Employment Law Bits

Employee or an independent contractor? Misclassification may be costly.

The Fair Labor Standards Act defines the word, “employ,” as “to suffer or permit to work.” Generally speaking, employees are those workers who are economically dependent on the employer. Independent contractors are those who are economically independent and are in business for themselves. These definitions may seem basic, but are in practice, extremely difficult to interpret. Generally, courts throughout the country use certain factors in making the employee/independent contractor determination.

Most courts use the “economic realities” test which helps decide whether the worker is independent of the employer. Some factors to consider follow:

• The extent to which the work performed is an integral part of the employer’s business (if the work performed is integral to the employer’s business, the more likely the worker is an employee)
• Whether the worker’s managerial skills affect his or her opportunity for profit and loss (examine the extent to which the worker exercises managerial skills)
• The relative investments in facilities and equipment by the worker and the employer (if the equipment is provided by the worker, then it is less likely the worker is an employee)
• The worker’s skill and initiative (the higher the worker’s skill, the more likely it is that the worker is contracting in the open market, i.e. carpenter)
• The permanency of the worker’s relationship with the employer (the longer the relationship, the more likely the worker is an employee), and
• The nature and degree of control by the employer

For the last factor, courts will look at whether the employer controls the hours, the place, and the time of the actual work.If the employer controls these factors, the more likely the worker will be an employee.

Although this list is not exclusively used by every court, it is generally common among them.

There are also factors that are immaterial to this distinction. For example, it does not matter whether the worker signed an agreement stating that he or she is an independent contractor. Also, employee status is not determined by time or method of pay.

When a worker is an employee, he or she must be paid the higher of either the federally mandated minimum wage or the state mandated minimum wage. That worker also must be paid overtime at time and one-half his or her regular rate of pay if he or she works over 40 hours in one week.

Misclassifying your workers can potentially have negative legal consequences, so if you are an employer unsure of your worker’s status please contact an employment law attorney.

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What is the Fair Labor Standards Act?

The Fair Labor Standards Act, commonly referred to as FLSA, is the federal law that sets the minimum wage, overtime, recordkeeping, and youth employment standards. 

So how do you know if the FLSA applies to you? There are two ways: “enterprise coverage” and “individual coverage.” 

Enterprise Coverage 

Businesses must have at least two employees and have an annual dollar volume of sales or business done of at least $500,000. Hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies are also covered by the FLSA. 

Individual Coverage 

This includes employees whose work regularly involves them in commerce between states. This includes those who produce goods (such as a work assembling components in a factory or a secretary typing letters in an office) that will be sent out of state, those who make phone calls to persons in other states, those who handle records of interstate transactions, those who travel to other states on their job, and those who do janitorial work in buildings where goods are produced for shipment to another state. 

If you have any questions regarding FLSA and if it applies to you, please speak to an employment law lawyer.

Image credit Pixabay under Creative Commons license

Is alcoholism considered a disability under the Americans with Disabilities Act (ADA)?

According to the ADA, a person is considered to have a disability if:

• They a physical or mental impairment that substantially limits one or more major life activities;
• There is a record of such an impairment; or
• If they are regarded as having such an impairment

In order to determine if alcoholism is a disability under the ADA, the employee must satisfy one of the above requirements. The first requirement, a major life activity, includes, but is not limited to: caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, lifting, bending, communicating, and working. Typically, the employee will claim that the major life activity that is impaired by their alcoholism is their ability to work. In this case, they would have to show that they are restricted from performing either a class or broad range of jobs compared to the average employee. 

If the employee is successful in showing that a major life activity has been impaired by their alcoholism, they must then request a reasonable accommodation. However, while an employer must accommodate an employee if their alcoholism is considered a disability under the ADA, they are still permitted to terminate the employee if they portray “egregious misconduct.” 

If you have any questions regarding alcoholism as a disability under the ADA, please contact to an employment law attorney.

Image credit: Pixabay under Creative Commons license

Requirements for starting a pet store

So you’re ready to be your own boss, and you would like to open a pet store. But where do you begin? There are a few things you need to do before you can start your business. 

