Have you heard the one about the coffee chain that wants its employees to engage customers about issues of race and racism in America? Here are the best things I read this past week on this issue, courtesy of Robin Shea’s Employment & Labor Insider:
And here’s the best thing I watched this past week on the issue, care of John Oliver’s Last Week Tonight on HBO.
Here’s the rest of what I read this week:
Social Media & Workplace Technology
HR & Employee Relations
Wage & Hour
Today, the new rule that would permit FMLA benefits for same-sex spouses was to take effect. However, late yesterday, a federal judge in Texas granted a preliminary injunction [pdf] temporarily halting the rule.
The plaintiffs—the attorney generals of four states that do not recognize same-sex marriages—successfully argued that they were likely to succeed on the merits of their claim that the FMLA rule infringed on their states’ rights under section 2 of the Defense of Marriage Act to ignore same-sex marriages lawfully entered in other states.
This is only a temporary victory for the plaintiffs in this case. And, while it legally only impacts the four states that are plaintiffs in this action, practically, the DOL will hold any implementation of this rule until this case plays itself out.
As for the merits of the case itself, as Robin Shea points out, this case could become moot (clearing the way for the FMLA rule-change) if the Supreme Court legalizes same-sex marriage later this term. Fingers crossed.
Since I’ve already provided more than 3,000 words of quality labor-and-employment content this week, today’s post will be on the (much) shorter side.
On April 14, the NLRB’s “ambush election” rules take effect. You can read all about these rules here. In advance of this implementation, the NLRB is training its employees on the ins and outs of these new rules. Do you know where the NLRB is conducting this training?
According to the U.S. Chamber of Commerce, the NLRB is holding its “ambush election” training at the New York City office of the Service Employees International Union. Does it seem a bit … disingenuous / offensive / plain-ol’-wrong … that the NLRB has chosen to train its own employees (federal employees, paid by your and my tax dollars) at the office of an organization that will be the beneficiary of these pro-union election rules? I’ll give the NLRB one thing. At least it doesn’t play hide-the-ball with its very pro-union agenda.
This morning, the U.S. Supreme Court issued one of its most anticipated employment-law rulings of this term, in Young v. United Parcel Service [pdf]. The case asked under what circumstances an employer must provide a workplace accommodation to a pregnant employee.
In its ruling, the court rejected the positions offered by both the employer and the employee.
- UPS argued that the Pregnancy Discrimination Act requires courts to compare the accommodations an employer provides to pregnant women with the accommodations it provides to others within a facially neutral category (such as those with off-the-job injuries) to determine whether the employer has violated Title VII. The Court rejected this argument as too narrow of a reading of the statute.
- Young argued that the PDA requires an employer to provide the same accommodations to workplace disabilities caused by pregnancy that it provides to workplace disabilities that have other causes but have a similar effect on the ability to work. The Court rejected this argument because the PDA, on its face, does not grant pregnant workers an unconditional “most-favored-nation” status.
Instead, the Court crafted its own interpretation by applying a modified McDonnell Douglas analysis to pregnancy accommodation claims:
Thus, a plaintiff alleging that the denial of an accommodation constituted disparate treatment under the Pregnancy Discrimination Act’s second clause may make out a prima facie case by showing, as in McDonnell Douglas, that she belongs to the protected class, that she sought accommodation, that the employer did not accommodate her, and that the employer did accommodate others “similar in their ability or inability to work.”
The employer may then seek to justify its refusal to accommodate the plaintiff by relying on “legitimate, nondiscriminatory” reasons for denying her accommodation. But, consistent with the Act’s basic objective, that reason normally cannot consist simply of a claim that it is more expensive or less convenient to add pregnant women to the category of those (“similar in their ability or inability to work”) whom the employer accommodates….
If the employer offers an apparently “legitimate, nondiscriminatory” reason for its actions, the plaintiff may in turn show that the employer’s proffered reasons are in fact pretextual. We believe that the plaintiff may reach a jury on this issue by providing sufficient evidence that the employer’s policies impose a significant burden on pregnant workers, and that the employer’s “legitimate, nondiscriminatory” reasons are not sufficiently strong to justify the burden, but rather—when considered along with the burden imposed—give rise to an inference of intentional discrimination.
