Holiday parties are a time-honored tradition in most workplaces.  While holiday parties can boost workplace morale and culture, poor management and planning can lead to unfortunate incidents and even worse, lawsuits.  In light of recent headlines on sexual harassment and other employment issues, it is especially important to consider various steps that you can take to minimize personnel issues and potential liability.

Monitor Alcohol Consumption and Provide Transportation

Alcohol is commonly served at holiday parties.  If not properly monitored, alcohol consumption can cause employees to engage in inappropriate, unwelcome or injurious conduct.  Successfully monitoring employee alcohol consumption can greatly reduce the risk of these kinds of incidents.

Consider limiting alcohol consumption by providing “drink tickets” or setting a drink maximum.  If your event is catered and not at a restaurant, you should hire a professional bartender to serve alcohol.  Professional bartenders are trained to monitor excessive drinking and cut off patrons who have had “too much.”  Also, consider providing transportation to and from the party.  This will reduce the risk of drunk driving and an employee hurting himself or others, and/or getting arrested.  Lastly, you should consider cutting off alcohol at least an hour before the party ends.

Set an Appropriate Time

Timing can be everything.  Holiday parties traditionally are evening affairs.  Consider departing from the evening tradition and hosting a party during the day.  If you plan to stick to the evening tradition, strongly consider starting and ending earlier in the evening.  Regardless of the time of day, make sure there is a strict end time and employees do not hang around after the party.  You should not sponsor or organize “after-party” events.  To this end, supervisors and managers should not attend the “after-party.”

Remind Employees of Personnel Policies and Expectations

Remind your employees that workplace rules will apply and clearly communicate your expectations in advance.  Consider reminding employees of the relevant personnel policies in advance of the event (e.g. anti-harassment, drugs and alcohol, dress code, and the code of conduct).  Before doing this, you should make sure that personnel policies and mandatory trainings are up-to-date.

Managers and/or supervisors should be reminded of their obligations to report certain behavior and should be encouraged to intervene where appropriate.  Managers and supervisors should help set the tone for holiday party behavior and hold employees accountable.  It is important that you clearly communicate your expectations and that employees understand that inappropriate behavior can lead to discipline.

Avoiding Wage and Hour Issues

Asking nonexempt employees to perform tasks at the holiday party can raise wage and hour issues.  Time spent performing duties for the benefit of the employer is considered compensable work time.  Therefore, you should establish that the party is voluntary and should not ask nonexempt employees to perform any duties or administrative tasks like setting up at the event, picking up supplies, or cleaning up.  Instead, rely on your exempt employees or consider hiring an outside company to complete these tasks.  If you choose to use nonexempt employees, make sure they are paid for all regular or overtime hours.

Holiday parties can be rife with potential liability if you are not careful.  If you follow these tips you can ensure your employees are able to celebrate the close of another business year while reducing your risk of liability.

Happy Holidays from the Carmody Labor and Employment team!


Notwithstanding all the news about repeal and changes to the Affordable Care Act, we are aware that the Internal Revenue Service is enforcing current provisions and assessing penalties.

Enforcement of the 2015 Employer Mandate Penalty

The IRS has announced that it will assess employer mandate penalties for the 2015 tax year.  Employers who had 100 or more full time employees (including full time equivalents) in 2014 and did not offer coverage to 70% of their full time employees in 2015 are subject to a penalty. The penalty applies if even one full time employee received a premium tax credit through the Exchange and employer coverage was not offered.  The 2015 penalty is $2080 times the total number of full time employees (minus 80).

Current Rule

Currently, the penalty applies to employers with 50 or more full time employees, including full time equivalents. If coverage is not offered to 95% of full time employees and at least one employee receives a premium tax credit through the Exchange, the penalty applies. The penalty for 2017 is $2260.

Other Penalties

Employers also can be subject to a penalty even when coverage is offered. The IRS penalizes employers for not offering affordable, minimum value coverage, if the employee received a premium tax credit through the Exchange. There are safe harbors for determining affordability.  The most commonly used one is the W-2 safe harbor, where the cost to the employee for self-only coverage is no more than 9.56% of W-2 income.  (This number is indexed for 2017.)  The penalty for this violation for 2015 is $3120 for each employee ($3390 for 2017).

