Category: Employment Law

Pregnant Employee

Calling Your Employment Lawyer — Pregnant Employee

I’ve been counseling employers for almost 14 years. One thing that’s become clear over that time is that no one wants to have to call their employment lawyer! But the truth is many companies would be better off if they called more often. It’s usually much cheaper to find out the law and best approach to an employment situation before it leads to litigation or other disputes. This is definitely true when you’re dealing with a complex scenario involving a pregnant employee, for example.

So, what does a call with an employment lawyer sound like?

My actual conversations with clients are confidential, of course. But I can summarize the tone from 1000s I’ve had over the years by way of example. The facts and circumstances of this scenario involving a pregnant employee are purely hypothetical and should not be followed as guidance for any actual situation. Most likely, I would have more background information about the employer before taking this call. Local and state laws also vary and could alter any legal considerations.

“We Have This Employee. . . .”

Client: “Hi, Scott.”

Lawyer: “Hi. How are you? Oh, I know, you’d be better off if you weren’t calling me.”

Client: “Well, nothing personal.”

Lawyer: “No, I get it. None of my clients ever want to be speaking to me about work. It’s the nature of my business. Anyway, how can I help?

Client: “We have this employee. She’s not really working out. She’d had performance issues for a while, and we’d like to move on . . . . But . . . .”

Lawyer: “Yeah, there’s always a ‘But’!”

“She’s Pregnant”

Client: “Afraid so, or I wouldn’t be calling. Before we had a chance to do anything about her performance issues, she told us last week she’s pregnant.”

Lawyer: “I see, well congratulations to her, but you’re worried about trying to let a pregnant employee go?”

Client: “Yes, but, that’s not everything. She had also filed a harassment claim against a co-worker a few months back. And she’s still angry that we didn’t fire the guy she filed it against.”

Lawyer: “Alright. Let’s try to work through this. First, how long has she been working there?”

Client: “Only nine months. She’s our receptionist and also does some of our social media.”

Lawyer: “So, she’s not FMLA eligible yet, but might be eligible for New York Paid Family Leave. Is she full-time?

Client: “Yeah, she works 40 hours. At least, she’s supposed to be working. She spends most of her time on Facebook.”

Lawyer: “You mean doing personal things, not managing the company’s social media.”

Client: “Right. But that’s not the real problem. We should do a better job of policing that and re-directing her. But the bigger problem is that she also answers phones and greets people who come into the office. But her personality is hit or miss. She’s not rude, exactly, but not always friendly either. Plus, she gets messages wrong, forgets to pass them along, etc. We’ve had a few complaints since she started.”

Lawyer: “Has she said when the baby is due?”

Client: “About 3 months from now.”

Lawyer: “So, at that point, she might be eligible for FMLA leave too. Did she get the paperwork on that?”

Client: “Not yet, but that’s one thing we needed direction on. As you know, we have over 50 employees, so we do have people eligible for FMLA. But since she hasn’t been here a year yet, we didn’t know how to handle it.”

Lawyer: “If the leave will begin after she has been there for a year and she meets the other requirements–so if she will have worked 1,250 hours over the past year when her leave starts–then she would qualify for FMLA leave. So you should probably at least give her the FMLA paperwork at this point to avoid a technical violation there.”

Client: “Does that mean we have to keep her on until after her 12 weeks expires?”

Lawyer: “Not necessarily. Even if she becomes eligible for FMLA leave, you don’t have to retain her if you have other legitimate grounds to end her employment. But, of course, it can’t be because of her pregnancy or leave. And even if it isn’t, she could claim it is discriminatory to let her go.”

Client: “So, are we better of waiting until she has the baby and then fire her after she comes back?”

Lawyer: “Not necessarily. That could still be discriminatory or retaliatory.”

“What Should We Do?”

Client: “Okay, you’re the expert. What should we do with her?”

Lawyer: “I know you don’t want to hear it, but like so many of these situations, it depends on various factors and considerations. But it comes down to why you’ve kept her on this long and now want to let her go. If it’s at all related to the pregnancy, then you probably shouldn’t do it. Maybe she’ll take the leave and then not come back, but if she wants to come back, you’d need to let her.”

Client: “We don’t have a problem with her being pregnant. If she were doing her job, we’d be happy to let her take the leave.”

