Categories
Independent Contractor

U.S. Department of Labor Withdraws Key Obama-Era Guidance on Independent Contractor and Joint Employment Status

U.S. Department of Labor Withdraws Key Obama-Era Guidance on Independent Contractor and Joint Employment Status

By Nancy E. Joerg of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Independent Contractor on Thursday, June 22, 2017.

On Wednesday, June 7, 2017, the U.S. Department of Labor (US DOL) issued a three sentence statement trumpeted by national news and happily noted by many employers. The recently-confirmed Labor Secretary, Alexander Acosta, personally announced that he has withdrawn the US DOL’S two Interpretations on two key legal issues worrying many businesses: joint employment and independent contractors.

These two withdrawn U.S. DOL Interpretations were issued in 2015 and 2016 during the Obama Administration and were widely viewed as “anti-business” at that time. The Obama-approved Interpretation on joint employment (issued in 2016) called for greater legal scrutiny of business arrangements where multiple companies appear to jointly employ workers. This naturally worried many business owners. The Obama-approved independent contractor Interpretation (issued in July 2015) aimed to discourage the misclassification of employees as independent contractors. This Interpretation also caused deep concern among many business owners who used independent contractors.

US DOL’S STATEMENT: The June 7, 2017 statement by Labor Secretary Acosta cautioned that the withdrawal of the two (Obama-approved) Interpretations “does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law.” Acosta warned on June 7, 2017 that the U.S. DOL “will continue to fully and fairly enforce all laws within its jurisdiction.”

THIS ACTION NOT LIKELY TO CHANGE LEGAL LANDSCAPE OF INDEPENDENT CONTRACTOR MISCLASSIFICATION: This June 7, 2017 announcement by Labor Secretary Acosta is being optimistically interpreted by many employers as a major shift in enforcement position of the US DOL in favor of employers. This recent announcement and withdrawal is, however, unlikely to significantly change the legal landscape of independent contractor misclassification, which is now handled mostly in a growing number of private class action lawsuits and state unemployment insurance audits and proceedings – not by the US DOL.

Strangely, Labor Secretary Acosta did not provide a rationale at all for the sudden withdrawals in his June 7th announcement. The decision by Labor Secretary Acosta to withdraw the independent contractor Interpretation should not be viewed as a reliable sign to businesses that the US DOL will now abandon all of its enforcement efforts against companies who are misclassifying independent contractors. Some degree of continuing enforcement in the independent contractor vs. employee area by the U.S. DOL should be expected regardless.

The Obama-era Interpretations of 2015 and 2016 were not actually law, but they served as a guide for the U.S. DOL’s Wage & Hour Division in its enforcement efforts. Withdrawal of the Obama-era Interpretations signals that the Trump Administration U.S. DOL will likely be less aggressive in its enforcement efforts in these two areas. However, state laws often differ from federal laws with regard to independent contractor tests and joint employment status. It is not clear whether the U.S. DOL will be issuing new standards or clarification after withdrawing the two Interpretations. What, if anything, will now replace them?

PRACTICE TIP: In light of these questions, developments and continuing state unemployment insurance audits, employers should seek legal counsel when considering whether to engage someone as an independent contractor. Additionally, employers should evaluate their existing websites and independent contractor relationships (and independent contractor agreements). Strengthen these relationships before you are hit with a costly legal challenge!

For assistance with independent contractor hearings or issues or restructuring independent contractor relationships or agreements to reduce risk, contact Attorney Nancy E. Joerg who can be reached at Wessels Sherman’s St. Charles, Illinois office: 630-377-1554 or email her at najoerg@wesselssherman.com.

Related Posts: Yes, You Can Win Before an IDES Hearing Officer on the Issue of Independent Contractor Status!!, IRS Form SS-8 Continues To Upset And Confuse Employers Across The U.S.!, Psychological Counselors In Pennsylvania Found To Be Independent Contractors, Yes, There are Certain Categories of Workers Who Are Independent Contractors By Law Under the Illinois Unemployment Insurance Act

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Categories
Hiring/Firing

Employee Resignation – Employer Problem?

Employee Resignation – Employer Problem?

By Walter J. Liszka of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Hiring/Firing on Tuesday, June 27, 2017.

