Tag: overtime

October 19, 2017

5 Big Legal Questions for New York Employers in October 2017

In July, I discussed 5 Big Legal Questions for New York Employers. Three months later, we’re still dealing with the same issues. Let’s update where we are.

Question 1: Healthcare???

July Prediction: Obamacare reigns for the foreseeable future, probably into 2018. Republicans will need to slow down and construct a fully workable alternative before repealing and replacing . . . before the mid-term elections next November. Wild card: This is Congress’ lead issue, and one that affects tens of millions of Americans. Republican leadership may make significant concessions in any other area to get something through.

October 2017 Update: Multiple Senate attempts to repeal/replace the Affordable Care Act have come up short. Most recently, on October 17, 2017, Senators Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) announced a bi-partisan healthcare plan. The deal would extend subsidies to health insurance companies for two years. President Trump eliminated the subsidies by Executive Order a week earlier. Initial reports suggest that Trump may not support the stop-gap measure. It’s not yet clear when or whether the Senate would vote on the plan. Or whether the House of Representatives would also accept the approach.

Scorecard: So far, the prediction was sound. Senate Republicans didn’t quite “slow down” as forecast. Rather, Senator John McCain (R-Arz.) cast a deciding vote against repeal in late July. He also helped prevent later repeal efforts. To date, the Affordable Care Act is still in place, albeit eroding slowly through the President’s actions. The powers that be don’t all agree on what to do, but everyone knows something has to be done. We’re still in wait-and-see mode, as predicted in July.

Question 2: FLSA Salary Threshold???

July prediction: The DOL will come out of litigation later this year or early next year with the preserved right to set a salary level for the exemptions. Over the next year or so, they will propose a new rule with a salary requirement somewhere between $455 and $913. The new threshold will probably be close to the midpoint of those two numbers. Wild card: Congress could amend the FLSA to fundamentally alter the related exemptions. Any such amendments would likely make more employees exempt and/or simplify the classification of employees as exempt/non-exempt. For example, a salary only test for non-manual workers would presumably reduce administrative burden on employers and reduce the risk of costly litigation.

October 2017 Update: On August 31, 2017, a U.S. District Court in Texas issued its final ruling that the Department of Labor exceeded its authority when it implemented the 2016 rules increasing the exemption salary level requirements. The decision permanently invalidates the rule, and DOL, which now agrees with the court, is not appealing. On July 26, 2017, the the DOL issued a Request for Information on Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees under the FLSA. The comment period ended in September.

Scorecard: Still on track. The court decision invalidating the Obama-era rule did not prohibit the DOL from setting a new salary level. For now, the pre-existing $455 weekly salary requirement remains in place. The DOL’s Request for Information foreshadows new rules. It’s still reasonable to assume they will increase the salary level. But the court’s decision almost guarantees that the new threshold will be below $913 per week.

Question 3: Federal Paid Family Leave???

July Prediction: Nothing meaningful happens in 2017 at least. It’s hard to fathom this Congress touching paid family leave with Obamacare still on the books. It’s also hard to imagine them tackling paid family leave in connection with healthcare, which is already complicated enough in its own right. Wild card: If the Democrats make significant inroads in the 2018 elections, this could be an issue where the White House reaches across the aisle beginning in 2019.

October 2017 Update: Republicans in Congress haven’t taken up this issue. With significant tax cuts on the table, funding new federal leave mandates for workers probably isn’t.

Scorecard: As predicted. There is growing popular support on this issue. And President Trump is, if unwittingly, on board. But it’s still not a Republican priority, even among labor and employment issues.

Question 4: New York State Paid Family Leave???

July 2017 Prediction: Many employers will not make deductions until they better understand the program. For some, this will be after final regulations are issued. For others, it will be very late in 2017 when they finally realize they have to pay for this additional component of their disability insurance policy. There will be frustration by both employees and employers when the deductions start, not to mention when employees become eligible for leave. Because the leave is administered as an insurance benefit, employers will not have full control, yet still may have to simultaneously adhere to FMLA requirements and maintain adequate staff to get the work done. Wild card: If/when some form of federal paid family leave takes effect, New York employers may have a nightmare scenario of trying to simultaneously understand and live with both sets of laws.

October 2017 Update: The New York Workers’ Compensation Board (WCB) issued final regulations on the Paid Family Leave Program on July 19th. (That was the same day I published the original post addressing this question. I was not yet aware of the final rules when it went up. I was at the time attending a conference where the General Counsel of the WCB later spoke about Paid Family Leave!) The final regulations appear to require employers to notify employees who are eligible to waive participation in the Paid Family Leave Program. Earlier this month, the WCB finally issued an opt-out form for employers to present to employees for this purpose.

