Posted by marykeating on April 29, 2010 under Federal wage and hour law, Pending legislation | 
I’ve discussed misclassification of employees before. The issue comes up when an employer decides to treat a worker as an independent contractor when the person actually qualifies as an employee. The savings to the employer include worker’s compensation premiums, unemployment insurance premiums, the employer share of the social security and medicare taxes, and, often, the cost of fringe benefits. In addition, an employee has protections under various non-discrimination laws which usually do not apply to independent contractors.
Congress now has before it a new version of The Employee Misclassification Prevention Act. It was introduced last week, and is expected to get a favorable hearing.
The law would add enforcement teeth to the Fair Labor Standards Act. One provision adds a presumption that someone receiving money for the performance of work is an employee, unless the employer has maintained records related to the classification and the hours worked and wages paid. In addition, the misclassified employee will be entitled to doubled liquidated damages for that violation. In other words, the amount recoverable by the misclassified employee could be triple the unpaid or underpaid wages, as is the case in state law.
Maryland is targeting specific industries, such as the landscaping industry, believed to have rampant violations. The new federal bill requires the Department of Labor to engage in targeted audites of industries the department finds to have a frequent incidence of misclassification.
Posted by marykeating on April 11, 2010 under Maryland wage law, Pending legislation |
The Maryland legislative session is nearly over for the year. One favorable bill clarifies the state’s wage payment and collection act to include overtime. Both houses have passed the bill, and it’s expected to be signed by Governor O’Malley.
The wage law helps employees enforce their rights to payment for their work. When there is no good faith dispute about the worker’s entitlement to the wages, a judge may triple the amount found to be owed, and award the employee reasonable attorney’s fees for taking the case to court. The policy behind the law is clear. When an employer withholds wages (and many such cases come up when the employer refuses to pay the last paycheck, apparently figuring that the employee will go away quietly), the employee should have an effective means of obtaining the compensation. Permitting additional damages and attorney’s fees are good incentives. In addition, the law penalizes the employer for holding back pay for no reason other than wage theft. On the other hand, if there is an actual dispute over the pay owed, or the amount of a commission, the employee cannot obtain the enhanced damages, but still has access to court.
Now the law will specifically include overtime pay as an element of the compensation that the employee may sue for. Not all courts had accepted the idea that compensation of any kind included overtime pay, so employees would sue under the Maryland law for unpaid straight-time wages or bonuses, and under the federal Fair Labor Standards Act for their overtime pay. This made the cases needlessly complicated. This may not change the reality that federal judges seem more likely to apply the correct burden of proof (it’s on the employer to show exemption from overtime), but it is a good clarifying law.
Posted by marykeating on March 24, 2010 under Employment benefit issues, Pending legislation |
Congress keeps tweaking COBRA subsidies to deal with the sustained unemployment rate. In December the COBRA subsidy was extended until the end of February. People eligible for the subsidy will have to pay only 35% of the monthly premium, while the employer pays the rest, and takes the cost of the 65% premium as a credit against withholding taxes. Congress added a month, and has not been trying to extend it further. Last week the House of Representatives passed a bill to extend COBRA subsidies until the end of April. Meanwhile the Senate passed a bill to extend the subsidy period through to the end of 2010. Both bills must be passed by the other house, though it looks as though there will be no problem making the April extension into law in time. American Workers, State and Business Relief Act of 2010.
Posted by marykeating on March 13, 2010 under Age discrimination, Pending legislation |
In a down job market, discrimination claims rise. One view is that people who are laid off anyway have nothing to lose by filing a claim. Another, and one I’m more partial to, sees the downsizing workplace as indulging in stereotypes of what the efficient future worker looks like. And age discrimination is the frequent result of a stereotyped, biased, look at “what this place needs to stay competitive in the 21st century.” Someone born way back in the mid-20th century, when they didn’t even have personal computers, can be muscled aside as necessarily lacking in technological skills. And someone without a college degree cannot possibly be as good as one with a degree. Application of these criteria on a group, rather than individual, basis in choosing who is laid off can lead to a disproportionate impact against older workers.
