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.

Political and economic tensions continue to influence employment-related legislation at the state level. As we approach the halfway point in the year, there are several noteworthy trends in state employment law that you should be aware of in order to proactively address potential high risk areas for your operation and stay compliant with the law. Below is a summary of some of the hot-button issues affecting employers at the state level.

The “Ban the Box” Movement

Some 65 million adults in the United States have a criminal record. According to a recent survey, more than half of all employers utilize criminal background checks to screen out prospective employees with criminal convictions. Recognizing the high recidivism rates for convicted criminals who cannot find work, more than 3 dozen states, counties, and local municipalities have implemented “ban the box” legislation in the last couple years.

Under these laws, employers are restricted from asking about a job seeker’s criminal history on an initial application. Depending on the specific law, an employer can inquire about a prospective employee’s criminal history either during the interview phase or after a conditional offer of employment. Proponents of “ban the box” laws argue that by preventing employers from inquiring about an applicant’s criminal history on the initial application, the applicant with a criminal conviction on his record will have a higher likelihood of receiving a job interview where he can attempt to impress the employer with his qualifications and job skills. Among the states that have adopted such laws are Connecticut, Hawaii, Massachusetts, Minnesota and New Mexico. Municipalities with “ban the box” ordinances include Philadelphia, Baltimore, Boston, Chicago, Cincinnati, Cleveland, Seattle and Washington D.C.

Considering Credit History in Hiring

More than a half dozen states limit the use of an applicant’s credit history in the hiring process. Another 20 states have bills pending that would regulate employment credit checks. The majority of these proposed laws would prohibit employers from using consumer credit information in the hiring process, unless the sought-after job involves financial decision-making or the handling of sensitive information. In contrast, New Jersey’s pending bill would ban the use of credit information in any employment situation by adding financial status as a protected category under the state’s anti-discrimination law.

Social Media and Privacy

As Congress and other states debate the issue, Maryland became the first state to make it illegal for employers to ask job applicants and employees for their social media passwords, or to retaliate for an employee’s refusal to do so.
 

Continue Reading Current Trends in State Labor and Employment Law

Back in December, we posted about the National Labor Relations Board’s (Board) resolution to change union election procedures. Among other things, the pro-union rule shortened the time between the filing of an election petition and the date of the election, thereby making it more difficult for employers to communicate with employees prior to the election. Later that month, two of the Board’s three members voted in favor of adopting the rule. The third member of the Board did not cast a vote or otherwise participate in the voting process. The rule took effect on April 30, 2012.

However, on May 14, 2012, the union election rule was held to be invalid. In Chamber of Commerce v. NLRB (pdf), the US District Court for the District of Columbia held that the Board lacked authority to adopt the final rule because a quorum of its members did not participate. Specifically, under the Labor Management Relations Act, three members of the Board constitute a quorum. However, only two Members were present during the final vote approving the rule.

It is important to note that the court’s ruling addressed only the quorum issue, refusing to reach—or express any opinion on—the merits of the final rule. The court stated that the union election rule could be lawful if issued through a procedurally sound voting process.

While the court’s decision will likely be appealed, the Board issued a press release on May 15, announcing that it has temporarily suspended implementation of the new union election procedures. The Board also directed its regional directors to revert to their prior practices for election petitions and procedures.

We will keep you updated as further developments in this area occur.

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Practice Group in Lancaster, Pennsylvania.

According to the Equal Employment Opportunity Commission ("EEOC" or "Commission"), if current incarceration rates continue, 1 in 3 African-American men and 1 in 6 Hispanic men will be incarcerated during their lifetimes. The rate for white men is only 1 in 17. Given this disparity in incarceration rates, the EEOC has long been concerned that employer policies restricting hiring based on prior criminal convictions may unfairly deprive minorities of employment opportunities. In Enforcement Guidance issued on April 25, 2012, the EEOC outlined its approach for determining whether an employer’s criminal history screening policies violate Title VII on the grounds of either "disparate treatment" or "disparate impact."

Disparate Treatment. Obviously, employers cannot hold applicants to tougher screening standards on the basis of their race or national origin. An employer that considers an applicant’s prior criminal history during the hiring process must do so on a consistent, non-discriminatory basis. A disappointed minority applicant with a criminal history may be able to prove he was subject to unlawful discrimination by showing inconsistencies in the hiring process, derogatory statements regarding a particular class or evidence suggesting that certain protected classes are held to a stricter screening standard than other groups.

