Tag: sexual harassment

June 21, 2018

EEOC Task Force Addresses Sexual Harassment

In the midst of the #MeToo and #TimesUp movements, the U.S. Equal Employment Opportunity Commission (EEOC) announced in a June 14, 2018 press release that it had recently filed several harassment lawsuits against employers throughout the county. The EEOC stated these lawsuits “should reinforce to employers that harassment – on all bases – is a violation of federal law”. The seven lawsuits referenced in the press release were all filed within two days of a meeting of an EEOC task force on harassment in the workplace. The meeting, entitled “Transforming #MeToo into Harassment-Free Workplaces: A Reconvening of the EEOC’s Select Task Force on the Study of Harassment in the Workplace,” took place on June 11, 2018.

Sexual Harassment Litigation

The EEOC lawsuits include allegations against a marine dealership for racial and sexual harassment from supervisors toward the welders they supervised. The EEOC also sued a trucking company for allowing an independent contractor trucker to sexually harass and threaten a female employee while they drove together. The majority of the lawsuits involve offensive sexual comments, unwelcome touching, and derogatory racial terms. The overall trends of these lawsuits include actions of supervisors toward employees and how the sexual harassment tends to occur in isolated areas of the workplace. The cases emphasize the failure of employers to prevent or address this inappropriate conduct and the allowance of retaliation against those who report this conduct.

The EEOC regularly sues employers for violations of federal employment discrimination laws. However, the agency’s group announcement of the cases in connection with the meeting of the harassment task force is notable. This action should remind employers that the federal government can prosecute businesses who allow harassment to occur in their workplaces. Employees may separately sue their employers under the same and other laws.

EEOC Task Force on Study of Harassment in the Workplace

EEOC Commissioners Chai R. Feldblum and Victoria A. Lipnic chair this task force. It also consists of academics, attorneys, employer and employee advocacy groups, and unions. The task force reconvened on June 11, 2018, with a focus on sexual harassment.

The EEOC task force encourages employers to avoid becoming a defendant in an EEOC (or employee) lawsuit. In June 2016, the EEOC task force reported on the causes, effects, and methods of preventing harassment in the workplace. The report detailed seven main findings:

Workplace harassment continues to be a problem. In 2015, about one-third of EEOC charges involved a form of workplace harassment.
Workplace harassment is consistently unreported. Victims of harassment often don’t report because of fear of retaliation or inaction in response to their complaints.
There is a compelling business case for addressing harassment and preventing further harassment. This includes direct costs, such as legal fees, along with its damaging effect on all workers, which results in lower productivity, higher turnover, and reputational harm.
Leadership and accountability are necessary. Workplace culture has a significant effect on the existence of harassment. Leadership must communicate its commitment toward addressing and preventing harassment.
Workplace training needs to change. Training is most effective when it is tailored to a specific workplace and includes relevant examples of unacceptable behavior.
New approaches to training must be explored. Studies on bystander intervention training and workplace civility training have shown promising results.
Harassment in the workplace won’t stop on its own- it’s on us. Harassment will only stop once everyone at the workplace has a shared sense of responsibility for stopping and preventing harassment.

EEOC Sexual Harassment Statistics

The June 11 meeting highlights the EEOC’s focus on addressing sexual harassment. Although it is just one form of unlawful workplace harassment, sexual harassment has served as an impetus for awareness over the past year. In 2017, the EEOC received 6,696 charges concerning sexual harassment. From these, the EEOC obtained $46.3 million on behalf of employees sexually harassed at work. To avoid joining these statistics, employers must implement effective anti-harassment policies and complaint procedures after analyzing the risk factors of their specific workplace. Then they must take all allegations of harassment seriously. This includes conducting a prompt investigation, taking appropriate remedial action, and preventing retaliation.

April 17, 2018

State Budget Expands New York Sexual Harassment Laws

On April 12, 2018, New York Governor Andrew Cuomo signed State Budget legislation that includes several provisions aimed at workplace sexual harassment. Some of the items included will require additional clarification through agency guidance and regulations. But here’s an initial overview of how New York sexual harassment laws will change.

Some new aspects of New York sexual harassment law took effect immediately. Others will become effective later. Here they are in the order that they take effect.

Protection of Non-Employees

Before April 12, 2018, the New York Human Rights Law only protected employees from sexual harassment. Effective immediately, it is also unlawful for employers to permit sexual harassment of non-employees in their workplaces.

In addition to employees, the law now protects:

Contractors
Subcontractors
Vendors
Consultants
Other persons providing services under a contract in the workplace
Employees of the above

An employer may be liable for sexual harassment against these individuals if it knew or should have known that the individual was subjected to sexual harassment in its workplace and failed to take “immediate and appropriate corrective action.”

