Legal Briefs for HR

Welcome to Legal Briefs for HR!   This employment law update identifies the tricks and treats that employers are in for, thanks to the courts, legislatures, executive agencies and the spooky economy.  Anyone is welcome to join our coven of over 3600 subscribers . . . just let me know if you’d like to be added to the list.  Missed one?  Just go to our crystal ball at www.munckcarter.com, click on E-Newsletter and the former issues will be exhumed for your reading pleasure!

Ghoulish greetings to new subscribers I had the pleasure of shrieking, er, speaking to at the HR Southwest Human Resources Conference and Exposition.  And I look forward to speaking at the Sage Software Summit in Denver on Nov. 19!

Here’s what’s top of mind:

1. Contractor Conundrum– In LB4HR#6 (June issue), the lead story was about a federal bill designed to identify and punish employers who misclassify employees as independent contractors.  The Employee Misclassification Prevention Act (H.R. 6111) now has a sibling in the Senate (S.3648), introduced by Sens. Kennedy (D.-Mass.), Obama (D.-Ill.) and Kerry (D.-Mass.).  The plan is to [1] make misclassification a FLSA violation and beef up the penalties; [2] require employers to notify all current and newly hired workers of their status and right to challenge that status, while providing U.S. Dep’t of Labor contact info to facilitate challenges; [3] compel state agencies who pay out unemployment insurance (UI) benefits to audit employers’ records relating to employee classifications; and [4] allow the DOL and IRS to share data.  State coffers and the IRS lose money when employers don’t withhold taxes and pay into UI and state disability funds.  Workers may lose out, due to unpaid overtime and lack of medical benefits and workers’ compensation coverage.  This trend toward increased regulation shows no signs of abating, so you might want to self-audit before someone does it for you.
2. Closer to Home – In finding that insurance marketing firm sales managers were employees, not independent contractors, the 5^th Circuit (covers TX, LA, MS) applied an economic realities test, to see if the worker is really dependent upon the employer for his livelihood, or in business for himself.  The primary factors weighed are [1] the degree of control exercised by the alleged employer; [2] extent of the relative investments of the worker and the employer; [3] the degree to which the worker’s opportunity for profit and loss is determined by the alleged employer; [4] the skill and initiative required in doing the job; and [5] the permanency of the relationship.  The parties’ written agreement to a contractor relationship was no match for the fact that [1] the employer controlled the business model used; [2] the employer paid for office space, marketing materials and more while the “contractor” invested very little; [3] the “contractor” had no special skills (only abilities common to all effective managers); and [4] the "contractors" tended for work there for several years. Hopkins v. Cornerstone America (5^th Cir. 10-13-08).
3. It’s Alive (and Growing) – It's no surprise, now that FMLA has been successfully amended for the first time since it’s enactment in 1993, that bills to further expand its reach are popping up like zombies at midnight.  H.R. 7233, if passed, will drop the covered employer threshold down to 25 employees (from 50). It tacks on an additional 24 hours of leave, in any 12-month period, for parents and grandparents to go to parent-teacher conferences or to take the kids, grandkids or other family members (Fido?) to routine medical and dental appointments.
4. Play Ball!- The Phillies may have won the World Series, but here's what's up and what's on deck:
   1. 
      At Bat- The Supplemental Final Rule, explaining the "safe harbor" (from liability under section 274A of the Immigration and Nationality Act) for employers who follow the  prescribed procedures after receiving either a "no-match letter" from the SSA or a "notice of suspect document" from the Dep't of Homeland Security (DHS), has been published. To recap the continuing saga of the no-match letter, [1] Proposed Rule published in June 2006; [2] Final Rule published in August 2007; [3] AFL-CIO and others file for and are granted a temporary restraining order followed by  a preliminary injunction, barring enforcement of the Rule; [3] DHS issues Supplemental Rule March 2008 to address the court's concerns; and [4] in October 2008, DHS issues Supplemental Final Rule that "republishes the text of the August 2007 Final Rule without substantive change."  The 100-page rule is ponderous so skip to the back to see the Rule, if you've got a short attention span.  Go to www.dhs.gov/index.shtm and click on No-Match Supplemental Final Rule for a press release and pdf of the Rule.  DHS attorneys are preparing to go to court and ask that the injunction in [3], above, be lifted.
   2. On Deck - Final rule amending the FMLA regulations was sent by U.S. DOL to OMB in mid-October, which means it will be published 2 to 3 weeks later.  Mmmm. New regs to digest with your turkey dinner!
5. Done Deal– Employers subject to EEO-1 and VETS-100 reporting should’ve had their numbers turned in by September 30.  Next year, get ready to add the new VETS-100A to the mix (but you should be collecting the necessary data now). EEOC is seeking to extend use of the current form through January 2010.  The form is submitted annually by roughly 45,000 private sector employers who have 100+ employees and some federal contractors and subcontractors.  The info is shared with other federal agencies, including the OFCCP, as well as 86 state and local fair employment practice agencies (e.g., TX Commission on Human Rights division of Texas Workforce Commission). The data is used to identify potential cases of race and gender employment discrimination under Title VII. 
6. Voting 101– With a national election on our doorstep, it’s a good time to refresh your memory (and remind your managers) about state laws that may apply.  Using Texas as an example, employees get paid time off to vote on Election Day, to the extent that the time absent is concurrent with their normal working hours UNLESS they have two consecutive nonworking hours while the polls are open (7 a.m. to 7 p.m.).  Many states have similar rules, and generally require that [1] the employee advise the employer before Election Day if time off will be needed; [2] the employer can direct the employee when it’s OK to be gone on Election Day (e.g., start of shift, end of shift); and [3] the employer usually cannot direct the employee to vote during his or her normal meal break. One option to handle the issue (and avoid paying nonexempts for time in the booth) is to tell employees that they do not need to report to work until 9 a.m. on Election Day, regardless of their normal start time OR let everyone leave at 5 p.m.  Happy Hour!
    
