Employment Law Bits

Emergency Influenza Containment Act

On November 3, 2009, House Representatives George Miller (D-CA) and Lynn Woolsey (D-CA) introduced H.R. 3991, known as the Emergency Influenza Containment Act. This bill would require employers to provide five (5) paid sick leave days per year to employees that are either sent home or directed to stay home due to a contagious illness such as the H1N1 flu virus. The bill would affect employers with fifteen (15) or more employees who do not already provide at least five (5) paid sick days, and it would protect both full-time and part-time workers.

This bill is especially important for low-wage workers, who may not be able to afford to take time off due to illness, and those in the hospitality, food service, education, and health care industries, as they come into contact with the public on a regular basis.

Moreover, the Center for Disease Control recently stated that an ill worker will infect one in ten co-workers, and the National Partnership for Women and Families estimates that the economy loses approximately $180 billion each year in terms of productivity when employees who are sick go to work anyway, (this phenomenon, increasingly common due to the recession, is coined as “presenteeism,” and its connotation is just as negative as the term “absenteeism.”) Finally, employers will likely benefit in other ways from the institution of paid sick leave: sick workers will not be present at work, which will reduce the opportunity of spreading sickness at the work site.

Details about the push to increase minimum wage for tipped-employees

On July 24, 2009, the federal minimum wage increased to $7.25 per hour from $6.55 per hour. However, not all minimum wage earners saw an increase in their paychecks. Employees who are classified as “tipped” employees have a lower minimum wage because of the income they receive from tips. This group of employees includes such professions as restaurant servers, bartenders, hotel workers, nail technicians, and car wash attendants.

The federal minimum wage for tipped employees is currently $2.13 per hour and has been since 1991. During that eighteen year period, the federal minimum wage for non-tipped employees has increased five times, from $4.25 per hour in 1991, to the most recent figure of $7.25 per hour.

Alerted to the inequities of this system, Representative Donna F. Edwards (D-MD) has introduced a bill that would raise the federal minimum wage of tipped employees to $3.75 per hour three months after enactment. It would then increase to $5.00 in 2011 and cap out at 70 percent of the regular minimum wage in 2012. From 1966 to 1996 the tipped employee minimum wage had been determined as a percentage of the regular minimum wage. Congressional action in 1996 ended that practice, giving restaurant industry employers a windfall.

The National Employment Law Project (NELP) is the main advocacy group behind this push for an increased minimum wage for tipped employees. NELP has reported that tipped employees have been forced to get by with poverty-level incomes as a result of this neglect by the legislature. Restaurant servers (the largest group of tipped employees) have nearly three times the poverty rate of the national workforce as a whole.

Thirty-two states currently have tipped employee minimum wages above the federal level, including seven which guarantee tipped employees the full minimum wage of regular workers. Although the fate of this legislative proposal is still uncertain, it could potentially affect thousands of businesses across the country.

Unemployment benefits in Massachusetts explained

The Massachusetts Division of Unemployment Assistance (DUA) works to help get Massachusetts citizens back on their feet when they lose a job. DUA provides unemployment insurance (UI) benefits and transitional services while workers are awaiting re-employment. Listed below is a brief description of the services offered to the temporarily unemployed.

Weekly Benefits
Unemployment Insurance claimants are able to receive a weekly benefit of approximately 50 percent of their average weekly wage, up to the statutory maximum. The current maximum benefit rate is $628 per week. However, those with children may be eligible to receive an additional $25 per child per week up to a total of one half of the weekly benefit amount.

The maximum number of weeks a claimant can collect full benefits is 30 weeks. The maximum benefit credit amount is $18,840. Like many regular paycheck schedules, workers who are eligible for UI benefits receive a weekly payment for the prior week’s benefit.

Additionally, through the Emergency Unemployment Compensation (EUC) Program, Massachusetts claimants may be eligible for extended federal benefits.

Health Insurance Coverage
Massachusetts residents who receive UI benefits and meet certain income eligibility guidelines may also qualify for health insurance coverage under the Medical Security Program (MSP). Participants in the Program can receive assistance with making payments to a COBRA or personal health insurance plan and may even qualify for enrollment in a free health insurance plan.

Job Training
While receiving UI benefits, workers can apply for approved training if they feel training will help to secure new employment. Though DUA will not cover the costs of training, workers may be eligible for up to an additional 18 weeks of UI benefits while attending approved full-time training.
 
Job Search Assistance - One-Stop Career Center Services
For those who are either unemployed or just looking for a better job, the Commonwealth offers helpful guidance. With locations across the state, One-Stop Career Centers provide employment services that allow workers to search for jobs in an environment that is comfortable and resourceful.

As the economy works to fight its way out of this slump, it is good to know exactly how our government is aiding us through our most trying times.

Increased minimum wage battle: good for employees or killing small business?

On July 24, the federal minimum wage went from $6.55 an hour to $7.25, an increase of 10.7%. Seven states had existing laws mandating $7.25 minimum hourly pay, while fourteen states exceeded the new minimum and twenty-nine states had minimum wage requirements below the new rate. Employers are required to pay whichever is the highest: federal or state.

