Transcript www.pahomecare.org

A Potpourri of Wages, Hours, Benefits
And Miscellaneous Considerations …
Everything you wanted to know,
but were afraid to ask in 90 minutes or less.
Presented by:
Thomas G. Collins, Esquire
Buchanan Ingersoll & Rooney PC
P: 717.237.4843
F: 717.233.0852
E: [email protected]
W: www.bipc.com
1
What are we going to
accomplish today?
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
“Hours worked”: What time is Compensable?
“White Collar” exemptions (just the basics).
Conflicts between the Federal FLSA and Pennsylvania MWA
Registry v. Agency?
ERISA Plan Documents: Why should I care?
Unemployment Comp: Should I appeal?
Terminating the Difficult Employee: How do
I protect my company from discrimination
claims?
Non-compete agreements: Do they really work?
Social Media and miscellaneous NLRB Considerations.
2
(1) Hours Worked: What time is
Compensable?
Issues directly impacting home care:
• Call time (schedulers, etc.);
• Travel time;
• In-service training; and
• Sleep time (24/7 Care).
3
(1) Hours worked: What time is
Compensable?
General considerations:
• All hours “permitted” or “suffered” to work.
• Hours “permitted” is the time you want employees to
work.
• Hours “suffered” is the time you don’t necessarily
want the employees to work, but they
do so anyway (usually applies in the
context of unauthorized overtime).
• Key: unauthorized overtime is a
disciplinary issue/not a payment issue:
Employees must be paid for all time
worked, even if unauthorized.
4
(1) Hours worked: What time is
Compensable?
General considerations cont’d …
• The moment employee begins principal activities for
the benefit of the employer.
– Example. Before starting work for the day at a client
location, employee records notes. In such circumstances,
the work day begins and the commute may be work time.
• Work time excludes de minimis activities of minimal
duration (e.g. a few minutes to map
driving routes before beginning work).
• No de minimis threshold. Rule of
reasonableness. Activities are
aggregated.
5
(1) Hours worked: What time is
Compensable?
Examples of “on the clock”:
• Breaks of less than 20 minutes;
• Breaks of more than 20 minutes, where the
employee is not free to leave or go about his or
her own business; and
• Company required in-services
or other training.
6
(1) Hours worked: What time is
Compensable?
Examples of “off-the-clock”:
• Commuting time to or from work: but only if it is
before the commencement of, or after completing,
responsibilities.
• Time exceeding 30 minutes when the
employee is free to engage in
personal pursuits without restriction.
7
(1) Hours worked: What time is
Compensable?
Examples of off-the-clock, cont’d …
• Meal periods, so long as the employee is
free from all work duties and the break is
long enough to be useful. (Be careful!)
• Sleep time, so long as the “tour of
duty” is 24 hours or longer and
no work is required. (We will
discuss in detail later.)
8
(1) Hours worked: What time is
Compensable?
Travel Time:
• Travel directly to client site at the start of the work
day is not compensable time under FLSA and
PMWA (concept of “portal-to-portal”).
• Travel from client site at the end of the work day is
likewise not work time.
• Employee travel time between
clients during the work-day,
however, is compensable work time.
9
(1) Hours worked: What time is
Compensable?
Travel Time cont’d …
• Travel time is also “on-the-clock” if it occurs
during an employee’s normal working hours.
• Issue: What if consumer visits are more than 30
minutes apart even taking into account travel
time?
10
(1) Hours worked: What time is
Compensable?
Travel Time cont’d …
• Example: Consumer A is authorized for 2
hours of service between 9:00 – 11:00 a.m.
Consumer B is authorized for 2 hours of
service from 12:00 – 2:00 p.m. A and B live
only 10 minutes apart. What
portion of time is compensable
between 11:00 – 12:00 if the
same employee services A and B.
11
(1) Hours worked: What time is
Compensable?
On-Call Time:
• Merely being “available” to work is not work
time, e.g., carrying a pager on the weekend.
• Employers who have employees
“engaged to wait” may pay
employees a different rate for
the waiting time.
• However, it is generally impermissible
to pay employees two separate rates
for the same work during a single
workweek.
12
(1) Hours worked: What time is
Compensable?
