Earlier this year, we told you that Pittsburgh became the second city in Pennsylvania to enact a paid sick leave law, providing, in part, that employers were required to provide employees a minimum of 1 hour of paid sick time per 35 hours worked, with the maximum accrual dependent upon the number of employees.  In September, a group of plaintiffs, including the  Pennsylvania Restaurant & Lodging Association, mounted a legal challenge against the Act.  Now, the Court of Common Pleas of Allegheny County has ruled that the Act is “invalid and unenforceable.”

The plaintiffs claimed that the City did not have the authority to enact the ordinance under what is known as the Home Rule Charter and Optional Plans Law.  That law provides that a home rule municipality, such as Pittsburgh, “shall not determine duties, responsibilities or requirements placed upon businesses, occupations and employers” unless expressly provided by statute.  The Court determined that the Act did just that, in violation of the Home Rule Charter and Optional Plans Law.  While the Court noted there is a statute which permits municipalities with boards or departments of health to enact ordinances pertaining to disease prevention and control, the Court found the City does not have the authority to adopt such an ordinance, as it does not have a department or board of health.  Finally, although the Act itself cited to the Second Class City Code, the Court found that the Code is not applicable to home rule municipalities.

As a result, companies with operations in Pittsburgh need not update their sick and paid leave policies to comply with the Act.  However, they should continue to stay tuned for any developments and further updates.

For some time now, the U.S. Department of Labor’s Wage and Hour Division (“WHD”) has been taking a progressively more aggressive approach to wage and hour compliance, marked by increased staffing/resources and more frequent investigations.  Certain industries, like construction and gas/oil industry employers, are now frequent targets, but no business is immune from the government’s reach and the potential for a time consuming and costly wage and hour investigation.  Unfortunately for employers, the potential for significantly increased damages is now also part of the equation.  More specifically, the WHD is pursuing not only back wages but also liquidated damages for overtime violations under the Fair Labor Standards Act (FLSA).  Liquidated damages are assessed in an amount equal to any unpaid wage/overtime liability.  With double damages, liability can become quite significant, particularly when multiple employees/collective action claims are involved.

While the FLSA has always provided for liquidated damages, the WHD traditionally pursued only back wages in connection with an administrative investigation.  Liquidated damages were typically pursued only in litigated cases (whether employee initiated or filed by the WHD on behalf of one or more employees).  Now, however, the WHD appears to be assessing liquidated damages almost as a matter of course as a normal part of the investigation process, thus subjecting employers to double liability (back pay plus an equal amount in liquidated damages) in the event an employer is determined to have violated the FLSA.

Although the FLSA recognizes a “good faith defense” to the assessment of liquidated damages, establishing that the defense applies is difficult.  An employer must demonstrate that it acted in good faith (such as by seeking and relying in good faith on the specific advice of counsel in advance of a violation) and had reasonable grounds to believe that its actions were in compliance with the FLSA.  The defense is very narrow and cannot be established by showing that the employer did not intend to violate the law, did not know that it was violating the law, acted based on pure mistake or ignorance, or that its employees are otherwise paid well.

Waiting to address these issues until after the DOL knocks at your door is a mistake that many employers all too often regret.  The smart employer is proactive, not reactive.  The best way for an employer to minimize and protect against wage and hour liability is to conduct internal audits and review compensation, payroll and recordkeeping practices.  Start now and conduct periodic audits going forward, to ensure and maintain compliance with wage and hour laws and to allow for an opportunity to correct issues of concern before you are faced with an outside investigation or lawsuit.  Audits should include review of employee classifications and payroll practices, how salary is paid and deductions are applied, how work time is tracked and recorded, and how overtime is calculated and when wages are paid, all to ensure that employees are properly classified as either exempt or non-exempt and that all practices, classifications, and payment methods are legally compliant with the FLSA and Pennsylvania’s Minimum Wage Act and Wage Payment and Collection Law.

The McNees Labor & Employment Practice Group can assist you with conducting internal audits, reviewing your employment practices, and responding to any DOL compliance inquiry. Please do not hesitate to contact any member of our group for assistance with these issues and any questions you may have.

