June 2017 – The Employer E-Letter: Labor and Employment Law News from the Duluth, Minnesota law firm of Hanft Fride, A Professional Association

June 2017 – Vol. 19, No. 6

The Employer E-Letter:  Labor and Employment Law News 
from the Duluth, Minnesota law firm of
Hanft Fride, A Professional Association.

Co-Editors, Richard R. Burns, rrb@hanftlaw.com and Scott A. Witty, saw@hanftlaw.com, or 218-722-4766. Please feel free to forward this e-mail or share it with others.  If there are other topics of interest to you or any other suggestions concerning this newsletter, please let us know.

This Month’s Topics:

  • Tip Of The Month 

New Secretary of Labor Withdraws Joint Employment and Independent Contractor Informal Guidance

The new Secretary of Labor Alexander Acosta recently announced the withdrawal of two informal guidances:  one on joint employment and the other on independent contractors.  In regard to joint employers, the informal guidance was similar to a 2015 National Labor Relations Board (NLRB) ruling now being challenged in court, but impacting different laws.  In general, the guidance suggested that employers are considered joint employers when they have “indirect control over the terms and conditions of employment or have reserved authority to do so.”  The most famous example of this is that the government challenged McDonald’s as “reserving the authority to do so,” based on its very specific employee manuals furnished to franchisees.  In regard to independent contractors, the informal guidance discussed when workers are employees under the Fair Labor Standards Act.  While previously a factor, the informal guidance suggested that, if one is considered “integral” to the core of the business (a full-time employee normally might do this work, then the person would be considered an employee.  In both of these areas there is continuing litigation, but the Secretary also suggested that the Department will continue to fully and fairly enforce all laws within its jurisdiction, including the FLSA and the Migrant and Seasonal Agricultural Work Protection Act.  Employers must recall that their responsibilities under these Acts are reflected in the Department’s long-standing regulations and case law and future court cases will frame these issues.  Employers, however, can feel some relief with the Secretary’s actions. 

Compensatory Time May Be Available Soon To Private Employers.

On May 4, 2017, the House passed a bill that would permit private sector employers to offer days off in lieu of earned overtime.  Supporters of the Worker Family Flexibility Act (WFFA) suggest that it allows employees more flexibility to choose either overtime compensation or time off whereas opponents suggest that it provides employers with too much control as to when and how the time off will be granted and that it grants the employer an interest-free loan.  Major provisions include the following:

  1. Each employee has an option to agree to elect compensatory time or withdraw that consent at any time.
  2. Employees earn compensatory time at a rate of 1 ½ times for each hour worked above 40 and when they actually take the time off it is at the higher of their hourly rate when they worked overtime or their current rate.  Compensatory time must be paid within 31 days after the completion of a company-determined 12 month period or within 30 days of receiving a written notice request from the employer requesting monetary compensation or upon the employee’s termination.
  3. Upon 30 days’ notice, the employers can discontinue compensatory time program and may reimburse employees for accrued compensatory time in excess of 80 hours.

The bill now goes to the Senate for approval or reconciliation, and the President has stated he would sign the bill in its current form.

Employees’ E-mails Critical of Employer are Protected

A National Labor Relations Board administrative law judge recently ruled that an employer was wrong to terminate employees as a result of e-mails they sent in support of an employee who had recently resigned. At the time of her resignation, the employee sent an e-mail to ownership, the general manager, and co-workers stating a list of complaints which were critical of the general manager. The co-workers who were included on the e-mail responded to it with critical comments regarding work schedules, the tip policy, and the behavior of the general manager. The employer then terminated the employees who sent such emails. The ALJ ruled that the employees in making their comments were engaged in concerted activities for mutual aid and protection since the comments were related to the terms and conditions of their employment and were communicated to other employees.  Such activities are protected under the NLRA. Another interesting issue in this case is that the employer is no longer in operation, so it is unknown how the employee’s reinstatement rights can or will be enforced against the employer in that it is unknown how the order to reinstate the employees will be enforced being the employer is no longer operating. Mexican Radio Corp. and Rachel Nicotra, Case No. 02-CA-168989 (April 26, 2017).

EEOC Final Rules Re: Employee Wellness Programs 

On May 16, 2016, the EEOC issued its final rules relating to employee wellness programs, under the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”).  While both the ADA and GINA generally prohibit employers from obtaining and using information relating to employee health conditions, or that of their family members, both allow employers to ask health-related questions and utilize medical examinations to determine risk factors amongst employees if the questions and examinations are part of a voluntary wellness program.  The new EEOC rules offer further guidance as to what is permissible under the ADA and GINA in the context of wellness programs.  The rules, which went into effect on January 1, 2017, apply to programs that obtain medical information in exchange for an incentive.  The rules place a restriction on the amount of incentive that an employer may provide employees and their spouses (up to 30 percent of the total cost of self-only coverage), and prohibit incentives for participation by employees’ children.  In addition, the rules emphasize and expound upon the requirement that programs be voluntary, that confidentiality of health information be safeguarded, and that reasonable accommodations be provided for ADA compliance.  Employers who offer employee wellness programs should ensure that their programs are reviewed for compliance with the new rules, and be cognizant of the fact that future changes to laws relating to wellness programs are likely.

TIP OF THE MONTH:  Employers should be encouraged to do background checks in many sensitive areas of employment and obviously are required to do so for some types of employment.  If you are going to do background checks, the best time to do them is after you have made an offer but before the person has started.  Please understand that under the Fair Credit Reporting Act you have a specific requirement to notify an applicant of the reasons you are withdrawing a job offer, if you have used a vendor to do the background check.  Obviously to do that background check before an offer could be expensive and certainly is unnecessary if the person does not interview well.  Also most states’ drug testing laws typically require that pre-hire drug testing occur post-offer and under the ADA medical examinations cannot occur until the offer has been made.

Hanft Fride’s business and trial lawyers are located at 1000 U.S. Bank Place, in Duluth, Minnesota.  Visit our website at www.hanftlaw.com for general information on the firm and our attorneys. Our employment lawyers include Tom Torgerson, Rob Merritt and Scott Witty.  Richard Burns is now of Counsel.

The information provided in this E-letter is general in nature and should not be used as a substitute for professional services and advice.  The communication and receipt of this information is not intended to create an attorney-client relationship.  Readers should consult with their legal counsel  before taking any action on matters covered in this E‑letter.

To subscribe or unsubscribe to Employer E-Letter, e-mail your request to lml@hanftlaw.com or call Scott Witty at 218.722.4766.

Copyright 2017 by Hanft Fride, P.A.  All rights reserved.  Hanft Fride, A Professional Association, 1000 U.S. Bank Place, 130 W. Superior Street, Duluth, MN 55802.  Phone 218.722.4766; Fax 218.529.2401. Cloquet Office 218-879-3333.