Some experts argue that this is the worst time to increase the minimum wage because most businesses are dealing with decreased revenues during the current recession. On the other hand, some experts argue the increased minimum wage is beneficial because putting more money into people’s pockets will boost the economy. Regardless, as business owners strive to comply with the new wage requirements, an array of new labor and employment issues are beginning to emerge.

Some of the emerging issues revolve around ways for employers to maintain profits, how the new wage will affect business operations, and cutting employee hours or the number of employees during a particular shift. However, it is important for employers to comply with employment laws that serve to protect employee rights. It is also important for employers to be cognizant of the potential for litigation.

Please contact an employment attorney for questions regarding the impact the new federal minimum wage requirements may have on you or your business.

Untangling the Workers’ Compensation web

The basic premise of workers’ compensation is that the employer provides wage replacement and payment of medical expenses for employees in relation to work-related injuries, illnesses, or death. In exchange, employees must agree to forego their right to sue the employer for damages in connection with the injury, illness, or death. Every state has its own Workers’ Compensation laws. For example, in Massachusetts, employers are required by law to have workers’ compensation insurance, and claims for benefits must be filed with the Department of Industrial Accidents (DIA.)

Employers must file a “First Report of Injury or Fatality” form (Form 101) with their insurer and the DIA within seven calendar days of notification of an incident. Failure to do so is a violation of the Massachusetts Workers’ Compensation statute. Three violations in the same year will result in a fine of $100 per violation, which employers must pay or appeal within thirty calendar days. If the insurer fails to pay or contest payment of a claim in a timely manner, a $200 fine may be assessed, payable to the injured worker. Further delays may result in fines payable to the Workers' Compensation Trust Fund.

If your employer fails to send the Form 101 to their insurer, you should report your claim to the insurance company yourself or complete the DIA’s “Employee’s Claim Form” (Form 110.) When the DIA has received your Form 110, it will schedule Conciliation (informal meeting between you and your employer’s insurer) in the department office closest to your home. The agreement that you reach during Conciliation will be non-binding unless you agree to be so bound.

If the conciliator refers your case to an administrative judge, an informal conference will be scheduled in which the judge will issue a temporary order regarding compensation. Both the employee and the employer’s insurer retain the right to appeal the decision within fourteen days of its filing date. At that point, it will go to a formal hearing similar to a trial. If still unsatisfied, you may appeal to the review board within thirty days of the decision. Keep in mind, however, that the decision is only subject to reversal if it was beyond the judge’s authority, in conflict with the law, or unjustified.

Massachusetts Wage & Hour Laws: A Summary

Minimum Wage – Currently, Massachusetts minimum wage is $8.00 per hour for most employees. For wait staff, service employees and bartenders, the minimum hourly wage is $2.63. The state minimum wage for agricultural employees is $1.60 per hour.

Payment of Wages – All wages must be paid within six days of the end of the pay period if the employee is employed less than seven days a week, and must be paid within seven days of the end of the pay period if the employee works seven days a week. Employees who are fired or laid off must be paid any wages due (including vacation time earned) on the day that they are terminated.

Overtime Pay – Most employees must be paid one and one-half times their regular rate for any hours worked over 40 in one week. However, there are several exceptions to this rule under both Massachusetts state law and federal law.

Tips Law – If tipped employees are not making the minimum wage of $8.00 an hour when their average hourly tips are added to the service minimum wage ($2.63), the employer must make up the difference. Employers are not permitted to require service employees to pool tips and distribute the tips to non-service employees; management employees or owners may never receive a portion of the employee’s tips.

Meal Breaks – An employee working six or more hours a day must receive a 30-minute break, during which he must be allowed to leave the workplace. While employers are not generally required to compensate the employee for this break, there are two circumstances under which the employer must pay the employee: (1) if the employee works through her meal break; or (2) if the employee remains on the premises at the request of her employer during her meal break she must be compensated.

This is just a brief summary of current Massachusetts wage and hour laws. If you have questions regarding compliance or more complex issues, you are urged to contact an employment attorney.

Mandatory paid sick leave: a fight on two fronts

Currently, less than half of private sector employees enjoy the benefit of paid sick leave. Look for that to soon change. Reformers at both the state and federal level have recently taken steps to make this employment perk mandatory for many workers. In Congress, Representative Rosa DeLauro (D-CT) and Senator Edward Kennedy (D-MA) have introduced in their respective Houses a bill that would require employers with more than 15 employees to provide workers one hour of sick leave for every 30 hours worked, up to 7 days a year. Proponents of the bill point to the fact that for many people, working when sick is a better option than staying home and missing a day’s pay. This often leads to the spread of that sickness in the workplace, causing a greater drop in productivity than if the original sick worker had just stayed home for a day or two. The bill’s opponents argue that those companies that are not offering paid sick leave, especially the smaller ones, simply cannot afford to create incentives for employees not to work by giving days of free pay. The suggestion is that, for these companies, an employee working at 70% is better than an employee not working at all. Closer to home, the Massachusetts Paid Leave Coalition is lobbying legislators in Boston to pass a similar law in the Bay State. The coalition, made up of various workers’ unions, has emphasized that fact that, because of the swine flu scare, employees are being asked to stay home if they feel unwell. The coalition’s position is that workers should not feel torn between sacrificing 1/5 of their paycheck and putting their co-workers at risk. For those who would be affected by mandatory sick leave legislation, keep an eye out, because a change may be coming soon.

