On October 23, 2008, the Department of Homeland Security (DHS) released an advance copy of its supplemental final no-match safe harbor regulation initially issued in August 2007. The original regulation was set to take effect in September 2007 but was enjoined by the U.S. District Court for the Northern District of California. The revised regulation is expected to be published in the Federal Register any day, and will take effect immediately. Of course, it is possible (even likely) that another lawsuit may be filed seeking to block this final regulation.

While the substance of the regulation has not changed, DHS did address the two main concerns that lead the court to enjoin the original regulation. First, the preamble of the new regulation clarifies that employers will be considered to have constructive knowledge only if they receive a no-match letter from the Social Security Administration (SSA). That is, DHS will not impute constructive knowledge based on any other communication from the SSA. Second, DHS explained that it would not take action based on no-match letters involving employees hired before November 6, 1986 (the date the Immigration Reform and Control Act was enacted).

The revised regulation outlines the steps an employer must take in order to benefit from a “safe harbor” if the employee named in a no-match letter turns out to be an unauthorized worker. Upon receipt of a no-match letter, the employer should check internal records and either make appropriate corrections or ask the employee to correct the discrepancy within 90 days. Once the discrepancy is resolved, the employer should update the relevant I-9 paperwork and notify agencies of the correction. If the discrepancy cannot be resolved within 90 days, the employer must complete a new I-9 form for the employee by the 93rd day. In completing this new I-9, the employer may not accept any document with the social security number contained in the no-match letter. In addition, the new verification document must include a photo. If the employer is still unable to verify the identity and employment authorization of the employee, the safest course of action is to terminate the employee, or risk facing charges.

Employers should develop and implement a policy to ensure compliance with the process described in our August 2007 Employer Alert. Employers should note, however, that no-match letters were not issued in 2007 and will most likely not be issued in 2008.

Today’s smokers [are] more addicted to nicotine according to a new study, which notes that 73% of those trying to quit are “highly dependent”. The Center for Disease Control and Prevention estimates that 20.2% of Americans are smokers. Pennsylvania has a slightly higher rate of smoking at 21.5 % with 51.9% attempting to quit. Many of these smokers are also employees.

Smokers are feeling the heat in the workplace through smoke-free workplace policies. Jon Hyman at the Ohio Employer’s Law Blog has a post asking Are there legal risks with smoking bans?  He notes that pushing back on these employer initiatives are  29 states which have enacted laws protecting employees who smoke from discrimination.

Pennsylvania has no law protecting smokers from discrimination. To the contrary, Pennsylvania’s new Clean Indoor Air Act mandates smoke-free workplaces and precludes employees from smoking indoors. However, the law allows employers to prohibit smoking anywhere on company property; it does not prevent the continuation of outdoor smoking areas. Employers are left with the sometimes delicate task of crafting a policy concerning outdoor smoking and monitoring the break schedules of employees who wish to smoke. In addition, many wellness programs have targeted smoking with cessation programs coupled with both financial incentives and penalties.

The Americans with Disabilities Act was recently amended to expand the definition of “disability” to the point that it may encompass nicotine addiction. The few ADA cases on “smoking” as a disability have not recognized a claim based on the pre-amendment definition of disability. However, the rationale for denying disability status to “smoking” or “nicotine addiction” is squarely predicated on the remedial nature of the condition exempting it from coverage of the ADA as expounded in Sutton v. United Airlines, Inc. The ADA Amendments expressly abrogated Sutton.  In the only published case of which I am aware, the court in Brashear v. Simms set forth the following rationale in dismissing a smoker’s ADA claim:

…[E]ven assuming that the ADA fully applies in this case, common sense compels the conclusion that smoking, whether denominated as “nicotine addiction” or not, is not a “disability” within the meaning of the ADA. Congress could not possibly have intended the absurd result of including smoking within the definition of “disability,” which would render somewhere between 25% and 30% of the American public disabled under federal law because they smoke. In any event, both smoking and “nicotine addiction” are readily remediable, either by quitting smoking outright through an act of willpower (albeit easier for some than others), or by the use of such items as nicotine patches or nicotine chewing gum. If the smokers’ nicotine addiction is thus remediable, neither such addiction nor smoking itself qualifies as a disability within the coverage of the ADA, under well-settled Supreme Court precedent.