The City of Pittsburgh recently became the second city in Pennsylvania to enact a paid sick leave law, with Mayor William Peduto signing the Paid Sick Days Act into law on August 13, 2015.  While the Act is facing legal challenges, Pittsburgh’s City Controller recently posted notice  that the Act is effective January 11, 2016.  The City Controller also posted to the city’s website two documents employers are required to post where employees can easily read them.

The Act is applicable to employers situated in or doing business in the City of Pittsburgh with one or more employee, and requires those employers to provide paid sick time to both full-time and part-time employees.  Similar to the Philadelphia law, the Act exempts several categories of workers from the term “employee,” including independent contractors, state and federal employees, members of construction unions covered by a collective bargaining unit, and seasonal employees.

A few key provisions of the law:

  • Employees of employers with 15 or more employees accrue a minimum of 1 hour of paid sick time per 35 hours worked in Pittsburgh, up to 40 hours of paid sick time per year, unless the individual employer designates a faster accrual rate or higher amount.
  • Employees of employers with fewer than 15 employees also accrue a minimum of 1 hour of paid sick time for every 35 hours worked in Pittsburgh, unless a faster accrual rate is designated by the employer, accruing up to 24 hours of unpaid sick time during the first year in which the Paid Sick Leave Act is effective and 24 hours of paid sick time thereafter, unless the individual employer designates a higher amount.
  • Accrual begins on the effective date of the Act for those currently employed, and upon commencement of employment for new employees. Employees can begin to use their accrued time beginning on the 90th calendar day following the commencement of employment.
  • Employees may use sick time in the smaller of hourly increments or the smallest increment that the employer’s payroll system uses to account for absences or use of other time.
  • Accrued time shall carry over to the next calendar year (as defined in the Act) unless at least the maximum amount of paid sick time is provided at the beginning of each calendar year.
  • Employers with collective bargaining agreements or paid leave policies which meet the Act’s paid leave accrual requirements and make such leave available for use in accordance with the purposes and conditions of the Act need not provide additional sick time.
  • Employers are not required to pay out any accrued but unused paid sick time upon the end of employment, and are not required to compensate employees for lost wages or commissions as a result of using paid sick time.
  • Sick time can be used to care for the employee’s or employee’s family member’s mental or physical illness, injury or health condition; need for medical diagnosis, care or treatment of a mental or physical illness, injury or health condition, or need for preventative medical care; when an employee’s place of business is closed or to care for a child when the child’s school or place of care is closed by order of a public health official due to a public health emergency; or to care for a family member whose presence in the community jeopardizes public health due to exposure to a communicable disease, as determined by health authorities.
  • Retaliation is prohibited, and employers must provide written notice to employees that retaliation is prohibited and that employees may file a complaint with the designated agency if they are retaliated against or denied sick time as required by the Act.
  • Employers must provide written notice that employees are entitled to sick time and the amount of sick time, as well as the terms of use guaranteed by the Act.

Although the Act is facing legal challenges, companies with operations in Pittsburgh should consider reviewing their current sick and paid leave policies to ensure they are compliant when the Act goes into effect and should stay tuned for further updates.

In a long-awaited decision, a split National Labor Relations Board has adopted a new test to determine joint-employer status, expanding the possibility that an employer utilizing staffing or temporary workforce agencies may be considered a joint-employer.  In Browning-Ferris Industries of California, Inc., the NLRB determined that both the recycling facility and the staffing agency providing labor to the facility were employers under the new, employee-friendly test.

The NLRB’s decision held that a joint-employer relationship may be found if two or more entities “are both employers within the meaning of common law, and if they share or codetermine those matters governing the essential terms and conditions of employment,” such as wages, hours, work assignments, and control over the number of workers and scheduling.  The Board further found that a joint employer is not required to exercise its authority to control terms and conditions of employment, and recognized that control may be “reserved, direct and indirect.”

