requires only two employees in a place of business. Accordingly, this legislation poses concerns for all Florida employers, regardless of size.
Because Florida is a “right to work” state, an employee can get a job regardless of whether they have a union card. Once employed, they are not required to join the existing union at their worksite – the payment of union dues is not mandatory. But the terms and conditions of their employment will still be subject to whatever collective bargaining agreement is in place.
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