Employment Law Bits

The Employment Non-Discrimination Act might actually pass in 2013

It has been illegal in Massachusetts for employers to discriminate against their employees based on sexual orientation since 1989. MA was the second state to enact such legislation and has since added gender identity to the list of protected classifications.

Many states have followed suit, but there remain 29 states that have no prohibition against discrimination based on sexual orientation and 34 states without a prohibition against gender identity discrimination.

However; proposed federal legislation, the Employment Non-Discrimination Act (ENDA) would fill this gap. ENDA is not new. It was first introduced in 1994 and has been introduced almost every year since then. This year Senate Majority Leader, Harry Reid has said that there is a chance he will bring it before the floor for a vote.

Supporters of the bill were encouraged by Senator Reid’s recent disclosure that his niece is gay, in an interview with the Huffington Post. “She’s a school teacher. Her employment shouldn’t be affected with that. We should have a law that says that, not just the good graces of wherever you work.”

While ENDA wouldn’t change much for employers in Massachusetts or Connecticut, as it would in states without any protections, the uniformity of the law would create greater protections across the board for lesbian, gay, bisexual, and transgendered employees. 

 

Photo credit: JodiWomack

Employers beware misclassifying employees as unpaid interns

With the spring semester over, thousands of college students in the Commonwealth are flooding the job market seeking practical experience to bolster their resumes. With the downturned economy, many students are competing to obtain offers from top employers—as unpaid interns.

While this trend provides employers with “cheap labor” and provides students with the requisite skills they need to compete in the competitive job market, employers beware. The unpaid intern you believe is saving your company money may actually increase your company’s liability.

In April of 2010, noticing an upward trend in the use of unpaid interns, the Department of Labor issued “Factsheet #71.” This factsheet sets forth standards for determining whether an intern is an employee for purposes of the Fair Labor Standards Act (FLSA.)

Analysis under this factsheet is crucial because, depending on the result, your unpaid intern may be owed minimum wage and even overtime under the FLSA. In fact, “intern” in the “for-profit” setting will almost always be defined as an employee unless careful and deliberate precautions are taken. 

The Unpaid Intern Test 

In making the determination as to whether your unpaid intern is owed pay, Factsheet 71 sets forth a 6-pronged test. Unless the test described below relating to trainees is met, interns will qualify as employees for the purposes of the FLSA.

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment
2. The internship experience is for the benefit of the intern
3. The intern does not displace regular employees, but works under close supervision of existing staff
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded
5. The intern is not necessarily entitled to a job at the conclusion of the internship
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Employer Precautions

While there is an increasing trend in wage and hour litigation for unpaid interns, there are easy precautions that you, as an employer, can take.

• Be cautious about who you seek as an unpaid intern
• Do not lead interns to believe they may potentially be hired
• Document the impact of educational training the intern program has on your company
• Set out terms at the beginning by contract, including the duration and activities the intern will partake in.

By following these precautions and adhering to the 6-pronged test established by the Department of Labor, it is likely that you will limit liability based on your company’s use of unpaid interns. 

 

Image credit: NASA Goddard Space Flight Center

Employers illegal beware tip pooling policies after the Starbucks decision

It is not uncommon for businesses in the hospitality industry to place a tip jar beside the cash register, the proceeds of which are split amongst the staff. However, a recent First Circuit decision, and the penalty handed down, should have all employers on alert as to who is entitled to share in those tips.

The dividing line between managerial, supervisory, and wait staff positions has been difficult to distinguish, but the 2012 Matamoros v. Starbucks decision establishes clear guidelines for tip-pooling.

Applying Massachusetts law, the case itself was ultimately decided by the First Circuit Court of Appeals.

In the case, the holding interprets the Tips Act, Mass. Gen. Laws ch. 149, § 152A, very narrowly and determined that, “any managerial responsibility,” will bar the employee from participating in a tip pool. Activities such as scheduling shifts, assigning servers to posts, and supervising banquets are defined as, “managerial responsibility,” by a 2004 Attorney General’s Advisory opinion and interpreted by the case law.

Additionally, the Tips Act allows for treble damages to be applied to an employer found in violation of the Act. The Starbucks court also clearly establishes that these damages are liquidated and not punitive in nature, thus, they are easier to apply to an employer found in violation.

Certainly you and your customers want to reward your employees for fantastic service. But this is an area of the law that is in flux, and there is currently proposed legislation regarding the statute, so, before you “86” the tip jar, consider taking some steps to avoid illegal tip pooling:

• Review the job descriptions of the different levels of employees to identify which activities fit with the Attorney General’s Advisory of “managerial responsibilities.”
• Establish a clear tip pooling policy that only includes wait staff members, which have no managerial responsibilities at all.
• Contact your labor or employment counsel for any questions or concerns you may have in order to protect yourself against Tips Act violations.

 

Photo credit: Microsoft 

New MA court decision establishes that retirement benefits, bargained for during employment, are enforceable once the employee is no longer employed

A recent decision from the Massachusetts Supreme Judicial Court, O’Neill v. School Committee of North Brookfield, reaffirms that fringe benefits contained in an employment contract are enforceable even after the employee is no longer employed.

Robert O’Neill was the superintendent of the North Brookfield schools from 1998 to 2005. During that time he had a number of employment contracts, however, his final contract contained a provision that entitled him, upon retirement, to be reimbursed annually for a percentage of his individual health insurance plan. The percentage was tied to his number of year of service and was not allowed to exceed that of the reimbursement rate for retired town employees.

The town argued that this provision was a violation of state law because it was an award of a contract for greater than the six year cap under Massachusetts law. However, the court saw it differently. Holding that it was “simply a benefit provided for in O’Neill’s final employment contract, and the fact that it was to be paid annually after the contract expired does not mean that the contract itself extended beyond the stated three-year term.”

The court found that the reimbursement provision was a bargained for fringe benefit and not part of any other benefits that the law would impose limitations on. The court made it clear that this contract was different from an unenforceable ‘evergreen clause,’ which operates to extend all of the contract terms beyond the end date of the agreement. This was different, much like a severance, except that it was to be paid over the course of O’Neill’s lifetime.

The important thing for employers to remember is that retirement benefits, bargained for during employment, are enforceable once the employee is no longer employed. 

 

Photo credit: Microsoft

Aging in the workplace: a more lenient law opens a legal avenue for all aging employees in Massachusetts

While proving age discrimination under the federal Age Discrimination in Employment Act (ADEA) is a rocky road, Massachusetts law paves the way for many wronged employees. Under the federal ADEA, employees over the age of 40 who are fired, or who suffer some other adverse employment action, must prove that their age was the only factor motivating their mistreatment. In other words, an employer can get the discrimination charge thrown out if it can prove that it relied on any non-discriminatory reason for the mistreatment other than age.

For example, if an older employee with an imperfect attendance record believes she was fired because of her age, an employer may successfully argue that the she was fired because of poor attendance – not because of age. If the court believes that bad attendance played some part in the decision, the employer wins.

However, last year the First Circuit Court of Appeals opened a new avenue of recourse to Massachusetts employees who believe they are the victims of age discrimination. In Diaz v. Jiten Hotel Management, the court interpreted the state’s anti-discrimination statute to include the “mixed motive” framework.

Under this framework, an employee can win his or her case by proving that age was at least one factor motivating the employer’s adverse action. So even if the employer has some other non-discriminatory reason for the action, such as frequent absences, the employee can prevail by showing that age factored into the decision. The more lenient law opens a legal avenue for all aging employees in Massachusetts. 

 

Photo credit: Microsoft