While there may be disagreement as to the current status of the work environment, most intelligent/competent people would agree that unemployment is low and the job market is beginning to tighten. The U.S. unemployment rate is at a sixteen (16) year low – 4.3%. In fact, there are 73 counties in the United States with unemployment rates of 2% or less based upon recent Bureau of Labor statistics. In this type of environment, talented Employees in your employ will be in higher demand, especially in a highly competitive industrial environment. Whether or not some have the perception of “manufacturing jobs” as “dirty work or low class” or that being “college educated” is an absolute requirement, the availability of experienced personnel with manufacturing skills is a growing talent shortage. While you may have in place Confidentiality, Non-Solicitation and Non-Compete Agreements, these documents, in and of themselves, do not totally protect an Employer. Employers must have a plan in place to address and deal with the unexpected departure of an Employee.

Here are three (3) actions that Employers should consider taking when one of its talented Employees resigns:

1. Do not panic! Most Employers have a written protocol to address Employee resignations/terminations. If you do not have such a protocol, it may be a wise decision to prepare one. Follow that protocol with each and every Employee who resigns or is terminated. This avoids the appearance of any impropriety, favoritism, or bias and, as well, establishes for the rest of the Employee Complement that Employees are fairly and properly treated. This will inure to the benefit of the Employer in enhanced Employee morale and may even have value in “helping in the employ” one or two individuals.

2. Make sure that the Personnel File of the departing Employee is protected. Keeping a paper and electronic copy of Personnel Files may be extremely beneficial to an Employer. Remember that the human mind or memory is degenerative – things can and will be forgotten. A secure Personnel File will really come in handy if issues arise involving the resigning or terminated Employee. If the Employee is, in fact, resigning, it could be extremely beneficial to have a Letter of Resignation in the Employee’s own handwriting as part of that Personnel File.

3. We are in a vast and sometimes overused Technical Age. Computers, smart phones, tablets, etc. are in constant use by Employees on behalf of the Employer. Any Employer has reaped the benefits of instant access to these Employees via their use. However, there is a downside – the Employees who are leaving can use those computers, smart phones and tablets to copy, forward or destroy company information. When an Employee advises you that they are leaving, you must act quickly to limit that Employee’s access to proprietary information and the cloning of company issued computers, phones and/or tablets. It may also be advantageous to have backups of the Employee’s work files and e-mails to not only facilitate continuity of your business operation but also to determine whether the leaving Employee had “bad intentions” in deleting or forwarding company data.

Whenever an Employee leaves an organization, there is some loss or impact to the continuity of the business. Having the right game plan in place to deal with an Employee’s leaving will help bridge the gap of that loss.

Questions? Contact Walter Liszka in our Chicago office at (312) 629-9300 or by email at waliszka@wesselssherman.com

Related Posts: The New Illinois Law Regarding Severance And Release Agreements: Five Commonly Asked Questions, Illinois Employers Have New Restrictions on the Use of Arrest Records in Employment Decisions, Artificial Intelligence Video Interview Act – What This Means For You, Illinois Employers Alert!: There is A New Illinois Law regarding Severance and Release Agreements!

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Categories
Harassment

Employer Found Not Liable For Racial Harassment

Employer Found Not Liable For Racial Harassment

By Nancy E. Joerg of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Harassment on Thursday, March 9, 2017.

In a February 9, 2017 Decision (Glenda Cable v. FCA US LLC, case number 16-2283), the United States Court of Appeals for the Seventh Circuit located in Chicago (“the Court”) found that Fiat Chrysler Automobiles (“Fiat”) was not liable for racial harassment.

THERE WAS RACIAL HOSTILITY IN THE WORKPLACE: What makes this case particularly interesting from a legal perspective is that there was indeed some truly terrible behavior in the workplace which caused the black plaintiff, Glenda Cable, to sue Fiat. Glenda Cable’s team leader hung a black voodoo doll from his belt and refused to remove the offensive doll which she asked him to. There were also racially hostile drawings and etchings in the Fiat workplace.

No one disagreed on the facts of this case, but there was disagreement about the legal responsibilities of Fiat. The Court found that Fiat took all reasonable steps to remedy the incidents as they arose. Fiat was not negligent in discovering or remedying the harassment.

EMPLOYER TOOK IMMEDIATE STEPS: This case was not one where there was a negligent supervisor or a supervisor who participated in or ignored the harassment. Rather, when Fiat management learned of these complaints, they took immediate steps to remove these racially hostile elements from the workplace.

For example, with regard to the voodoo doll, Fiat did not act negligently in responding to the employee’s display of a voodoo doll. Rather, Fiat promptly demanded he never bring it to work again. As the Court approvingly noted in its decision “thereby promptly stopping this conduct from recurring.”

While acknowledging that there was racial hostility in the workplace, the Court noted that Glenda Cable lacked a legal basis to “hold Fiat liable for the racial harassment that she experienced.”

