A Summary of Hiscox Guide to Employee Lawsuits – Employee Charge Trends Across the United States

By: Christina M. Reger 
 
A recent survey published by Hiscox compiled data on employment charge activity from the Equal Employment Opportunity Commission (EEOC). The report provided some concerning statistics for small and mid-sized business owners. 
 
The report concluded that 19% of all charges resulted in a defense and settlement. Conversely, the 81% that did not result in payment does not mean that such matters did not involve the legal cost to defend the EEOC charge. 
 
Equally significant, the average cost to defend and settle an EEOC charge was $125,000, and the median judgment is approximately $200,000. That is not an insignificant sum to a small business owner. Oh, and the $200,000 judgment amount does not include the legal defense costs to litigate the charge. 
 
Lastly, the report noted that the average duration of an employment claim is 275 days. 
 
What does that mean for you? 275 days of business disruption, staff that must be pulled off of their regular duties to gather documents and prepare them, you or members of your staff meeting with lawyers, time away from the business for meetings, conferences or settlement negotiations, preparing for hearings and then eventually you (and possibly members of your staff) missing work to testify. What else does it mean? An opportunity for 275 days of bad press in print and on social media for your business. 
 
Oh, and at the end, you have to pay the attorney and possibly the employee. 
 
So how can you prevent or, at the very least, mitigate such events from happening to you? 
 
It starts in the hiring process. Making sure your hiring policies are up to date and that they comply with federal, state and local laws. 
 
Then once the employee is hired, they should be provided with an up-to-date, customized employee handbook (not the freebie you downloaded from the internet) which summarizes your company’s policies and procedures on issues such as discrimination, harassment, and a thorough complaint policy, to name just a few. If you don’t have a handbook or yours has collected dust on your shelf, I suggest you contact an employment attorney. 
 
Lastly, train your employees on these policies as well as educate them on how they can report such issues internally — so that you can address the issues before you get those papers from the EEOC. 
 

So What is ‘Ban the Box’ and Why Do I Care?

By: Christina M. Reger 

Last week, President Obama banned the box for federal employees. So what does that mean? And more importantly, does it apply to me? 

As the President explained it, Ban the Box “delay[s] inquiries into criminal history until later in the hiring process.” The President’s Order follows a multitude of states including New Jersey, and municipalities, including Philadelphia, that have already adopted similar laws. The theory behind Ban the Box legislation is that individuals with criminal records are not weeded out of the hiring process at the application stage. 

The hope is that once an employer has an opportunity to interview the individual, they might extend an offer that they otherwise might not have done. Such measures would benefit all of society as such individuals are reintegrated into society. 

Does it apply to me? 

Well that depends. If you are a New Jersey or Philadelphia employer, the answer is YES. If you are an employer in the greater Philadelphia area, Delaware, Montgomery, Chester, or Bucks County maybe. I recommend if you hire from NJ or Philadelphia, or you conduct business in either location, that you comply. It is only a matter of time until these laws apply to you as well. 

Lastly, a word of advice. Getting an application off the internet or from the big box office supply store does not guarantee that the application is compliant with the local or state laws. If you are planning to hire permanent, temporary or seasonal employees, you must comply with these laws. If you have questions, you should speak to a good employment attorney – I can recommend a good one if you need a recommendation. 

A New One-Stop Shopping Website for Employee Complaints Against Employers

By: Christina M. Reger 

To help employees address their pressing employment problems, the Department of Labor is introducing: 

worker.gov 

What is it? 

The website is a collaborative effort between the Department of Labor, the National Labor Relations Board, the Equal Employment Opportunity Commission and the Department of Justice. The website “remov[es] the guesswork, and provid[es] workers access to critical information about their rights under the major labor statutes in a way that makes sense for them.” 

How does it work? 

The site will ask you what your job title is, and then provide the employee with many handy links to educate them on a variety of employment law problems. Clicking on a link to explain the problem will provide them with another link to file a claim, right from the worker.gov site. 

Does it apply to everyone? 