The law does add that: “In reviewing such cases involving non-employees, the extent of the employer’s control and any other legal responsibility which the employer may have with respect to the conduct of the harasser shall be considered.”

Public Officers

Effectively immediately, employees and officers of public entities (including the State, its agencies, local governments, and school districts) who are found personally liable for intentional wrongdoing related to sexual harassment must now reimburse their employer if it pays the judgment to a victim.

If the employee does not repay their public employer within 90 days, the employer may withhold compensation from the employee’s pay. If the person is no longer employed by the public entity, the employer may pursue collection through the courts.

Mandatory Arbitration Clauses

Beginning July 11, 2018, New York law will prohibit “any clause or provision in any contract which requires as a condition of the enforcement of the contract or obtaining remedies under the contract that the parties submit to mandatory arbitration to resolve any allegation or claim of an unlawful discriminatory practice of sexual harassment.”

This law defines a “mandatory arbitration clause” as “a term or provision contained in a written contract which requires the parties to such contract to submit any matter thereafter arising under such contract to arbitration prior to the commencement of any legal action to enforce the provisions of such contract and which also further provides language to the effect that the facts found or determination made by the arbitrator or panel of arbitrators in its application to a party alleging an unlawful discriminatory practice based on sexual harassment shall be final and not subject to independent court review.”

The law contains a telling exception. This prohibition applies “except where inconsistent with federal law”. That language is probably unnecessary, as the State law could not trump federal law anyway. But, it shows the Legislature’s recognition that federal law, including the Federal Arbitration Act, broadly favors arbitration. Thus, it remains to be seen whether this state restriction will be enforceable.

The law also allows that mandatory arbitration clauses contained in collective bargaining agreements are not prohibited.

Nondisclosure Agreements

Also as of July 11, 2018, employers may no longer include a provision in any settlement document resolving any claim involving sexual harassment that “would prevent the disclosure of the underlying facts and circumstances to the claim.”

The law provides an exception where “the condition of confidentiality is the plaintiff’s preference.” In that case, the plaintiff must have 21 days to consider the nondisclosure terms. Then, after 21 days, the parties can agree to the provision in a written agreement signed by all parties. But the plaintiff still must have at least 7 days to revoke the agreement after signing it.

New York Sexual Harassment Prevention

For the first time, New York will require all employers to maintain sexual harassment prevention policies and provide training for employees. These requirements take effect October 9, 2018.

Model Policy

A new provision of the New York State Labor Law requires the Department of Labor (DOL) to consult with the Division of Human Rights and publish a “model sexual harassment prevention guidance document and sexual harassment prevention policy.”

The model New York sexual harassment prevention policy must:

Prohibit sexual harassment and provide examples of prohibited conduct;
Include information about federal, state, and local sexual harassment laws;
Include a standard complaint form;
Identify a procedure for “timely and confidential investigation of complaints and ensure due process for all parties”;
Inform employees of their rights of redress and all available administrative and judicial forums for adjudicating sexual harassment complaints;
State that sexual harassment is a form of employee misconduct with sanctions for both individuals engaging in it and supervisors and managers who allow it to continue; and
Prohibit retaliation against individuals who complain of sexual harassment or testify or assist in any proceeding.

Once the model policy is available, all New York employers must adopt it or one that “equals or exceeds the minimum standards provided by such model”. Employers must provide their policy to all employees in writing.

Model Training Program

The DOL must also consult with the Division of Human Rights and produce a model sexual harassment training program.

The model New York sexual harassment prevention training program must be “interactive” and include:

An explanation of sexual harassment;
Examples of conduct that would constitute unlawful sexual harassment;
Information about federal and state sexual harassment laws and remedies;
Information about employees’ rights of redress and available forums; and
Additional responsibilities regarding supervisors.

Every New York employer will have to provide sexual harassment prevention training to all employees annually. Employers may use either the model training program or one that “equals or exceeds the minimum standards provided by such model training.”

State Contractors

Starting January 1, 2019, any entity seeking a contract with the State of New York through competitive bidding must certify that they have instituted a written policy on sexual harassment prevention. They must further certify that they provide annual sexual harassment training to all employees.

Stay Tuned for More on These New York Sexual Harassment Laws

Since most of these New York sexual harassment law changes don’t take effect immediately, employers have some time to prepare. For many, the biggest project will be complying with the new policy and training requirements. Even employers who already provide anti-harassment training to their employees will have to review the model policies and training programs to make sure they meet the minimum standards.