REMEDY THE HARASSMENT IMMEDIATELY: The biggest lesson from this very recent case is that companies upon receiving complaints about harassment in the workplace should take immediate steps to uncover and remedy all behaviors and situations complained of. Companies must act fast in removing any discriminatory cartoons, etchings, graffiti, etc. The most dangerous thing a company can do upon discovering discriminatory situations in the workplace is to drag its feet or stick its head in the sand.

TRAIN SUPERVISORS: This case of course also underscores the crucial need for companies to thoroughly train their supervisors (because any complaints of harassment or discrimination must be quickly forwarded from the supervisor to the responsible Human Resources or management person in the company).

For assistance with training managers and supervisors about how to identify and deal with harassment, contact Attorney Nancy E. Joerg who can be reached at Wessels Sherman’s St. Charles, Illinois office: 630-377-1554 or email her at najoerg@wesselssherman.com.

Related Posts: Internal Harassment Complaints, Seventh Circuit Decision-Use Of The “N-Word”, Illinois Workplace Transparency Act, Alert: Pending Legislation in Illinois Would Impose Huge Impact on Sexual Harassment Claims on all Employers

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Categories
Harassment

Illinois Employers – Liable for Criminal Acts of Supervisors?

It reached a similar conclusion with respect to her FMLA claim:

Illinois Employers – Liable for Criminal Acts of Supervisors?

By Walter J. Liszka of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Harassment on Thursday, April 20, 2017.

While the liability of employers in the State of Illinois has been expanded substantially by recent amendments to the Illinois Human Rights Act and the recent decision of the US District Court of Appeals for the Seventh Circuit in the Hively v. Ivy Tech Community College of Indiana (Case No. 15-1720), which was a landmark decision holding that Title VII of the Civil Rights Act of 1964 bars discrimination on the basis of sexual orientation, there have been few, if any, cases in which Illinois employers have had to bear the responsibility for the criminal conduct of their employees. Unfortunately, the United States Court of Appeals for the Seventh Circuit recently issued a decision (March 24, 2017) in the Case of Sherry Anicich v. Home Depot USA, Inc.; Grand Service, LLC and Grand Flower Growers, Inc. (Case No. 16-1693). The Federal Court, acting and applying Illinois law, found that the joint employers were liable for the criminal acts of a supervisor (Brian Cooper – Regional Manager) in his rape and murder of Alisha Bromfield.

The Seventh Circuit Court of Appeals, which has changed quite substantially over the last few years (its previous moniker as an “Employer Favored Circuit”), found that the joint employers had a duty to protect its employee, Alisha Bromfield, from the criminal acts of the supervisor, Brian Cooper, based on Cooper’s unfortunate behavior as the Regional Manager. Cooper had a history of sexually harassing his female subordinates and, quite candidly, prior employees as well as Ms. Bromfield had reported his sexual harassment to the employer. While the employer investigated the complaints and ordered Mr. Cooper to take anger management classes, the employer never enforced upon Cooper the requirement to take anger management classes nor did the employer remove Cooper from his supervisory responsibilities. When Cooper threatened Alisha Bromfield with termination or reduction of hours if she failed to accompany him on a trip to a family wedding, she agreed and was ultimately raped and murdered when she refused to enter into a consensual sexual relationship with him.

While the Seventh Circuit Court of Appeals fashioned in this case a remedy based on Illinois law, the Seventh Circuit said that it was quite clear that all employers have a duty to act reasonably in the hiring, supervising and retaining of employees. If they fail to “act reasonably in the hiring, supervising and retaining of employees”, they must bear the burden of the “inappropriate conduct” of the involved employee. Even though the rape and murder of Bromfield occurred “off work”, the Seventh Circuit interpreted Illinois law as imposing liability. The Court relied in large part on two (2) decisions of the Illinois Courts – Van Horn v. Mueller, 705 NE 2nd 898 (Illinois – 1998) and Pelatson v. NSM America, Inc., 748 NE 2nd 1278 (Illinois Appellate – 2001). Both cases held that Illinois law recognizes a cause of action against an employer for negligently hiring or retaining in its employ an employee that it knew, or should have known, was unfit for the job and could create a danger of harm to third parties.

In essence, the Seventh Circuit was stating that but for the employer’s granting to Mr. Cooper his authority of supervision over Ms. Bromfield, he would not have had the opportunity to commit these heinous acts.

It is strongly recommended that every employer in the State of Illinois thoroughly and completely investigate and document any claims of sexual harassment. If there is validity/credence to the complaint, appropriate disciplinary action should be taken, including the possibility of termination. No employer wants to put itself in the position of expending its valuable assets to pay for a claim that could have been avoided through prompt action.

