Tag Archives: Employers

Another Business Resolution: Conduct a Pay Audit in 2019

Pay Audits are different from wage and hour audits. A wage and hour audit looks at whether employees are being paid in compliance with state and federal wage and hour laws. A pay audit reviews whether there may be discrimination in pay practices within an organization. With the #metoo movement and a renewed focus on pay gaps, an internal review of pay practices could save a business from liability under the primary statutes used to combat discriminatory pay gaps – Title VII, the Florida Civil Rights Act, and the Equal Pay Act.

As with other types of claims brought under state and federal discrimination statutes, a claim of disparate pay based on any protected characteristic is subject to the same administrative filing requirement and provides the same remedies as a wrongful termination case. On the other hand, under the Equal Pay Act (which only covers disparities based on gender), there is not an administrative filing requirement, and the definitions and statute of limitations for an employee to bring a claim is the same as those in place for the Fair Labor Standards Act. Further, Equal Pay Act claims do not require proof of intent to discriminate on the part of the employer. And, not having intent as a requirement makes it easier for an employee/former employee to establish a prima facie case. Under the Equal Pay Act, an employee need only show that she works at the same location, performs substantially equal work (regardless of job title), works under substantially equal working conditions, and is paid less than a male counterpart.

In a perfectly competitive labor market, the value an employee contributes to a business should determine that employee’s wage. However, in the real world, there are disparities of income that may be due to differences in labor productivity, and there are wage disparities across genders and ethnicities. When it comes to gender, disparities may be due to:

  • Compensating wage differentials: men may be employed in more dangerous or “dirty” jobs that pay more
  • Choice of college major and choice of career
  • Time constraints: mothers may have only limited time to pursue career advancement
  • Different negotiating skills of men and women
  • The number of years of work experience
  • The number of years in continuous employment
  • The number of hours spent at work
  • Employer discrimination

As set forth above, employer discrimination is only one of several reasons why a gap may exist and employers may have pay gaps that are based on non-discriminatory reasons.  Both the civil rights statutes and the Equal Pay Act provide several defenses to claims of discriminatory pay. Employers can avoid liability by proving the pay differential is due to one of the following reasons:

  • Seniority System
  • Merit Pay System
  • System that measures quality or quantity of work
  • Factor based on any factor other than sex  (this is considered a “catch all” defense)

It is good for employers to be aware of any gaps that exist in its pay practices and understand why they exist. When an employer does not have an explanation, that is when litigation and potential liability can ensue. Below are a few ways that businesses can help prevent (and if necessary defend) discrimination in pay claims:

  • Evaluate all forms of compensation (starting salary, benefits, bonuses, shift differentials, overtime, training opportunities, separation pay, etc.) at least annually for potential pay disparities based on race/ethnicity and gender
    • Evaluate how pay raises and bonuses are determined to ensure that decisions are made in a non-discriminatory manner.
    • Evaluate how you assign your employees to specific jobs.
    • Focus on job recruitment, placement and how pay is assigned to job classes.
  • In addition to an annual assessment, throughout the year conduct periodic “spot” checks for potential compensation problems.
  • Correct problems as soon as they are discovered.
  • Evaluate how women and minorities are placed in your workforce. Do not make assumptions about what they can or cannot do.
    • Does your hiring process seek diversity in the qualified applicant pool?
    • Do you offer career training or opportunities for both genders?
    • If starting salaries and signing bonuses are negotiated, ensure that such a practice does not have an adverse impact on women or minority workers.
    • Evaluate whether all workers have equal opportunity for advancement. Placing one gender in areas that lead to greater advancement could be a violation of law.
  • Periodically review your performance evaluation process and the ratings given to each employee to determine whether the process or the ratings unfairly disadvantage women, or any other protected classes.

This post is part of a series of business resolutions to consider for the new year. In case you missed them, our previous posts in the series discussed Florida minimum wageemployee performance management, and employee handbook/wage audits.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
(941) 552-2558

Business Resolutions: Ensuring Your Business Starts the New Year Off Right

When was the last time that your business had a wage audit to evaluate whether your employees are properly classified under the Fair Labor Standards Act, or had your employee handbook reviewed and revised to bring it up-to-date with the law and current company practices? If it has been a few years, then this may be the year that your business resolves to invest in a wage audit and/or handbook review.