To operate a pet shop in Massachusetts, you must have a license issued by the Department of Food and Agriculture. To obtain this, you must submit an application along with the required fee. Once the department receives the application, it will inspect the facility to ensure compliance with the appropriate laws. If the license is approved, it must be displayed in a place visible to the public and renewed each year. (It expires annually on December 31^st) 

You must do several things in order to receive a license: 

• Your facility must be in good repair and in a sanitary condition
• Equipment must be used and maintained in a manner that ensures proper storage or disposal of wastes or disease-contaminated material
• There must be control measures to prevent infestation
• There must be artificial illumination in each room where animals are kept (which should be well distributed to efficiently inspect and clean the facility)
• The facility must provide quarantine or isolation rooms for sick animals and for isolation of newly acquired dogs and cats
• The area where the animals are actually housed must also meet certain requirements

This is only the beginning. If you have employees, you must follow additional rules and meet more requirements. It is advisable to consult with an experienced employment law attorney.

Image credit: Wikipedia

Reducing Intermittent FMLA Leave at Work*

According to the Disability Management Employer Coalition (DMEC) and Spring Consulting Group LLC, 57% of employers say that intermittent leave is the biggest leave-related challenge their company experiences. However, intermittent leave actually accounts for only 25% of FMLA-related leave.

There are some steps an employer can take to reduce unnecessary intermittent leave:

1. Require medical certification - this could include the date the condition began and its expected duration, facts about the condition, and limitations it poses on work performance.
2. Request recertifications - the employer can ask for recertifications as long as they are at reasonable intervals or if they have a legitimate reason to question the intermittent leave.
3. Require use of paid time off - employees tend to be more conservative if the leave is also coming out of their paid leave bank.
4. Enforce notice requirements - employers can require employees to follow customary notification requirements for requesting leave. That way, with the exception of extenuating circumstances, if an employee does not follow the policies, the employer has the right to delay or deny the FMLA request.
5. Collaborate on scheduling - some employees may use intermittent leave to attend regularly scheduled medical appointments. Employers have the right to ask employees to schedule these appointments at convenient times, when possible.

If you have any questions regarding intermittent FMLA leave, please contact a qualified attorney to discuss your legal rights.

*Adapted from Maureen Minehan, Five Steps to Reducing Unnecessary Intermittent FMLA Leave, 31 No. 11 Emp. Alert NL 3 (2014)

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Reemployment rights of military personnel when returning from active duty

If you are a member of the United States military, or if you employ someone who is, then you must be aware of the federal rights granted to members of the military. An employer may not refuse to employ or reemploy a person simply because they are a member of the National Guard or a branch of the Reserves. An employer also may not take any adverse action against a current employee for that reason.

To be entitled to reemployment, the employee generally must have given advanced notice of their deployment, must not have had a total of five years absence by reason of prior deployments, and the employee must have submitted an application for reemployment. The military member must be reemployed at the job they would have obtained absent military service, and with the same seniority and pay.

Moreover, these rules apply regardless of the size of a company. It is also important to note that a military leave cannot affect a worker’s right to bonuses, vacation time, advancement or other employment benefits. However, an employer need not pay an employee while the employee is away for military service.

There are various exceptions to these general rules. If you are a member of the armed forces and want to know your rights, or if you are an employer and would like to know your obligations under the law, consult an attorney.

Image credit: Wikipedia

The changing attitude toward whistle blowers

Small business owners and human resource managers constantly read documents filled with legal terms. So, what exactly is whistle blowing?

According to the U.S. Office of Special Counsel, a whistleblower is a person who reports information which he or she believes evidences any of the following:

• A violation of any law, rule, or regulation
• Gross mismanagement
• A gross waste of funds
• An abuse of authority
• A substantial and specific danger to public health
• A substantial and specific danger to public safety

Legislation to protect whistle blowers was initially enacted in the late-1970’s during the civil rights movement. In 2002, federal legislation extended whistle blower protection to employees in publicly traded companies.

Courts are most likely to protect whistle blowers when reports of misconduct have been made to a government agency. Oftentimes, when internal reports are made within a company, the employee’s activities will not be considered “protected conduct.” It is advisable to encourage all employees to report any problems promptly to a supervisor so that the company can deal with the issue internally, before whistle blowing to a government agency becomes necessary.

The attitude toward whistle blowers has changed to the point where the employee may be able to reap the benefits of a government law suit in a False Claims Act action. These are called qui tam actions brought by the government against the company. The employee who witnesses a “false claim” by his or her employer will bring forward evidence to the United States Attorneys. If they decide to go ahead with the action, the whistle blower will be entitled to collect a percentage of the damage against the company won during litigation. This provides an incentive for whistle blowers to come forward after they have consulted with supervisors, and the supervisors have taken no action.

If you are an employee in a difficult position and need guidance, please contact an employment law attorney. If you are an employer who needs advice about a better oversight system please do the same.