On-Call Time cont’d …
• On-call “bonus” must be included in the employee’s
“regular rate” when calculating overtime.
• Employees who do not have to be compensated for
on-call time still must be compensated for time
actually spent taking call.
• Employer’s should be tracking time spent actually
taking call and compensating for same
on an hourly rate basis (or some multiple
thereof, e.g., double time).
• DOL audit risk.
• No issue for exempt employees.
13
(1) Hours worked: What time is
Compensable?
On-Call Time Cont’d …
• Example: Agency pays scheduler a flat fee of $125.00 to take
call on Saturday . The scheduler worked 40 hours between
Monday and Friday during the workweek at $12.00 per hour.
On Saturday, the scheduler spends 2 hours addressing call. If
the US DOL conducts an audit, they will add the $125.00 into
the schedulers “regular rate” for overtime purposes and expect
additional overtime compensation as follows:
Regular rate = (40 hours x $12.00) + ($125.00)
42 hours
Regular rate = $14.40
Overtime = $14.40 x .5 x 2 = $14.40
14
(1) Hours worked: What time is
Compensable?
On-Call Time Cont’d …
In sum:
• Track time actually spent taking call.
• Pay some multiple of the employee’s
standard rate for time spent
taking call on weekends or
evenings.
15
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• Live-in Aides provide services around-theclock.
• Although they maintain separate residences,
they often stay at the consumers’ premises for
weeks and sometimes months on-end, working
24 hour/7-day schedules.
• In the industry, these employees are
often paid “day-rates.”
16
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• Is a “day-rate” permissible under
FLSA and PMWA?
• Is “sleep time” compensable?
17
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• Two separate laws are implicated: the FLSA and PMWA.
• Under the FLSA, there is a “companionship service”
exemption for employees that provide “companionship
services” for individuals who because of age or infirmity are
unable to care for themselves. See 29 U.S.C. § 213(a)(15).
• The “companionship service” exemption
has been confirmed by the U.S. DOL as
applying to situations where the Aide is
employed by a third-party/Agency.
• In sum, acceptable under the FLSA
for now.
18
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• December, 2011: DOL Notice of Rule Making.
– If the new rule proposed by the DOL goes into
effect, the “companionship services” exemption
will no longer apply to agency employers.
– However, given the state of Pennsylvania law, this
is likely not an issue for Pennsylvania
home care providers.
19
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• Under the PMWA, there is no counterpart to the FLSA
“companionship service” exemption with respect to third-party
employment.
• Bayada Nurses, Inc. v. Pennsylvania Dept. of Labor &
Industry, 8 3d. 866 (Pa. 2010).
• In Bayada, the Pennsylvania Supreme Court expressly held
that agency employers may not rely upon the “domestic
services” exemption set forth in the PMWA.
• Accordingly, home care aides employed
by agency employers are entitled to both
the applicable PA minimum wage and
overtime.
20
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• The definition of “hours worked” under the PMWA may (it is
not certain) allow agency employers to exclude up to 8-hours
designated for “sleep-time.” See 34 Pa.Code 231.1.
• The regulation governing payment of the minimum wage
states that: “in the case of a residential employe [which is an
employe who resides and works on the premises of the
employer], the Secretary will approve any reasonable
agreement between the employer and employe
for determining hours worked.”
34 Pa.Code § 231.21(b).
• Issue: Is the consumer an “employer” for
this purpose? Concept tacitly rejected by
the Supreme Court in Bayada.
21
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• On March 6, 2006, the Pennsylvania
Department of Labor & Industry issued a letter
ruling expressly approving the exclusion of up
to 8-hours for “sleep time” from a home care
worker’s “hours worked.”
• In such letter ruling, the Dept.
further noted that it would defer
to 29 C.F.R. § 785.22(b) (requiring
that at least 5-hours be uninterrupted)
for enforcement purposes.
22
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• Although there is little guidance on the payment of
“sleep-time” under the PMWA regulations, a reasonable
interpretation of the definitions referenced above would
appear to allow employers to treat home care workers as
“residential employees” and exclude up to 8 hours for
sleep-time, provided that:
– the employee gets at least 5 hours of
uninterrupted sleep (see FLSA
regulations); and
– there is a “reasonable agreement” in
place with the worker to exclude sleeptime from the “hours worked” calculus.
