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Immigration Reform Update

Now that the State of the Union address is in the rear-view mirror, it's a good time to peek in on just where things are at with respect to immigration reform.  As you might recall, President Obama announced a series of changes he intended to implement by Executive Order in November of 2014 (read about them here.)  So just where are things with respect to all these changes?  The answer is a simple one -- UNDER CONSTRUCTION.  For those expecting immediate change, immigration reform has been a bit of a sore subject.  As you will remember, comprehensive immigration reform has been a topic of discussion throughout President Obama's presidency.  In fact, Congress was debating comprehensive immigration reform following the election cycle in 2012.  The key takeaway is that while immigration reform gets a lot of discussion and press, actual progress is hard to come by and slow to arrive.  With that said, deferred action related information is likely to arrive in February.  In addition, the new deferred action program targeted at parents of children born in the U.S. will likely arrive in the late spring or early summer (May/June).  What will be interesting to watch is how these upcoming executive changes will motivate Congress to act.  So while things are likely to remain quiet in early 2015, expect immigration reform to be a hot topic again as we move towards spring.  As always, stay tuned. 

DOL Continues to Add States to Employee Misclassification Initiative

With the addition of Wisconsin last week, the Department of Labor (DOL) now has 19 states participating in the collaborative effort to reduce the misclassification of employees as contractors.  The DOL's initiative is a concerted effort to investigate and pursue companies that misclassify employees as contractors to avoid various tax and/or benefit burdens.  Over the last three to four years, the initiative has resulted in a significant number of companies being investigated by the DOL (or a state partner) and the payment of significant back pay amounts to employees.  If your company makes use of independent contractors (contract labor), you should carefully review these arrangements to ensure they are truly contractors and not employees.  Correcting these issues before a government investigation is almost certain to be better for your company.  

Court Invalidates DOL Change to Companionship Exemption

Last week a federal judge invalidated the Department of Labor's (DOL) proposed change to the companionship exemption under the Fair Labor Standards Act.  The change in the rule was expected to cause the majority of home health workers to no longer be exempt and thus subject to the minimum wage and overtime rules.  At issue was how the DOL defined companionship in the rule.  The primary change at issue was eliminating the exemption for those home health care workers that spend more than 20% of their time on personal care related tasks.  These tasks include things like bathing, dressing, cooking, shopping, cleaning, etc.  In most cases, these tasks are a significant portion of what home health care workers do to assist their clients.  It is now in the DOL's court to decide whether to appeal the decision.  Stay tuned.

Termination Case Goes South

A recent decision in a Texas federal court case highlights for employers the dangers of a sloppy termination process.  The basic story is an employer terminated the employment of a 55 year old employee for having a poor attitude and poor work performance.  The employee's story differed in that he claims he met all requirements and his supervisor harassed him.  The parties ended up in litigation and through the discovery process the employer's termination process began to unravel.  The employer's basis for the termination came into doubt when the supervisory team could not identify who made the decision to terminate the employee.  Multiple supervisors pointed in different directions as to the identity of the person making the decision.  In addition, the employer failed to follow its own progressive discipline policy with respect to the employee.  These flaws in the termination process resulted in the court providing the employee the opportunity to present his case to the jury at a trial.  This outcome is a significant loss for the employer and will likely result in the employer choosing to settle the case with the employee rather than go forward to a trial.

Looking back at the facts of the Texas case, there are a couple simple and obvious lessons for other employers.  First, ensure in any termination of employment that you follow your own company policies/procedures.  If you fail to follow your own policies/procedures a court or agency will doubt the truthfulness of story you tell regarding the termination.  Second, make sure your management team is on the same page with the decision-making process.  If      Continue Reading...

New OSHA Reporting Rule Goes Into Effect

Effective January 1, 2015, the new OSHA incident reporting rule took effect.  The rule change expands the types of incidents employers are required to report to OSHA.  The prior rule required employers to report a work-related fatality or work-related hospitalization of three or more employees.  The rule has been modified to require the reporting of any work-related fatality, work-related hospitalization of one or more employees, all work-related amputations, and any work-related loss of an eye.  These new rules significantly lower the threshold for reporting incidents to OSHA.  The result of these changes will be an increase in the number of incidents that an employer is required to report to OSHA.  Employers should make note of the lower threshold on hospitalizations and the addition of the amputation and eye loss requirements. 