Pennsylvania employers can and must adopt policies prohibiting smoking in the workplace. However, employers may well be required to reasonably accommodate nicotine-addicted employees much as they would need to do so with other addictions, like drugs and alcohol. The scope of such accommodations must be explored. Section G of the EEOC’s Guidance on Applying Performance Standards to Employees with Disabilities may prove helpful.

 

UPDATE:  How will this new wrinkle weigh in the mix: Under Obama will smoking become  "cool" again?

Union membership and the public perception of the role of labor unions are relatively unchanged in recent years. Union membership was up only slightly in 2007 based on a report by the Bureau of Labor Statistics of the Department of Labor, which published the following statistics on union membership:

     Percentage of unionized workforce
     Total – 12.5%
     Public sector – 36.5%
     Private sector – 7.8%

Public perceptions of unions is also remained constant. An annually conducted Gallop Poll shows a relatively constant union approval rating hovering around 60%, with only 22% of those polled feeling that unions would be “stronger” in the future.

The 2008 Election may dramatically change the landscape of U.S. labor relations with a reinvigoration of organized labor. The following influence could align to compel unprecedented unionization:

  • Payback to Union Supporters: Democratic candidates received substantial support from organized labor both financially and in getting out the vote. This support will garner political power, which will likely translate into a pro-union legislative agenda.
  • Uncontested Legislative Agenda: Senator Obama is the cosponsor of the EFCA and RESPECT Act both of which are strongly supported by unions. A Democratic majority in the House and Senate will pave the way for an uncontested legislative agenda that will likely include these laws. Republicans could be unable to slow the process down using a “filibuster” if the Democrats secure a 60-seat majority in the Senate to invoke cloture on floor debates.
  • Economic Woes: The economy downturn will continue to hurt businesses making necessary reductions in force, smaller paychecks and other cuts in benefits. The promises of job security and better wages are typical union themes. Nervous workers may turn to unions for help.  Traditionally, unions were forced to the bargaining table where strikes were their primary weapon to put economic pressure on an employer. The historic economic balance between unions and employers will be upset by passage of the EFCA, which mandates arbitrator-crafted contracts within 120 days after initial union recognition.
  • Unprepared Employers: Passage or the RESPECT Act and the EFCA would be a one-two punch for which many employers will be grossly unprepared. RESPECT would make many working supervisors eligible to unionize and to assist a union in collecting cards and other organizing activities. Employers would be unable to use these working supervisors as advocates for their union-free message or to collect intelligence on organizing activities. The EFCA would eliminate the secret ballot and mandate first contracts through arbitration.

 

Clinical staffing problems for Pennsylvania healthcare facilities created by shortages of nursing professionals will be greatly exacerbated by a new law prohibiting mandatory overtime for employees engaged in direct patient care. The Commonwealth is already facing a nursing shortage, which is growing worse. According to the Health Resources and Services Administration (HRSA), an arm of the U.S. Department of Health and Human Services, Pennsylvania health care providers will experience a 41 percent vacancy rate in nursing positions by the year 2020, requiring more than 54,000 nurses to provide adequate patient care. Restrictions on the amount of work time for an already short labor pool will likely increase problems.

The Prohibition on Excessive Overtime in Health Care Act becomes effective on July 1, 2009. Health care facilities covered by the law include hospitals, ASCs, hospices, long-term care facilities and other inpatient facilities, but it excludes private physician offices and group practices. Employees protected by the law include all nonsupervisory employees involved in direct patient care activities or clinical services, including individuals employed through a temporary service or employment agency. Physicians, physician’s assistants, dentists, and job classes with no direct patient care are excluded from the overtime limitations.