SAFETEA-LU update

In June 2008, Congress enacted the SAFETEA-LU Technical Corrections Act of 2008 (TCA) to amend and make technical corrections to the SAFETEA-LU legislation enacted in 2005.

SAFETEA-LU changed the definition of “motor carrier” so that that motor carrier exemption under the Fair Labor Standards Act was no longer available to employers operating vehicles under 10,000 pounds. Section 305 of the TCA reversed this change, restoring the definition of motor carrier to its pre-SAFETEA-LU state. (See original blog posts on this subject in June and July 2008).

The TCA also contains language suggesting that this change was retroactive, and changes made by SAFETEA-LU to the motor carrier exemption should be treated as never having been enacted. This would mean that employers who were eligible for the motor carrier exemption prior to Aug. 10, 2005 (the date SAFETEA-LU was enacted) retained their eligibility through the enactment of the TCA on June 6, 2008.

Since the TCA was enacted, several employers have attempted to use this retroactivity provision as ground for summary judgment in litigation against them for failure to pay overtime as required by the Fair Labor Standards Act. As of January 9, 2009, five federal district courts (in California, Georgia, Kansas, Missouri, and Texas) have issued opinions regarding the retroactivity of the TCA’s change to the motor carrier exemption. All five courts have held against the employer, ruling that the provision restoring the motor carrier exemption will not be applied retroactively because (1) Congress has not indicated clear intent for retroactivity and (2) if it was applied retroactively, it would nullify other sections of the TCA, specifically section 306, which provides a limit on liability for violations of the FLSA overtime provisions for one year after the enactment of SAFETEA-LU.

So, what does this mean for employers involved in litigation for alleged violations of SAFETEA-LU overtime provisions after Aug. 10, 2005? It appears that those employers can rely on section 306, which limits liability for such violations for one year after SAFETEA-LU was enacted or until the employer had actual knowledge that is was no longer eligible for the motor carrier exemption, whichever is earlier.

Lilly Ledbetter Fair Pay Act - what it means to you

President Obama signed the Lilly Ledbetter Fair Pay Act on January 29, 2009. This Act restores the law to where it was before the Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber Co. In that case, a female worker’s pay had become lower than her male counterparts over her twenty years of service, even though her original salary was in line with the salaries of men performing substantially similar work. Despite this discrepancy, the Supreme Court ruled that employees must file a claim for pay discrimination within 180 days of the employer’s original decision to pay them less - - even if the employee did not discover the discriminatory reduction in pay until much later.

This new Act Amends Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967, and modifies the operation of the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973. The Ledbetter Act is intended to clarify that a discriminatory compensation decision or other practice that is unlawful under any of these Acts occurs each time compensation is paid pursuant to the discriminatory compensation decision or other practice.

Basically, an employer that engages in discriminatory pay commits an illegal act during each paycheck. As a result, each discriminatory paycheck resets the 180-day limit to file a claim. Under applicable laws, plaintiffs still can recover back pay for a period of no more than two years before they challenge the discrimination.

What does this mean for employers? This Act restores the ability of victims of wage discrimination to hold their employers accountable for each discriminatorily reduced paycheck, because every time pay is unfairly lowered, it’s a violation of the law. Therefore, this Act creates a new class of Plaintiffs that were previously unable to bring a complaint because the time limit had passed.

If you have any questions about the Ledbetter Act, you are urged to consult an employment attorney

Small business caution – you must comply with wage laws

In Mullally v. Waste Management of Massachusetts, Inc., the Supreme Judicial Court of Massachusetts recently upheld a trial court’s finding that a company that provided solid waste disposal services to municipalities violated the state overtime statute. The Court concluded that the company was erroneously calculating overtime wages by using a regular hour rate, which was significantly less than the wage rate set for employees performing under municipal contracts.

Indeed, Mass. Gen. Laws ch. 149, §27F requires that the prevailing wage rate set by the Department of Labor be paid to waste disposal employees performing under municipal contracts. However, the court rejected the company’s argument that the statute only authorizes the Department of Labor to set wages for regular work hours, and not overtime wages.

Additionally, the Court found that the company’s “untenable” practice was a deliberate attempt to frustrate the purpose behind the Massachusetts equivalent of the federal Fair Labor Standards Act, Mass. Gen. Laws ch. 151, §1A.

According to the Court, that statute aims to reduce the number of hours worked, encourage the employment of more persons, and compensate employees for the burden of a long workweek. The Court was also troubled by the possibility that the company’s policy of underpaying workers gave it an unfair competitive advantage over other waste management companies that were paying lawful wages. This advantage, the Court believed, negatively impacted all workers in the industry. In light of this decision, employers are urged to carefully review their compliance with Massachusetts and federal laws