Scorecard: Looking good. Employers who haven’t spoken to their disability insurance carrier about their Paid Family Leave premiums should do so immediately. Depending on the anticipated costs and payment due dates, employers may want to begin making deductions. Before doing so, they should allow eligible employees to opt out.

Question 5: NLRB???

July 2017 Prediction: Employers who have changed policies and procedures to satisfy the Obama Board won’t rush to change them back. But they may be less conservative in other areas, such as dealing with unions regarding current/potential bargaining units. It will take several years for a Republican majority to decide cases in all areas touched by the Obama NLRB. But the NLRB could act relatively quickly to change the “quickie” union election rules issued by the Obama Board. That could perhaps occur by early 2018. Wild card: The Republican Congress may try to amend the National Labor Relations Act to more swiftly, comprehensively, and dramatically undue the Obama Board’s actions. Although there have already been bills proposed to do this (which is not unusual of Republican lawmakers), it’s too soon to tell whether any such efforts will take priority and gain enough support before the 2018 elections.

October 2017 Update: The Senate has confirmed Republican attorneys Marvin Kaplan and William Emanuel as Members of the National Labor Relations Board. This gives Republicans a 3-2 majority on the Board. Peter Robb, President Trump’s nominee to become the NLRB’s General Counsel, is now waiting for a vote by the Senate and for Richard Griffin’s term to end at the beginning of November. The only potential wrinkle in the equation towards more employer-friendly decisions is that Chairman Miscimarra’s term will end in December. He will not continue for another term. So Trump must nominate another Board member to fill his spot. Any gap between expiration of Miscimarra’s term and confirmation of a new Board member would leave the NLRB with a temporary 2-2 Republican-Democrat deadlock.

Scorecard: Too early to tell. Everything is still trending towards a reversal of key Obama-Board decisions. But it remains to be seen how quickly the new Republican members can change course. There is even some speculation that the Board will become more aggressive than ever in setting policy by rulemaking. This way, they wouldn’t have to wait for new cases to bring critical issue back before the NLRB for adjudication. Opponents would likely challenge the Board’s authority to proceed in that fashion.

Looking Ahead

These won’t be the only legal questions for New York Employers in the coming months. I’ll check back in with updates on these issues and others.

Keep following the blog and sign up for my email newsletter so you don’t miss anything!

August 10, 2017

5 Bad Business Ideas for Good Employers

You’re in charge of managing a workforce. Maybe you own the company. Or you could be in human resources. Or another aspect of management. I assume you want to be considered one of the good employers, right?

In that case, here are 5 things you should never do!

1. Date Subordinates

Okay, you know what I’m talking about. But let’s start with what I’m not talking about. Especially if you own or help operate a small business, it’s reasonable that your spouse or longtime partner may also become involved. I’m not strictly advocating “no nepotism” policies. But don’t cross dangerous lines needlessly!

No matter how well you and your direct reports get along, it needs to stay professional, or at most friendly. Dating, where it could become romantic, isn’t worth the risk. Sure, it might work out great. But there are many ways it could go south.

First, advances may be rebuffed. If that happens, then the relationship between the two of you may be permanently tainted.

Second, even if a relationship develops, what are the motives? Is your employee only dating you to keep the job, to get ahead, to set you up? This just isn’t the right way to look for love!

Third, even if the relationship is real and works out, other employees may not like it. They might see it as creating a bias in favor of the employee you’re dating. And, let’s face it, you probably would, even should, be biased in that situation. What happens if the employee’s performance drops below an acceptable level and you have to fire your significant other?

Fourth, sexual harassment claims. By your desired paramour. From other employees. And these could come months or years down the road in some cases. These claims are a big hit for otherwise good employers!

If you nonetheless do find yourself dating an employee that reports to you, figure out a way to minimize the risk. Yes, there are even so-called “love contracts” where both parties make representations in writing to help the employer avoid liability. Hopefully, you don’t have to go that far in most cases. Reassigning the employee may solve, or at least help, the problem. But don’t just assume you can date an employee and have everything go smoothly. It probably won’t.

You don’t have to just take my word for. Get The Scoop on Love Contracts.

2. Keep Problem Employees

Any business with multiple employees over time will eventually end up with a bad one. This doesn’t necessarily mean someone with bad motives, but it can. More often, it’s just an employee who isn’t the right fit for the job for whatever reasons.

Some good employers think they can right the ship no matter what. “I hired this guy . . . I can fix him.” But that philosophy doesn’t always work. Okay, it usually doesn’t work.