 

A health care facility cannot compel a protected employee to work more than an agreed to, predetermined and regular daily shift exclusive of “on call” time, unless one of the following exceptions applies:

(1)     the employee voluntarily agrees;

(2)     there is an unforeseen emergent circumstance but as a “last resort”, after exhausting other staffing options and giving the employee one hour arrange for family care alternatives;

(3)     the extended work is required to complete a patient care procedure already in progress, but only if the employee’s departure would have an adverse effect on the patient.

 

Employers are permitted to have agreed upon, predetermined and regular shifts greater than 8 hours; however, an employee who volunteers to work more than 12 consecutive hours shall be entitled to 10 hours off duty but may waive the entitlement. Employers may not retaliate against employees who refuse to accept work in excess of the limits. Employers who violate the law are subject to fines ranging from $100 to $1000 per violation.

 

The Department of Labor and Industry is to develop regulations within 18 months.  The law received modest press as it was signed by the Governor along with 31 other pieces of legislation.

The election rhetoric has been relatively quiet on employment-related topics, except for the brief mention in the last debate. Candidate Obama has a clear agenda employment legislation based on his co-sponsorship of various bills and other media comments. Candidate McCain’s position is less clear. Detailed below is a summary of the key legislative initiatives considered by Congress in 2008, all of which have passed the House of Representatives except the RESPECT Act.

Employee Free Choice Act (H.R. 800 and S. 1041)

Summary:  The EFCA amends the NLRA to change the procedures for union certification and first contract negotiation. The primary components of the act are as follows:

  • Allows NLRB certification of a relevant bargaining unit upon authorization card showing from 50% plus one of employees bypassing secret ballot election.
  • Mandates initial collective bargaining contract be negotiated within 120 days or first contract is produced by an arbitrator covering employees for 2 years.
  • Provides new fines for employer unfair labor practices.

Impact:   EFCA is a monumental change to the NLRA. Much has been made of the abrogation of the secret ballot election, but equally dramatic are the limitations placed on collective bargaining and contract determination by an arbitrator if no agreement is reached in 120 days of negotiations.   If enacted, EFCA will result in unprecedented organizing activity with employers losing their ability to demand an election and engage in hard bargaining over a first contract.

Candidate Positions:  H.R. 800 passed the House but did not receive enough votes for consideration by the Senate. Candidate Obama is a co-sponsor of the Senate Bill and supports its passage. Candidate McCain opposes the Senate Bill.

Prior Posts:  NOW is the Time for Employers to Gear up for the Employee Free Choice Act (Unions Are)

 

Employment Non-Discrimination Act (H.R. 3685/ no Senate Bill)

Summary:  ENDA adds sexual orientation to the protected classes under Title VII for all employers except religious organizations. It allows reasonable access to adequate facilities that are not inconsistent with the employee’s identified gender, but does not require domestic partner benefits or protect “gender identity”.

Impact:  ENDA adds a protected class to employment discrimination protections allowing compensatory and punitive damage claims against employers.     

Candidate Positions:  H.R. 3685 passed the House but did not receive enough votes for consideration by the Senate.  No legislative position by either candidate.   Candidate Obama’s website expresses support for the legislation.

 

Ledbetter Fair Pay Act (H.R. 2831/ S. 1843)

Summary:  FPA overturns the Supreme Court’s decision in Ledbetter v. Goodyear Tire and Rubber Co. effectively eliminating the 180 or 300-day statute of limitations for filing a wage-related discrimination claim. The bill allows family members and others affected by discrimination to file claims and reinstitutes the Paycheck Rule for determining when a claim accrues. It also allows claims based on paychecks and annuity payments which would allow retirees to bring claims.

Impact:  FPA virtually eliminates the statute of limitations for wage-related claims.

Candidate Positions:  H.R. 2831 passed the House but did not receive enough votes for consideration by the Senate.  Candidate Obama is a cosponsor of the Bill. Candidate McCain has expressed no opinion on the Bill.