Disparate Impact. Under Title VII, employers may also be liable for hiring policies that are consistently enforced if the policy disproportionately screens out a particular protected class and the employer cannot show that the policy is job-related for the position and consistent with business necessity. The EEOC’s recent Guidance notes that an employer may be liable for the "disparate impact" of a hiring policy even if the employer has a racially balanced workforce. In order to establish that a hiring policy that relies on criminal history information is job-related for the position and consistent with business necessity, the employer will need to show that it operates "to effectively link specific criminal conduct, and its dangers, with the risks inherent in the duties of a particular position." The EEOC notes two ways an employer can establish this: 1) by validating the criminal conduct screen for the position under the Uniform Guidelines on Employee Selection Procedures; or 2) developing a "targeted screen" which considers a number of factors, including the nature of the crime, the time elapsed and the nature of the job and then conducting an individualized assessment for the people excluded. In other words, if a screening policy has a disparate impact on certain protected classes, an employer must be able to show that the policy is nevertheless reasonable and necessary.

Other Laws. Title VII is only the tip of the iceberg when it comes to laws governing the use of criminal background checks in hiring.
 

Continue Reading EEOC Guidance Highlights the Risks of Using Criminal History Checks in Hiring

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.

In recent weeks, identical bills were proposed in the House (H.R. 4123) and Senate (S. 2145) to eliminate the so-called “safe harbor” in the federal tax code that protects businesses that have misclassified employees as independent contractors and, thus, have avoided paying payroll taxes, unemployment insurance, workers’ compensation premiums and other costs. These bills mark the second time in 18 months that such legislation has been put forward. Though unlikely to pass, especially in this gridlocked Congress, the bills are just the latest in a number of recent endeavors by state and federal lawmakers and law enforcement agencies to curb independent contractor misclassification.

While the bills recognize that many workers are properly classified as independent contractors, the U.S. Department of Labor (DOL) estimates that as many as 30% of employers are misclassifying employees as independent contractors. According to the IRS, approximately $54 billion in tax revenues are lost annually because of independent contractor misclassification.

In light of these large numbers, this past September, the IRS and DOL announced a joint initiative aimed at businesses that misclassify employees as independent contractors. Under the agreement between the two agencies, the IRS and DOL will begin to share information with each other and coordinate vigorous efforts to crack down on the misuse of the independent contractor designation. The agencies will also provide educational materials to businesses using independent contractors and to employees who may be misclassified. 

For employers who cannot take advantage of the safe harbor, the IRS also announced an employment tax “amnesty” program that allows businesses to rectify past independent contractor misclassifications at a reduced cost. 

Continue Reading Independent Contractor Misclassification in the Crosshairs

The National Labor Relations Board’s notice posting rule has been under fire since it was issued last year. In the past few months, the rule has garnered significant attention in courts around the country. The rule would require all employers subject to the Board’s jurisdiction to notify employees of their rights under the National Labor Relations Act, including the right to unionize. To that end, employers were required to post a Notice of Employee Rights in the workplace by April 30, 2012.

Earlier this week, we reported on a recent decision from the U.S. District Court for the District of South Carolina striking down the Board’s notice posting rule because it went beyond the scope of the Board’s limited rulemaking authority. The South Carolina decision followed on the heels of a decision by the District Court for the District of Columbia that upheld the posting rule. (While the D.C. court upheld the posting requirement, it struck down the part of the rule that would impose penalties on employers who failed to comply.) Business groups immediately appealed the D.C. decision to the U.S. Court of Appeals for the D.C. Circuit.

In light of these conflicting decisions, and with the end of April quickly approaching, employers were left wondering whether the Board would again postpone the effective date of the rule. Well, employers just got an answer. Or at least a temporary one.

On April 17, 2012, in response to an emergency motion, the D.C. Circuit issued an injunction blocking the Board from implementing the posting rule during the appeal. In its decision granting the injunction, the D.C. Circuit referenced the earlier South Carolina opinion and the uncertainty about the enforcement of the rule.

As a result of the court’s injunction, employers nationwide are relieved from having to comply with the notice posting rule until the conclusion of the appeal. While the appeal is on an expedited schedule, a decision is not expected until September 2012 at the earliest.

This post was contributed by Bruce D. Bagley, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.

Readers of this blog may recall our article from March 6, 2012, where we noted that the NLRB’s controversial Final Rule requiring employers to notify employees of their NLRA rights had been upheld by the U.S. District Court for the District of Columbia (pdf). We pointed out at that time that there was another federal court challenge to the Final Rule which had not yet been adjudicated.

