Contractual Limitations Periods

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By:  Claudia D. Orr, Plunkett Cooney

 

Contractual Limitations Periods

 

Today I write about contractual limitations, one of my absolute favorite defenses. When one of my clients gets sued and does not have a contractual limitations period agreement with the plaintiff, and it would have defeated the claims, I am really, really, disappointed. This has been a valid defense for claims brought under Michigan law since 2001. Therefore, there is no reason for any employer not to have this agreement with its employees.

When I read Dzurka v MidMichigan Medical Center-Midland wherein the Michigan Court of Appeals recently upheld the dismissal of the state law claims on this basis I thought this was a great opportunity to remind employers just how important this is!

Keeping the story brief, the plaintiff filed her complaint in the Midland Circuit Court on December 5, 2017 (765 days after her termination of employment and 36 days after the dismissal of a related federal lawsuit).  The trial court enforced a contractual limitations period found on plaintiff’s 2007 employment application which stated:

Limitations on Claims.  I agree that any lawsuit against MidMichigan Health and/or its agents arising out of my employment or termination of employment including but not limited to claims arising under State or Federal civil rights statutes, must be brought within the following time limits or be forever barred: (a) for lawsuits requiring a Notice of Right to Sue from the EEOC, within 90 days after the EEOC issues that Notice, or (b) for all other lawsuits, within (i) 180 days of the event(s) giving rise to the claim or (ii) the time limit specified by statutes, whichever is shorter.  I waiver any statute of limitations that exceeds this time limit.

Not bad.  I write mine a little differently, but this version did the trick in this case. The trial court found it enforceable and dismissed the lawsuit. On appeal, the plaintiff argued that the “agreement” lacked mutuality of obligation and therefore it failed because it lacked consideration.  The appellate court disagreed, recognizing that the grant of employment established consideration, and the dismissal was upheld.

It is unclear whether a contractual limitations period is applicable to federal civil rights claims, but there are plenty of cases that suggest it would.  Unfortunately, we know that contractual limitations will not apply to claims under the federal wage law (at least in the Sixth Circuit).

Does your employment application have a contractual limitations period on it?  If not, what are you waiting for? A final note: it likely will not be enforceable if it is in the Employee Handbook because if the handbook is written correctly it starts off by saying “nothing in this handbook creates any contractual rights.”  That means if the employer wants to enforce a term it has to be in a separate “contract”.  If you need assistance in drafting a contractual limitations period, contact an experienced employment attorney.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association.  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. February 2019.

EEO-1 Filing Deadline Extended until May 31, 2019

By: Miriam L. Rosen, McDonald Hopkins PLC

 

EEO-1 Filing Deadline Extended until May 31, 2019

 

On February 1, 2019, the EEOC announced an extension of the filing deadline for the 2018 EEO-1 report from March 31, 2019 to May 31, 2019. The extension is the result of the partial federal government shut down, which delayed mailing of log-in information for the EEO-1 web portal.

The EEOC indicated that the filing portal will now be open in early March.  In addition, the EEOC will soon release more information about EEO-1 filing and suggests employers monitor the EEO-1 website.

Completing the EEO-1 form can be a trying process.  If you are in need of a refresher on EEO-1 basics, here are answers to a few common questions related to preparing and filing the EEO-1 report:

  • Does my company need to file an EEO-1 Report?

All companies that meet the criteria below are required to file the EEO-1 report annually:

  1. Subject to Title VII of the Civil Rights with 100 or more employees; or
  2. Subject to Title VII of the Civil Rights Act with fewer than 100 employees if the company is owned by or corporately affiliated with another company and the entire enterprise employs a total of 100 or more employees; or
  3. Federal government prime contractors or first-tier subcontractors subject to Executive Order 11246 with 50 or more employees and a prime contract or first-tier subcontract amounting to $50,000 or more.
  • What information is used to complete the EEO-1 Report?

The EEO-1 Report is based on workforce data from one payroll in the fourth quarter of 2018.

  • How is an employee’s ethnicity determined for EEO-1 reporting purposes?

The EEOC notes that employee self-identification is the preferred method of identifying the race and ethnic information necessary for completing the EEO-1 report. Employers are required to attempt to allow employees to use self-identification to complete the EEO-1 report. If an employee declines to self-identify, employment records or observer identification may be used.

Employers can find additional answers to EEO-1 preparation and filing questions at the EEOC’s web page: EEO-1 Frequently Asked Questions and Answer at: https://www.eeoc.gov/employers/eeo1survey/faq.cfm.

This article was written by Miriam L. Rosen, who is Chair of the Legal Affairs Committee of Detroit SHRM and Chair of the Labor and Employment Law Practice Group in the Bloomfield Hills office of McDonald Hopkins PLC, a full-service law firm. She can be reached at mrosen@mcdonaldhopkins.com or at (248) 220-1342.

 

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. February 2019.