Questions? Contact Attorney Walter Liszka in our Chicago office at (312) 629-9300 or by email at waliszka@wesselssherman.com

Related Posts: Internal Harassment Complaints, Seventh Circuit Decision-Use Of The “N-Word”, Illinois Workplace Transparency Act, Alert: Pending Legislation in Illinois Would Impose Huge Impact on Sexual Harassment Claims on all Employers

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Categories
Harassment

Sexual Harassment Protection – Chicago Style

It reached a similar conclusion with respect to her FMLA claim:

Sexual Harassment Protection – Chicago Style

By Walter J. Liszka of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Harassment on Monday, November 20, 2017.

The highly questionable activities of Harvey Weinstein and others have caused the City Council of the City of Chicago to make significant changes to its laws in an effort to reduce sexual harassment. As a result of a recent survey of numerous hotels in the Chicagoland Area, which asserts that more than half of the women surveyed were allegedly sexually harassed or assaulted on their job, the Chicago City Council passed an Ordinance with the intent of protecting Hotel Workers.

The new Ordinance, which is a modification of the Municipal Code of the City of Chicago, has two primary components, both of which will require Chicago Hotels to take quick actions.

As of October 11, 2017, Chicago Hotels will have sixty (60) calendar days to comply with the Ordinance and adopt reporting policies and practices for sexual harassment. It is a requirement that Chicago Hotels provide to all employees a copy of the Hotel’s anti-sexual harassment policy in English, Spanish and Polish and also display copies of the policy in conspicuous places in the area of the Hotel, such as supply rooms or employee lunch rooms. The policies must encourage the reporting of alleged sexual assault and harassment and allow workers to leave the area of perceived danger until security arrives. As well, workers who complain of sexual harassment dealing with a guest must be assigned to work elsewhere during the offending guest’s stay. Further, Hotels will have to provide sufficient Paid Time Off to a worker to file a complaint with the police or testify in Court with regard to related proceedings.

As well, as of July 1, 2018, Chicago Hotels must provide “panic buttons” to all employees who work alone in guestrooms or restrooms. According to the Ordinance, the “panic buttons” are defined as “a portable emergency contact device that the involved employee can quickly and easily activate to effectively summon assistance from a Hotel Security Officer, Manager, or other appropriate Hotel Staff Members who are designated by the Hotel to assist the employee” in these difficult situations. A Hotel employee can use the “panic button” if the “employee reasonably believes” that there is an ongoing crime, sexual harassment, sexual assault or other emergency occurring on their premises. As would be expected, the Hotels must provide the “panic buttons” free of charge to employees.

Chicago Hotels that fail to meet the aforementioned deadlines with regard to the creation of an anti-sexual harassment policy and/or providing of the panic buttons, may suffer major consequences. Hotels could have their operating licenses revoked and be fined between $250 and $500 per day for each offense and each day that a violation continues is a “separate and distinct offense”.

To see a copy of the actual Ordinance, go to: Hotel Workers Sexual Harassment Ordinance

Questions? Contact Attorney Walter Liszka in our Chicago office at (312) 629-9300 or by e-mail at waliszka@wesselssherman.com

Related Posts: Internal Harassment Complaints, Seventh Circuit Decision-Use Of The “N-Word”, Illinois Workplace Transparency Act, Alert: Pending Legislation in Illinois Would Impose Huge Impact on Sexual Harassment Claims on all Employers

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Categories
Other

Not if, But When: Employers Must Have Plan in Place to React to; Data Breaches Compromising Employee Records

Not if, But When: Employers Must Have Plan in Place to React to; Data Breaches Compromising Employee Records

On behalf of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Other on Saturday, June 24, 2017.

Last year U.S. companies and government agencies reported 1,093 data security breaches, a 40 percent increase from 2015. The high-profile breaches include the hacking that affected more than 1,000 Wendy’s Co. chains in July 2016. Just last week, McDonald’s Canada announced that data of 95,000 of its job applicants were compromised in a cyber-breach. But, it’s not only cyber hacking that can cause security breaches for companies; in 2014, the thet of unencrypted laptops at Coca-Cola, revealed sensitive information of about 74,000 current and former employees at the company. Last fall, a Boeing worker inadvertently exposed the personal data of 36,000 Boeing employees in four states by sending a spreadsheet to his spouse. According to a UK-based study, employee error, like that in the Boeing case, is most often to blame for data security breaches.