23
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• Still risk involved even if above steps are taken.
• Dept. of Labor & Industry letter rulings are not
binding on Courts. (Current 8/80 issue, by way of
specific example.)
• PMWA Regs. Define “hours worked”
to include “time during which an
employee is required to be on the
premises of the employer, to be on
duty or to be at the prescribed
workplace.” 34 Pa. Code. § 231.1.
24
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• In any event, however, the home care
worker will be entitled to at least the
minimum wage for the first 40 hours, and
time-and-a-half for hours worked in excess
of 40 in the workweek.
• Therefore, a “day-rate” is
problematic under the PMWA.
25
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• PMWA “regular rate” regulations provide that “[i]f
the employe is paid a flat sum for a day’s work … his
regular rate is determined by totaling all the sums
received at the day rates or job rates in the workweek
and dividing by the total hours actually worked. He
is then entitled to extra half-time
pay at this rate for hours worked
in excess of 40 in the workweek.
34 Pa. Code § 231.43(b).
26
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• Example: Home care worker receives a “day rate” of
$120.00 per day. Works 16-hours per day (excluding
sleep-time) for 7-days in the workweek. Day rate
yields $840 for the week (7 x 120.00). Dept. of
Labor & Industry calculation will yield additional
compensation owed of $270.00.
16 hours x 7 days = 112 hours worked.
Regular rate = $7.50 ($840.00 / 112).
72 overtime hours (112 – 40) x
½ $7.50 = $270.00.
27
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• In light of the “regular rate” regulation under
the PMWA, the payment of a “day rate” is
highly questionable under the PMWA.
• Better approach is to have an
agreement premised on hourly
compensation which expressly
addresses the “sleep time” issue.
28
(1) Hours worked: What time is
Compensable?
24/7 Care: How do I pay my workers?
• “Day rate” solutions under the PMWA.
– Establish a day rate equivalent of $145.00
[(8 x $7.25) + (8 x $10.88)] for the first 5-days of any
workweek.
– Must pay full 16-hours at time and a half minimum wage of
$7.25 or $10.88 for days 6 and 7 in any workweek
($174.08).
– Must have agreement in place with
employee encompassing above and
acknowledging that 8 hours will be
excluded for sleep time.
29
(1) Hours worked: What time is
Compensable?
Overtime Calculation Issues:
• Employees working for two or more clients
with different rate ― What rate to use for
overtime?
• The “regular rate.”
30
(1) Hours worked: What time is
Compensable?
Overtime Calculation Issues:
Amounts included in the “regular rate”:
• All non-discretionary amounts paid to employees
are presumed to be included in the “regular rate”
when computing overtime.
 Shift differentials.
 On-call bonuses.
 Attendance bonuses.
 Retention bonuses.
 Performance bonuses.
31
(1) Hours worked: What time is
Compensable?
Overtime Calculation Issues cont’d …
Hourly Paid Employee: Shift Differentials – An Example.
•
Calculation: Shift differential must be added in the regular rate.
(a) Hourly rate is $8.00.
(b) Shift Differential for evening shift is $1.00/hour.
(c) Employee works 48 hours in the week – 8 overtime hours, and
3 evening shifts.
* 24@ $8.00 hour $ 192.00
* 24@ $9.00 hour 216.00
* T = $408.00 $ 408.00
(d) Overtime premium: 408 ÷ 48= $8.50 regular rate.
(e) Regular rate x½ = overtime premium times
overtime hours:
* $4.25 x 8 = $34.00.
(f) Total compensation for the week: $408.00
(straight time pay)
34.00 (overtime)
•
$442.00
Same analysis if employee working for two clients at different rates.
32
(1) Hours worked: What time is
Compensable?
Comp Time:
• Essentially, comp. time does not
exist for private employers.
• For private employers, the employee must
be given the time off within the
same week in which the
overtime is accrued.
33
(2) Are your “White Collar”
employees really exempt?
