Announcing KJK’s next Breakfast Briefing: The Top 5 Issues Confronting Your Business’s HR Practices Today

Top 10 lists are so 2009. KJK’s employment lawyers will bring you the top 5 issues currently facing your business and its HR practices as we move through 2010.

1. Classifications of Employees: The Department of Labor is ramping up its resources and enforcement measures. Learn why you need to get a handle on who is exempt versus who is not exempt, and the difference between an employee and an independent contractor.

2. Health Care Reform: Be honest, you haven’t read all 2000+ pages of the landmark health care legislation. We have. Learn about the most important issues that face your business.

3. Technology: Learn when you can and cannot read employees’ emails, text messages, and other electronic communications, and why even the best drafted policy likely will not grant you access to personal, sensitive information.

4. Disability Discrimination: The ADA amendments have been in place for a little over a year and the EEOC is about to issue sea-changing regulations. This is not your father’s ADA. Learn what has changed, and what you can do to protect your organization from this new breed of discrimination.

5. Hiring: If 2008 and 2009 were all about layoffs and downsizing, we are hopeful that 2010 and beyond will be about hiring. Learn how to plan for the economic upswing and proactively protect yourself by implementing key policies and procedures for hiring new employees and rehiring old ones.

Date:	Wednesday, May 12, 2010
Time:	8:00-8:30 Continental Breakfast
	8:30-9:30 Presentation
	9:30-10:00 Q&As
Place:	The Club at Key Center, 127 Public Square, Cleveland (on-site parking is free)
Cost:	Free

If you are interested in attending this free seminar, or for more information, please contact Andrea Hill, (216) 736-7234 or ach@kjk.com, by May 7, 2010.

Do you know? Overtime for non-exempt commissioned employees

Only a small subset of commissioned employees are exempt from the Fair Labor Standards Act’s overtime provisions. For the majority of employees who are paid wholly or in part by commissions, the FLSA presents a complicated calculus of rules and regulations that employers must follow to properly account and pay overtime premiums for hours worked in excess of 40 in any workweek.

The key question for for commissioned employees is how one computes the “regular rate of pay” for purposes of calculating the proper overtime premium to apply to commissions paid.

If a commission is paid on a weekly basis, the calculation is fairly basic. The commission is added to any other earnings for that workweek. The total is then divided by the number of hours worked during that week to obtain the employee’s regular rate for that particular workweek. The employee must then be paid overtime compensation of one-half of that rate for each hour worked in excess of 40 for that week.

It gets more complicated, however, If the calculation and payment of the commission cannot be completed until sometime after the regular pay day for the workweek. In the case, the employer may disregard until later the commission in computing the regular hourly rate and pay overtime exclusive of the commission. However, when the commission is ultimately paid, the employer has to go back and recalculate the overtime premium for each workweek covered by the deferred or delayed commission payment. The employer must apportion the commission back over the workweeks of the period during which it was earned. The employee must then receive additional overtime compensation for each week during the period in which he worked in excess of 40 hours.

It gets even more complicated if it is not possible or practicable to allocate the
commission among the workweeks per the amount of commission actually earned or reasonably presumed. In this case, the Department of Labor permits employers to choose from one of two different methods fairly and equitably account for overtime premiums.

1. Allocation of equal amounts each week. Under this method, the employer will assume that the employee earned an equal amount of commission for each week of the period covered, and compute any additional overtime compensation based on that pro rata amount. For example:

• For a commission paid monthly, multiple the commission by 12 and divide by 52 to obtain the amount attributable for each week of that month.
• For a commission paid semi-monthly, multiply by 24 and divide by 52.
• For a commission that covers a specific number of workweeks, divide the total commission paid by the number of weeks it covers.

Once the pro rata weekly commissions is determined, simply divide that amount by the total number of hours worked to obtain the increase in the hourly rate. The employee is then owed one-half of that increase for each hour worked in excess of 40 for a given week.

2. Allocation of equal amounts to each hour worked. Sometimes,
there are facts which make it inappropriate to assume equal commission
earnings for each workweek (such as when the number of hours worked each
week varies widely). In such cases, the employer can assume that the employee earned the same amount of commission for each hour worked during the computation period. The total commission payment should be divided by the total number of hours to determine the amount of the increase in the regular rate. To determine the amount of additional overtime compensation owed for the period, multiply one-half of the figure by the total number of overtime hours worked by the employee for all workweeks during the covered period.

Clear enough for you? Is it any wonder that companies get themselves in trouble with wage and hour issues?

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

When should you get an attorney involved with a problem employee? As soon as possible.

A few weeks ago I wrote about what employers need to know about EEOC investigations. I suggested that employers get attorneys involved “as early as the first receipt of the charge of discrimination.” West v. Tyson Foods (6th Cir. 4/15/10) (unpublished) [pdf] provides a great example of the importance of the early involvement of counsel.

