A reminder about holiday pay

Tomorrow’s July 4th holiday is a paid day off for many American workers. Last year, I wrote a post entitled, “8 things you need to know about holiday pay.” In light of tomorrow’s holiday, I thought it was a good idea to revisit that list.

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1. Do you have to pay for holidays? You are not required to pay non-exempt employees for holidays. Paid holidays is a discretionary benefit left entirely up to you. Exempt employees present a different challenge. The Fair Labor Standards Act does not permit employers to dock the salary of an exempt employee for holidays. You can make a holiday unpaid for exempt employees, but it will jeopardize their exempt status, at least for that week.

2. What happens if holiday falls on an employee’s regularly scheduled day off, or when the business is closed? While not required, many employers give an employee the option of taking off another day if a holiday falls on an employee’s regular day off. This often happens when employees work compressed schedules (four 10-hour days as compared to five 8-hour days). Similarly, many employers observe a holiday on the preceding Friday or the following Monday when a holiday falls on a Saturday or Sunday when the employer is not ordinarily open.

3. If we choose to pay non-exempt employees for holidays, can we require that they serve some introductory period to qualify? It is entirely up to your company’s policy whether non-exempt employees qualify for holiday pay immediately upon hire, or after serving some introductory period. Similarly, an employer can choose only to provide holiday pay to full-time employees, but not part-time or temporary employees.

4. Can we require employees to work on holidays?Because holiday closings are a discretionary benefit, you can require that employees work on a holiday. In fact, the operational needs of some businesses will require that some employees work on holidays (hospitals, for example).

5. Can we place conditions on the receipt of holiday pay? Yes. For example, some employers are concerned that employees will combine a paid holiday with other paid time off to create extended vacations. To guard again this situation, some companies require employees to work the day before and after a paid holiday to be eligible to receive holiday pay.

6. How do paid holidays interact with the overtime rules for non-exempt employees? If an employer provides paid holidays, it does not have to count the paid hours as hours worked for purposes of determining whether an employee is entitled to overtime compensation. Also, an employer does not have to pay any overtime or other premium rates for holidays (although some choose to do so).

7. Do you have to provide holiday pay for employees on FMLA leave? You have to treat FMLA leaves of absence the same as other non-FMLA leaves. Thus, you only have to pay an employee for holidays during an unpaid FMLA leave if you have a policy of providing holiday pay for employees on other types of unpaid leaves. Similarly, if an employee reduces his or her work schedule for intermittent FMLA leave, you may proportionately reduce any holiday pay (as long as you treat other non-FMLA leaves the same).

8. If an employee takes a day off as a religious accommodation, does it have to be paid? An employer must reasonably accommodate an employee whose sincerely held religious belief, practice, or observance conflicts with a work requirement, unless doing so would pose an undue hardship. One example of a reasonable accommodation is unpaid time off for a religious holiday or observance. Another is allowing an employee to use a vacation day for the observance.

Here comes the disclaimers. The laws of your state might be different. If you are considering adopting or changing a holiday pay policy in your organization, or have questions about how your employees are being paid for holidays and other days off, it is wise to consult with counsel. Also, these 8 tips assume that your company lacks a collective bargaining agreement.

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Friday, July 5 is also a paid holiday for me. WIRTW will not run this week, and will return on Friday, July 12, with WIRTW #280.

The FMLA, the ADA, and no-fault attendance policies

A no-fault attendance policy assigns points each time an employee is absent, with corresponding levels of progressive discipline automatically imposed at certain point levels. Employers like these policies because they simplify attendance issues. These policies, however, carry, a certain degree of risk—namely in the handling of absences protected by the FMLA or ADA. If the FMLA or ADA protects an employee’s absence from work, an employer would violate the statute by counting the absence as part of a no-fault attendance policy.

• In Green v. Wal-Mart Stores (S.D. Ohio 6/25/13), the district court denied the employer’s motion for summary judgment on an employee’s FMLA claim because the employer admitted to counting FMLA-days for purposes of progressive discipline under its no-fault attendance policy.
• In July 2011, the EEOC reached a $20 million settlement with Verizon Wireless over claims that the wireless company denied reasonable accommodations to disabled employees by disciplining or firing them pursuant to its no-fault attendance policy.

