It is well known that employers must reimburse California employees for cell phone use when employees are required to use their personal cell phones for business purposes. Reimbursement is required even if the employee does not actually incur extra expenses as a result of his or her use. However, what is not well understood is how much must be reimbursed.
A mandatory drug and alcohol test after a workplace injury seems like a no brainer, right? Most companies believe so, which is why mandatory drug and alcohol testing after workplace injuries has become a common policy. However, new Occupational Health and Safety Administration (“OSHA”) regulations on electronic reporting of workplace injuries cast doubt on the continued legality of such policies. Specifically, OSHA’s new position is that mandatory post-injury testing deters the reporting of workplace safety incidents by employees and therefore employers who continue to operate under such policies will face penalties and enforcement scrutiny. In light of OSHA’s enforcement position, it is time for your company to review and revise its mandatory post-accident drug and alcohol testing policy.
Effective August 10, 2016, OSHA’s final rules on electronic reporting of workplace injuries require employers to implement “a reasonable procedure” for employees to report workplace injuries, and that procedure cannot deter or discourage employees from reporting a workplace injury. The final rule, which amends OSHA’s regulation on Recording and Reporting Occupational Injuries and Illnesses (29 CFR 1904), requires employers to electronically submit injury and illness data to OSHA that they are already required to keep under OSHA regulations. Even though the content of these submissions depends on the size and industry of the employer, all employers are now required to: 1) inform employees of their right to report work-related injuries and illnesses free from retaliation; 2) clarify that an employer’s procedure for reporting work-related injuries and illnesses must be reasonable and not deter or discourage employees from reporting; and 3) incorporate the existing statutory prohibition on retaliating against employees for reporting work-related injuries or illnesses.
As we’ve previously covered here, on April 8, 2014 President Obama signed Executive Order 13665 (“Non-Retaliation for Disclosure of Compensation Information), at an event commemorating National Equal Pay Day, an annual public awareness event that aims to draw attention to the gender wage gap. On September 10, 2015, the Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) announced the Final Rule implementing the Order, which will take effect on January 11, 2016.
In its press release announcing the Final Rule, the DOL highlighted its intent to specifically address the gender pay gap, stating that “a culture of secrecy keeps women from knowing that they are underpaid, and makes it difficult to enforce equal pay laws. Prohibiting pay secrecy policies and promoting pay transparency helps address the persistent pay gap for women . . .”
The Final Rule seeks to promote pay transparency by, among other things:
- Revising the Equal Opportunity Clause included in covered federal contracts to include a provision prohibiting employers from discriminating against employees or job applicants for discussing or disclosing their or their co-workers’ compensation;
- Requiring covered contractors to notify employees and applicants of these nondiscrimination protections in existing policies;
- Enabling employees and job applicants who believe they have been discriminated against for discussing or inquiring about pay to file discrimination complaints with the OFCCP.
The Final Rule outlines two defenses that a contractor may assert where a violation of the nondiscrimination requirement is alleged. The first is a “general defense” that the contractor “disciplined the employee for violation of a consistently and uniformly applied company policy . . . [which] does not prohibit, or tend to prohibit, employees or applicants from discussing or disclosing their compensation or the compensation of other employees or applicants.” The second is the “essential job functions” defense, which essentially permits a contractor to take action against an employee (such as a Human Resources Director) whose job duties and functions necessarily entail access to compensation information, and who discloses such information other than in response to a formal complaint, charge, investigation, or proceeding.
The Obama administration has in the past few years issued multiple orders or memoranda to accelerate change in employment-related areas it believes are within the authority of the Executive Branch, without the need for legislation. As described in more detail here, there is an often lengthy rule-making process required for these mandates to become effective law, but the DOL is close to (or has) announced Final Rules on many of the administration’s proposals. Accordingly, employers should be aware that many of the prospective regulatory changes discussed in the past few years are, in the near future, set to become reality.
Familiar with this? It’s time to update your affirmative action plans. For the women and minorities plan, you gather your applicant data, prepare spreadsheets and update your written materials to reflect new goals and changes in your recruiting sources. For the veterans and individuals with disabilities plan, you update a bit and you’re done. Starting early next year, however, the rules will change making updates more onerous for employers. On August 27, 2013, the Office of Federal Contract Compliance Programs announced final rules for federal contractors regarding hiring and employment of disabled individuals and protected veterans and imposing new data retention and affirmative action obligations on contractors. The rules are expected to be published in the Federal Register shortly and will become effective 180 days later.
