Download 2017 Bills: Pay / Benefits / Wage and Hour

Employment Law Update – What
Employers Need to Know in 2017
William T. (Tommy) Simmons
Legal Counsel to Commissioner Ruth R. Hughs
Commissioner Representing Employers
Texas Workforce Commission
[email protected]
Book: www.twc.state.tx.us/news/efte/tocmain2.html
Web app: texasworkforce.org/tbcapp
1-800-832-9394; 1-512-463-2967
Increased Agency Enforcement
• DOL & IRS: teamwork to discourage misclassification of
employees as independent contractors
• DOL has hired hundreds of new wage and hour investigators
• USCIS / ICE have ramped up their I-9 audits – less lenience
toward I-9 violations (even clerical errors)
• OSHA is getting more aggressive toward retaliation issues
• EEOC issued new regulations for the ADAAA – focus is on
reasonable accommodation, not whether something is a
disability
• EEOC is also looking closely at discrimination against the
unemployed
EEOC Guidelines on Use of
Arrest and Conviction Records
• http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm
• If criminal background exclusion has disparate impact, EEOC requires
“targeted screen”:
– Nature/gravity of crime, time passed, specific duties
• Excluded applicants get the following:
– Individualized assessments (is the hiring standard “job-related &
consistent with business necessity”?)
– Opportunity to explain why exclusion should not be applied
– Consideration by employer of whether any new information from
the applicant justifies an exception
• Remember FCRA requirements: prior notice and written authorization
Sexual Orientation/
Gender Identity Issues
• Discrimination on the basis of sexual orientation and
gender identity is included in the category of gender
discrimination
• EEOC and courts generally follow the “failure to conform
to gender stereotypes” rationale (Macy v. DOJ (Appeal No.
0120120821 - 2012); EEOC v Boh Brothers Const. Co.,
L.L.C., 731 F.3d 444 (5th Cir. 2013))
NLRB on Social Media
• NLRB has questioned employer policies regarding
employees’ comments about the work or the company on
social media sites
• No real changes to the labor laws – what was protected
activity before is still protected, while what was unprotected
before is still unprotected
• NLRB’s focus is on the primary intent of the posting – if it
relates to the terms and conditions of employment, chances
are it will be protected
• The law does not protect violations of others’ rights, such as
statements that are themselves defamatory, discriminatory,
or create a hostile work environment that would violate EEO
laws
• Theft of company secrets is of course not protected activity
New Test for Interns
Glatt v. Fox Searchlight Pictures, Inc., 791 F.3d 376 (2d Cir.
2015), amended by 2016 WL 284811, at *5 (2d Cir. Jan. 25,
2016) gives a new seven-part test focused on internships:
• No expectation or promise of compensation whatsoever
• Training similar to that given in an educational environment,
including clinical and other hands-on training
• Tied to the intern's formal education program by integrated
coursework or the receipt of academic credit
• Accommodation of the intern's academic commitments by
corresponding to the academic calendar
New Test for Interns (cont’d)
• Duration is limited to the period in which the intern
receives beneficial learning
• Intern's work complements, rather than displaces, the
work of paid employees while providing significant
educational benefits to the intern
• No expectation by either party that the internship will turn
into a paid job at the conclusion of the internship
• This seven-part test was adopted by the 11th Circuit in
Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199 (11th
Cir. 2015)
Other Significant Court Cases
• Damages for pain and suffering and punitive damages are
not recoverable under the ADEA for either age
discrimination or retaliation – Vaughan v. Anderson
Regional Medical Center, 2016 U.S. App. LEXIS 22412 (5th
Cir. 2016)
• Damages for emotional distress are recoverable in
retaliation claims under the FLSA – Pineda v. JTCH
Apartments, L.L.C., 2016 U.S. App. LEXIS 22569 (5th Cir.
2016)
• Proof of replacement with non-minority individual not met
in case involving merger of one job into another job with
higher requirements – Dallas I.S.D. v. Allen, 2016 WL
7405781 (Tex. App. - Dallas 2016)
Other Significant Court Cases - 2
• Whistleblower protections: reports to internal investigators
are not to “appropriate law enforcement authorities”, but
reports to a school district’s own police department are –
Connally v. Dallas I.S.D., 2016 WL 7384188 (Tex. App. – El
Paso 2016)
• Whistleblower protections: “adverse personnel action” can
stem from an “employee coaching” form that was
unreasonable in various ways and also from an adverse
change in the employee’s work schedule - 2017 WL 511196
(Tex. App. – Dallas 2017)
Other Significant Court Cases - 3
• Proof of bias: EEOC’s offer to prove that the employer’s
hiring officials were motivated by bias against those with
hearing impairments, on the basis that such bias is held by
many in society, was unsuitable in the absence of proof that
any of the employer’s employees harbored such bias – EEOC
v. S&B Industry, Inc., 2017 U.S. App. LEXIS 9259 (N.D. Tex.
