Employment Law Update May 13, 2011

1. Employment Law UpdateMay 13, 2011 Kimberly Vanover Riley, Esq. Montgomery, Rennie & Jonson Co., L.P.A. Cleveland (440)779-7978 kriley@mrjlaw.com

2. Agenda for Today • Department of Labor Update • Wage and Hour law • Military Leave • Nursing Mothers • Ethical Role of Court Personnel • The Myth of At-Will Employment & Updates to Workplace Discrimination, ADA, Harassment & Retaliation Law • Social Media & The Public Sector

3. The DOL Busy Season Wage and Hour Initiatives FMLA Changes Nursing Mother Laws

4. Wage and Hour Law

5. Big changes coming • DOL recently hired 350 new investigators—no one knew why. • Now we do: • Mandatory employer compliance plans will soon be required. • DOL will require most employers to prepare and adopt compliance plans aimed at ensuring they do not violate wage, job safety and other employment laws. • Decisions will need to be documented and shared with their workers and the government. • Deputy Labor Secretary Seth Harris said many specifics of what employers will be required to do “had yet to be worked out.” • Proposed rules are still being drafted, and businesses will have a chance to respond before any final rules are issued. • The first wave of these regulations is expected in April 2011.

6. “Good Jobs for Everyone” • Part of the DOL’s vision statement is “good jobs for everyone.” It includes its definition of a “good job.” This includes, among other things: • Jobs that increase workers’ incomes and narrow wage and income inequality; • Jobs that assure works are paid their wages and overtime; • Jobs that provide workplace flexibility for family and personal care-giving; • Jobs that assure workers have a voice in the workplace. • http://www.dol.gov/_sec/stratplan/2010/vision-2010.pdf

7. DOL Regulatory Agenda Narrative • “only limited resources to protect America’s workers” • “employers do not have a culture of compliance” • “many will not change their behavior, even if provided with the best information” • “some are complacent, depend upon luck to avoid violations” • others refuse to comply because they compare the costs of compliance against the odds of being caught • The “catch me if you can” model has become a problem in America’s workplace.

8. DOL Plan to Address this Problem: • Employers will be forced to “take responsibility to find and fix problems rather than wait for a Labor Dept. investigator to inspect, discover the problems, and enforce the law.” How? • “Leveraging” their limited resources: Plan/Prevent/Protect. • “Compliance will be non-negotiable under the Plan/Prevent/Protect” system.” • http://www.dol.gov/regulations/2010RegNarrative.htm

9. Plan • Dept. will propose a requirement that employers create a plan to identify/fix risks of violations. • Employer will provide employees with opportunities to participate in the creation of plans. • Plans will be made available to employees so they can fully understand and help monitor them.

10. Prevent • Department will propose a requirement that employers “thoroughly and completely implement the plan in a manner that prevents legal violations.” • It “cannot [be] draft[ed] . . . and then put . . . on a shelf.”

11. Protect • Dept. will propose a requirement that the employer ensures the plan’s objectives are met on a regular basis. • Employers who fail to follow these steps will be out of compliance and subject to remedial action.

12. What does this mean for W & H specifically? • These initiatives apply to a broad range of employment laws, including workplace safety (OSHA, MSHA), but also the Wage & Hour Division. • The particular P/P/P initiative for the WHD is called “Right to Know”

13. Right to Know • The WHD will publish a NPRM to FLSA regs, requiring: • Communication to Employees • How their pay is calculated • Who is exempt / excluded from FLSA entitlements (OT, minimum wage) • Why (e.g., exempt, personal staff, volunteer, independent contractor) • Openness and Transparency • Portions of this communication may need to be provided with each paycheck. “Wage statements” • Summarizes hours worked/wage computation. • Maintenance • Keep this information on file • Why? So it may be quickly provided to WHD enforcement personnel.

