Often employers will neglect or overlook revising their vacation and/or paid time off (PTO) policies, which are buried in the employee handbook that was last revised a half-dozen years ago. For many, this is a big mistake. Depending on your jurisdiction, a poorly drafted vacation/PTO policy can carry significant potential liability. If a company’s vacation/PTO policies are unclear or, worse, there are no such policies, its employees may be able to claim they are entitled to payment for their accrued but unused vacation upon termination.
For example, in New York, if there is no clear statement that accrued but unused vacation/PTO time is forfeited upon termination, employees can potentially claim payment for all accrued but unused vacation/PTO. In addition, the company may be left unable to “correct” (i.e. take away) already accrued vacation/PTO time payable under these policies. In other jurisdictions, policies that deny payment for accrued vacation/PTO may be prohibited altogether (e.g. California). Employers must also be cautious of the interplay of state and local paid sick (or other) leave laws in order to ensure any legally required leave does not become payable upon termination.
What should you do? First, it is important to know your state and local laws regarding vacation/PTO/paid leave accrual, usage, and payout. Next, you should review all prior versions of your vacation/PTO policies to determine what exactly has been provided and whether or not you can correct those policies retroactively. In jurisdictions that allow it, vacation/PTO policies should be revised and tailored as much as possible to prevent the excessive accrual and payout of vacation/PTO upon termination and reduce the company’s potential liability.
Some companies believe in their business judgment that it is beneficial to provide some form of economic payout to departing employees, ostensibly rewarding them for years of loyal service. This is admirable, however automatic vacation/PTO payouts reward both good and bad employees alike. As an alternative, offering severance, and conditioning it upon the signature of a general release agreement, is a better course of action. This allows the company to retain discretion over how much will be paid to each departing employee depending on the circumstances and also helps limit potential legal claims. General releases do not eliminate all claims, but they go a long way and certainly help us attorneys get a good night’s sleep. As always, we suggest speaking to legal counsel about any contemplated practices in order to ensure they are implemented lawfully and effectively.
First, let us wish our fellow blogger, Tom Basta our hearty congratulations on the birth of his twins! They are adorable and likely to keep Tom very busy (and tired) these next few weeks.
Before the twins arrived, Tom and I had some discussions about how much time off he was going to take so that we could plan coverage for his absence. These discussions and a recent webinar on pregnancy accommodation in which I was a co-presenter re-focused me on issues with paternity leave and maternity leave.
The fact is there are still some employers who think that maternity leave should be longer than paternity leave because, well, she was the one busy giving birth. This may be true. However, the fact is that employers need to be careful about such policies as they may be discriminatory against men.
If an employer’s policy is only to provide time for bonding with the baby after the birth, then maternity leave and paternity leave should be offered in equivalent amounts. In that case, there is no reason to distinguish between how much time a mother versus a father may spend bonding with the newborn.
For those employers who think that the mother deserves longer leave because she had to physically give birth and the father did not, such policies may be legal provided they are structured in the correct way. Employers may lawfully give pregnant women longer leave amounts if a portion of the leave is considered disability leave related to actually giving birth and a portion is related to bonding with the newborn. Again, in this case, employers should make sure that the bonding portion of the leave is the same as being offered to fathers.
Lucrative guaranteed income arrangements, such as management-fee agreements, hold for many companies the promise of additional income with relative ease, leveraging a company’s already established brand and reputation. We commonly see such arrangements in the hotel industry with respect to food and other on-premises services. Other companies seek to avoid various employment-related headaches by hiring outside cleaning, maintenance, or other vendors. All of these arrangements, unfortunately, are fraught with risk, potentially exposing such companies to liability under relevant employment and wage laws.
The courts generally construe the concepts of “employer” and “joint employer” broadly with respect to employment and wage laws. These concepts are then frequently applied or asserted against managers in management-fee arrangements or companies that engage vendors, holding them liable for violations committed against individuals providing services under these types of agreements. In many of these cases, the company may not even pay the employees involved or be authorized to manage their employment and wage practices, however any violations committed by the vendor or owner creates a liability risk.
One solution that is frequently proposed is entering into an “iron-clad” indemnification agreement, where the owner or vendor agrees to indemnify all employment and wage related liability associated with the project or arrangement. Unfortunately, what many companies do not know is that the enforceability of such contractual indemnification clauses is uncertain in some jurisdictions, such as New York. Some courts have reasoned that contractual indemnification of employment or wage liability is against public policy, i.e. an employer cannot contract away its responsibility to pay and manage their employees lawfully and thereby skirt the purposes of the employment and wage statutes. See, e.g., Goodman v. Port Authority of New York and New Jersey, 850 F. Supp. 2d 363, 388-89 (S.D.N.Y. 2012). Although the law here is still unsettled, the reliability of contractual indemnification provisions with respect to employment and wage claims is uncertain at best. Moreover, with the possibility of class and collective actions, as well as steep liquidated damages penalties, punitive damages, and liability for plaintiffs’ attorneys’ fees, caution is advisable.