Here, the relationship between the staffing agency and the facility was controlled by a temporary labor services agreement, which specifically indicated that the staffing agency was the sole employer of the laborers, and that the agreement did not create an employment relationship between the laborers and the facility.  The agreement set forth required qualifications for the laborers and a wage rate schedule, including a provision which indicated the laborers could not be paid a higher rate than that of a similar facility employee without approval.  The agreement further provided the facility with the authority to discontinue use of any laborer at any time.  The facility determined the schedule of working hours, overtime, and break times, as well as the number of laborers needed and productivity standards.  Facility managers and supervisors communicated with staffing agency supervisors regarding the positions to be occupied, daily operating plans, and concerns regarding productivity and job performance and at times addressed these concerns directly to the laborers.

The laborers were to comply with the facility’s safety policies, procedures and training requirements, and received occasional training and education from facility managers.  Additionally, staffing agency laborers were only to be assigned to the facility for six months, but that provision of the agreement was never invoked.  Further, although the agreement provided the facility the ability to review the staffing agency’s records regarding the laborers, the facility had never asked to inspect personnel files.  The agreement further provided sole responsibility for disciplinary action to the staffing authority, although the agency was prompted to take such action in two instances after being notified by the facility of misconduct.

Based upon a careful review of the facts in light of the new standard, the NLRB found the recycling facility to be a joint-employer of the temporary staffing agency employees.  Specifically, the majority found that the facility had significant control over employment-related decisions such as hiring, firing and discipline as well as employee wages and wage increases as detailed by the agreement.  The majority further found that the facility exercised direct and indirect control over operational decisions and productivity standards.  Additionally, the facility exercised “near-constant oversight of employees’ work performance,” at times directly communicating with the laborers and using staffing agency supervisors to communicate directives in other circumstances.

The NLRB justified its new standard by noting changes in today’s workplace arrangements and pointed towards these changes as “reason enough” to adopt a new joint employer test.  This new standard is employee-friendly, and may expose employers to potential liability as joint employers under the NLRA.  Employers should carefully review this decision for its potential impact on any arrangements they may have with temporary staffing agencies and other contractual arrangements which provide workforce assistance.

In late June, the Occupational Safety & Health Administration (OSHA) announced a major initiative that will intensify and expand the agency’s enforcement resources in the healthcare industry, with a focus on several common causes of workplace injuries in hospitals and nursing homes including workplace injuries related to patient or resident lifting, as well as workplace violence, bloodborne pathogens, tuberculosis, and slip and falls.  OSHA has cited to statistics in support of its new initiative. In Calendar Year 2013, the rate of workplace injury and illness in inpatient healthcare settings was nearly twice the rate for private industry workers, and approximately half of the reported injuries in healthcare were attributable to “overexertion-related incidents” which led to musculoskeletal disorders, or “MSDs,” from patient handling.

As part of its new focus, patient handling procedures previously issued by OSHA as guidance will now be enforced as if a regulation.  In addition, OSHA staff have been advised that all hospital and nursing home facility inspections (whether prompted by a complaint, referral, or severe injury report) are now to include review of potential hazards involving MSD-related to patient handling, bloodborne pathogens, workplace violence, tuberculosis, and slips, trips and falls.  These more focused, intensive reviews will include an initial determination regarding the extent of handling hazards and the manner in which they are (or are not) addressed.  It is expected that OSHA compliance officers will evaluate the healthcare employer’s safety program management, program implementation, and employee training. OSHA has provided specific guidance to compliance/investigating officers who will be conducting these evaluations.

Once the employer’s program has been evaluated, compliance officers will make a decision as to whether the ergonomic portion of the inspection will continue.  If there are issues that are not addressed or require further attention, the employer may receive an Ergonomic Hazard Alert Letter identifying deficiencies. OSHA will follow up with any employer receiving an Ergonomic Hazard Alert Letter to determine whether the deficiencies have been addressed and may conduct follow-up inspections as necessary.

The bottom line is that now, and for the foreseeable future, healthcare employers can expect to face more frequent, more focused, and more intensive safety compliance reviews and inspections as a result of this new OSHA initiative. The proactive employer will be in the best position to successfully navigate through an OSHA visit and reduce potential liabilities.  The unprepared healthcare employer will run the risk of significant and costly citations.

Contact any of the attorneys in Labor & Employment Practice Group if you have a question about this post or need assistance with OSHA compliance.

