New I-9 Form Required September 18, 2017

Effective September 18, 2017 employers must use a new and updated version of Form I-9, the Employment Eligibility Verification Document.  The easiest way to identify the new form is by the date (07-17-17) noted in the bottom left corner.

Key points for employers include the following:

  1. The new I-9 must be used for any new employees hired on or after September 18, 2017. It is not necessary to complete the new form for any current employee.
  2. Using the wrong version of the form is considered a violation and could subject the employer to civil fines if Immigration and Customs Enforcement (“ICE”) conducts an I-9 inspection.
  3. As was the case previously the I-9 Form must be completed on the employee’s first day of employment. The Form now states it must be completed “no later than the employee’s first day of employment.”  Previous instructions noted that the form had to be completed by “the end of” the first day of employment.
  4. The list of acceptable documents on Page 3 of the Form has been revised. There are changes to List C to include certain documents evidencing the birth abroad of an employee.  These documents are Certificate of Report of Birth (Forms DS-1350 and FS-545) and the Consular Report of Birth Abroad (Form FS-240).
  5. The Handbook for Employers: Guidance for Completing Form I-9 Form (M-274) was updated in July 2017.  This handbook is a great resource on completing I-9s, retention requirements, unlawful discrimination and other prohibited practices and use of the E-Verify system. You can obtain a copy of the handbook and the new I-9 Forms by visiting the website I-9 Central, which is the official website of the Department of Homeland Security.
Tagged ,

Employer Lessons From The Comey Firing

In May President Trump fired then FBI Director James Comey.  The firing created a political firestorm.  In June Mr. Comey testified before Congress regarding the FBI’s investigation of whether the President’s campaign colluded with Russia to rig or alter the results of the presidential election.  Regardless of your politics the Comey firing provides several lessons for employers on “what not to do” when firing an employee.

I.          IF YOU HAVE A REASON TO FIRE ACT ON IT SOONER RATHER         THAN LATER.

Some reports are that the President had decided to fire Mr. Comey in January shortly after the President took office.  If that is accurate the President should have fired Comey then.  By waiting until May the termination looks highly questionable, and potentially illegal, because Comey got fired after telling the DOJ that he needed more money to expand the Russia investigation and after the U.S. Attorney issues a grand jury subpoena in its probe of Michael Flynn, President Trump’s former National Security Advisor.  By waiting the President turned what would have been a clean termination into one that is extremely messy.

If you have a valid reason to terminate act on it then.  By waiting, you allow the circumstances to change and a termination which might have been clean could become clouded by something like a workers’ compensation claim, an EEOC Charge, or an internal complaint of discrimination or harassment that occurs during the delay.

II.                DON’T HAVE SHIFTING EXPLANATIONS FOR THE DECISION.

The administration has offered various reasons for Mr. Comey’s termination.  These have ranged from a statement that the President merely relied on a recommendation from the Attorney General, that Mr. Comey was terminated because he handled the Hillary Clinton email situation poorly, that Mr. Comey was simply not doing a good job, that Mr. Comey lost respect from the FBI rank and file and that the FBI’s office was in turmoil.

When differing explanations are given for the reason it is easy for the employee to argue that the reasons are a pretext for discrimination, retaliation or some other illegal motive.  That means the case is most likely headed to a jury.  Then it is for the jury to decide the reason for the termination, and it may decide that the reason was illegal.

III.             IF YOU ARE GOING TO WRITE IT, GET IT RIGHT.

In Tennessee and in most states you are not required to provide the employee with a termination letter.  Tennessee law does require a separation notice for unemployment purposes, but those notices are bare bones and there is no penalty for not providing one.

President Trump’s termination letter to Mr. Comey stated that he relied on the recommendation of the Attorney General and the Deputy Attorney General to make his decision.  But the President subsequently contradicted the statement in the letter in a subsequent television interview.  This contradiction makes the letter look false and offers further support for an argument of pretext.

A termination letter can go a long way to supporting your defense against any claims by the employee.  But if you choose to prepare such a letter, do it right.

Below I have listed other issues to consider before making a termination decision.

Does the employee fall within a protected class (age, race, sex, religion, national origin, color, creed, disability/handicap, pregnancy)?

Are there any other red flags (whistleblower, workers’ compensation claim, jury duty, witness/some form of testimony, illness/sickness, medical/FMLA    leave)?

Has a thorough and complete investigation been conducted?

Has the employee been disciplined for the conduct previously?

Are the reasons for the termination well documented?

