Final Rule Implementing Executive Order Mandating Paid Sick Leave by Federal Contractors Published

By Jerilyn Jacobs

Last week, the Department of Labor published a Final Rule regarding implementation of Executive Order 13706, which requires certain federal contractors to provide paid sick leave to their employees.  The Final Rule applies to contracts where the solicitation was issued or the contract was awarded on or after January 1, 2017.

Under the Final Rule, applicable federal contractors will be required to provide employees with one hour of paid sick leave for every 30 hours worked on or in connection with a covered federal contract, up to 56 hours.  Employees may use paid sick leave for the following reasons:

  • To care for the employee’s own illness and other health care needs, including preventative health care;
  • To care for a family member who is ill or needs health care, including preventative health care (the Final Rule takes an expansive view of the types of family relationships that are covered, extending beyond individuals with biological or legal ties to the employee); and
  • For purposes related to being the victim of domestic violence, sexual assault or stalking, or assisting a family member or loved one who is such a victim.

The four major types of federal contracts that fall under the Final Rule are procurement contracts for construction covered by the Davis-Bacon Act (DBA), service contracts covered by the McNamara-O’Hara Service Contract Act (SCA), concessions contracts, including any concessions contracts excluded from the SCA by the Department of Labor’s regulations at 29 CFR 4.133(b), and contracts in connection with federal property or lands and related to offering services for federal employees, their dependents, or the general public.

The Executive Order and Final Rule do not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the federal government that are subject to the Walsh-Healy Public Contracts Act (PCA).  However, where a PCA-covered contract involves a substantial and segregable amount of construction work that is subject to the DBA, employees whose wages are governed by the DBA or the Fair Labor Standards Act (FLSA), including those who qualify for an exemption from the FLSA’s minimum wage and overtime provisions, are covered for the hours spent performing work on or in connection with such DBA-covered construction work.

As to employees working on contracts covered by a collective bargaining agreement (CBA), if the CBA already provided the employee with at least 56 hours of paid sick time per year, then the other requirements of the Executive Order and the Final Rule do not apply to the employee until the date the CBA terminates or January 1, 2020, whichever is first.  If the CBA provides less than 56 hours or seven days, in cases where the CBA refers to days rather than hours, the contractor must provide covered employees with the difference between the amount provided under the CBA and 56 hours in a manner consistent with the Executive Order and Final Rule or the terms and conditions of the CBA.

The Final Rule also provides that employees can carry over up to 56 hours of unused paid sick leave from year to year while they work for the same contractor on covered contracts. Further, contractors are required to reinstate employees’ accrued, unused sick leave if the employee returns to work within 12 months after a job separation, unless the employee was paid for unused sick leave upon separation.

Employees can use as little as an hour of paid sick leave at a time.  An employee’s request to use paid sick leave may be made orally or in writing.  Advance notice can be required where the need for leave is foreseeable, and a contractor can require supporting documentation if the employee is absent three or more consecutive full days.

For further reference, the Final Rule may be found at https://www.federalregister.gov/documents/2016/09/30/2016-22964/establishing-paid-sick-leave-for-federal-contractors

 

Wisconsin Among 21 States to Challenge DOL’s New Overtime Rules

By Sally A. Piefer

With less than 90 days before the Department of Labor’s new white collar overtime rules take effect, Wisconsin is among a group of 21 states challenging the Final Rule.

On May 18, 2016, the Department of Labor (“DOL”) issued Final Rules changing the eligibility for overtime for employees falling in the executive, administrative or professional exemptions. The Final Rule more than doubles the minimum salary necessary for an employer to consider a particular job exempt from overtime, increasing the salary threshold from $23,600 to $47,476 annually ($913 per week). In addition, the Final Rule provides for automatic indexing of the minimum salary threshold every three years. This new “salary” test is expected to affect approximately 4.2 million U.S. employees who are currently considered exempt. The Final Rule was set to take effect on December 1, 2016.