Lawyer: “Then you have to be able to explain why you’re considering letting her go now. Did anything happen recently that’s of particular concern?”

Client: “Remember I mentioned she filed a harassment complaint against a co-worker?”

Lawyer: “Yes. We needed to get back around to that too.”

Client: “Yeah. She claimed a guy who has worked here for 20 years was hitting on her whenever he walked in the building. Now, he’s a salesman who works remotely, so he’s only in a few times a month. She didn’t make any extreme allegations, just that he was too flirty. We investigated it and directed him to stop, and he has.”

Lawyer: “Okay. But has become relevant again?”

Client: “Yes. We need to promote this guy to a director of sales position where he will be in the office full-time. So he’d walk past her every day. Probably multiple times every day. But he refuses to work in the building as long as she’s the receptionist.”

Lawyer: “Is that why you want to let her go now?”

Client: “That’s not the only reason. We know we can’t fire her because the guy she complained about doesn’t want to work in the same building with her. It’s just that we have had these performance issues and they’re not getting better. Eventually, we’d have to let her go. But between the pregnancy and trying to promote the sales guy, we don’t know what the best approach is.”

Lawyer: “Right. I see you’re trying to do the right thing, but there seems like landmines in every direction.”

Client: “Pretty much. So that’s why we called you.”

“Any Alternatives?”

Lawyer: “I understand. Glad you did. Now, let’s see. . . . Just by chance, are there any other open jobs that she might be able to do without the same performance issues?”

Client: “We could try to make her an administrative assistant.”

Lawyer: “But it sounds like she’s already had problems with messages and communication. Would that be a factor in those jobs?”

Client: “Yes. It would just move her from the front desk and maybe solve the problem with the sales guy.”

Lawyer: “I don’t really want you to create new problems in trying to solve this one. If we figured out the right approach, would you consider offering her a severance package?”

Client: “We might be able to pay her a month’s pay and continue her health insurance. I guess that would become an issue for her with the baby and all.”

Lawyer: “Good point. So she’s taking the company’s insurance?”

Client: “Yes. She is. She is married, but they have family coverage through us. He might have it available at work too. I don’t know. Maybe ours is a better deal.”

Lawyer: “Sure. That could be an issue. If he has coverage, then losing yours might not be as bad. But she’s looking at some disability and PFL benefits coming up when she has the baby too if she were still employed. And if he doesn’t have insurance available, they might have to go on COBRA coverage. She would probably get unemployment.”

Client: “Yeah. We wouldn’t contest the unemployment.”

Lawyer: “Okay, how bad has her performance been? Has it gotten any worse lately?”

Client: “It’s just ongoing mistakes. No single recent incident.”

“Severance Package?”

Lawyer: “Alright, overall, I’d say there is some risk of some kind of pregnancy or even retaliation–for the harassment complaint–claim if you fire her now. But that doesn’t necessarily diminish as time goes on. Maybe it would get easier if she does something really bad, but you don’t want that either for operational reasons. Some options include putting her on a formal performance improvement plan and seeing how that plays out or just having a conversation with her now pointing out the performance problems and noting that you have to let her go but will offer a severance package. There’s no perfect solution. If she says no to the severance and you fire her, then she might make a claim.”

Client: “But if she agrees to the severance, then we’d get a release and she couldn’t sue us?”

Lawyer: “Yes, we’d make the severance contingent on her signing a release.”

Client: “Okay, I got it for now. I’ll go back and speak to the managers involved. I’ll probably be giving you another call once we decide how to handle this.”

Lawyer: “Sounds good. I’ll be here. Hopefully, there’s a way to make this work out okay for everyone.”

Client: “Hope so. Thanks.”

 

Some of these calls lead to a straightforward solution. Others, like this hypothetical one, involve balancing risky alternatives. But understanding the risks better allows better decisionmaking and helps avoid obvious missteps.

 

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Employment Law Remedies

Federal Employment Law Remedies

You’ve probably read news stories where employees win incredible amounts of money by suing their employer.  The good news is lawsuits like those are rare. And most lawsuits end in settlement, where each side ends up compromising. However, if both parties have extremely different views and high confidence of winning, they might go to court. What employees have a chance of getting from lawsuits varies depending on not only the facts of the case, but also what laws they sue under.  Here are the primary employment law remedies under several significant federal statutes.

