December 15, 2016

5 Things Every Employer Should Consider Now

In recent presentations I have been sharing thoughts with contacts and clients concerning areas to deal with now, proactively.  Hopefully it will help you as well.

1.  Do You Hire Temporary Employees?

If you hire temporary employees through a staffing agency, you need to be aware that the law, according to the National Labor Relations Board (NLRB) has changed for ALL employers.  You should care because it is not enough to have an agreement between the entities that the temporary employees are not employees of your company.  Now, contrary to 30 years of case law, if you have indirect control of the individuals; if you control the essential terms of what they do; despite anything in your agreement with the respective agency; it is likely that you may be considered joint employers.  Which means both parties could be on the hook for everything from discrimination to salaries, benefits to workers compensation.

So take the time to contact your staffing agency, review your agreements and how things are drafted.  Frankly, even if you are a staffing agency, now is a very appropriate time to take a look at what your agreements state and consider what changes should be made to try and avoid this issue.  You should know there is a Bill in Congress to alleviate this issue, but as of now it has not passed.

2.  When You Hire Do You Check References?

If you are like most, professionally you are on Linkedin and using it in all sorts of ways, potentially even for enhancing how you do reference checks on potential employees.  Recently five individuals filed an action claiming one service from Linkedin, which allows you to obtain a list of people who may know a candidate, violated the Fair Credit Reporting Act (FCRA) and should have require notice to the individual that such a list was requested.  Thankfully, the Court dismissed the matter in its entirety, but it begs a good question as businesses look to grow by hiring the right people.

The question is what process do you use to check up on your candidates?  I do not mean do you do a background check, but do you Google them or otherwise look for them on Linkedin or elsewhere?  Do you have a standardized policy or procedure concerning how you do it and are all your recruiters aware of it?  Given the above mentioned case, it is a very good idea to have a specific plan in place that everyone internally knows and follows so you do not have any recruiters checking things out on their own, potentially creating legal issues for you, rather than helping to solve your talent needs.

3.  Do You Have Any Transgender Employees?

A recent case made me sit back and think, because in one situation an electrical company had an employee who self-identified as transgender and ultimately had the sex reassignment surgery after notifying his employer that he was becoming a woman.  Regrettably, the response from management was to preclude him from discussing his situation at work and ultimately she was terminated.  In the ensuing litigation, the employer correctly noted that Title VII does not presently cover transgender as a protected class.  However, as the Court pointed out, that was not the theory under which the suit was brought.  The basis for this litigation was sex stereotyping, in essence treating someone in a discriminatory manner because they were initially one sex, but did not act in the manner expected of that sex. As you may know, sex stereotyping is covered under Title VII.

Part of the challenge in this case as well as in many organizations today may not be the typical understanding of having the protected class of transgender, but the fact that there is a lack of understanding for the individual and the sex stereotyping that could result from either misunderstanding or ignorance.  Whether you are dealing with this now in your workforce or it is merely a precaution, it is something that should be dealt with and added into your training catalogue.  It can either be a standalone session or recently we have added it into our overall harassment training.  However you choose to address the discussion, it is one that needs to be had before you end up as the next piece of litigation in this evolving area.

4.  Do You Have Locations Where Medicinal Or  Recreational  Marijuana Is Approved?

As of today, there are 23 states and D.C. who have approved medicinal use.  Additionally, 4 states have approved recreational use.  One of the states included in these statistics of course is Colorado, which recently had a case arise that may be instructive as we consider what happens for an employer in situations where you have a medicinal approved user, who tests positive in a random drug test.  Of course he files suit after being terminated for the infraction, despite his state right to obtain the marijuana.  While the Colorado Supreme Court upheld his termination, the suit may actually be foreshadowing things to come.

Independent of your personal opinion on marijuana use, the legal fact is that now almost half the states in the U.S. have legalized some form of marijuana use.  This of course creates a challenge for employers, since under federal law, marijuana is still illegal.  As a practical pointer, where you are physically located matters in this discussion because in many situations what an employer can or cannot do is dependent on the specific state law.  So, for example, in Colorado, it specifically carves out the ability of employers to manage their workers independent of any state approved marijuana use.  What that means is that if you are in one of the states that allows some type of use, check out the law itself or consult your employment counsel, determine what you can do, so you know in the event that it comes up later.  One last thought on this issue: if someone has approved medicinal marijuana, they are likely covered under the law for other reasons, so breathe slowly and react intentionally.

5. Who Receives Overtime In Your Organization?

One of the most impactful things that the U.S. Department of Labor (“DOL”) has done recently is put out proposed regulations that are the precursor to altering the manner in which everyone currently is required to handle overtime payments and more specifically the threshold beyond which an employee may be exempt from overtime.  To suggest that this is a big issue for the business community is an understatement and was revealed in part by the more than 250,000 responses the DOL received during its comment period in the summer of 2015.  The big potential hit to employers is the threshold salary move up from the current $23,660 to potentially $50,440.  Of course, that was more proposed, but that may be the largest initial impact to organizations in 2016.  The challenge for employers is that we do not know when the DOL will put out the final rule and subsequently when it will go into effect at the higher salary threshold number.  It is conceivable that someone could be exempt today and once this goes into effect may be entitled to significant overtime payments.

As an employer you should know that the best guess (which is as good as it gets right now) suggests that the DOL will come out with the final rule in the second half of the year and likely go into effect prior to the President leaving office.  The challenge this reality creates is a potential for a very short window between announcement of the final rule and implementation of the same.  In fact, depending on your industry that could come at a challenging time (in the fourth quarter) when many organizations have seasonal employees working longer hours.  To avoid being caught off guard and scrambling to adjust salaries or revise balance sheets, take the time to review all of your job descriptions now, assess who should legitimately be exempt and put steps in place to ensure that any movement necessary is accounted for before the end of 2016.  That way, even if you need to change a few things under the final rule, most of the heavy lifting and evaluation is already completed.

By: Louis Lessig, Esquire
Partner at Brown & Connery, LLP