 

Paycheck Fairness Act (H.R. 1338/ S. 766)

Summary:  PFA changes the burden of proof in gender based pay claims requiring the employer to affirmatively demonstrate that any pay differential is not based on sex. Employers who cannot meet this burden face unlimited compensatory and punitive damages. The EEOC would be required to collect employer payroll information based on sex, race, and national origin thereby targeting its enforcement activities. The Bill also changed rules on class actions automatically including employees in such claims unless they specifically opt out.

Impact:  PFA subjects employers to wage related class actions with unlimited damages and makes it easier for employees to prove such claims.

Candidate Positions:  H.R. 1338 passed the House but did not receive enough votes for consideration by the Senate.  Candidate Obama is a cosponsor of the Bill. Candidate McCain has not taken any position on the Bill.

 

RESPECT ACT (H.R. 1644/ S. 969)

Summary:  The so-called Re-Empowerment of Skilled and Professional Employees and Construction Tradesworkers (RESPECT) Act would change the NLRA definition of “supervisor” to exclude “working supervisors” who do not spend a majority of their worktime in strictly managerial duties excluding the tradition duties of assigning work and directing the activities of others.

Impact:  Respect would allow many working or front line supervisors to join a union dividing their loyalties to the company, as they would be permitted to assist in the unionization of the company.

Candidate Positions:  Candidate Obama is a cosponsor of the bill and Candidate McCain has taken no position on the Bill.

Prior Posts: Bosses do not Deserve RESPECT

 

If there is a Democratically-controlled House, Senate, and President, it is likely that some or all of the above legislation will be enacted in 2009. Others have commented on the HR landscape following the election:

What The Future of HR Looks Like in 2009

Small business owner’s guide to the election

Employers offering severance payment to employees are typically uncertain about the payroll taxes that may apply to these additional payments. Severance pay is treated as “supplemental wages” because it is not a payment for services in the current payroll period but a payment made upon or after termination of employment for an employment relationship that has terminated. As supplemental wages, special payroll tax withholding rules apply. The Internal Revenue Service recently clarified its position on withholding for supplemental wages, including severance pay.  Employers should also make sure that severance payments offered in conjuntion with a waiver and release comply with the ADEA and WARN requirments.

Revenue Ruling 2008-29 addresses nine different situations where supplemental payments are made to employees that require additional payroll tax withholding as follows:

  1. commissions paid at fixed intervals with no regular wages paid to the employee;
  2. commissions paid at fixed intervals in addition to regular wages paid at different intervals;
  3. draws paid in connection with commissions;
  4. commissions paid to the employee only when the accumulated commission credit of the employee reaches a specific numerical threshold;
  5. a signing bonus paid prior to the commencement of employment;
  6. severance pay paid after the termination of employment;
  7. lump sum payments of accumulated annual leave;
  8. annual payments of vacation and sick leave; and
  9. sick pay paid at a different rate than regular pay.

For the supplemental wage payments identified above that do not exceed $1 millon, the amount of income tax withholding is determined under the rules provided in § 31.3402(g)-1(a)(6) and (7). These paragraphs describe two procedures for withholding on supplemental wages: the aggregate procedure and optional flat rate withholding. The Revenue Ruling explains the application of the two procedures to each of the nine payment types. A Supplemental to Circular E also provides guidance on withholding in Publication 15 and Publication15A.

October 16th is the annual celebration of Boss’s Day, which has traditionally been the day for employees to “thank their boss for being kind and fair throughout the year”. In most workplaces, it is clear who is a boss and who is not. The boss is the one who tells you what to do, completes your performance review and hassles you when you do not follow company policy.

The term “boss” generally means “supervisor”. For us in the legal-compliance world, knowing who is a supervisor and who is not is very important. Supervisors are not paid minimum wage and overtime; cannot be members of a union; and make the company liable for their actions like sexual harassment. Organized Labor has pushed the NLRB to narrowly define supervisor, but the Supreme Court rejected previous definitions as inconsistent with the text of the NLRA. In Oakwood Healthcare Inc, the NLRB modified the definitions of "assign," "responsibly direct," and "independent judgment" (all used to determine a supervisor) to conform to the Supreme Court rulings in NLRB v. Kentucky River Comty. Care, Inc. and NLRB v. HCR.