•
•
•
Issue spotting …
Understanding salary basis compensation …
Exempt duties … Executive,
Administrative, Professional …
34
(2) “White Collar” Exemptions …
• Section 13(a)(1) of the FLSA provides an exemption
from both minimum wage and overtime pay for
employees who are employed in a bona fide:




Executive;
Administrative;
Professional; or
Outside Sales capacity.
• Certain computer employees may also be
exempt professionals under Section
13(a)(1) or exempt under Section
13(a)(17) of the FLSA.
35
(2) “White Collar” Exemptions …
Three Tests for Exemption:
• Minimum Salary Level;
• Salary Basis Compensation; and
• Exempt Job Duties.
36
(2) “White Collar” Exemptions …
Minimum Salary Level:
• For most employees, the minimum salary level
required for exemption under the FLSA is
$455 per week.
• Must be paid “free and clear.”
37
(2) “White Collar” Exemptions …
Salary Basis Test:
• Regularly receives a predetermined amount of compensation
each pay period (on a weekly or less frequent basis).
• The compensation cannot be reduced because of variations in
the quality or quantity of the work performed.
• Must be paid the full salary for any week
in which the employee performs any
work.
• Need not be paid for any workweek
when no work is performed.
38
(2) “White Collar” Exemptions …
Deductions from Salary:
• An employee is not paid on a salary basis if
deductions from the predetermined salary are made
for absences occasioned by the employer or by the
operating requirements of the business.
• If the employee is ready, willing
and able to work, deductions may
not be made for time when work
is not available.
39
(2) “White Collar” Exemptions …
Permitted Salary Deductions:
There are seven exceptions to the “no pay-docking” rule:
1. Absence from work for one or more full days for
personal reasons, other than sickness or disability.
2. Absence from work for one or more full days due to
sickness or disability if deductions made under a bona
fide plan, policy or practice of providing wage
replacement benefits for these types of
absences.
3. To offset any amounts received as
payment for jury fees, witness fees,
or military pay.
40
(2) “White Collar” Exemptions …
Permitted Salary Deductions cont’d …
4. Penalties imposed in good faith for violating safety
rules of “major significance.”
5. Unpaid disciplinary suspension of one or more full
days imposed in good faith for violations of workplace
conduct rules.
6. Proportionate part of an employee’s full salary may be
paid for time actually worked in the first
and last weeks of employment.
7. Unpaid leave taken pursuant to the
Family and Medical Leave Act.
41
(2) “White Collar” Exemptions …
Additional Compensation:
• An employer may provide compensation in
addition to the $455 minimum guaranteed
weekly salary, such as:
 Commissions;
 bonuses; and
 additional pay based on hours worked
beyond the normal workweek.
42
(2) “White Collar” Exemptions …
Executive Duties:
• Primary duty is management of the enterprise or of
a customarily recognized department or
subdivision;
• Customarily and regularly directs the work of two
or more other employees; and
• Authority to hire or fire other
employees or whose suggestions and
recommendations as to hiring, firing,
advancement, promotion or other
change of status of other employees
are given particular weight.
43
(2) “White Collar” Exemptions …
Primary Duty:
• Employees who spent more than 50% of their time
performing exempt work will generally satisfy the
primary duty requirement under FLSA.
• However, the regulations do not require that exempt
employees spend more than 50% of time
performing exempt work.
• Lower threshold of 20% under
PMWA.
44
(2) “White Collar” Exemptions …
Administrative Duties:
• Whose primary duty is the performance of office
or non-manual work directly related to the
management or general business operations of the
employer or the employer’s customers; and
• Whose primary duty includes
the exercise of discretion and
independent judgment with
respect to matters of significance.
45
(2) “White Collar” Exemptions …
Learned Professional:
• The employee’s primary duty must be the
performance of work requiring advanced
knowledge;
• In a field of science or learning;
• Customarily acquired by a
prolonged course of specialized
intellectual instruction.
46
(2) “White Collar” Exemptions …
Nurses:
• Registered nurses who are registered by the
appropriate State examining board generally meet the
duties requirements for the learned professional
exemption.
 Registered Nurses compensated on an
hourly basis, however, would not be exempt.
• Licensed Practical Nurses generally
do not qualify as exempt learned
professionals.
