Employment discrimination charges are at a twelve-year low, the U.S. Equal Employment Opportunity Commission (“EEOC”) reported last week. The EEOC released data for charges of workplace discrimination in fiscal year 2018. However, the number of sexual harassment charges increased, likely due to the #MeToo movement which has focused on publicizing and eradicating sexual harassment in the workplace.

The Numbers

The EEOC is the first stop for an employee to bring a charge against an employer raising employment discrimination, harassment or retaliation claims in violation of a variety of federal laws. In 2018, the EEOC took in 76,418 charges (8,000 less than 2017). Sexual harassment claims typically make up nearly one third of all sex discrimination charges with the EEOC. The recent data shows sexual harassment complaints have increased by 13.6 percent from last year, a likely effect of the #MeToo movement.

The Reasons

As the unemployment rate is low and worker demand is up, there are fewer job rejections and employee terminations for employees to contest. Additionally, with the recent public outcry against workplace discrimination, employers have taken steps to educate its employees in awareness and prevention of such activity. Employer education remains one of the most important aspects of reducing and preventing workplace discrimination. Contact us to provide workplace discrimination prevention for your employees!

The American Bar Association (“ABA”) published an article written by Alan H. Bowie, Jr. titled Updates from the NLRB and the Office of The General Counsel in its 2019 Section of Labor and Employment Law Winter Newsletter.  His article summarizes updates from the National Labor Relations Board (“NLRB”) and the Office of NLRB General Counsel given at the ABA’s 12th Annual Labor and Employment Law Conference.

NLRB updates were given by current Board Members Chairman Jonathan Ring, Lauren McFerran, Marvin Kaplan, and William Emanuel.  The Board Members covered topics ranging from the use of rulemaking to establish the current board’s position on laws, internal ethics and the recusal process, and the use of alternative dispute resolution to resolve NLRB cases more efficiently.  As we previously reported, the issue of Board Member recusals became a hot topic after the Board was required to vacate the Hy-Brand decision.

The updates from the Office of the NLRB General Counsel were given by Assistant General Counsel for the NLRB Alice Stock.  Attorney Stock discussed the Office’s first-year case statistics under new General Counsel Peter Robb, the General Counsel’s approach to case handling, and his position on certain NLRB laws.

Overall, the respective updates indicated that the NLRB and Office of the General Counsel are looking to prioritize efficiency and restore “balance” to the agency and the laws.  For the full article, click here.

The Federal Department of Labor (“DOL”) recently proposed two new rules addressing joint employer status and overtime pay calculation under the Fair Labor Standards Act (“FLSA”). These proposals are significant because the underlying regulations had not been updated in decades.

Joint Employer Status

On April 1, 2019, the DOL proposed the new rule for determining joint employer status. The proposed rule would establish a four-factor test that would consider whether the potential joint employer actually exercises power to:

  • hire or fire the employee;
  • supervise and control the employee’s work schedules or conditions of employment;
  • determine the employee’s rate and method of payment; and
  • maintain the employee’s employment records.

The proposed rule also includes 9 examples analyzing potential joint employer relationships, which will be open to the public for comment.

This proposed rule would be the first major revision of the joint employer regulations since 1958. In addition, it would cement the current administration’s position on joint employer status.  Recall that the DOL under President Obama issued guidance in 2016 that scrutinized joint employer relationships. In 2017, the current administration rescinded that guidance. Thus, finalizing this new rule would completely overturn the previous administration’s rule and reinforce the new administration’s position.

Overtime Pay Calculation

Last week, the DOL proposed another new rule to clarify and update the regular rate requirements for purposes of calculating overtime under the FLSA. The FLSA generally requires that employers pay overtime of at least one and one-half times the regular rate for hours worked in excess of 40 hours per workweek. Under the current rules, employers are discouraged from offering more perks (e.g., gym memberships or bonuses) because it may be unclear whether those perks must be included in the calculation of an employee’s regular rate of pay.