Whistleblower Claim Delivered To The Employee With A Bow!

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By:  Claudia D. Orr, Attorney, Plunkett Cooney

 

Whistleblower Claim Delivered To The Employee With A Bow!

 

Sometimes I read an opinion and I am just astonished by the decisions made by the employer and just how wrong things can go.  This is a case that never should have happened and probably wouldn’t have had the employer obtained legal advice before acting. Let’s look at what happened in Apacanis v Carter and Services to Enhance Potential (STEP), a recent unpublished decision of the Michigan Court of Appeals.

STEP is a nonprofit that contracts with Detroit/Wayne County Mental Health Authority (the Authority) to provide various services to individuals who have mental health issues or other disabilities. Plaintiff Whitley Apacanis is employed by STEP and receives job-training assistance from it.  Defendant Carter is employed by STEP as a liaison between outside agencies and clients, like plaintiff.  Clients, like plaintiff, receive on-the-job training as they work in STEP’s workshop assembling various items.  Clients also receive a small payment for their work.

One evening, plaintiff and Samuel Eiland, another STEP client, engaged in a number of sexual acts at Eiland’s home. All but one sexual act was consensual. But that is all it takes because no means no.  When plaintiff objected, Eiland sexually assaulted her.  Plaintiff reported the assault to the police and also to the courts via her request for a personal protective order against Eiland.

Plaintiff also reported the assault to STEP. While no assaultive behavior occurred at work, Eiland was banned from the premises and suspended as a client. Significantly, STEP also suspended plaintiff because she had reported the crime to the police and had obtained a PPO.  In fact, the written suspension given to plaintiff stated: “Consumer suspended from program until completion of pending criminal investigation.” Is that a collective gasp I am hearing from readers? It took my breath away to be sure.

Plaintiff sued under the Whistleblowers’ Protection Act (WPA), MCL 15.361, et seq, and the Elliott-Larsen Civil Rights Act (ELCRA), MCL 37.2101, et seq. The case was dismissed by the lower court when it granted the defendants’ motion for summary disposition.

On appeal, the dismissal of the retaliation claim under ELCRA was upheld by the appellate court because there was no evidence that STEP took any action against plaintiff based on the exercise of any rights under ELCRA. The alleged assault did not occur on the premises and STEP took appropriate action by removing Eiland as soon as it received notice of plaintiff’s allegations.

However, the WPA claim is a problem for STEP.  The WPA makes it unlawful for an employer to-

[d]ischarge, threaten, or otherwise discriminate against an employee regarding the employee’s compensation, terms, conditions, location, or privileges of employment because the employee … reports or is about to report, verbally or in writing, a violation or a suspected violation of a law or regulation or rule promulgated pursuant to law of this state, a political subdivision of this state, or the United States to a public body, unless the employee knows that the report is false, or because an employee is requested by a public body to participate in an investigation, hearing, or inquiry held by that public body, or a court action.

MCL 15.362. Over the years I have found whistleblower claims to be the most dangerous claims to defend, in part because of the decisions from the appellate bench.  For example, case law provides that (1) the employee’s motive to use the law as a sword, rather than a shield (i.e., trying to obtain some job security when he/she is about to be fired) is no longer relevant; (2) it doesn’t matter if the employee’s job required him/her to make the report and they were simply acting within the scope of their duties; and (3) conferring with an attorney, who is an “officer of the court”,  satisfies the “public body” requirement). These are just a few of the troubling rulings for employers from Michigan’s appellate bench.

To prove her claim,  plaintiff is required to show (1) she engaged in protected activity; (2) the employer took an adverse action against her; and (3) a causal connection existed between the two. Here, it is undisputed that plaintiff reported a violation of the law (the alleged rape) to a public body (the police and the court). While STEP conceded that it based its decision on plaintiff’s report (the causal connection), it argued as a defense that it had not taken an “adverse action” against the plaintiff because it reinstated her.  Does any reader believe for a moment that this argument succeeded?

Defendants admitted that for “a period of several weeks plaintiff was suspended, and therefore prevented from receiving services and earning pay from STEP, and that her suspension was based solely on her decision to report Eiland and his alleged sexual assault of plaintiff to police.”   This is clearly an adverse employment action.  I recall one court’s opinion that held a suspension, that was thereafter paid, was an adverse employment action because of the uncertainty and stress during the period of suspension.

Defendants also argued that the suspension was “justified” because STEP had consulted with the Authority and that the state mental health code required it to treat both plaintiff and Eiland the same – either suspend both or neither.  The appellate court noted that defendants failed to cite any legal authority that supported their proposition that “the victim of an alleged crime should be treated exactly the same as the alleged perpetrator”. The appellate court seems shocked and displeased by the defendants’ actions too.