The lawsuit, filed yesterday in federal court in Texas, charges that the DOL failed to analyze the type of work that an employee is doing in these exempt classifications and simply determined that the amount of salary received by the employee was the best indicator of whether the employee fit within one of the exemptions. The DOL, the lawsuit claims, failed to consider any changes to the duties tests because those changes would have been “more difficult.”  They charge that salary should not be used as a “proxy” for duties and that employees who satisfy the duties portion of the test should still be considered exempt. In addition, the States challenge the automatic indexing because the use of automatic indexing is “without specific Congressional authorization” and is therefore invalid. Instead, if the DOL wants to use automatic indexing, the Plaintiff States say this process should go through the normal administrative agency notice and comment rulemaking process.

In addition, the lawsuit states that the payment of overtime to employees who will no longer be eligible to be considered exempt would force not only state and local governments – but also private employers – to substantially increase labor costs. Unlike private businesses, the Plaintiff States allege that state and local governments have fewer discretionary funds available and therefore have less ability to reduce costs or increase revenue. The result of the Final Rule, they claim, will force state and local governments to reduce or eliminate essential government services and functions.

The Plaintiff States allege that the Final Rule violates the 10th Amendment. The Tenth Amendment, a section of the Bill of Rights, essentially says that any power that is not given to the federal government is given to the people or the states. The States say that compliance with the Final Rule will impair the States’ ability to run their governments because of the huge impact the Final Rule will have on their respective budgets. The States ask the Court to declare the Final Rule invalid. At this point, the Plaintiff States have not sought immediate injunctive relieve preventing the rule from taking effect on December 1, 2016, but perhaps that will come as the deadline draws closer.

Other states joining Wisconsin in the lawsuit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, South Carolina, Texas, and Utah.

Shortly after this lawsuit was filed, the U.S. Chamber of Commerce and fifty different business groups also filed suit in federal court in Texas challenging the Final Rule. The Chamber’s lawsuit also alleges that the Final Rule disqualifies millions of employees from the executive, administrative, and professional employee exemption and that “the new salary threshold is no longer a plausible proxy for the categories exempted from the overtime requirement.”  The lawsuit also argues that the automatic update to the salary threshold every three years without rulemaking or seeking input from stakeholders is not authorized under the law.

Lindner & Marsack, S.C. will continue to keep you posted on further developments. However, in the interim, you should proceed as though the Final Rule will take effect on December 1, 2016, so that you are not scrambling or putting your business in jeopardy of running afoul of the Final Rule.

For more information about the DOL’s new overtime exemption rules or your general employment law needs, please contact Attorney Sally Piefer at (414) 226-4818 or spiefer@lindner-marsack.com or any of the other attorneys you work with at Lindner & Marsack, S.C.

LINDNER & MARSACK, S.C. WELCOMES JOSEPH BIRDSALL AS AN ASSOCIATE

Lindner & Marsack, S.C., one of the region’s most respected and longstanding management-side labor and employment law firms, today announced Joseph Birdsall as the newest associate to join their growing team of leading labor and employment attorneys.

Birdsall defends clients against worker’s compensation claims, advises clients of exposure reduction strategies and keeps clients informed of Wisconsin worker’s compensation law developments. He has particular experience in handling subrogation issues, unreasonable refusal to rehire claims and safety violation claims.

“Joe’s experience across the spectrum of labor and employment law, and especially in the area of worker’s compensation, is a valuable asset for our clients as we help them navigate complex workplace legal challenges,” says Lindner & Marsack Firm President Thomas Mackenzie.

Birdsall received his Juris Doctor from Marquette University Law School in 2013 with certifications in Litigation and Alternative Dispute Resolution. While in law school, Birdsall served on the Moot Court Executive Board, received the CALI Excellence for the Future Award in Negotiations and interned for The Honorable Kitty K. Brennan, Wisconsin Court of Appeals District I. Prior to joining Lindner & Marsack, Birdsall practiced worker’s compensation defense at a large Milwaukee-based law firm. He is a member of the State Bar of Wisconsin, the American Bar Association, the Milwaukee Bar Association and the Wisconsin Association of Worker’s Compensation Attorneys.

“There are continually new issues, new regulations and new laws that expose employers to all sorts of potential risks,” says Birdsall. “My goal is to stay on the cutting edge of workplace legal developments to ensure my clients are informed, protected and, ultimately, successful.”