Employers have a lot to gain from no-fault attendance policies, both in ease of personnel management and certainty in attendance calculations. In deciding whether to adopt or continue a no-fault attendance policy,however, employers must carefully to balance those benefits against the risk of FMLA or ADA violations. Moreover, with a no-fault attendance policy in place, employers must be careful to train those responsible for administering the policy with the exceptions required by the FMLA and ADA for protected absences.

Today’s post is brought to you by the letters W, A, R, and N

Last week, CNNMoney reported that the Sesame Workshop is laying off approximately 10 percent of its employees. The layoff will not affect enough employees to trigger the WARN Act, the federal statute that governs advance notice for certain plant closing and mass layoffs. It does, though, provide a good jumping-off point for a short discussion about the WARN Act and its requirements.

WARN Act is shorthand for the Worker Adjustment and Retraining Notification Act. In general, it requires 60-day advance notice of either a plant closing or a mass layoff.

It covers all employers with 100 or more employees, not counting those who worked less than 6 months in the last 12, and those who work less than 20 hours per week. Even though short-term and part-time workers are not counted for purposes of determining WARN Act coverage, they still must receive notice if affected by an otherwise qualifying plant closing or mass layoff.

For purposes of WARN Act notice, a plant closing is the shut-down of an employment site that will result in an employment loss for 50 or more employees during over 30-day period.

The WARN Act covers a mass layoff that will result in an employment loss at the employment site during any 30-day period for 500 or more employees, or for 50-499 employees if they make up at least 33 percent of the employer’s active workforce.

An employment loss for purposes of the WARN Act means either (1) a termination, other than a discharge for cause, voluntary departure, or retirement; (2) a layoff longer than 6 months; or (3) a reduction in an employee’s hours of work of more than 50 percent in each month over any 6-month period.

The WARN Act requires employers to provide 4 different notices—to the affected employees, to the employees’ union representative (if any), to the State dislocated worker unit, and to the chief elected official of the unit of local government. The Act’s regulations detail the information that must be included in each notice.

An employer who violates the Act by closing a plant or affecting a mass layoff without providing sufficient notice is liable to each aggrieved employee for back pay and benefits for the period of violation, up to a maximum of 60 days. An employer can reduce its liability, however, by paying employees during the period of the violation. For example, if an employer is worried about employee sabotage after announcing a layoff, the employer can lay off the employees immediately and pay in lieu of providing the WARN notice.

The Act provides exceptions for faltering companies, unforeseeable business circumstances, and natural disasters that, if met, would excuse an employer from providing the 60-day written notice required by the WARN Act.

If you are near or above the WARN Act’s 100-employee threshold, and you are considering closing a plant or laying off a large number of employees, it behooves you to check with employment counsel to determine whether the WARN Act will be triggered, and, if so, what specific notices you must provide and to whom.

photo credit: Looking Glass via photopin cc

WIRTW #279 (the “stand your ground?” edition)

Having recently settled a nasty harassment case on the day of trial, I read with great interest Molly DiBianca’s post, Why Employers Settle Lawsuits, at her Delaware Employment Law Blog. One of the key reasons Molly provides to consider settlement is the employer’s ability to return to normal:

Often times, employers find that the most attractive part of settlement is the ability to put an end to the drain on resources that litigation absolutely involves. Litigation is costly in attorney’s fees and other expenses. But there are other critical costs, too, including the time key decision makers must devote to the case and the general distraction that it causes in the workplace. Every hour spent in depositions and discovery is an hour that cannot be devoted to achieving the organization’s objectives. I’ve never had a client who didn’t take a deep sigh of relief once the case was resolved and they realize they’re able to return to running their business.

Molly’s thoughtful post is worth reading by any business facing the decision of whether to stand its ground and litigate, or move on and settle.

I’ve also previously covered this issue, in Fight or flight? When an employee sues you, should you litigate or settle?

