Since 2012, the United States Department of Labor (DOL) reports that it has recovered over $40 million in back wages for employees in the oil and gas industry.  Employers in the industry can expect claims to rise as the DOL continues its enforcement initiatives.  The leading cause of back pay awards? Worker misclassification.  The DOL’s nearly 1,100 investigations into the oil and gas industry’s workforce classifications have focused primarily on two areas; independent contractors and white-collar exemptions.

Misclassifying Employees as Independent Contractors

Many employers in the energy sector commonly pay certain types of workers on a per diem or flat rate basis, irrespective of the number of hours that they work.  Oftentimes, these workers are classified as independent contractors and many even enter into independent contractor agreements with their employers.  As many companies in the oil and gas industry have learned the hard way, these factors alone are not enough to establish the existence of an independent contractor relationship.  Instead, there are a number of criteria that must be met in order for a worker to be properly classified as an independent contractor (and lawfully exempt from minimum wage and overtime provisions of the Fair Labor Standards Act).  Employees in the energy sector who are misclassified as independent contractors are often entitled to considerable back pay due to the considerable amount of overtime that they work.

Misclassifying Employees as Exempt Based on Job Title

The DOL’s investigations of oil and gas employers also commonly uncovers employees who are misclassified as exempt from minimum wage and overtime requirements under the Fair Labor Standard Act’s white collar exemptions. These employees are frequently and improperly considered by their employers to qualify for the executive, administrative, or professional exemptions in particular.  Employers operate under the inaccurate assumption that these exemptions apply based upon the employees’ job titles which regularly include one or more of the following “buzzwords”: manager, foreman, engineer, technician, and specialist.  As the DOL has made clear, however, job titles are not determinative of exempt status.  Instead, employees’ salary levels and job duties are the true measure of whether they are eligible for these exemptions.

Employers in the oil and gas industry (and in general) are well-advised to ensure proper classification of workers who they consider as independent contractors or as exempt from minimum wage and overtime under a white collar exemption.  In the meantime, the DOL can be expected to continue pursuing its misclassification enforcement initiative.

Employers with more than 100 employees and federal contractors are probably more than familiar with the EEO-1 reporting requirements, but those requirements are about to change. On July 13, 2016, the Equal Employment Opportunity Commission published a revised version of a proposed rule to broaden the scope of data collected in the EEO-1 report. Earlier this year, the EEOC issued an initial version of the proposed rule, which would have required additional reporting on each of ten categories of employees and pay information reported by race and gender.  The July 13 version of the rule contained some key changes.

Changes to Proposed Rule

Under the new proposal, the EEOC will require reporting on an employer’s established pay ranges for positions and hours worked. In response to the comments received regarding the initial proposal, the revised proposal proposes moving the due date for filing the required report from September 30, 2017 to March 31, 2018. This change will allow employers to use employee’s W-2 earnings for reporting. Because of the revisions to the proposal, a new 30 day notice and comment period commenced with the release of the new revised proposal in the federal register.

Purpose of Data Collection

EEOC explained that it intends to use pay data for early analysis of discriminatory complaints. Investigators will examine the data for pay disparities and perform statistical analyses, yet to be determined in order to investigate whether compensation discrimination appears likely. EEOC has further stated that it will compare periodic reports on pay disparities by gender and race based on the data. Finally, the agency will use the data to enhance its support for training programs by, among other things, providing supporting evidence for training programs.

What Should I Do Now

EEOC actually pays attention to the comments it receives as is evidenced by the new revised proposed rule. We strongly encourage employers to make comments on the hardships the proposed revised rule would create. EEOC has remained silent on how it will account for the merit based non-discriminatory factors that could lead to differences in pay in the same job category. This is an issue we suggest employers should press heavily in their comments. Tenure, skill sets and even the broad nature of the job categories themselves can be pivotal in determining wage differences. Stay tuned, we will likely see more changes when the final rule is published.

 

A national home health care provider, doing business in York Pennsylvania as Epic Health Services, was recently issued a citation and significant fine by The Occupational Safety and Health Administration (OSHA) in connection with an assault of an employee by a client.