On April 13, 2012, Judge David C. Norton, of the U.S. District Court for the District of South Carolina, decided that the Board did not have the authority to issue the Notice Posting Rule (pdf) and therefore found it unlawful under the Administrative Procedure Act. 

Unlike Judge Jackson of the D.C. District Court, who ruled that the Board had “broad authority” to issue such rules, Judge Norton found that the Board’s rule-making authority was limited to subjects necessary to carry out its functions under the NLRA, such as investigating unfair labor practice charges and conducting representation elections. The Board’s role was to be “reactive,” Judge Norton held, not “proactive.” He also questioned whether the Board’s Final Rule was consistent with Congressional intent, noting as follows:

"Congress has inserted at least eight additional notice requirements in federal labor laws since 1934, while the NLRA remained silent. . . . Congress clearly knows how to include a notice-posting requirement in a federal labor statute when it so desires."

Of most immediate concern is how the Board will respond to the South Carolina decision, which on its face relieves only South Carolina employers from the obligation to post the Notice which is otherwise effective on April 30. No doubt the Board will appeal Judge Norton’s decision to the U.S. Court of Appeals for the Fourth Circuit. (The Court of Appeals for the D.C. Circuit is already considering appeals from Judge Jackson’s March 2012 decision.)

Will the Board voluntarily delay the effective date of the posting requirement pending further developments? We would hope that as a federal agency charged with implementing uniform, nation-wide labor relations policies, the Board will again postpone the posting requirement, but we shall await the Board’s pronouncement and will communicate further once the Board announces its decision.
 

Thanks to recent headlines about the increase in employers demanding social media passwords of employees and job applicants, employers have gotten a quick lesson on the increased the risks of this practice, especially if the employer neglects to have the proper policies and procedures in place.

For organizations who still insist on reviewing social media data to determine whether an applicant would be a good fit in their organization, they can start by appointing a social media screener not involved in the decision-making process. Also, the employer should implement a policy and procedure to identify who will be involved in the decision, what data will be collected, when it will be collected and from what sites, and how the data will be communicated to the hiring manager.

http://www.jdsupra.com/videoembed/?fid=40eef8f6-dbfe-4285-8db4-cf84ae9c4ebc

This video is also posted on www.JDSupra.com.

There has been a lot of backlash against the practice of employers asking potential employees for their Facebook password. So much so that U.S. senators are calling on the EEOC and the U.S. Department of Justice to launch an investigation to determine whether this practice is lawful. Facebook is also weighing in and threatening legal action against employers who engage in this practice.

Employers can avoid the current controversy by using other less risky approaches to screen applicants. One such practice is to conduct a thorough background check that complies with the Fair Credit Reporting Act. Be sure to disclose the background check to the applicant, receive authorization in writing, and use the information the applicant directly provides to you to minimize legal liabilities and inaccurate results.

 

 

http://www.jdsupra.com/videoembed/?fid=05e7eb5d-d2a6-43a7-8617-8700f1156741

You can also view this video at www.jdsupra.com. 

The National Labor Relations Board’s (“NLRB”) aggressive campaign to educate non-union employees about their rights under the National Labor Relations Act (“NLRA”) is in full swing.

In addition to the mandatory notice posting requirement that will go into effect for all employers on April 30, the NLRB recently announced its plan to launch a new website designed to educate both union and non-union employees about their rights under the NLRA. These rights include the rights to discuss working conditions and to present grievances to their employers. Under the NLRA, employees have a right to engage in such “protected concerted activity,” even when they are not union employees or involved in union organizing efforts.

The new website will be rolled out in mid-April, just before employers are required to post the Notice of Employee Rights. The NLRB also plans to distribute pamphlets, published in both English and Spanish, addressing workers’ rights and to publicly discuss this information across various media outlets.

This aggressive educational campaign could lead to more complaints from workers. Accordingly, employers should ensure that they have appropriate policies in place that comply with the NLRA. Employers also should ensure that their managers are properly informed of employee rights under the NLRA and trained on how to respond to employee complaints.

We will keep you updated as new developments are announced.

This post was contributed by Jennifer E. Will, Esq., a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.

You may recall a prior entry on this site detailing the National Labor Relations Board’s Acting General Counsel’s first social media report. The Acting General Counsel’s second report was issued just six months later, which highlights how quickly the issues surrounding social media in the workplace are developing. It is important for private sector employers to remember that the National Labor Relations Act ("Act") applies, whether or not employees are represented by a union.

According to the new report, the following common policy provisions may be unlawful because they "chill" employees’ rights under Section 7 of the Act:

Continue Reading Second Verse: Worse Than the First!