Wisconsin Mandates Leave for Organ and Bone Marrow Donation

By: Sally A. Piefer

Wisconsin law mandates a number of different leaves for employees, including family and medical leave. Effective July 1, 2016, Wisconsin joined the growing number of states which now require private employers to provide leave for employees who are bone marrow or organ donors. This new law warrants the attention of Wisconsin employers.

Many of the provisions of the donation leave follow Wisconsin’s Family & Medical Leave law (WFMLA). Like the WFMLA, the new law applies to employers with 50 or more employees. Employees are eligible for the leave if they have worked for the employer for at least 52 consecutive weeks and have worked at least 1,000 hours during that 52-week period. The law allows eligible employees up to 6 weeks of unpaid leave during a 12-month period, but employees may substitute other paid leave provided by the employer.

Employees are required to schedule the donation procedure so that it doesn’t unduly disrupt an employer’s operations, and must give the employer reasonable advance notice of the need for the leave. Employers can ask the employee to provide certification of the need for the leave, but this certification is limited to:

  1. Confirmation the donee has a serious health condition the necessitates a bone marrow or organ transplant;
  2. The employee is eligible and has agreed to serve as a bone marrow or organ donor for the donee; and
  3. The amount of time expected to be necessary for the employee to recover from the bone marrow or organ donation procedure.

In addition to providing the leave, employers must also maintain the employee’s group health insurance coverage under the same conditions as existed immediately before the leave began. If the employee makes his/her contribution to the group insurance coverage, the employer must also continue making its share of the premium payment.

Provided the employee returns to work within the 6 weeks allowed for donation leave, the employee must be reinstated to the same position held when the leave began, or if that position is no longer vacant, to an equivalent position “having equivalent compensation, benefits, working shift, hours of employment, and other terms and conditions of employment.”

There is nothing in the donation law which prohibits an employer from having donation leave run concurrently with an employee’s eligibility for FMLA or WFMLA. So if the bone marrow or organ donation also satisfies the definition of a “serious health condition,” the time taken for donation leave could also be counted for purposes of the FMLA and/or WFMLA. If, however, an employee’s allotment of FMLA and/or WFMLA has been exhausted – or the leave does not constitute a “serious health condition,” the employee is still eligible for up to 6 weeks of donation leave.

The law prohibits interference with or denial of leave and it also prohibits discrimination or retaliation against any employee who exercises his/her right to take the leave. The law also follows the WFMLA process in the event an employee feels that an employer has violated the law, including the ability to bring a civil action once the administrative process has been completed.

What should employers do now? While bone marrow and organ donation leave may not be frequent events, they are likely to become more common as advances are made in the medical community. To ensure your compliance, employers should take the following steps:

  1. Wisconsin employers with 25 or more employees should ensure that you have posted your policy on taking time off for bone marrow or organ donation.
  2. Wisconsin employers with 50 or more employees must:

For more information about the donor leave law or your general employment law needs, please contact Attorney Sally Piefer at (414) 226-4818 or spiefer@lindner-marsack.com or any of the other attorneys you work with here at Lindner & Marsack, S.C.

Three Lindner & Marsack Attorneys to Present at the State Bar of Wisconsin Health, Labor & Employment Law Institute

Lindner & Marsack’s Tom Mackenzie, Laurie Petersen and Daniel Finerty will share expertise on a variety of employment law matters at the State Bar of Wisconsin’s 2016 Health, Labor, and Employment Law Institute, an event is designed to share comprehensive information to help attorneys stay current on new developments that impact health, labor and employment law practice.

The conference will be held at the Wilderness Hotel and Golf Resort in Wisconsin Dells on August 18-19 and the agenda includes:

  • Tom Mackenzie will co-present NLRB Update: The Changing Landscape of Labor with Jennifer Abruzzo, Deputy General Counsel to the National Labor Relations Board. The focus will be on ever-changing issues faced by today’s employers including topics critical to health care employers such as the use of cameras and videotaping in the workplace, “English only” policies, civility and confidentiality rules and other updates regarding recent changes to the election rules (Breakout Session 1: Thursday, August 18th at 10:05 a.m.).
  • Daniel Finerty will present Advanced Issues in Health Care Employee Background Checks to further review the applicable federal and state law regarding background checks and review recent examples of missteps in the hiring process and claims filed by applicants (Breakout Session 3: Thursday, August 18th at 1:25 p.m.).
  • How to Fire Someone the Right Way will be presented by Laurie Petersen along with Richard Rice of Fox & Fox, S.C. The session will explain that it is best to provide a legitimate, clearly-articulated business reason for termination in order to prevent costly litigation and obtain the best result (Breakout Session 3: Thursday, August 18th at 2:35 p.m.).
  • Lindner & Marsack will co-host a complimentary Thursday Evening Social Hour and Cocktail Reception for conference attendees (Thursday, August 18th at 4:50 p.m.).

