Duff on Hospitality Law

The Office of Federal Contract Compliance Programs (OFCCP) enforces regulations aimed at federal government contractors, with a specific eye towards preventing both intentional and unintentional employment discrimination based on any protected class (e.g. race, sex, or disability). Many employers think that the OFCCP has no interest in them because they do no business with the federal government. If only it were that easy. Many clients have called after receiving notice that they now are considered a federal contractor because of a service that was purchased by a previously unknown federal government group.

It is important to be aware of your status as a federal contractor because you may need to comply with complex affirmative action practices, including for hiring, and you may need to keep detailed records of your efforts to comply. In addition, OFCCP rules have been changing lately. The new rules expand the affirmative action, non-discrimination, and related record keeping obligations for contractors regarding covered veterans and individuals with disabilities. So, even if you thought you were doing it right – you may need to make changes.

As fast food workers across the country stage walkouts in a push for a $15 hourly wage and the Obama administration renews its call to boost the federal minimum wage, states on the left coast have already embraced employee-friendly increases.

Oregon, the state with the second-highest minimum wage in the country, announced last week that it will raise its minimum wage to $9.10 in 2014. It’s in good company: Oregon’s neighbor to the north just announced that Washington will raise its state minimum wage to $9.32 (the highest in the nation), and Oregon’s neighbor to the south just enacted a law that will hike California’s minimum wage to $10 per hour over the next three years in one dollar increments – from $8 to $9 on July 1, 2014, then to $10 on January 1, 2016.

The Seattle Office of Civil Rights has recently issued proposed rules to implement the Job Assistance Ordinance, which limits the consideration of criminal history information in hiring and employment decisions within the City of Seattle. See my previous post on the topic HERE. The Office of Civil Rights is seeking public comment on these proposed rules.

To Pay or Not to Pay?

As the school year begins again, it is a great time for hoteliers to think about their unpaid internship programs. Unpaid internships can be great symbiotic relationships. College students or individuals trying out new fields are willing to work for free in exchange for real-life work experience and something to add to their resumes. However before accepting free labor, employers must be aware of the potential consequences of this relationship and take steps to ensure their internship program complies with the law.

Jared Van Kirk is a member of Garvey Schubert Barer’s Labor and Employment group and previous blog contributor. Jared has been following City Council discussions surrounding the newly enacted Job Assistance Bill for some time. Thank you, Jared, for this timely and very important update for all hospitality industry employers in Seattle.  – Greg

For businesses that use social media to vet job applicants or to monitor employees, change is afoot. On Tuesday, May 21, Governor Inslee signed into law a bill that makes it illegal for any employer in Washington State to require an employee or applicant to provide access to his or her social media account. This law covers any employer with one or more employees, and it goes into effect July 28, 2013. Here’s the scoop:

The law prohibits employers from requesting, requiring, or coercing a current employee or job applicant into doing any of the following:

• • Giving the employer the login information to a private social media account
  • “Friending” a manager or other third person so the employer can view the individual’s account
  • Requiring that the employee change his or her privacy settings to make the account publicly available
  • Logging into the account in the employer’s presence so as to enable the employer to view the content

The law also expressly prohibits employers from taking any “adverse action” against an employee for refusing to engage in any of these prohibited acts. This means firing, refusing to hire, or disciplining the employee or applicant, or threatening to do so.

There is a narrow exception to the law for when access to an account is necessary for the company to make a factual determination during a workplace investigation. This applies only if the employer has information that leads it to believe (1) that some content on the employee’s account might violate the law, regulatory requirements, or prohibitions against employee misconduct, or (2) that the employee has disclosed the employer’s confidential information on the account. Even under these circumstances, however, the employer still may only ask to view the account – it may not request the employee’s password.

This law does not apply to a work-focused technology platform primarily intended to facilitate communications and collaboration among employees, such as an in-house intranet or social network. It also does not prevent the employer from requesting login information for an account, service, or device the employer provides or pays for or that is only provided by virtue of the employment relationship. The law also will not apply if the employer unintentionally learns an employee’s login information, such as through a company mobile device or program monitoring the employer’s network, so long as the employer does not use the login information to access the employee’s social networking account.