While management-fee and vendor relationships are relatively easy methods to draw in additional revenue or relieve certain operational burdens, an entity looking to enter into such arrangements cannot always contract away employment and wage related liability. Improper employment and/or wage practices engaged in by a vendor or owner in such a venture could easily result in a lawsuit. Vetting your potential partner is key.
There has been some immediate fallout from the Supreme Court’s gay marriage decision in Obergefell v. Hodges. The decision has become a lightning rod for several Republican candidates who have denounced the decision on religious grounds. Some, such as Ben Carson, have suggested that Congress pass a law protecting people’s religious views. Of course, there are already several laws protecting people’s religious views, the First Amendment and the Religious Freedom Restoration Act of 1993 to name a few, but I digress.
The bigger issue and one everyone seems to be forgetting is that these types of “religious belief” arguments to justify discrimination have already been rejected by the Supreme Court. The Supreme Court’s decision in Burwell v. Hobby Lobby Stores, Inc. seems to have opened the door for employers to argue that their religious beliefs conflict with certain legal requirements (in that case providing insurance coverage for contraception, but easily analogized to gay marriage). However, in Hobby Lobby, Justice Alito specifically noted that religious beliefs could not be used to justify discrimination:
The principal dissent raises the possibility that discrimination in hiring, for example on the basis of race, might be cloaked as religious practice to escape legal sanction. . . . Our decision today provides no such shield. The Government has a compelling interest in providing an equal opportunity to participate in the work force without regard to race, and prohibitions on racial discrimination are precisely tailored to achieve that critical goal.”
It is true that federal law does not explicitly protect sexual orientation. However, as we have reported the EEOC has become increasingly focused on same-sex harassment and sexual orientation discrimination as a form of gender discrimination. Further, many state and local anti-discrimination laws do define sexual orientation as a protected class.
This can be a confusing area for employers since Title VII and many state and local laws require that an employer accommodate a sincerely-held religious belief. Quite simply, employers cannot justify an employee’s discrimination against gay people because homosexuality is against that employee’s religious beliefs. Employees must still comply with anti-discrimination laws even if they have a religious objection to homosexuality.
I did harassment training for a client earlier this week and we spent a significant amount of time at the training discussing posts on social media. There were, of course, people who never use social media or strictly limit their Facebook friends to non-work people and then there were others who frequently use a variety of social media sites. The class was very active in the discussion about what was appropriate on social media.
Usually when I have these discussions at training sessions, the class is still stuck on the idea that they should get to say whatever they want on Facebook or Twitter because they did it in their free time after work. This time, the class was unanimous in the idea that co-workers should not be bashing each other on social media. I consider this progress made.
Where we spent a lot of time was discussing posts that were not harassing or threatening other employees but may be posts that show questionable judgment of the employee — drinking being the big question. The fact is that, for the most part, employers are free to discipline employees for off-work behavior if it reflects poorly on the employer. There are some states, like New York, that have laws prohibiting an employer from disciplining an employee for engaging in lawful “recreational activities.” However, this is not the usual case.
Employees should realize that their right to post exactly what they are thinking with no filter, might come with consequences. Just look at recent case in Louisiana where a lawyer was disbarred for her online activity. The lawyer, frustrated with two judges’ responses to her client’s allegations of child abuse, took to Twitter to encourage people to sign an online petition to force the judges to look at her evidence. Needless to say, the Disciplinary Board was not amused.
At my training session this week, employees wanted to know how the employer becomes aware of their posts. Employees often seem to forget just who are their “friends” on Facebook. I have, on more than one occasion, had a manager who was friends with the employee bring the post to the company’s attention. Often times, it is other co-workers who bring in the posts. Employees should also realize that in most states an employer faced with a complaint about a post can force the employee to show them their social media page, even if it was marked private.
Earlier today, the United States Supreme Court in its decision in Obergefell v. Hodges rendered same-sex marriage as the law of the land in all 50 states. This blog is not about the wisdom or reasoning of the decision (for analysis on that you can check out, well, basically anywhere else on the web). But regardless of your feelings, all employers must make very minor modifications to their policies to ensure that they are in compliance with what is now unquestionably federal law.