7. State Your Case – Multi-state employers will be eyeing election results on propositions impacting the way they do business:
   1. 
      Arizona – Prop 202, if passed, will amend the current law which punishes employers who employ aliens not authorized to work in the U.S., including revocation of the license to do business in AZ upon a second offense.  Changes include [a] limiting the “knowingly employ an unauthorized alien” test to actual knowledge by an owner or officer of the company; [b] allow alternatives (e.g., Form I-9, other federal screening systems) to the requirement that employers use E-Verify to check the status of all new hires; and [c] expand the reach of criminal penalties for identity theft to apply to persons who use and/or accept employment identification that does not belong to the person offering it.
   2.  Colorado – CO may become the 23^rd “right to work” state if Prop 47 passes.  Workers in right to work states can’t be required to join a union or pay dues as a condition of continued employment.  Not sure of the law in your state(s)?  Go to www.nrtw.org and click on the map of each state to see a copy of the applicable law.
   3. Michigan – Prop 08-1, if passed, would allow the use of marijuana for certain medical conditions (but it would not trump employers’ rights, under federal law, to prohibit employees' use and being under the influence at work).
8. Let’s Do Lunch– Lt. Gov. David Dewhurst will deliver post-election and pre-legislative session dish on taxes, energy and healthcare at the Hilton Anatole Coronado Ballroom on Thursday, November 13.  The Texas legislative session, which opens on January 13, 2009, will consider many bills with potentially significant impact on employers and you need to know what they up to.  Sponsoring groups include the Dallas chapter of the Texas Ass’n of Business and the Dallas Human Resources Management Association.  The cost for lunch is $55@ and reservations are being accepted by the Dallas CPA society at www.cpadallas.org.  Hope to see you there!

Until next time,

 

Audrey E. Mross
Labor & Employment Attorney
Munck Carter P.C.
600 Banner Place
12770 Coit Road
Dallas, TX 75251

972.628.3661 (direct)
972.628.3616 (fax)
214.868.3033 (cell)
amross@munckcarter.com
www.munckcarter.com

Legal Briefs for HR (“LB4HR”) is provided to alert recipients to new developments in the law and with the understanding that it is guidance and not a legal or professional opinion on specific facts or matters.  For answers to your specific questions, please consult with counsel.  If you wish to be removed from the group, reply and put “Remove” in the subject line.  You may also reply to notify the author of an additional or changed email address.

If you wish to post, reprint or send LB4HR for the benefit of your organization, please contact the author for permission.  Upon approval, nonprofit entities may post, reprint or send LB4HR to their members for no fee.  For-profit entities may be charged a nominal fee. LB4HR is copyrighted work product and may not be posted, reprinted or sent without permission, however, individual subscribers are welcome to forward LB4HR to individuals or within their place of employment without seeking permission, so long as the author’s complete contact information is included.

Subscribers are encouraged to notify their Internet Service Provider (ISP) that amross@munckcarter.com is a trusted source, in order to receive an uninterrupted subscription to LB4HR.  Due to the size of the email group and occasional use of sensitive words, LB4HR can be perceived as spam or inappropriate email and deleted or diverted by your ISP’s filter.