The appellate court noted that “there is only one exception to [WPA’s] prohibition against taking an adverse employment action as retaliation for otherwise protected conduct:  if the employee knowingly makes a false report about the alleged violation of law.” The court rejected defendants’ position, stating “[t]here is not, as defendants seem to believe, an exception granted for employers who feel they can justify conduct that otherwise violated the WPA.”  Because defendant Carter signed the suspension form and was identified as the decision maker, she is also responsible for any violation of the WPA.  Thus, the appellate court reversed the dismissal of the WPA claim as to both defendants and sent the claim under the WPA back to the lower court for trial.

This case just leaves me shaking my head and wondering at what point did STEP consult with an employment attorney. Perhaps not until the lawsuit was filed at which point defense counsel was stuck with the facts above.  If there is one take away for the reader it should be this:  always consult with an experienced employment attorney before you take action against an employee whenever you have any unusual circumstances. There may be little any attorney can do for these defendants given the actions taken and the admissions that they have made.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association.  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html

 

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. January 2019.

 

Wellness Plan Rules Under Attack

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By:  Claudia D. Orr, Attorney, Plunkett Cooney

 

Wellness Plan Rules Under Attack

Do you remember how you struggled with creating a wellness plan for your workforce until the Equal Employment Opportunity Commission (“EEOC”) published its final Wellness Rules under the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”) in May 2016?  Ah, a sigh of relief.  You could finally develop your wellness program and offer employees incentives to keep your healthcare costs down without running afoul of either federal law if you followed the rules.  Take a deep breath because a key provision of these final rules has been scrapped.

A wellness program is intended to help keep the cost of healthcare benefits down by encouraging employees to become healthier by quitting smoking, exercising at a gym, losing weight, eating healthier, etc.  The concern, if you recall, is that in order to participate, employees generally need to respond to disability-related inquiries about themselves and/or their spouse and could be required to submit to a medical examination. Both the ADA and the GINA restrict an employer’s ability to make disability-related inquiries or to require medical examinations. However, under the final rule, such inquiries and examinations were permitted if they were part of an employee health program that was reasonably designed to promote health or prevent disease and participation is voluntary.

But, is participation truly voluntary if the employee is going to pay less for health insurance if he or she participates? What if it is significantly less? As a practical matter, is it still voluntary? The guidance issued by the EEOC in May 2016 set the limit on the financial incentive at 30% of the total cost of “self only” coverage for this reason. See 42 CFR 1630.14 (d)(3) [ADA] and 29 CFR 1635.8 (b)(2)(iii) [GINA]. Employers can offer a carrot, but it can’t be a really big sweet one.

In October 2016, AARP challenged the incentive section of the final rules under the ADA and GINA in the United States District Court for the District of Columbia. In August 2017, the district court found that the EEOC failed to provide sufficient reasoning for the 30% incentive limit and remanded the rule back to the EEOC (without vacating it) instructing the EEOC to reconsider it. AARP was not overly thrilled with the court’s order and filed a motion seeking to alter or amend the order. The court then vacated the incentive section of the final rules and, effective last month, 42 CFR 1630.14 (d)(3) [ADA] and 29 CFR 1635.8 (b)(2)(iii) [GINA] have been removed from the final rules.

So, what will the EEOC do next?  It is hard to tell.  First, it has to reopen.  Yep, the EEOC is one of the budget fight closures.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association.  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html

 

 

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. January 2019.

Governor Synder Signs Off On Paid Medical Leave Act and Improved Workforce Opportunity Wage Act

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By: Claudia D. Orr, Attorney, Plunkett Cooney 

 

Governor Synder Signs Off On Paid Medical Leave Act and Improved Workforce Opportunity Wage Act

 

The Michigan legislature’s lame duck session approved two bills that were sent to, and signed by, Governor Snyder on December 14, 2018. The Paid Medical Leave Act (“PMLA”) requires certain Michigan employers to provide eligible employees with paid time off to address their medical issues or those of a family member and for other reasons including sexual assault or domestic violence. The Improved Workforce Opportunity Wage Act slowly increases the state’s minimum wage rate through calendar year 2030.

Beginning with the minimum wage rate changes, the increases are to occur each calendar year unless the state’s unemployment rate was 8.5% or greater during the prior calendar year.  Should that happen, the increase will occur in the first calendar year following a calendar year when the unemployment rate is less than 8.5%.  Assuming no delays, the following minimum wage rates shall be in effect for the following calendar years:  2019 – $9.45, 2020 – $9.65, 2021 – $9.87, 2022 – $10.10, 2023 – $10.33, 2024 – $10.56, 2025 – $10.80, 2026 – $11.04, 2027 – $11.29, 2028 – $11.54, 2029 – $11.79,  2030 – $12.05.  Tipped employees (those who regularly receive gratuities) remain at 38% of the minimum wage rate, provided the tips and wage payments do not fall below the minimum wage rate established by state or federal law. For proponents of the $15.00 minimum wage rate, this is clearly disappointing news.

