Labor & Employment Insights

In NJBIA’s recent article, Kathleen Connelly, a member of Lindabury’s Employment Law practice group, discusses the U.S. Department of Labor’s (DOL) new test to determine if a student intern is an employee, which may make unpaid internships a more viable option for employers.

“By no means is this a green light for employers to avoid their minimum wage and overtime requirements by masking their employees as unpaid interns,” Connelly said. “I think the best way to approach it is for the employer to stand in the shoes of the intern and craft the internship in such a way that it provides real value to the intern that is linked to the intern’s course of study.”

To access the full article click here.

The change in administrations has brought a series of reversals of the Obama era’s less than employer-friendly positions by the U. S. Department of Labor (DOL) and the National Labor Relations Board (NLRB or Board). This article highlights some of the favorable recent developments from these agencies that may be a harbinger of better things to come in 2018.

DOL REINSTATES 17 FAVORABLE OPINION LETTERS WITHDRAWN BY THE PRIOR ADMINISTRATION

For many, many years, the DOL issued official written Opinion Letters in direct response to employer questions regarding the interpretation and implementation of federal labor laws. Although they do not create law, Opinion Letters set forth the DOL’s position on how the Fair Labor Standards Act (FLSA) and other laws apply to very specific circumstances presented by employers seeking the DOL’s guidance. Under the FLSA, an employer who relies in good faith upon an Opinion Letter issued by the DOL is shielded from liability for violations of the minimum wage and overtime requirements of the FLSA, so long as the facts pattern surrounding challenged practice is identical to that contained in the relied-upon Opinion Letter.

On August 29, 2017, the Office of Management and Budget (“OMB”) announced that it was immediately suspending the revised Equal Employer Information Report (“EEO-1 Report”), which included burdensome pay reporting obligations for employers. Previously, the EEO-1 Report directed federal contractors and employers with 100 or more employees to report annually the number of individuals that they employ by job category, race, ethnicity and gender. The proposed EEO-1 revisions, however, expanded the information collected to include pay ranges and hours worked. This expansion was aimed at identifying pay gaps and focusing employers on the issue of equal pay between male and female employees.

In response to the proposed reporting requirements, employers expressed concern over privacy and confidentiality issues surrounding the disclosure of pay data and also questioned the overall utility in collecting such data. In suspending the revised EEO-1 Report, the OMB recognized similar concerns, stating that some aspects of the proposed collection of information “lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.” Accordingly, the OMB directed the EEOC to publish a notice advising that the proposed wage and hour reporting requirements were immediately suspended and further directed the EEOC to provide additional information for its future consideration.

As a result of this directive, employers can put aside plans to collect data reflecting pay ranges and hours worked for the time being. However, in doing so, employers should be mindful to stay abreast of any updates in reporting requirements following any further review by the OMB. In addition, employers are still required to submit EEO-1 Reports using the previously approved form, which requires employers to disclose their employees’ race, ethnicity, and gender by job category. The deadline for submission of this report remains March 21, 2018.

Employers who take proactive measures and engage in an interactive process with their employees could avoid liability in disability discrimination lawsuits.  One recent case, Grau v. AHS Hospital, Docket No.: A-3959-15T1, sets forth a good model of how employers should approach an employee’s demand for disability accommodation for purposes of avoiding liability.  Grau involved a long time employee, a hospital nursing assistant, who suffered a shoulder injury after she fell at her workplace.  The employee’s physician cleared her to work on light duty, and restricted her from lifting and pushing, key functions of her daily work activities.  Despite the fact that she could not perform these key functions, the employer accommodated the employee by placing her on a light duty desk position, but could only do so for ninety days.  The employer had also tried to find the employee a permanent sedentary position but no such positions were available.  It also tried to retrain the employee for a computer job, but the employee could not be retrained because of her limited ability to use a computer.  Because the employee was unable to find another position at the hospital, the employee retired and successfully applied for social security benefits.  She thereafter filed a disability discrimination lawsuit against the hospital system, which was ultimately dismissed on summary judgment by the trial court.  The employee appealed and the Appellate Division affirmed the dismissal, agreeing with the trial court that the employer had offered the employee sufficient reasonable accommodation, actively engaged with her in the interactive process, and ultimately finding that the employee was unable to perform the essential functions of the job.  The court agreed that even with reasonable accommodations, the employee could not perform the job of a nursing assistant in her disabled state, and was satisfied that the employer had no other open positions for which the employee was qualified. In other words, the hospital had done absolutely all it could to reasonably accommodate the employee, but her condition would not allow her to perform the essential functions of the job. It would benefit all employers facing claims for accommodation based on disability to immediately consult qualified employment law counsel, so that reasonable accommodations may be planned, and the interactive process could be commenced with the employee.  As the Grau case demonstrates, a proactive strategy could avoid substantial liability and headaches down the road.

