Counseling & Compliance Training - Page 68 of 87

Accounting Firm Partner Cannot be a Whistleblower Under New Jersey’s Conscientious Employee Protection Act

Editor’s Note – The below appeared in Legal Briefs, Drinker Biddle’s periodic summary of judicial decisions affecting accounting and financial services professionals. To view the entire issue click here.

Accounting Firm Partner Cannot be a Whistleblower Under New Jersey’s Conscientious Employee Protection Act

The district court for the District of New Jersey recently ruled that an accounting firm partner may not claim he was a whistleblower who was improperly fired by his firm. In Largie v. TCBA Watson Rice, Civil Action No. 10-cv-0553 (D.N.J. Aug. 20, 2013), the court considered the plaintiff Largie’s claim that he had been wrongfully terminated in retaliation for his attempted disclosures about alleged fraudulent practices at his accounting firm. The firm contended that it had fired Largie for his chronic absences and for attributing fees from the firm’s clients to another accounting firm. Largie was the director of the firm’s taxation department and an equity partner, holding a 10.5 percent interest in the firm. He also set his own schedule and did not report to anyone else. Without reaching his claims of fraudulent practices, the court found that Largie was not an employee who was entitled to protection under the CEPA statute. Largie’s ability to influence the operations and activities of the accounting firm meant that he had the power to save himself from the kind of unlawful retaliatory actions the CEPA statute was intended to prevent.

New Jersey Expands Protections Against Pregnancy-Based Discrimination By Employers And Other Entities

Update 1/23/14 – On Wednesday, January 22, 2014, Governor Christie signed S2995 into law. LaborSphere’s original post on the legislation appears below.

New Jersey is on the precipice of expanding anti-discrimination protections to both pregnant women and new mothers and those recovering from childbirth. The State Senate and now the State Assembly have passed identical measures with only one dissenting vote in either legislative body. The expansive legislation now awaits the signature of Governor Chris Christie in order to become law.

Amendments to New Jersey Law Against Discrimination

In order to address the perceived vulnerability of pregnant women in the workplace as well as to foster the goal of healthier pregnancies and recovery from childbirth, the legislation passed by New Jersey’s legislature expands the anti-discrimination and anti-retaliation protections of New Jersey’s Law Against Discrimination (“NJLAD”). Should it pass, both pregnant women but also those who have recently given birth or have medical conditions related to pregnancy will be statutorily protected against disparate treatment and retaliation by employers, labor organizations, landlords, lending institutions as well as an array of other entities that offer public accommodations.

Further, not only does the pending legislation add “pregnancy” to the array of protected categories covered by the NJLAD. It also specifically requires employers to provide “reasonable accommodations,” such as bathroom breaks, breaks for increased water intake, periodic rest, assistance with manual labor, job restructuring, modified work schedules and temporary transfers to less strenuous or hazardous work.

The legislation implied but does not specifically state that any such requested accommodations will likely need to be based on the advice of a physician. As such, it appears that pregnant women and those who have recently given birth cannot merely demand that an accommodation is “reasonable” and necessary absent some input from her physician.

Further, employers are not obligated to agree to any requested accommodation, even if it is supported by a physician’s recommendation, if such an accommodation would impose an “undue burden” as defined by the statute. The proposed legislation provides specific factors to be utilized in determining whether an accommodation would impose undue hardship on the operation of an employer’s business. These include:

overall size of the employer’ business with respect to the number of employees;
number and type of facilities;
size of budget;
the type of the employer’s operations, including the composition and structure of the employer’s workforce;
the nature and cost of the accommodation needed, taking into consideration the availability of tax credits, tax deductions and outside funding; and
the extent to which the accommodation would involve waiver of an essential requirement of a job as opposed to a tangential or non-business necessity requirement.

New Protection To Employees Seeking Information About Claims

Perhaps the start of a new trend, among the proposed amendments to the NJLAD is also a provision that protects any employee against reprisals by employers for asking coworkers or former coworkers for information that is part of an investigation or in furtherance of a possible claim under the NJLAD. Such information may include requests for data regarding pay, compensation, bonuses or benefits. Significantly, this new protection extends beyond pregnant women and those who have recently given birth.

Impact of Amendments

If enacted, the amendments to the NJLAD would override the New Jersey Supreme Court’s 2005 ruling in Gerety v. Atlantic City Hilton Casino Resort, 184 N.J. 391 (2005). In that case, New Jersey’s highest court held that the NJLAD does not protect against the firing of a female worker who exceeded the leave available under state and federal as well as the defendant-employer’s policy. Under the proposed amendments, it is likely that the accommodations requested in the Gerety case, by a plaintiff who had a difficult pregnancy with twins, would be considered reasonable and covered under the NJLAD.

More broadly, while the federal Family Medical Leave Act and New Jersey Family Leave Act each allow for a maximum of twelve weeks of pregnancy-related leave, under the proposed amendments, the amount of leave available to a woman who is pregnant or recovering from childbirth is not as clearly defined. To the extent a women seeks an accommodation – including additional leave or a reduced work schedule – because of pregnancy and childbirth-related conditions, an employer has, at the very least, an obligation to review and consider such requests.

Should the proposed amendments to the NJLAD be passed, we recommend a review of leave policies as well as training for managers to identify requests for accommodations. Each request for accommodation must be considered carefully and should it appear to impose an undue burden, then the statutorily defined factors must be taken into account.

Special Rules Apply To Documents With Employee Protected Health Information

Editor’s Note: The following post by Heather Abrigo, Counsel in the Los Angeles office, appears in the latest issue of the California HR Newsletter.

Special Rules Apply To Documents With Employee Protected Health Information

The Issue: Must an employer safeguard documents containing employee protected health information (PHI) in any special way?