In another unemployment compensation case, the Commonwealth Court held that a substantial and unilateral change to a claimant’s pay and performance goals was enough to meet the burden of a necessitous and compelling cause to voluntarily quit employment.

Claimant was a vice president of sales for an insurance company for approximately 17 months. Shortly before the end of his employment, he was reassigned to a new supervisor. Claimant had experienced issues with his former supervisor, and filed a formal complaint with the human resources department subsequent to this new assignment. After an investigation, Claimant’s employer did not take any disciplinary action against his old supervisor and dismissed his complaints. Shortly thereafter, Claimant’s new supervisor changed the way Claimant’s bonuses would be calculated, resulting in a significant decrease in his annual pay, and further set forth what Claimant felt were “unachievable expectations.” Claimant met with both his former and current supervisors, but was told that there would be no changes to the new expectations. Claimant considered the changes to be retaliation for the complaint against his former supervisor, quit his job, and filed for unemployment compensation benefits.

In upholding the Unemployment Compensation Review Board’s decision and affirming Claimant’s eligibility to receive UC benefits, the Court opined that “necessitous and compelling cause” to quit one’s job may exist where a unilateral and unreasonable change has been made by an employer, and further, that a substantial reduction in pay may amount to such cause. The UCBR concluded, and the Court agreed, that the Claimant had established such cause for quitting his job, citing to the above events which all occurred within a four week period. The Court further agreed that it was not unreasonable for the Claimant to believe that these “unachievable expectations” were in retaliation for filing a formal complaint with his employer.

While the Court is careful to point out that “mere dissatisfaction with reasonable modifications” is not enough to establish a necessitous and compelling cause to quit one’s job, employers should be aware of making unilateral changes which may be viewed as unattainable or unachievable.

In a case of first impression, the Pennsylvania Commonwealth Court recently issued an opinion examining the standards applicable to a claimant’s behavior when the claimant is receiving workers’ compensation benefits and has filed for unemployment compensation.

By way of background, the claimant suffered a brain injury at work and received workers’ compensation benefits. Several months after her injury, her employer sent her for an IME. Although Claimant’s treating doctors had not released her to return to work, the IME physician did so with no restrictions. Upon receipt of the IME report, her employer offered her several jobs; however, her workers’ compensation attorney indicated that she was disputing the report. The employer subsequently filed a petition to terminate, modify or suspend her workers’ compensation benefits. During a deposition, Claimant stated that she believed she could return to a light duty job. Several weeks before her workers’ compensation claim ultimately settled, Claimant was terminated. She subsequently filed for unemployment compensation benefits, but was found ineligible due to willful misconduct for failing to make her employer aware she was able to return to work and failing to respond to the employer’s job offer. Claimant appealed, arguing that she did not fail to respond to a job offer, as the Employer never made one, and further, that her conduct did not amount to willful misconduct. In reversing the decision of the Unemployment Compensation Review Board, the Court applied Workers’ Compensation law and not UC law to analyze the Claimant’s behavior.

On the first issue, the Court found that no job offer had been made after Claimant’s deposition, wherein she indicated she could return to a light duty position. While the UCBR argued that Claimant failed to meet a reasonable expectation when she did not return to work immediately after her deposition, the Court disagreed for several reasons, opining that the IME doctor’s release was not relevant, that Claimant did in fact respond to earlier offers of employment, and that during said offers there was no indication about the nature (i.e., light duty or not) of the positions available.

The Court further found that the employer did not comply with its duty under the Workers’ Compensation Act when it failed to contact Claimant regarding light duty work after her deposition (wherein she opined that she was able to return to light duty work) and that Claimant had no duty to report to work immediately after the deposition. An employer must show that an employee violated some policy, work rule or reasonable expectation in order to establish willful misconduct. The Court opined that the Workers’ Compensation Act “governs the reasonable expectations of an employer with respect to an employee receiving workers’ compensation.” While the Act requires an employee receiving benefits to report wages within a specified time, it does not require an employee to report when he or she has recovered from the work injury. Rather, the Act imposes a duty on the employer to seek out such information. In this case, the Court found that there was no evidence that the employer sought out this information or gave Claimant the requisite amount of time to respond.