Is the reason for the termination consistent with company policy, as stated in a handbook, employee manual or in practice?

Have other employees been treated differently for the same or similar conduct?

Are the reasons for the termination supported by the facts? In other words, if we have to justify it in court, can we do so?

What is the employee’s length of service with the company?

What is the employee’s overall performance record with the company?

Is the decision maker objective?

Is termination the appropriate action or would some lesser form of discipline suffice?

Are there other extenuating circumstances (it’s the Christmas season; it’s the employee’s birthday; the employee was recently given a commendation or bonus for good performance)?

This list of issues is a guideline and is not exhaustive.  Remember, when in doubt, call your attorney before making the decision

Tagged , ,

Does Title VII Prohibit Sexual Orientation Discrimination?

Does Title VII prohibit sexual orientation discrimination?  The answer, like many answers in the law is “it depends”.  With this issue it depends on the allegations of the plaintiff and the state in which you live.

The United States Court of Appeals for the Sixth Circuit, the federal court of appeals that governs Tennessee, recently held that Title VII does not prohibit discrimination based solely on sexual orientation.  In Clemons v. City of Memphis, decided on December 28, 2016, the court held that Davin Clemons, an officer with the Memphis Police Department, could not state claims for discrimination, harassment or retaliation based solely on his sexual orientation.  Clemons alleged that his supervisors voiced disapproval of his homosexual lifestyle and that he was mocked and harassed because of his engagement to another male officer.

Based on these facts the court held that Clemons claim was based solely on his sexual orientation, and not prohibited by Title VII.  In reaching its holding the Clemons Court did not overrule the 2006 Sixth Circuit decision of Vickers v. Fairfield Medical Center.   Vickers held that while Title VII does not prohibit discrimination based solely on sexual orientation, it does prohibit discrimination based on sex stereotyping.  A discrimination claim based on sex stereotyping requires an employee to establish that he or she is being discriminated against based on an observable gender non-confirming characteristic.  In other words, a homosexual man is discriminated against because he is not masculine enough, or a homosexual woman is discriminated against because she is not feminine enough.

On April 4, 2017 the United States Court of Appeals for the Seventh Circuit became the first federal court of appeals to hold that Title VII prohibits discrimination solely on the basis of sexual orientation.  In Hively v. Ivy Tech Community College the Seventh Circuit held that Ms. Hively’s claim that she was passed over for jobs because she is a lesbian was protected under Title VII.  The court specifically held that Title VII applied to this claim without proof that Ms. Hively was discriminated against based on sex or gender stereotyping.

The Seventh Circuit covers appeals from federal district courts in Illinois, Indiana and Wisconsin.  Of those three only Indiana lacks a state law prohibiting employers from discriminating on the basis of sexual orientation.

Regardless of whether you are in a state governed by the Hively decision, or a state with a law prohibiting discrimination on the basis of sexual orientation, make sure you investigate all claims of discrimination and harassment promptly and thoroughly.  Furthermore, if an employee makes a claim that he or she is being discriminated against based on sexual orientation and the investigation establishes that discrimination or harassment has occurred, take prompt, corrective action to stop the conduct and resolve the situation.  The failure to do so could result in an expensive and uncertain legal battle.

Tagged , ,

Fed Ex Stands By Driver Who Stopped Flag Burning

On Friday a video circulated on social media of a Federal Express Driver stopping protesters from burning a U.S. Flag.  The video can be see  here https://mobile.twitter.com/sgrubermiller/status/824680301003677696/video/1

As you can see from the link, the altercation got a bit heated.  Federal Express has announced that the driver’s employment status will not change  as a result of the incident.   But could the company have fired the driver for his role in this matter? Absolutely.

The driver is likely an at will employee, which means that either he or the company could terminate employment at any time, with or without cause and with or without prior notice. Furthermore, even if he is not an at will employee his conduct likely violates several rules of conduct or company procedures, since he involved himself in a protest while on the job  that did not involve or impact the performance of his duties.  My guess is he kept his job because he has a strong performance record with Federal Express and he stopped flag burning which, while legal, is extremely unpopular and controversial.  Firing this employee likely would have resulted in a backlash against Federal Express.

The take away for employers is when employees engage in conduct that violates your rules, you can legally terminate their employment, even if the termination is unpopular.

 

 

 

Tagged , ,

Mandatory Paid Sick Leave For Federal Contractors

Recently the Final Rule implementing Executive Order 13706 (“Final Rule”) was issued which requires certain federal contractors to provide their employees with up to seven days (56 hours) of paid sick leave annually, including paid leave for family care. The highlights of the Final Rule are set forth below.

