The Employer's Legal Resource - December 2008
Upcoming FMLA audio conferences
NEW FMLA REGULATIONS: Are you ready?
DSDA will present a three-part audio conference to get your company ready to meet the challenge. Each audio conference will begin at 2 PM CST and last for 1.5 hours. All you need is a phone line.
January 8 - FMLA Documents (policy requirements, DOL forms, etc.).
January 15 - How to operate day-to-day under the new regulations.
January 22 - Military Caregiver Leave and Qualifying Exigency Leave.
The first hour of each conference will be devoted to presentation of written materials by DSDA. The last half hour is for your questions. The audio conferences are free, but space is limited. For more information or to register your business for one of more of these sessions, contact Alessa at afrench@dsda.com.
New FMLA regulations
AND YOU THOUGHT NOTHING ELSE WOULD HAPPEN BEFORE OBAMA TOOK OFFICE
I had naively planned to write about the changes to the FMLA regulations, just published by the Department of Labor on November 17 and effective on January 16, 2009. However, as I sat down to write, all I could think of was the song from Love Story, "Where do I begin to tell the story . . .". Only, this is definitely not a story "of how great a love can be." This is a story of new regulations, almost six years in the making, and how they will forever change the lives of HR professionals and business owners everywhere.
The regulations are just under 200 pages. If, for your reading pleasure, you throw in the commentary provided by the DOL, you top 700 pages. The full text is accessible at http://edocket.access.gpo.gov/2008/E8-26577.htm. Ours is a simple e-newsletter, so addressing the literally hundreds of changes would crash your computer. Instead, this article will focus on whether your business is a covered employer. This should either give you a heads-up as to needed steps your company must take or allow you a sigh of relief. However, for most of you, I suspect it will be the former.
In the coming months, we will address many aspects of the new regulations. In addition, we are offering audio conferences on the new regulations. Details at the top of this e-newsletter.
Are you a covered employer? You are a covered employer, if:
- you employ 50 or more on each working day during each of 20 or more calendar workweeks in the current or preceding calendar year;
- you are a public agency, a public school, or a private school, regardless of the number of employees you have.
Remember, you can be a covered employer, requiring that you make certain decisions to comply with the FMLA, even though you have zero "eligible employees."
Are you involved in a joint employment situation? Do you hire temps? Do you outsource any administrative functions? If you think you escape the requirements of the FMLA because your business is structured in such a way that you fall below the 50 employee requirement, but you are integrated with other businesses, you may want to seek legal counsel about the application of the joint employment test.
The DOL knows American businesses are using temps. The new regulations contain such sentences as "For example, joint employment will ordinarily be found to exist when a temporary placement agency supplies employees to a second employer." 29 CFR § 825.106(b)(1). The DOL is also aware of the prevalence of outsourcing certain administrative functions. The DOL specifically addresses companies who contract with separate corporations to handle various administrative functions such as payroll, benefits, regulatory paperwork, and updating employment policies. 29 CFR § 825.106(b)(2). The DOL is calling these "Professional Employer Organizations" or PEOs.
In a joint employment situation, the employee is considered an employee of both the primary and the secondary employer for determining if the FMLA is applicable. You need to understand whether you are the primary or secondary employer because your obligations to the employee can differ.
Of course, the DOL has stated a general opinion on determining which is the primary and which is the secondary employer. "For employees of temporary placement agencies, for example, the placement agency most commonly would be the primary employer. Where a PEO is a joint employer, the client employer most commonly would be the primary employer." 29 CFR § 825.106(c).
What must covered employers do? If you are a covered employer, now is the time to start familiarizing yourself with the new regulations and/or seeking competent legal counsel to assist you in your journey. Again, covered employers have two real tasks. First, a covered employer must determine its policy and practice, including such decisions as whether to run unpaid FMLA leave concurrently with other paid forms of leave. Second, once the policy and practice have been established, covered employers have the daunting task of administering those policies and practices on a sometimes daily basis.
By Kristen L. Brightmire, kbrightmire@dsda.com
Vacation Policies
YOU GET TO MAKE THE RULES: YEAR END CARRY-OVER AND PAY OUT OF ACCRUED LEAVE.
It never fails, at the end of the year some of your employees have not taken all of their vacation time, sick leave or other paid time off accrued during the year. Frequently employees will ask to carry that time over to next year or be paid for it. What are your responsibilities and duties?
