Does An Employer Have To Pay Hourly Employees For Commuting To Work In A Company Vehicle?

By Kathryn Lease Simpson, Esq.

A: Not necessarily. Two provisions of the Fair Labor Standards Act (FLSA), that otherwise appear simple, create confusion. The first, employers do not have to pay their hourly employees for an ordinary commute to and from work. This is true even if an employee reports to different locations. However, the travel between work sites, after the first location, is normally compensable. For employees who regularly report to different job sites, at the beginning of the work day, factors such as the company’s usual business area and the frequency of changes to reporting locations may impact whether the drive is an ordinary commute.

Second, many employees believe if they are driving company vehicles to and from work, or to the initial job site, they are entitled to compensation. This is not necessarily the case. Courts will look to whether driving the vehicle and carrying tools impose more than a “minimal burden” on the employee.

Each situation is unique and the answer to the question turns on several factors. It is therefore important for companies that are considering entering into these types of commuting agreements to consult with counsel.

Background Investigation of Prospective Executive Hires: a Necessary Evil

By: Kathryn L. Simpson

The headlines are everywhere. Every day another occupant of the “C-Suite” in a large company is accused of sexual harassment or physical assault. Many of the instances of harassment may have occurred while the person worked for another employer but the sins come home to roost on the current employer. The public is left to doubt the employer’s credibility and its attention to detail when it hires a person with a history of sexual harassment.

What can you do to prevent hiring a harasser?

– Ask the candidate why their prior employment ended.
– Get a signed waiver from the candidate to allow former employers to speak openly about prior conduct.
– Check all references.
– Do a criminal record search to find felony or misdemeanor convictions.

There is no way to repair the damage resulting from hiring an executive with a history of sexual harassment. The only effective way to avoid disaster is due diligence in the hiring process.

There’s a New I-9 in Town

By Kathryn Lease Simpson

New I-9 In Town

Starting on September 18, 2017, all employers will be required to have completed a new I-9 Form for every NEW employee. However, you can start using the new form immediately. Form I-9 is used for verifying the identity and employment authorization of individuals hired for employment in the United States.

Form I-9 is used for verifying the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must ensure proper completion of Form I-9 for each individual they hire for employment in the United States. This includes citizens and noncitizens. Both employees and employers (or authorized representatives of the employer) must complete the form. On the form, an employee must attest to his or her employment authorization. The employee must also present his or her employer with acceptable documents evidencing identity and employment authorization. The employer must examine the employment eligibility and identity document(s) an employee presents to determine whether the document(s) reasonably appear to be genuine and to relate to the employee and record the document information on the Form I-9. The list of acceptable documents can be found on the last page of the form. Employers must retain Form I-9 for a designated period and make it available for inspection by authorized government officers. NOTE: Some agricultural recruiters and referrers for a fee may be required to use Form I-9.

What are the changes? The instructions have changed in this way:
1.) The name of the Office of Special Counsel for Immigration-Related Unfair Employment Practices is changed to its new name, Immigrant and Employee Rights Section.

2.) The words “the end of” have been removed from the phrase “the first day of employment.” This means the Form I-9 MUST be completed BEFORE the new employee starts work.

The list of acceptable documents has changed:
1.) The Consular Report of Birth Abroad (Form FS-240) has been added to List C. Employers completing Form I-9 on a computer will be able to select Form FS-240 from the drop-down menus available in List C of Section 2 and Section 3. E-Verify users will also be able to select Form FS-240 when creating a case for an employee who has presented this document for Form I-9.

2.) The certifications of report of birth issued by the Department of State (Form FS-545, Form DS-1350 and Form FS-240) have been combined into selection C#2 in List C.

3.) All List C documents have been renumbered except the Social Security card. For example, the employment authorization document issued by the Department of Homeland Security on List C will change from List C #8 to List C #7.

These changes are included in a revised Handbook for Employers: Guidance for Completing Form I-9 (M-274), which is also easier for users to navigate.