However, employees working for private employers having 50 or more employees may be eligible for paid leave time under the PMLA.  An “eligible employee” excludes certain individuals such as those who are exempt under the Fair Labor Standards Act, have a primary work location outside of Michigan, worked less than 25 hours/week in the prior calendar year, or were employed by a “temporary help firm”, among others.

Under the PMLA, an eligible employee would accrue paid leave at a rate of at least one hour for every 35 hours worked, but the employer is not required to allow an employee to accrue more than an hour in a work week and it may cap the accrual at 40 hours per benefit year. In the alternative, an employer may grant 40 hours of paid leave at the beginning of a benefit year (and may prorate the amount for an employee hired during the benefit year).  A benefit year is any twelve month period used by the employer to calculate employee benefits (i.e. a rolling year, calendar year, etc.).

Paid leave begins to accrue the latter of the effective date of the law (on the 91st day after the final adjournment of the 2018 legislative session, or Mar. 21, 2019 if the last day in session is Dec. 20, 2018) or upon the individual’s employment. The employee can use the paid leave as it accrues, but the employer may deny use until the 91st day of employment. Leave can be used in 1-hour increments, unless the employer uses and has a different increment in a written policy.

An employee may carry over 40 hours from one benefit year to another, but the employer does not have to allow the employee to use more than 40 hours in any benefit year or pay the employee for time not used by the end of the year.

Time off may be used for (1) the employee’s own mental or physical illness, injury, or health condition, for diagnosis of the medical condition or its care or treatment, or preventative healthcare, or for these same reasons for a family member of the employee; (2) if the employee or a family member is the victim of sexual assault or domestic violence  in order to address medical or psychological issues, to obtain victim services, to relocate, to obtain legal services or to participate in civil or criminal proceedings; or (3) due to the closure of the employee’s workplace or child’s school or place of care by order of a public official due to a public health emergency, or if health authorities or the healthcare providers determine that, due to exposure to a communicable disease, the presence of the employee or family member in the community might jeopardize the health of others. Only certain family members are included within the definition of that term in the act.

An employee who transfers to a separate division, entity, or location but remains employed by the same employer, will retain all leave that was previously accrued. When the employment relationship terminates, the employer is not required to pay out any unused paid leave.  If the employee is re-employed, the employer is not required to credit the employee with previously unused time.

The Department of Licensing and Regulatory Affairs is charged with enforcement of the act including investigating complaints by employees.  An employer that fails to provide paid medical leave is subject to a $1000.00 and may be ordered to make payment to the employee for the leave that was withheld.   The Department must provide a means for appeal of its orders and there are requirements for posting notices and for record retention by employers. There are also rules concerning current collective bargaining agreements and the donation of time from one employee to another.

Employers having 50 or more employees should consult legal counsel for further details concerning this new law and for a policy and procedure that is in compliance.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association.  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.  

 

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. December 2018.

‘TIS THE SEASON FOR RELIGIOUS ACCOMMODATIONS

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By: Claudia D. Orr, Attorney, Plunkett Cooney 

 

‘Tis The Season For Religious Accommodations

 This time, the religious accommodation case was brought under Michigan’s Elliott-Larsen Civil Rights Act, MCL 37.2101, et seq.  Quite frankly, I can’t recall ever seeing one brought under Elliott-Larsen rather than Title VII, so my interest was immediately piqued. After all, it is the time of year when requests are often made.

My initial thought was that the plaintiff may have failed to file a charge with the Equal Employment Opportunity Commission (“EEOC”) within 300 days of the claim.  Or perhaps the plaintiff’s attorney just wasn’t comfortable practicing in federal court.  Or, maybe, an employer’s obligations are greater under state law. But it was odd to see this claim being brought under state law.

We know under Title VII, federal courts routinely recognize that any accommodation that is more than a de minimus cost to the employer is not required.  Of course, the EEOC takes the position that an employer has a much greater burden to accommodate, nearing an undue hardship standard similar to that required by the Americans with Disabilities Act.  But, what are an employer’s obligations under state law? Let’s look at Robinson v JCIM, LLC, an unpublished decision released by the Court of Appeals on November 27, 2018.

Plaintiff Thomas Robinson began working for the Defendant JCIM, LLC, an automotive interiors company in Grand Rapids, as a racker loader in the paint department on the first shift.

In January 2015, plaintiff, a Muslim, asked to leave work early, at 2 p.m., on Fridays so he could engage in congregational prayer, known as Jumu’ah. JCIM allowed plaintiff to do so because, as a racker loader, plaintiff had some flexibility in his schedule because he worked independently racking parts. Typically there were five or six such racker loaders grabbing parts off the line, so when one was missing, the others had to work harder but the line kept moving.

