LEGAL UPDATE 2015...FLSA – ECONOMIC REALITIES TEST 1. The degree of control exerted by the employer over the worker; 2. Risk of profit or loss for the worker; 3. The worker’s investment

© 2015 Husch Blackwell LLP. All Rights Reserved. 1

Lawfully Managing Your WorkforceApril 29, 2015

LEGAL UPDATE 2015

Chris Ottele and Kyle Montour


Colorado Discrimination Claims

HB 1136 • Effective January 1, 2015• Punitive Damages• Compensatory Damages

(typically emotional distress)• Attorneys’ Fees• Applies to Small and Large

Employers• Significant Uptick in CCRD

Charges

U.S. Supreme Court

• Pregnancy Discrimination Act• Accommodate pregnant

women (such as offering light duty) in a manner similar to other employees with similar abilities

Young v. UPS (March

25, 2015)

• Title VII• Discussing the duty that an

employer has to engage in interactive process

EEOC v. Abercrombie

& Fitch (argued)


U.S. Supreme Court

Integrity Staffing Solutions v. Busk (2014)

• Fair Labor Standards Act• Time spent by warehouse

workers waiting to undergo and undergoing security screenings is not compensable

• Unanimous decision

Coats v Dish Network

No Decision Yet

Lawful Off-Duty Activity Statute v. Medical Marijuana

Can an employer discharge an employee in Colorado for using marijuana?


Federal Contractors

LGBTDiscrimination

Prohibited

Prohibits Arbitration of

Some Disputes

$10.10 Minimum

Wage

Enhanced Reporting

Requirements

Wellness Programs: EEOC Guidance Reasonably designed to

promote health or prevent disease

Voluntary

Incentives limited to 30% of

employee coverage

Confidential Information

Accommodate


Proposed Laws in Colorado 2015

Paid Family Leave: (FAMLI)

Personnel File Access

Minimum Wage

Repeal 1136

Severance Agreements

EEOC and SEC

Challenging

• Cooperation• Non-disclosure• Covenants not to sue• Non-disparagement


FMLA Spousal Definition

Attempt by DOLto recognize that spouse includes

same sex

Colorado law already provides

Notes


Avoiding Wage & Hour PitfallsA Legal Update on Employee Pay Issues

Barbara Grandjean and Carrie Claiborne

Employee Pay Topics:

1. Independent Contractors

2. FLSA & Exemptions

3. Interns & Volunteers

4. Colorado Wage Act


Who are Independent Contractors?

Definition of Employee

IRS Definition – an employee is: “any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee . . . .”

Three Tests (IRS, FLSA, Colorado)

FLSA – ECONOMIC REALITIES TEST1. The degree of control exerted by the

employer over the worker;

2. Risk of profit or loss for the worker;

3. The worker’s investment in the business;

4. Skills required to perform the work;

5. Permanency of the relationship; and

6. Degree to which the work is an integralpart of the employer’s business.


COLORADO Federal Unemployment Tax Act & Workers Comp Act

9-factor test

Contract language option

2014 Colorado Cases (totality of the circumstances) Industrial Claim Appeals Office v. Softrock

Western Logistics, Inc. v. Industrial Claim Appeals Office

RISKS

DOL Enforcement / Audit

FLSA Collective Action


True or False?ACME employer hires extra servers during its busy banquet season. ACME can treat these servers as independent contractors as long as they each agree in writing they are not employees of ACME and they will not file workers’ compensation or unemployment claims against ACME.

FALSE

True or False?Applicant tells ACME employer he wants to be hired as a contractor so he has more flexibility with his schedule. ACME agrees since this is what the applicant prefers. ACME is protected from liability since the applicant/contractor is prevented from suing based on his request.

FALSE


FAIR LABOR STANDARDS ACT (FLSA)

• Elements of the FLSA

• Goals of the FLSA

• Who’s Covered

FLSA EXEMPTIONS“White Collar” or “541” Exemptions to Overtime

• Executive

• Administrative

• Professional

• Outside Sales

• Computer-Related Positions


FLSA EXEMPTIONS Three Factors for Executive, Administrative, and

Professional exemptions:

Salary Level

Salary Basis

Primary Job Duties

FLSA EXEMPTIONS Salary Level - $455 / week;

Salary Basis – regularly receives a preset amount (i.e., a set salary that can rarely be reduced); AND

Primary Duties – principal, main, major or most important duty the employee performs (no longer requires 50%)


FLSA EXEMPTIONS• Upcoming Changes?

- Salary Level (Obama announcement in March 2014)

- Primary Duty (may reestablish quantitative test)

• Dynamic Analysis- Perez v. Mortgage Brokers Assoc.