The Pennsylvania Supreme Court Decides the Protz Case

By Michael A. Farrell

Worker's Compensation

On June 20, 2017, the Pennsylvania Supreme Court handed down its decision in Protz v. WCAB (Derry Area School District). The Protz decision rendered unconstitutional, Section 306(a)(2) of the Pennsylvania Workers’ Compensation Act, eliminating the use of an impairment rating evaluation in order to change the disability status of an injured worker from total to partial thereby limiting the injured worker to 500 weeks of benefits. At the heart of the Court’s decision, the Supreme Court recognized that the integrity of the legislative function is vital to the preservation of liberty. While the General Assembly, under some circumstances, is permitted to delegate the authority and discretion to execute or administer laws, it found that 306(a)(2) of the Workers’ Compensation Act lacked any of the procedural safeguards that the Court considers essential to protect the authority and discretion of legislative decision-making.

Once finding that the offending language of Section 306(a)(2) did not pass constitutional muster, the Court determined that without Section (a)(2) the remainder of that Section of the Act would be rendered incomprehensible. Accordingly, it struck down that Section of the Act, in its entirety.

In the wake of that decision lies the unanswered question of what effect does the Court’s holding have on cases that have affected an injured worker’s disability status through the use of the impairment rating evaluation and what clarification and/or guidance can we expect from the courts and/or the legislature? Also, what effect will the holding in Protz have on the administration of future workers’ compensation claims?

In its decision, the Pennsylvania Supreme Court did not specifically state that its holding was to be applied retroactively, although that would appear to be the logical application of the holding. Nevertheless, there is precedent for the argument that in any case in which the issue in question has not been properly preserved at every stage of the proceding, that issue is deemed waived. Using that argument as applied to all cases in which an injured worker’s disability status has been changed from total to partial through the use of the impairment rating evaluation, unless the constitutionality issue had been preserved at all stages of adjudication, the courts may well determine that the constitutionality issue is waived and that the injured worker does not have the opportunity to have his or her disability status reverted to total disability. Additionally, the courts can consider the effect that a retroactive application would have on the Workers’ Compensation Adjudication System in determining whether or not the holding of the Court is to be applied retroactively.

Another obvious effect that the Court’s holding in Protz will have on the administration of workers’ compensation claims is that employers can no longer utilize the tool of an impairment rating evaluation to limit the exposure presented by a workers’ compensation claim. Accordingly, it is likely that other traditional tools for the administration and limitation of the exposure presented by workers’ compensation claims will have to be utilized, such as earning power assessments followed by labor market surveys and the filing and litigation of modification and suspension petitions. A more immediate effect of the Protz holding is that reserves placed on workers’ compensation claims will have to be adjusted upward to account for the likely extended period of time that claims will have to be paid while the process of having a vocational evaluation performed followed by a labor market survey and the litigation of the appropriate petition is proceeding. Accordingly, I would expect to see an uptick in the use of vocational experts to perform earning power assessments and labor market surveys to attempt to control the ongoing exposure presented by workers’ compensation claims.

Finally, with respect to the workers’ compensation claims that have been resolved through settlement, I fully expect that the resolution of those claims will remain undisturbed by the Protz decision. The case law is well settled that compromise and release agreement can only be set aside for fraud, misrepresentation, concealment or mutual mistake of fact. The settlement was a bargained for transaction by the parties, both of whom understood the terms and effects of the settlement.

Having said all the above, all workers’ compensation practitioners are looking towards the courts and/or legislature for guidance on the application and effect of the Protz decision on the future administration and litigation of workers’ compensation cases.

Court Injunction Puts New FLSA Overtime Regulations on Hold

overtime-pay-photoFLSA REGULATION UPDATE

On November 22, 2016, the federal district court for the Eastern District of Texas granted a preliminary injunction, effectively stopping the implementation of the FLSA overtime regulations, which were scheduled to go into effect on December 1, 2016.

For the moment, the existing overtime rules and regulations will continue and there will be no changes required.

It is anticipated that there will be an appeal of the decision but there is no way to predict when a decision might be reached. In addition, it is unclear whether the new Trump Administration will support the proposed FLSA overtime regulations.

Will Your Exempt Employees Pass The New Test?

Exempt employees are those who are exempt from the overtime provisions of the Fair Labor Standards Act – the “white collar” employees. On December 1, 2016, the salary basis and salary level tests for a white collar employee changes dramatically.