As the DOL explains, “in the coming weeks and months, the site will expand to target more and more occupations, informed by use and feedback. In future releases, as users answer more questions, the site will learn to narrow in on the precise information that workers need most. For example, if workers who identify as construction workers most often look for information about worker safety and wage theft, the site will begin to feature that information more prominently for users who identify themselves as construction workers.” 

How Does Your Employer Wellness Program Measure Up?

By: Christina M. Reger 
 
Last Friday, the EEOC published proposed amendments to GINA, the Genetic Information Nondiscrimination Act as it relates to Employer Wellness Programs. 
 
What is GINA you ask? GINA prohibits employers from discriminating against employees because of their genetic information, including genetic information of family members such as spouses, unless one of six narrow exceptions applies. One of those narrow exceptions is when an employee voluntarily accepts health or genetic services offered by an employer, including such services offered as part of a wellness program. 
 
What do the current regulations say? Under the current EEOC regulations implementing GINA, employers are prohibited from offering incentives in return for genetic information. Therefore, an employer offering a wellness program had to tread lightly so as not to violate GINA. 
 
What does the proposed regulations say? An employers that offer wellness programs as part of group health plans may provide limited financial and other inducements (also called incentives) in exchange for an employee’s spouse providing information about his or her current or past health status information. 
 
What is the financial incentive that an employer may offer? “The total incentive for an employee and spouse to participate in a wellness program that is part of a group health plan and collects information about current or past health status may not exceed 30 percent of the total cost of the plan in which the employee and any dependents are enrolled.” 
 
How does this affect me? The enactment of these regulations will provide clarity to employers and offer additional benefits to keep employees healthy that will benefit everyone. 
 
Attached below are links to the EEOC press release: 
  
http://www.eeoc.gov//eeoc/newsroom/release/10-29-15.cfm 
 
EEOC Q&A: http://www.eeoc.gov//eeoc/newsroom/release/10-29-15.cfm 
 
And EEOC Small Business Fact Sheet: http://www.eeoc.gov//laws/regulations/fact-sheet-gina-wellness.cfm 

Just Because the Employee is a Temp Does Not Mean That You (The Employer) Do Not Have to Pay Overtime

By: Christina M. Reger 
 
New Jersey snack food company, J&J Snack Foods Inc., learned the hard way. 
 
The company must pay $2.1M to temp workers that were shorted overtime pay. $1.26M of that sum goes directly to 465 works who did not receive overtime wages. 
 
If you are working with a temporary agency, make sure that they are properly paying the individuals that are working for you, and if you don’t know, stop reading, pick up the phone and ask. If you have further questions, pick up the phone and call me. 
 
For the complete story, please visit: 
 
http://www.philly.com/philly/business/labor_and_unions/20151028_N_J__snack_food_maker_paying__2_1_million_to_temp_workers_shorted_overtime_wages.html#dkG02VEAHPS8uKoG.03 

The New DOL Overtime Rules are Coming. Big Companies Take Action – Are You?

By: Christina M. Reger 

A recent article from Philly.com summarizes how Vanguard Group recently reclassified 2,100 of its employees from exempt (salaried) to non-exempt (hourly) in response to the recent proposed changes to the Fair Labor Standards Act, which employment lawyers expect to go into effect in 2016. 

If you were waiting to see what the big companies are doing to address the proposed regulations, here is your sign. They are acting in anticipation of what is to come. Don’t wait until the laws are in effect, or worse, until you get that lawsuit, to take action. Now is the time to consider your workforce and make the appropriate changes. 

If you have questions, or would like to discuss the matter further, please contact me. 

For a complete copy of the article, please visit: 

http://www.philly.com/philly/blogs/inq-phillydeals/Vanguard-2000-workers-to-overtime-list.html#cpRUUVaTkj0FLvuj.03

Department of Labor to Pay $1.5 Million to Employer

By: Christina M. Reger 

The Fifth Circuit Court of Appeal the Department of Labor agreed to pay an employer $1.5M to settle claims involving the DOL’s overly aggressive behavior. 