The Supreme Court allows an employer to win an age discrimination case by bringing up a “reasonable factor other than age.” Smith v. City of Jackson, 544 U.S. 228 (2005). In the scenario above, an employee who truly lacks necessary technological skills for his job, regardless of his age, is a reasonable candidate for the reduction in force. But these factors have to be applied in an objective manner so as to avoid stereotyping.
The Equal Employment Opportunity Commission highlights this dichotomy in its proposed rules on reasonable factor other than age. The EEOC’s rules would require that the criteria used to determine the layoffs are objectively reasonable, and that they strive to ensure that they are applied in a way that avoids, as much as possible, subconscious discrimination. For example, the EEOC warns that “criteria known to be susceptible to age-based stereotyping, such as flexibility, willingness to learn, or technological skills” should be backed up by training in judging each employee’s performance level, and how to avoid age-based discrimination in doing so. 75 Fed. Reg. at 7217. When managers are given too much discretion, and little training on the application of these criteria, the reasonable factor defense weakens.
Importantly, the EEOC addresses the common issue of a company firing its most expensive workers. This looks objectively reasonable, but the EEOC warns that when it has a disproportionate impact on older workers, the company should also consider the revenue that the highly paid people bring in when deciding whom to cut.
These rules are open to comment until April 19.
Posted by marykeating on February 6, 2010 under Pending legislation, Unemployment compensation |
We get occasional glimpses of hope in the economic news, but the unemployment rate remains high. The latest projection I heard projected unemployment remaining above ten percent all year. To deal with the prolonged unemployment of so many workers, the government has extended the maximum weeks of unemployment benefits. It also has increased the unemployment tax payable by employers.
This sets the stage for the classic clash of interests in Annapolis. Some business interests are asking for a reduction of benefits, while others are urging higher weekly benefits and more weeks. An emergency bill is pending this session, and has made it past the first stage. According to the bill, some of the changes to the law are necessary to qualify for the federal stimulus funds.
One of the more employee friendly provisions changes the formula for calculating the weekly unemployment benefit, by looking at the most recent four quarters of pay rates. This provision would help workers who had been earning increased amounts in their fields before becoming unemployed.
In addition, the law provides for extended benefits and training for unemployed workers who have been unemployed for an extended period, and are in a declining occupation, or were laid off in a permanent reduction in force. Employers’s rating experience is not charged for unemployed individuals receiving the additional training benefits.
Posted by marykeating on December 19, 2009 under Government contractors, Pending legislation, sexual harassment |
The Franken Amendment has passed the House and is expected to become law. Under the amendment to next year’s appropriations bill, contractors doing more than $1,000,000 of business with the federal government must agree not to require arbitration, rather than court, claims of discrimination, sexual assault, and other employment claims. Six months after the effective date of the law, the contractors are responsible for ensuring that their own subcontractors with jobs of more than a million dollars also abide by the law.
The amendment forbids mandatory arbitration on the following types of claims:
- any claim under title VII of the Civil Rights Act of 1964, and
- any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention.
The law arose out of a horrendous situation involving a woman who was raped and terrorized overseas while working for an American company. The perpetrators worked for an American company, and our government. Her employment contract required her to arbitrate her claims, and limited her remedies. Senator Franken’s amendment forbids companies from imposing this waiver of rights on people working as employees or independent contractors on major goverment contracts.
Posted by marykeating on December 2, 2009 under Employment benefit issues, Pending legislation |
The discussion about health care reform has increased awareness of the high cost of health insurance for people who are not in a group plan. While employed and in an employer-sponsored plan, an employee usually gets a reasonable plan for a pretty reasonable price, or even free, depending on the employer’s policies. But then the job ends, whether voluntarily or not. If the employer has at least 20 employees, the departing employee is entitled to COBRA coverage for 18 months, in most cases.
