Source: HR.BLR.com, 1/14/2010
Compensation laws are changing, and the changes will likely mean you’ll do things differently. The recent Ledbetter decision may have you scrambling to document pay decisions better and keep the records longer (or indefinitely). What you may not know is that these decisions could have an impact on your overall human resources function.
Stephanie Thomas, director of the Equal Employment Advisory and Litigation Support Division for Minimax Consulting LLC (www.minimaxconsulting.com), wants to help you ward off problems you may not have even thought about. She is concerned with two little words in the Lilly Ledbetter Fair Pay Act, the (January 2009) legislation that discusses unlawful employment practices and how they impact compensation. The Act essentially says it is unlawful to make compensation decisions based on discriminatory decisions or other practices. What, exactly, are those other practices?
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U.S. Secretary of Labor Hilda Solis recently announced the hiring of an additional 250 wage and hour investigators, as well as plans for a new public awareness campaign on worker rights, expected to launch in 2010.
The hiring effort at the Wage and Hour Division (WHD) represents a staff increase of more than 30%, a move that will likely improve DOL’s top priority of protecting worker rights by allowing faster response to complaints of wage violations and more deliberate enforcement. Solis’ message is clear: “Failure to comply with these basic labor standards means that workers are not receiving the money they have earned,” and the department “will not rest until the law is followed by every employer, and each worker is treated and compensated fairly.”
Historically, the WHD has announced impressive recovery efforts, claiming that more than $185 million in back wages were restored to workers in the 2008 fiscal year.
Solis also unveiled details of “We Can Help”, a program slated for early 2010 through which the department will work to inform workers of their labor rights.
Of course the best defense against run-ins with the Wage and Hour Division is to establish and follow legal, documented policies regarding payment of wages. HRN’s HR Suite is an online human resource compliance solution that addresses wage and hour compliance and many other critical areas of human resource management.
In the recently decided case U.S. Gross v. FBL Financial Services, Inc., the U.S. Supreme Court ruled that a plaintiff bringing an age discrimination case must prove that but for his age, the adverse job action at issue would not have happened. Consequently, it’s no longer enough for a plaintiff to show that age discrimination was just a “motivating factor” or there was a “mixed motive.” The decision makes it much easier for employers to win age bias cases as they are only liable for discriminatory conduct that actually causes an adverse action.
However, employers may not benefit from this ruling for long. Congress is already talking about reversing it through legislation.
An Indiana federal court found that an employee’s remarks to her supervisor at a holiday party that she wanted to start a family would entitle her to protection under the Pregnancy Discrimination Act. The intention to become pregnant places an employee in a protected class. However, the court found that the company had a legitimate reason for firing the plaintiff due to poor performance. The employee had received below average individual and team performance reviews, poor sales reports, and had made personal charges on her company credit card, in violation of policy. As a result of good documentation, the company was successfully able to defend the discrimination case as well as related retaliation claims. [Batchelor v. Merck & Co. N.D. Ind.]
Managers, HR staff, and business owners are well aware that their organizations can be sued by employees, applicants, and ex-employees for a variety of reasons from discrimination, to overtime violations to safety issues. But if you are a manager can you be sued as an individual as well?
Yes, You Can Be Personally Liable in Some Situations
- Discrimination Law
The good news is that the majority of federal Circuit Courts of Appeal have found that there is no personal liability in discrimination cases brought under Title VII (e.g., race, sex, religion, etc.), The Age Discrimination in Employment Act, and the Americans with Disabilities Act. The statutes are similar and the definition of “employer” under each of them is not interpreted as intended to apply to individuals.
The bad news is that many state courts have found individual liability under state discrimination laws. State law claims are typically included with federal claims. Also, public sector managers may be liable under Section 1983 of the Civil Rights Act of 1871.
- Fair Labor Standards Act
Managers can be individually liable under the FLSA as that statute defines an employer as “any person acting directly or indirectly in the interest of an employer in relation to an employee.” The Equal Pay Act, which is part of the FLSA, provides for similar liability. FLSA lawsuits (especially class actions) have spiked recently and are an increasing source of risk for employers generally.
- Family and Medical Leave Act
The FMLA is based on the FLSA. Consequently, in the majority of the courts that have examined the issue, personal liability of managers has been found. Possible liability under the FMLA might be particularly troubling, given the complexity of the FMLA and how commonly managers as well as HR people are involved in FMLA actions.
- COBRA, ERISA & HIPAA
Both COBRA and ERISA impose individual liability on those who act as plan administrators. Liability for actions under HIPAA may also exist.
- State Common Law Claims
State common law claims, based on case law not statute, can be another source of personal liability. They can include such things as wrongful termination, intention/infliction of emotional distress, defamation or invasion of privacy.
- Criminal Liability
Going through the trauma of being named in a lawsuit and facing possible financial penalties are bad enough, but could you really go to the slammer or face other criminal penalties? While certainly not a common occurrence it is possible that managers could be subject to criminal liability in certain circumstances. Some examples could include: charges of obstruction of justice (e.g., destroying documents or making false statements), OSHA violations, or immigration related charges.
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On April 1, 2009 the U.S. Supreme Court found that a collective bargaining provision that requires employees to arbitrate age discrimination claims is enforceable. While the issue in 14 Penn Plaza LLC v. Pyett involved age discrimination, it is likely that employers in union environments could also require employees to arbitrate other types of discrimination and workforce claims. The Court was clear, however, that in order to use arbitration and avoid litigation, the employer and union must have “clearly and unmistakably” agreed that grievance and arbitration procedures must be used. Although there are still unresolved issues, the decision makes clear that the Court views arbitration as an acceptable means to address employment disputes.
We knew that HR law would change with a Democratic Congress and administration. Well, the changes have begun.
President Obama has signed the Lilly Ledbetter Fair Pay Act into law. The law overrules the 2007 Supreme Court decision of Ledbetter v. Goodyear Tire & Rubber Company, Inc., making it easier for employees to bring discrimination cases by allowing them more time to do so.
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We knew that HR law would change with a Democratic Congress and administration. Well, the changes have begun. President Obama has signed the Lilly Ledbetter Fair Pay Act into law. The law overrules the 2007 Supreme Court decision of Ledbetter v. Goodyear Tire & Rubber Company, Inc., making it easier for employees to bring discrimination cases by allowing them more time to do so. The Act effectively increases the statute of limitations (or deadline) for filing federal pay discrimination claims, including those under Title VII, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA) and the Rehabilitation Act. The Supreme Court had said that an employee must file a discrimination claim within 300/180 days of the company’s initial act of pay discrimination. Supporters of the Ledbetter law have argued that employees may not even be aware that pay discrimination has occurred until years later and so would be essentially foreclosed from taking legal action.
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Who knew that there would be HR lessons to be found in the world of porta potties? Apparently wage and hour law knows no bounds. According to the New York Daily News, a portable potty company, Call-A-Head, has found itself in the middle of a class action lawsuit. Employees claim that they were required to clean 100 toilets each day, which often took 15 hours to complete although they were paid for 10 hours daily. It’s alleged that the company had used hiring ads offering to pay $1000 weekly for 4 ten hour days of work. It is also claimed that employees were required to clock in but couldn’t clock out. The employees are seeking back overtime which could be over $1 million. The company denies the charges.
What can be learned from this case so that you can avoid flushing your profits along with your reputation in a Fair Labor Standards Act (FLSA) lawsuit?
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