Since the majority of employers maintain employee records that include sensitive information, such as social security numbers and driver’s license numbers, a data breach of employment information can be catastrophic. Given the likelihood that such breaches and computer hacking may continue to grow, employers must have plans in place and know what to do when sensitive information of their employees is compromised in a data security breach.

Minnesota Statute Section 325E.61, requires an employer to notify employees “in the most expedient time possible and without unreasonable delay.” This obligation applies to employers if “personal information” is disclosed in a security breach. “Personal information” includes a social security number, a driver’s license or Minnesota identification card number, and an account number or a credit or debit card number, in combination with a required code that would permit access to the person’s financial account. Depending on the severity of the breach, notice may be provided in writing, electronically, via web postings, and / or through dissemination by major statewide media.

Minnesota employers that fall victim to a mass data breach (affecting 500 or more individuals) have additional obligations. Within 48 hours, they must provide notification to “all consumer reporting agencies that compile and maintain files on consumers on a nationwide basis … of the timing, distribution and content of the notices.” In addition, Minnesota law restricts the use of social security numbers in an employment setting by prohibiting a number of acts involving social security numbers (i.e. requiring an individual to transmit the number over an unsecured or unencrypted internet connection).

Like Minnesota, the majority of states now have a notice requirement when a security breach compromises commonly-held private information. Some states go well beyond the Minnesota statute. For example, on January 1, 2017, Illinois’ data breach notification law was amended to include expanded categories of trigger data (data content that triggers a notice requirement). Today Illinois’ trigger data includes health insurance information, medical information, unique biometric data, and log-in credentials. In addition, if the breach impacts more than 250 Illinois residents, companies have an obligation to notify the Illinois attorney general. While employer duties and obligations under the state laws vary, the laws often share the same basic requirement: that an employer must notify employees if a security breach compromised or is reasonably believed to have compromised, personal information of the employees.

While the statutory obligation to notify employees may be clear, the courts are not settled on whether an employer has a contractual obligation to secure an employee’s personal information. In the Coca-Cola data breach referenced above, a former employee sued Coca-Cola alleging that the company had failed to secure his data and to promptly notify employees of the breach. A Pennsylvania federal judge found that Coca-Cola had no contractual obligation to secure an ex-employee’s personal information. The District Court analyzed Coca-Cola’s Employee Code of Conduct and concluded that the document imposed no duty on the employer.

Conversely, a district court in California ruled in the favor of former and current employees in a claim brought against Seagate Technologies, Inc. for a data breach that resulted in the thet of W-2 forms. The Court held that Seagate had a duty to its former and current employees, and their spouses and dependents, to protect personal information. The court concluded that the employees provided their information as a condition of employment “with the understanding their employer would guard that information.”

With the law on this topic clearly in flux, as well as varying state laws, employers should take steps to prevent a data breach and protect employees’ data. For Minnesota employers, as well as employers in other states, the following steps are of utmost importance:

•1. Mandate security training for employees and teach employees to reach out to the IT department to avoid accidental data breaches.

•2. Avoid using social security numbers as employee identification numbers and eliminate data collection forms that include requests for unnecessary personal data.

•3. Ensure that data stored electronically is in a secure computer system. Limit access to the data and avoid taking data off-site.

•4. Purchase cyber-liability coverage from your insurance broker.

•5. Review current policies to safeguard data and create a comprehensive plan to respond to a security breach. Conduct simulations to test the effectiveness of a response plan.

•6. Review your employee handbook and consider changes may limit potential contractual liability for data breaches.

•7. Check the notification requirements for each state where your employees are located.

•8. Develop template notification letters to use in the event of a breach.

•9. In the event of a breach:

•a. Treat your employees like clients or customers, regardless of your legal requirements.

•b. Notify employees quickly to meet obligations under Minnesota (and many other) state laws.

•c. Offer free credit monitoring services.

•d. Provide immediate notice to law enforcement and employees.

Related Posts: New Illinois Laws in the New Year, Illinois Changing Employment Landscape, Get Ready! All Owners of Hotels and Casinos in Illinois Must Soon Protect their Employees from Sexual Assault and Harassment with Panic Button Safety Devices!, So You Have A Whistleblower

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Categories
Employee Handbooks

Common Mistakes Found in Illinois Employee Handbooks

Common Mistakes Found in Illinois Employee Handbooks

By Anthony J. Caruso Jr. of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Employee Handbooks on Friday, October 27, 2017.

Beware Illinois employers! Just because a policy is in or not in your employee handbook does not make it legal under employment laws.

