Entrepreneurs take aim at ever-moving employment laws
Employment law is one of the most complex and important labor topics. Trying to keep a grip on ever-changing federal, state and local regulations is akin to playing 3-D chess.
Yet, entrepreneurs not aware of — or who ignore — the latest developments do so at their peril.
Dave Berndt, an expert client advocate with G&A Partners, led a discussion of these issues with Kate Tornone and Jon Steingart. G&A is a human resources and administrative outsourcing firm. It provides HR expertise and insights on company culture, workplace dynamics and benefits.
Tornone, senior editor of HR Dive, has covered employment law as a business-to-business journalist for more than 10 years.
Steingart, legal editor at Bloomberg Law, covers litigation and developments in the field of labor and employment law. This includes wage-and-hour regulations, workplace discrimination and harassment, and the gig economy.
Top employment law trends include paid sick leave at the local and state level; harassment and discrimination, including new laws regarding legal settlements; privacy, including data breach laws; background checks and screening; and ban on salary history.
“Generally, trends include the ever-increasing body of state and local laws on paid leave, marijuana and so on,” Tornone said. “Specifically, we hear a lot about drug testing. These laws plus a talent shortage — partially caused by the opioid crisis — have led many to scale back testing.
“The Fair Labor Standards Act also is having a moment right now with the classification issues raised by the gig economy,” she said.
Well into the current White House, changes continue.
“Among the biggest is the continuing transition from the Obama Administration into the Trump Administration,” Steingart said. “The U.S. Equal Employment and Opportunity Commission still has a Democratic majority. I’m interested to see what changes may happen in its approaches to employment discrimination when Trump nominees take office.
“States — especially California, New York and others — are jumping past the federal government with their own requirements,” he said.
Entrepreneurs could find themselves in court if they come in conflict with these issues. Those appearances can be avoided.
“It’s very important for employers to stay on top of employment law developments and ensure that their human resources practices and procedures are compliant,” Berndt said.
“If employers don’t have the means and resources to monitor such developments, it’s critical that they seek the advice and counsel from a company like G&A Partners,” he said. “In many situations, employers will find that ignorance is no excuse for legal liability.”
Those who prepare will be rewarded.
“Managers can mess up in any of these areas, which means training is critical,” Tornone said.
“It’s managers who look the other way when employees work off the clock,” she said. “It’s managers who say ‘We don’t do Family and Medical Leave Act’ or ‘I have too many pregnant workers.’”
Bloomberg Law tracks the laws that land employers in federal court, including New Work suits.
Employers fail when they discipline employees without documenting events leading up to and causing the problem. That readily leads to lost lawsuits in return.
“Many employers make a decision too quickly, especially when it results in termination,” Berndt said.
“Before doing this, employers must step back, gather information and feedback from various sources, and assess what really happened,” he said.
Misplaced compassion also can prove costly.
“Many forget that discipline and criticism can be a ‘benefit’ of employment,” Tornone said. “One manager felt bad, so she kept giving an employee with a disability inflated performance reviews.
“If you terminate and end up with a discrimination claim, you have no documentation showing the worker was a poor performer for years,” she said.
“Off-the-clock” work is a persistent source of litigation for businesses. It occurs because employers encourage or demand it in not so many words — overloading workers with tasks that can’t be done during normal work hours.
Those who don’t work off the clock are seen as not dedicated.
“Off-the-clock work occurs primarily because of employee and manager ignorance,” Berndt said.
“To ensure this doesn’t happen, some companies will make accurate timekeeping and oversight of employee timekeeping part of their disciplinary process to hold people accountable,” he said.
Steingart took a different perspective.
“I’d like to turn the question around and ask why off-the-clock work is allegedly happening,” he said. “Sometimes the rules on what’s compensable and what isn’t compensable are hard to navigate.
“The U.S. Department of Labor Wage and Hour Division lets employers write in and ask for an opinion letter about how the FLSA applies in specific situations,” Steingart said. “This was a practice it did for decades until the Obama Administration discontinued it. Then the Trump Administration revived it.”
Solving off-the-clock takes out-of-the-box thinking.
“We’re seeing some novel approaches, like turning off access to email,” Tornone said. “But compliance starts with requiring workers to report all hours worked.
“Employees need to fill out time sheets honestly or sign off on automatically generated ones,” she said. “If they work unauthorized hours, discipline them because they broke a rule — but don’t refuse to pay them.”
Movements like #MeToo and #TimesUp have not only pushed sexual harassment to the forefront of workplace-issues conversations but also raised pay equity problems.