- DOL can change its mind

True or False?ACME employer closes its business for one day due to [fill in the blank natural disaster]. Because the business is completely closed, ACME doesn’t have to pay any of its employees for that day.

FALSE


True or False?ACME employer is prohibited from docking the pay of an exempt employee with a serious medical condition.

FALSEFamily and Medical Leave Act (FMLA)

Regulations: 29 C.F.R. § 825.206

True or False?

ACME employer does not have to pay a non-exempt employee for work ACME did not request.

FALSE


Travel Time Refresher- Pay or Not?Management team travels from headquarters to off-site meeting location? PAYAdministrative Assistant travels from home to work and home again? NOT PAY

Travel Time Refresher- Pay or Not?Administrative Assistant out of town for one day seminar and back home again? PAYTechnician travels from the office to a customer site? PAY

Administrative Assistant stays overnight for a two-day seminar? PAY


INTERNS Unpaid Interns (DOL’s 6 Criteria)

1. Training / similar to educational environment

2. For the benefit of the intern

3. Does not displace regular employees; close supervision

4. No immediate advantage to employer

5. Intern is not necessarily entitled to a post-internship job

6. Mutual understanding—no wages during internship

UNPAID INTERNSCase Law:

• 10th Circuit – 6 Criteria PLUS “totality of the circumstances”

• Recent New York cases & collective actions• Glatt v. Fox Searchlight Pictures, Inc. (2013)

• Wang v. Hearst Corp. (2013)


VOLUNTEERSIndividuals can work for free (and not be considered employees under the FLSA) for:

• Public Service;

• Religious Reasons; and/or

• Humanitarian Objectives

VOLUNTEERS• Public Sector or Non-Profit

• NOT Private Sector, for-profit

• Employees cannot volunteer time (unpaid) to do the same work they do in their regular job


TRUE OR FALSE?

ACME employer has a booth at a trade show held on a weekend in Las Vegas. ACME can ask its Administrative Assistants to volunteer to work at the booth in exchange for a free hotel room and some drink coupons. FALSE

TIP: WHAT CAN EMPLOYERS DO TO PREVENT WAGE AND HOUR ISSUES?

•Update job descriptions–Can be used to argue exempt status

•Audit payroll practices–Regular rate calculation (bonuses, awards)–Changes in overtime–Deductions/Authorized pay changes


TIP: WHAT CAN EMPLOYERS DO TO PREVENT WAGE AND HOUR ISSUES?

•Update record keeping policies/retention policies

•Audit exempt/non-exempt and employee/independent contractor status

•Look closely at “other” categories

COLORADO WAGE ACT

2014 Amendments (effective January 1, 2015) Administrative Procedure

Claims up to $7,500

Process

Potential Claims


PRACTICE TIP

CLARITY


4/27/2015 © Nicoletti-Flater Associates

DANGER IN THE WORKPLACE: IDENTIFYING & MANAGING RISKY

EMPLOYEES

Lawfully Managing Your Workforce Seminar

John Nicoletti, Ph.D.Nicoletti-Flater Associates

303-989-1617 www.nicoletti-flater.com

Facebook: Nicoletti-Flater Associates

WHY COLORADO?


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WHAT ARE THE CATEGORIES OF RISKS?

A risk for Proactive Attack Behaviors against people or property

A risk for Reactive Attack Behaviors against people or property

A risk for behaviors that create Social and Psychological Disruption


WHO ARE THE ATTACKERS? Insider – Individuals who are on your radar before they

attack.

Outsider – Individuals who are not on your radar before they attack.



SPECIFICALLY, WHO ARE THE INSIDERS AND OUTSIDERS?

Staff Ex-Employees Guests / Clients Family Members / Ex-Family Members Contractors Others


PERSONALITY CATEGORIES Delightful Task-Oriented PIB’s – Will always remain BMW’s__________________________________ Disruptive Volatile Violent



WHAT IS YOUR PLAN FOR THE FOLLOWING TIME & RESPONSIBILITY CONSIDERATIONS?

Pre-Event Threshold – before the person gets on your radar.

Event Threshold –when the person gets on your radar.

Event Horizon –when the person attacks you.

Post-Event Horizon – when you try to recover and live with what happened.


BASIC CONSIDERATIONS IN KEEPING PEOPLE OFF YOUR RADAR, DEALING WITH DISRUPTIONS, & STAYING SAFE

Development of Policies, Procedures, & Protocols for Threats & Violence

Development of a Centralized Data Collection Point (VORTEX)

Target Hardening

Activation of Dynamic Countermeasures



If They Broadcast It –Believe It!