After reviewing literally hundreds of Illinois employee handbooks, I have noted some common mistakes and areas of concern:

Anti-Harassment/Sexual Harassment Policy: MISTAKES

· Policy does NOT exist or is NOT in handbook;

· Policy required by law if Company contracts with State of Illinois;

· Policy limits the chain of command for reporting harassment;

· Policy retaliates against alleged victims if claim is found to be frivolous, reporting employee may be disciplined.

Vacation Pay Policies: MISTAKES

· Policy has too long of a waiting period (i.e., one year) to earn benefits in violation of Illinois Department of Labor regulations;

· Employee forfeits earned vacation upon separation of employment (i.e., failed to give two week notice upon resignation or termination for cause). These are violations of the Illinois Department of Labor regulations;

· Policy fails to provide provision that employee does not earn vacation while on a leave of absence.

Sick Pay Policies: MISTAKES

· Company does NOT have paid sick leave policy in compliance with City of Chicago or County of Cook ordinances which were effective July 1, 2017;

· Policy does NOT include use for illnesses of qualified dependents as provided under the Illinois Sick Leave Act;

· Policy automatically deducts from employee’s final pay check negative sick leave balance in violation of the Illinois Wage Payment and Collection Act.

Leave of Absence Policies: MISTAKES

· Company has 50 or more employees and is covered under the Family and Medical Leave Act but fails to have the complete provisions of FMLA in the employee handbook as required by law;

· Company does not have a policy for pregnancy accommodation in the handbook as required by the Illinois Human Rights Act;

· Company has personal leave of absence/medical leave of absence policy that limits the maximum duration of the leave (e.g., 6 months) instead of leave assessed on a case by case situation. Set limitations of duration is a violation of the Americans with Disabilities Act.

The above mistakes are only a sample of some of the common mistakes Illinois employers make in their employee handbooks. Wessels Sherman highly recommends that employers have their handbooks reviewed by employment law attorneys on a regular basis to avoid such mistakes.

Questions? Need an employee handbook review? Contact Attorney Tony Caruso in our St. Charles office at (630) 377-1554 or by email at ancaruso@wesselssherman.com

Related Posts: What Policies Should A Company Have in Their Employee Handbook?, NLRB General Counsel Issues Much Needed Guidance on Lawful Employee Handbook Provisions, Slash All Unnecessary Promises In Your Employee Handbook!, Employees Gambling At Work?

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Categories
Employee Benefits

Final Warning to Implement Policy Changes for Minneapolis and St. Paul Sick Time / Safe Laws

Final Warning to Implement Policy Changes for Minneapolis and St. Paul Sick Time / Safe Laws

On behalf of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Employee Benefits on Sunday, June 25, 2017.

In 2016, both Minneapolis and St. Paul passed city ordinances requiring private employers to provide their employees with paid sick time / safe time. These ordinances, despite opposition in the courts and in the legislature, go into effect on July 1, 2017. Many employers already provide their employees with paid time off; however, it is wrong to assume that more generous leave policys automatically satisfy these ordinances. Unfortunately, the majority of existing leave policies require modifications to fully comply with these new laws. Some of the more common areas that we have been addressing with clients, include:

  • Ensuring that leave can be used for all of the purposes allowed in the ordinances (e.g. domestic abuse).
  • Eliminating existing restrictions common in most employers’ leave policies that may not be applied to these newly mandated leaves (e.g. documentation or other forms of proof).
  • Conflicts between existing “use-it-or-lose-it” policies and new rights to carry over accrued leave from year to year.

The sick time / safe time ordinances will provide about 150,000 workers with paid sick time / safe time leave. Both ordinances provide leave for employees who perform work in the city for at least 80 hours per year. The Minneapolis ordinance covers all employers. Employers who employ six or more employees must provide paid leave. However, Minneapolis provides an exemption for smaller employers; those with fewer than six employees may provide unpaid leave. In St. Paul, employers who employ 24 or more employees must provide paid leave starting July 1, 2017. Starting January 1, 2018, employers with 1-23 employees must also provide paid leave. In determining number of employees, both ordinances require that employers count all employees, including part time employees, temporary employees, and employees performing work outside of the city.

The sick time / safe time ordinances are designed to provide leave to cover situations involving health conditions, safety concerns, and childcare responsibilities. The sick time may be used for the employee’s own health condition, appointments for diagnosis, or preventative care. In addition, the leave may be used for the health condition of a family member. Safe time refers to the use of leave as a result of domestic abuse, sexual assault, or stalking. It may be used in situations involving the employee or a member of the employee’s family. Finally, the new ordinances apply to time of used for childcare in the event of a school closing.