The proposed rule clarifies whether certain kinds of perks, benefits, or other miscellaneous items must be included in the employee’s regular rate. For instance, the rule clarifies that the following perks are excluded from the employee’s regular rate of pay:

  • the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts;
  • payments for unused paid leave, including sick leave;
  • reimbursed expenses, even if not incurred “solely” for the employer’s benefit;
  • reimbursed travel expenses that do not exceed the maximum travel reimbursement permitted under the Federal Travel Regulation System regulations and that satisfy other regulatory requirements;
  • discretionary bonuses;
  • Benefit plans, including accident, unemployment, and legal services; and
  • Tuition programs, such as reimbursement programs or repayment of educational debt.

The overtime calculation rule has been submitted for public comment. Click this link to submit a comment. The joint employer status rule is being finalized and will be published for public comment soon. We will keep you updated on the developments. Please feel free to contact us if you have any questions.

On March 27, 2019, the U.S. House of Representatives passed the Paycheck Fairness Act addressing the gender pay gap by bolstering the Equal Pay Act. The bill, sponsored by Rep. Rosa DeLauro, D-Conn, would protect employees from pay discrimination and hold employers accountable for pay discrimination on the basis of sex. Among other changes, the Paycheck Fairness Act would prohibit employment policies or practices that bar employees from discussing their salaries, and it would increase penalties for violations of the Equal Pay Act.

The Past and Present: Equal Pay Act

The Equal Pay Act bans pay discrepancies between men and women who hold substantially the same jobs unless wages are based on seniority, merit, quality or quality of work, or any factor other than sex. An employer may use any of those four factors as a defense against claims of wage discrimination. As noted in the findings of Congress in the Paycheck Fairness Act, gender-based wage discrimination still persists, undermining women’s financial security and burdening the progress of commerce.

The Future: Paycheck Fairness Act

Rep. DeLauro first introduced the bill in 1997, which would: 

  1. Prohibit retaliation against employees who discuss their salaries with other employees.
  2. Prohibit employers from using an applicant’s prior salary as a mechanism for setting salaries; prohibit employers from requesting salary history from applicants or previous employers (although salary history may be used as part of negotiations following a job offer).
  3. Require the Equal Employment Opportunity Commission to gather compensation data from employees based on sex, race, and national origin to track discriminatory patterns or practices.
  4. Require the Department of Labor to inform and incentivize employers to make efforts to eliminate the pay gap between the sexes. Enhance the current penalties to add compensatory damages and punitive damages (these are the same remedies available for other civil rights violations).

What’s Next

The House passed the Paycheck Fairness Act and now it goes to the Senate for a vote. With a historic number of women in the Senate and the momentum of the #MeToo Movement, the bill has a chance to move beyond the Senate. If the Senate passes the Act, then it goes to the President before becoming law.

Stay tuned for other exciting labor and employment news!

On March 14, 2019, the U.S. Department of Labor, Wage and Hour Division (“DOL”) released an opinion letter clarifying the DOL’s position on designating and taking leave under the Family and Medical Leave Act (“FMLA”). Specifically, the DOL stated that employers cannot delay the designation of FMLA-qualifying leave or designate more than 12 weeks of leave (or 26 weeks for military caregivers) as FMLA leave. This opinion is at odds with a 2014 Ninth Circuit ruling.

The Law

The FMLA grants eligible employees of covered employers up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons, or up to 26 weeks to care for a family member who is a covered servicemember. Employees may choose, or employers may require employees, to substitute accrued paid time off for FMLA leave. This means that the paid leave provided by the employer will run concurrently with the unpaid FMLA leave.

The Opinion Letter

The opinion letter reiterated that when an employer determines that a leave qualifies for FMLA, the employer must notify the employee of the FMLA status within five days. Ultimately, the DOL clarified that an employer may not permit employees to use other available paid leave instead of or before taking FMLA leave.

The opinion letter also tackled the issue of whether an employer may designate FMLA leave beyond the 12-week entitlement (or 26 weeks with respect to military caregivers). Employers are prohibited from doing so according the DOL. This does not mean, however, that employers cannot or should not allow employees to take additional unpaid or paid leave. It just means that the FMLA leave entitlement may not be expanded by paid leave.

Opinion letters are issued by the DOL to help employers and employees understand and comply with federal labor laws.