Even if you could retrain a chronically underperforming employee, it probably isn’t worth the effort. You could find someone else better out there right now.

And if someone lies to you once or twice, can you afford to give them another chance?

This doesn’t mean you should have a zero tolerance policy in all respects. It just means you need to be realistic. If someone isn’t the right fit now, they probably won’t be in six months either.

Here’s another secret. The longer you employ someone, the more it costs to get rid of them. There are many inputs in this calculation. They may include training costs, severance pay, risk of litigation, etc. Do the analysis earlier rather than later, compare the cost of trying someone else, and make the difficult decision. You’ll be glad you did.

Check out my 5 Tips for Firing Problem Employees!

3. Hire People Like You

We are all predisposed to like people who resemble us. We’re automatically more comfortable and familiar with them. We know how they think, how they behave, and what motivates them. Or, at least we assume we do.

There are two big problems with hiring based on similarities:

The first is a legal concern. Discrimination. If you only hire/promote people similar to you in race, age, gender, etc., then you may be systematically disadvantaging particular classes of candidates. This can mean litigation, legal fees, and settlements or damages awards. Not good, obviously.

The second is a business concern. Do you really need more people like you? You already do you better than anyone else. What you need is a mix of “not-yous” to complement your strengths and weakness.

This doesn’t mean you can or should only hire people who are nothing like you. To be sure, only hiring employees of a different race or sex may also constitute discrimination. But good employers embrace diversity of experience, personality, characteristics, etc., not only because it’s the right thing to do, but because it works for their business too!

While you’re at it, Don’t Ask These Questions During Job Interviews!

4. Ignore Complaints

No one is perfect. Your business is going to make mistakes, or at least the people working for you will. It’s better to foster a culture where people are open about their mistakes so that they can be corrected. Otherwise, they build on themselves, making matters worse.

So, how do you foster this positive culture? First, don’t overreact. Try not to scream or disparage someone when you find out they did something wrong. If this is simply a performance matter, then try to correct it and move on. Obviously, consistent poor performance is another issue, addressed above.

Now, let’s say you find out about a mistake because another person files a complaint. And let’s say this complaint alleges harassment, discrimination, or other mistreatment. Then you have to investigate, but, again, don’t overreact.

Just because someone complains about a co-worker, it doesn’t always mean they want to sue you. Often, your investigation will reveal a misunderstanding that can be remedied. Other times, you may discover that someone has crossed the line. But even then, it doesn’t necessarily mean they meant to. Where possible, correct the mistake and make sure it doesn’t happen again.

Especially in the harassment context (sexual, racial, age-based, etc.), the potential liability often arises once an employer knows of misconduct and fails to act. But acting doesn’t have to mean firing anyone, or even transferring employees. The investigation may be sufficient.

But if you don’t take a complaint seriously or don’t try to get to the bottom of things, then you create a big target if the unwelcome behavior persists. Yes, this often increases the employer’s legal responsibility for this conduct. More importantly, it increases the likelihood that the complaining employee will go outside your organization to seek redress.

Be prepared for these situations in advance. Read my post on Responding to Employment Discrimination Complaints.

5. Forego Overtime Pay

Overtime is a major compensation issue that many employers, including good employers, get wrong. Yes, it’s nice to have employees who are willing to work as much as you need them to. But if you don’t pay them as required, it can cost you tremendously.

Lawyers representing employees are eager to file lawsuits against employers for failure to pay overtime. Not only can they recover handsomely for their clients. They also receive their fees from the employer if they win. Don’t be a target for these lawyers. Do it right!

The basic rule is that employees who work over 40 hours in a week must be paid overtime at time-and-a-half. Some employees can be exempt, meaning they don’t have to receive overtime pay. And, in some cases, different hour thresholds and payment requirements apply.

Here are some of the common mistakes:

Not accurately recording all hours worked.
Not paying overtime when earned.
Providing “comp time” instead of overtime pay, which isn’t allowed for private employers and has specific limits for public employers.
Improperly classifying an employee as exempt.
Miscalculating the overtime rate.

Remember, in most cases, employees can’t simply agree not to be paid for overtime. The law requires it, so any such agreement probably won’t hold up. If there is a claim in court or with the Department of Labor, then it’s the employer’s burden to show compliance with the law.

Keep in mind that the U.S. Department of Labor is in the process of reviewing its overtime exemption rules.

My Most Important Tip for Good Employers Like You!

There are so many traps in the employment law minefield. And the laws and workplace realities simultaneously change all the time. You need to stay up-to-date on what’s going on if you want to remain one of the good employers out there. My free email newsletter can help you be one of the great ones! Sign up here now!