I know many of you are probably thinking, “It’s about time!” or “Now the DOL has a taste of their own medicine” or even “What comes around goes around.” Let’s just make sure that when it comes back around to you or your clients, you are ready! 

http://www.wagehourinsights.com/dol-news/dol-to-pay-15-million-to-employer-for-bad-faith-investigation/#.VhmCNBUcE_A.email

It’s Not Too Late to Respond – The DOL Proposed Overtime Rules Deadline is September 4th

By: Christina M. Reger 

Attention Business Owners: 

More than 2,000 comments have already been posted in response to the U.S. Labor Department’s proposals regarding the federal Fair Labor Standards Act’s Section 13(a)(1) exemptions. Under the proposed regulations, the overtime threshold could be as high as $970 per week ($50,440 annually) – a far cry from the current $455 per week ($23,660 per year). 

Time is running out to comment or object. The deadline is September 4, 2015. Attached here is an objection from the National Association of Women Business Owners. Do not wait for someone else to object on your behalf. These proposed regulations will impact your business. 

EEOC Rules Discrimination Based on Sexual Orientation is Sex Discrimination

By: Christina M. Reger 
The News:

In a recent decision, the EEOC ruled that a claim for discrimination based on sexual orientation can be brought under Title VII of the Civil Rights Act of 1964. While many commentators have called this ruling “groundbreaking,” for employers in the counties surrounding Philadelphia, it creates more inconsistency and confusion. 

Why Do I Care:
Federal courts have not yet weighed in on this recent EEOC decision. However, the Third Circuit has previously ruled (in 2001) that Title VII does not cover discrimination based on sexual orientation. A lot has changed since 2001, including amendments to the Philadelphia Fair Practices Ordinance which prohibits discrimination based on sexual orientation in Philadelphia. 

But what about my business outside of Philadelphia County? 

Well, as of now, your employee may be successful in an EEOC charge against your business for sexual orientation discrimination, but you, the employer, will likely prevail on appeal in court – a costly battle to undertake for a small or mid-sized business. Employers in the counties surrounding Philadelphia should be mindful and align their policies with the more stringent standards for the greatest protection. 

The Nitty Gritty:

The case involved a Supervisory Air Traffic Control Specialist at a Agency’s Southern Region, Air Traffic Control Tower in Miami, Florida who alleged that he was passed over for a promotion to a permanent position because he was an openly gay male. 

The EEOC interpreted Title VII’s prohibition of sexual discrimination to prohibit employer from “’rel[ying] on sex-based considerations’ or take gender into account when making employment decisions.” The Commission held, “[s]exual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee’s sex.” 

In reaching its conclusion, the Commission held “[d]iscrimination on the basis of sexual orientation is premised on sex-based preferences, assumptions, expectations, stereotypes, or norms. ‘Sexual Orientation’ as a concept cannot be defined or understood without reference to sex.” 

Copy of decision attached here

Your Independent Contractors (1099ers) are Probably Misclassified

By: Christina M. Reger 
 
As non-exempt (hourly) employees, workers are guaranteed minimum wage, overtime compensation, and a host of insurances. Independent contractors do not enjoy such perks. In breaking news last week, the Department of Labor published a memo emphasizing the broad and expansive definition of employee under the Fair Labor Standards Act (FLSA) and concluding (some may say cautioning) that “most workers are employees.” 
 
Due in large part to the growing number of independent contractors and the corresponding decrease in the number of “employees,” Administrator Weil’s memo interpreted the FLSA’s “suffer or permit to work” and provided an “economic realities test” to assist employers in determining whether their workers are employees or truly independent contractors by asking these six simple questions: 

Is the work performed an integral part of the employer’s business? 
Does the worker have an opportunity to impact profit or loss? 
Does the worker have an investment in the business relationship? 
Does the worker utilize special skills or take independent initiative? 
Is the relationship between the worker and the employer permanent or indefinite? 
Does the business exercise significant control over the worker? 
 
Now is the time, to (call me) take a look at your workforce. Otherwise, you could be (calling me) looking at back pay for up to three years, interest, penalties, and oh yeah, attorneys’ fees.