47
(3) Conflicts between the
Federal FLSA and
Pennsylvania MWA …
48
PMWA conflicts with the FLSA (domestic
services exemption) (as discussed)
• FLSA § 213(a)(15) “companionship services”
exemption interpreted to apply to agency
employers. Long Island Care at Home, Ltd. v.
Coke, 127 S.Ct. 2339 (2007).
• PMWA “domestic services” exemption
interpreted not to apply to agency
employers. Bayada Nurses, Inc. v.
Commonwealth of Pennsylvania
Dept. of Labor and Industry,
8 A.3d 866 (Pa. 2010).
49
PMWA conflicts with the FLSA
(Example: 8/80 Rule)
• Section 207(j) of the FLSA allows a hospital nursing or
other establishment engaged in the care of the sick, aged
or mentally ill to utilize a 14-day “workweek.”
• Pursuant to this rule, employees receive overtime for
hours in excess of 8 in any day or 80 in the 14-day
workweek (the “8/80 Rule”).
• There is no express counterpart to
the 8/80 Rule under the PMWA.
• Issue is currently being litigated
across the state.
• Key: 5 Pa. Dept. of Labor & Industry
letter rulings authorizing the practice.
50
PMWA conflicts with the FLSA
(Example: Computer Professionals)
• The FLSA includes an exemption for
computer professionals. 29 C.F.R. §
541.705.
• There is no exemption for computer
employees under the PMWA.
51
PMWA conflicts with the FLSA
(Misc. Issues)
• Definition of “regular rate” (e.g. how do
we include bonuses, premium payments
etc.)
• Definition of “hours worked” (e.g., how do
we deal with travel time, on-call time, etc.)
• In sum, be careful and always
consider the PMWA when
addressing exemptions from
overtime.
52
(4) Registry v. Agency?
53
(4) Registry v. Agency?
How is the difference defined in the Dept. of Health Regulations?
• Home care agency--An organization that supplies, arranges or
schedules employees to provide home care services, as directed by
the consumer or the consumer’s representative, in the consumer’s
place of residence or other independent living environment for
which the organization receives a fee, consideration or
compensation of any kind.
• Home care registry--An organization or business entity or part of an
organization or business entity that supplies, arranges or refers
independent contractors to provide home care
services, as directed by the consumer or the
consumer’s representative, in the consumer’s
place of residence or other independent living
environment for which the registry receives a fee,
consideration or compensation of any kind.
28 Pa. Code § 611.5
54
(4) Registry v. Agency?
Concerns:
• Can a home care worker legitimately be
characterized as an independent contractor?
• If the home care worker is an “employee,” is
there any possibility of “joint employer” status
with respect to the Registry?
55
(4) Registry v. Agency?
Concerns cont’d …
•
•
•
•
•
•
•
•
Under the FLSA and PMWA, the “economic reality test” will be employed in
determining if an entity is an “employer” or “joint employer.” The relevant
considerations include:
1)
the degree of control exercised by the employer over the workers;
2)
the worker’s opportunity for profit or loss depending upon managerial skill;
3)
the alleged worker’s investment in equipment or material required for the
tasks or the employment of helpers;
4)
whether the service rendered requires special skill;
5)
the degree of permanence of the working
relationship; and
6)
the extent to which the work is an integral part of the
employer’s business.
Commonwealth, Dept. of Labor & Industry, Bureau of
Labor Law Compliance v. Stuber, 822 A.2d 870, 874
(Pa. Cmwlth. 2003) (emphasis added), appeal granted,
577 Pa. 681, 843 A.2d 1239 (2004), affirmed, 580 Pa.
66, 859 A.2d 1253 (2004).
56
(4) Registry v. Agency?
Concerns cont’d …
• Just because Dept. of Health regulations
recognize registries does not mean that the
Dept. of Labor & Industry will not find “joint
employer” status.
• Lawyers are free to argue “joint
employer” status regardless of
views of Dept. of Health or
Labor & Industry.
57
(4) Registry v. Agency?
Concerns cont’d …
• The reason this distinction--independent contractor
(Registry) v. employee (Agency)-- matters:
–
–
–
–
Employment taxes (FIT, FICA, FUTA);
Minimum wage & overtime;
Workers compensation insurance; and
Unemployment compensation
insurance.