Types of Employment Law Remedies

If courts find employers liable, they are responsible for paying damages to the employee. There are three main types of remedies: lost pay, compensatory damages, and punitive damages. Courts award employees lost pay and compensatory damages to make them “whole”. “Making whole” refers to placing the employee back in the position as if the employer hadn’t violated the law. This theoretically includes reinstatement to the employee’s former position, but more often lost pay and benefits. Reinstatement is rare. Courts will not reinstate an employee if they find the employee/employer relationship has become too hostile or the position is no longer available. By the time litigation reaches a verdict, much time has usually passed, with significant negative feelings between the parties. This makes reinstatement untenable in most cases.

Backpay and Front Pay

Lost pay can include backpay and front pay.

Backpay generally begins at the start of the adverse treatment and lasts until the judgment date or until the employee finds comparable employment. Backpay is calculated by factoring in salary or wages, interest, overtime, shift differentials, lost benefits, and potentially even raises the employee would have received. The court usually offsets the award by what the employee was able to or should have been able to earn through reasonable effort in alternative employment.

When reinstatement isn’t possible, courts might award “front pay” to compensate for future lost wages. Similar to backpay, front pay also includes compensation for lost benefits.

Compensatory Damages

“Compensatory damages” include additional monetary awards for out-of-pocket expenses (e.g., medical bills), as well as “pain and suffering” or “emotional distress.”

Under most federal employment laws, losing employers must also pay the employee’s attorney fees and litigation costs.

Punitive Damages

Sometimes courts can award punitive damages when they find the employer’s actions were especially malicious or offensive. Punitive damages seek to deter employers beyond the limits of compensatory relief.

Liquidated Damages

Liquidated damages serve a similar purpose. Where applicable, employees might receive a specific amount in addition to their lost pay as a further deterrence to employers. Often this results in employees receiving twice what they actually lost.

Employment Law Remedies under Specific Statutes

Title VII of the Civil Rights Act of 1964

Title VII law prohibits employment discrimination based on race, color, religion, sex, and national origin. It limits employees’ compensatory and punitive damages based on the size of their employer’s workforce.

Employer Size Combined Damage Cap
15-100 employees $50,000
101-200 employees $100,000
201-500 employees $200,000
Over 500 employees $300,000

These caps do not apply to backpay and front pay awards.

Americans with Disabilities Act

The ADA forbids employers from discriminating against employees with disabilities. It also requires employers to provide reasonable accommodations to employees with disabilities in some cases.

These caps on compensatory and punitive damages also apply to the ADA.

Age Discrimination in Employment Act

The ADEA prohibits employment discrimination against employees age 40 or over.

Damages available under the ADEA are similar to those of Title VII and the ADA, except that employees cannot receive any compensatory or punitive damages. Instead, they can recover liquidated damages equal to the amount of backpay.

Equal Pay Act

The EPA prohibits employers from discriminating in compensation based on sex. Similar to the ADEA, the EPA allows recovery of lost pay and an equal amount of liquidated damages.

Fair Labor Standards Act

The FLSA sets the federal minimum wage, currently at $7.25 per hour. It also sets overtime pay requirements after 40 hours in a workweek for nonexempt employees.

Under the FLSA, employees can recover underpaid minimum wage and overtime, plus an additional amount of liquidated damages.

National Labor Relations Act

The NLRA establishes the right for employees of non-government companies to form unions. It also provides employees, whether unionized or not, the right to engage in concerted activity.

The NLRA only permits make-whole remedies. It does not allow punitive damages.

Damages Title VII ADA ADEA EPA FLSA NLRA
Backpay
Compensatory
Reinstatement or Front Pay
Liquidated
Punitive
Attorney fees

What Does This All Mean for Employers?

Most importantly, employers should try to avoid violating employment laws in the first place. Despite variations between laws, all of these federal employment statutes have an array of serious consequences. If you are concerned about whether your company is in compliance, contact an experienced employment attorney.

 

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EEO-1 Compensation Data

EEO-1 Compensation Data Update

In April 2019, a federal judge ruled that all employers required to file the annual EEO-1 report must include 2018 compensation data by September 30, 2019. The court ruling left some open questions for employers regarding the EEO-1 compensation data requirements. The U.S. Equal Employment Opportunity Commission (EEOC) has answered some of those questions, as we’ll explain here.