2017)
• FMLA leave / availability for work: non-working employee
out on FMLA leave who files an unemployment claim is not
“able and available” for work, as every claimant must be –
TWC v. Wichita County, Texas 2016 WL 7157247 (Tex. App. –
El Paso 2016)
Action on Proposed Salary Rule
• New U.S. Department of Labor regulations pertaining to
salaried exempt employees were scheduled to take effect
on December 1, 2016, but a federal court issued a
nationwide injunction on November 22, 2016 preventing
DOL from enforcing the rule
• New minimum salary for white-collar exempt employees
would have been $913/week ($47,476/year)
• The court ruled that DOL exceeded its authority
• That rule is unlikely to return in that form anytime soon
Exempt White-Collar Employees
• Executive, administrative, professional, outside sales
representative, computer professional
• Both salary and duties tests must be satisfied
• Minimum salary - $455/week
• Duties test – focus is on “primary duty” of exempt work –
exempt employees customarily and regularly perform an
exempt duty as their primary duty
• Discretion and independent judgment as to the details of
the work
Salary Basis Test
• True salary of at least $455/week
• No partial-day deductions
• Partial-week deductions only if specifically
allowed (absences due to personal business,
medical reasons, unpaid suspensions)
• Special exception for FMLA
• Special rules apply for governmental employers
• Extra pay for extra work is OK
Problem: Improper Wage
Payments
• Failure to pay minimum wage
• Failure to properly track all time worked
• Failure to pay overtime
– Improperly classifying non-exempt employees as exempt
in order to save on overtime pay
– Allowing employees to work “off the clock” - never
allowed, even if employee “agrees”
• Failure to pay according to the wage agreement that was in
effect when the work was performed
• Failure to pay fringe benefits that are promised in writing
• Failure to get written authorization for wage deductions
that are not ordered by a court or specifically mandated or
authorized by a law
Minimum Wage – Allowable
Deductions
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payroll taxes and other legally-required deductions
court-ordered garnishments (child support)
meals, lodging, and other facilities
voluntary wage assignments, loans, and advances
vacation pay advances
uniforms and uniform cleaning costs *
tip credits
union dues
cash losses due to misappropriation *
Keep the Texas Payday Law in mind!
Hours of Work
• Includes all time during which the employee is at the
disposal of the employer, i.e., “suffered or permitted to
work”
• Waiting or on-call time
• Breaks (rest breaks = work time; meal breaks ≠ work
time if the employee is relieved of duties)
• Sleeping time
• Preparatory and concluding activities
• Time spent in meetings and training programs
• Travel time – includes travel between jobsites and extra
travel time out of town
• Time worked does not include paid leave or paid
holidays
Voluntary or Unauthorized
Overtime
• If overtime is worked, employer must pay for it
• Whether it was authorized or wanted is irrelevant
• Employer may handle unauthorized overtime as a
disciplinary matter
• Employees may not
voluntarily give up
the right to overtime
pay
– agreements to
contrary are void
• No working “off
the clock” allowed
Calculating Overtime Pay
• Hourly: time and a half over 40 hours
• Salary: salary ÷ number of hours the salary is intended to
compensate = regular rate
– Regular hours < 40: add regular rate for each hour up to
40, then pay time and a half for hours over 40
– Regular hours = 40: time and a half
– Regular hours > 40: pay hours from 40 up to regular
schedule at half-time, then time and a half past that
– Irregular hours: regular rate = salary ÷ total hours,
then pay half-time for all hours over 40
• Other pay methods: regular rate = total pay ÷ total hours;
add half the regular rate for each overtime hour
Pay Agreements
• verbal or written
• hourly, daily, weekly, monthly, piece, job, book, or
commission rates, or a combination of those
• the more complicated the arrangement is, the more
important it is to put it in writing
• methods and rates of pay may be changed, but never in
such a way that a retroactive pay cut results
Paying on Time
• No specific penalty for paying late
• Employer cannot hold paycheck pending return of items or
repayment of loans
• Employer cannot hold paycheck pending submission of
timesheets, unless there is no way to calculate pay
otherwise
• Excessive late payments may lead to bonding requirement
or administrative penalties in repeated cases
Final Pay
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Must include all components of final pay