• Employees are free to challenge
characterization.
58
(4) Registry v. Agency?
Concerns cont’d …
• The new regulations (28 Pa.Code §§ 611.1 et seq.), which
were published on December 12, 2009, have created additional
responsibilities which “complicate” the registry model.
• Specifically, the registry model is again premised on the care
givers not being employed by the registry, but rather the
consumer.
• The new licensure requirements, however,
obligate the registry to engage in
screening, competency assessments
and supervision.
• These requirements draw into question, at
least, the employment of home care workers
assigned through registries.
59
(4) Registry v. Agency?
The screening regulations require:
(1)
(2)
(3)
(4)
face-to-face interviews;
two satisfactory references;
criminal history report; and
The maintenance of documents confirming
these steps have been taken for each
caregiver.
See 28 Pa.Code § 611.2.
60
(4) Registry v. Agency?
The Competency and Supervisory
regulations require:
(1) Other than nurses, new hires must demonstrate competency
by either passing an exam administered by the
registry/agency addressing certain enumerated core areas, or
independently complete an approved training course such as
a home health aide training program meeting the
requirements of 42 CFR 484.36;
(2) Must also confirm and document competency
through direct observation, testing, training,
consumer feedback or combination of
methods, including annual assessments;
(3) If a HHA is disciplined or sanctioned, then
the foregoing supervision must occur with
greater frequency (more than annually).
61
(4) Registry v. Agency?
• Separate agencies and entities determine whether an
individual is an employee or independent contractor,
such as:
–
–
–
–
PA Dept. of Labor & Industry;
U.S. Dept. of Labor;
The IRS ; and
Judges (via lawsuits).
• The foregoing entities utilize different
tests with respect to independent
contractor v. employee status.
• Fact and circumstance test will be
applied regardless of any contract
or agreement.
62
(4) Registry v. Agency?
• The new and additional supervision
requirements push the independent contractor
envelope and, accordingly, create risk for
entities employing the registry model.
• There is no clear answer yet.
• Unfortunately, uncertainty
breeds litigation.
63
On to the fun stuff …
(5) ERISA Plan Documents:
Why should I care?
64
(5) ERISA Plan Documents: Why
should I care?
What is ERISA?
 The Employee Retirement Income Security Act of
1974, 29 U.S.C. §§ 1001 et seq. (“ERISA”).
 “Pension” and “welfare” plans covered.
 Our focus will be on “welfare
plans.”
 Plan documentation, reporting
and disclosure are key
components to statutory scheme.
65
(5) ERISA Plan Documents: Why
should I care?
• Plans must be maintained in writing.
• Must provide covered employees with a
Summary Plan Description or “SPD.”
• Insurance booklet may include broad coverage
language such as “employees of the
employer” … working 32 hours or more
on average.”
• Problem if your practice is not
consistent with language in
insurance booklet.
66
(5) ERISA Plan Documents: Why
should I care?
Other “welfare plans” subject to ERISA.
• Long Term Disability.
• Short Term Disability (including funded sick leave
banks).
• Life Insurance.
• Vacation Plans (funded).
• Severance Pay Plans (even those not
structured to conform with ERISA) are
covered due to the incorporation by
reference of LMRA § 302(c). 29 C.F.R.
§ 2510.3-1(a)(3); e.g., Blakeman v.
Mead Containers, 779 F.2d 1146, 1149
(6th Cir. 1985).
67
(5) ERISA Plan Documents: Why
should I care?
Homecare considerations:
• If we offer coverage, are we doing so consistently
among caregivers?
• Do our plan documents reflect accurately who is and
who is not covered.
• Does our coverage constitute a “plan” for purposes of
ERISA?
• Are pre-tax contributions being handled
through a § 125 “Cafeteria plan”?
• What are we all going to do if
the Affordable Care Act moves
forward?
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(6)Unemployment compensation:
Should I appeal?
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(6) Unemployment compensation:
Should I appeal?