EFFECTIVE DATE

The Final Rule applies to new contracts and replacements for expiring contracts with the Federal Government that result from solicitations issued on or after January 1, 2017, or that are awarded outside the solicitation process on or after January 1, 2017.

COVERAGE

There are four major categories of contractual agreements covered: (a)   Procurement contracts for construction covered by the Davis-Bacon Act (DBA); (b)   Service contracts covered by the McNamara-O’Hara Service Contract Act (SCA); (c)   Concessions contracts, including any concessions contracts excluded from the SCA by the Department of Labor’s regulations; and (d)   Contracts in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.

Furthermore, any subcontract of a covered contract that (like the upper-tier contract) falls into one of these four categories is subject to the paid sick leave requirements.

EXCLUDED CONTRACTS

The Final Rule does not apply to contracts that are subject only to the Davis-Bacon Related Acts, i.e., Acts under which Federal agencies provide financial and other assistance to construction projects through grants, loans, guarantees, insurance and other methods, but do not directly procure construction services. It also does not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the Federal Government, including those subject to the Walsh-Healey Public Contracts Act.

There are certain narrow exclusions from coverage: (1) grants; (2) contracts and agreements with and grants to Indian Tribes; (3) any procurement contracts for construction that are not subject to the DBA (i.e., procurement contracts for construction under $2,000); and (4) any contracts for services, except for those otherwise expressly covered by the Final Rule, that are exempted from coverage under the SCA or its implementing regulations.

EMPLOYEES ENTITLED TO SICK LEAVE

The Final Rule applies to any person engaged in performing work on or in connection with a contract covered by the Executive Order whose wages under such contract are governed by the SCA, DBA, or Fair Labor Standards Act (FLSA), including employees who qualify for an exemption from the FLSA’s minimum wage and overtime provisions. It includes a narrow exemption from the rule’s accrual requirements for employees who perform work duties necessary to the performance of a covered contract (but who are not directly engaged in performing the specific work called for by the contract) and who spend less than 20 percent of their hours worked in a particular workweek performing work in connection with such contracts.

PAID SICK LEAVE ACCRUAL

Employees can accrue 1 hour of paid sick leave for every 30 hours worked on or in connection with a covered contract. Contractors also have the option to provide an employee with at least 56 hours of paid sick leave at the beginning of each accrual year rather than allowing the employee to accrue leave based on hours worked.

A contractor’s existing PTO policy can fulfill the paid sick leave requirements of the Final Rule so long as it provides employees with at least the same rights and benefits as the Final Rule requires. In other words, if a contractor provides 56 hours of PTO that meets the requirements described in the Final Rule but employees can use the leave for any purpose, the contractor does not have to provide separate paid sick leave even if an employee uses all of the time for vacation.

MAXIMUM ACCRUAL, CARRYOVER, REINSTATEMENT, AND PAYMENT FOR UNUSED LEAVE

Contractors may limit the amount of paid sick leave employees may accrue to 56 hours each year and must permit employees to carry over accrued, unused paid sick leave from one year to the next. The Final Rule also allows contractors to limit the amount of paid sick leave employees have accrued to 56 hours at any point in time. Furthermore, contractors are required to reinstate employees’ accrued, unused paid sick leave if the employees are rehired by the same contractor within 12 months after a job separation unless they provide payment to employees for accrued, unused paid sick leave upon separation. Contractors are not required to pay employees for accrued, unused paid sick leave at the time of a job separation (“cash-out”); however, if they do provide cash-out, they will not be required to reinstate unused leave.

CONTRACTOR DUTIES

Contractors with covered contracts must comply with the paid sick leave requirements. They must also insert a clause regarding those requirements into any covered lower-tier contracts and ensure that lower-tier contractors comply with them. Contractors are required to provide notice to employees of the paid sick leave requirements. Additionally, contractors will be required to make and maintain records of the notifications sent to employees of the amount of paid sick leave accrued, denials of employees’ requests to use paid sick leave, dates and amounts of paid sick leave used and other records showing the tracking of employees’ accrual and use of paid sick leave.