In July 2015, Defendant Yanfeng US Automotive Interior Systems II, LLC took over the ownership of JCIM, and allowed plaintiff to leave work early until October 2015, when plaintiff accepted the position of an assembler. Assemblers work as part of a team, so when an assembler is missing, a replacement has to be found to keep the presses operating so customer needs can be met. Therefore, Yanfeng told plaintiff on October 30, 2015, he would no longer be permitted to leave early.

Despite being told he could no longer leave early, plaintiff disregarded the instruction and continued to do so.  By late November, he had accumulated 19 points for unexcused absences. Under the Collective Bargaining Agreement, an employee is subject to termination at 21 points. Company documents showed that the human resources manager had met with plaintiff on November 10, and 19 to warn plaintiff he couldn’t leave, but offering to allow plaintiff to return to his former position as a racker loader. Plaintiff was also told he could stay an assembler but work on the third shift so that his work hours would not interfere with Friday prayer.

By November 23, 2015, plaintiff was given a final warning. Plaintiff grieved the warning, seeking removal of the points and to require Yanfeng to honor its prior agreement allowing him to leave for Friday prayer.  On December 7, 2015, plaintiff left early and was fired.

In his lawsuit, plaintiff claimed that Yanfeng discriminated against him by demanding he abandon his religious practices, failing to offer him any “alternate” accommodation and applying attendance points based on his religious observances. Defendants argued, among other things, that Elliott-Larsen does not require an employer to accommodate religious beliefs.

So, how did the appellate court rule on this issue? The court stated:

[A]t its core, plaintiff’s case concerns a claim that Yanfeng was required to accommodate his religious practices and failed to do so, thereby establishing religious discrimination. We are not aware of any published, or even unpublished, Michigan cases answering the question whether [Elliott-Larsen] authorizes a religious-accommodation case.  Defendants have directed us to a number of unpublished federal cases that indicate that [Elliott-Larsen] does not include an affirmative duty to accommodate an employee’s religious beliefs.  One published federal opinion, Wessling v Kroger Co, 54 F Supp 548, 552 (ED Mich, 1982), states, without any reasoning, analysis, or explanation, that there is no requirement to accommodate religious practice under [Elliott-Larsen].  We decline to resolve the question…

So, after all of that build up, we still don’t know!  Not definitively. Is my disappointment showing? Until this issue is decided in a published opinion by the Michigan Court of Appeals or the Michigan Supreme Court we can only do what these defendants did – rely on decisions that are only persuasive and not binding on lower courts.

In the meantime, what should an employer do when an employee asks for time off to observe religious practices?  If practicable an employer may wish to consider such things as the following:

  • schedule the employee off on his/her religious holidays and have others of different faiths fill in
  • allow the employee to switch days off with coworkers and “encourage” his/her coworkers to consider doing so
  • offer employees a “floating” holiday instead of their birthday off which can then be used for a holy day
  • be flexible with the employee’s use of paid time off
  • permit the employee to leave work and return a few hours later to complete the shift after the religious observance

Remember, under Title VII, more than a di minimus cost makes the proposed accommodation unreasonable.

In addition to time off, other requests may be made such as allowing piercings, beards, a quiet space for prayer, a variation in the dress code, etc. Employers should be flexible when operations don’t suffer, and safety or health issues are not created. Flexibility shows tolerance and encourages diversity which in turn makes it easier to recruit and retain talent in this competitive labor market. If you receive a request and need legal guidance, consult an experienced employment attorney, such as the author.

This article was written by Claudia D. Orr, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM) and an arbitrator with the American Arbitration Association.  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.  

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. December 2018.

 

Early Christmas Present for Michigan Employers: Earned Sick Time Act Overhauled and Wage Hike Delayed

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By: Miriam L. Rosen

 

Early Christmas Present for Michigan Employers:
Earned Sick Time Act Overhauled and Wage Hike Delayed

 

The Michigan legislature just gave employers an early Christmas present by scaling back on the terms of broadly-worded minimum wage and earned sick time laws that started out as citizen-initiated ballot proposals.

When the Michigan legislature adopted the minimum wage increase and earned sick time proposals in September 2018, the intent was to keep both provisions off the November ballot.  By adopting the proposals “as is”  before putting them to a popular vote, the legislature hoped to preserve the opportunity to amend the terms of both acts by simple majority votes during the post-election lame-duck session.  In contrast, if the provisions had passed by popular vote in November, a 75% vote by the legislature would have been required to amend the provisions.

As originally passed in September, the acts would have raised the minimum wage to $12 by 2022 and would have given many full time employees the opportunity to use up to 72 hours of paid sick time a year.

The Amended Terms

The amended bills, passed by the Michigan legislature on December 4, 2018, significantly scale back on the timing of the original minimum wage increase and the scope of the earned sick time law.

The amended minimum wage bill gradually increases the state’s $9.25 minimum wage to $12.05 an hour by 2030 as opposed to $12 by 2022.   As a first step, the minimum wage would increase to $9.45 in 2019.