How Are These Penalties Assessed?

These assessments result from IRS review of Forms 1095-C filed by employers for each full time employee against the records of employees who claimed a premium tax credit. Employers who receive what the IRS has labeled as Letter 226J must respond, typically within a 30 day period.

We can assist you in responding to the IRS.  Ignoring the letter will lead to the assessment of the tax.

Last week, both the U.S. House of Representatives and Senate took actions that may have a significant effect on labor and employment law.

Senate Confirms Peter Robb

On November 8, 2017, the Senate confirmed President Trump’s nominee for NLRB General Counsel, Peter Robb.  Robb is a longtime management-side labor and employment attorney.  He previously served as an NLRB field attorney and Chief Counsel to a former NLRB member.  Robb also litigated President Reagan’s firing of the Air Traffic Control Association members in 1981.

Robb’s confirmation is important because it confirms the change at the NLRB.  The General Counsel controls the agenda by setting NLRB policy and instructing the regional offices on the handling of cases and which issues to pursue and prioritize.  Robb’s management-side background signals a significant departure from his more pro-employee predecessor.

With the addition of Robb and the new Republican-appointed NLRB members, more employer friendly policies and decisions are expected from the NLRB.

Save Local Business Act

On November 2, 2017, the House of Representatives advanced the Save Local Business Act.  The relevant portion of this Act would amend the definition of joint employer under the National Labor Relations Act and the Fair Labor Standards Act to require that the employer exercise “direct control” over an employee to be considered a joint employer.

In 2015, the NLRB issued the Browning-Ferris decision in 2015 which expanded the Board’s definition of a joint employer to include employers who exercised indirect control over employees.  In addition, the Obama-era DOL issued guidance which significantly broadened the interpretation of a joint employer.  The current DOL rescinded this guidance in June.

This Act is Congress’s attempt to return the joint employer definition to the pre-Browning-Ferris standard.  The Senate is expected to introduce a companion bill, and the bill has a realistic chance of passing. We will keep you updated on any developments.

Carmody Torrance Sandak & Hennessey will hold a training session for supervisors on Thursday, November 16th on the prevention of sexual harassment in the workplace.  The program will be presented from our Waterbury office, but individuals may also participate by video conference in our New Haven and Stamford offices.  Registration starts at 8:15 a.m. and the program begins at 8:30 a.m.  The fee is $75 per person and includes a continental breakfast.

For more information and to register, please click here.

On October 30, 2017, apparently in the spirit of Halloween, the Department of Labor gave life to the Obama-era Overtime Rule we previously reported was virtually dead.  The DOL appealed the Texas federal judge’s decision to strike down the Rule.  In a short press release, however, the DOL made it clear that it would request that the court hold the appeal while it “undertakes further rulemaking to determine what the salary level should be.”

What does this mean for us?

This does not mean that the Obama-era Overtime Rule has been revived.  But, what it does signal is that the DOL is considering its own change to the current Rule.  Secretary Alexander Acosta’s statements in his confirmation hearing and his actions since being confirmed suggest that a salary increase may be coming.  The DOL recently published a “Request for Information” seeking public comment on a revision of the regulation, which drew as many as 165,000 commenters.

Why appeal the decision?

The DOL’s decision to file an appeal was likely a strategic decision to preserve its ability to effectively revise the Rule in the future.  Much of the Texas federal judge’s reasoning for striking the rule centered on the drastic salary increase.  In fact, the judge’s decision raised questions as to whether it was clear that the DOL had the authority to use salary as a basis for defining exemption under the FLSA.  Therefore, the DOL likely filed the appeal to make certain that the judge’s decision did not restrict its ability to issue a revised rule in the future.

We will continue to monitor these developments.  Please do not hesitate to contact us if you have any questions regarding the FLSA Overtime regulations, or this update.