14. Right to Know • Target Date: April 2011 • See http://www.dol.gov/whd/regs/unifiedagenda/fall2010/1235-AA04.htm

15. Bridge to Justice • But how will 350 DOL investigators enforce all these new initiatives? • The Bridge to Justice is an “unprecedented collaboration” between the WHD and ABA • Workers who cannot get immediate DOL help will be referred to W & H attorneys through the ABA’s Lawyer Referral and Information Service. • http://www.dol.gov/whd/resources/ABAReferralPolicy.htm

16. What will the Bridge to Justice Look like? • When e/ees call DOL for help, they will get help from a DOL employee or referred to a toll-free number. • The number will provide contact information for W & H attorneys in their area. • If WHD investigation finds violations, it can: • Prosecute; OR • Supply the employee with: • Its list of violation(s) and back wages calculations • The phone number for the attorney referral service

17. We Can Help • 2010 Campaign designed to reach “high risk” industries • Agriculture • Construction • Janitorial • Hotel/Motel • Food Service • Home Health Care • Includes booklets, posters, and user-friendly website • Includes spreadsheet for tracking hours worked:

18. http://www.dol.gov/whd/FLSAEmployeeCard/calendarR5Web.pdf

19. http://www.dol.gov/whd/FLSAEmployeeCard/calendarR5Web.pdf

20. http://www.dol.gov/whd/FLSAEmployeeCard/calendarR5Web.pdf

21. http://www.dol.gov/whd/FLSAEmployeeCard/calendarR5Web.pdf

22. http://www.dol.gov/whd/FLSAEmployeeCard/calendarR5Web.pdf

23. Bottom Line • Ignoring wage and hour law will soon no longer be an option. • Merely assuming you are in compliance will no longer be enough. • You will have an affirmative obligation under the law to get into compliance, document your analysis, and share it with your employees.

24. Is anyone feeling the need for a little review?

25. General Rule • EVERYONE IS PRESUMPTIVELY NON-EXEMPT • i.e., entitled to minimum wage and • presumptively entitled to 1.5 OT • Unless excepted or exempt • or Unless proactively changed to comp time or modified version of OT

26. Minimum Wage • Federal: $7.25 • Ohio: $7.40 • Every September 30, it is increased as of the first day of the following January by the rate of inflation for the 12-month period prior to that September, rounded to the nearest five cents. • The annual update to the Ohio minimum wage is available on the Web site of the Ohio Department of Commerce, Division of Labor & Worker Safety. • http://www.com.ohio.gov/laws

27. Overtime and Compensatory Time • OT and Comp Time (1.5) vs. Flex/Bonus Time (1.0) • Comp time • State and local government • Ratio – 1.5 hours off for every 1 hour of overtime • Available only when follow prescribed notice / rules

28. E/ees notified: comp time off in lieu of overtime May not accrue more than 480 / 240 hours If accrue more, entitled to OT Afforded opportunity to use banked comp time w/in reasonable period, and when requested—so long as notice is reasonable Termination – must be paid for unused but earned comp time Compensatory Time – Requirements

29. Excepted vs. Exempt • Excepted: not subject to the coverage of the FLSA in any respect • independent contractors • elected officials and their personal staff • policy-making political appointees and legal advisors • bona fide volunteers • Exempt: subject to certain aspects of the FLSA, such as its recordkeeping requirements.

30. Exceptions • Volunteers—not covered by FLSA • However, make sure your volunteers truly are volunteers: • No pay (any kind of compensation) • No promise / (reasonable) expectation of pay • Independent Contractors—not covered by FLSA • Again, ensure they truly meet this status (IRS 20 factor test)

31. Exceptions, cont. • Elected Officials, Personal Staff Members & Policymakers serving elected officials • Elected officials (e.g., Judge, elected Clerk) • Personal staff of elected officials • Appointees of elected officials to serve on a policymaking level • Immediate advisors to elected official re: constitutional/legal powers of the office

32. Excepted employees=No FLSA obligations • Note—Ohio exceptions are narrower. • May still have obligations to Ohio employees that do not exist under federal law.

33. The “White Collar” Exemptions The first of the 13(a) exemptions is, by far, the largest. Section 13(a)(1) provides the “White Collar” exemptions. • Executive • Administrative • Professional

34. The “White Collar” Exemptions • 2 Requirements • Duties—must entail a certain amount of exempt work. • Salary—must be paid: • In a specified form (salary, or sometimes fee, instead of hourly) • In a specified minimum amount Note: Significantly changed in 2004.