Lindabury’s Labor and Employment Law partner, John H. Schmidt, was interviewed by New Jersey Business Magazine‘s Editor-in-Chief Anthony Birritteri for the article published in the May 2017 issue. Their discussion focused on the fine lines of major issues employers face regarding diversity and discrimination in the workplace and in the hiring process.

New Jersey’s Law Against Discrimination (NJLAD) is among the strongest anti-discrimination laws in the country and according to John Schmidt, “The New Jersey LAD is much broader than the provisions of Title VII because the latter deals with race and sexual discrimination. On the federal level, there is a separate statute for disability discrimination, as an example. In fact, since the mid-to-late 1980’s, most plaintiff attorneys have decided it is to their advantage to bring claims under the NJLAD”

Most companies claim they are equal opportunity employers and have been recognized by the top diversity lists. John Schmidt cautions; “If you select a particular class of individuals [a certain minority group] to hire – giving preference to them- you could be in violation of the NJLAD and federal laws.”

By now, most employers had already implemented or were posed to implement the United States Department of Labor’s (DOL) new overtime rules aimed at swelling the ranks of employees eligible for overtime payments. The rule increased the salary threshold to qualify for the executive, administrative or professional overtime exemptions from $23,660 to $47,476 per year. As a consequence, employers were faced with the prospect of many employees who were previously exempt from overtime requirements being overtime eligible when the rule were scheduled to go into effect on December 1, 2016.

However, in a surprise 11th hour development last Tuesday, a Judge in the U.S. District Court, Eastern District of Texas issued a national preliminary injunction staying implementation of the new DOL rules. The injunction is not a permanent injunction, but merely preserves the status quo until the court can review the merits of arguments by the challenging parties that the DOL overstepped its authority in raising the salary basis test for exemption. Pending a further decision from the Eastern District or an appellate court, employers need not comply with the new salary requirements. While employers generally champion the ruling, the DOL is expected to file an appeal.

What’s an employer to do? For those employers who had yet to take final steps aimed at meeting the new overtime requirements, further action should be delayed until this issue winds its way through the courts. Unfortunately, in anticipation of the regulations many employers notified salaried staff that going forward they would be paid on an hourly basis and be overtime eligible, or alternatively, bumped up the salary of key employees to meet the increased salary basis and preserve the overtime exemption, actions that may not be readily reversed by the employer. Employers should consult with employment law counsel for further guidance on this new development. In all cases, employers cannot assume that the new overtime rules are permanently shelved, and should have a compliance plan in place should the new regulations be revived.

Earlier this month, the New Jersey State Assembly reviewed Assembly Bill 4119 (“A-4119”), which would amend the New Jersey Law Against Discrimination to prohibit employers from seeking compensation history from prospective employees. The purpose of A-4119 is “to strengthen protections against employment discrimination and thereby promote equal pay for women[.]”

Specifically, A-4119 provides that an employer may not seek the salary history of a prospective employee until an offer of employment is extended to the candidate. The Bill further prohibits an employer from requiring an employee to disclose information about either his or her own wages, including benefits and other compensation, as well as the wages of any other employee. Additionally, A-4119 provides that an employer may not require that a prospective employee’s wage or salary history meet any minimum or maximum criteria as a condition of being interviewed or as a condition of being considered for an offer of employment. Under A-4199, an employer is prohibited from taking any retaliatory action against an employee or candidate based upon compensation history or any employee’s opposition to a request for salary information.

The Bill, however, does not prohibit prospective employees from volunteering compensation history provided that the disclosure is not coerced by the employer. An employer may only confirm or permit a candidate to confirm compensation history after making an offer of employment.