Affected workers will begin accruing time on their first day of employment and are eligible to use the leave after 90 days on the job. According to the ordinances, the leave accrues at the rate of one hour per 30 hours worked. Workers may accrue up to 48 hours per year and may roll over 80 hours per year. Therefore, an employee would be able to use up to 128 hours of paid sick leave per year.

The ordinances permit employees to use the paid leave without providing any notice if the need is not foreseeable. However, if the notice is foreseeable, employers may require notice. In St. Paul, employers may require reasonable advance notice. Minneapolis employers may also request reasonable notice, but may not request more than seven days of advance notice.

While it appears that these new requirements will go into effect in July, future changes are possible given ongoing litigation over the Minneapolis ordinance. The Minnesota Chamber of Commerce filed a lawsuit requesting a Hennepin County Court to halt enforcement of Minneapolis’ ordinance as a whole, arguing that it conflicted with state law and was an example of local government overreach because it was written to apply to any workers doing business in the city. The Court ordered an injunction limiting the reach of the Minneapolis ordinance to cover only employees who work for employers within a Minneapolis location. However, the Court let the remainder of the ordinance stand. The Minnesota Chamber of Commerce appealed this decision to the Minnesota Court of Appeals, arguing that the entire ordinance should be halted. Businesses and city officials in St. Paul have been closely watching this litigation to determine its impact on their own ordinances. It appears the Minnesota appellate courts will have the last word in deciding whether and to what extent the Minneapolis and St. Paul ordinances survive.

What should employers do?

While employers that already provide paid time off that meets the ordinance requirements do not need to provide any additional leave, there are steps that every employer should take to prepare prior to the July 1, 2017 effective date.

•1. Prepare but don’t take action just yet. The final versions of these ordinances are still undecided, as is evident by the pending appellate litigation. Best practice is to wait until the ordinances become effective to announce any program changes.

•2. Count your employees and determine your company’s responsibilities. As stated above, Minneapolis’ ordinance obligations vary depending a business size of 6 employees. In St. Paul, 24 or more employees will determine when an employer must meet its obligations. In addition, new employers should prepare to comply within 6 months of hiring their first employee. The ordinances permit a six-month grace period for new employers until January 1, 2023.

•3. Review current leave and handbook policies. Employers must prepare to make changes to comply with the new ordinances starting July 1, 2017. If an Employee Handbook exists, employers should also include a notice of employee rights and remedies in the handbook.

•4. Ensure compliance with leave entitlements by creating a system to tally and track time. Under the ordinances, employers must provide workers with a current leave balance upon a worker’s request. Business should devise a system that will track this balance with ease.

•5. Prepare to post notice of employee rights at any worksite where any employee works. The cities will release notices in multiple language for employer use. Using the posting published by the department, employers should prepare to display versions of the postings in those languages spoken by at least five percent of the employer’s workforce.

•6. Watch the news. While the pending appeal will certainly impact the outcome of Minneapolis’ ordinances, it is also likely to change how the St. Paul ordinance is ultimately administered. Other cities that have been considering local sick time requirements (Duluth) will also be watching the appeal outcome to determine how to best institute similar rules.

Questions? Please contact James Sherman at (952)-746-1700 or by email jasherman@wesselssherman.com

Related Posts: What Illinois Employers Should Know About Vacation Pay: Frequently Asked Questions, Why a Handbook? The Necessity of Having an Employee Handbook, Paid Sick Leave For Employees is Now the Law of the City of Chicago and Cook County: Is Your Company in Compliance?, Federal Court Bars Minnesota Department of Labor and Industry From Pursuing Claims for Sick Leave Benefits Against AT&T on Behalf of Union Employees Who Were Not Sick

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Categories
EEOC

Trump Names a New Chair to Head the EEOC

Trump Names a New Chair to Head the EEOC

On behalf of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in EEOC on Friday, June 30, 2017.

President Trump has appointed Janet Dhillon, an attorney from the mega law firm, Jones Day, to serve as Chair of the Equal Employment Opportunity Commission. Ms. Dhillon’s background with a law firm that represents businesses is expected to bring a better appreciation of employers and the challenges they face in complying with a growing number of civil rights laws and regulations in the workplace.

In addition to naming a new Chair of the EEOC, the agency’s general counsel, David Lopez will be replaced by a successor that is yet to be named by the President and the term of Commissioner Jenny Yang (an Obama appointee) ends in July. Besides these changes in the agency’s leadership, the Republican controlled Congress already has acted to reduce the EEOC’s budget, which grew significantly under the previous administration.