The short answer to the question is that you have to pay or allow carryover of accrued time off in accordance with whatever policy you have put in place. So, if your policy, written or verbal, allows employees to carry over vacation then you must act accordingly. On the other hand, if your policy prohibits such carry over, you must not allow it-for anyone. If you do not have a written policy or agreement, the employee will be considered to have earned that time as "wages," and must either receive payment for it or be allowed to carry it over to the next year.
Oklahoma law is pretty straightforward in this area. It goes without saying that an employer owes employees the "wages" they have earned. The law initially excepts items such as vacation, paid time off and sick leave from the definition of "wages." However, those "benefits" become "wages" as soon as they are accrued and payable under the terms of the employer's established policy. This means, you, the employer, get to make the rules as to when "benefits" become "wages," and thus the right of the employee. Generally, there are only two limits on this right to make the rules: 1) your rules may not be discriminatory, and 2) your rules may not be "after the fact."
For example, Oklahoma allows you to set limits on how much time off may be accrued, what may be carried over into the next year, and when the leave may be used. In other words, as the employer, you may require an employee to work a certain number of weeks before they acquire leave. You may also require them to use all of their leave by the end of the year or lose that which is acquired. But, if they have already earned it under your policy, you can not now change the rules and take it away.
The key is consistency. You can best achieve consistency with a written policy that is clearly written and always enforced.
The Bottom Line:
1) If you have a written policy that employees cannot carry over accrued vacation or leave, and you have followed it, then DO NOT allow an employee to carry over;
2) If you have a written policy that employees cannot carry over accrued vacation or leave, but you have not followed that policy, then you might allow carry over this year, but put a new policy in place which states that carry over is no longer allowed;
3) If you have a verbal policy or practice, act in accordance with that practice and then put a written policy in place; and
4) If you have no policy at all, allow carry over (or pay out) this year, but put a written policy in place for next year.
What do you do if you have no policy? You write one, have it reviewed, distribute it to all employees, and then have them sign an acknowledgment that they received the policy. The new policy needs to address how the benefit accrues and the terms under which it must be used, paid, and/or forfeited. The policy must be reasonable and cannot take away any time already converted to "wages" without compensating the employee for that time.
The roll out of new leave policies requires detailed thought in the areas of wage and hour laws, taxes, and accounting. However, in the long run, the time and effort will certainly be worth the effort to both you and your employees.
By Sharolyn C. Whiting, swhiting@dsda.com
Privacy, Part II
MONITORING AND SURVEILLANCE IN THE WORKPLACE
Last month, we discussed how an employer can maintain the right to monitor employee mail, electronic or hard copy, in the face of employee claims of a right to privacy. This month, we will look at the issues surrounding computer monitoring and searches, telephone monitoring, and video surveillance.
Computers. Generally, an employer has the right to screen computers provided in the work place, and even those employer-supplied computers that are used at home. This is true especially when the employer puts employees on notice, through an employee handbook policy, that personal use of company computers is prohibited. It is even better when the employee has signed such a policy. Most commonly, an employer searches a computer to figure out why an employee is not getting the work done or when the employer has received a tip that something's going on that should not be. These searches result in a wide variety of finds, from tax preparation software (it was not an accounting firm) to (most frequently) pornography.
These types of searches have been upheld by courts when challenged by the employee claiming a right to privacy. One court went so far as to find that employer searches of computers had become a "community norm." Another court, however, found an exception. It determined that stored communications with an employee's spouse and attorney were privileged. That does not mean you cannot search the computer - it just means you would not be able to use any information from those communications.
Telephones. Telephone monitoring, on the other hand, is not quite as employer friendly. As with email monitoring, telephone monitoring falls under the federal Wiretap Act. Telephone monitoring is most commonly used by businesses providing customer service via phone or call centers. Although the Wiretap Act allows unannounced monitoring of business related calls, we always recommend that you advise your employees if you will be recording and/or monitoring their calls. The Wiretap Act does not allow monitoring of personal calls. So, if you are listening to the calls you have recorded, or are listening to them in real time, and it becomes apparent that the call is a personal one - hang up.