NLRB Election Rule Challenged

As most of you are aware, the National Labor Relations Board (NLRB) recently issued a rule changing the process for representation election proceedings.  The rule changes essentially accelerate the process and is a favorable change for unions.  This is the second time the NLRB has attempted to implement this new representation election rule.  The last time the NLRB attempted to implement the rule (2011), the U.S. Chamber of Commerce filed a lawsuit that ultimately resulted in the rule being rescinded due to technical issues in how the NLRB adopted the rule.  Now that the NLRB has reintroduced the rule, the U.S. Chamber of Commerce has filed suit again in an attempt to block the implementation of the rule.  This time around the rule will need to be challenged on its merits because the technical issue from the 2011 implementation will not be an issue.  These challenges will resolve around due process, freedom of speech, and the intent of the National Labor Relations Act.  Stay tuned as the litigation proceeds forward.  The rule is set to take effect on April 1. 

The Save American Workers Act

Congress is already at work in early 2015 and attempting to make changes to the Affordable Care Act.  The House passed legislation to change the definition of full-time employment from 30 hours per week to 40 hours per week.  Now its up to the Senate to pass a similar measure.  While Congress seems intent on making changes to the Affordable Care Act, the White House isn't likely to sign off on such a measure.  Stay tuned for further developments as the measure works its way through the Senate.  The introduction of this legislative proposal is likely to be just the first of many actions Congress will take in the coming months.

H-1B Season is Approaching

Now that the calendar has turned to 2015 it is time to begin considering the rapid approach of the H-1B filing window.  The H-1B visa is the most commonly utilized work visa for employers.  While USCIS has not issued any information yet with respect to the filing window and lottery process, employers should expect 2015 to be no different than the last couple of years.  The H-1B cap for the 2016 fiscal year (starts on October 1, 2015) will be hit in the initial filing window.  This means employers seeking a H-1B visa for an employee will need to be prepared to file the application by April 1, 2015, to participate in the lottery for a visa.

As a word of warning, if you have individuals working for you that are utilizing OPT (Optional Practical Training) this blog posting applies to you.  If these individuals haven't asked yet, expect them to be asking soon about an H-1B filing in this upcoming filing window.  Considering the need to file by April 1, 2015, it isn't too early to start talking through these issues and planning for any filings. 


NLRB Opens Company Email Up for Employee Use in Organizing Campaigns

In a recent decision, the National Labor Relations Board (NLRB) reversed its longstanding rule regarding employee use of corporate email systems for the purpose of union organizing.  The historical rule allowed employers to prohibit the use of its email systems so long as it did so on a non-discriminatory basis.  This is no longer the case.  The NLRB reversed direction last month changing the rule.  The new rule requires employers to allow employees to use corporate email systems to engage in union organizing activities.  The use must be during non-working hours and cannot interfere with workplace discipline or production.  So long as employees stay within these vague boundaries, employers must allow use of email for these purposes. 

It is likely your Company's electronic communications policies do not permit this type of usage.  It might be time for a revision of the policy.  At a minimum, you need to ensure no discipline is issued to an employee for this type of usage even if your Company's policy prohibits such usage.  

Can Angry Birds Make Employees Happy (and Productive)?

Do you want employees to be more productive and happier during the workday? According to research from Kansas State University, allowing employees to take short breaks to text friends, play Angry Birds or Candy Crush, or check Facebook on their smartphones may help. Here's the story, written by K-State's Division of Communications and Marketing, reprinted with permission.

In his latest research, Sooyeol Kim, doctoral student in psychological sciences, found that allowing employees to take smartphone microbreaks may be a benefit — rather than a disruption — for businesses. Microbreaks are nonworking-related behaviors during working hours.

Through a study of 72 full-time workers from various industries, Kim discovered that employees only spend an average of 22 minutes out of an eight-hour workday playing on their smartphones. He also found that employees who take smartphone breaks throughout the day are happier at the end of the workday.  

"A smartphone microbreak can be beneficial for both the employee and the organization," Kim said. "For example, if I would play a game for an hour during my working hours, it would definitely hurt my work performance. But if I take short breaks of one or two minutes throughout the day, it could provide me with refreshment to do my job."
To study smartphone usage, Kim and collaborators developed an application that the 72 study participants installed on their smartphones. The app privately and securely measured the employees' smartphone usage during work hours. The app also divided the employees' smartphone usage into categories such as entertainment, which      Continue Reading...
HIPAA Settlement Highlights Focus on Security Concerns

The latest announcement by HHS regarding settlement of an investigation under the HIPAA privacy, security, and breach-notification rules reflects an increased focus by HHS on security-related issues and the need for health plans and other covered entities to take reasonable steps to protect PHI from hacking, viruses, and malware attacks.

Background. The covered entity in this case (a non-profit community mental health services organization) reported a breach affecting the PHI of approximately 2,700 individuals. The breach was caused by a malware attack on the covered entity’s IT system. The system was using outdated software that made it vulnerable to attack. Following the HHS investigation, the covered entity agreed to a settlement that included a cash payment of $150,000 and a two-year corrective action plan.

Keep Your Software Updated! A key takeaway from this case is that covered entities will be held responsible for maintaining a sound IT infrastructure. System software must be kept up-to-date, and appropriate technical security measures must be implemented, such as firewalls capable of threat monitoring.