The legislature also took a machete to the Earned Sick Time Act.  As originally passed in September, the broadly-worded law allowed for paid time off for sickness as well as a host of other reasons. The law, which encompassed employers with as few as 11 employees in the requirement to provide up to 72 hours of paid sick time annually, also included other provisions that would have made administration difficult for employers.

As amended, sick time law now excludes employers with under 50 employees.  In addition, under the amended law, employees working 35 hours per week can earn up to 40 hours of paid leave per year, instead of the 72 hours in the original act.  In terms of administering the law, the amended act now requires that employees comply with an employer’s “usual and customary notice, procedural, and documentation requirements for requesting leave.”  The Earned Sick Time Act includes many other provisions with which employers will want to familiarize themselves.

The two amendments will now go to Governor Snyder for his signature.  If signed, the new acts will be effective 91 days after adjournment of the 2018 legislative session, which will make them effective at the end of March 2019.  

 There will be Challenges

The amendments by the lame duck legislature are sure to face challenges.  In a legal opinion issued on Monday, December 4, 2018, outgoing Republican Attorney General Bill Schuette advised that the state constitution requires a 75% vote in both chambers to change voter-approved laws, but that it imposes no “express limitations” on amending citizen-initiated laws passed by the legislature.

Democratic legislators are, however, crying foul.  They note that a 1964 opinion by a Democratic attorney general determined that changes cannot be made in the same legislative session in which the law was passed.  And, advocates for paid sick time have already promised another ballot initiative in 2020 to restore the original terms.

All of this means that these “gifts” will likely come with some headaches for employers.  Employers should consult with their employment lawyers about the status of the amended legislation and for advice for implementation.

This article was written by Miriam L. Rosen, who is Chair of the Legal Affairs Committee of Detroit SHRM and Chair of the Labor and Employment Law Practice Group in the Bloomfield Hills office of McDonald Hopkins PLC, a full service law firm. She can be reached at mrosen@mcdonaldhopkins.com or at (248) 220-1342.

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. December 2018.

Federal Appellate Court Reminds Employers That Fourth Amendment Standards Must Support Agency Inspections

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By:  Julia Turner Baumhart, Kienbaum Opperwall Hardy & Pelton, P.L.C.

 

Federal Appellate Court Reminds Employers That Fourth Amendment Standards Must Support Agency Inspections

 

            Employers routinely encounter demands from the alphabet soup of Department of Labor sub-agencies:  OSHA, OFCCP, OWCP, W & H (including FLSA and FMLA variations), among others.  Not always as obvious or recognizable, however, are agency attempts to overreach in their demands.  This is often found in the case of on-site inspections or audits.

            Recently, an Eleventh Circuit federal appellate panel reminded employers that they may be overlooking a basic fundamental right.  Simply because a DOL inspector shows up after a workplace accident or to audit an employee complaint does not entitle the agency to unfettered access to the employer’s premises.  Specifically, in United States v. Mar-Jac Poultry, Inc., the court reminded employers of their Fourth Amendment protection against unreasonable searches.

            The Mar-Jac case arose out of an electrical injury at a poultry processing plant in Georgia.  As required by law, Mar-Jac reported the electrical accident to the Occupational Safety and Health Administration (“OSHA”), the following day.  Several days later, an OSHA inspection team arrived and demanded access, not only to the alleged hazards involved in the accident, but to the entire facility.  Mar-Jac refused access except to the accident site and any tools involved in the accident, but did provide access to certain paperwork including its “OSHA 300 logs,” in which it recorded work-related illness and injuries.  Based on this limited access, OSHA found nine potential OSHA violations, only three of which related to the accident.  The remaining six citations involved areas allegedly common to the poultry processing industry.

            Using these findings, OSHA secured a federal warrant to expand its earlier inspection to again include the entire facility.  Mar-Jac, however, successfully quashed the warrant as to five of the nine potential violations.

            Affirming the lower courts, the Eleventh Circuit again reminded employers that the DOL and its sub-agencies do not have a right to unlimited access to inspect employer premises.  Rather, an agency’s rights extend to two types of on-site inspections or audits.

  • First, the DOL can select the facility based on a general administrative or legislative plan where the selection is based on neutral criteria.
  • The second, and only other basis for inspection, is where the agency has specific identifiable evidence of an existing violation.

While the DOL does not need a warrant to initiate either type of inspection, it must obtain a warrant if the employer refuses to consent on Fourth Amendment grounds, i.e., that the search is not a reasonable one in its inception or scope.  And the required probable cause to overcome the employer’s objection is a higher burden for the government where the agency is relying on the second basis – the specific evidence of an existing violation.  Somewhat higher scrutiny applies to alleged existing violations because, absent legislative or administrative standards, there is a greater possibility that the agency has either targeted the employer or unreasonably expanded the search for purposes of harassment.