Even a sanitized version of the facts is disturbing. The employer provides health care and therapy services to clients in their homes. One of the employer’s home health workers was sexually assaulted by a client of the employer while working in the client’s home. Prior to this incident, another employee had specifically warned the employer about sexual assaults. In addition, the employer has received numerous prior reports of verbal, physical and sexual assaults directed toward employees, and of a concern that an employee was working in a home where domestic violence occurred.

Following a complaint by the assaulted employee, and resulting investigation, OSHA determined that the employer failed to adequately protect its employees from the dangers of workplace violence. More specifically, OSHA concluded that Epic Health exposed employees to risk of physical assault while provided home health care to clients and support services to family members, without any system in place for reporting or addressing threats or incidents of violence. In its official news release for this case, OSHA stated: “Epic Health Services failed to protect its employee from life-threatening hazards of workplace violence and failed to provide an effective workplace violence prevention program.”

Obviously, the fact that the employer ignored prior employee reports of hazards and the potential for violence at outside work locations (in clients’ homes) was considered significant in terms of OSHA’s conclusion that the employer failed to adequately protect its workers and provide a safe workplace.

As a result, the employer was cited for a “willful” violation for failing to maintain a safe workplace under OSHA’s General Duty Clause, which is a catch-all type provision that is applied when the issue under consideration is not covered by a specific regulation, as well as a second citation for several “other than serious” recordkeeping violations. In addition, the employer was hit with hefty fines totaling $98,000.00 (including the current maximum $70,000 fine for the willful violation plus an additional $28,000 for the recordkeeping violations).

In the primary citation, OSHA also stated a number of suggested abatement measures that the employer was encouraged to implement in an effort to address workplace violence issues and avoid future similar violations, including:

  • A written, comprehensive workplace violence prevention program;
  • A workplace violence hazard assessment and security procedures for each new client;
  • Procedures to control workplace violence such as a worker’s right to refuse to provide services in a clearly hazardous situation without fear of retaliation;
  • A workplace violence training program;
  • Procedures to be taken in the event of a violent incident in the workplace, including incident reports and investigations; and
  • A system for employees to report all instances of workplace violence, regardless of severity.

As with any OSHA citation, Epic Health Services has 15 days to request a conference with OSHA’s area director to discuss the findings and proposed penalties or file a formal contest with before the Occupational Safety and Health Review Commission to challenge the findings and penalties.

There are many lessons that the prudent employer can take from this case, including:

  • Always be on the lookout for and continuously assess safety and health risks and hazards in the workplace;
  • Keep your eyes and ears open, and listen to and consider legitimate employee concerns and complaints;
  • Don’t ignore, and apply safety programs to, outside/remote work locations;
  • Address safety risks in a timely manner;
  • Recognize that it’s an employer’s responsibly to assess risks and keep employees safe at work within established standards, even with respect to risks, hazards and dangers created by non-employees/third parties; and
  • Maintain, review and update as necessary appropriate and comprehensive policies and procedures addressing workplace safety.

All employers should be attentive to and serious about workplace safety issues, particularly considering OSHA’s ongoing aggressive enforcement efforts and the potential for significant liability (including that the already substantial maximum penalty amounts are expected to be significantly increased in the near future).   Don’t be the unprepared employer that is faced with the likely unfavorable and costly outcome of an unexpected OSHA investigation. Instead, take a proactive approach, review safety programs and overall OSHA compliance status now – before an investigator is at your door – and significantly reduce your risk of liability.

Please feel free to call any member of our Labor and Employment Law Practice Group if you have any questions about this post and for further guidance regarding OSHA compliance and workplace safety issues.

This post was contributed by Erica Townes, a McNees Summer Associate. Ms. Townes is a rising third year law student at the Widener University Commonwealth Law School and is expected to earn her J.D. in May of 2017.

