The Employer's Legal Resource - January 2011
|
January 2011 Wage and Hour After reading the first two articles in this series you've determined that you have made some improper deductions from the salary of one or more employees who you intended to be exempt. Now what happens? Generally, an employer who makes improper deductions from an exempt employee's salary will lose the exemption if the facts indicate that the employer did not intend to pay the employee on a salary basis. An actual practice of making improper deductions will establish that the employer did not intend to pay employees on a salary basis. Some courts have even ruled that being subject to a policy allowing impermissible deductions is sufficient to lose an employee's exempt status, even though an employee is never actually affected by the policy. Other courts have ruled that a deduction must actually be made before exempt status is affected. The factors considered in determining whether an employer has an actual practice of making improper deductions are: 1. The number of improper deductions made, particularly when compared to the number of employees and the reasons for making the deductions. 2. The time period during which the employer made the improper deductions, the number of employees whose salaries were impermissibly reduced, and the geographic location of those employees. 3. The number and geographic locations of the managers responsible for taking the improper deductions. 4. Whether the employer has a clearly communicated policy permitting or prohibiting improper deductions. Generally, if it is established that the employer has an actual practice of making improper deductions, the exemption is lost during the time period in which the improper deductions were made, for the employees in the same job classification, and working for the same managers responsible for the actual improper deductions. This means those employees must be paid the overtime premium rate for all hours worked in excess of 40 per week. Employees in different job classifications or who work for different managers will not lose their status as exempt employees. On the other hand, if an employer has a clearly communicated policy that prohibits improper pay deductions, provides a complaint mechanism, reimburses employees for any improper deductions and makes a good faith commitment to comply in the future, the employer will not lose the exemption. The best evidence of clearly communicated policy is, of course, a written policy that was distributed to employees prior to the improper pay deductions. This can be accomplished by, for example, providing a copy of the policy to employees at the time of hire, publishing the policy in an employee handbook or publishing the policy on the employer's intranet. In addition, the regulations adopted by the U.S. Department of Labor provide a safe harbor for employers who make an impermissible deduction, allowing them to correct the error under certain circumstances and preserve the employee's exempt status. The exemption will not be lost if the impermissible deduction is inadvertent, or is made for reasons other than lack of work, and the employer reimburses the employee for such deductions and promises to comply in the future. The DOL interprets its "window of correction" regulation to be limited to the situation where the employer has exhibited an "objective intention" to pay its employees on a salaried basis. By Rebecca M. Fowler rfowler@dsda.com
As more and more Americans spend more and more time social networking, employers are beginning to draft social networking policies designed to prohibit or regulate this conduct, both in the workplace and beyond. These policies cannot interfere with employees' Section 7 rights under the National Labor Relations Act, 29 U.S.C. §§ 151 et seq. ("NLRA"), but recent activity by the National Labor Relations Board ("NLRB") has given employers new guidance when drafting policies. Section 7 of the NLRA provides that "[e]mployees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection...." 29 U.S.C. § 157. As the highlighted language demonstrates, Section 7 protects more than just union organization activities or activities by unionized employees. It also protects "concerted activities" undertaken by non-union employees for their "mutual aid or protection." Significantly, whether conduct amounts to protected "concerted activity" is a "factual" determination, "based on the totality of record evidence." See e.g., Myers Industries, 281 NLRB 882 (1986). There must be some "linkage to group action." In other words, the activity must be "engaged in with or on the authority of other employees, and not solely by and on behalf of the employee himself." However, this does not mean that activity undertaken by an individual employee does not qualify as protected "concerted activity." The NLRA protects the individual employee, who is not a designated spokesman, but who brings a work-related complaint to the attention of management. It also applies in "those circumstances where individual employees seek to initiate or induce or to prepare for group action, as well as individual em ployees bringing truly group complaints to the attention of management." In both situations, a significant factor is whether the individual employee has discussed his or her concerns or activity with other employees. On October 27, 2010, the National Labor Relations Board filed a Complaint against unionized employer American Medical Response of Connecticut, Inc., Case No. 34-CA-12576. American Medical maintained a "Blogging and Internet Posting Policy" which, among other things, prohibited employees from making "disparaging, discriminatory or defamatory comments when discussing the Company or the employee's superiors, co-workers and/or competitors." In November 2009, American Medical notified a union member employee that she would be required to participate in an investigatory interview. Fearing that the interview would result in discipline, the employee requested union representation during that interview. Her request was denied, and the NLRB alleges that the employee's supervisors threatened her with discipline for her request. According to the NLRB Complaint, the employee subsequ ently "engaged in concerted activities with other employees by criticizing [her supervisor] on her Facebook page." The employee was terminated approximately three weeks later. The NLRB maintains that the employee was terminated as a result of her Facebook activities "and to discourage employees from engaging in these or other concerted activities," and