Skip the “Tea Leaf” Reading

If a concerning behavior occurs, go to a

countermeasure.



RATIONALIZATION -- Inserting ‘JUST’ in the behavioral description


Focus on WHAT –

Not WHO



DON’T WORRY ALONEor

MAKE UNILATERAL RISK ASSESSMENTS


WHAT ARE THE CATEGORIES OF RISKS?

A risk for Proactive Attack Behaviors against people or property

A risk for Reactive Attack Behaviors against people or property

A risk for behaviors that create Social and Psychological Disruption



DEVELOP A PLAN FOR CODING BEHAVIORS

• Normal Behaviors

• Boundary Probing Behaviors

• Attack Related Behaviors

• Attack Behaviors


BOUNDARY PROBING

Involves pushing rules, regulations and tolerance levels.

The purpose is to determine how much he/she can get away with.



IMPORTANT ISSUE

If you allow a boundary probe to occur without a disrupter, then by default

that behavior becomes normal.


ATTACK RELATED BEHAVIORS Desensitization Behaviors (threat making – direct,

veiled, conditional) In Vivo Virtual

Dehumanization Behaviors In Vivo Virtual



ANALYZING THREATSAccording to Secret Service and other research, the

majority of attackers (over 85%) will broadcast a threat prior to an attack.

The majority of the threats will be veiled or conditional.

The threats most likely will not have a time frame.

The threats may not specify a named target.

Therefore, the condition of imminence will not necessarily be present.


HIPAA & CONFIDENTIALITY ISSUES

versus DUTY TO WARN / DUTY TO PROTECT



ATTACK RELATED BEHAVIORS

Skill Set Building Development of an Armament

Inventory Development of an Attack Plan


ATTACK RELATED BEHAVIORS

Threatening Verbalizations

Threatening Behaviors

Personal Space Violations



ATTACK BEHAVIORS

PeopleProperty


ACTIVATION OF COUNTERMEASURES

Always Interrupt / Disrupt the Behavior



TREES CATEGORIES (Disrupters)

CATEGORY I

QUESTIONINGCATEGORY II

CONFRONTINGCATEGORY III

CONSEQUENCES


WHEN A TREE IS PLACED AFTER A PRACTICE SESSION THE INDIVIDUAL HAS A CHOICE TO EITHER

BACK OFF

OR

CLIMB OVER IT

INDIVIDUAL REACTIONS TO TREES



PREDICTING FUTURE VIOLENCE

The best predictor of future behavior is not past behavior

but post-intervention behavior.


INTERPRETING LACK OF COMPLIANCE

If the concerning behaviors continue after an intervention, then two possible hypotheses have been generated:

1. The individual is choosing to disregard rules when it suits him/her.

2. The individual does not have the capacity to control his/her actions.


WHEN VIOLENCE IS OCCURRING –PICK ONE OF THE OPTIONS BELOW

LOCK OUT – Safe Rooms

GET OUT

HIDE OUT – Concealment

FAKE OUT – Play Dead

TAKE OUT – Active Resistance


Notes


MANAGING EMPLOYEE LEAVES

Mary Stuart and Emma Nagengast

Where are your employees when you need them?


Leaves Required by Federal Law

Family and Medical Leave Act (FMLA)

Americans with Disabilities Act (ADA)

Pregnancy Discrimination Act (PDA)

Uniformed Services Employment and Reemployment Rights Act (USERRA)

Leaves Required by Colorado State Law

Domestic violence leave

Time off for voting

Time off for jury duty

Parental leave for school conferences (sunsets in 2015)


Leaves Granted by Contract Holidays

Vacation

Sick leave

Combined PTO plans

Short term disability

Long term disability

Test Your Knowledge Employee takes FMLA leave due to mental health issues

Returns to work, has performance problems stemming from mental health issues

Employer terminates employment for performance

Employee sues claiming FMLA interference

Result?


Test Your Knowledge Employee with serious illness exhausts FMLA

Employer grants 60 additional days of leave

At end of 60 days, requests 45 additional days of leave

Must employer grant the additional 45 days?

Test Your Knowledge Employee on intermittent leave for chronic illness

Certification is for up to 4 times per month for up to 2 days at a time

Employee scheduled to start shift at 6:00 am

Can employer change shift start time to 9:00 am?


Test Your Knowledge Pregnant employee has complications and is off work for

two months before delivery

How much time off, if any, must employer allow the employee after delivery?

Test Your Knowledge Employee suffers serious injury on the job

How long must the employer hold the employee’s job?

How long must the employee remain on the roster?


Test Your Knowledge Employee has seriously ill father in health care facility in

Omaha

Employee requests intermittent leave of every other Friday to travel to Omaha

Must employer grant the leave?

