Employment Law Update - Fall 2014

NEW FALL DOL FASHIONS: BLUE COLLARS TO REPLACE WHITE

This Autumn the U.S. Department of Labor (“DOL”) is expected to release proposed amendments to its regulations under the Fair Labor Standards Act, modifying the rules used to determine whether certain “white collar” salaried employees will continue to be exempt from overtime pay. In response to a directive from President Obama, it is expected these changes will sharply reduce the number of salaried employees eligible for this exempt treatment. According to the Regulatory Agenda submitted by the DOL, we should expect to see the proposed new regulations by November of 2014 if not before.

The current regulations exempt certain professional, administrative, and executive salaried personnel from the overtime provisions of the FLSA. The federal regulations defining what it means to do “professional,” “administrative,” or “executive” work were last revised in 2004. At that time, the minimum salary required for these “white collar” exemptions was raised to $455 per week (under $24,000 per year). The DOL is almost certainly going to propose a substantial increase to this “salary basis” test along with changes to how an employee’s duties may affect whether they meet overtime exempt status.

Speculation as to the new weekly salary amount to be proposed in the regulations has run the gamut, but any substantial increase could have a dramatic impact on the number of salaried employees who may be exempt pursuant to the “white collar” exemptions. For example, an independent economic analysis of a proposed change in the weekly minimum salary concluded that approximately six million white-collar exempt workers would become non-exempt if the current $455 salary is adjusted upwards merely to compensate for ten years of inflation.

We do not know what the new regulations will propose, and the notice-and-comment process means that we should not expect final changes until late in 2015. But employers should take notice: prepare for a number of salaried exempt employees to become non-exempt, even if their duties and compensation remain the same.


MODEL COBRA NOTICES RELEASED

In light of new Obamacare Marketplace options for purchasing individual health insurance, the Department of Labor has released redesigned COBRA notices incorporating information about the new exchanges and the potential for paying less to continue health insurance coverage. The new notices, which are available on the DOL’s website in a downloadable format, come with a cover page explaining the new information and the procedure for giving legally compliant notices to COBRA-eligible employees. While the revised notices are currently awaiting final regulations approving the updated substance, employers should begin using the new notices immediately to ensure “good-faith compliance” with the DOL’s proposed requirements. Aside from the substance of the new notices, the COBRA notification process remains the same.

Members of the K&C Employment Team will be on hand at the November 13th showing of the 31st Annual Employment Law Update to present recent benefits developments to include COBRA, Obamacare, and the impact of recent same-sex marriage cases. As with all Update workshops, attendees are encouraged to bring all their benefits questions to be answered at the program.


THE ADAAA TURNS FIVE

While most employers won’t be inclined to break out the party hats and celebrate, the ADA Amendments Act (“ADAAA”) turned five this year. The primary goal of the ADAAA was to make it easier for individuals with disabilities to obtain protection under the ADA. Most experts agree, based on a review of the last five years, that the ADAAA is achieving its intended purpose.

Without question, the ADAAA has increased the number of individuals covered by the ADA, consequently increasing potential liability for employers. In fact, the number of ADA charges filed with the EEOC in 2013 exceeded the number filed in 2008 by over 6,500 and resulted in almost twice the monetary benefits to ADA claimants ($109.2 million in 2013 as compared to $57.2 million in 2008). Accordingly, the ADAAA now demands that the term “disability” be broadly construed by employers thus making it easier for employees to jump over their first hurdle to ADA protection.

With more employees deemed “disabled,” employers have shifted their focus to the interactive process to determine whether a reasonable accommodation can be provided that would allow the disabled employee to perform his or her essential job functions. Engaging in a proactive dialogue regarding accommodation and documenting such efforts may provide an employer with its most effective defense to an ADA claim. So, as we “celebrate” the ADAAA’s five-year milestone, employers are advised to revisit their policies on ADA compliance and ensure that managers are properly trained to handle accommodation requests from disabled employees.

WRONGFUL DISCHARGE CLAIM RECOGNIZED FOR AT-WILL EMPLOYEE

In Virginia, employees hired without an agreement to the contrary are generally “at-will” employees – meaning that they may be terminated at any time, for any lawful reason. However, Virginia courts have created a narrow exception to the at-will employment doctrine for terminations that are deemed to violate public policy. To take advantage of this narrow exception, a plaintiff must identify a particular Virginia statute and describe how his or her termination violated a public policy supported by that statute – often a difficult task.

In Altizer v. Town of Cedar Bluff, a former town clerk participated in a deferred compensation plan offered by the Town of Cedar Bluff. According to the terms of the plan, the Town was required to deposit amounts received from employee paycheck deductions for the deferred compensation plan into a trust account. The town clerk discovered that the Town held on to the employee funds for a period of time instead of making an immediate deposit to the trust account. Unable to resolve the issue internally, the town clerk’s husband, on his wife’s behalf, questioned the accounting practices at a public meeting before the Town Council.