One thing you can do now is sign up for my email newsletter to make sure you get my updates on these important topics. This will include an announcement about a free webinar once the State issues the model New York sexual harassment materials.

February 8, 2018

Tax Reform Affects Sexual Harassment Settlements and Employee Benefits

On December 22, 2017, President Donald Trump signed sweeping tax reform legislation. The controversial tax bill includes many changes that directly affect the employment relationship. These range from sexual harassment settlements and paid family and medical leave to reimbursed employee expenses and retirement plans.

Although I am neither a tax lawyer, nor an accountant, I offer a synopsis of these changes here.

Tax Deductions for Sexual Harassment Settlements

In response to the ongoing #MeToo movement, Senator Bob Menendez (D-NJ) introduced a new provision to the Internal Revenue Code’s section on tax deductions for ordinary trade or business expenses. The provision prohibits deductions for:

any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement; or
attorney’s fees related to such a settlement or payment.

The tax reform bill doesn’t expand on the meanings of the terms used in this new provision. That leaves its application open for debate, at least until the IRS issues guidance and begins to apply the restriction to actual returns.

Clearly, this new tax code provision will affect settlements of employment claims. This may include both cases of an asserted claim involving sexual harassment or sexual abuse and those where the employer seeks a general release to cover all employment-related claims. In the latter scenario, the employee may not have specifically alleged sexual harassment/abuse. But a broad release would typically reference Title VII and similar state laws that could encompass sexual harassment claims. Employers (and employees) will need to weigh the trade-off between release coverage, confidentiality, and tax deductibility.

Employer Credit for Paid Family & Medical Leave

Employers can now claim a tax credit starting at 12.5% of wages paid to qualifying employees on family and medical leave. Wages paid must be at least 50% of the employee’s normal wages. The credit increases by 0.25% for each full percentage point by which the employer’s wage payment exceeds 50% of the employee’s normal wages, up to a maximum 25% credit.

To be eligible to take the credit, the employer must provide all qualifying full-time employees at least two weeks of paid family and medical leave each year under a written policy. The employer must also provide part-time employees leave on a pro-rata basis.

Qualifying employees are only those who have been employed for one year or more and whose wages do not exceed $72,000 (in 2018, indexed for inflation).

The credit is limited to 12 weeks of paid leave per employee in a tax year. It is only in place for 2018 and 2019 and does not apply to paid leave mandated by state or local law.

Certain Reimbursed Expenses No Longer Excluded from Employee Income

The 2017 tax reform bill repeals certain exclusions from employees’ taxable income. One such exclusion previously applied for certain moving expenses reimbursed by their employer. Another permitted employees to exclude up to $20 per month of qualified bicycle commuting expenses reimbursed by their employer. Under the new tax law, neither of these exclusions apply between January 1, 2018 and December 31, 2025. Subject to future Congressional action, these exclusions are scheduled to return in 2026.

The reforms also indefinitely eliminated employer deductions for certain transportation benefits provided to employees. Specifically, these deductions applied to up to $255 per month for employee mass transit commuting and parking and up to $20 per month in bicycle costs.

There are also changes to tax treatment of qualified equity grants to employees, employee achievement awards, and length of service award plans.

Retirement Plans

The tax changes also affect employer-sponsored defined contribution plans. It gives employees more time to roll over loan balances to an IRA following plan termination or separation from employment. Under the old rules, employees had 60 days to avoid having the loan treated as a distribution. They now have until the due date for filing that year’s tax return.

Other earlier drafts included additional changes that were ultimately dropped. These included reducing the age for beginning in-service distributions from defined benefit and state and local governmental plans to 59 1/2 and changing rules regarding hardship distributions.

Health Care

The new tax bill eliminates the penalty connected to the Affordable Care Act’s individual mandate as of 2019. The penalty still applies to individuals who haven’t maintained sufficient health insurance coverage in 2017 and 2018.

It also reduces the threshold for claiming itemized deductions for qualified medical expenses from 10% to 7.5% of income in 2017 and 2018. The 10% threshold returns in 2019.

Response to Employment-Related Tax Reform Issues

Most of these issues do not require employers to take action (other than paying taxes differently). However, because they will affect taxation of both the employing organization and the employees, questions are likely to arise. Proactive employers should consider the tax impacts and plan accordingly.

Businesses should seek further guidance from appropriate professionals in considering their approach in response to these developments. Often that will mean accounting or tax law professionals. But it will also include attorneys involved in settling disputes with employees, especially (but not only) those involving sexual harassment allegations. An experienced employment lawyer can also assist in preparing a credit-qualifying paid family and medical leave policy.

The IRS indicates that it will provide updates and resources about the new tax reforms here.