Most tellingly, the definition of “spouse” now must be modified in states that previously did not recognize same-sex unions. If you consult your employee handbook you will likely find the word in numerous places under such topics as medical leave, conflict of interest, and equal opportunity (many jurisdictions, including my home state of New Jersey, recognize marital status as a protected classification in employment discrimination laws). We recommend that all handbooks be updated periodically to allow for new developments in the law that can render your policies outdated.
Finally, remember that any discussion of the case and its significant ramifications should be limited in the workplace. We’ve talked before about how even well-intentioned discussion of current events can give rise to a claim of discrimination. Be mindful of the impact of these types of discussions on LGBT employees and their straight allies.
We talk a lot about providing training to employees, usually in the context of preventing harassment and discrimination. In addition to this training, hopefully your employees are getting good training on how to perform their job skills. We have all been in that situation where, despite training and refresher training, an employee is simply not performing the job well.
It can be difficult to terminate an employee both because of the time that you have invested in training them, but also the human component that it is tough to see someone lose his or her job. However, in the long run, keeping a marginally performing employee costs more than terminating them and finding a good performer. Indeed, the cost to morale is one that is hard to quantify. The fact is that the longer you have an underperforming employee in a position, the more that other employees will have to pick up the slack. This drains your resources but also creates resentment amongst the staff who are expected to pick up extra duties.
The following shows us that sometimes no matter how much training you provide, some people are just not the right fit for their positions. After working with the employee, you just have to finally make the decision to part ways.
The story of Rachel Dolezal, the recently-deposed head of an NAACP chapter in Spokane, WA, ignited a media firestorm last week with regard to claims that she, a Caucasian, “identified” as an African-American. Opinions of Ms. Dolezal are passionate and varied, but regardless of one’s opinion of her, she illustrates an important point that New Jersey employers must remember- it is not the employee’s actual race (or sex, national origin, etc.) that matters, but rather what they are perceived to be in deciding whether they fall under a protected discrimination classification.
Let’s take Ms. Dolezal for example: If she had brought an action against her employer for racial discrimination, she technically could have sued due for discrimination based on her African-American race (if she was perceived by her employer to be African-American) or, in the unusual circumstance of reverse discrimination, for being Caucasian (her actual race). To wit, it is true that she allegedly sued a former employer in 2002 for discrimination based on her Caucasian race.
The point is that New Jersey discrimination statutes protect individuals for their actual characteristics as well as those which they are perceived to have by their employer. Keep that in mind when evaluating exposure in the context of discrimination litigation.
In the vein of a shameless personal plug, I will be speaking as part of a panel in an upcoming Strafford live webinar, “Accommodating Pregnant Workers After Young v. UPS: Navigating New Obligations Absent Clear Court Guidance” scheduled for Wednesday, July 15, 1:00pm-2:30pm EDT.
Our panel will discuss how to reconcile the Court’s vague new standard with EEOC guidance and differing state laws regulating workplace accommodation of pregnancy and pregnancy-related conditions, and offer best practices for crafting workplace policies that avoid Pregnancy Discrimination Act violations.
We will review these and other key issues:
- What factors might constitute legitimate, nondiscriminatory, nonpretextual reasons for denying an accommodation?
- Under what circumstances must employers accommodate pregnant employees?
- What steps should employers take when engaging in the “interactive process”.
I hope you’ll join us.
For more information or to register >
Or call 1-800-926-7926 ext. 10
Ask for Accommodating Pregnant Workers After Young v. UPS on 7/15/2015
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Massachusetts’ new sick leave law goes into effect on July 1, 2015. In anticipation of the law, the Attorney General has posted the Earned Sick Time Notice of Employee Rights which must be posted by Massachusetts employers by July 1, 2015.
Under the law, employers with 11 or more employees must offer up to 40 hours of paid sick leave. Employers with fewer than 11 employees must offer up to 40 hours of unpaid sick leave. Sick leave accrues at the rate of 1 hour earned for every 30 hours worked.
The Attorney General recently published proposed regulations further explaining the law. The public comment period for the proposed regulations ends today. The regulations do offer some interpretations that are not readily apparent from reading the law itself.
For example, under the proposed regulations, an employee is eligible to earn leave if his or her primary place of employment is in Massachusetts. This simply means that the employee works the majority of his or her time in Massachusetts. This may or may not be 51% of the employee’s time depending on how many localities the employee works. Once an employee is eligible, under the proposed regulations, he or she will earn sick time for all hours worked, not only those worked within Massachusetts.
At this point, it is hard to speculate whether the proposed regulations will be changed before final publication and employers should consult with legal counsel as the effective date of the law approaches to determine their obligations.