• The general rule is that an employee is entitled
to unemployment compensation unless (inter alia):
 They have voluntarily left employment without
“compelling and necessitous” reasons;
 Lack of work, perpetual layoffs, and drastic reductions
in hours constitute “necessitous and compelling
reasons” to quit one’s job for purposes
of determining eligibility for
unemployment compensation benefits.
 they have committed “willful
misconduct.”
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(6) Unemployment compensation:
Should I appeal?
• An Employers’ position in challenging the
employee’s unemployment compensation
claims should be consistent with their
reasoning for termination.
• Arguments, testimony and other evidence
offered at the Unemployment Comp.
proceedings often finds its way into
subsequent discrimination litigation.
• In sum, think about it and take your
responses seriously.
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(6) Unemployment compensation:
Should I appeal?
• Many employers will agree to “not oppose” an
application for unemployment compensation
benefits to appease a terminated employee.
• By not responding to the notice of
unemployment compensation claim, the
employer does not make any
statement against interest.
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(6) Unemployment compensation:
Should I appeal?
• Generally speaking, Unemployment
Compensation “Referees” have a propensity to
grant unemployment benefits.
• However, where the employer
suspects a subsequent lawsuit
may ensue, the hearing provides
a good opportunity for
examination of the employee.
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(6) Unemployment compensation:
Should I appeal?
• In sum, the decision to appeal is dependent
upon the circumstances of each case.
• Hard to gauge costs of any specific claim from
an underwriting perspective.
• Be careful not to “invite” litigation.
There are a lot of hungry lawyers
out there with time on their hands.
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(7) Terminating the difficult
employee: How can I
protect against
discrimination claims?
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(7) Terminating the difficult employee: How can
I protect against discrimination claims?
• In sum, you can’t. Frivolous claims not only
persist, but make up the bulk of all filings.
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(7) Terminating the difficult employee: How can
I protect against discrimination claims?
Mitigating risk …
• The manner in which the employee has been
treated in the termination is often more
important to them than the fact of termination.
• The complaint isn’t just, “I can’t
believe they fired me;” more often
it’s, “I can’t believe the way they
treated me when they fired me.”
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(7) Terminating the difficult employee: How can
I protect against discrimination claims?
The following general principles are important to
remember:
 “Winging it” is never a good idea; you only get one chance to make a
last impression.
 Witness!
 If you would not be comfortable explaining your decision in court, you
probably haven’t made the right decision.
 Even if the employee ought to know the reason for termination already,
if “The Question” is asked, it needs to be answered in honest and
concise terms.
 No matter how badly one feels about firing an
employee, apologizing for doing so is never a
good idea.
 Anything you say can and will be used against
you in a court of law.
 Keep it simple. Not an opportunity to debate.
 Don’t sugar coat it!
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(7) Terminating the difficult employee: How can
I protect against discrimination claims?
• If any kind of severance package is being
offered, a release should be included.
• If the employee is over age 40, the release
must conform with the requirements of the
Older Workers Benefits Protection Act.
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(8)
Non-Compete Agreements: Do they
really work?
Yes.
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(8) Non-Compete Agreements: Do
they really work?
As a general rule:
 Non-compete agreements are enforceable where they serve
to protect an employer’s “legitimate business interests.”
 This requires that the agreements be reasonably tailored in
three aspects: geographic scope, duration, and the manner
of activities prohibited.
 There is “no mathematical formula for what makes a
covenant reasonable; rather, the court must
evaluate the specific circumstances of the
case at hand.” Darius Int’l, Inc. v. Young,
2008 U.S. Dist. LEXIS 33489 (E.D.Pa. 2008).
• State laws vary widely on the
enforceability of noncompetition
agreements.
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(8) Non-Compete Agreements: Do
they really work?
• Warning: In Pennsylvania, where an employer fires an
employee for “failing to perform in a manner that promotes the
employer’s business interests,” the employer “deems the
employee worthless” and, therefore, it is “unreasonable as a
matter of law to permit the employer to retain unfettered
control [through a non-compete agreement] over that which it
has effectively discarded as worthless to its legitimate business
interests.” Insulation Corp. of Am. v. Brobston, 667 A.2d 729,
735 (Pa. Super. Ct. 1995) .