Recently, Democratic federal legislators proposed a bill to bar companies from requiring employees to sign mandatory arbitration agreements and also from preventing employees from bringing class actions.

Proposed Bill

The proposed bill, the Forced Arbitration Injustice Repeal Act (“FAIR Act”), sponsored by Connecticut Senator Richard Blumenthal and New York Congressman Jerrold Nadler, would ban mandatory arbitration in employment agreements, prohibiting employees from taking their claims to court.  It would also bar agreements that prevent workers from bringing class action claims against their employers.

Reactions to the Epic Systems v. Lewis Decision

This past summer, the United States Supreme Court ruled in an appropriately named case, Epic Systems v. Lewis, that mandatory arbitrations provisions, as well as waiver of class action claims in employment agreements, were enforceable.  Proponents for employees regard the Epic case as a blow to employees’ rights by preventing them from going public with claims, having their day in court and obtaining potentially larger jury awards, among other reasons.  In the midst of the recent #MeToo movement and pressure by employees to end mandatory arbitration at high profile companies such as Google and Vox Media, there is a concern that allowing employers to keep claims private and separate will in turn sweep legitimate claims under the rug.  Those who favor the Epic decision believe that arbitration provides a more civilized way of dealing with employment disputes because arbitration tends to be faster, cheaper, less obtrusive and private.  The FAIR Act would reverse the Supreme Court’s ruling in Epic.

Future Path of the FAIR Act

While similar bills have been proposed in recent years without moving forward, the FAIR Act has more support in the House of Representatives than in it has had in the past.  However, it will face more opposition in the Republican-controlled Senate and it is probably unlikely that President Trump would sign a bill reversing a decision written by his first Supreme Court appointee.

Stay tuned as we keep you updated with the issues that affect you!

Recently, we reported that the Department of Labor (“DOL”) would likely release a new rule addressing the “white collar” overtime exemptions for executive, administrative, and professional workers soon.  The DOL released this much anticipated proposed rule on March 7, 2019.

Proposed Changes

Under the proposed rule, the salary level threshold would increase from $455 per week (or $23,660 annually) to $679 per week (or $35,508 annually.) The DOL’s proposed increase falls almost squarely at the midway point between the proposed Obama-era increase ($913 per week) and the current salary threshold ($455 per week.) The DOL estimates that more than one million more American workers would be eligible for overtime as a result of this increase.

Other proposed changes would include:

  • Increasing the salary threshold for so-called “highly compensated employees” from $100,000 to $147,414,
  • A commitment to periodically review the salary threshold, which would require the DOL to use the notice-and-commenting rule making process, and
  • Allowing employers to use non-discretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level.

The proposed rule does not include:

  • Changes to the overtime protections for police officers, fire fighters, paramedics, nurses, laborers, and non-management employees,
  • Changes to the job duties test, and
  • Inclusion of automatic adjustments to the salary threshold.

At this point, this rule is just a proposal and will be open for public comment for 60 days after it is published to the federal register. The DOL will then finalize the rule after a careful review of the comments. Based on previous responses to changes to the overtime rule, it is expected that groups that are not satisfied with the final rule will take legal action to prevent its implementation.

In February, the New York City Commission on Human Rights, released guidance that defines race discrimination to include discrimination based on natural hair and hairstyles.  Under this guidance, the New York City Human Rights Law now protects the rights of New York City (“NYC”) employees to maintain natural hair or hairstyles that are closely associated with their racial, ethnic, or cultural identities.  This includes, but is not limited to, the right to maintain hairstyles such as “locs, cornrows, twists, braids, Bantu knots, fades, Afros, and/or the right to keep hair in an uncut or untrimmed state.”

Examples of policies that violate the NYC law are:

  • A grooming policy prohibiting twists, locs, braids, cornrows, Afros, Bantu knots, or fades which are commonly associated with African American people;
  • A grooming policy requiring employees to alter the state of their hair to conform to the company’s appearance standards, including having to straighten or relax hair (i.e., use chemicals or heat); and
  • A grooming policy banning hair that extends a certain number of inches from the scalp, thereby limiting Afros.

The guidance further provides that facially neutral grooming policies may violate the NYC law if an employer enforces the policy only against a protected class.