Amanda West quit her job at a Tyson chicken processing plant after being subjected to more than a month of fairly pervasive sexual harassment. During her exit interview with Tyson’s HR manager, West talked about all of the harassment to which she had been subjected and that her supervisors failed to respond to her complaints. She also identified the perpetrators by name. The HR manager, however, did not conduct any investigation into the allegations until after Tyson received West’s EEOC charge. At trial, the court admitted into evidence the HR manager’s notes from the exit interview, along with its EEOC statement of position. That position statement falsely claimed that Tyson launched an investigation following the exit interview. From this evidence—along with the evidence of the harassment and the supervisors lack of response—the jury awarded West $1,281,636.58—$131,636.58 in lost wages, $750,000 for mental distress, and $400,000 in punitive damages—which the 6th Circuit affirmed.

What is the lesson here? Having an attorney draft the position may not have saved the day, but it would have certainly lessened the impact of Tyson’s involvement in the harassment. The misstatements in the position statement make it look like Tyson was trying to cover up what happened. That perception of a cover-up likely led to the high compensatory and punitive awards.

WIRTW #123

It’s impossible to cover every labor & employment story that hits every week. The most interesting news of the week that I did not yet have a chance to cover is the revelation that Department of Labor enforcement data is now available online. Right now, your search capabilities are limited to division and state. Thanks to Dan Schwartz’s Connecticut Employment Law Blog and the Workplace Prof Blog for reporting on this issue.

On to the rest of the week’s stories:

Wage & Hour

• The IRS and HR: Who is an Employee? – from Michael Haberman’s HR Observations

• PDA Use Creates Wage and Hour Issues – from Jennifer Hays at the Warren & Hays Employment Law Blog

Discrimination & Harassment

• Arroyo v. Accenture, LLP: The Potential Pitfalls of Criminal Background Checks – from Natalie Klyashtorny’s A Case of the Mondays

• Workplace Rules And Job Requirements Justify Employers’ Termination Decision In Face Of ADA Claims Based On Alcoholism – from Hunton Employment & Labor Law Perspectives™

• Credit Reports and the Hiring Process: The Value (and Risk) to HR Professionals – from Nick Fishman at the employeescreenIQ Blog

• More Men File Sex Harassment Charges: Man Gene Waning? – from The Word on Employment Law with John Phillips

• The role mistaken beliefs play in retaliation and hostile environment claims – from Work Matters

• Maternity Leave Policy – from Colorado Employment Law Blog

• Email Harassment - Jesse James Edition – from Philip Miles’s Lawffice Space

• Harassment Reporting: Who’s Your Weakest Link? – from Mindy Chapman’s Case In Point

Labor Relations

• The Supporter Side Politics of EFCA – from Michael Fox’s Jottings By An Employer’s Lawyer

• Another Attempt at EFCA Before Year’s End? – from LaborUnionReport.com

• Breaking News: Reports Say SEIU’s Andy Stern To Resign – from Labor Relations Today

Competition & Trade Secrets

• Customer Lists as Trade Secrets? Not A Per Se Rule – from Trade Secrets Blog

• How to enforce a non-compete without a non-compete – from Rob Radcliff’s Smooth Transitions

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Pets in the workplace: assessing the risks and drafting a policy

Sarah’s Needleman’s Small-Business Boss column in today’s Wall Street Journal discusses pet-friendly workplaces. I spoke with Sarah earlier this week. Here’s what I had to say:

“You want to set expectations,” says Jon Hyman, a partner in the labor and employment group at Kohrman Jackson & Krantz PLL, a law firm in Cleveland. For example, he suggests that owners determine if employees can leave a pet at work while they go off-campus to a meeting and where the animal should stay during their absence.

Business owners should also consider how they would help employees who are allergic to animals avoid flare-ups if they allow pets in their workplaces. Mr. Hyman says that while rare, workers have successfully sued business owners for violating the American Disabilities Act by not taking such steps.

“If you have an employee that just cannot be in the same facility, you would have to accommodate that person,” he says. “You have to run your business first, and the core of your business is still your people.”

Are you thinking about opening up your business to employees’ pets? You will find very few resources on the Internet to help. And, you will need a written policy before you allow pets in. Here’s some considerations.

1. People come first. Despite your desire to allow pets—whether as a perk, a recruitment tool, or both—your employees still make up the core of your enterprise. If you have to choose between an employee or a pet, you should always choose the employee.

2. One of the biggest legal risk is the Americans with Disabilities Act. If an employee is allergic to animals, pet owners must understand that they may have to leave their animals at home as a reasonable accommodation. Other possible accommodations include creating sufficient separation between the allergic employee and the pet, segregating the pet to a specific part of the facility, or improving ventilation. Ignoring the pleas of an allergic employee, though, will open you up to potential ADA liability.

3. Animals must of “office broken.” Animals with any bite history should not be permitted. Moreover, any aggressive behavior, such as growling, barking, chasing, or biting, should result in the animal’s expulsion on the first complaint. Animals should also be house broken, friendly towards people and other animals, and not protective of their owners or their owners’ spaces. Finally, you should define when animals must be leashed or caged, and what is expected of employees when they have to leave the workplace during the work day.