The RESPECT Act would make three major changes to the current definition. It would eliminate the two most common supervisory duties- the authority "to assign" other employees, and the authority to "responsibly to direct" other employees. In addition, the RESPECT Act would require that the "majority of a supervisor’s work time" be spent engaging in the remaining duties outlined in the NLRA definition below.

The new definition of “supervisor” under Section 2(11) of the NLRA would read as follows:

Any individual having authority, in the interest of the employer, and for a majority of the individual’s worktime, to hire, transfer, suspend, lay-off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them,or to adjust their grievances or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

 

Changing the definition of “supervisor” would significantly affect many workplaces by:

  • Create divided loyalties among front-line supervisors who assign work to employees. Under the RESPECT Act, such supervisors would be covered by the NLRA and could then form, join or assist labor organizations; be eligible to vote in NLRB supervised elections; solicit signatures for union authorization cards from "co-workers;" or picket, go on strike or engage in other work stoppages that would be inconsistent with a supervisor’s duty.
  • Fundamentally tip the balance between the dual functions of the national labor policy: (1) to protect the rights of rank-and-file employees in exercising their rights to form, join or assist a union without managerial or supervisory interference, while at the same time (2) ensuring supervisors act as agents in the interests of their employers in matters of labor-management relations.
  • To the extent that the NLRA definition is changed, there may also be changes to the FLSA’s definition, triggering litigation involving individuals currently classified, as "supervisors" but who may not meet a new definition.

Organized Labor’s legislative wish list includes the Re-Empowerment of Skilled and Professional Employees and Construction Trades workers ("RESPECT") Act, along with similarly misnamed Employee Free Choice Act.   Candidate Obama supports both acts; while Candidate McCain opposes them. The addition of supervisors to the ranks of potential union members and the ease of organizing workforces without a secret ballot election would dramatically change the balance of labor management relations. It would also greatly increase the dues collected by unions from organized employees.

Employers engaging in business where employees have “significant likelihood of regular contact with children” should be paying close attention to the amendments to Pennsylvania’s Child Protective Services Act, also know as Act 73. Act 73 became effective on July 1, 2008, and has taken many employers off guard.

Act 73 expands criminal background check requirements under the Child Protective Services Act beyond its traditional scope, which included employees engaging in child care professions, adoptive parents and foster families. Now, “prospective employees applying to engage in occupations with a significant likelihood of regular contact with children, in the form of care, guidance, supervision or training” must also undergo criminal background checks prior to being employed. Examples of such prospective employees identified by Act 73 include, social service workers, hospital personnel, mental health professionals, members of the clergy, counselors, librarians and doctors. 

What background checks are required for covered prospective employees? A Pennsylvania criminal background check, a Department of Public Welfare clearance and a report of Federal criminal history record information verified by a fingerprint check.   The Federal fingerprint check is new. Applicants with founded reports of child abuse during the five-year period preceding their application are ineligible to be hired. Applicants with any state or Federal convictions related to certain crimes (e.g. homicide, rape, indecent exposure and corruption of minors) are also ineligible to be hired. 

Act 73 is creating some headaches for employers in a couple of areas. The Act’s general statement concerning “significant likelihood of regular contact with children” is not further defined and there are no anticipated regulations coming to give further guidance to employers. Employers, such as hospitals, that provide services to children and adults are struggling to define what employees fall within Act 73’s requirements. For example, housekeeping and environmental services employees may have contact with children simply by being present in the hospital, although childcare is not part of their job.

 

Another area causing difficulty for employers is the new requirement of a Federal background fingerprint check. Employees are initially responsible for obtaining the Federal background check. These checks can take upwards of sixty days and many applicants are simply unaware of the new requirements at the time they apply. The result has been difficulty in filling needed positions quickly. Employers are permitted to hire employees on a provisional basis provided that the employee provides proof of application for a Federal background check. Provisional hiring periods for in-state applicants cannot exceed 30 days. The period is 90 days for out of state applicants.