The Conference also features an optional paid lunch with Tammy H. Scheidegger, Ph.D. According to Dr. Sheidegger, while “having it all” seems to go hand-in-hand with being “successful,” research on happiness, and the emerging science of neuro-counseling, is shifting the happiness paradigm and providing a clear roadmap for how “having enough” is actually the way to balance all aspects of one’s life.

Watch for live updates on Twitter at the #2016HLE conference from Daniel Finerty (@DanielFinerty). A full schedule and registration information is available at http://hle.wisbar.org/schedule.html.

Lindner & Marsack, S.C. has represented management exclusively in all facets of labor, employment, employee benefits and workplace injury defense law since 1908.  Call Tom, Laurie or Daniel at (414) 273-3910 regarding any of their #2016HLE topics, or visit http://www.lindner-marsack.com/ to learn more about the firm and how our experienced and innovative attorneys can help your business.

NLRB Expands Appropriate Bargaining Unit to Include Temporary Workers

In a 3-1 decision issued this week, the National Labor Relations Board (“Board”) reversed current precedent that prohibited the inclusion of temporary employees along with permanent, or “solely employed,” employees in a bargaining unit absent employer consent, as it returned to the previous standard under M.B. Sturgis, Inc., 331 NLRB 1298 (2000), where no such consent was required.

In its July 11, 2016 decision, Miller & Anderson, Inc. and Tradesmen International and Sheet Metal Workers International Association, Local Union No. 19, AFL-CIO, the Board expressly overruled the 2004 decision of Oakwood Care Center, 343 NLRB 659 (2004), which had held that the National Labor Relations Act (“NLRA”) did not authorize the Board to direct elections in units encompassing employees of more than one employer, i.e. a company’s employees and other employees placed at the company via a staffing agency.  The Oakwood Board further held that combining such employees would lead to significant conflicts among the various employers and among groups of employees.

With the Miller & Anderson decision, the Board reversed course again, holding that the terms “employer” and “employer unit,” as used within Section 9(b) of the NLRA, were sufficiently broad to encompass temporary employees performing work for another employer.  The Board also reasoned that the Sturgis standard better effectuated the purposes of the NLRA.

Going forward, the Board will apply the traditional “community of interest” factors when determining if a bargaining unit is appropriate.  The Board will determine whether the temporary employees and solely employed employees have the same or substantially similar interests as to wages, hours or other working conditions.

While the Board described its decision as a return to Sturgis, the landscape has changed since 2004, when Sturgis was last the standard.  Last year, the Board issued the highly contentious Browning-Ferris decision, which overruled two other long-standing joint-employer decisions.

Under Browning-Ferris, the Board greatly expanded the joint-employment standard by abandoning the requirement that an employer exercise “direct and immediate” control over an employee’s terms and conditions of employment and instead including relationships where an employer merely exercised “indirect” control or even where an employer has simply reserved the authority to exercise control.   Thus, between 2000 and 2004, when Sturgis was the standard, the law was much clearer as to when a joint-employer relationship existed.  Now those waters are far murkier, and employers will have to navigate them to make best judgments as to whether a joint-employer relationship exists and, if so, whether a group of temporary employees and solely employed employees have sufficient interests in common in order to create an appropriate bargaining unit.

Employers and other amici cautioned that a return to Sturgis would create confusion and hinder meaningful bargaining.  We will see whether those concerns bear out.

LINDNER & MARSACK, S.C. WELCOMES SALLY PIEFER AS PARTNER

Lindner & Marsack, S.C., one of the region’s most respected and long-standing management-side labor and employment law firms, today announced Sally Piefer as the newest addition to the firm’s growing team of leading labor and employment attorneys. Piefer specializes broadly in all aspects of employment law.