On Monday, October 30, 2017, a federal court partially blocked President Trump’s plan to bar transgender individuals from serving in the military while this case is under review by the court. The court found that the portion of the new policy prohibiting transgender recruits from enlisting and calling for the discharge of current transgender service members likely violates their due process rights. The court, however, also dismissed claims challenging the policy’s ban on using military resources to pay for sex reassignment surgery because none of the plaintiffs were affected by that provision.

On October 26, 2017, the firm hosted its 29th Annual Labor and Employment Seminar at the Aqua Turf Club in Southington, Connecticut. Our annual seminar is a complimentary offering for our clients. This year, the seminar was eligible for SHRM and HRCI credit. The event began with lunch and an opportunity to mingle before the seminar. After, we hosted a reception with an additional chance to mingle and an opportunity for follow up questions.

We featured four “Breakout” sessions titled:

Accommodating Differences in the Workplace
Cybersecurity and Protecting Company Assets
Screening Employees with Background Checks, Social Media and Drug Testing
Common Mistakes Employers Make

We also covered “Hot Topics in Labor and Employment Law” including important updates on what to expect from the DOL, NLRB, EEOC, CHRO, OSHA, and the relevant benefit regulations.

Thank you to all of our client-subscribers for coming. If you subscribe to our blog, but have not attended our seminar before please join our mailing list by clicking here.

Below are some pictures from the event. We look forward to seeing you next year.




In three cases pending before the United States Supreme Court in the upcoming term, the Court will address whether employees can be forced to arbitrate class action employment law claims. The three cases, involving Murphy Oil, Epic Systems and Ernst & Young, highlight the two sides of the debate that have split the Circuit Court of Appeals.  The National Labor Relations Board has taken the position that requiring employees to give up their right to arbitrate class or collective action claims is a violation of the provision of the National Labor Relations Act that protects employees’ rights to engage in concerted activity.

In the key case to address this issue, D.R. Horton, Inc. v. NLRB, the Fifth Circuit Court of Appeals rejected the NLRB’s position. The Fifth Circuit held that arbitration agreements under the Federal Arbitration Act take precedence over the National Labor Relations Act and must be enforced. The Fifth Circuit issued a similar decision in Murphy Oil, which is one of the cases pending at the U.S. Supreme Court. Other Courts of Appeals including the Second Circuit, which includes Connecticut and New York, have agreed taken the same position and rejected the NLRB’s stance.

By contrast, the Seventh and Ninth Circuits, in the Epic Systems and Ernst & Young decisions held that employees’ rights under the National Labor Relations Act would be rendered meaningless if they cannot bring collective actions. This position has been has been supported by 17 States, as well as major unions, the American Civil Liberties Union and the NAACP. Several courts and judges in circuits that have upheld barring class actions in arbitration have expressed similar views and concerns but have felt constrained to follow the precedent in their circuits.

The decision on these three cases likely will provide key insight into the current Supreme Court’s views towards arbitration, employees and the National Labor Relations Act. Oral argument on the case is scheduled for October 2, 2017; a decision is expected in early 2018. The Supreme Court cases are NLRB v. Murphy Oil USA, Inc., Case 16-307; Epic Systems Corp. v. Lewis, Case 16-285, and Ernst & Young, LLP et. al, v. Stephen Morris et. al., Case 16-300. Stay tuned.

This week the Connecticut Department of Labor released posters in English and Spanish relating to the new pregnancy discrimination law that will take effect on October 1, 2017.  Please see our prior blog post about this new law. In addition to adding protections against pregnancy discrimination and requiring employers to provide reasonable accommodations to pregnant employees, the new law also requires that employers give notice to employees of their rights.  Notice must be given as follows:

  • New employees must be given notice at the time of their employment.
  • Currently employees must be given notice within 120 days of the effective date.
  • Pregnant employees must be given notice within 10 days of after notifying you of her pregnancy.

The new law states that employers can comply with these notice requirements by displaying a poster, in English and Spanish, in a conspicuous place that is accessible to employees and informs employees of their rights under the new law.

The English poster can be found here, and the Spanish poster can be found here.