Recently you’ve noticed that an employee takes FMLA-covered leave the same week every year or always seems to have a medical emergency between Thanksgiving and January 1. Similarly, another employee regularly calls out of work requesting FMLA-covered, coincidentally on Fridays during football season. How can employers prevent this type of FMLA leave abuse? Several courts have addressed this issue.

Generally, employers are free to enforce company policies even with respect to employees on FMLA leave, provided that such policies are consistent with the FMLA.  Specifically, company policies cannot conflict with or diminish rights guaranteed under the FMLA.  Accordingly, the Third Circuit, the court of appeals that covers Pennsylvania, has routinely held that employers do not have to forego enforcement their call-in policies simply because an employee is FLMA eligible.

The Third Circuit has upheld an employer’s right to terminate employees for violating other policies while the employee was out on FMLA leave.  While employees may view these call-in policies as burdensome or intrusive, courts have expressly held that, despite the fact that employees have the right to take FMLA leave, employees do not have the right to be left alone when out on leave.

For example, one employer implemented a policy that required employees out on paid sick leave to stay home unless the employee was tending to a personal matter related to the reason they were on sick leave.  The employer further required employees to notify a hotline upon leaving and returning to their home, and if necessary, a sick leave investigator could call or visit the employee while he or she was out on leave.  In that case, the court held that the policy could be applied to an employee who was using FMLA-covered leave concurrently with paid sick leave, and that such application of the policy did not run afoul of the FMLA because nothing in the FMLA prevents employers from ensuring that employees are not abusing their leave.

In another case, an employee took FMLA and paid sick leave concurrently to have an operation done.  Only a few weeks after the operation, the employer learned that the employee had gone on a trip to Cancun, Mexico with friends, and as a result, the employee was terminated.  The employee brought a claim challenging her discharge under the FMLA.  Ultimately, the court held that the employee was bound by the employer’s sick leave and absenteeism policies, emphasizing that the FMLA, in no way, restricted the employer from preventing FMLA fraud.  As such, the discharge was upheld.

The Third Circuit has also held that an employer may enforce a written policy prohibiting moonlighting, or working part-time for a different employer, while the employee is out on FMLA leave.

The lesson learned from these cases is that employers have the right to safeguard against FMLA leave fraud and abuse.  To that end, employers may implement policies to reduce the fraudulent use of FMLA, so long as such policies do not abrogate rights guaranteed to the employee under the Act.

Practice Pointers

In addition to the policies mentioned above, consider the below practice pointers.

  • Consistency.  When handling FMLA leave, consistency is critical.  Providing an exception to the rule out of sympathy may hurt the employer in the long run as a disgruntled employee will use such exceptions against the employer in the future.  As the old adage goes, no good deed goes unpunished.
  • Records.  Maintain accurate records of FMLA leave so that (1) an employee’s FMLA eligibility can be accurately determined and (2) to identify suspicious patterns of absence.
  • Paid Leave.  Consider requiring employees to use paid leave concurrently with, or even before, FMLA leave. An employee will be less inclined to abuse FMLA leave if he or she has to exhaust their on time.
  • Abuse.  Immediately address employees who violate your policies.  Without doing so, employees may later argue that the employer excused the violation.
  • Seek Advice.  If you are still unsure whether you can enforce a particular policy, seek advice from legal counsel.

 

Since the passage of the Medical Marijuana Act (“MMA”), we have received many questions from employers regarding the MMA’s impact on employment law; one of the most frequent questions being – what do I do if an employee tells me he/she is using medical marijuana? While the answer to this question will partly depend on state regulations that have yet to be issued, for now there are a few things that employers should know and do when confronted with an employee who is using medicinal marijuana:

  1. Recognize that only “certified users” are legally permitted to use medicinal marijuana in Pennsylvania. Only individuals who are “certified” under the MMA are authorized to use medical marijuana in Pennsylvania. Because the regulatory framework to implement the certification process has not been implemented, there presently is no mechanism for individuals in Pennsylvania to become “certified.” Until the regulatory framework is in place and certifications are being issued, any employee who reports that he is using medical marijuana is likely violating the law. Until a certification is issued, the employee is not entitled to the protections contained in the MMA, such as the anti-discrimination provision at §2103(b)(1), which we discussed here.
  1. Understand that the MMA does not require employers to accommodate the use of medical marijuana while the employee is at work. The MMA specifically provides “nothing in this Act shall require an employer to make an accommodation for the use of medical marijuana on the property or premises of any place of employment.” §2103(b)(2). For this reason, it appears employers may implement and/or continue to enforce policies that prevent marijuana use at work or on the employer’s premises, regardless of whether the use is certified under the MMA.
  1. Analyze the employee’s situation in accordance with the ADA. Under current interpretations of the law, it appears that the ADA does not prohibit an employer from discharging an employee who tests positive for marijuana, even if the use was prescribed by a doctor. However, the employee who voluntarily discloses medical marijuana use, because the employee has a disability, may be entitled to protection under the ADA. Accordingly, an employer should engage in an interactive process with the employee to determine whether accommodations are warranted. While we strongly recommend that employers seek guidance from counsel in these situations, the following general steps should be followed in all situations:
  • Ask the employee, in writing, to obtain a letter or report from his/her health care provider identifying the condition for which the medicinal marijuana has been prescribed and how, if at all, the employee’s use of medicinal marijuana will impact or impair the employee’s ability to perform his/her job. Providing a copy of the employee’s job description to the health care provider is a best practice.
  • To the extent the employee’s ability to perform his/her job is impacted by the use of medicinal marijuana, assess whether the employee can perform the essential functions of the job with or without reasonable accommodation. Remember, this is a fact-specific inquiry that should be conducted on a case-by-case basis. For example, if you would normally provide medical leave to an employee temporarily prohibited from performing his job due to the use of prescription drugs, you may be required to do the same for an employee with a prescription for medicinal marijuana.
  • To the extent an employee’s ability to perform his/her job is not impacted by the use of medicinal marijuana, remind the employee that reporting to work “under the influence” and the use of marijuana at work or on the employer’s premises are strictly prohibited.
  • Continue communicating with your employee to fulfill your obligations to interact under the ADA.

Naturally, if you have specific questions about the MMA and its impact on your workplace, please don’t hesitate to call any member of our Labor and Employment Law Practice Group for further guidance. As the Pennsylvania Department of Health begins to implement temporary regulations, we will keep you apprised of further developments.

The United States Department of Labor issued regulations earlier this year finalizing the “Persuader Rule.” Under the new Rule, employers and consultants (including lawyers) would be required to report labor relations advice and services under the Labor-Management Reporting and Disclosure Act’s “persuader activity” regulations when such advice and services are offered in the context of union organizing campaigns. Information subject to mandatory reporting under the Persuader Rule includes the identity of the employer, a description of the services rendered to the employer, and the fee arrangement between the employer and consultant/attorney.

The rule was set to become effective on July 1, 2016. Fortunately for employers and management-side labor attorneys everywhere, a United States District Judge in Texas issued a nationwide injunction barring the Department of Labor from enforcing the rule. According to the Judge, the rule obligates attorneys to violate the attorney-client privilege by disclosing clients’ identities, fee arrangements, and the nature of the advice and services provided. The opinion also holds that the Persuader Rule violates employers’ First Amendment rights to free speech and association, as well as their Fifth Amendment Rights to due process.

The decision does not mean that the Persuader Rule is dead, however. The Department of Labor may appeal the District Court’s Decision to the Fifth Circuit Court of Appeals. Alternatively, the Department could elect to scrap the current rule and go back to the drawing board. For now, however, employers and management-side attorneys are not required to comply with the Persuader Rule. We will continue to monitor this issue and report any further developments right here on our blog.

The EEOC has recently issued guidance addressing a variety of issues under the Americans with Disabilities Act, the Pregnancy Discrimination Act, and Title VII of the Civil Rights Act.