            The court agreed in this case that OSHA had unreasonably expanded the search, primarily by using the OSHA 300 logs to equate the existence of a workplace injury or illness with an OSHA violation, without regard to causation.  As the court observed, “the [OSHA] Regulations provide that ‘recording or reporting a work-related injury, illness, or fatality does not mean that the employer or employee was at fault, that an OSHA rule has been violated, or that the employee is eligible for workers’ compensation or other benefits.’”

The same standard pertinent to OSHA audits applies to on-site inspections by the other DOL sub-agencies.  Two caveats to bear in mind, however.  First, once the employer consents to the inspection – whether or not the consent is informed – it probably has waived its Fourth Amendment protection, at least to the extent of its consent.  And second, employers should carefully consider the potential impact on their agency relationships before objecting.  Both caveats suggest a reasoned approach based on fulsome advice and counsel before committing to either path.

This e-blast was written by Julia Turner Baumhart, who is a member of the Detroit SHRM Legal Affairs Committee.  Ms. Baumhart is a partner in the labor and employment firm of Kienbaum Opperwall Hardy & Pelton, P.L.C. in Birmingham, Michigan and can be contacted at jbaumhart@kohp.com or (248) 645-0000. 

 

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article.  November 2018. 

 

 

 

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DOL Wage & Hour Stepping Up Reliance on Opinion Letters

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By:  Julia Turner Baumhart, Kienbaum Opperwall Hardy & Pelton, P.L.C

 

DOL Wage & Hour Stepping Up Reliance on Opinion Letters

 

            The Trump Administration’s reinstatement of Wage & Hour Division Opinion Letters – a practice suspended during the Obama Administration – is gaining momentum.  On November 8, 2018, the Department of Labor issued four Opinion Letters on a variety of topics ranging from tipped employee wage credits to much narrower topics.

            The most encompassing Opinion Letter – that dealing with tip credits under the Portal-to-Portal Act – reissued a letter issued in the closing moments of the George W. Bush Administration that the successor administration promptly mothballed.  The new letter – FLSA 2018-27 – reissued the old letter virtually verbatim to distinguish between tipped employees in dual jobs (where one job is a tipped occupation but not the other) and tipped employees who perform both tip-generating and non-tip generating duties.

            In the case of dual jobs, the letter clarifies what should be common sense: the employer may take a tip credit only for those hours spent performing the tipped job.  The letter provides the example of the hotel maintenance employee who also serves as a hotel waiter.  The FLSA would require the hotel to pay minimum wage for any hours worked in maintenance but allow the hotel to take advantage of a tip credit for hours spent as a waiter – a bright line test.

            The standard applied to tipped employees who also perform non-tipped duties presents a much fuzzier line.  The letter provides the example of the waiter who also spends time in non-tip generating duties such as cleaning and setting tables, toasting bread, making coffee, occasionally washing dishes or glasses, or vacuuming before or after closing.  Earlier guidance implied that, under the above circumstances, any allocation of non-tipped duties that exceeded 20 percent of working time could not be eligible for a tip credit.

            Opinion Letter 2018-27 rejects the 20 percent ceiling on non-tipped duties as imposing an unrealistic burden to monitor and track minute-by-minute job performance.  Rather, the new standard allows credit for duties listed as core or supplemental to the specific tip-producing occupation on the Occupational Information Network (O*NET) or in 29 C.F.R. § 531.56(e), provided the duties are performed contemporaneously with or immediately before or after duties directed at serving customers.  The specific occupational duties considered core or supplemental for each tipped occupation can currently be found at https://www.onetonline.org/ link/summary/35-3031.00.

            Another November 8 Opinion Letter, FLSA 2018-25, addresses when exempt salaried employees may receive additional hourly compensation for hours worked without endangering the exemption.  The opinion letter addresses engineers and senior designers, classified as professional salaried employees, who receive a guaranteed weekly salary of $2,100, regardless of the number of hours worked during the week.  However, those employees also could earn $70 for every hour worked in excess of 30 per week.  As a result, some engineers were earning a weekly average salary of up to $3,761.

            Opinion Letter 2018-25 provides that the guaranteed weekly – or “usual” – salary has to bear a reasonable relationship to the amount actually paid.  A reasonable relationship exists provided the average weekly salary does not exceed 1.5 times the usual salary.  Moreover, the ratio has to be determined on an employee-by-employee basis.  Under the circumstances presented, the usual or guaranteed salary of $2,100 per week would support an average actual salary of up to $3,150.  Presumably, then, the employer would need to increase  the usual or guaranteed weekly salary of any engineer or senior designer whose average actual salary exceeded $3,150 to avoid endangering the exempt status of that employee.

            The remaining two opinion letters deal with narrower topics.  One addresses when swimming pool or similar recreational operators supporting multi-faceted operations, such as hotels and apartment complexes, are entitled to claim relief from wage and hour laws as seasonal amusement or recreational establishments.  For this to occur, according to FLSA 2018-26, those in the employer’s employ must work at (1) an establishment; (2) frequented by the public, including for a non-prohibitive fee; (3) that is for amusement and recreation.