USE OF PAID SICK LEAVE

An employee may use paid sick leave, in increments as small as one hour, for an absence resulting from:

  1. Physical or mental illness, injury, or medical condition of the employee;
  2. Obtaining diagnosis, care, or preventive care from a health care provider by the employee;
  3. Caring for the employee’s child, parent, spouse, domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any of the conditions or need for diagnosis, care, or preventive care described in (i) or (ii); or
  4. Domestic violence, sexual assault, or stalking, if the time absent from work is for the purposes described in (i) or (ii) or to obtain additional counseling, seek relocation, seek assistance from a victim services organization, take related legal action, or assist an individual related to the employee as described in (iii) in engaging in any of these activities.

REQUESTS TO USE SICK LEAVE

A request to use paid sick leave may be made orally or in writing. A leave request must be made at least 7 calendar days in advance where the need for the leave is foreseeable, and in other cases as soon as is practicable. A contractor is required to communicate any denial of a request in writing, with an explanation for the denial—which cannot be based on whether the employee has found a replacement worker or on the contractor’s operational needs.

REQUIRED DOCUMENTATION FOR USE OF SICK LEAVE

A contractor may require certification from a healthcare provider – or appropriate individual or organization if the leave is for domestic violence, sexual assault or stalking – only for absences of three or more consecutive full days, and the employee must have received notice of the requirement to provide certification before he or she returns to work.

INTERACTION WITH OTHER LAWS

A contractor may not use paid sick leave required by the Final Rule toward the fulfillment of its SCA or DBA obligations. A contractor’s obligations under the Final Rule have no effect on its obligations to comply with, or ability to act pursuant to, the Family and Medical Leave Act (FMLA). Paid sick leave may be substituted for (that is, may run concurrently with) unpaid FMLA leave, and all notices and certifications that satisfy FMLA requirements will satisfy the request for leave and certification requirements of the Final Rule.

With respect to state or local paid sick time laws, contractors must comply with both any such law that applies as well as the Final Rule, but contractors may satisfy their obligations by providing paid sick time that also fulfills the requirements of a State or local law provided that the paid sick time is accrued and may be used in a manner that meets or exceeds all of the requirements of the Final Rule. Where the requirements of an applicable state or local law and the Final Rule differ, satisfying both will require a contractor to comply with the requirement that is more generous to employees.

ANTI-RETALIATION

Employers may not interfere with the accrual or use of paid sick leave and may not discriminate or retaliate against any employee for the exercise of rights under the Final Rule.

Tagged , ,

Court Holds Religious Freedom Restoration Act Is Defense To Firing Of Transgender Employee

Last year the United States Supreme Court held that the Religious Freedom Restoration Act (“RFRA”) allowed Hobby Lobby to avoid providing health insurance coverage under the ACA for methods of contraception because doing so violated the sincerely held religious beliefs of the company’s owners. Last week in EEOC v. R.G. and G.R. Harris Funeral Homes, Inc. the United States District Court for the Eastern District of Michigan held that RFRA could provide a defense to a sex discrimination case under Title VII.

In Harris Funeral Homes it was undisputed that the Funeral Home fired a male employee, Stephens, because Stephens intended to “dress as a woman” while at work. Stephens is transgender and transitioning from male to female. The EEOC alleged that the termination violated Title VII because Stephens was terminated due to his transgender status or his gender identity. The court rejected that argument because transgender status and gender identity are not protected classes under Title VII. The EEOC also argued that Stephen’s termination was sex discrimination because Stephens did not conform to the Funeral Home’s sex/gender based stereotype.

The Funeral Home argued that it was entitled to an exemption under RFRA because allowing Stephens to dress as a woman at work would impose a substantial burden on its ability to conduct business in accordance with its sincerely held religious beliefs. RFRA prohibits the government from substantially burdening a person’s exercise of religion. After the RFRA defense was asserted the burden shifted to the EEOC to show that its efforts to prevent the Funeral Home from enforcing its dress code were (a) in furtherance of a compelling governmental interest and (b) the least restrictive means of furthering that compelling governmental interest.

The court held that the EEOC failed to show filing suit for sex discrimination was the least restrictive means of furthering the compelling governmental interest. For example, the court reasoned that if the EEOC’s interest was truly eliminating gender stereotypes, it could have proposed a gender neutral dress code as a less restrictive means of furthering the governmental interest.

Some take aways for employers:

  1. Transgender and sexual orientation are not protected classes under Title VII. However, they might be protected under applicable state or local law;
  2. Discrimination based on the failure to conform to a sex stereotype (e.g. a male employee is not masculine enough) is sex discrimination under Title VII;
  3. For RFRA to apply the government must be taking action against the employer. A suit by an employee, for example, would not be subject to a RFRA defense;
  4. RFRA also requires that an employer’s sincerely held religious belief be impacted by the action in question. This is more likely to be the case when the employer is a closely held corporation; and
  5. The Harris Funeral Homes decision may be appealed to the Sixth Circuit where it could be reversed.