To be exempt after December 1, a white collar employee generally must:

• be salaried, meaning that they are paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”);

• be paid more than a specified weekly salary level, which is $913 per week ($47,476 per year) (the “salary level test”); and

• primarily perform executive, administrative, or professional duties,as defined in the Department’s regulations (the “duties test”).

While employees like doctors, teachers and lawyers are not subject to these tests, for the others, an employer will be required to pay overtime – at least 1.5 times the hourly wage for every hour worked over 40 – if an employee is not paid $913 per week regardless of their duties.

The Defend Trade Secrets Act: Do Your Employment Documents and Policies Comply?

By Kathryn Lease Simpson

The Federal Defend Trade Secrets Act

The Federal Defend Trade Secrets Act (DTSA) was amended on May 11, 2016, effective immediately. The newly amended law contains a whistleblower clause that provides immunity for the disclosure of trade secrets to government officials for the sole purpose of reporting violations of the law.

Why is that important to you? The new law requires employers to give notice of that immunity “in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.”

If you have an employment agreement that contains a section addressing trade secrets that does not include the notice of immunity, should you sue the employee for unauthorized disclosure, you will not be able to recover punitive damages or attorneys’ fees that may otherwise be available under the DTSA or under state trade law. The DTSA applies to all such contracts entered into after May 11, 2016.

In addition to making sure that your employment agreements comply, you should also should consider looking at your employee handbook or manual and see what trade secret policies you have in place and amending them to bring them into compliance. Other agreements that need to be examined include non-disclosures, proprietary information, and invention assignments.

Legal Wellness Checkup – Form I-9

by Kathryn Simpson

/legal-wellness-checkup

Are you an employer? Have you hired any new employees lately? Do you have a completed a Form I-9 for every new hire?

Finding and hiring qualified employees for your business can be a long and involved process. Once you do hire a new employee, be sure to complete all the legal requirements for the hiring process by filling out Form I-9. Failing to properly complete a Form I-9 and securing the appropriate identity documents is a violation of federal law. Employers who violate the law may be subject to civil fines, criminal penalties or debarment from government contracts.

All U.S. employers must ensure proper completion of Form I-9 for each individual they hire for employment in the United States, whether those individuals are citizens or noncitizens. Both employees and employers (or authorized representatives of the employer) must complete Form I-9. On the form, an employee must attest to his or her employment authorization.

The employee must present the employer with acceptable documents evidencing identity and employment authorization. The employer must examine the employment eligibility and identity document(s) an employee presents to determine whether the document(s) reasonably appear to be genuine and to relate to the employee and record the document information on the Form I-9.

Form I-9 must be retained and stored by the employer either for three years after the date of hire or for one year after employment is terminated, whichever is later. The form must also be available for inspection by authorized U.S. Government officials.

More information about properly completing Form I-9 is available on the U.S. Citizenship and Immigration Service website, which includes a link to a downloadable guide. Learn more at: http://www.uscis.gov/i-9.

Employee Handbook Mistakes

by Kathryn Simpson

Employee Handbook Mistakes

As a business owner, you probably have an employee handbook (or manual). You may have had it drafted by an attorney or perhaps an employee downloaded a template from the internet and adapted it to your situation. Wherever that handbook came from or whenever it was done, it is always a good idea to try it on and see if it still fits.

• Should you decide it needs improvement, here are some of the mistakes to avoid in drafting either an entirely new handbook or in updating the old:

• failing to consider the effects of both state and federal laws on your employees (for example, wage issues including overtime)

• failing to include certain information required or highly recommended by federal and state law (sexual harassment policy, and FMLA, USERRA, COBRA notices – and if you don’t know what those initials stand for, then you need an attorney right now)

• failing to update the handbook to keep pace with changes in the law (new FMLA regulations have been in effect since March 8, 2013.)

• failing to include a disclaimer that the handbook is not a contract of employment

• failing to look at the big picture and not drafting sections that deal with generalities (and not specific situations)

• failing to provide flexibility for the employer to deal with employee situations that arise

• failing to make the handbook user-friendly (table of contents, easy to read, etc.)
including specifics about employee benefits (health insurance, pension or retirement benefits) where there is a plan and a summary plan document that governs

• failing to have the draft of your handbook reviewed by counsel experienced in employment law.

The experienced attorneys at Mette, Evans & Woodside are able to assist you in the revision of an existing handbook or in the creation of a new one.