The town clerk claimed that her subsequent termination violated Virginia public policy; however, she failed to cite a particular Virginia statute to support her claim. Instead of dismissing her claim, the Court took the initiative to track down a statute that prohibited the restriction of a local employee’s right “to express opinions to state or local elected officials on matters of public concern.” The statute also prohibited “acts of retaliation because the employee has expressed such opinions.” The Court then allowed the town clerk to move forward with her case under the narrow public policy exception to Virginia’s at-will employment doctrine.

While Virginia remains an at-will employment state, employers must take care to ensure that the driving force behind any termination is a lawful one. This involves not only determining whether the discharge would violate a policy contained in a state statute, but also avoiding any termination that would constitute illegal discrimination.


CHANGES AT THE EEOC

The U.S. Equal Employment Opportunity Commission (EEOC) is the principal federal agency tasked with enforcing the federal laws prohibiting employment discrimination. In recent months, there have been numerous changes in the leadership of the EEOC’s local offices. In Norfolk, there were three significant retirements. In July, the Norfolk Intake Supervisor, Cheryll Patterson, retired, followed by the August retirement of the longtime Director of the Norfolk Office, Herbert Brown. Then one of the Norfolk Office’s most experienced representatives, Program Analyst Marilyn Booker, announced her retirement effective September 30.

There were also significant changes in Richmond and Raleigh. The Director of the Richmond Office, Darrell Graham, was promoted to the Deputy District Director position in the Atlanta District Office, and the Director of the Raleigh Office, Thomas Colclough, was promoted to the position of Deputy District Director of the Charlotte District Office. While Mr. Colclough will retain his role as Director of the Raleigh Office, efforts are underway to replace the Directors of the Norfolk and Richmond EEOC Offices. In the meantime, Michael Johnson is the Acting Director of the Norfolk EEOC Office, and Rosalind Hall-Smith is the Acting Director of the Richmond EEOC Office.

Despite all the changes, it is business as usual at all of the EEOC Offices as they continue to process claims of employment discrimination. We look forward to the new head of the Norfolk Office, Michael Johnson, participating in the November showing of K&C’s 31st Annual Employment Law Update at which time he should be able to provide further insight into that Office’s enforcement plans.


FLSA LAWSUITS ON THE RISE

Wage-hour lawsuits filed under the Fair Labor Standards Act (FLSA) have reached a record high and are expected to continue to increase. From June 1, 2013, to March 31, 2014, more than 8,000 such FLSA lawsuits were filed. This trend, combined with a more aggressive enforcement stance from the Wage-Hour Division of the DOL, creates a growing risk for employers.

To help employers cope with this ever-increasing risk, the former Regional Enforcement Coordinator for the DOL Wage-Hour Division, Patricia Slate, will be at the 31st Annual Employment Law Update on November 13. She will be part of a workshop designed to provide a wage-hour “game plan” to avoid these costly lawsuits.


31ST ANNUAL EMPLOYMENT LAW UPDATE - YOUR EMPLOYMENT LAW “REALITY” CHECK

The reality of employment law is that it can be multifaceted, complex and difficult to understand. Being an reality TV star when it comes to the laws that govern the workplace requires employers to be on top of ever-changing state and federal employment laws. For 31 years, the Kaufman & Canoles Employment Law team has been educating employers on the complicated issues often faced when dealing with the realities of employment law. Keeping with tradition, this year’s seminar will feature speakers from relevant government agencies and highlight current hot topics. In addition, the very popular Answer Booth will be open as part of our guarantee to answer any and all employment law questions attendees may have. The 31st Annual Employment Law Update - Your Employment Law “Reality” Check will be held on Thursday, November 13, 2014 at the Virginia Beach Convention Center.

Topics include: ADA in a Changing Environment; Real Outrageous Employment Law Cases; Employee Handbooks; Workplace Harassment Today; Wage-Hour Compliance; Interviewing & Hiring, and more! Workshops will include presentations from a number of current and former representatives from federal and state agencies, including the EEOC, the DOL Wage-Hour Division, VEC and the Virginia Workers Compensation Commission.

The 31st Annual Employment Law Update will provide essential information for HR professionals and small business owners. Additionally, attendance at this conference qualifies for 6 credit hours toward PHR and SPHR Recertification through the Human Resource Certification Institute (HRCI). For more information or to register online, please visit www.kaufCAN.com or contact Andrea D. King at adking@kaufcan.com.
 


The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2017.

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