that both actions violate Section 7. A hearing is set for January 25, 2011. Notably absent from the Complaint are any allegations that the employee discussed the matter on Facebook with coworkers or any description of the type of "criticisms" the employee shared. Nevertheless, this development is important for all employers who implement policies addressing employees' social networking activities. While employers, particularly private employers, are generally free to regulate social networking conduct as a term and condition of employment, employers must scrutinize their policies and examine their practices to determine whether they may be interpreted as interfering with or "chilling" Section 7 rights. Employers are strongly advised to draft social networking policies that are neutral in terms of the substantive content prohibited. In other words, employers are advised to prohibit conduct targeted at coworkers or management, without regard to the particular nature or type of comments made. Employers are further advised to draft policies that address numerous types of unwanted social networking activities in one policy. When a policy prohibits disparaging conduct as well as discriminatory conduct and/or the disclosure of proprietary or confidential information, it is less likely that the policy will be construed as interfering with Section 7 rights. However, when determining whether social networking activities qualify as protected "concerted activity" under the NLRA, employers should examine the substantive content of the postings. If the comments or content can be construed as invoking Section 7 rights, the employer should carefully consider the appropriate disciplinary action to be taken, if any. By Courtney Bru, cbru@dsda.com
Recently, the Equal Employment Opportunity Commission issued an informal advisory letter serving as a reminder to employers of the proper role of criminal histories and convictions in employment screening. The EEOC monitors the exclusion of applicants due to a criminal history or background because the practice can lead to employment discrimination in violation of federal law. Employers are free to consider an applicant's criminal background during the hiring process. However, if an employer excludes applicants because they have criminal records and this practice disproportionately excludes African Americans, Hispanics, or other protected groups, the employer must show that these exclusions are job related and consistent with business necessity. If an employer's applicant screening practices do not meet this standard, the practices may be found discriminatory and unlawful. Employers must consider the nature of the job, the nature and type of offense for which the person was convicted, and how long ago the conviction occurred. A practice of not hiring anyone who was ever convicted of a crime will not meet this standard if it disproportionately excludes members of a protected class (e.g. African Americans, Hispanics). Ideally, employers should individually consider each application revealing a criminal conviction. However, if this is not practical, employers may apply a carefully-tailored rule to screen applicants who are likely to pose an unacceptable risk in particular positions. Shortly after the general letter regarding criminal histories, the EEOC issued a second informal letter opinion addressing its previous opinion as it relates to the recently-enacted Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) which requires an applicant to undergo a state and national criminal history background check to be eligible for license and registration. The EEOC was careful to note that, to the extent the two laws might be inconsistent, it did not trump the SAFE Act. However, it did counsel that employers subject to the SAFE Act still allow an applicant a reasonable opportunity to explain or dispute any information revealed in the criminal history. Our employment group is always available for any questions or concerns regarding employment screening and the hiring process. By Ken Short, kshort@dsda.com
Credit Checks For years, the EEOC has often viewed what appear to be benign employer practices and found underlying discriminatory impact. Well, the agency is trying its hand at proving an employer's use of credit checks constitutes has an adverse discriminatory impact upon Black applicants and incumbents. On December 21, the EEOC sued Kaplan Higher Education in Ohio alleging that its use of credit histories is not job related and consistent with business necessity. The EEOC further alleges these credit checks have had an adverse impact based upon race. The EEOC is not alone. Last month, a class action was filed against the University of Miami alleging that its use of credit histories in screening applicants had a disparate impact on African Americans and Latinos. While it could be some time before we have an answer from the Courts, it is a reminder that employers should be vigilant in ensuring that all hiring criteria it uses be both job-related and consistent with business necessity. NOTE: For a discussion on the right way to conduct background checks, see our article in the December Employer's Legal Resource by clicking here. By Kristen L. Brightmire, kbrightmire@dsda.com
DOT Drug and Alcohol Testing Please note that the DOT did not change the rates for required drug and alcohol random testing for 2011. For more information, click here. By Kristen L. Brightmire, kbrightmire@dsda.com
What's New oba cOMMITTEE aPPOINTMENT MIKE WOFFORD IN THE NEWS Mike Wofford was recently elected as the chair-elect of the Environmental Law Section of the Oklahoma Bar Association. Mike Wofford is editor of the updated "You're 18 Now. It's Your Responsibility!", a legal guide for young adults in Oklahoma. The guide covers such topics as employment, contracts, domestic law, criminal law, driving and traffic accidents, medical treatment and privacy, consumer credit and buying a car. This is a project of the OKlahoma Bar Association and its Law Related Education committee. The new guide will be available for distribution during the first quarter of 2011. If you would like copies for schools, churches, youth organizations, or your own relatives and friends, call Mike at 405-319-3504 or email or contact Debra Jenkins of the Oklahoma Bar Association.
Dates to Remember January 13, 2011 Kristen Brightmire will be speaking to the Oklahoma Safety Council on Hiring and Firing in Oklahoma. For more information, go to http://www.oksafety.org/. January 31, 2011 Deadline to furnish Form W-2s to your 2010 employees. |