Wage audits include an evaluation of your job positions, pay and overtime policies, as well as payroll records of each position within an organization or department. Sometimes, audits can also include interviews with employees to ascertain if there are any issues that management should be aware of. Audits can reveal if a business has any issues with, not only misclassification of employees as exempt when they should be non-exempt, but whether managers are following the organization’s policies regarding overtime. As a company grows and changes, often the duties of its employees also change. Sometimes these changes are significant enough that a change in classification is in order and a failure to adjust the classification could result in liability. Further, a wage audit can often help to determine if an organization’s accountant or payroll company is calculating overtime in accordance with the applicable regulations. Many a lawsuit are filed against employers who believe that since they have enlisted the assistance of a third party, employee overtime is being calculated appropriately. That is not always the case.

Employee handbooks should be reviewed every couple of years, not only to ensure that the handbook reflects the current state of the law, but also that it reflects the actual practices of a company. Businesses grow and change, and actual practices can start to diverge from what is reflected in the handbook. It is always better to have a handbook that provides policies and procedures that the company is currently using and enforcing. It is never recommended for a company to have policies that it does not follow.

This post is part of a series of business resolutions to consider for the new year. In case you missed them, our previous posts in the series discussed Florida minimum wage and employee performance management.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
(941) 552-2558

Another Business Resolution: Ensure Your Business Implements Florida’s New Minimum Wage

The next suggested resolution in our series of business resolutions is one that all businesses in Florida should implement, as it is legally required. On January 1, 2019, Florida’s minimum wage will increase from $8.25 to $8.46 an hour. Employers should be prepared to make appropriate pay adjustments for their minimum wage earners. Failing to pay non-exempt employees Florida’s statutory minimum wage can result in claims against employers pursuant to Section 24, Article X of the State Constitution and Section 448.110, Florida Statutes. The maximum tip credit ($3.02) that can be taken by Florida employers with tipped employees will remain the same, but the direct wage paid to tipped employees will increase from $5.23 to $5.44 an hour.

In addition to raising the minimum wage, Florida employers are required to post a minimum wage notice in a conspicuous and accessible location. You can download the 2019 Florida Minimum Wage Notice from the Florida Department of Economic Opportunity’s website. This notice requirement is in addition to the requirement that employers post regarding the federal minimum wage (which has not been increased). There will also be commercially available Florida-specific “all-in-one posters” that satisfy both the federal and state notice requirements.

In case you missed it, our first business resolution of this series covered employee performance management.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
(941) 552-2558

What Are Your Company’s Business Resolutions for the New Year?

As 2019 approaches, many companies reflect on the year that has gone by, remembering both the triumphs and missteps. As this year comes to a close, many businesses will be making business resolutions for the new year. You may already have some goals set, but if you do not, this post will be the first in a series designed to provide insight into areas where companies may want to focus in the year ahead.

We will start this series off with our colleague John Hament’s recent article from our Requisite X publication, “Adapting to Change: Reinventing Employee Performance Management.” As explained in this article, for some employers there can be downsides to the traditional annual performance evaluation system. Recognizing these downsides, and ascertaining if a different approach is good for your organization, may be a worthwhile business resolution.

Stay tuned for more resolutions to consider in 2019.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

Office Holiday Parties: Avoid Adding Your Company to the Naughty List

Harvey Weinstein, Kevin Spacey, Michael Oreskes, Brett Ratner, Louis C.K., Charlie Rose, and Matt Lauer are a few well-known names that have already appeared on the naughty list for 2017. Although the Mad Men days of the sexy secretary sitting on Santa’s lap (the boss’s lap) with his arms wrapped around her while both are drinking a dry martini SHOULD be a vestige of the past, there are those that believe that “keep your hands to yourself” does not apply to them.  And, there are those that understand the “hands-off” rule, yet when under the influence of alcohol, find their inhibitions on the copy room floor.

