Tag: unions

May 8, 2018

Workforce Downsizing Selection Procedures

Even if it will only affect a small part of the business, many companies face workforce downsizing at some point. The “why” is usually obvious. But it’s often more difficult to decide how to make these cuts. Here, I’ll suggest a general approach to selecting who will stay and who will go in consideration of possible legal constraints.

For more on this topic, check out my free webinar: Conducting Your Next Reduction in Force.

What’s the Motivation?

Money makes the world go ’round, and it’s usually what prompts companies to downsize their workforces. But finances aren’t the only reason organizations reduce their headcount.

Here are a few other reasons why a business may downsize:

Transition to New Operating Method
Automation of Functions
Elimination of Redundancies
Reallocation of Talent

Whatever the reason, make sure everyone involved in organizing the reduction in force understands it before they choose individual positions and employees. The company should document the rationale up-front. Then move on to evaluating how best to achieve the desired business outcome.

Don’t Identify People First

To best prevent and defend against claims by affected employees, companies should leave the identification of specific employees to the end of the selection process. The earlier specific employees are identified, the more likely they are to perceive the decision as being personal. Thus, the more likely they may believe the decision was discriminatory or in violation of their personal rights.

Sure, if the whole purpose is to outsource all engineering functions, and your company has two engineers, it will be obvious early on who will lose their jobs. But at least make sure there is a valid, documented reason for eliminating the internal engineering function. (Think about the scenario where your two engineers are in their 60s and are longtime employees. Be prepared to prove that their age isn’t the reason for the company’s decision!)

Especially where the goal is to reduce overall labor costs, most companies should start from the premise that all facets of the workforce are in play. Some will quickly narrow in on particular departments or job functions. But again, the rationale for those decisions should be documented as you move down the path toward the selection of individual employees.

Determine the Workforce Goal

Through the reduction analysis, the company should ultimately determine what it wants its workforce to look like after the downsizing is complete. This still doesn’t mean who the specific employees are. Instead, the focus is on functions, tasks, skills, etc.

For example, a company that initially has 125 employees may decide that it would operate best with about 100 employees. It then determines that all “front office” functions are still necessary–say, 25 employees. Of the other 75 post-reduction positions, 50 may be in production and 25 in sales/customer service. If there are currently 65 production employees and 35 sales/customer service employees, then the company must eliminate 15 production positions and 10 sales/customer service roles.

Next, the company must decide how to choose the 15 production and 10 sales/customer service employees to let go.

The company has options to get to the desired workforce size. It could gradually downsize by attrition when people leave. Or it could offer an incentive for employees to voluntarily resign. But here we’ll assume the company wants to reduce the workforce all at once through involuntary terminations–what many would call a layoff.

Picking the People

This component of workforce downsizing often becomes the most personal. It also creates the greatest risks of claims by affected employees. So, it’s important for the company to make these decisions without considering protected individual characteristics.

As discussed, ideally managers shouldn’t sit around the room and just throw out names of whom they want to see leave. Instead, the company should determine a structured selection process and apply it consistently.

Selection procedures may end up being objective or relatively subjective.

One straightforward objective selection criteria is length of service. If the company in the above example wanted to, it could just retain the 50 production and 25 sales/customer service employees who have been with the company the longest. The biggest downside to seniority-based workforce downsizing is that it doesn’t account for employees’ relative job performance and skillsets.

Subjective selection criteria, such as most performance evaluations, increase the risk of manager bias, if unintentional. Supervisors may naturally recognize people like them (based on age, race, sex, etc.) as being higher performers. Thus, it may be better to have multiple managers evaluate each individual and arrive at some quantifiable measure. Then the company would rank all the employees and keep the top ones.

No selection method is perfect. But it is important to establish the selection procedure before applying it to particular employees. Applying one method and then starting over after it doesn’t result in the “right” people being chosen adds risks to the equation. A company should specifically document why it changed course, assuming it has a legitimate non-discriminatory business reason to do so.

Additional Factors and Hurdles to Workforce Downsizing

The above analysis assumes employers have full discretion to determine which employees to let go in a workforce downsizing program. However, that might not always be the case.

If there is a union involved, the collective bargaining agreement may dictate how a reduction in force will occur. For example, unions often bargain for layoff based on inverse seniority. The union contract might also provide for severance pay that could affect the size of the reduction that the company pursues. Or it could even result in the company avoiding reductions in the unionized workforce altogether.

Some companies also have contracts with individual employees. These might either guarantee employment for a certain amount of time or, again, require severance pay.

Finally, even a carefully prepared employee selection process could produce arguably discriminatory results. If a disproportionate number of the employees losing their job share the same protected characteristic (e.g, race, sex), then the employees might have a claim for disparate impact employment discrimination. That type of claim can be viable even if the company had no intent to discriminate. When workforce downsizing involves a large enough pool of employees, employers can conduct statistical analyses to evaluate latent bias in their selection process. Skewed results may be one good reason to rework the selection procedure and start again.