The harassment and equal-pay movements reveal the injustice of the status quo. Male and female managers alike need to understand that bravery and social media will hold them accountable even if old corporate culture won’t.
“EEOC is certainly paying attention,” Tornone said. “The pay equity and transparency movements seem to have had a related boost, with states and cities increasingly adopting equity and pay-history laws.”
The conflicts have shown that problems lurk everywhere.
“The great thing is that these movements have increased awareness of two very important issues: harassment and discrimination,” Berndt said.
“With increased awareness, we find more companies reviewing their internal policies around the prevention of harassment and discrimination,” he said.
The surge in complaints might not be as big as it appears.
“Perhaps surprisingly, the acting chair of EEOC said the agency hasn’t seen an upswing in harassment charges,” Steingart said.
The amount of employment-related legislation passed by local jurisdictions — states, cities and counties — is increasing, which presents challenges — or opportunities — for employers.
There ought to be a central repository for ever-changing federal, state and local laws and regulations. Ignorance of the law is no excuse, but it’s easy to see how that can occur.
“The biggest challenge is keeping track of all the changes and understanding how they might apply to your organization,” Berndt said. “The responsibility for doing so falls squarely on the employer, which is often tough for small and mid-size businesses.
“Take the City of Austin’s paid sick leave law,” he said. “This law is similar to many other local ordinances. It affects any company that has employees working in or traveling to that jurisdiction, regardless of whether or not the company has an office there.”
Entrepreneurs wonder which way to turn.
“The main challenge, of course, is tracking and complying with various mandates for each work site,” Tornone said.
“It’s been so burdensome that some are opting to provide the most generous benefit to all employees,” she said. “That doesn’t always work. Some have differing notice requirements, for example.”
Steingart noted that many jurisdictions have enacted minimum wage increases.
“It isn’t just legislatures,” he said. “Administrative agencies matter, too. Michigan’s Civil Rights Commission has interpreted its law against sex discrimination to include lesbian, gay, bisexual and transgender bias.
“Besides California, New York is also moving ahead with rules that go further in some respects than the federal government and other states,” Steingart said.
Googling is a poor solution to keep up with employment law trends, but it’s better than doing nothing at all.
“The best way to stay up to date on HR compliance issues is to either have a dedicated resource within the company to monitor developing laws and regulations, or work with a company like G&A Partners that can keep you informed of changes and how they might impact you,” Berndt said.
Steingart said his company also has information resources.
“The labor and employment team at Bloomberg Law is full of people who know the law backward and forward,” he said.
Tornone pitched her HR Dive for management news along with conferences.
“They can give you a good look at broader trends,” she said. “There also are great law firm blogs that track individual states and industries.”
In the near future, Berndt expects to see more jurisdictions pass paid sick leave ordinances.
“Congress is also talking about a potential national paid sick leave law that would eliminate local ordinances and give companies one law to address this topic,” he said.
“We’re watching a potential national privacy law,” Berndt said. “Currently, we have 50 state privacy or data breach laws in place. This creates another regulatory burden for companies with operations or customers in multiple states.”
Local and state jurisdictions will stay active related to background checks, previous compensation and drug testing.
“These actions may take many different forms,” Berndt said. “Keep your eyes open for more change.”
Tornone will keep her eyes on equal opportunity.
“We’ll see employers working to include older workers and LGBTQ employees in diversity and inclusion efforts,” she said. “EEOC is really active in these areas. There are both business and compliance reasons to do so — and yes, those can be one and the same.”
Steingart added that the National Labor Relations Board plans to kick off its joint employer rulemaking.
“The U.S. Labor Department’s tip-pooling rule is another big one to watch,” he said. “The department is rolling back an Obama Administration rule, which is being challenged in the Supreme Court.”
The Fair Labor Standards Act has a tip credit provision. It allows employers to pay a reduced hourly wage or subminimum wage to tipped employees, provided the tipped employees receive enough tips to bring their hourly rate to the prevailing minimum wage.
“On tip-pooling, there is a larger issue,” Steingard said. “The discussion involves how the Labor Department administers the FLSA.
“It’s an employment law issue that affects how much deference the agency’s interpretations should get, which can last beyond the Trump Administration,” he said.
Tornone sees momentous times ahead.
“I feel like we’re at a tipping point with discrimination based on sexual orientation and gender identity,” she said.
“If the Supreme Court passes on the question again, we may see more of a push for Congress to step in,” Tornone said.
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