Test Your Knowledge Employee is one of three accounts receivable clerks

Employee takes 12 weeks bonding time with new child

While off, other two clerks absorb work load

Employer decides to eliminate third position for business reasons

Does employee who took leave have a claim?


Test Your Knowledge Employer offers STD policy at 60% pay for 6 months

Employer’s FMLA policy provides that FMLA runs concurrently with any other employer leave

Employee qualifies for FMLA for own illness, and has 20 PTO days available

Must employee use up PTO before STD?

FMLA Leave Employer with 50 employees within 75 miles

Worked for employer for one year

Worked 1250 hours in preceding 12 months

12 weeks continuous or intermittent in 12 months

26 weeks to care for injured service member


FMLA Leave Own serious illness

Serious illness of parent, child or spouse Colorado: domestic partner or civil union

Bonding following the birth of a child

Family member deployment or serious illness

Absolute right if qualify, cannot consider undue burden

FMLA Leave 12 weeks following the birth or adoption of child

Combined with needed medical leave

Within first year, but not immediately following birth

If not qualified at time of birth, may qualify later

If both parents work for same employer, only one 12-week period required


FMLA Leave Job protected

Employer cannot interfere or retaliate

No retaliation, but can continue discipline or PIP

Interesting cases Gabriel v. Colorado Mountain Med., P.C. (D.Colo. 2014)

Curry v. Brown (6th Cir. 2015)

FMLA Leave Protecting against abuse

Recertification after 30 days

Second opinion

Require compliance with certification and policies

Critical to keep track, particularly intermittent

Can run concurrently with workers’ comp, STD, PTO


Pregnancy Discrimination Act

May entitle employee to additional leave time for pregnancy and related conditions

Does not provide for additional bonding time

A number or states have pregnancy leave laws as well

ADA Leave as an Accommodation

Leave not a matter of right

Leave may be a form of accommodation

Will leave allow employee to return to work and perform essential functions?

Individualized analysis



Can consider whether the leave would create an undue burden on the employer

Depends on size of employer

Depends on unique skills required

Depends on duration


Long term, indefinite leave generally not reasonable

But must consider reasonableness and undue burden at time of request

Not by looking back



EEOC frowns upon hard end times for leaves

But, one recent case upheld an “inflexible” maximum 6 month leave policy: Hwang v. Kansas State University (10th Cir. 2014)


Employee must request leave for disability Amon v. Union Pacific Dist. Services Co. (D.Neb. 2015)

Employer can propose alternative to leave as an accommodation


Military Leave Right to re-employment at position and level would have

been if had not taken leave

Entitled to take 15 days of leave per year for reserve or guard duty

Cannot discriminate because of taking leave

Colorado Leave Rights Domestic violence

Up to 3 days every 12 months

Voting Up to 2 hours, unless polls open three hours when off duty

Jury duty Must pay up to $50.00 per day for first 3 days


Leaves by Contract No federal law requires paid leave

But, some state and local law require paid sick leave

Part of compensation package where offered

Once granted, cannot be taken away

Can change prospectively

Leave by Contract 72% of U.S. workers earn paid time off*

69% of private sector

40% of workers finished 2013 with unused PTO* 2.4 days per employee

Could result in 580 million travel days and $67 billion*

* Oxford Economics, February 2014


Leave by Contract Leave banks can result in large liabilities on books

Companies increasingly looking at purpose of leave Time off versus additional pay

Part of employee well-being initiatives

More mobile workforce vs. retiring 6 months early

Leave by Contract Combine vacation and sick leave

Combine holidays with PTO

Provide no set time off


Leave by Contract Contract determines terms of payout

Sick leave generally does not have to be paid out

If policy is silent, most state require vacation be paid out

Leave by Contract Written policy determines if vacation paid out

Limit accrual of vacation time

Provide that not paid out at termination

Terminology important Avoid “banks,” “vested,” “use it or lose it”


Leave by Contract Short term disability

From third party

Salary continuation

Can run concurrently with FMLA Cannot require substitution of PTO, 29 C.F.R. 825.207

Leave by Contract Long Term Disability

Does employment end?

Need to consider ADA


Apply Your Knowledge Employee takes FMLA leave due to mental health issues

Returns to work has performance problems stemming from mental health issues

Employer terminates employment for performance

Employee sues claiming FMLA interference

Result?

Apply Your Knowledge Employee with serious illness exhausts FMLA

Employer grants 60 additional days of leave

At end of 60 days, requests 45 additional days of leave

Must employer grant the additional 45 days?