For more on workforce downsizing, check out my free webinar on Conducting Your Next Reduction in Force.

May 2, 2018

Drug Testing New York Employees

Many employers test their employees for drug use. Some test only during the hiring process. Others require drug testing for existing employees on either a periodic or occasional basis. This post doesn’t weigh in on whether your organization should drug test employees. But it provides an overview of some of the legal issues involved.

Employee Rights Under New York Law

New York’s Labor Law protects employees’ legal use of “consumable products” before and after work, as long as the employee is off the employer’s premises and is not using their employer’s equipment or other property.

This means that, with a few possible exceptions, New York employees have the right to smoke cigarettes and drink alcohol outside of work. Employers usually cannot discipline or decline to hire employees for engaging in these activities.

However, the law does not prohibit employers from drug testing or disciplining employees who use illegal drugs, even if they only do so while off duty.

Medical Marijuana

New York’s legalization of medical marijuana adds one further caveat for employers.

The Compassionate Care Act permits New York residents (and individuals receiving treatment in the state) with a qualifying “serious condition” to obtain marijuana from licensed dispensaries for medicinal purposes. As of April 24, 2018, there were 52,435 certified medical marijuana patients in New York. That’s only about one-quarter of one percent of the total population of New York State.

Those certified patients do receive some job protections. However, the scope of those protections remains somewhat murky. Among other factors, the law does not require employers to violate federal law or federal contracts. Since marijuana remains an illegal drug under federal law even for New York certified patients, there may be situations where employers could discipline employees for testing positive for marijuana use.

Moreover, New York law does not give anyone, even if certified as a medical marijuana patient, the right to smoke marijuana, use it in a public place, or be “impaired” at work. Unfortunately, drug testing typically cannot measure impairment per se. Instead, it measures the presence of a drug in one’s body. Thus, a drug test alone may not conclusively establish that a certified patient has misused marijuana.

ADA Considerations

The Americans with Disabilities Act restricts employers’ medical inquiries and examinations of employees. Drug and alcohol testing are medical examinations, which usually must be job-related and consistent with business necessity. However, the ADA does not cover testing for illegal drugs.

Alcohol is not illegal, so employers must have a legitimate business reason for alcohol testing. There must be some basis for conducting alcohol testing and it cannot be done on an arbitrary basis.

Employers may require alcohol testing as a condition of return to work from an alcohol rehabilitation program if the employer believes the employee will pose a direct threat if not tested.

To avoid potential violations of the ADA’s confidentiality requirements, employers should maintain drug test results in employees’ separate medical files. They should only be available to managers with a need to know the results for valid administrative reasons.

Drug Testing Procedures

Under the federal Omnibus Transportation Employees Testing Act of 1991, some employees within the transportation industry are subject to mandatory drug and alcohol testing rules. The rules apply to employees in “safety-sensitive” positions, such as pilots, airline mechanics, truck drivers, and bus drivers.

Although the federal transportation drug testing rules do not technically apply to most employees, they provide a detailed set of testing protocols and procedures often voluntarily borrowed by other industries.

The transportation industry rules identify these drug testing scenarios:

Pre-employment
Random
Reasonable Suspicion
Periodic
Post-Accident

They also establish rigorous laboratory parameters to ensure accurate test results. Most employers who require employee drug testing us specimen collection/analysis professionals who comply with federal Department of Transportation standards.

Drug Testing Unionized Employees

Drug testing employees who belong to a bargaining unit represented by a union is a mandatory subject of bargaining. So, employers with union-represented employees must negotiate with the union over any employee drug testing programs.

However, private sector employers generally do not have to negotiate with a union over pre-employment drug testing. Because applicants are not yet employees, the National Labor Relations Board has found that employers have no obligation to bargain over pre-employment requirements.

Drug Testing Public Employees

Unions represent most public sector (i.e., government) employees in New York. And, like private companies, most governmental employers in New York must negotiate with their employees’ unions over drug testing.

Beyond any bargaining obligations, constitutional restrictions may apply to public employee drug testing. Because of the Fourth Amendment’s protection against unreasonable searches and seizures, public employers must have “individualized suspicion” to drug test an employee. Where there is “individualized suspicion,” the employer may drug test the employee when a “special need” outweighs the employee’s privacy interest.

The Drug-Free Workplace Act

Employers with federal grants and some federal contractors are subject to the federal Drug-Free Workplace Act. Covered employers must adopt a drug-free workplace policy and establish a drug-free awareness program. The law does not require any employers to drug test any employees.

For more, read What Does the Drug-Free Workplace Act Require?