What is unique about this recent guidance is that the materials, entitled “Legal Rights for Pregnant Workers Under Federal Law,” “What You Should Know: Equal Pay and the EEOC’s Proposal to Collect Pay Data,” and “Helping Patients Deal with Pregnancy-Related Limitations and Restrictions at Work,” are directed at employees and physicians rather than employers. However, this guidance certainly offers a trove of helpful information that employers may rely on when necessary.

For instance, in “Legal Rights for Pregnant Workers”, the EEOC provides guidance regarding the employee’s right to an accommodation of any restrictions that may result from a pregnancy, particularly in the nature of altered break and work schedules, permission to sit or stand, ergonomic office furniture, shift changes, elimination of marginal job functions and/or permission to work from home. However, the guidance also notes instances in which accommodations would be unreasonable and therefore, unnecessary. Being primed to discuss some of those issues as part of the interactive process and referencing the guidance’s conclusion that “the ADA doesn’t require your employer to make changes that involve significant difficulty or expense” and that “if more than one accommodation would work (to address your restrictions), the employer can choose which one to give you” may help keep the employee engaged and effective in the workplace.

The materials directed at physicians are also helpful for employers, particularly because it can easily be attached to correspondence to the physician when requesting additional information about a potential employee accommodation issue. Employers often have to follow up with physicians because an initial request for accommodation comes in the form of a note scrawled on a prescription pad, with no explanation of the condition, the reason for the accommodation, and how the accommodation will address the circumstances of the condition. The EEOC’s resource should be of assistance to employers on these issues, where it notes that documentation from a physician is most helpful where it includes:

  • The nature of the patient’s condition. State the patient’s pregnancy-related medical condition.
  • The patient’s functional limitations in the absence of treatment. Describe the extent to which the medical condition would limit a major life activity (e.g., lifting, bending or concentrating), or a major bodily function (e.g. bowel or circulatory functions), in the absence of treatment or any other accommodation. If the symptoms of the condition come and go or are in remission, describe the limitations during an active episode. It is sufficient to establish substantial limitation of one major life activity or major bodily function.
  • The need for an accommodation. Explain how the patient’s medical condition makes changes at work necessary. For example, if your patient needs an accommodation to perform a particular job function, you should explain how the patient’s symptoms – as they actually are, with treatment – make performing the function more difficult. If necessary, ask your patient for a description of her job duties. Also explain to the employer why your patient may need an accommodation such as a schedule change (e.g., to attend a medical appointment during the workday.) Limit your discussion to the specific problems that may be helped by an accommodation.
  • Suggested Accommodation(s). If you are aware of an effective accommodation, you may suggest it. Do not overstate the need for a particular accommodation in can an alternative is necessary.

This language, at least, can be cited by employers in their correspondence to physicians regarding accommodations requests to better help advance these discussions quickly.

The Pay Data guidance relates to the recent proposal to begin collecting summary pay data by gender, race and ethnicity, and again is generally directed at employees to explain their rights to equal pay and how to enforce those rights. However, the one piece of additional news for employers is that the EEOC is continuing to pursue the revision of the EEO-1 for the collection of pay data and, sometime during this summer, will be submitting revisions for a second comment period before the proposal for data collection is finalized. We will keep you posted on this initiative.

On June 14, 2016, the Office of Federal Contract Compliance Programs (“OFCCP”) released its updated final rule regarding sex/gender discrimination. The stated purpose of the update was to revise OFCCP’s decades old guidance which was, at some level, in conflict with certain new principles currently espoused by EEOC. For example, OFCCP’s old rule required covered contractors to provide separate bathrooms for men and women.

Oh how times have changed!

The new rules do some reiterate well-known requirements that personnel actions may not be taken on the basis of gender. The rule also reminds contractors that distinctions between married and unmarried persons in the workplace, without applying them equally to men and women, are unlawful.

With respect to gender identity, the rule explains that contractors may not make facilities and employment-related activities available only to members of one sex. Significantly, the rule provides that if a contractor provides showers, changing rooms, restrooms or other similar facilities, the contractor must provide same sex or single user facilities as well. The rule goes on to state that employers must allow employees to use the facilities consistent with the gender with which they identify. It also makes it unlawful to discriminate against applicants based on the applicant’s receipt of “transition-related medical services.”