Our number one job is to help employers navigate workplace legal challenges and find the best path to success and stability, and Sally has a proven track record of success in doing just that,” says Lindner & Marsack Firm President Thomas Mackenzie.

Before joining Lindner & Marsack, Piefer served as a Shareholder with the Waukesha-based The Schroeder Group, S.C. from 1998 until spring of this year. She has represented employers in all types of legal matters including employment discrimination; non-competition and trade secret misappropriation; employee theft; harassment; retaliation; wage and hour issues; ADA and accommodation issues; and FMLA and OSHA matters. She has litigated employment cases before state and federal courts and in administrative agencies, and also guided clients through compliance issues including employee handbooks and contracts, human resources audits, I-9 audit compliance, WARN/plant closing compliance, and internal investigations.

“Reducing risk to employers is always my main goal,” says Piefer. “I take pride in working with clients to develop and implement solutions that are proactive, practical and legally sound.”

WISCONSIN RIGHT TO WORK LAW REINSTATED

District 3 of the Wisconsin Court of Appeals issued a decision yesterday, May 24, reinstating Wisconsin’s right to work law pending appeal of a Dane County Circuit Court Judge’s decision finding the law to be unconstitutional.  The Court of Appeals held that the Circuit Court erred in not granting a stay pending the appeal of the decision.

The decision means that unions and employers are again unquestionably prohibited from entering into agreements requiring union membership as a condition of employment.  Wisconsin was the 25th state to enact a so-called right to work statute.  Under the law, as contracts expire, are extended or are amended after March 11, 2015, the parties are precluded from maintaining or agreeing to contract language requiring employees to be members of a union.

It is anticipated the case will find its way to the Wisconsin Supreme Court.  Given that Court’s 5 to 2 conservative majority, we expect the law will ultimately be upheld.

 

Department of Labor Issues Final Rule on FLSA Exemptions

By Oyvind Wistrom

The U.S. Department of Labor issued its much-anticipated final overtime exemption rule on May 18, 2016, raising the minimum salary threshold required to qualify for the Fair Labor Standards Act’s (FLSA) “white collar” exemptions to $47,476 per year ($913 weekly).  The new salary test will apply to all administrative, professional, executive, outside sales and computer employees who are treated as exempt and salaried under the FLSA.  This new rule will affect approximately 4.2 million U.S. workers who are currently treated as exempt, but who would not satisfy the new salary test under the FLSA.

The rule has been a long time coming.  The first version of the new rule was proposed in June 2015 and drew approximately 300,000 public comments between June and September 2015.  That first version of the rule would have more than doubled the salary threshold from $23,660 per year ($455 weekly) to $50,440 per year ($970 weekly).  The final rule just issued still doubles the salary threshold, but reduced the proposed salary threshold by approximately $3,000.  The rule will take effect on December 1, 2016.

Under previous regulations, employees had to meet certain tests related to job duties and be paid at least $23,660 per year ($455 weekly) on a salary basis to be exempt from the minimum wage and overtime requirements under the FLSA.  While DOL’s final rule raises the salary level significantly, non-discretionary bonuses and incentive payments can now count for up to 10 percent of the new salary level, provided the payments are made at least quarterly.  This change has been viewed by some commentators as DOL “throwing employers a bone” in the final rule.  In addition, this new salary threshold will be automatically updated every three years to ensure it stays at the 40th percentile benchmark, according to the Obama administration.  The final rule also raises the overtime eligibility threshold for “highly compensated” workers from $100,000 annually to $134,004 annually.

Employers have a range of options in responding to the updated standard salary level.  For all employees who are currently treated as exempt under the FLSA’s “white collar” exemptions, but who are paid less than $47,476 per year ($913 weekly), the following options exist:

  • Increase the salary of the employee to at least the new salary level to maintain his or her exempt status;
  • Convert the salary to an hourly rate and pay the overtime premium (one and one-half times the employee’s regular rate of pay) for all hours worked in excess of 40 hours in a week;
  • Control, reduce or eliminate overtime hours;
  • Reduce the amount of pay allocated to base salary (provided that the employee still earns at least the applicable hourly minimum wage) in order to account for overtime hours worked in excess of 40 hours (paying employee time and one-half for all overtime hours), to hold total weekly pay constant; or
  • Use some combination of these responses.

