This post was contributed by Joseph S. Sileo, Esq., a new addition to McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.  McNees recently welcomed Joe, Jennifer LaPorta Baker and Jennifer J. Walsh in Scranton, Pennsylvania. 

The Department of Labor (DOL) routinely investigates and audits employers to ensure compliance with a variety of important labor and employment laws. Historically, wage and hour (overtime) compliance under the Fair Labor Standards Act has been the most common subject of the DOL’s enforcement efforts.

Fueled by additional resources, funding and staffing, the DOL is increasing its enforcement efforts both in terms of frequency and scope. This concerning trend means that employers can expect an increase in the number of investigations and that such investigations, once initiated, will cover a broader range of compliance issues and dig deeper into those issues under review. In this regard, our clients are reporting that, in addition to typical wage and hour issues, expanded DOL inquiries as a matter of course now include review of other laws, such as the Family and Medical Leave Act, and even the Patient Protection and Affordable Care Act. It is also common for DOL investigations to "spread," resulting in the inquiry ultimately moving into areas other than the initial issue under review.

DOL audits can be inconvenient, disruptive and costly. If a violation is found, the DOL will attempt to compel remedial/corrective action, which may require an employer to revise its policies and pay damages. In the case of a wage and hour violation, for example, an employer may be liable for any unpaid overtime over the course of the past two to three years for each affected employee. Given the potential consequences, it is typically best to seek the advice of counsel at the onset of an audit. 

To reduce the negative impact and potential liabilities associated with a forced government audit, particularly in the face of the DOL’s more aggressive and expanded enforcement approach, employers are advised to review relevant employment practices and polices, and to periodically conduct internal compliance self-audits, before any outside investigation occurs. Our Labor & Employment Practice Group can assist you with reviewing employment polices/practices, conducting internal self-audits, 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.

In the past year there has been a flurry of activity in the courts and the General Assembly surrounding the availability of unemployment compensation benefit to employees within the state. To start off 2012, amendments to the Pennsylvania Unemployment Compensation Law (“Act 6” or “amendments”) took effect and imposed a requirement that claimants “mak[e] an active search for suitable employment” in order to be eligible for UC benefits. Prior to Act 6, Pennsylvania was the only state that did not require a UC claimant to search for work in order to qualify for benefits.

Act 6 directed the state’s Department of Labor and Industry (“L&I”) to establish the specific search efforts necessary for a claimant to satisfy the active search requirement. At a minimum, though, the amendments required claimants to (i) register for employment search services with the Pennsylvania CareerLink system, (ii) post a resume to the site, and (iii) apply for similar employment within a certain commuting distance.

Pursuant to the directive, L&I proposed specific additional steps claimants must take to make an active search for work. L&I’s proposal established a two-tiered search scheme, tying the level of search efforts to the number of weeks for which a claim for UC was filed. Notably, L&I’s regulations required claimants to apply for a specified number of positions each week, undertake certain work search activities other than applying directly for a position, and keep a record of such activities. The required efforts increased after a claimant filed for benefits for eight consecutive weeks. Legislative staff estimated L&I’s proposed work search regulations would yield an estimated $24 million in annual savings to the state UC system.

Last week, officials with the Pennsylvania Independent Regulatory Review Commission (“IRRC”) voted to disapprove the work search rules. The IRRC, an independent state agency tasked with reviewing regulations before implementation, concluded that the L&I work search proposals were “not in the public interest.” In its comments on the regulations, the IRRC stated its opinion that the two-tiered system was inconsistent with the General Assembly’s intent in establishing the active search requirements, was unreasonable and overly burdensome on claimants, and exceeded L&I’s statutory authority.

Although IRRC disapproval does not permanently bar a regulation, it does delay its implementation. At this point L&I has three options: (i) withdraw the regulation; (ii) modify the regulation in light of the IRRC’s comments and resubmit for consideration by the IRRC and legislative standing committees; or (iii) resubmit the regulation without modification for consideration. L&I has yet to publicly address the vote of disapproval. While this development does not require employers to take any immediate action, we will keep you updated on any updates as they come to light.

Historically, in determining whether an employee discharged for absenteeism and tardiness was eligible for unemployment compensation benefits, the court’s analysis had focused on the final incident that led to termination. Specifically, even where the employer could point to a pattern of excessive absenteeism as the cause for discharge, the employee was not disqualified from receiving benefits if the last absence was justified. Late last year, however, the Commonwealth Court of Pennsylvania issued a decision that undermines this "last in time" approach.