Video. Video surveillance of employees in the workplace raises an additional issue. In addition to invasion of privacy, many employees claim that video surveillance violates the Fourth Amendment prohibition against unreasonable searches and invades the privacy of the monitored employee. Video surveillance, regardless of audio capabilities, is subject to the Fourth Amendment principles that protect individuals from unreasonable searches. This does not mean that video surveillance automatically violates the Fourth Amendment. The Fourth Amendment is only violated if the party under surveillance has a reasonable expectation of privacy in the area under surveillance. If there is not a reasonable expectation of privacy, there is no Fourth Amendment violation, regardless of the nature of the search.
To establish a reasonable expectation of privacy the employee must have a "subjective" expectation of privacy (the employee believes he is in a private area) that is "objectively" reasonable. Surveillance of areas open to the public or to fellow employees is always permissible because no expectation of privacy in these areas is reasonable.
Situations under which there might be a reasonable expectation of privacy could be when the employee works in an office that is out of the public view, and can and does close the office door for privacy during meetings or telephone calls. Under these circumstances, the expectation of privacy might be reasonable.
Some courts have held that there is a difference between workplace surveillance using a hidden camera, as opposed to a visible camera. Surveillance using visible cameras is usually upheld because the employees are assumed to be on notice of the surveillance and as a result have no reasonable expectation of privacy. Surveillance by hidden cameras, however, may present more of a threat to employee privacy, but are permissible when used in common or public areas because a reasonable expectation of privacy does not exist in those areas.
By Rebecca M. Fowler, rfowler@dsda.com
Eye on the Courts
Review of 2008 U.S. Supreme court decisions
The U.S. Supreme Court decided seven important labor and employment cases during 2008. Some cases favored employers and some cases favored employees, with no clear trend. Here is a summary:
Sprint/United Management Co. v. Mendelsohn, 128 S.Ct. 1140 (appeal from 10th Circuit) (February 26, 2008). Employers scored first with an important victory, as the Court, in a unanimous decision, held that a trial court is not required to admit "me-too" evidence - that is, testimony by non-parties - in discrimination cases. Rather, trial courts are to determine the admissibility of such evidence on a case-by-case basis. This case is important because, if trial courts were required to admit "me-too" evidence, then in every employment discrimination case an employer would have to litigate not only the decision being challenged by the plaintiff, but also the decision concerning the termination or other adverse employment action taken against the "me-too" witnesses.
Federal Express Corp. v. Holowecki, 128 S.Ct. 1147 (appeal from 2nd Circuit) (February 27, 2008). Employees evened the score when the Court held that the filing of a simple intake questionnaire with the EEOC may suffice for a timely charge of discrimination. This decision may permit informal filings with the EEOC to be recognized as a charge of discrimination.
CBOCS West, Inc. v. Humphries, 128 S.Ct. 1951 (appeal from 7th Circuit) (May 27, 2008). In another ruling disappointing to employers, the Court held that race retaliation claims are actionable under §1981 of the Civil Rights Act. Thus, retaliation claims can be brought under both Title VII and §1981. The ramifications of this decision can be far reaching, as §1981 does not contain some of the safeguards found in Title VII, such as timeframes for when a claim must be filed and pre-suit dispute resolution strategies that are spelled out in Title VII.
Meacham v. Knolls Atomic Power Laboratory, 128 S.Ct. 2395 (appeal from 2nd Circuit) (June 19, 2008). In still another victory for employees, the Court ruled that when older workers are disproportionately affected by employment decisions, the employer bears the burden of showing "reasonable factors other than age" were responsible for the decision.
Kentucky Retirement Systems v. EEOC, 128 S.Ct. 2361 (appeal from 6th Circuit) (June 19, 2008). Employers prevailed here, but barely, as the Court, in a 5-4 decision, held that the use of age as a factor in determining benefits in retirement or benefit plans does not automatically violate the Age Discrimination in Employment Act.
Chamber of Commerce v. Brown, 128 S.Ct. 2408 (appeal from 9th Circuit) (June 19, 2008). Still another employer victory as the Court rejected a California statute which attempted to restrict employer communications with employees concerning union organization. The Court held the statute was preempted by the National Labor Relations Act.
Metropolitan Life Insurance Co. v. Glenn, 128 S.Ct. 2343 (appeal from 6th Circuit) (June 19, 2008). Employees prevailed here, as the Court held that federal courts reviewing claim denials under an ERISA employee benefit plan should take into account any conflict of interest created by a plan administrator's dual role of both evaluating and paying benefit claims.