• In other words, some courts have held that
where an employee is fired for failure to
perform sufficiently, the non-compete
agreement may not be enforceable.
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(8) Non-Compete Agreements: Do
they really work?
Two types of relief available under a noncompete agreement:
 Relief at Equity: Court forces employee to
terminate his/her employment, and to cease
performing new work for former-employer’s
clients, etc.
 Relief at Law: Court awards
monetary damages suffered by
former-employer. (Usually lost
revenues due to lost clients/
customers.)
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(8) Non-Compete Agreements: Do
they really work?
• Important distinction: Relief at Law (i.e.,
money damages) does not require the court to
weigh the reasonableness of the relevant
restrictions, and rather, merely looks for an
enforceable agreement.
• Accordingly, a non-compete
agreement does, in most
circumstances, “work” (at least
with respect to damages at law).
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(8) Non-Compete Agreements: Do
they really work?
In sum …
• Don’t loose site of “quelling effect” … Employer’s
shy away from employees with covenants and
employees seek to avoid risk of violation …
• Narrowly tailor any non-compete in the homecare
setting when dealing with caregivers.
• Short durations and restrictions limited
to former clients should be construed
as reasonable.
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(9) Recent Changes to NLRB Rules
Affect All Employees -Both Non-Union and Union …
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Introduction …
• In the past year there have been more changes
at the NLRB than perhaps at any time since
passage of the National Labor Relations Act.
These changes have resulted in the NLRB
enforcing laws against non-union employers.
– Social Media …
– Proposed Election Rules …
– Posting Rules …
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Social Media …
• The use of social media by employees may
have replaced the “water cooler” and “happy
hour” as the commonplace to talk (i.e.,
“complain”) about work.
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What is Social Media?
• Social media essentially is a category of online media
where people are talking, participating, sharing,
networking, and bookmarking online.
• Social media is a term for the tools and platforms
people use to publish, converse and share content
online. The tools include blogs, wikis, podcasts, and
sites to share photos and bookmarks.
• Examples: Facebook, Twitter, LinkedIn,
MySpace, Blogs, Wikis, Podcasts.
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NLRA …
• Employers may be violating the National
Labor Relations Act …
– Section 7 of the National labor Relations Act protects
“the right…to form, join, or assist labor
organizations…and to engage in other concerted
activities for the purposes of collective bargaining or
other mutual aid or protection.”
– Section 8(a)(1) states that it is an unfair
labor practice for an employer “to
interfere with, restrain, or coerce
employees in the exercise of their rights
guaranteed in Section 7 of this Act.”
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The Problem …
• Section 7 of the NLRA has for years protected
employees’ “water cooler talk” to share gripes
about work.
• However, yesterday’s water cooler talk is not the
same as broadcasting disparaging comments on
Facebook that could reach millions of people.
• How then does an employer decide
when an employee’s post on social
media constitutes a protected posting
versus an act for which it may
legitimately discipline?
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NLRA
• Key Threshold Considerations:
– Is the content protected (e.g., related to a term or
condition of employment)?
– Is the activity concerted (e.g., does it involve two
or more employees)?
– Who is making the post (e.g., supervisor not
protected by the Act)?
– Would a reasonable employee believe
the policy is meant to chill exercise
of his or her Section 7 rights?
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Proposed Election Rules …
• The new rules “are intended to reduce
unnecessary litigation, [and] streamline preand post election procedures.”
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Proposed Election Rules …
• Time Frame Change
– Currently, the Board’s goal is to hold
representation elections within 42 days from the
filing of the petition.
– As of April 30th, the election will be held 14 to 20
days from the filing of the petition.
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NLRB Notification of Employee
Rights …
• All employers within the jurisdiction of the
Act were to post by April 30, 2012.
• Lawsuits have delayed this posting
requirement.
• On April 17, 2012, the D.C. Circuit Court
enjoined the rule until oral
argument in September 2012.
• Employers may post their own
notice in addition to the Board’s.
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Questions …
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It’s finally over !!!
Thank you for your attention!
Thomas G. Collins, Esquire
Buchanan Ingersoll & Rooney PC
P: 717.237.4843
F: 717.233.0852
E: [email protected]
W: www.bipc.com
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