Here’s the rest of what I read this week:

Discrimination

• Vance v. Ball State: the press miscoverage begins — from Walter Olson’s Overlawyered
• Are Employers Racist for Conducting Employment Background Checks? — from employeescreenIQ Blog
• The Government Checks Criminal Records. Why Can’t Private Employers? — from Forbes
• When a hostile work environment isn’t a hostile work environment — from Eric Meyer’s The Employer Handbook Blog
• Breast Feeding on the Job — Is a Mother Protected? — from Maryland Employment Law Developments
• What Not To Do When An Employee Is Pregnant — from Employer’s Corner Blog
• Q&A: Five Areas of Employment Discrimination Law Sparking Scholarly Interest — from Bloomberg BNA
• The Employment Non-Discrimination Act might actually pass in 2013 — from Employment Law Bits
• Paula Deen, Racism and Employment Lawyers — from The Cynical Girl

Social Media & Workplace Technology

• Facebook Introduces Instagram Video Which Promises New Social Media Headaches for Corporations — from from Technology Law Source
• Can You Control Your Employees’ LinkedIn Profiles? — from Evil HR Lady, Suzanne Lucas
• “Tweet” becomes an official word — from Ragan
• The Five Rudest Things You Can Do Online — from Wall Street Journal
• Laid-Off ESPN Employee Of 26 Years Fights Back On Facebook — from AOL Jobs

HR & Employee Relations

• Can I fire an employee by phone or email? — from Ask a Manager
• The Internal Struggle When We Must Make Make Ridiculous Terminations — from TLNT
• The New Rules of Tattoos In the Workplace — from The HR Capitalist, Kris Dunn
• How to “Listen In” to Workforce 2.0 — from Fox Business
• Rogue Employees - What to do? — from Smooth Transitions

Wage & Hour

• If Unpaid Interns Don’t Like Their Bosses, They’ll Hate Justice Alito — from Above the Law
• Smartphone Overtime: The FLSA Knows No Bounds — from Corporate Counsel
• The Perils of “Rewarding” FLSA Exemption — from Compensation Force
• Why the New Internship Ruling is Bad For College Students — from Inc.
• Employer Obligations Under the Affordable Care Act — from Inhouse Blog
• How Does the Fall of DOMA Impact the FMLA and Other Employee Benefits? — from Jeff Nowak’s FMLA Insights

Labor Relations

• The Next Frontier for NLRB: Videos & Photos in the Workplace? — from Dan Schwartz’s Connecticut Employment Law Blog
• Union 2.0: how a browser plug-in is organizing Amazon's micro-laborers — from The Verge
• SCOTUS to Decide Noel Canning (NLRB Recess Appointments) — from Phil Miles’s Lawffice Space
• Cheat Sheet: A guide to the NLRB recess appointment controversy — from Inside Counsel

Happy 75th Birthday, FLSA

75 years ago yesterday, President Franklin D. Roosevelt signed the Fair Labor Standards Act. By establishing a minimum wage, setting an overtime premium for any hours worked in excess of 40 in any week, and creating child-labor protections, the FLSA is one of the most important pieces of employment legislation ever enacted.

In the 75 years since its passage, the FLSA has morphed into one of the most confounding statutes with which employers must comply.

To celebrate the FLSA’s Diamond Jubilee, please take a walk through 10 of my greatest wage-and-hour hits from the archives (in no particular order):

1. Taking issue with the term “wage theft”
2. We ♥ our phones, but should employees be paid for using them off-duty?
3. Are employers screwing up the FLSA’s lactation mandate? Probably not.
4. The 5 little words that will cause your company a huge headache
5. SCOTUS rules pharmaceutical reps are exempt outside salespeople
6. “Eat Shop Sleep” underscores the importance of proactively addressing wage and hour issues
7. “If I could press a button and instantly vaporize one sector of employment law?”
8. Paying overtime to salaried, non-exempt employees
9. Administrative employees vs. the administrative exemption
10. The ticking time bomb of overtime

 

 

Vance v. Ball St. narrows employer liability for harassment

In its prologue to yesterday Supreme Court opinion in Vance v. Ball. St. Univ. [pdf], Justice Alito, writing for the five-member majority, frames the importance of the issue facing the Court:

