December 1, 2016 isn’t so daunting for employers across the country as a result of a nationwide injunction issued yesterday by a federal judge in Texas. Continue Reading Texas Court to Employers: Hold up on those Federal Overtime Requirements
Pursuant to a recent ruling by the Pennsylvania Commonwealth Court, employers who require employees to take drug or alcohol tests are not required to keep the results of such tests confidential pursuant to the Pennsylvania Drug and Alcohol Abuse Control Act.
On October 28, 2016, the Court issued an opinion that the Control Act only provides confidentiality of drug and alcohol tests relating to patients who take drug or alcohol tests for treatment purposes, and not to an employee, who took a drug or alcohol test for employment purposes.
The opinion is at odds with a 1999 case, Murray v. Surgical Specialties Corp., which held that the Control Act prohibited an employer from releasing employee drug tests results taken for employment purposes. Continue Reading Employment Law Update: Pennsylvania Court Rules Employee Drug Test Results Not Confidential
In a March 17, 2016 press release, the White House announced that the Department of Labor will issue a final rule today that will expand workers’ eligibility to receive overtime pay (time-and-a-half). Under the prior rule, only workers making a salary of less than $23,660 per year ($455 weekly) qualified to receive overtime pay when working over 40 hours in a week. The new rule will increase the salary threshold to $47,476 per year ($913 weekly), thus expanding coverage to over four million workers nationwide, and approximately 185,000 Pennsylvanians. We expect that restaurant/hospitality employers and retailers will be impacted the most, but all employers may be impacted depending on the current payment structure of their workforce.
Employers have six months to prepare for the final rule, which goes into effect on December 1, 2016. Options include raising an employee’s salary to keep the employee exempt from overtime, payment of time-and-a-half when necessary, or evaluation and realignment of hours and staff workload.
For more information, here’s a list of resources from the United States Department of Labor that will answer common questions about the new rule:
- A blog post and YouTube video from the Department of Labor explaining the changes.
- Plenty of Options with New Overtime Rule, which explains employer implementation options.
- Who Benefits from the New Overtime Rule, which includes demographic information about the impact of the rule.
- The full text of the final rule.
The impact on your business may be minimal if your employees are compensated hourly and already receive overtime pay, or if salaries are already in excess of $47,476 per year, however if your employees are salaried in the range between the former threshold of $23,660 and the new threshold, some careful planning will need to occur prior to December 1, 2016.
In the coming weeks we will post additional information to help determine whether your employees are exempt from the overtime requirement and strategies to address the adoption of the new overtime rule.
Matt Landis is an attorney at Russell, Krafft & Gruber, LLP, in Lancaster, Pennsylvania. He received his law degree from Widener University and works regularly with business owners and entrepreneurs.
As a follow-up to my recent presentation to the talented entrepreneurs at Assets Lancaster about employment and business law issues, I wanted to create a resource that outlines some of the myths we hear associated with employment and the law.
This is by no means an exhaustive list, and if you have more questions or are wondering about a particular issue that you’ve encountered, feel free to contact us!
Myth 1: Paying employees under the table is permitted under the law.
Payment of employees under the table and failure to withhold Pennsylvania personal income tax on wages, tips or other forms of taxable compensation is illegal and considered tax evasion. The Pennsylvania Department of Revenue investigates tax fraud claims and such claims can be submitted here.
Similarly, the IRS also investigates claims for tax evasion for failure to withhold federal employment taxes. Each year, the IRS assesses billions of dollars in penalties to employers who fail to pay employment taxes and accurately report employee income.
Myth 2: An employee who is paid a salary is exempt from being paid overtime.
As discussed in this post by Christina Hausner, there are a number of circumstances in which salaried employees are entitled to overtime pay. All employees are entitled to overtime unless they are exempt under applicable law. The Fair Labor Standards Act provides specific rules as to who is exempt. Payment of wages on a salary basis does not make an employee exempt from overtime or minimum wage entitlement.
There are some pending changes to existing law proposed by the United States Department of Labor. What are known as white collar exemptions are now being rewritten to require payment of a greater minimum annual salary to qualify as exempt than is currently applicable. Continue Reading Debunking Common Employment Law Myths
Everyone knows about the recent Supreme Court decision Obergefell v. Hodges with regard to gay marriage. Last year, President Obama entered an Executive Order prohibiting federal contractors from discriminating on the basis of gender identity and sexual orientation. In recent years, there has been a gradual acceptance that discrimination against transgender individuals constitutes discrimination on the basis of sex prohibited under federal law Title VII of the Civil Rights Act of 1964. Now, for the first time, EEOC (Equal Employment Opportunity Commission), the federal agency charged with enforcing discrimination laws, held in a July 15, 2015 decision that discrimination on the basis of sexual orientation necessarily involves discrimination on the basis of sex and is unlawful under Title VII.