It remains to be seen whether these ongoing changes at the EEOC will bring about the kinds of changes businesses are hoping for; i.e. a less aggressive, confrontational and litigious EEOC. Among the specific changes employers hope to see is less expansive interpretation of employment laws beyond what Congress intended when passing those laws; fewer expansive subpoenas of records far beyond the particular matter being investigated; and a more reasonable approach to conciliating and resolving cases short of litigation when the EEOC does determine there has been a violation.

Related Posts: He Who Hesitates May be Lost, EEOC Collection Of Employer Pay Data On Target For September, EEOC Charges At 12-Year Low, EEOC Lawsuits Demonstrate An Aggressive Position On Employer Obligations To Reasonably Accommodate

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Arbitration

Ongoing Saga – Class Action Waivers

Ongoing Saga – Class Action Waivers

By Walter J. Liszka of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Arbitration on Thursday, June 15, 2017.

Since 2012, there has been an ongoing saga created by the National Labor Relations Board (NLRB) as to whether or not an Employer can require its Employees, as a Condition of Employment, to agree to arbitrate all Legal Claims against the Employer on an individual basis only, thereby waiving Class and Collective Action Procedures. The NLRB initially took issue with this type of action in the D.R. Horton, Inc. Case., 357 NLRB No. 184 (2012), in which it held that requiring Employees to waive the right to bring Claims in the form of a Class Action (or a Collective Action under the Fair Labor Standards Act) violated the guarantee of rights, as provided in Section 7 of the National Labor Relations Act, that allows Employees the right to engage in “protected concerted activity for mutual aid or protection”. When that Case was appealed to the Fifth Circuit Court of Appeals, the Fifth Circuit denied enforcement of the Board’s Order in the D.R. Horton, Inc. Case. Subsequently, the NLRB issued another Decision with a different Employer (Murphy Oil USA, Inc., 361 NLRB No. 72 (2014)) reaching the exact same results – that Class Waivers in Arbitration Agreements, as a Condition of Employment, unlawfully interfered with Employees’ rights to engage in “protected and concerted activity” under the National Labor Relations Act. That ruling was again rejected by the Fifth Circuit on Appeal.

Subsequent to the Fifth Circuit’s position in rejecting the NLRB stance on Class Waivers in Arbitration Agreements, those Decisions were joined in Decisions by the Second Circuit, the Eighth Circuit, as well as the Eleventh Circuit and numerous State Courts including, for example, the California Supreme Court in the Iskanian Decision (Iskanian v. CLS Transportation Los Angeles, LLC, 327 P.3d 129 (2014).

Undaunted, in May 2016, the NLRB finally had a favorable decision issued by the Seventh Circuit Court of Appeals in the Lewis v. Epic Systems Case (823 F.3d 1147 (7th Cir. 2016)). The Seventh Circuit did find that the inclusion of a “Class Waiver Provision was in violation of the National Labor Relations Act”. The Seventh Circuit was joined by the Ninth Circuit (Morris v. Ernst and Young, LLP, 834 F.3d 975 (9th Cir. 2016)). Because of the obvious conflict among Federal Court of Appeals Circuits, the United States Supreme Court agreed to take up this matter, consolidating the Murphy Oil, Lewis and Morris Cases, and is expected to rule on this interesting issue sometime in the latter part of 2017 or early 2018.

Unfortunately, even though this matter is currently pending before the United States Supreme Court, the Sixth Circuit Court of Appeals decided to join in with the Seventh and Ninth Circuit in concluding that mandatory Waivers of Class and Collective Action proceedings violated Section 7 of the National Labor Relations Act in NLRB v. Alternative Entertainment, Inc. (Case No. 16-1385 (May 26, 2017)). The Sixth Circuit Court of Appeals has taken it a little further than the Seventh and Ninth Circuit in stating that “The right to engage in Class Action Litigation is not merely a procedural right that can be waived by Employees but, in fact, is a Substantive Right guaranteed by the National Labor Relations Act” and thus an Employer cannot require Employees to waive this Substantive Right as a condition of Employment.

Hopefully, sometime in the latter part of 2017 or early 2018, the Supreme Court will take a stand on this issue and finally and fully resolve it for Employers. Until that time, stay tuned for developments.

Questions? Contact Attorney Walter Liszka in our Chicago office at (312) 629-9300 or by email at waliszka@wesselssherman.com

Related Posts: Illinois Workplace Transparency Act, Arbitration Agreements and Class Action Litigation, New Prime Loses In Its Attempt To Compel Arbitration In Interstate Trucking Case, Yes, Have Your Independent Contractors (Or Employees) Sign An Agreement To Arbitrate Disputes And Waive Their Rights To Class Action Suits!!

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