The final portion of the rule covers some nonbinding best practices recommended by OFCCP including avoiding the use of gender-specific job titles such as foreman or linemen.

While the revised rule addresses a number of other issues regarding sex discrimination, harassment and pay discrimination, the revisions related to gender stereotypes and gender identity seem to be the largest change. The rules are effective August 14, 2016. They apply to all covered government contractors with contracts of $10,000 or more. The final rule is available here.

Covered contractors should note that the rules will likely require some changes to their restroom facilities and should plan accordingly. As always, the true impact of these rules will not be fully understood until courts begin to rule on their implementation. Stay tuned.

Just as the Commonwealth Court seemed to know we would be discussing the work-relatedness of injuries that occur on an employer’s premises, so too did the EEOC anticipate our presentation entitled “Your Leave is Giving Me a Migraine” by issuing guidance on May 9, 2016 addressing “Employer Provided Leave and the Americans with Disabilities Act.”

The guidance, which discusses the question of when and how leave is to be provided in cases of an employee’s disability under the Americans with Disabilities Act, makes several key points for employers that we also raised at the McNees Labor seminar:

  • If an employer has a leave policy, such as sick, vacation, extended, or otherwise, and whether paid or unpaid, a disabled individual must be permitted to use this existing leave in the same way any other employee would use it. Importantly, if an employee asks for leave under this policy and an employer would not normally request a doctor’s note for use by any other employee, the employer cannot require it of the disabled employee as a condition of the leave.
  • In the absence of a leave policy and/or where leave has been exhausted, additional leave can be a reasonable accommodation. As noted by the EEOC, the “purpose of the ADA’s reasonable accommodation obligation is to require employers to change the way things are customarily done to enable employees with disabilities to work.” An employer cannot assert that it does not provide leave or the leave provided has been exhausted as a defense to a leave request and/or the ultimate claim that the ADA has been violated.
  • Anytime leave is requested as an accommodation, an employer should consider whether or not or under what circumstances it could be granted; such leave does not have to be paid leave. However, leave should only be refused where the employer has determined that providing additional leave will constitute an undue hardship to the employer.
  • Because the employer should generally refuse leave only where it presents an undue hardship, policies that provide for a maximum amount of leave, after which an employee would be automatically terminated, do not satisfy an employer’s obligation to engage in the interactive process and undue hardship analysis. As much as we as employers and attorneys would prefer it, the EEOC has refused to set a bright line rule defining how much leave is too much.
  • Similarly, requiring that an employee be 100% healed before returning to work from a leave of absence could constitute an ADA violation because it fails to take into account whether the employer can perform the functions despite any ongoing limitation with or without a reasonable accommodation. Unless no accommodation exists or the employee poses a “direct threat” in the restricted capacity, the employer must consider reassignment and other alternatives to the application of the 100% healed policy that would allow the employee to return to work. Naturally, this will require the employer to consult with the employee prior to their return as a natural part of the ongoing interactive process mandated by the ADA, and employers can, within reason and considering the circumstances of the leave, engage with the employee during the course of the leave in order to plan for the return to work.
  • In assessing the reasonableness of the need for leave and whether or not it presents an undue hardship, employers can consider leave already taken, the amount of leave being requested, the frequency of the leave if not continuous, the flexibility of the leave in terms of when it is taken if intermittent in nature, whether intermittent leave is predictable or unpredictable, the impact on coworkers and/or the duties can still be performed in an appropriate and timely manner, and the impact on the employer’s operations and ability to serve its customers. No one factor is controlling, and each of these factors is wholly unique to each individual case.

The takeaway here is that communication is key. This includes communication with employees requesting leave about the nature of and need for the leave as well as expectations regarding the return to work, and it also includes communication with managers and supervisors about the effect of the leave, and communication with decision-makers about policy modifications. Policies must also allow for communication, employers must ensure that the communication occurs in each case, and employers also have to consider each request individually in order to avoid ADA concerns.