What Is the EEO-1?

U.S. employers with at least 100 employees and some smaller companies with federal government contracts must file the EEO-1 each year. The annual reports identify numbers of employees by job categories and demographic characteristics.

The EEO-1 job categories are:

  • Executive/Senior Level Officials and Managers
  • First/Mid-Level Officials and Managers
  • Professionals
  • Technicians
  • Sales Workers
  • Administrative Support Workers
  • Craft Workers
  • Operatives
  • Laborers and Helpers
  • Service Workers

Within these job categories, employers must provide the number of employees based on sex and race/ethnicity from among these options:

  • Hispanic or Latino
  • White
  • Black or African American
  • Native Hawaiian or Pacific Islander
  • Asian
  • Native American or Alaska Native
  • Two or more races

EEO-1 Compensation Data Requirement

In February 2016, the EEOC modified the Form EEO-1 to include wage and hours data beginning March 31, 2018. In 2017, however, the Office of Management and Budget (OMB) informed the EEOC that it was suspending the new pay data collection requirements pending further review. This prompted litigation.

The plaintiffs in a lawsuit against the government prevailed. The judge is requiring the EEOC to collect the new EEO-1 compensation data from covered employers for at least two years. One of these years is 2018. The judge allowed the EEOC to decide whether the second year would be 2017 or 2019. The EEOC has selected 2017 as the second year.

For now, it’s not clear whether the EEO-1 compensation data requirement will continue beyond this year. It is possible that the EEOC will formally revise the forms going forward.

What Do Employers Need to Know?

1. What Is the Deadline for the 2018 EEO-1?

The filing period for the traditional EEO-1 survey (without the compensation data) ends May 31, 2019. Covered employers must submit the standard job category and demographic surveys by that date.

However, companies will have to submit separate new reports with the EEO-1 compensation data.

[Click here to file your EEO-1 or get more information directly from the EEOC.]

2. When Can We File the EEO-1 Compensation Data?

The EEOC expects to open filing for the new EEO-1 compensation data in mid-July 2019. When available, filers apparently will need to submit wage and hour information for both 2018 and 2017.

3. What Compensation Statistics Will We Need?

Employers will need to submit W-2 wage data and hours worked for employees within 12 specified pay bands:

  • <$19,239
  • $19,240-$24,439
  • $24,240-$30,679
  • $30,680-$38,999
  • $39,000-$49,919
  • $49,920-$62,919
  • $62,920-$80,079
  • $80,080-$101,919
  • $101,920-$128,959
  • $128,960-$163,799
  • $163,800-$207,999
  • $208,000+

Employers will report wages earned based on W-2 “Box 1” year-end earnings and hours worked.

Hours worked will be actual hours for non-exempt employees. For exempt employees, employers can report an estimate if they do not maintain actual time records. The estimate will be computed at 40 hours per week for full-time exempt employees and 20 hours per week for part-timers. Employers will report aggregate hours for all employees in each pay band and job category by ethnicity.

Employer Concerns

One concern many employers have is how much hassle it will be to satisfy this new filing requirement. That answer depends on factors like the size of the workforce and sophistication of the payroll system. Some companies will be able to generate the data quickly from computers. Others will have to analyze individual employee records to compile the necessary EEO-1 compensation data.

Another question is how the EEOC will use this new information. For various reasons, the limited aggregated payroll data might not give an accurate snapshot. Yet, the EEOC may use the numbers to evaluate potential discrepancies along gender, racial, or ethnic lines. Although the EEOC probably will not make every employer’s EEO-1 compensation data public, the reports could come out in litigation. This may include use by private plaintiffs whose attorneys could obtain the data from the EEOC by subpoena, for example.

Don’t Wait for July!

Employers who will have to file the new EEO compensation data should not wait until July to prepare. Companies should at least evaluate their ability to generate the information necessary when the filing period opens. Plus, employers should start analyzing whether the data is going to paint a picture that might cast their compensation practices in a bad light. If so, they might want to review and modify their practices or start preparing the explanation for why the EEO-1 report is misleading, as many will be given many statistical limitations in the way employers must report on wages.

 

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