This year, with stories of sexual harassment and abuse dominating the news, it is more important than ever for employers to consider the potential risks associated with any planned celebration. Employers should keep in mind that office policies that are generally recognized in the workplace sometimes are forgotten when there is a party, especially a party with libations. A holiday office party can embolden inappropriate behavior, from simple innuendos to unwelcome touching that could lead to claims of sexual harassment. The office holiday party can be a quagmire of potential employment issues, even beyond sexual harassment. These issues can include claims due to on-the-job injuries (workers compensation), unpaid wages for attending the party (the Fair Labor Standards Act), or other types of workplace harassment or discrimination (e.g. religion).

As you prepare for your office party, consider whether alcohol should be available, as most issues arise due to someone bending the elbow a bit too much. If you do decide to provide spirits make sure you have someone (a designated responsible adult) that is watching to ensure that your workforce does not get too “relaxed” and cross the line. Possibly limit how much alcohol is served and make sure any employee that drinks a little too much has a ride home. Evaluate in advance whether the party is going to be mandatory or not. If its voluntary and employees do not feel compelled to attend, then employers are not required to compensate employees for their attendance. Review the plans for the party in advance to see if there are any activities that could be considered inappropriate or offensive to members of any protected class.  Finally, make sure that employees understand that the company’s policies and procedures, especially those related to conduct, are still in effect at the party. Most parties are benign and conclude with no real issues to speak of, but you don’t want to be the exception to the rule. You do not want your CEO or VP added to the naughty list.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

The NLRB Shifts its Strategy in its Attempts to Change the Joint-Employer Standard

After a failed attempt to change the joint-employer standard through legal decision arising out of a pending case before the NLRB, on September 14, 2018, the National Labor Relations Board (the “Board”) published a Notice of Proposed Rulemaking in the Federal Register regarding its joint-employer standard. The proposed rule would overturn the standard set by the Board in Browning-Ferris, 362 NLRB No. 186 (2015) to determine if an employer is a joint employer. Under the Browning-Ferris standard, the inquiry turns on whether the alleged joint employer had the potential to control aspects of the workplace, either directly or indirectly, regardless of whether the employer actually exercised that authority.

The proposed rule would revert to the pre-Browning-Ferris standard for determining whether an employer will be considered a joint employer of a separate employer’s employees. Under this proposed rule, an employer may be considered a joint-employer of another employer’s employees only if it possesses AND exercises substantial, direct, and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine. This would effectively reverse the Browning-Ferris standard and render indirect influence and contractual reservations of authority insufficient to establish a joint-employer relationship.

The 60-day period for public comments on this proposed rule began on September 14, 2018, and continues through November 13. After the Board receives and reviews the public comments and replies, it will issue a final rule regarding the joint employer standard. If issued without substantial changes, this rule would be great news for employers as this stricter standard is clearer, provides more consistency, and reduces the likelihood of an employer inadvertently becoming a joint employer.

Ryan P. Portugal
rportugal@williamsparker.com
941-329-6626

Unleashing Weingarten Rights

When conducting investigations of employees in a unionized workforce, employers often feel like the lion tamer in the cage with nothing but a whip and stool between them and legal jeopardy. Unfortunately, a recent decision by the National Labor Relations Board, In re Circus Circus Casinos, may have just taken the stool away and, in doing so, created a real circus.

The National Labor Relations Act has been interpreted to allow employees to request preferred union representation for investigatory interviews that may reasonably lead to discipline. Up until [this] Circus, this right was understood to arise only if an employee requested representation. Moreover, it was well confirmed that the employee’s selection of a representative could not be used to delay an employer’s investigation. In fact, as recently as September 2017, when the NLRB released to the public an advice memorandum addressing Weingarten rights, in which it noted that:

“[I]f the employee requests an unavailable representative, it is the employee’s obligation to request an alternative available representative in order to remain under Weingarten’s protections; the employer is not required to postpone the interview, secure an alternate representative, or otherwise accommodate the employee’s specific request.”

Nonetheless, in Circus Circus the panel broke with these seemingly settled principles.