By Jon E. Brightmire, jbrightmire@dsda.com
Plan Limits
2009 Plan Limits
With the New Year approaching, it is time again to review the changes made to many dollar limits that apply to your retirement plans. While you need to be aware of all of the changes, there are three that will most affect your employees. Starting in 2009, participants may now contribute $16,500 in elective contributions (up from $15,500 in 2008). Additionally, for participants who are age 50 or older in 2009, they may contribute an additional catch-up contribution of $5,500 (up from $5,000). Finally a participant may receive a total of employee and employer contributions of $49,000 (up from $46,000).
By Anita K. Chancey at achancey@dsda.com
What's New at DSDA
ANNOUNCEMENTS
DSDA Attorney to premiere film at Sundance
The film Barking Water, written and directed by Sterlin Harjo of Tulsa and produced by DSDA's attorney Chad Burris, will premiere at the 2009 Sundance Film Festival January 15-25 in Park City, Utah.
Frankie is dying. Irene hasn't forgiven him. And they are racing against time to find their way home. Theirs is the story of love that never dies and the consequence of our actions. Frankie is sick and Irene is the only one there to help. He must go home one last time. And, like so many times before, Irene is extending herself beyond her common sense. The two set out on a journey that becomes more than getting home; confronting the past, love, understanding, and self discovery. Barking Water is a tale of great love that looks at what brings us all together. It's a tale of home...and what it takes to get there.
Starring Casey Camp-Horinek and Richard Ray Whitman, the film was shot in and around the cities of Ponca City, White Eagle, Holdenville, and Pawhuska, Oklahoma.
2008 Outstanding Service to the Public Award
The Oklahoma Bar Association has conferred the Outstanding Service to the Public Award for 2008 to DSDA attorney S. Douglas Dodd. Congratulations Doug!
DSDA has gone Green
Each of us has a responsibility to protect the environment as best we can. DSDA takes this challenge seriously and continues to explore ways to be "green".
The ABA and the U.S. Environmental Protection Agency (EPA) have designed a program to encourage law offices to take simple, practical steps to become better environmental and energy stewards. Law offices and organizations may participate by adopting best practices for office paper management or by joining at least one of three voluntary EPA partnership programs. DSDA has qualified as ABA-EPA Law Office Climate Challenge Partner.
Participating in the ABA/EPA program is but one step DSDA has taken to protect the environment. If you have questions, contact Linda C. Martin, head of our Environmental Law practice group, at lmartin@dsda.com.
Upcoming Events
Seminars and presentations
December 2, 2008.
Hilary L. Velandia and Laura Bachman will be presenting a seminar on state and federal immigration laws affecting Oklahoma immigrants and employers. This class will cover updates on the implementation of HB 1804, the Oklahoma Taxpayer and Citizen Protection Act, and an overview of the process for obtaining a temporary or permanent status under Federal immigration law. For more information or registration, go to http://www.tulsabar.com/.
December 4, 2008.
Jim McCann will be presenting "Deposition Skills" at the Tulsa County Bar Association at 1:00 p.m. For more information or registration, go to http://www.tulsabar.com/.
Michael Minnis will be leading a workshop for the Oklahoma Press Association in Tulsa covering open meetings and open records laws, libel, reporters' privileges, privacy suits, and more. For more information, go to http://www.okpress.com/.
December 5, 2008.
Sharolyn C. Whiting will be presenting "Recent Developments in Occupational Safety and Health Law" at the Oklahoma Bar Review CLE Employment Law 2008 seminar in Oklahoma City. For registration and more information, call (405) 634-1445.
December 8, 2008.
Leonard I. Pataki and Sharolyn C. Whiting will be presenting a seminar on OSHA Basics and Recent Developments 2008 at the Tulsa County Bar Association. For registration and information about continuing legal education, go to http://www.tulsabar.com/.
December 11, 2008.
Michael Minnis will be leading a workshop for the Oklahoma Press Association in Norman covering open meetings and open records laws, libel, reporters' privileges, privacy suits, and more. For more information, go to http://www.okpress.com/.
January 8, 2009.
Kristen L. Brightmire and Courtney L. Bru will be presenting an audio conference on the New FMLA Regulations. This is the first of a three-part series. For more information or to sign up, please contact Alessa at afrench@dsda.com. Space is limited for this free audio conference.