The significance of this decision is that employers cannot rely on the fact that Congress never added “sexual orientation” as a protected class to federal anti-discrimination laws which expressly name race, color, religion, sex and national origin as bases for protection. Sexual orientation discrimination is now a subset of sex discrimination.
In reviewing the many claims of discrimination on the basis of sexual orientation, courts have consistently held that Title VII does not prohibit sexual orientation discrimination. However, discrimination on the basis of what is referred to as “gender stereotyping” has been recognized, most notably in the 1989 Supreme Court decision in Price Waterhouse v. Hopkins. There, the plaintiff claimed that she was denied a promotion because her employer found that her actions and conduct were not sufficiently feminine. The Court upheld her claim, stating that Title VII applied to discrimination because of gender, not just biological sex. Continue Reading Expanding Gay Rights
On July 6, 2015, the Department of Labor proposed changes to the manner in which overtime pay is calculated for executive, administrative and professional employees. These employees, collectively referred to as white collar workers, have been exempt from overtime pay protections for many years. To be considered exempt, the employees must meet certain minimum tests related to their primary job duties and be paid on a salary basis at not less than $455 a week ($23,660 a year), which amount was last updated in 2004.
Now, the Department of Labor proposes to update that salary level to $921 a week or $47,892 annually. These amounts represent calculations based on 2013 statistics; the adjusted levels as projected for 2016 would be $970 a week or $50,440 per year.
These changes are to the rules interpreting the exemptions under the Fair Labor Standards Act and can be enacted and approved without Congressional action. However, there is a 60-day comment period (through September 4, 2015) during which individuals, corporations and other organizations can express opinions which could result in changes to the rule that is ultimately adopted. It is not clear whether or when these proposed changes will become effective, and what actions opponents will take to try to block implementation. Because these are regulations under the FLSA, not the statute itself, these rules will not be voted on by Congress.
If the rule is adopted and a worker would otherwise meet the definition of an executive, administrative or professional employee but earns less than $47,892 per year, that employee would have to be paid time and a half for hours worked over 40 per week. In addition, in order to prevent the salary level requirements from becoming outdated, the Department of Labor proposes to automatically update the minimum salary levels on an annual basis. Continue Reading What’s Happening With Changes to Overtime Requirements?
When I read that Lancaster City Council voted on October 1, 2014 to delete the box inquiring whether an employment applicant had been convicted of a crime from Lancaster City’s employment application form, it reminded me of how conflicted our positions are on criminal activity and employment.
The “Ban the Box” movement is a nationwide effort to reduce the effects of criminal convictions on employment. At the same time that Council is explaining that taking this action is necessary to give people a fair chance for a job, others are criticizing NFL officials for failing to ban football players from the League when accused of off-field violence, sometimes before they are even charged, much less convicted. Is domestic violence different from other crimes, or are football players different from Lancaster City employees? What does this mean for other employers?
Pennsylvania’s Criminal History Record Information Act provides that an employer may consider felony and misdemeanor convictions “only to the extent to which they relate to the applicant’s suitability for employment." The Act is often cited for the proposition that summary offenses and charges that do not rise to convictions may not be considered in hiring.
Notwithstanding the Criminal History Record Information Act, each body of the Pennsylvania General Assembly has enacted substantially similar legislation that would require an applicant for a position involving direct contact with children to provide a written statement of whether the applicant “has been the subject of an abuse or sexual misconduct investigation by any employer . . . unless the investigation resulted in a finding that the allegations were false.” Employers will be asked to indicate whether a former employee “was the subject of any abuse or sexual misconduct investigation.” This legislation, referred to as “Pass the Trash”, has the admirable goal of protecting school children from sexual abuse. But considering an “investigation” conducted by a prior employer and perhaps in the remote past certainly doesn’t comport with the policy requiring consideration only of criminal convictions, not unproven charges. See my blog post on Employment Law Lessons from the Penn State Scandal.
Now, Lancaster City Council will consider a resolution calling on other employers to “Ban the Box.” At the same time, the Pennsylvania legislature may in its few remaining session days enact “Pass the Trash” legislation. This is an interesting area where employers’ obligation to protect workers, customers and students, employees’ civil rights and public policy to employ those who have paid their debt to society intersect.
Christina Hausner is an attorney at Russell, Krafft & Gruber, LLP in Lancaster, PA. She received her law degree from Duquesne University School of Law and has practiced in the area of employment law for over 25 years.