4. Respect for property. Designate a specific area outside for animals to go to the bathroom (preferably away from the entrances), and make sure pet owners understand that it is their responsibility to clean up messes outside and accidents inside.

5. Licenses and vaccinations. Before being permitted to bring animals to work, owners should verify that vaccinations are up to date, and that the animal licensed and free of parasites and insects. 

6. Liability. Employees should verify, in writing, that they have sufficient home owners’ or renters’ insurance to cover any damage to person or property caused by the animal. You should also consider indemnification in case your business gets sued, and a paycheck deduction authorization for any damage caused.

If you are considering having a pet-friendly workplace, I recommend contacting qualified employment counsel to walk you through the risks and assist in drafting an appropriate policy.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Reasonable accommodations for an employee’s inability to commute to work

Consider the following story. An employee with a history of eye problems (glaucoma and partial blindness) presents a doctor’s note recommending that she not drive at night. That note presents a scheduling problem, since she works third shift, public transportation is not available, and she has no other way to consistently get to work. Do you have a responsibility to accommodate this employee by transferring her to a day shift so that she can commute? Here’s the answer, at least according to the 3rd Circuit in Colwell v. Rite Aid Corp. (4/8/10) [pdf]:

Rite Aid argues that it had no duty to even consider changing Colwell’s shift because Colwell’s difficulties amounted to a commuting problem unrelated to the workplace, and the ADA does not obligate employers to address such difficulties…. Instead, we hold as a matter of law that changing Colwell’s working schedule to day shifts in order to alleviate her disability-related difficulties in getting to work is a type of accommodation that the ADA contemplates … [and] that under certain circumstances the ADA can obligate an employer to accommodate an employee’s disability-related difficulties in getting to work, if reasonable…. In sum, we hold that the ADA contemplates that employers may need to make reasonable shift changes in order to accommodate a disabled employee’s disability-related difficulties in getting to work.

This decision potentially opens a can of worms for employers. How far do you have to go to accommodate an employee’s disability-related commuting difficulties? Under this case, a shift-change is one possible accommodation. What about arranging for rides by co-workers? Paying for taxis or other transportation? Exceptions to attendance policies and rules? What is reasonable will change from employee to employee and workplace to workplace. What never changes, however, is your responsibility to explore these options through the interactive process required by the ADA.

Employees with medical conditions that impede their ability to do their jobs raise a huge red flag. Before summarily denying a reasonable accommodation, you should be consulting with counsel to make sure that you are not stepping into a lawsuit.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Do you know? Using criminal histories and conviction records in hiring

A rejected applicant has filed a class action lawsuit against management consulting firm Accenture, claiming that it discriminates against minorities through a policy of rejecting qualified individuals with criminal histories. Judy Greenwald at Business Insurance provides the details:

According to Roberto J. Arroyo vs. Accenture L.L.P., filed … in federal district court in New York, Mr. Arroyo spent two and one-half years in prison in a 10-year-old conviction for vehicular homicide in a car accident in which he had been driving while intoxicated.

Mr. Arroyo worked for Chicago-based Accenture as a contract employee in its Murray Hill, N.J., office from November 2005 to April 2007. In April 2007, the firm offered Mr. Arroyo permanent employment subject only to the results of a background check, but withdrew the job offer and terminated his employment as a contract worker based on his conviction, according to the lawsuit.

This lawsuit illustrates an important issue—that the EEOC targets blanket policies that bar the employment of any applicant because of an arrest or conviction. According to a December 14, 2004, informal EEOC opinion letter:

Although Title VII does not, on its face, prohibit discrimination on the basis of conviction records, the EEOC and courts have concluded that a policy or practice of excluding individuals from employment on the basis of their conviction records may have an adverse impact on certain minority groups in light of statistics showing that they are convicted at a rate disproportionate to their representation in the population.

Just because a company cannot per se disqualify individuals because of criminal histories does not mean that they can never be used a factor. What are the rules for the proper use of arrest and conviction records as employment criteria?

1. If an employer collects arrest or conviction information, it must do so consistently. It is unlawful under Title VII to obtain criminal records in an inconsistent manner—based on the race, color, religion, national origin, or sex of the applicant. For example, it would be facially unlawful for an employer only to require background investigations of applicants who were born in the Middle East or are Muslims.

2. An Employers should assure applicants and employees that honestly providing criminal histories will not result in an automatic disqualification from consideration.

3. If a policy concerning arrest or conviction records disproportionately affects minorities, an employer may nevertheless maintain the policy if it can prove a business need. According to the EEOC, an employer must consider whether a particular applicant should be excluded from a particular job based on:

• The nature and gravity of the offense;
• The time since the conviction and/or completion of the sentence; and
• The nature of the job held or sought.

In other words, employers must undertake a job-by-job, employee-by-employee, check-by-check analysis of the relationship between the conviction and the ability to perform the job.

If you have a question about the use of criminal backgrounds in hiring and other employment decisions, you should contact employment counsel to guide you through this thorny issue.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.