In determining which course of action to utilize, employers should analyze their workforce and determine which solution best suits their particular needs.  For salaried, exempt employees who regularly work overtime and currently earn slightly below the new standard salary level, employers may be best suited to raise the employees’ salaries to the new salary level to retain the “white collar” exemption.  For employees who rarely or almost never work overtime hours, employers may be best suited to start treating those employees as non-exempt, pay the employees a standard hourly rate, and pay the overtime premium when necessary.

If you have questions about this material, please contact Oyvind Wistrom by email at owistrom@lindner-marsack.com or by phone at (414) 273-3910, or any other attorney you have been working with here at Lindner & Marsack, S.C.

THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION CHANGES COURSE ON RELEASING EMPLOYER POSITION STATEMENTS TO CHARGING PARTIES

By: Daniel Finerty & Oyvind Wistrom

Employers that have endured the Equal Employment Opportunity Commission’s charge process concerning allegations of discrimination, harassment or retaliation know that an effective, persuasive position statement responding to a charge is critical to securing a successful outcome. For years, employers could be assured that the EEOC would not share its position statement or attachments with a charging party. In doing so, this procedure complied with Section 709(e) of Title VII, which provides:

It shall be unlawful for any officer or employee of the Commission to make public in any manner whatever any information obtained by the Commission pursuant to its authority under this section prior to the institution of any proceeding under this subchapter involving such information. Any officer or employee of the Commission who shall make public in any manner whatever any information in violation of this subsection shall be guilty of a misdemeanor and upon conviction thereof, shall be fined not more than $1,000, or imprisoned not more than one year.

Notwithstanding this statute, the Commission announced a reversal of course, as of January 1, 2016, and advised that it intends to release employer position statements:

EEOC has implemented nationwide procedures that provide for the release of Respondent position statements and non-confidential attachments to a Charging Party or her representative upon request during the investigation of her charge of discrimination. … These procedures apply to all EEOC requests for position statements made to Respondents on or after January 1, 2016. … The new procedures provide for a consistent approach to be followed in all of EEOC’s offices, which enhances service to the public. The procedures will also provide EEOC with better information from the parties to strengthen our investigations.

In contrast to this new practice, the Commission will not share the charging party’s position statement with the employer. While the Commission has recognized that employer EEO-1 reports are confidential under Section 709(e) (“[a]ll reports and information from individual reports will be kept confidential, as required by Section 709(e) of Title VII. Only data aggregating information by industry or area, in such a way as not to reveal any particular employers statistics, will be made public.”), it has not explained this new interpretation or how Section 709(e) permits its one-sided disclosure of employer position statements.

The protections for information and documents deemed “confidential” by an employer is limited. The Commission’s clear delineation of the information it will consider confidential is limited to sensitive medical information, social security numbers, confidential commercial or financial information, trade secrets information; non-relevant personally identifiable information of witnesses, comparators or third parties (for example, social security numbers, dates of birth in non-age cases, home addresses, personal phone numbers, personal email addresses, etc.), and any reference to charges filed against the employer by other charging parties. “Sensitive medical information” excludes the charging party’s medical information relating to the investigation. It is critical for employers to consult with labor and employment counsel to correctly categorize confidential information and justify such designation(s) to ensure confidentiality can be secured. “[T]he agency will not accept blanket or unsupported assertions of confidentiality.”

Further, upon receipt of information deemed confidential by an employer, the Commission has indicated that it will not withhold; rather, “EEOC staff may redact confidential information as necessary prior to releasing the information to a Charging Party or her representative.”

Employers need to be mindful of the Commission’s new procedure when responding to EEOC discrimination charges. Confidential information should be withheld (when permissible) or should be designated as “confidential.” Additionally, employers should keep in mind, when drafting position statements, that a charging party or his or her attorney may receive a copy of the position statement and any attachments.

If you have questions about this new practice by the EEOC, please contact Daniel Finerty, Oyvind Wistrom, or your Lindner & Marsack contact attorney at 414-273-3910.