In Grand Sport Auto Body v. UCBR (pdf), the Court considered whether Andrew Terrell was eligible for benefits after being discharged for excessive absences. Mr. Terrell had a pattern of unexcused tardiness and absences, including 19 incidents in a period of less than six months, and was previously warned about his attendance issues. His employer even pushed back his start time to improve his attendance, but he continued to be tardy. Towards the end of his employment, Mr. Terrell requested and was approved for leave from March 14 through March 21, 2011 to get married in Mexico. On March 21, 2011, Mr. Terrell’s flight home from Mexico was overbooked, leaving him unable to return to work on March 22, 2011, as scheduled. When Mr. Terrell did return to work the following day, he was suspended and later discharged because of his “history of attendance and tardy arrivals.”

Following his termination, Mr. Terrell applied for unemployment compensation benefits. Relying on court precedent, the referee found Mr. Terrell to be eligible for benefits. Specifically, the referee concluded that because the last absence was justified due to a change in flight schedule it did not constitute willful misconduct sufficient to deny benefits. The Unemployment Compensation Board of Review (“Board”) agreed.

Continue Reading Employee’s History of Absenteeism Sufficient to Deny UC Benefits Even if Final Incident Justified

In 2009, the Family and Medical Leave Act (“FMLA” or “Act”) was amended to expand military leave entitlements available under the Act. Last week, the Department of Labor (“DOL”) issued new regulations implementing and clarifying these amendments. In addition, the regulations increase the scope of qualifying exigency leave to include parental care and extend military caregiver leave to include care for veterans with a serious injury or illness.

From a practical perspective, these regulations do not create any significant changes to the availability or administration of FMLA benefits. However, in conjunction with these new regulations, the DOL has made revisions to its mandatory poster—Employee Rights and Responsibilities under the FMLA. Employers must begin using the updated poster no later than March 8, 2013. The Department of Labor has noted, though, that employers may start using the poster immediately.

All employers covered by the Act—generally public and private employers with 50 or more employees—are required to display the FMLA poster in a conspicuous place accessible to employees and applicants. The poster must be displayed at all worksites, even if there are no FMLA-eligible employees. The updated poster is available for free here.

As you may have heard, the District of Columbia Circuit Court of Appeals recently sent shockwaves through the labor relations world by holding that President Obama’s "recess" appointments to the National Labor Relations Board were invalid. The court concluded that, as a result, the Board was acting without a quorum and did not have the power to render binding decisions. The question has now become, how many Board actions will go down?

The decision, Noel Canning v. Nat’l Labor Relations Bd. (pdf), addressed the President’s ability to make "recess" appointments, that is, appointments to executive branch positions without the confirmation of the Senate. The court concluded that the "recess" appointment power is available, not surprisingly, only when the Senate is actually in recess. The three Board appointments at issue were declared invalid because the Senate was not in recess at the time the appointments were made. The court concluded that, since the appointments were invalid, the Board has been operating without a quorum since January 4, 2012. As such, in accordance with the Supreme Court of the United States’ holding in New Process Steel v. Nat’l Labor Relations Bd. (pdf), the Board’s decision was null and void.

The wave of challenges to the Board’s actions rendered since January 4, 2012, (and some even prior to that date) has begun to crest. Interestingly the Noel Canning court, anticipating the likely impact of its decision, noted that it was not concerned about the repercussions of its holding on the Board. The Board, on the other hand, seems to have taken the position (in a January 25, 2013 press release) that the impact of Noel Canning is limited to only that case and therefore, its other decisions remain valid.

Despite the Board’s position, one key decision that could be washed away is the Board’s holding in D.R. Horton, Inc. (pdf).  In that groundbreaking case, the Board held that mandatory arbitration clauses in employment agreements that prohibit class-based claims violate the National Labor Relations Act. Although rendered before the January 4, 2012 appointments at issue in Noel Canning, the D.R. Horton decision was rendered by a Board that also included at least one recess appointment. This decision was already on appeal, but the attorneys for D.R. Horton have the appeals court to consider the impact of Noel Canning.

Also, HealthBridge Management LLC asked the Supreme Court to make a splash by requesting that the Court issue an emergency stay of an injunction issued by the Board due to the uncertainty surrounding the Board appointments. Last week, however, the Court denied the petition. The impact of the decision may also be felt in other areas outside of labor law. For example, there has been a challenge to the "recess" appointment of the director of the relatively new federal Consumer Financial Protection Bureau that could undermine the actions of that agency.

For now, it appears that chaos reigns. Prudent employers, both union and non-union alike, are wise to proceed with caution in assessing the damage. President Obama has almost four years left in office, and it may be safe to assume that the Board, when properly constituted, will return to its pre-Noel Canning agenda.
 