The NYC law prohibits employers from harassing, imposing unfair conditions, or otherwise discriminating against employees based on aspects of their appearance associated with their race.  Examples of discrimination include:

  • Requiring African American people to obtain supervisory approval prior to changing hairstyles, but not imposing the same requirement on other races;
  • Requiring only African American employees to alter or cut their hair or risk losing their jobs;
  • Telling an African American employee with locs that they cannot be in a customer-facing role unless they change their hairstyle;
  • Refusing to hire an African American candidate with cornrows because her hairstyle does not fit the “image” the employer is trying to promote for sales representatives; and
  • Mandating that African American employees hide their hair or hairstyle with a hat or visor.

This law is an interesting development in light of a 2016 federal appellate court decision that held that an employer’s ban of dreadlocks was not per se race discrimination.  In that case, the Equal Employment Opportunity Commission took the position that it was.  The Supreme Court declined to hear the case and federal courts remain split on whether natural hair discrimination is race discrimination.  We will update you as this area of the law develops.

An updated rule for the Fair Labor Standard’s Acts “white collar” overtime exemptions for executive, administrative, and professional workers is likely coming soon.  In mid-January, the United States Department of Labor (“DOL”) submitted its proposed final rule governing these exemptions to the White House Office of Management and Budget for final approval.  As we reported previously, the drastic Obama-era updates to the overtime exemptions, which nearly doubled the salary threshold, were struck down by a federal court.

What can we expect in a new rule?

You can certainly expect an increase in the salary threshold.  Current DOL Secretary Alexander Acosta testified in his confirmation hearings that the salary threshold should increase but he thought that the Obama-era increase was done in a way that “created a shock to the system.”  It is likely that the salary threshold will fall somewhere in the middle of the current threshold, which is $23,600 and the proposed Obama-era threshold, which was $47,476.

When can we expect a new rule?

No release date has been provided.  However, the DOL is likely to publish a new rule this year.  An appeal of the court’s decision to strike down the Obama-era rule is pending before a federal appellate court.  The federal appellate court can overturn the lower court’s decision and reinstate the Obama-era proposed rule if the DOL does not finalize its new rule.

The General Assembly began its 2019 Legislative Session on January 9th.  Many bills affecting the workplace have already been introduced.  They include the following:

Leave of Absence

  • HB5003 and SB1 would create a paid Family and Medical Leave funded by employee contributions, similar to a workers’ compensation program. The bills would also broaden the existing Connecticut FMLA, making it applicable to all employers, and offering up to twelve weeks of paid leave during any twelve-month period.
  • SB358 would provide time off to employees in order to vote.

Wage and Hour

  • HB5004 would raise the minimum wage in the state from $10.01 to $15 over multiple years.
  • SB764 would prohibit on-call shift scheduling.
  • HB6111 would permit employers to require employees to participate in direct deposit for paychecks.
  • HB5053 would create a task force to increase employment opportunities for people recovering from substance abuse.
  • HB5045 would create a task force to increase employment opportunities for people with disabilities.

Non-Compete Agreements

  • HB6913 would prohibit employers from requiring certain employees from signing unfair non-compete agreements. The terms “certain” and “unfair” are currently undefined.
  • HB6914 would prohibit non-compete agreements for employees below a certain salary.
  • HB377 would prohibit non-compete clauses in a physician employment contract.

Discrimination

  • HB5271 would revive last year’s Time’s Up Act. It would require employers with 3 or more employees to provide sexual harassment prevention training to all employees of Connecticut employers.  Currently, employers with 50 or more employees are required to provide two hours of training for supervisors
  • SB697 would restrict workplace nondisclosure agreements “to prohibit the silencing of victims in the workplace and to prevent sexual harassment by repeat offenders.” This goes beyond the federal Tax Cut and Jobs Act of 2017, which limited tax deductions for confidential sexual harassment settlements.
  • HB6113 would prohibit employers from asking about an applicant’s date of birth or date of graduation on an employment application to prevent age discrimination.
  • SB765 would ensure all employees “receive fair and equal pay for equal work.”

Stay tuned as we continue to monitor these bills and update you over the course of the legislative session.