The Court further noted that if work is available, in line with any restrictions on a claimant, it must be offered. It is the employer’s burden to show that such work is actually available once it has information that a claimant can work in some capacity. Again, the Court found that there was no evidence that the employer ever offered light duty work or requested that Claimant return to work at all, and further found there was no reasonable expectation for Claimant to return to work or provide information to the employer which the employer already had. As such, the Court reversed the decision of the UCBR.

In a strongly worded dissent, the minority opined that the Court had “dramatically chang[ed] well-established precedent and impos[ed] upon employers newly created requirements.” The minority further opined that as the Claimant was seeking UC benefits, UC law controlled, and that a claimant who fails to act in a reasonable manner (i.e., to report to work once released to do so or at least communicate a reason for not returning) has engaged in willful misconduct.

Employers should carefully review the Court’s ruling and ensure that they understand the interplay between the Workers’ Compensation Act and the Unemployment Compensation Act.  Employers should further ensure that they are complying with the standards and requirements set forth under the Workers’ Compensation Act.

No, we’re not talking about the skit performed by the McNees Players at our recent Labor and Employment Seminar. In a recent case out of a Pennsylvania federal court, an employee alleged that she suffered from a fragrance allergy and “multiple chemical sensitivity” to fragrant chemicals, perfumes and scented lotions, which impacted her in several ways, including migraines, nausea and difficulty concentrating and focusing. After suffering for several years, she informed her employer of her sensitivity and asked for a “fragrance-free zone” at work. Over the course of the next ten months, the employer made various accommodations, including providing (and later replacing) an air purifier for her desk, relocating her workstation, purchasing face masks (which she refused to wear), distributing a “no fragrance memo” to employees (no less than four times), and cleaning and replacing the panels of her work station. The employee continued to suffer the adverse effects of her allergy and even took a brief medical leave, for which she was subsequently notified was FMLA-eligible.

Despite these efforts, the employee continued to suffer adverse effects and was unable to work her full schedule. She ultimately took additional time off and was notified that she was potentially eligible for leave under the FMLA. However, just one week after submitting a request for medical leave- and before receiving a response- she was terminated, allegedly for her failure to regularly report to work and consistently perform her essential job functions. The employee filed suit alleging FMLA, ADA and PHRA violations, and the employer subsequently sought summary judgment.

In reviewing the employer’s request for summary judgment, the court was not convinced that the employee was ineligible for FMLA leave as argued by the employer, both because her request could be construed as a request for intermittent or reduced leave and the employer had notified the employee less than two weeks before her termination that she was potentially eligible for such leave, and further, that there was evidence of retaliation and a pretextual reason for her firing.  The court also found that the employee offered enough evidence to meet the definitions of disability (under both the old and new ADA standards) and qualified individual, as well as “at least some evidence of… hostility” towards the employee as a result of her condition in regards to her ADA and PHRA claims of disability discrimination. As it had in regards to retaliation, the court opined that the employee provided sufficient evidence to show that the employer’s reason for terminating her was pretextual.

In denying the employer’s motion for summary judgment on all counts, the court’s opinion provides a few key reminders about the FMLA:

  • Terminating an employee who has made a valid FMLA leave request may amount to interference and retaliation, which are both prohibited under the FMLA.
  • Intermittent or reduced leave is permissible under the FMLA.
  • Timing may be “unusually suggestive of retaliatory motive.”

In a recent case out of California, a state appellate court found that an employee’s inability to work for a particular supervisor due to boss-related stress and anxiety did not constitute a disability under state law. The employee worked for her employer for approximately three years before being diagnosed by her doctor with adjustment disorder with anxiety. Based on the diagnosis, she was granted a disability leave of absence under both state and federal leave acts, with her disability listed as “stress when dealing with her Human Resources and her manager.” The employee exhausted her leave and returned to work for a brief period of time.  Employee alleged that upon her return, she received a negative performance evaluation (her only one while with the employer), and was accused by her supervisor of being irresponsible in regards to her identification badge. She further claimed that her regional manager was mean to her, singled her out for negative treatment, gave her a disproportionate amount of work, and grabbed her arm and yelled at her, causing her to suffer a panic attack.