With unemployment still high, Congress is now thinking about extending the COBRA coverage for six more months, for those people who lost their jobs between April 1 and December 31 of 2009. In addition, even better for some, the COBRA subsidy discussed here would be extended as well. The subsidy has the federal government picking up 65% of the cost of the premium, which is repaid to the employer by a credit on the payroll taxes. If passed, the new law will be called the “Extended COBRA Continuation Protection Act of 2009.”
It’s hard to think of an interest group that would oppose this law, other than those who think that the government is subsidizing the unemployed too much.
Posted by marykeating on November 6, 2009 under Gender orientation discrimination, Pending legislation |
As reported here, the Employment Non-Discrimination Act, or ENDA, is one of the Obama administration’s top priorities. The bill would outlaw discrimination on the basis of gender identity and sexual orientation. Those categories are protected under Maryland law, but not federal law yet. There won’t be action this calendar year. It’s hard to tell whether the defeat of the same sex marriage proposition in Maine will affect prospects of this law.
Posted by marykeating on October 30, 2009 under Employment benefit issues, Pending legislation |
The Secretary of Health and Human Services released a report explaining in very clear language the effect of health insurance reform on the ability of small businesses to offer health insurance. According to HHS’s report, 56,593 small businesses in Maryland alone would qualify for an attractive tax credit. In addition, health insurance reform would end the catastrophe that effects some businesses when insurers hike premium costs as a result of an illness or injury of even a single worker. Small businesses have been rated by their own experience. So when one person of 50 has a serious illness, incurring hospital care, the rates for the business are directly affected. For a huge business, an illness or two does not alter the experience very much, because of the law of averages. But small businesses can be forced into giving up insurance benefits if two people are diagnosed with cancer.
The new law, if it passes, would forbid rating based on health status. In the end, the law of averages across the spectrum of the state or the country will drive insurance prices. In addition, the new law would end the lifetime cap on insurance benefits. This was an issue advocated by the late Christopher Reeve, who would not have made the progress he did without personal resources.
Finally, the law would end the practice of discrimination against women. There are insurance plans that refuse to cover women of child-bearing years, or treat pregnancies as uncovered conditions. (Maryland law is stronger than some states, and does not permit a blanket prohibition against insurance for childbearing.)
The economic hardships that have befallen many employees and businesses have brought some of these issues to the forefront. I hope we have the fortitude to make some much-needed reform to the existing system.
Posted by marykeating on October 8, 2009 under Pending legislation, sexual harassment |
The Senate, with the help of a number of Republicans, passed the Al Franken Amendment (Senate Amend. 2566) to the Defense Appropriations Act yesterday. (No Democrats voted against it.) The amendment would prohibit government funding to defense contractors and subcontractors if they require employees to arbitrate Title VII claims. The bill states that it prohibits the U.S. government from using “funds for any Federal contract with Halliburton Company, KBR, Inc., any of their subsidiaries or affiliates, or any other contracting party if such contractor or a subcontractor at any tier under such contract requires that employees or independent contractors sign mandatory arbitration clauses regarding certain claims.”
The amendment came in reaction to Jamie Leigh Jones, a Halliburton computer technician working in Iraq. She was drugged and raped by her coworkers. She returned to find her court case barred because she had signed an employment agreement requiring arbitration of all disputes. No one was prosecuted, after various parts of her file were inexplicably lost by Halliburton. Ms. Jones told her story on national television, and also accused a state department employee of sexually assaulting her, too (according to the news clip, he admitted doing so). Ms. Jones’ story is not unique, and claims of rape in the military are rampant.
Title VII forbids discrimination on the basis of sex, race, religion, color, and national origin. Sexual harassment, of which rape is an extreme form, is sexual discrimination under Title VII.
Arbitration has become more popular with employers, since it is a private process, there is no appeal, no legal precedents are set, and it affords no jury trial. The fees are often quite high, despite the commonly heard rallying cry of expensive litigation. For a three-person arbitration panel, the parties must pay by the hour for each of their fees to prepare for and hear the case, as well as hefty administrative fees imposed by the American Arbitration Association. By contrast, agencies such as the EEOC and MCHR are free, and court filing fees are low.