Layoff or discharge: within six calendar days of discharge
Voluntary quit: by next regularly-scheduled payday
Exception: commissions, bonuses, and fringe benefit
payments covered by written contract, policy, or agreement
– simply follow the agreement and the timeline in it
• Nature of work separation is determined by TWC’s rules on
unemployment claims
Final Pay – Things to Avoid
• Do not “hold” the final paycheck past the pay deadline
• Make only the deductions that are mandatory or that have
been specifically authorized
• Installment payments: lump-sum deductions of loan, wage
advance, or overpayment balances are allowed only if the
written wage deduction authorization agreement allows
them (thus, be careful before ever loaning or advancing
money to employees)
Minimizing Risk of Wage Claims
 Have clear written wage agreements
– Best evidence rule: whoever has the best evidence of the
wage agreement or of time worked will prevail on those
points
– Written wage agreement and good time records avoid
confusion and misunderstandings
 Get written authorization for any deduction that is not
ordered by a court or required by a law
 Keep documentation or get receipts for all wage payments,
especially cash!
Federal Legislation
• HR 122 - minimum wage would be based on the federal
poverty threshold for a family of 4, as determined by the
Bureau of the Census
• HR 1180, S 801 - would amend the FLSA to allow
compensatory time for employees in the private sector
 HJR 42 - invalidated the rule submitted by the Department
of Labor relating to drug testing of unemployment
compensation applicants (signed into law on March 31,
2017); DOL will probably draft a completely new regulation
• S 44, S 345 - would enhance the existing non-retaliation
provisions relating to equal pay requirements
2017 Bills:
Civil Rights - Discrimination
• HB 192 – no housing discrimination due to sexual
orientation or gender identity or expression
• HB 225, SB 165 – no employment discrimination due to
sexual orientation or gender identity or expression
• HB 290 – extensive pay discrimination legislation
• HB 1018 – no insurance discrimination on basis of sexual
orientation or gender identity or expression
• SB 223 – adoption of federal statute of limitations for pay
discrimination claims into Texas law by inserting language
similar to federal law (Lily Ledbetter Fair Pay Act) into
Chapter 21 of the Texas Labor Code to align Texas law more
closely with federal law
2017 Bills:
Employee / Family Leave
 HB 88 – equal leave rights for foster parents (passed the
House) – effective September 1, 2017
• HB 656 – family and medical leave for employees; wage
replacement benefits paid by the state; new payroll tax on
employees to pay for the benefits
• HB 718 – FMLA-style leave for employees – substantial
penalties for non-compliance
• SB 191 – school and career-related leave for employees with
respect to children and grandchildren
• SB 285 – time off from work to obtain an election ID (“voter
ID”)
2017 Bills:
Human Resources – General
• HB 252 – food and general retail store employers must give
two weeks’ advance notice of work schedules
• HB 317, HB 334 - no consideration of credit reports in
employment decisions
• HB 548 – would “ban the box” on job applications, i.e.,
prohibit questions on criminal history until a tentative job
offer has been made
• HB 577 – would ban “ban the box” ordinances statewide
2017 Bills:
Human Resources – General - 2
• HB 742 – strengthens existing breastfeeding rights laws
• HB 1104 – protects from liability any cosmetologists who
report sexual assault or domestic violence they hear about
• HB 1987, SB 75 – parental consent required for a minor to
join a labor union (SB 75 passed the Senate – stopped in the
House)
 SB 745 – excludes services of temporary staff from
temporary help firms from the sales and use tax (sent to the
Governor for signing)
2017 Bills:
Immigration / E-Verify
• HB 765 - political subdivisions must use E-verify
• SB 23, SB 254 - state contractors must use E-verify (SB 23
has passed the Senate – stopped in the House)
• HB 1453 - state contractors and political subdivisions must
use E-verify
• HB 3792 – prohibits knowing employment of unauthorized
workers and allows suspension of licenses for knowingly
employing unauthorized workers
• SB 85 - state contractors and state grant recipients must use
E-verify; certain licenses held by private employers can be
suspended for knowingly hiring unauthorized workers
2017 Bills:
Pay / Benefits / Wage and Hour
• HB 202, SB 462 – TWC database of wage law violators
• HB 253, - extends time for filing a wage claim to one or two
years
• HB 285, HB 475, HB 992 – increase minimum wage to
$15/hour
• HB 924, HB 937 – increase minimum wage to $10.10/hour