The employee left work again and requested another leave of absence, which was granted and extended several times. Additionally, she requested accommodation in the form of a transfer to a different department with a different schedule. Her doctor indicated that if the transfer occurred, she would be able to work without limitation. The physician later requested that the employee be permitted to transition, on light duty, back to her original department in connection with the employer’s transitional program. The employer requested additional information regarding her return and indicated that without such information, her employment would be terminated. Ultimately, the employee did not return to work.  Her employment was terminated and she filed suit alleging, among other things, disability discrimination and wrongful termination.

Under the relevant state law, discrimination against an employee on the basis of mental disability is unlawful. California law includes “any mental or psychological disorder… such as… emotional or mental illness” that “limits a major life activity” as a qualifying mental disability. In order to establish a prima facie case of disability discrimination, a plaintiff must show that she has a disability, is otherwise qualified to perform the job with or without reasonable accommodation, and was subject to an adverse employment action because of her disability. The court, in affirming summary judgment for the employer, found that the employee was unable to establish a prima facie case of discrimination, as she “did not have a legally recognized mental disability,” finding that the inability to work for a certain manager did not rise to a disability under state law. Additionally, the Court found that the employee could not claim that her inability to work for a certain supervisor was akin to the exclusion from a single type of job with a single employer. The court found that her additional causes of action, including failure to engage in the interactive process and provide reasonable accommodations, also failed because the employee “did not have a legally recognized mental disability.”  Further, the employee’s claims related to her use of state leave failed, as there was no proof that she could have actually returned to work and further, that the employer had a legitimate reason for terminating her and she was unable to establish pretext for same.

Although the employee’s condition was ultimately found to not be a disability under California law, it’s important to note what can happen when an employer or an employee fails to engage in the interactive process.  The process is just as important as the outcome, and both parties must participate to identify appropriate accommodations.

All employers should be aware of the specific laws and regulations pertaining to employee personnel files. Pursuant to the Pennsylvania Personnel File Act, medical information should not be included in an employee’s personnel file. Medical information includes any document that relates or refers to an individual’s physical or mental health, condition, or impairment, including but not limited to notes, excuses or any other information received from an employee’s doctor, FMLA paperwork, injury reports, workers’ compensation claim forms, medical exam results, medical questionnaires, information concerning prescription drug use, alcohol use or past drug addiction (excluding current illegal drug use), drug and alcohol testing information, documents relating to any request for accommodation or the interactive process, information relating to claims for disability benefits or health insurance claims, and any employee hazardous substance exposure records. All information that relates in any way to an employee’s medical condition should be kept in a separate, secure and confidential file.

Medical records aren’t the only items that do not belong in an employee’s personnel file.  Records relating to the investigation of a possible criminal offense, reference letters, documents developed or prepared for use in civil, criminal or grievance procedures or materials which are used by the employer to plan for future operations or information available to the employee under the Fair Credit Reporting Act are also excluded from the definition of personnel file.

So, what should be included in an employee’s personnel file? Applications for employment, wages or salary information, notices of commendations, warnings or disciplinary letters or actions taken, authorizations for payroll deductions or withholding of pay, fringe benefit information, leave records, employment history with the employer, including salary information, job title, employment status changes, attendance records, retirement record, and performance evaluations are all included in the definition provided by the Pennsylvania Personnel File Act.

Pennsylvania employers should also be aware that the law gives employees (or their designated agents) the right to inspect his or her personnel file(s) upon request. Only current employees are entitled to access, but this will include recently terminated employees who make a request for access within a short period of time following termination.

Employers may require a written request before allowing access, including the purpose of the request or the specific parts of records the employee wishes to review, to assist the employer with producing the correct records. An employer must honor the inspection request and make personnel records available during regular business hours of the office where the records are ordinarily maintained, and must allow sufficient time for inspection of same. The employer may limit inspection to once every calendar year by an employee and once every calendar year by the employee’s designated agent, if any, except for reasonable cause. While employees have the right to such an inspection, employees may not remove, copy or mark personnel records, although they may make separate notes about the records. Such inspection may take place in the presence of an employer’s designated official, and the employer retains the right to protect the integrity of the file(s).