Image credit: Steven Depolo

ERISA – plan administrators' conflicted duties

The Employee Retirement Income Security Act (ERISA) requires all plan fiduciaries to discharge their duties with respect to a plan solely in the interest of the participants and beneficiaries. A problem arises when what’s best for all participants is not best for a select few beneficiaries.

This situation will generally arise when the fund for a plan is in financial danger. In response, the plan fiduciaries decide to check the eligibility requirements of all those receiving pensions and cancel the benefits of those beneficiaries who were never entitled to a pension in the first place. This is a mechanism applied to help the fund stay financially afloat. It is needed so participants who are not yet entitled to a pension will one day be able to apply for one. However, the plan fiduciaries also have a duty to those already receiving pensions, and by canceling those pensions, they would not be acting in the interest of those beneficiaries.

Courts in general will be more lenient regarding plan fiduciary decisions when they are made to maintain the fund’s actuarial soundness. However, those decisions cannot be arbitrary or capricious, meaning that plan policies cannot be amended for the sole purpose of canceling beneficiary pensions. As a side note, all amended policies must be published so all participants and beneficiaries have the opportunity to protect themselves.

If you are a plan administrator and have a dilemma involving conflicted participant/beneficiary interests please contact an employment law attorney.

Employing youth ages 14 & 15 in restaurants and quick-service establishments

The U.S. Department of Labor produces fact sheets to help make people aware of certain Federal standards. In fact sheet 2a the Fair Labor Standards Act (FLSA) provides important information regarding the employment of youth in restaurants and quick-service establishments. These provisions under the FLSA ensure that when young people work, the work does not jeopardize their health, well-being, or educational opportunities.

If the worker is 14 or 15 years old, there are a few requirements that must be met:

Hours:

• Must work outside school hours
• Cannot work more than 3 hours on a school day, including Friday
• Cannot work no more than 8 hours on a non-school day
• Cannot work no more than 18 hours during a week when school is in session
• Cannot work no more than 40 hours during a week when school is not in session
• May work between 7 a.m. and 7 p.m. between June 1 and Labor day the evening hour is extended to 9 p.m.

14 and 15 year old workers may:

• Perform cashiering, table service and “busing,” and clean-up work including use of vacuum cleaners and floor waxers
• Perform kitchen work involved in the preparation of food and beverages including the operation of devices such as dishwashers, toasters, milk shake blenders, warming lamps, and coffee grinders
• Perform limited cooking duties involving:
• Electric or gas grills as long as they do not entail cooking over an open flame
• Deep fat fryers that are equipped with and utilize devices that automatically raise and lower baskets into and out of the hot grease or oil
• Dispense food from cafeteria lines and steam tables
• Heat food in microwave ovens that do not have a capacity to heat food over 140°F
• Clean kitchen surfaces and non-power driven equipment, and filter, transport and dispose of cooking oil, but only when the temperature does not exceed 100°F

14 and 15 year old workers may NOT:

• Operate NEICO broilers, rotisseries, pressure cookers, fryolators, high-speed ovens, or rapid toasters
• Perform any baking activities
• Operate, clean, set up, adjust, repair, or oil power driven machines including food slicers, grinders, processors, or mixers
• Operate power-driven lawn mowers or cutters, or load or unload goods to or from trucks or conveyors
• Work in freezers or meat coolers, but may occasionally enter a freezer to momentarily retrieve items
• Work with any equipment deemed to be hazardous

If you have any questions regarding the employment of 14 and 15 year olds in a restaurant or quick-service establishment, please refer to Regulations 29 CFR Part 570 or contact an employment law lawyer.

Healthcare and religion: The potential impact of striking down a company’s requirement to pay for employees’ contraception

The Supreme Court recently struck down an Affordable Care Act mandate requiring all closely held for-profit businesses to pay insurance coverage for their employees’ contraception. The court ruled that this mandate violated the Religious Freedom Restoration Act of 1993.

What does this mean for employers with sincere religious beliefs? Justice Ginsburg, in her dissent, made a very strong argument that this case would open a floodgate of litigation. She believes that this case will allow any commercial enterprise to opt out of any health-care related law they believe to be incompatible with their religious beliefs. Some examples include blood transfusions for Jehovah’s Witnesses, antidepressants for Scientologists, medication derived from pigs such as anesthesia for certain Muslims, Jews, and Hindus, and vaccinations for Christian Scientists.

Although it is too soon to tell, with this decision, closely-held commercial enterprises with sincere religious beliefs may be able to opt-out of certain types of government mandated healthcare coverage. For more information about this landmark decision and its implications, please contact an employment law attorney.

Image credit: Wikimedia Commons under Creative Commons license