Maryland lawmakers have introduced a bill that would increase the minimum wage to $15.00 per hour by 2023. Notably, the State’s minimum wage is currently $10.10 per hour, which is significantly greater than the federal minimum of $7.25. Many progressive leaders and newly elected legislators do not think Maryland’s current minimum wage is high enough, and as a result, there has been an increased push to pass the proposed legislation. If enacted, Maryland would join the notoriously employer-unfriendly jurisdictions like California, New York, Massachusetts, New Jersey, and Washington D.C. If the experience in those States is a guide, the increased minimum wage would increase the cost of doing business in Maryland, create incentives to deploy technology to reduce labor costs, harm workers who are least skilled (by making them less attractive “at the price” vis-à-vis more skill peers), and create severe obstacles for businesses operating within the State. Continue Reading Fight Against $15! An Opportunity to Testify Before the Maryland General Assembly
New York City is often on the fringe. From its fashion to its tall buildings to its restaurants, the Big Apple likes to be cutting edge. Even when it comes to its laws. Really, who can forget the controversial proposed ban on “big” sugary sodas? Fortunately, that specific attempt to regulate personal choice was ultimately stopped in its tracks. Continue Reading New York City Proposes Right to “Ignore Your Boss” Law
We are all watching and reading how Uber is responding to yet the latest scandal and legal problem to confront the on-demand ride service giant. About a week ago, a former Uber employee, Susan Fowler, posted a blog about why she left Uber last December. Susan alleges (and these are only allegations at this point) that during her one year at Uber as an engineer, she was subject to harassment and a rampant sexist culture at Uber, and when she complained, Uber did nothing. Continue Reading What Does the Ex-Uber Employee’s Blog Teach Employers about the Power of Social Media?
As the Wall Street Journal reported this week, the Department of Labor’s (DOL) highly anticipated rules regarding employees’ eligibility for overtime are not likely to be finalized until sometime in mid to late 2016. This timeline, which is later than the Spring-time anticipated date, was acknowledged by the Department of Labor (DOL) Solicitor, Patricia Smith, during the American Bar Association, Labor and Employment Section Conference two weeks ago. I attended the panel at which Solicitor Smith spoke, and counsel for both management and employees were surprised by this revelation.
As my firm previously reported, in June 2015, the DOL proposed revisions to the overtime rules. The proposed rules significantly increased the required salary for employees to qualify as exempt. The current salary threshold is $23,660. The proposed rules more than double it to $50,400! Clearly, this is a significant increase and would make many more employees eligible for overtime pay.
Solicitor Smith said the reason for the delay in the issuance of the final rules is the significant number of comments that were received by the DOL, which are in excess of 200,000! This is three times more than the number of comments received by the DOL when it revised the regulations back in 2004.
Employers did not need another reason to complain about the burdens of the Affordable Care Act (“ACA”). Most of us know that the law includes onerous obligations on employers that have made human resources and benefits personnel’s jobs increasingly difficult. For example, you have to figure out if the law applies to your organization (how many full-time and FTE employees do you have?), to whom you have to offer coverage (full-time, part-time, variable hour, seasonal employees?), what coverage you have to offer (minimum essential coverage that is affordable and meets the minimum value test), how to tell if the coverage you are offering is affordable (something about 9.5% of the employee’s W-2 wages, right?), how to track employees’ hours, etc., etc., etc.!
Well, I am sorry to say that for those of you that use temporary or contract workers, you have another thing to worry about under the ACA. Specifically, you need to determine whether you have to offer those temporary or contract workers health insurance benefits. The ACA requires that an applicable large employer offer health insurance benefits to its full-time employees (those that work on average 30 or hours more a week). The ACA uses the well-known IRS control test to determine who is an “employer.” That is, it does not matter what the agreement between the temporary agency and your organization spells out. If your organization exercises sufficient control over the temp or contractor employee, it will be deemed the common-law employer of that employee. And if that is the case, under ACA, your organization will be obligated to offer health care coverage to full-time workers, regardless of whether you categorize them as “temps,” “temps-to-hire” or “independent contractors.”
That being said, however, the ACA provides a workable option that enables you to – in essence – take credit for an offer of health insurance benefits by the temporary or staffing agency. Specifically, if the temporary staffing agency offers coverage that passes muster under the ACA, you can take credit for that offer. This option is spelled out in the preamble to the ACA Final Regulations on the employer shared responsibility requirements. The provision reads:
… if certain conditions are met, an offer of coverage to an employee performing services for an employer that is a client of a professional employer organization or other staffing firm (in the typical case in which the professional employer organization or staffing firm is not the common law employer of the individual) (referred to in this section IX.B of the preamble as a ‘‘staffing firm’’) made by the staffing firm on behalf of the client employer under a plan established or maintained by the staffing firm, is treated as an offer of coverage made by the client employer for purposes of section 4980H. For this purpose, an offer of coverage is treated as made on behalf of a client employer only if the fee the client employer would pay to the staffing firm for an employee enrolled in health coverage under the plan is higher than the fee the client employer would pay to the staffing firm for the same employee if the employee did not enroll in health coverage under the plan.
If you are inclined to take credit for the offer of coverage by the temporary staffing agency, you should make sure the agreement (including what the additional fee will be) is clearly spelled out in writing. In addition, while the regulations are silent on what the additional fee must be, it should be more than a token.
Now, if this seems like a headache for your organization to take on at this time, I remind you that the ACA requires applicable larger employers (defined as those with 100 or more employees in 2015; 50 or more employees in 2016) to offer coverage to “substantially all” of its full-time employees. “Substantially all” means 70% in 2015 and to 95% in 2016. Therefore, if your percentage of temporary employees falls within the less than 30% this year or 5% next year of full-time employees who are not being offered benefits, you may be fine in terms of ACA compliance. But obviously, you must carefully track the numbers of temporary employees you are using, as compared to the total workforce (including those temp agency/contractor employees) to ensure you stay within those percentages.
The EEOC recently issued another information discussion letter regarding pre-employment criminal background checks. Many employers conduct criminal background checks, and the EEOC has long-held that such screenings do not violate Title VII per se because Title VII does not regulate inquiries by employers. The discussion letter, however, reminds employers that the use of criminal records by an employer may violate Title VII if it is done in a discriminatory way.
An employer must not use criminal history information to engage in unlawful disparate treatment (e.g., excluding African American applicants with certain criminal charges while accepting white applicants with the same charges). In addition, because a disproportionate numbers of African Americans and Hispanics are convicted of crimes, the use of a criminal background check may have a disparate impact on certain groups of people. In order to limit that disparate impact, the EEOC’s position is that an employer may use criminal history information to make employment decisions only when it is job related for the position in question and consistent with business necessity. To meet this standard, a criminal conduct must be recent enough and sufficiently job-related to be predictive of performance in the position sought. The EEOC’s guidance identifies three factors to consider in making this assessment:
1. The nature and gravity of the offense or offenses;
2. The time that has passed since the conviction and/or completion of the sentence; and
3. The nature of the job held or sought.
Employers should conduct a review their policies to ensure that they take into consideration these factors. No policy should impose an absolute ban on hiring applicants with criminal convictions. The policy should allow discretion to determine the nature of the offense, the nature of the job for which the applicant has applied, and the length of time that has passed since the conviction. For example, a criminal conviction for public drunkness that happened 15 years ago may not be considered a preclusion for an individual seeking a position in the accounting department.