For years, Pennsylvania courts have consistently denied unemployment compensation benefits to employees who accept early retirement incentive packages. Recently, however, the Pennsylvania Supreme Court overruled this well-established precedent. In Diehl v. Unemployment Compensation Board of Review, the Supreme Court found that employees who accept early retirement packages offered pursuant to employer-initiated workforce reductions are eligible for benefits. 

In Diehl, the employer initiated a reduction in force due to deteriorating business conditions. To encourage high seniority employees to leave voluntarily, the employer offered employees over age 60 an early retirement package. Diehl accepted the early retirement package, believing that he also would be entitled to receive unemployment compensation benefits. 

Under Pennsylvania’s Unemployment Compensation Law (“Law”), generally, a claimant who voluntarily quits his job will be ineligible for benefits unless he can prove that he had a "necessitous and compelling" reason to quit. In cases involving an employee’s acceptance of an early retirement package, the Pennsylvania Commonwealth Court typically has granted benefits only where the employee demonstrated a justifiable belief that his job was imminently threatened. Importantly, however, the Supreme Court did not apply this general “voluntary quit” rule in this case. Instead, the Court focused on a “voluntary layoff option” proviso under the Law (“VLO Proviso”). 

The VLO Proviso provides in part that an employee who voluntarily resigns his employment will not be denied benefits when he exercises “the option of accepting a layoff … pursuant to an established employer plan, program or policy.” 43 P.S. § 802(b). For years, the Pennsylvania Commonwealth Court has consistently refused to apply the VLO Proviso to employees who voluntarily accepted severance or retirement incentives offered by their employers.

The Supreme Court reversed the Commonwealth Court’s long-standing precedent. Specifically, the Supreme Court considered whether the option to accept an early retirement plan offered as part of an employer-initiated workforce reduction was equivalent to the “option of accepting a layoff” under the VLO Proviso. The Court found the options to be equivalent, as both essentially were a termination of employment initiated by the employer. The Supreme Court concluded that the VLO Proviso applies to employees who accept employer-offered early retirement packages as part of a workforce reduction, and as such, voluntary acceptance does not automatically disqualify them from eligibility for benefits. 

The Diehl decision is notable because it increases the likelihood that employees who elect a retirement or severance incentive package also will be granted unemployment compensation benefits. Although the Law does provide a severance pay offset against unemployment compensation benefits, which may be available for some employers, the availability of the offset will depend upon the type of payment and the amount paid to the employee. As a result, employers must carefully consider potential unemployment compensation costs when evaluating the merits of offering incentive programs to employees during a reduction in force. 

This post was contributed by Tony D. Dick, Esq., an Associate in McNees Wallace & Nurick LLC’s Labor and Employment Practice Group in Columbus, Ohio.

The Department of Labor (DOL) recently issued additional guidance to employers regarding the definition of “son or daughter” under the Family Medical Leave Act (FMLA) as it relates to an adult child. Under the FMLA, an eligible employee may take leave to care for a son or daughter who is 18 years old or older if the following four conditions are met: (1) the adult child has a disability as defined by the Americans with Disabilities Act (ADA); (2) he or she is incapable of self-care as a result of the disability; (3) he or she has a serious health condition; and (4) the adult child is in need of care due to the serious health condition.

A lingering question has been whether the onset of the child’s disability had to occur prior to the child turning 18 in order for the adult child’s parent to be eligible for FMLA leave. DOL has now clarified that it is irrelevant whether the onset of the disabling condition occurred before or after the child turned 18. DOL’s interpretation falls in line with the majority of courts that have decided the issue.

In addition, in light of the broader definition of “disability” under the Americans with Disabilities Act Amendments Act of 2008 (ADAAA), DOL has offered further guidance on the impact of those changes on the FMLA. Among other things, the ADAAA broadened the definition of “major life activities” and expanded the definition of “disability” to include episodic conditions that periodically flair up and substantially limit a major life activity. Since the FMLA’s inception, DOL has utilized the definition of disability under the ADA in defining a “son or daughter” who has reached the age of 18. DOL has now explicitly taken the position that the expanded definition of disability under the ADAAA should apply to the definition of “son or daughter” under the FMLA.  It remains to be seen whether courts will adopt DOL’s position.

Finally, DOL has issued guidance concerning FMLA leave used to care for an adult child who has become disabled during military service. Under the FMLA’s military caregiver provision, a parent of a covered service member who sustained a serious injury or illness is entitled to up to 26 weeks of FMLA leave in a single 12-month period. Acknowledging that the servicemember’s injury or illness could have an impact that lasts beyond the single 12-month period covered by the military caregiver leave entitlement, DOL clarified that the servicemember’s parent may take FMLA leave to care for a son or daughter in subsequent years because of the adult child’s serious health condition. 

DOL’s recent guidance is just the latest example of it construing the FMLA generously in favor of employees. Employers should train managers and HR personnel who handle leave requests on these new changes to ensure compliance with the law.

