With the new year underway there
are a number of resolutions employers of all sizes and industries should act on
if they wish to avoid winding up in the crosshairs of governmental workplace
watchdogs bent on expanding their influence in 2016. Here are 5 highly
recommended areas deserving of employers’ immediate attention:
1. Avoiding
“joint employer” status and liability under newly adopted standards –
Last year, the
National Labor Relations Board (NLRB) overhauled the test to determine whether
two (or more) employers are “joint employers” for purposes of labor law, with
its Browning-Ferris Industries decision.
The new test makes it much easier to establish joint employer status and
is now being used to pursue claims against McDonald’s Corp. for the actions of
its franchisees. The NLRB’s test is being
used to hold multiple employers liable for unfair labor practices committed by
one, as in the case of McDonald’s Corp. as a joint employer with its
franchisees. Joint employer status may
also be used to impose collective bargaining and union contract obligations, as
well as determining whom can be subjected to picketing and other strike
activity or economic pressure, from unions.
The
Department of Labor (DOL) recently issued its own definition of “joint
employers,” amid allegations from some United States Congressmen of collusion
between the two agencies. Although some
of the factors in the two tests are similar (the DOL definition is actually
broader than that of the NLRB), the consequences of finding a joint employer
relationship by the different agencies differ significantly. The DOL’s guidance is relevant for the Fair
Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker
Protection Act (MSPA). Under these laws,
the hours worked for joint employers will be aggregated for purposes of
determining if an employee has worked overtime during a workweek. In either case, both joint employers will be
jointly liable for any violations under these laws.
Because of the
severe ramifications at stake and the current heightened focus on the issue, we
highly recommend that employers make the New Year’s resolution of auditing any
potential joint employment relationships with the help of someone knowledgeable
in these areas.
2. Ensuring
those regarded as “independent contractors” are not employees, again, under
newly adopted standards –
Last summer the
Department of Labor (DOL) issued a new interpretation of when a worker is an
independent contractor rather than an employee for purposes of wage and hour
requirements under the Fair Labor Standards Act (FLSA). According to the new interpretation, the key
question is whether the worker is economically dependent on the employer or in
business for him or herself, and can be determined by considering several
factors. The DOL boldly stated that under
its new analysis, “most workers will be considered employees rather than
independent contractors.”
Workers that
might be reclassified under this interpretation as employees rather than
independent contractors could include subcontractors, salespeople, drivers, cleaners,
nurses and caretakers, etc. Companies
that use these types of workers risk being held liable for tracking hours and
paying minimum wage and overtime under the law.
Additionally, the DOL has signed an agreement with the Minnesota
Department of Labor and Industry to share information and to coordinate
investigations and enforcement with regard to the misclassification of workers
as independent contractors. Unwary companies
could find themselves taken by surprise with liability under a number of laws
for their assumed “independent contractors” when the DOL defines these workers as
employees under its new stringent standard.
Given the DOL’s
war on independent contractors, once again an audit of these relationships is
in order.
3. Thoroughly
preparing for anticipated changes to exempt vs nonexempt status and the
explosion of rest break and meal wage/hour claims –
American
businesses are bracing in 2016 for the DOL to issue its final regulations on
minimum salary levels for white-collar exemptions, which potentially could
convert over 6 million workers from exempt to non-exempt hourly employees,
regardless of their exempt duties.
Proactive business and Human Resources professionals are auditing their
current exempt employees and preparing contingency plans to deal with these
regulations. In the meantime, however,
the onslaught of class action wage and hour lawsuits continues, unabated. In addition to overtime suits based on
employee misclassifications under the state and federal FLSA, claims of employers
mishandling meal and rest breaks are proving to be fertile ground for plaintiff
lawyers.
Given the
explosion of wage and hour lawsuits, coupled with what could well be monumental
changes in employee classifications necessitated by the DOL’s regulations
expected to issue sometime this year, resolving to conduct an internal audit of
employee pay practices is one New Year’s resolution every employer ought to
have high on its “to do” list.
4. Becoming
politically active to oppose an onslaught of proposed anti-business legislation
(2016 is, after all, an election year) –
In the current
Minnesota legislative session, among the more controversial proposals to impact
employers, include:
·
Outlawing an “abusive work environment” (i.e.,
bullying), and providing a private cause of action for employees to bring a
lawsuit. While most employers oppose
bullying in their workplaces, most lawsuits do not have merit, and this right
to a private cause of action would allow employees to bring lawsuits for
frivolous claims of bullying;
·
Imposing fines on employers for discriminating
against unemployed individuals;
·
Preventing employers from providing different
pay or benefits to employees based on the number of hours worked;
·
Impinging on employers’ ability to set and
change work schedules, as needed; and
·
Providing for paid family leave, as well as
earned “sick and safe time,” which would allow the employee to use the earned
leave for absences caused by the illness or injury of the employee or the
employee’s family member, or for domestic abuse, sexual assault, or stalking of
the employee or the employee’s family member.
Employers who
oppose these intrusions into their operations should resolve to become active
in their local business groups in 2016 and otherwise contest these and other
similar pieces of legislation.
5. Updating
employee handbooks or policies, especially any that are 2 years or older;
chances are they are seriously outdated –
The passage of
the Women’s Economic Security Act brought several changes to Minnesota law
within the past two years—including a new law requiring language relating to
employees’ rights to discuss and disclose their compensation to be included in
employee handbooks, and changes to Minnesota’s parental leave law and the
Minnesota Human Rights Act, as well as a new law regarding pregnancy
accommodations—leave many employee handbooks with out-of-date or illegal
policies. Additionally, several federal
agencies—most notably the National Labor Relations Board—have been increasing
their scrutiny of many common handbook policies, such as provisions regarding
confidentiality, e-mail use, social media, use of cameras and recording
devices, communications with the media and other parties, conduct toward the
company and supervisors, and more.
Any employee
handbooks that have not been updated within the past 2 years, with these important
new legal developments in mind, can be presumed to be outdated and should be
reviewed and revised ASAP.
Contact the experienced attorneys
of Wessels Sherman for help with auditing and compliance measures as part of
your company’s 2016 resolution to keep up with the developing law of the
workplace. In many cases an hour or two
of legal “prevention,” can be worth much more than what it may take to “cure”
problems down the road. To arrange a
free discussion of your issues with an experienced attorney and get a proposal
or quote of the cost to address them, please email or call Ms. Christine Beggan
at (952) 746-1700, or email her at chbeggan@wesselssherman.com.