Under Title VII, an employer’s liability for such har­assment may depend on the status of the harasser. If the harassing employee is the victim’s co-worker, the employer is liable only if it was negligent in controlling working conditions. In cases in which the harasser is a “supervisor,” however, different rules apply. If the supervisor’s harassment culminates in a tangible employment action, the employer is strictly liable. But if no tangible employ­ment action is taken, the employer may escape liability by establishing, as an affirmative defense, that (1) the em­ployer exercised reasonable care to prevent and correct any harassing behavior and (2) that the plaintiff unrea­sonably failed to take advantage of the preventive or corrective opportunities that the employer provided. Under this framework therefore, it matters whether a harasser is a “supervisor” or simply a co-worker.

Ultimately, the Court held that to qualify as a supervisor for purposes of vicarious liability for harassment, one must be able to impart a “significant change in [the] employment status” of the plaintiff:

An employer may be vicariously liable for an employee’s unlawful harassment only when the em­ployer has empowered that employee to take tangible employment actions against the victim, i.e., to effect a “sig­nificant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a signifi­cant change in benefits.”

Make no mistake, this is a huge victory for employers. Vicarious liability for unlawful harassment is a huge problem for employers. It means that that if the unlawful harassment occurred, the employer is liable, whether or not it knew about it, should have known about, or even took efforts to stop it from occurring. This case limits that vicarious liability only to those are in an actual position to affect the plaintiff’s terms and conditions of employment/

The majority made it clear that it was drawing this bright line to aid parties embroiled in harassment litigation:

The interpretation of the concept of a supervisor that we adopt today is one that can be readily applied. In a great many cases, it will be known even before litigation is commenced whether an alleged harasser was a supervi­sor, and in others, the alleged harasser’s status will be­ come clear to both sides after discovery. And once this is known, the parties will be in a position to assess the strength of a case and to explore the possibility of resolv­ing the dispute. Where this does not occur, supervisor status will generally be capable of resolution at summary judgment.

In other words, the court’s bright-line rule is meant to weed out for resolution those cases in which vicarious liability exists. As Kevin Russell correctly pointed out at SCOTUSblog, these cases “will provide judges greater authority to prevent the case from getting to a jury in the first place.”

To ensure that employers avail themselves of the benefits of this decision as often as possible, it is best that businesses review organizational charts, chains of authority, and job descriptions. Businesses should spell out, in detail, those supervisors who have the authority to effect a “sig­nificant change in employment status.” They should also spell out which supervisors have the express authority to hire, fire, demote, or reassign which employees. Businesses should spell out which supervisors lack that authority. By establishing clear chains of authority, employers will place themselves in the best position to limit the risk of vicarious liability.

The importance of Vance as a win for employers cannot be understated. When you couple this decision with the Court’s retaliation decision in Nassar, it’s fair to say that yesterday, employers had their best day in recent memory at the Supreme Court.

BREAKING: SCOTUS decides on but-for causation standard for retaliation under Title VII

In a busy, end-of-term day at the Supreme Court, the Court has issued its decision in University of Tex. S.W. Med. Ctr. v. Nassar. In this 5-4, partisan-line decision, the Court decided that but-for causation is the appropriate standard for retaliation claims under Title VII.

Thus, going forward, an employee cannot succeed on a Title VII retaliation claim without proving that the employer would not have taken the adverse employment action but for an improper, retaliatory motive.

Needless to say, this is huge win for employers by narrowing an employee’s likelihood of proving retaliation. It eliminates mixed-motive retaliation. Retaliation must be the cause for an employee to prove retaliation.

Aside from its legal implications, this case is significant because it is the first retaliation case that this Court has decided in favor of the employer.

Perhaps the most curious part of the opinion, however, comes from Justice Ginsberg, who calls for passage of a “Civil Rights Restoration Act” in light of this opinion and the opinion in Vance. Given the political climate in Congress, I’d say this is unlikely. The drumbeats of employment-law reform, however, will begin to beat loudly from the left.

The Court’s opinion is available for download here.