So, what led to the three-ring circus of Circus Circus? First, employer directed an engineering department temporary employee to be fitted with a respirator to comply with OSHA regulations. Citing anxiety, the employee advised the third party that was fitting the employee that he wanted to speak with a doctor. The third party denied this request and advised the employer that the temporary employee refused to cooperate.  The employer suspended the employee pending an investigation.

Subsequently, the employer’s HR representative spoke with the employee, informing him that he was to report for a “due process” meeting the next day. The HR representative advised the employee “that if he wanted Union representation that he needed to bring the steward with him.” The employee repeatedly called and left a message with his union about representation for the meeting, but he never received a return call.

The day of the meeting, the employee appeared at the employer’s facility, walking past where the union steward worked. The employee, however, did not attempt to speak with the shop steward. Instead, the employee looked around the HR representative’s office before entering, allegedly searching for a union representative. Nevertheless, no union representative was there. When the meeting began, everyone agreed that the employee stated:

“I called the Union three times [and] nobody showed up, I’m here without representation.”

After the meeting, the employee was separated. The employee would later claim that he told the employer’s representative that he wanted the union at the meeting and, moreover, the representative told him he did not need anyone present because the matter was not a disciplinary action. The employer’s representative denied these allegations.

Focusing on the employee’s statement that he attempted to reach the union, the NLRB panel, in a 2-1 decision concluded that this statement was, in fact, a request for representation. Alluding to the fact that no magic words were needed to invoke Weingarten rights, the majority decided that the employee’s statement about his unsuccessful attempt to reach a representative—standing alone—was sufficient to invoke Weingarten rights. The NLRB affirmed the administrative law judge’s order of reinstatement and backpay.

Although Circus Circus Casinos has since appealed this decision, employers will still be well-served to tread carefully when conducting employee investigations in the interim—lest they wake the lion. As such, employers may want to consider any statement by a union employee referencing their union, their steward, a witness, or a representative as invoking Weingarten rights. A failure to do so may put an employer at risk of taking a nasty bite in the form of reinstatement or back pay.

Attorney John Getty* assisted in preparing this blog post.
*Admitted in Louisiana and Georgia

Arbitration Update: Eleventh Circuit Finds in Favor of Florida Employers

Florida employers are beginning to benefit from recent U.S. Supreme Court and National Labor Relations Board (NLRB or Board) rulings.  On June 26, 2018, the federal Eleventh Circuit Court of Appeals issued two decisions in favor of Florida employers in which it rejected NLRB rulings that the employers had violated the National Labor Relations Act (NLRA). The cases are Everglades College, Inc. v. NLRB and Cowabunga, Inc. v. NLRB.

Applying the Supreme Court’s Epic Systems decision (for further information on Epic, click here), the Eleventh Circuit held in both cases that the inclusion of class and collective action waivers in these employers’ mandatory arbitration agreements did not violate the NLRA. Additionally, relying on the Board’s Boeing decision (for more information, on Boeing click here), the Eleventh Circuit vacated the NLRB’s holdings that the arbitration agreements were unlawful because employees could “reasonably believe that they were prohibited from filing unfair labor practice charges with the NLRB.”

In Boeing, the NLRB retroactively changed the rationale it used to evaluate the lawfulness of facially neutral employee policies, thus eliminating the broadly applied “reasonably believe” standard that prohibited any rule that could be interpreted as covering protected activity. Without that standard, the Board could not defend its prior decisions in the appeals. Therefore, the Eleventh Circuit remanded the remaining issues in the cases to the NLRB so that it can apply its new Boeing rationale, which does not interpret ambiguities against the drafter and does not ban all activity that could conceivably be included in generalized provisions.

Even with the NLRB General Counsel’s recent memo addressing the application of the Boeing standard (for more on the memo, click here), it is unclear how the Boeing rationale will apply to arbitration agreements. Regardless, employers should remain hopeful as the new standard provides for a more balanced review.

Gail E. Farb
gfarb@williamsparker.com
941-552-2557

[Editor’s Note: Williams Parker attorney Gail E. Farb represented the employer in the Everglades College, Inc. case cited above.]