The plaintiff can create a genuine issue of material fact as to whether a significant burden exists by providing evidence that the employer accommodates a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers. Here, for example, if the facts are as Young says they are, she can show that UPS accommodates most nonpregnant employees with lifting limitations while categorically failing to accommodate pregnant employees with lifting limitations. Young might also add that the fact that UPS has multiple policies that accommodate nonpregnant employees with lifting restrictions suggests that its reasons for failing to accommodate pregnant employees with lifting restrictions are not sufficiently strong—to the point that a jury could find that its reasons for failing to accommodate pregnant employees give rise to an inference of intentional discrimination.
What’s the problem with this decision? As Justice Scalia astutely and correctly points out in his dissent, by permitting a pregnant worker to establish pretext by demonstrating a disadvantage presented by the application of a facially neutral work rule, the majority’s opinion allows one to establish intentional disparate treatment by demonstrating a disparate impact. What does this mean for employers? It means that employers must analyze the impact of work rules on pregnant workers and accommodate accordingly. Thus, in application, the majority’s rule grants pregnant workers the unconditional “most-favored-nation” status that the majority says it was rejecting.
My practical take for handling pregnant workers remains unchanged. Unless you can unequivocally demonstrate that you’ve never provided an accommodation to a disabled worker, you should be prepared to offer the same to your pregnant workers.
Just because you pay an employee a salary does not render that employee “exempt” from the overtime requirements of the Fair Labor Standards Act. A salaried employee can be non-exempt if the employee fails to meet the non-salary aspects of the tests for the exemption. For example, a assistant retail manager who exercises no independent judgment in how he or she “manages” the store, but merely serves as a glorified, and more highly paid, babysitter for the other employees.
As an employer, you have two options to pay these salaried, non-exempt employees:
Under the standard method, you calculate the employee‘s weekly rate based on the salary divided by the number of hours worked that week, and then pay the employee 1.5 times that rate for all overtime hours. Thus, if a non-exempt employee earns a salary of $1,000 a week, and works 50 hours in a week, the employee would earn an additional $30 per hours worked over 40 ($1000 / 50 = $20 per hour base weekly rate x 1.5 = overtime premium of $30). Thus, in this week, the employee would earn an additional $300 for the 10 hours of overtime, rendering his total pay for that week $1,300, not the customary $1,000 salary.
Under the fluctuating workweek method, you include the base-rate part of the overtime premium in the employee’s weekly salary, and only pay the 0.5 premium kicker as overtime. Using the same example as in number 1 above, the employee would still have an hourly rate of $30, but would only earn an additional $100 for the week, as under this method, $20 of the $30 overtime rate has already been paid as part of the base salary.
As you can see, there is a clear economic advantage to employers using the fluctuating workweek calculation to pay overtime to salaried non-exempt employees. You’ll realize a 66 percent savings on your overtime pay. Under the FLSA, however, an employer cannot unilaterally implement the fluctuating workweek calculation. Instead, to pay salaried, non-exempt employees via this advantageous method, you must meet these four elements:
- the employee’s hours must fluctuate from week to week;
- the employee must receive a fixed salary that does not vary with the number of hours worked during the week (excluding overtime premiums);
- the fixed amount must be sufficient to provide compensation every week at a regular rate that is at least equal to the minimum wage; and
- the employer and employee must share a “clear mutual understanding” (best confirmed in a written document) that the employer will pay that fixed salary regardless of the number of hours worked.
Recently, an Ohio federal court examined whether an employer, sued in a misclassification case, can use the fluctuating work week for its calculation of unpaid overtime. The court said no, for one key reasons: in a misclassification case, it is impossible for the employer and its employee to have had the required “clear mutual understanding.” Because the parties never agreed to an essential term of a fluctuating work week arrangement—that overtime would be paid at different rates depending on the number of hours worked per week—it is improper to use that calculation for purposes of back pay in a misclassification case.
What are the takeaways from this case?
If you haven’t recently audited your wage-and-hour practices, it’s a good idea to do so sooner rather than later. Classification issues should be a key component of any wage-and-hour audit. Do not mis-assume that an employee is exempt merely because you pay a salary.
If you have non-exempt salaried employees who work hours fluctuate from week to week, give strong consideration to implementing a fluctuating work week, via a written agreement that explains, in plain English the arrangement.
- If a salaried employees whom you’ve been treating as exempt sues claiming a misclassification, it is likely that you will have to pay damages at the full time-and-half overtime rate, not at the half-time fluctuating work week rate.