Settlements are the grease that makes the wheels of justice run. Without plea bargains, the criminal court system would grind to a halt. The civil justice system depends on reliable monetary settlements as well. Lawyers are used to working within this framework, but every so often, some sand gets thrown in the machinery, and it grinds to a halt.
With most civil settlements, particularly those involving employment law, confidentiality is key. Employers don’t want others knowing the payout made to buy peace. Exceptions may be specified for counsel and tax advisors, but generally litigants cannot discuss the facts or terms of a settlement even with a spouse unless the spouse agrees to maintain confidentiality as well.
In the old days when oral rumors were the rule, it might be tough to prove a breach of confidentiality. But in the 21st century, we have social media to establish beyond a reasonable doubt who spilled the beans.
In the age discrimination claim of Patrick Snay v. Gulliver Preparatory School, it was the daughter of the plaintiff who posted to her 1,200 Facebook friends: “Mama and Papa Snay won the case against Gulliver. . . . Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.” The daughter was a student at the school her father had sued, so her post broadcast to current and former students that Gulliver had lost its case with its former headmaster.
Four days after signing an $80,000 settlement agreement, the school cried foul and refused to pay. Now over two years later and after two court appeals, Florida’s Third District Court of Appeal sided with the school and refused to enforce the settlement agreement. “Snay violated the agreement by doing exactly what he promised not to do. . . . His daughter then did precisely what the confidentiality agreement was designed to prevent,” said Judge Linda Ann Wells in her ruling on February 26, 2014.
Maybe this case will go back to court, and how much impetus will there be for the school to offer a voluntary settlement? Lots of work for everyone involved just because of a slip of the mouse.
Always take a confidentiality clause seriously and never document any breach on social media.
Christina Hausner is an attorney at Russell, Krafft & Gruber, LLP in Lancaster, PA. She received her law degree from Duquesne University School of Law and has practiced in the area of employment law for over 25 years
Matt Grosh recently talked about Cam and Mitchell from Modern Family as a backdrop to the IRS’s recent revenue ruling. That ruling recognized same-sex marriages for federal tax purposes even when a couple resides in a state that does not permit same-sex marriages. The couple must only have been validly married in a state that recognizes same-sex marriage.
After last summer’s Supreme Court decision analyzing the Defense of Marriage Act, numerous questions arose regarding legal treatment of same sex couples. Employers were confused about their obligations regarding benefits such as health insurance and retirement plans. After consultation with the Department of Justice and the Department of Treasury (Internal Revenue Service), the United States Department of Labor (DOL) issued Guidance to Employee Benefits Plans on the definition of spouse and marriage.
The DOL advised that employers are to recognize "spouses" and "marriages" based on the validity of the marriage in the state where the couple was married rather than the state where they reside. The DOL concluded that such an interpretation would make it easier for employers to uniformly administer benefits to all employees, in addition to offering more protection to same-sex couples. In effect, the Department of Labor Regulations, Rulings, Opinions and Exemptions will assume that the term "spouse" refers to any individual who is legally married under any state law. Consistent with the IRS ruling, the terms "spouse" and "marriage" will not include individuals in domestic partnerships or civil unions.
Although I don’t spend much time watching TV, I came across the new Netflix series House of Cards in which all 13 episodes were released at once for back to back watching. I enjoyed the series for its political perspective, but found it interesting as an employment lawyer as well.
Claire Underwood played by Robin Wright is the cold and beautiful wife of Francis Underwood, House Majority Whip (Kevin Spacey). Claire is the director of the non-profit Clean Water Initiative (CWI). In the beginning of the season, she fires half her staff, assigning the actual serial ax job to the office manager, who is terminated by Claire immediately after the firings are completed. She then actively recruits Gillian Cole (Sandrine Holt). When Claire first interviews Gillian, she is ill and, even before she is hired, Claire sends her to her personal physician, all expenses paid, a novel recruiting tool. Once she is on the job for a few months, Gillian tells Claire that she is pregnant as an explanation of why she cannot fly on CWI business. Gillian begins missing work periodically, and childless Claire makes a remark questioning her priorities and commitment to CWI. Ultimately, Gillian defies Claire on a matter of principal and Claire fires her on the spot for her insubordination. When Claire is later visited by counsel, we find out that not only has Gillian sued CWI but that she will not accept any monetary amount to settle her claim. Gillian tells Claire that the publicity resulting from her suit will cost CWI, Claire and her high profile politician husband more than any settlement payment and insure a better world for her unborn child. She also has many witnesses happy to testify for her including the former office manager, and adds that any embellishment of her testimony is justified by the need to expose CWI as a sell-out to corporate interests.