Employers Hear Music as the Supremes Cut into Employee Class Actions

The United States Supreme Court recently decided two cases addressing class-action proceedings. These cases show that “Things Are Changing” and employers will no longer have “Nothing But Heartache.” Both decisions are employer-friendly, in that these opinions effectively limit participation in class-action lawsuits.

In Epic Systems Corp. v. Lewis, the Supreme Court upheld the enforceability of class-action waivers in employee arbitration agreements. Arbitration is an alternative means of resolving a dispute without proceeding to a court trial. A class-action waiver in the employment context is a contract provision in an arbitration agreement that prevents employees from resolving employment disputes in a group. The Court found that employers can put these waivers in their arbitration agreements, and the waivers do not invalidate the agreements. Opponents to these waivers are now screaming, “Stop, In the Name of Love.”

Now, some “Reflections.” In light of this decision, employers should keep two things in mind.

  • The Epic Systems decision does not represent a blanket endorsement of arbitration agreements; rather, this decision requires courts not to overturn arbitration agreements solely because they contain class-action waivers. This case does not prevent courts from refusing to enforce arbitration agreements for other reasons.
  • Epic Systems does not mean all employers should declare, “I’ll Try Something New,” and adopt arbitration agreements. Employers considering using arbitration agreements should evaluate whether arbitrating their disputes is the right choice. Employers should keep in mind that by agreeing to arbitration, they are generally giving up their right to appeal an adverse decision.

In the second case, China Agritech v. Resh et al., which was not an arbitration case, the Court held that employees/former employees who were not certified as members of a class-action lawsuit before the legal deadline to join the lawsuit could not file a new class-action suit after the passage of the statute of limitations on the initial class action. Thus, some employees/former employees who do not timely protect their rights will no longer be able to belt, “You Keep Me Hangin’ On.”

“No Matter What Sign You Are,” as an employer these decisions are “Automatically Sunshine” and maybe even a bit of “Buttered Popcorn.”

Summer associate Kelley Thompson assisted in preparing this blog post.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

The Tax Act May Limit Resolutions of Sexual Harassment Complaints

One aspect of the new Tax Act (the Act) that has not been widely reported impacts employers that amicably resolve claims of sexual harassment. The provision denies tax deductions for any settlements, payouts, or attorneys’ fees related to sexual harassment or sexual abuse if such payments are subject to a non-disclosure or confidentiality agreement. Specifically, Section 162(q) to the Internal Revenue Code provides:

PAYMENTS RELATED TO SEXUAL HARASSMENT AND SEXUAL ABUSE.—No deduction shall be allowed under this chapter for—

(1) any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement, or
(2) attorney’s fees related to such a settlement or payment.

The intent of this provision is to deter confidentiality provisions in settlements of harassment claims. It is unclear if this provision will actually have the desired impact. Companies may value the confidentiality provisions more than the tax deductions permitted in their absence, and thus continue to enter into confidential settlement agreements. Alternatively, this provision of the Act may end up hurting those bringing harassment claims. Alleged victims may want confidentiality provisions in order to avoid any publicity about their claims. However, by removing tax incentives for employers, an employer may reject a higher settlement amount or settlement of claims altogether.

Section 162(q) of the Act is bound to create confusion as to its applicability as it fails to define key terms. Namely, the Act fails to define “sexual harassment” or “sexual abuse,” both of which are pivotal to the application of the new provision. The Act also fails to contemplate how the provision is to be applied in settlement arrangements involving a variety of claims. Are the sex-based claims separable from a universal confidentiality covenant? Causing further confusion, the Act fails to explain what attorney’s fees are considered to be “related to such a settlement or payment.” Are these only the fees related to settlement negotiations, drafting the agreement, and execution or payment? Or does it extend to the claim’s inception and include the underlying investigation of the claims?

In light of the numerous questions raised by Section 162(q), employers should review their standard settlement agreements and practices and consider revising the breadth of any releases, nondisclosure provisions, or any representations or remedies.

Ryan P. Portugal
rportugal@williamsparker.com
941-329-6626