35. Executive • Salary: Minimum $455/week. • Duties • Primary duty must be managing the enterprise in which the employee is employed, or of a customarily recognized department or subdivision. • Won’t lose exemption of jumping in to help subordinates (e.g., fast food manager) • Directing 2+ FT employees’ work– Customarily and regularly directs the work of two or more employees or full-time equivalents. • Actual authority or particular weight in hiring/firing

36. Administrative • Salary= $455.00/week • OK to receive fee instead of salary • Duties • Primarily performs office or non-manual work directly related to the management and general business operations. • Exercises discretion and independent judgment in matters of significance • New section on the use of manuals • Regulations provide examples of exempt and non-exempt

37. Cautions • What does “significant” mean? • i.e., “matters of significance,” “significant matters,” “matters that have significant financial impact” • Factors • Authority to formulate/interpret policies • Authority to carry out major assignments • Duties affect operations to a substantial degree • Authority to commit money • Authority to waive/deviate from policies

38. Typically Exempt Insurance claims adjusters Financial services employees Team Leaders Executive/admin assistants HR Managers Management Consultants Purchasing Agents Buyers Typically Non-Exempt Financial services sales employees Personnel screeners Comparison shoppers Ordinary Inspection work Graders/Examiners Public Sector investigators/inspectors Typical Exempt Status under Administrative Test:

39. Professional • Salary • $455.00/week (Generally n/a to licensed lawyers, some teachers, and certain medical professions) • Two different duties tests: • Learned Professional • Creative Professional

40. Learned Professional, cont. • Primary duty - work requiring • knowledge of advanced type (predominantly intellectual; requires consistent discretion/independent judgment) • in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. • 4-year degree or experiential equivalent • Specific skilled groups discussed in new regs (e.g., medical technologists, dental hygienists, chefs, athletic trainers, and funeral directors).

41. Computer Employee Exemption • Salary= $455.00/week or $27.63/hour. • Duties: • Working as computer system analysts, software engineers, or programmers; • Primary duties include application of analysis techniques and procedures • NOT everyone who works with computers.

42. To recap • If your employees do not meet one of these exceptions or exemptions, they the default is 1.5 OT. • If your employees DO meet one of these exemptions, they must perpetually maintain BOTH • Duties • Salary

43. Docking exempt e/ees’ salariescan void their exempt status.

44. Exempt Employee Docking Rules & Safe Harbor • Permissible exempt salary deduction: • full day absences (mostly N/A in public sector—see next slide) for qualifying reason: • Unpaid suspensions for violating serious workplace conduct rules (e.g., sexual harassment, drug use) • Major safety violations • Illness/disability with other compensation • Offset jury duty, witness fees, military pay • Proportionate share of first/last weeks • FMLA • Full week absences for violating any other conduct rule

45. Public sector exception to salary basis/docking • Public sector employee • who otherwise meets salary basis test • but whose pay is, by law, subject to unpaid absence for personal reasons, illness, or injury in partial-day increments • Won’t lose exemption if • Employer denies request for partial day paid leave • Accrued leave has been exhausted • Employee chooses partial day unpaid leave • Budget-required furloughs won’t disrupt salary basis • Bottom line: Salary basis diluted in public sector, but review reg carefully: 29 CFR 541.710; still advisable to follow default

46. Safe Harbor • Safety net: minimizes impact of improper deductions from an exempt employee’s salary. • Brief period of time to correct improper deductions without jeopardizing exemption. • Requires: • Isolated/inadvertent deduction • Clearly communicated policy prohibiting improper deduction • Complaint procedure • Prompt reimbursement • Good faith commitment to future compliance

47. What’s an hour “worked”? • Working—On duty time furthering e/er goals • Nearly all training • Must be voluntary and inapplicable to job to be unpaid. • Brief planned downtime (coffee breaks, lactation breaks) • All unplanned downtime… • BEWARE after-hours email, smartphone, voicemails • Consider a policy prohibiting (or limiting) such work without prior written consent.

48. What’s NOT an hour “worked”? • Sick • Vacation • Personal leave • (Most) meal breaks

49. What’s in the gray zone of hours “worked”? • Other meal breaks • Control and length of time affect compensability of the time • Travel • Work pulling the regulations every time—it’s complicated • On-call • The more control you exert, the more likely it is compensable

50. Ways to make time off-duty • Allow e/ees to leave site for meal breaks/on-call time • Provide at least 30 minutes; 60 better • Give reasonable time to report when on call • Schedule/publicize call-in periods • Minimize call backs • Don’t require call-ins to wear uniforms (or provide them at the work site) • Encourage personal activity during on-call time • Consider whether to discipline on-call violations • Memorialize on-call policy in writing