            The fourth letter is narrower still, answering the question of whether a nonprofit, private volunteer fire department contracting with a state or local government to provide fire protection services to the public can benefit from the partial exemption from overtime requirements applicable to employees of public agencies.  This Opinion Letter, FLSA 2018-24, concludes that private fire departments that are not directly responsible to public officials or the general public and who are designated in their contracts as independent contractors do not qualify for the partial exemption.  This is true even if the department receives partial funding from a state or locally imposed fee.

This e-blast was written by Julia Turner Baumhart, who is a member of the Detroit SHRM Legal Affairs Committee.  Ms. Baumhart is a partner in the labor and employment firm of Kienbaum Opperwall Hardy & Pelton, P.L.C. in Birmingham, Michigan and can be contacted at jbaumhart@kohp.com or (248) 645-0000. 

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article.  November 2018. 

Michigan voters say yes to recreational marijuana. But employers get the say on workplace policies.

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By: Miriam L. Rosen

 

Michigan voters say yes to recreational marijuana. But employers get the say on workplace policies.

On Tuesday, Michigan voters had their say. One thing that they said loud and clear was “YES” to legalizing recreational marijuana.

As the saying goes, “elections have consequences.”  For Michigan employers, a consequence of the new law will be how recreational marijuana affects the workplace.    This means Michigan employers must understand the provisions of the law and must make decisions about workplace policies.

The Terms of the Law

 Approved through a public referendum, the new law, officially named the Michigan Regulation and Taxation of Marijuana Act, makes Michigan the first Midwestern state to approve recreational use of marijuana. The Act amends existing Michigan law to allow the following:

  • personal possession and use of marijuana by people 21 and older;
  • the lawful cultivation and sale of marijuana and industrial hemp by people 21 and older;
  • taxation of revenue from commercial marijuana facilities;
  • creation of administrative rules and establish penalties for violations.

Significantly for employers, the Act also includes a very clear statement on legal recreational marijuana and the workplace.

“This act does not require an employer to permit or accommodate conduct otherwise allowed by this act in any workplace or on the employer’s property.  This act does not prohibit an employer from disciplining an employee for violation of a workplace drug policy or for working while under the influence of marijuana. This act does not prevent an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because of that person’s violation of a workplace drug policy or because the person was working while under the influence of marijuana.”  (Emphasis added).

To summarize, employers can refuse to hire job applicants and discipline or fire existing employees if they test positive for marijuana in violation of a workplace drug policy or are under the influence while working.    This is consistent with the Michigan Medical Marijuana Act that voters approved in 2008.

The new law will go into effect ten days after the election results are certified – making it  effective in mid-December 2018.   This gives Michigan employers some time to think about – and plan for – the consequences of legal recreational marijuana.

Takeaways for Employers

Here are some takeaways for employers to consider:

  • Employers can implement and enforce workplace drug policies that prohibit employees from being under the influence of marijuana at work and can refuse to hire applicants and discipline/terminate employees who test positive for marijuana.
  • The Act specifically refers to conduct that is “in violation of a workplace drug policy.” So employers, now is a (really) good time to pull out that policy and make sure that it is up-to-date.
  • Employers should state clearly and directly how recreational – and medical – marijuana will be handled under their workplace drug policy.
  • Employers do have choices here. Employers can, but are not required to, drug test employees and discipline/terminate for a positive test for marijuana.
  • Data from other states where recreational marijuana is legal indicates that some employers are modifying drug screening practices to exclude marijuana from pre-employment testing. Those employers say that they are just responding to the particular realities of the need for workers.
  • Of course, decisions about testing and other workplace restrictions should be thoughtfully considered and based on the specifics of each workplace.
  • Educate employees on the company workplace drug policy. Since employees may not have parsed the finer points of the new law, they may assume that since recreational marijuana is legal, they can’t be fired for a positive test.  It would be unfortunate to see someone’s job “go up smoke” over a misunderstanding.
  • For employers with federal government contracts, marijuana is remains an illegal substance under federal law and compliance with applicable federal regulations is required.

The new recreational marijuana law gives employers broad ability to limit the impact of recreational marijuana use on the workplace. However, it does not require it.  Just like the voters of Michigan, employers have a choice to make. Employers – especially those with multi-state operations – are encouraged to seek the guidance of an experienced employment lawyer in making those decisions and implementing workplace drug policies.

This article was written by Miriam L. Rosen, who is Chair of the Legal Affairs Committee of Detroit SHRM and Chair of the Labor and Employment Law Practice Group in the Bloomfield Hills office of McDonald Hopkins PLC, a full service law firm. She can be reached at mrosen@mcdonaldhopkins.com or at (248) 220-1342.

 Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. November 2018.