The Solution: Yes. An employer must adopt privacy policies or procedures related to employee PHI. These policies should include controls over who has access to the documents (physically and electronically).

Analysis: Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), employers must prevent the unauthorized disclosure of protected health information (PHI). This will primarily affect those employers that sponsor self-insured health plans, cafeteria plans with a flexible health spending account component, offer on-site health clinics, and/or that offer significant hands-on help to employees in connection with their group health plans (e.g., handling benefit claims).

Employers subject to the HIPAA privacy rules should have written privacy procedures in effect that safeguard all documents with PHI. This includes the administration of the PHI (e.g., who needs access to such information to administer the health plan, entering into business associate agreements with any third-parties who might handle, and training employees who may handle, PHI as part of their duties). The written privacy procedures should also address other safeguards of PHI (whether in paper or electronic form) including physical safeguards (e.g., workstation use/security) as well as technical safeguards (e.g., person authentication and transmission security).

If you are unsure whether these rules apply and you sponsor any of the aforementioned plans, please contact your benefits lawyer.

New Jersey Raises State Minimum Wage

By: Meredith R. Murphy

This past November the voters of New Jersey approved a ballot question both raising the state minimum wage and amending the State Constitution to tie future increases to inflation. Here is what employers need to know:

1. Effective January 1 the state minimum wage for almost all employees has increased from $7.25 per hour to $8.25.

2. Going forward, the state minimum wage will be increased every January 1 in accordance with an increase in the federal government’s consumer price index for all urban wage earners and clerical workers (commonly referred to as the CPI-W) as of the preceding September 30.

Employers should also be aware that if at any time the federal minimum wage should surpass that which is provided by the State Constitution’s formula, the state minimum wage will be automatically increased to match the federal wage rate. Employers with employees in New Jersey should replace their New Jersey State Wage and Hour Law Abstract poster with the new poster [click here to download] that reflects the change.

Risk Management: What to Include In A Personnel File

Editor’s Note: The following post by Los Angeles Partner Pascal Benyamini appears in the latest issue of the California HR Newsletter. To sign-up to receive the California HR Newsletter click here.

Risk Management: What to Include In A Personnel File

By: Pascal Benyamini

The Issue: Can employers reduce risks of potential claims of discrimination and retaliation by employees through thoughtful management of personnel files?

The Solution: Yes. One of the many steps that employers can take to reduce risk of litigation is to ensure that documents that do not belong in a personnel file are kept in separate files and locked up.

Analysis: Discrimination claims come in many forms, including, race, gender, sex, sexual orientation, national origin, religion, mental or physical disability, or pregnancy. One of the most effective ways to reduce legitimate employment discrimination cases is for employers to expend the necessary resources to properly train their workforce, starting with management level employees. As part of that training, employers should be mindful of the types of documents that should be in personnel files and those that should not, but should be maintained separately. The rule of thumb is that employers should keep documents containing subjective information separate. This is because when managers make personnel decisions about an employee and the file contains information about protected characteristics of that employee, such as race, age, medical condition etc., the file may serve as circumstantial evidence in a discrimination claim against the employer.

Documents That Belong In A Personnel File: Any objective information related to the hiring, promotion, demotion, compensation, discipline or discharge of an employee, including, but not limited to: application; resume; offer letter; performance reviews; disciplinary notices; termination letter; resignation letter; compensation and deduction information; acknowledgment of receipt of handbooks; attendance records / receipt of vacation and personal leaves; change in name, address, telephone number; beneficiary regarding insurance provided by company; emergency contact information; and training records.

Documents That Do Not Belong In A Personnel File But Kept Separate: Any subjective information regarding the employee, including, but not limited to: subjective notes about the employee during the interview process, on application, resume etc.; reference checks or letters of reference; documents pertaining to criminal or
other investigation of the employee; credit reports; immigration and naturalization information (I-9 Forms); medical files of any records informing of a medical condition, including drug test results; wage garnishments; any
photos of employee, including photo of driver’s license, passport etc.; and EEO forms.

The file should not be available to supervisors who have no legitimate need for it.

Adhering to these simple guidelines will help the company reduce unnecessary claims.

California Employers: What You Need to Know for 2014 – Everything Else

A new year means new legislation and regulations for employers with operations in California. This four-part series will take a look at some of the new laws and regulation affecting private employers doing business in California. Today’s final post in this series takes a look at the other changes for 2014 that California employers should be aware of and were not already covered in the first three posts (Wage and Hour Laws and Penalties, Discrimination and Retaliation and Immigrant Protections & Leaves, Accommodations, and Benefits) of this series.

Miscellaneous

Criminal conviction history. Existing law prohibits all employers from asking job applicants to disclose, orally or in writing, any information related to an arrest or detention that did not result in a conviction. Effective July 1, 2014, AB 218 will further prohibit any state or local agency from asking an applicant to disclose information regarding a criminal conviction until after determining that the applicant meets minimum employment qualifications. Positions for which a criminal background check is otherwise required by law are exempt.

Business mileage deduction. The IRS has issued new optional standard mileage rates which may be used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. The standard mileage rates for 2014 for business driving is $.56 per mile. Of course, taxpayers still have the alternative option of calculating the actual costs of using a business vehicle.

Labor Commissioner liens on real property. Under current law, the Labor Commissioner is authorized to issue orders, decisions, or awards in connection with employee complaints governed by the Labor Code. AB 1386 provides that the amount due under a final Labor Commissioner order, decision, or award shall create a lien upon the employer’s real property, recordable by the Labor Commissioner.

Garment manufacturer registrations. AB 1384 creates a civil penalty for a garment manufacturer’s failure to display its name, address, and registration number at the front entrance of the premises. The penalty for an initial citation is $100 per calendar day of non-compliance, and the fine increases to $200 per calendar day for subsequent violations.