Apply Your Knowledge Employee on intermittent leave for chronic illness

Certification is for up to 4 times per month for up to 2 days at a time

Employee scheduled to start shift at 6:00 am

Can employer change shift start time to 9:00 am?

Apply Your Knowledge Pregnant employee has complications and is off work for

two months before delivery

How much time off, if any, must employer allow the employee after delivery?


Apply Your Knowledge Employee suffers serious injury on the job

How long must the employer hold the employee’s job?

How long must the employee remain on the roster?

Apply Your Knowledge Employee has seriously ill father in health care facility in

Omaha

Employee requests intermittent leave of every other Friday to travel to Omaha

Must employer grant the leave?


Apply Your Knowledge Employee is one of three accounts receivable clerks

Employee takes 12 weeks bonding time with new child

While off, other two clerks absorb work load

Employer decides to eliminate third position for business reasons

Does employee who took leave have a claim?

Apply Your Knowledge Employer offers STD policy at 60% pay for 6 months

Employer’s FMLA policy provides that FMLA runs concurrently with any other employer leave

Employee qualifies for FMLA for own illness, and has 20 PTO days available

Must employee use up PTO before STD?


EMPLOYEE PRIVACYChris Ottele

Why Monitor Your Employees? Employers want employees who are

Productive

Efficient

Diligent

ResponsibleLoyal

Cost-effective

Safe


Why Monitor Your Employees?

Fear of liability to

third-parties

Inappropriate posting

Customer data and

information

Confidential, proprietary or trade secret information

Common Practices That Create Risk

Drug Testing

Background Checks

Interviews

Employee Searches (desks, lockers, cars)

Monitoring Internet Usage

Monitoring Social Media

Monitoring Telephone


Legal Risks

Common Law – Invasion of Privacy (Restatement (Second) of Torts § 652A) Reasonable expectation

of privacy

Highly offensive intrusion

Without reasonable business justification

Injury


Laws Protecting Employee Privacy

•Medical Testing •Disability Questions

Americans with Disabilities Act

•Pregnancy Discrimination•Age Discrimination in Employment Act•Title VII of the Civil Rights Act of 1964

Discrimination Laws

•Limited Employers•Limited Circumstances

Employee Polygraph Protection Act

•Criminal Background Checks•Notice Requirements Before and After

Fair Credit Reporting Act

Laws Protecting Employee Privacy

• Obtaining Medical Information• Use and Maintenance of Information

HIPAA: Health Insurance Portability

and Accountability Act

• Genetic Testing• Family Medical History

GINA: Genetic Information

Nondiscrimination Act

• Protected Concerted ActivityNational Labor Relations Act


EEOC Scrutiny

Pre-employment Inquiries• “limited to those essential for

determining if a person is qualified for the job”

Criminal Background Checks• “job related and consistent with

business necessity”

Colorado Law


Colorado – Lawful Off-Duty Activity Statute (C.R.S. § 24-34-402.5)

• Discharge only• During non-working hours• Due to “lawful activity”

Employers prohibited from discharging

employee for engaging in lawful activities

• A bona fide occupational requirement • Reasonably related to the employment

responsibilities of a “particular” employee • To avoid an actual or apparent conflict of interest

Unless off-duty activity

LODAS Protected Activities


Colorado Social Media and the Workplace Law C.R.S. § 8-2-127 Prevents employers from accessing employees’ and job applicants’ personal social media accounts

An employer may not require the disclosure of employees or applicants user names or passwords

Compel “friending”

Require an employee to change privacy settings

Colorado Employment Opportunity Act (C.R.S. § 8-2-126)

• The credit information is "substantially related" to the employee’s current or potential job

• The person being evaluated or the employer are exempt from the law

Employers may not request or

use credit report or

consumer credit information

unless:


What to make of this mess?

Do you want to know?

Legal Risks

Restricts Talent Pool

Strains Employee Relationship


Best Practices

Assess on case-by-case basis

Focus on job relatedness and job performance

Know the difference: duty to monitor vs. opportunity to monitor

Treat everyone the same

Best Practices

Train interviewers and supervisors

Social media policy and protocol


Drug Testing

Safety Sensitive Positions

Comply with the Drug Free Workplace Act

Incidence and Pre-Employment Testing Preferable to Random

Common Practices That Create Excessive Risk or Liability

“Googling”

Connecting on Social Media

Inquiries into Lifestyle, Relationships or Health

Personality Tests

Lie Detector Tests

IQ Tests / Standardized Test Scores

LEGAL UPDATE 2015...FLSA – ECONOMIC REALITIES TEST 1. The degree of control exerted by the employer over the worker; 2. Risk of profit or loss for the worker; 3. The worker’s investment

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