Elements of an Effective Drug Testing Program

Employers who choose to test for drug or alcohol use regularly should implement a written policy. The policy should identify:

Prohibited Conduct
Occasions for Drug Testing of Employees/Applicants
Test Collection and Analysis Procedures
Consequences of Failing a Test
Provisions for Rehabilitation and Recovery

In addition to drug and alcohol testing, employers should consider making available an Employee Assistance Program to address substance use, among other employee issues. Especially if reasonable suspicion testing will be used, employers should also provide training to supervisors and employees regarding signs of substance abuse.

For more insights, updates, and best practices regarding employment law and the workplace subscribe to our free email newsletter.

April 25, 2018

10 Telecommuting Topics for Employers

Does your company allow employees to work from home? Telecommuting can be a great fit for many workers (and their employers). But organizations should consider various implications before going in this direction.

Here, I’ll share 10 potential legal issues related to telecommuting. This isn’t meant to deter any business from using this model. It’s just designed to help you make an informed decision and take appropriate precautions.

1. Timekeeping

Most employers are required under the FLSA or state laws to keep accurate time records of their employees. This is especially true for non-exempt employees who may be eligible for overtime pay when they work over 40 hours per week (or another applicable threshold). Employers must be able to trust their employees working at home to report their time accurately and provide a mechanism for doing so.

2. Meal Periods

Some state laws, such as New York’s, impose mandatory meal period breaks during the workday. These may apply to employees working from home as well as those on the employer’s premises. If so, employers must ensure that their telecommuting employees take the required time off during the day.

3. Overtime

Many companies restrict the amount of overtime their employees work–usually as a cost-containment measure. This may be more difficult to control for telecommuting employees who are out of sight. Nonetheless, if non-exempt employees working from home exceed the applicable threshold, the employer must pay the overtime compensation.

4. Time Off

It can be a challenge to monitor and handle time off for on-site workers. This can sometimes become even more difficult when the employees don’t physically report to work. First, supervisors may not know whether an employee is actually working, so some employees may not use leave time even though they are not doing work when they normally should be. And the opposite can also raise issues. A telecommuter who takes a day off may feel compelled to perform some work while they’re supposed to be on vacation or sick leave. This may raise complications in tracking benefit time and hours worked.

5. Confidentiality

Telecommuting employees often have remote access to company information that on-site workers may not need. Or, at least, they usually have less direct supervision in their use of company data and property. Employers should consider measures to prevent employees from intentionally or accidentally taking or transferring their proprietary information to unauthorized third parties.

6. Security

Even if your employees don’t misuse company information, other nefarious third-parties may seek to do so. Remote data transfer between telecommuting employees and the company’s electronic systems may not be as secure as on-site access. This could be especially true when employees may access company information from outside their homes, such as through public Wi-Fi connections.

7. Discrimination

As with most workplace issues, consistency is important in permitting employees to telecommute. Inconsistent treatment, even if inadvertent, can give the appearance of unfair treatment. This may even give rise to discrimination claims. For example, although well-intended, a company that only allows women with young children to work from home, might be discriminating against male employees. Likewise, an organization that discourages older workers from working from home, but permits younger employees to do so (on the theory that they’re more “tech savvy”) could be engaging in age discrimination.

8. Disability Accommodations

The Americans with Disabilities Act and similar state laws require employers to make reasonable accommodations to qualified employees with disabilities. This could extend to the home workplace. Thus, under some circumstances, employers may need to modify employees’ homes to enable them to work there. At present, however, most employers would probably not be required to allow employees to work from home to accommodate a disability if they do not normally allow telecommuting. This could mean that allowing telecommuting in the first place opens employers to greater disability accommodation responsibilities.

9. Safety

Under OSHA, employers must keep their employees’ workplace reasonably safe. In addition, companies may become responsible, through their workers’ compensation insurance, for telecommuting employees’ injuries occurring in their own homes. As a result, it may be prudent (though not always practical or desirable) for an employer to inspect employees’ home workspaces.

10. Unions

Employees who work from home can still be in represented bargaining units. And unions vary in their approach to whether this is a good idea. Some unions would object to an employer allowing some employees to telecommute. Others may push for the option.

Telecommuting on the Rise

Like unions, employers have different ideas about how effective telecommuting can be. Some embrace it completely, and others reject it altogether. Others are in-between. But, whatever your take, telecommuting is increasingly popular.

A 2017 State of Telecommuting in the U.S. Employee Workforce Report indicates that 3.9 million U.S. employees work from home for at least half of their work time. This is 2.9% of the overall U.S workforce and a 115% increase since 2005.

In this digital era, many employees place tremendous value in having the flexibility to work remotely. Companies that want to attract those workers may need to modify their past approach to telecommuting. But, there remain many industries, such as manufacturing, hospitality, and construction, where much of the workforce must be physically present. Remember that the above issues also apply to traditional work arrangements as well!