Late last week, the Departments of Labor, Treasury, and Health and Human Services issued a new Frequently Asked Question (“FAQ”) page addressing implementation questions under the Patient Protection and Affordable Care Act (“PPACA”).  Of particular note in the latest FAQ is the Departments’ announcement is the delayed effective date for the written notice of Exchange requirements under PPACA. Originally, PPACA required employers to issue specific written notices regarding the existence of Exchanges to new and current employees effective March 1, 2013. This deadline has now been delayed until late summer or fall of 2013. Additional guidance, which may include model notice language, likely will be forthcoming. 

Stay tuned – and look for future PPACA updates on this blog. Additionally, if you have any questions regarding PPACA requirements, please do not hesitate to contact any member of our Labor & Employment Practice Group.

Recently, Eric N. Athey, Esq. and Kelley E. Kaufman, Esq., attorneys in McNees Wallace & Nurick LLC’s Labor and Employment Law Group, prepared a White Paper entitled: "IRS Proposed Regulations On PPACA’S Shared Responsibility Provisions Full of New Year Surprises (Some Good For Employers – Some Not)". 

On December 28, 2012, the Internal Revenue Service (“IRS”) issued long-awaited proposed regulations regarding the “shared responsibility” penalty provisions of the Patient Protection and Affordable Care Act (“PPACA”). In addition to consolidating prior IRS guidance on the subject, the proposed regulations also contain some surprising interpretations of PPACA’s penalty provisions. Employers will likely be pleased by some of these interpretations and disappointed with others.

Click to view the entire white paper. 

 

This post was contributed by Tony D. Dick, Esq., an Associate in McNees Wallace & Nurick LLC’s Labor and Employment Practice Group in Columbus, Ohio.

A client shared an interesting article that appeared recently in BusinessWeek which highlights a growing emphasis among H.R. professionals and job interviewers in finding job candidates that are a good “cultural fit” for an organization, even when that means a less qualified candidate is ultimately selected for a particular job.  The article focuses on a comprehensive study conducted by Northwestern University professor, Lauren Rivera, who found that many employers are making hiring decisions “in a manner more closely resembling the choice of friends or romantic partners.”  According to the study, while qualifications and accolades will usually help a candidate get their foot in the door, more and more people are being asked questions in interviews about their hobbies, pop culture interests, and world views in an effort to determine whether a prospective employee will be compatible with current employees.

The job review website, Glassdoor.com, found that among the 285,000 interview questions it collected from hiring managers in the last year, questions concerning an interviewee’s favorite movie, favorite website, most recent leisure read and most uncomfortable experience all ranked among 2012’s most common interview inquiries.  The article also provides anecdotal examples of job candidates being asked in interviews about where they like to vacation, what cities they would like to visit in the future and even whether they prefer Star Wars or Star Trek.

There are a number of reasons why employers are focusing more and more on cultural fit as a key criterion in hiring.  For one, employers are increasingly recognizing the substantial costs associated with training a new employee, which can easily cost tens of thousands of dollars depending on the job and industry.  In order to make such an investment, employers want some level of assurance that the employee will mesh well with others within the work environment.  The article also suggests that companies are placing a newfound emphasis on cultural fit in the workplace as a means to attract and retain Millenials who are more prone to moving from job to job and demand a company culture that is less hierarchical and more flexible.

There are downsides to placing a special focus on these types of questions in interviews, however.  For example, it is quite possible that an interviewer will miss an opportunity to select the best candidate for a position simply because he or she did not like the candidate’s answer to an inane question about who their favorite superhero is and why.  Further, as the article points out, when an employer seeks to hire employees because it believes they will be pals with other workers, it has the tendency of creating a rather homogeneous workforce.  This can hinder diversity of thought and lead to counterproductive groupthink.

Beyond the practical drawbacks, as a labor and employment attorney, I would be remiss if I failed to mention that the line between choosing candidates based on cultural fit and discrimination is, at times, a very thin one.  As Eric Peterson, manager of diversity and inclusion at the Society for Human Resources and Management points out in the article, “A lot of times, cultural fit is used as an excuse. Maybe a hiring manager can’t picture himself having a beer with someone who has an accent.  Sometimes, diversity candidates are shown the door for no other reason than they made the interviewer a little less at ease.” 

When an employer utilizes an amorphous concept like cultural fit as a factor in the hiring process, it opens the door to an argument that discriminatory animus tainted the decision, especially when the person passed over for the job is equally or more qualified for the position.  Still, there are very real upsides to trying to ensure the prospective employee will be an ideal fit within the organization’s culture.  The article, which can be accessed here, is good food for thought and definitely worth the read.