Common Sense Approach. Although covered entities may have varying degrees of technical sophistication, HHS’s press release emphasized the need for a “common sense approach” to risk mitigation. “This includes reviewing systems for unpatched vulnerabilities and unsupported software that can leave [PHI] susceptible to malware and other risks.”

Adopting Policies Isn’t Enough. Another key takeaway is that adopting policies and procedures to address the HIPAA privacy and security rules is only the beginning of an appropriate HIPAA compliance program. The policies must be implemented, followed, and      Continue Reading...

Court of Appeals Weighs in on H-2B Wage Rule

In a recent decision, the U.S. Court of Appeals for the Third Circuit rejected the Department of Labor's (DOL) 2009 guidance regarding the use of private employer surveys for determining prevailing wages under the H-2B program.  The Court found that the usage of the private wage surveys had the effect of depressing wages which harms H-2B workers and U.S. workers.  The Court also found a harm to U.S. employer that could not afford to do a private wage survey and were required to use DOL's wage data which was higher than the private survey data.  The likely effect of the decision will be a push to the use of the DOL's wage data rather than private surveys. 

The decision is just another step down the windy and painful road of prevailing wage complications for H-2B employers.  Stay tuned as DOL plans to engage in further rulemaking on the H-2B prevailing wage front.

Corporate Media Policy Runs Afoul of the National Labor Relations Act

Does your Company have a policy prohibiting employees from speaking to media representatives about the Company?  If so, your policy might be unlawful under the National Labor Relations Act (NLRA).  As a short review, the NLRA protects the rights of employees to engage in concerted activities for their mutual aid or protection with respect to their terms and conditions of employment.  In simple form, anything an employer does to interfere or prevent employees from joining together to address workplace concerns can run afoul of the NLRA. 

In a recent decision, an Administrative Law Judge (ALJ) found a Company media policy overbroad and prevented employees from engaging in protected activities under the NLRA.  The particular policy simply stated that if contacted by the media that "no information exchange is permitted" unless done so by the specifically appointed Company spokesperson.  While the Company tried to assert the policy did not expressly prohibit employees from engaging in NLRA protected activity, the ALJ noted the terms of the policy were "ill defined" and "the guideline, as written, could also encompass and prohibit communications about wages, labor disputes, and other terms and conditions of employment."  The ALJ followed a prior case from 2008 in which a similar corporate media policy was struck down as unlawful.  What is important to note is that in both cases the employer argued a significant need to limit media communications to the centralized corporate spokesperson for official comments to the media for a range of reasons.  These arguments failed and are likely to continue to fail in the immediate future. 

The policies      Continue Reading...

IRS Releases 2015 COLAs for Benefit Plans

The IRS has released the annual cost of living adjustments for various benefit-plan limits. The adjusted amounts will apply for 2015. Here are the highlights:

  • Retirement plan elective deferrals (402(g) limit) - $18,000 ($500 increase)
  • Retirement plan catch-up contributions - $6,000 ($500)
  • Annual additions to a defined contribution plan (415 limit) - $53,000 ($1,000 increase)
  • Definition of highly compensated employee - $120,000 ($5,000 increase)
  • Annual compensation limit (401(a)(17) limit) - $265,000 ($5,000 increase)

For individuals age 50 and older, these increased limits represent the ability to electively contribute up to $24,000 to a 401(k) plan, 403(b) plan, or governmental 457(b) plan during 2015. 

Inflation-adjusted amounts for high deductible health plans (HDHPs) and health savings accounts (HSAs) were released earlier this year (see prior post here).

DOL Delays Proposed Amendments for White Collar Exemptions

The Department of Labor recently announced that the roll-out of its proposed amendments to the white collar exemption regulations under the Fair Labor Standards Act (which were previously scheduled for a November release) have been pushed back to sometime in 2015.  Various reports have targeted a release date between February and May.   

From comments by the Secretary of Labor earlier this year, these amendments are expected to significantly restrict the scope of the white collar exemptions with the goal of making more employees eligible for overtime.  It’s likely that DOL will seek to achieve this goal through a combination of a higher minimum salary (currently $23,660 per year) along with stricter job duty requirements. 
While these changes may be significant, they are not imminent.  The proposed amendments will be open for a period of public comment that is at least 30 days, and usually from 90 to 120 days.  After that period is closed, DOL will digest the comments and determine if any of the amended regulations should be revised before they are published for final implementation.  It’s unlikely that any of the proposed changes will be in place before the end of 2015 at the earliest.   

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Don Berner, the Labor Law, OSHA, & Immigration Law Guy
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Boyd Byers, the General Employment Law Guy
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Jason Lacey, the Employee Benefits Guy
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