The key changes include:
- Benchmarks. Contractors must establish benchmarks, using one of two methods approved by the OFCCP, to measure progress in hiring veterans. Likewise, contractors must strive to hire individuals with disabilities to comprise at least seven percent of employees in each job group. The OFCCP says these are meant to be aspirational, and are not designed to be quotas.
- Data Analysis and Retention. Contractors must document and update annually several quantitative comparisons for the number of veterans who apply for jobs and the number of veterans that they hire. Likewise, for individuals with disabilities, contractors are required to conduct analyses of disabled applicants and those hired. Such data must be retained for three years.
- Invitation to Self-Identify. Contractors must invite applicants to self-identify as protected veterans and as an individual with a disability at both the pre-offer and post-offer phases of the application process, using language to be provided by the OFCCP. This particular requirement worries employers who know that the less demographic information they have about applicants, the better – especially when the application is denied. Contractors must also invite their employees to self-identify as individuals with a disability every five years, using language to be provided by the OFCCP.
Additional information, including with respect new requirements such as incorporating the equal opportunity clause into contracts, job listings, and records access, can be found here (http://www.dol.gov/ofccp/regs/compliance/vevraa.htm) and here (http://www.dol.gov/ofccp/regs/compliance/section503.htm).
Contractors with an Affirmative Action Plan already in place on the effective date of the regulations will have additional time, until they create their next plans, to bring their plan into compliance. However, whether they have a current Affirmative Action Plan or not, federal contractors should begin looking at these new rules now and take steps to ensure they are in compliance.
These are real headlines from the last four days:
- Holiday Inn at LA Airport Hit with Wage Class Action
- Bath & Body Works Will Pay $1.3M to End Managers’ Wage Suit
- Texas Sales Managers Hit Gold’s Gym with Overtime Suit
- FedEx to Pay $10M to Settle OT, Meal Break Suit
- Kraft Paying $1.75M to Settle Sales Workers’ OT Suits
- ZipRealty Pays $5M to Settle California Agents’ Wage Claims
Similar headlines from the last two weeks would fill this screen. And these headlines do not reflect a new trend – rather, they are just examples of the many similar headlines featured almost daily in Labor and Employment publications. In fact, a record number of wage and hour lawsuits have been filed in the last 18 months. And there’s no sign that they will be dwindling any time soon.
Why are these suits here to stay? For one, with the availability of attorneys’ fees and liquidated damages, they’re a boon for plaintiffs and their lawyers. For another, given economy-driven layoffs, potential plaintiffs may end up in lawyers’ offices more often, looking for ways to strike back. And don’t think you’re protected just because the former employee signed a severance agreement. Employees cannot release wage and hour claims, even if your agreement says otherwise. Perhaps most compellingly, the Fair Labor Standards Act is not the easiest law to comply with. Ever try to compute the regular rate when non-discretionary bonuses are paid every week and the amount varies? Do you really know what “independent discretion and judgment” is? Do you know if you need to count the time employees spend at home checking their email as “time worked”?
What are the most popular practices targeted by plaintiffs?
- Failure to pay overtime – either because the employer doesn’t like paying overtime or because employees are misclassified as exempt.
- Failure to pay overtime at the proper rate.
- Paying workers less than the minimum wage, especially tipped workers.
- Failure to provide uninterrupted meal breaks of the appropriate length.
- Retaliation against workers who complain.
What should you do? Short of making everyone non-exempt and prohibiting overtime, ask yourself how confident you are that your classifications are correct. If you’re not confident, call your lawyer and schedule an audit. Review a sampling of time and pay records to ensure that overtime was properly calculated and paid. Not sure? Call your lawyer. Don’t have time records? Groan.
Finally, don’t think you’re safe because your company is not big enough to be on anyone’s radar screen. Ever heard of 888 Consulting Group? Savvy Car Wash? Geosite Inc.? Quicksilver Express Courier Inc.? ZipRealty? Me either. But all of these companies have been hit with wage and hour suits. You may not be able to avoid being sued, but an FLSA audit before that happens could help you minimize the damages.