• HB 373 – enhancement of bad-faith penalties against
employers
• SB 70 – earnings statement required each pay period
• SB 473 – rest breaks required for construction employees
• SB 476 – substantial penalties for wage claim retaliation
and bad-faith violations of the Texas Payday Law
2017 Bills:
Regulatory / Criminal
• HB 665 – contractors on public works must verify
compliance with wage payment laws when submitting bids
or contracting with public entities
– Five-year lookback on past violations
– Could include pay stub violations
– Violations within past five years disqualify a bidder
• SB 283 – extends existing protection of employee voting
rights to early voting
2017 Bills:
Regulatory / Criminal - 2
 HB 3769, SB 7 - designed to curtail rehiring of school staff
who have been suspended or discharged due to improper
relationships with students; regulation of social media
contacts; regulation of job references (SB 7 is effective on
September 1, 2017)
 HB 3309, SB 1498, SB 2065 - would remove the temporary
common worker employer industry from licensing and
regulation by TDLR and give local governments the authority
to regulate such companies pursuant to various changes
made within Chapter 92 of the Labor Code (SB 1498 passed
the Senate, but was stopped in the House; SB 2065 has
been sent to the Governor for signing)
2017 Bills:
Unemployment Insurance
• HB 230 – school bus drivers would be eligible for UI benefits
during breaks between school terms
• HB 463 – a claimant who gives notice of quitting and is
"terminated" by the employer prior to the effective date of
the notice is disqualified, regardless of whether the
employer pays the employee through the end of the notice
period
• HB 1432 – TWC may cash a check with a restricted or
conditional endorsement w/o settling for that amount
• HB 1433 – three-year statute of limitations is suspended
during a lawsuit to collect UI taxes
• SB 592 – new penalties for misclassification of workers
2017 Bills:
Workers’ Compensation
• SB 474 - contractors and sub-contractors would have to
provide workers’ comp coverage for each of their
employees and furnish proof of coverage to the public
entity with which they contract
Employment at Will – Right
to Work – Which Is It?
• “Right to work” means that employment cannot be
conditioned or denied based on membership or nonmembership in a union – 24 states have such laws
• “Employment at will” means that either party in an
employment relationship may alter or terminate the
relationship at any time, for any reason, with or without
notice, as long as the change does not violate an express
contract or specific statute (some exceptions exist for
public policy reasons)
Best Practices
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Hire for fit - train for skills
Classify workers correctly
New hire paperwork
Keep actions fair, job-related, and as consistent with known
policies as possible
• Signed, written wage agreements with each employee
• Pay an hourly or performance-based rate unless an
employee clearly fits a salaried exemption category
Best Practices (cont’d)
• Get signed, written authorization for any pay deduction that
is not ordered by a court or required by a law
• Give as much advance written notice as possible of pay and
benefit changes
• UI claims: file timely claim responses and appeals, present
testimony from firsthand witnesses, and present clear
documentation of warnings, policies, and other relevant
facts
I-9 Requirements
• Main problem: “document abuse” (going beyond I-9
requirements) - possible national origin / citizenship
discrimination charges
• Not for applicants - only for new hires
• Employer has three business days following hire to get the
information
• Use only the latest version of the form
• Accept only unexpired documents to begin with
• Copies of documents are not required, but keeping them
helps show they were reviewed
• Keep I-9 documentation for three years after hire or one
year after employee leaves, whichever comes last
New Hire Paperwork
• I-9, W-4 forms, notice of workers’ comp coverage
• Don’t allow work to begin without at least a signed W-4
• New hire report – within 20 days of hire – include the date
of hire or rehire
• Acknowledgement of receipt of policy HB
• Consent for drug testing / search policy, if applicable
• Consent for video surveillance, if applicable
• Consent for background checks, if not already obtained
• Agreements regarding pay, benefits, schedule, work
location, and so on (with employment-at-will disclaimers)
Thanks!
Thanks for your attendance
and
Good Luck!
Remember the toll-free hotline for employers:
1-800-832-9394
[email protected]
www.twc.state.tx.us/news/efte/tocmain2.html
Web app: texasworkforce.org/tbcapp