E-Verify Soon Required For Some Tennessee Employers

Thanks to an amendment to a Tennessee law  some Tennessee employers will soon be required to use E-Verify.  Effective January 1, 2017 private employers with fifty (50) or more employees must use E-Verify to verify the work authorization status of all employees hired on or after that date.  This is a change to the Tennessee Lawful Employment Act, which currently allows all employers to choose between using E-Verify or collecting one of eleven specified identification documents in order to comply with the law.

Penalties for noncompliance with the TLEA include a $500 penalty plus $500 per employee or non-employee not verified, or a copy of appropriate verifying documentation not maintained, for the employer’s first offense.  Those amounts increase to $1000 for a second offense and $2500 for a third offense.

The TLEA allows first time violators to receive a warning in lieu of a penalty if the employer remedies the violation within 45 days of receipt of the notice and initial order from the Tennessee Department of Labor.  Employers previously had 60 days to achieve compliance, but the amendment shortened the time to 45 days.  Also, if the employer fails to remedy the violations within 45 days the initial order shall be deemed a final order not subject to further review.

All Tennessee employers should review their verification documentation now by conducting an “I9 Audit” to make sure they are in compliance with the TLEA and applicable federal law.  Tennessee employers with 50 or more employees can enroll in E-verify now, or wait until January 1, 2017 to do so, but make sure you enroll.  The failure to do so can be costly!

 

 

Tagged , ,

The New DOL Overtime Rules Are Here: What You Need to Know

After much anticipation ( and likely some dread from employers) the DOL released its new overtime rules last night.  The Final Rule makes changes to the salary test for the Executive, Administrative and Professional (EAP) Exemptions as well as the Highly Compensated Employee Exemption.

* Key Provisions of the Final Rule *

The Final Rule focuses primarily on updating the salary and compensation levels needed for EAP workers to be exempt. Specifically, the Final Rule:

  1. Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South, which is $913 per week or $47,476 annually for a full-year worker;
  2. Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally, which is $134,004; and
  3. Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.
  4.  Amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.  A “catch up” payment can also be made in an effort to satisfy the new salary level, provided it does not exceed 10 percent of the new minimum salary. However, HCE employees must still receive at least the full standard salary amount each pay period on a salary or fee basis without regard to the payment of nondiscretionary bonuses and incentive payments.
  5. The Effective Date is December 1, 2016.

Significantly, the Final Rule made no changes to the current duties tests for these exemptions.

Employers  have almost 6 months to prepare before these changes become law.  Use that time wisely to consult with employment law counsel, audit your employees currently classified as exempt and analyze your business to determine the best way to respond .

 

Tagged , ,

Will the New Salary For The White Collar Exemptions Be Lower Than Expected?

Employers are anxiously awaiting the new DOL rules for the executive, administrative and professional  exemptions, which are also known as the “white collar exemptions”.  The proposed new rule would increase the annual salary for these exemptions to $50,440.  But rumors are circulating that the final rule will set the new annual salary at $47,000.  This would be almost exactly double the current salary threshold of $23,660 per year.

We should have the final rule later this month.  Stay tuned for further developments!

Tagged , ,

Individual Liability Under The FMLA

A little known fact about the FMLA is that it can provide for individual liability in certain circumstances.  Recently, the Second Circuit Court of Appeals in Graziadio v. Culinary Institute of America served a loud reminder of that fact.

The FMLA defines “employer” as “any person who acts, directly or indirectly, in the interest of any employer to any of the employees of such employer”.  That is a convoluted way of saying an individual can be liable under the Act.  This definition came directly from the FLSA, and in certain FLSA cases individual liability is imposed.

What are the circumstances which can result in individual liability? The Second Circuit adopted a nonexclusive four factor “control” test. The four factors the court recognized are:

  1. The power to hire and fire;
  2. Supervising and controlling employee work schedules or conditions of employment;
  3. Determining the rate and method of payment to employees; and
  4. Maintaining employment records.

In Graziadio the court applied this test and held that there were disputed factual issues as to whether the company’s HR Director met the definition of employer and ruled that a jury will have to decide the question.

This case may lead to plaintiffs suing both the company and an HR Director or some other member of management under the FMLA, particularly if there is some question about the solvency of the company.  Only time will tell.

Tagged , ,