 

Employers should approach Act 73 with an abundance of caution, especially in light of its potentially broad reach. Intentional failure of a person to obtain necessary background checks from a covered applicant is a misdemeanor of the third degree.

Let’s take a moment to honor this cinematic legend while examining the dynamics of leadership that exist in all organizations whether it’s corporate America or in this case the Hole in the Wall Gang.

In this classic flick, Butch is an absentee leader with no succession plan. He is challenged by one of his subordinates for leadership of the gang.  Butch leads the gang through his dominant intellect and control over the gang’s star member –  the Sundance Kid a.k.a. Robert Redford. Here are some of Butch’s leadership shortcomings:

 

Assuming his Leadership won’t be Challenged

Butch is surprised when his leadership is challenged, but reminded by a gang member that “you always said that any one of us could challenge you Butch.”  Butch responds, “That’s cause I figured no one would do it."  The challenger responds, ”You figured wrong Butch.”

 

Losing Touch with his Team and then making Excuses 

There is support for the challenge when one gang member says “ Well at least [the leadership challenger] is with us… you have been spending a lot of time gone.” Butch makes his excuse in that “everything is different now… it’s harder now…you have to plan more….”

 

No Succession Plan

Butch has no succession plan creating a leadership vacuum where the rules are unclear. The ensuing battle is won only by Butch’s quick thinking and fancy footwork.  Ultimately, he must profess to the gang that there are no rules.

 

Retailating against those who Oppose him

Butch tells Sundance Kid that he doen’t mean to be a sore loser, but it the fight is done, and he’s dead, kill his successor.

 

Here is the full scene. Your comments on leadership are welcome.

 

https://youtube.com/watch?v=2y87EaadjqM%26hl%3Den%26fs%3D1

Transcript below:

Continue Reading Paul Newman: A Lesson in Leadership from Butch Cassidy

The New York Times article Tattoos Gain Even More Visibility discusses the rising popularity of body art and challenges facing employers in regulating employee dress. The article focuses on tattoos but raises the larger issue of employer dress code standards and their challenges in terms of both employee retention and legal compliance.

Jon Hyman at the Ohio Employers Law Blog notes that Employment decisions based on tattoos are not discriminatory and I would add “per se”. In fact, most courts defer to an employer’s evaluation of dress standards focusing on whether the policy is discriminatory or fails to reasonably accommodate religious practices. For example, in Coulter v. Costco Wholesale Corp., a court determined that “Costco has made a determination that facial piercings, aside from earrings, detract from the "neat, clean and professional image" that it aims to cultivate. Such a business determination is within its discretion. As another court has explained, ‘Even assuming that the defendants’ justification for the grooming standards amounted to nothing more than an appeal to customer preference, . . . it is not the law that customer preference is an insufficient justification as a matter of law.’"

Courts may not question the business reason for the dress code standard, but the application of the standard across the pool of applicants and employees is clearly, where discrimination can occur. Discrimination is more likely to occur where managers are called upon to subjectively evaluate compliance. As noted in the NYTimes article, “Defining what the courts in the Cloutier case called a “neat, clean and professional” workplace image becomes more challenging when you consider that in 2006, a Pew Research Center survey found that 36 percent of people age 18 to 25, and 40 percent of those age 26 to 40, have at least one tattoo.” The difficulty arises from both the prevalence of tattoos and the excessive subjectivity of the standard.

Human Resource Professionals and managers loathe their role as fashion policy, but the subjectivity of some dress code standards invites claims of discrimination. For example, an employer requires all applicants to have a “neat, clean and professional appearance”. If hiring managers are called upon to describe this qualification standard, it is likely that all will have different measures.  If the subjective dress standard disproportionately disqualifies applicants in a protected class, it may be challenged as discriminatory.

Kris Dunn at the HR Capitalist gives a great perspective on customer preference in his post  Your Employee’s Tattoo Is Causing a Consumer Confidence Issue….John Phillips at The Word on Employment Law also comments on the subject in his post  Coming to Your Workplace: Visible Tattoos.