Violations of this law can have serious ramifications.  Employees may bring a civil action against employers who violate the law and, if they win, will be entitled to a $500 statutory penalty, any actual damages suffered, and – importantly – reasonable attorney’s fees and costs. An employer who is sued for a violation but prevails will only be able to recover attorney's fees if it can prove the action was frivolous.

Eleven states have now enacted laws of this nature, and similar legislation is being considered in over thirty more. If you have any questions about this development or how this law impacts your business, please don’t hesitate to contact Diana Shukis or Greg Duff.

Just when it seems that businesses spend more time ensuring employment law compliance than they do on actual business, the Department of Labor (DOL) has announced they intend to increase the frequency of their FMLA audits while also increasing the number of site visits during these audits. What, you may ask, is a FMLA audit and why should I care?

For employers who qualify for the Family Medical Leave Act (“FMLA”) (over 50 employees within a 75 mile radius) the required paperwork is an administrative process and the tracking is done by the Human Resources Department. It is a formality that also provides certain job protections, but it really isn’t that big a deal once the processes are in place. Right? The short answer is, no. The FMLA is form driven and form dependant – but it takes more than the forms to make sure you are complying with the law. Audits of an employer’s FMLA practices are not something new – at least in theory. The DOL has always had the right to conduct audits, but it is not a right often exercised. It has not been unusual to see the EEOC investigating employee claims under the FMLA, but rarely has the DOL investigated. That is about to change.

DOL Branch Chief for FMLA, Diane Dawson, recently announced that the DOL’s national office has instructed the regional offices to identify occasions when an audit would include an on-site visit. These visits could be announced or unannounced. The investigations may be triggered by an employee complaint they were not given all their rights under the FMLA, that they were about to lose their job (or had recently lost their job) due to exercising their rights under the FMLA, or because DOL is seeing a pattern of FMLA issues within the target company. Violating the FMLA can be costly. The employee can sue you and the government can fine you. The DOL is opting to increase the on-site investigations because the actual visit can reduce the time an audit may take. The investigators have ready access to the records, policies and files. More importantly, they have ready access to the employees for a face-to-face discussion while reviewing the forms.

So, what can an employer do to prepare? First and foremost, an employer should be proactive and review their current processes and forms. The DOL forms were updated recently and all employers should be using the updated forms. The current poster should also be placed in the appropriate locations. It is important to note that the poster must be able to be seen by both employees and applicants.

One of the most important things to do is to review (or develop) your FMLA policy. The DOL will start with a review of the policy (and the forms) to ensure the March 2013 regulations are incorporated. So, make sure your policy is up to date. At a minimum, the policy must incorporate issues such as the leave year calculation (calendar, rolling backward, rolling forward), eligibility requirements for leave, the reasons for leave, your call-in procedures, substitution of paid leave, the employee’s obligations in the FMLA process, medical certification process, explanation of intermittent leave and that the employee is responsible for telling you when an absence is covered under approved intermittent leave, benefit rights under leave, fitness for duty requirements and any outside work during FMLA prohibitions.

The rash of NLRB guidance and new protections for employee social media activity discussed in our previous posts may make employers shy about taking corrective action based on an employee’s social media postings. While employers should always be careful in these situations, however, the mere fact that something is posted online does not make it “protected.” Recent examples in the news are a great reminder that where a posting is vulgar, offensive, or airs a petty grievance without implicating employees’ rights to discuss the terms and conditions of employment, the employer can and in many cases should discipline the employee. Where a posting is less offensive, however, the employer should tread carefully, as unpopular personnel decisions can also draw serious scrutiny.

Our Portland, Oregon partner, Joy Ellis, updates us on the very latest news about Portland's Earned Sick Leave Policy. Thank you Joy.

Many companies have heard all the chatter about the changes to the healthcare system under the Affordable Care Act, but really haven’t had the time to figure out what the changes mean to them as an employer. After all, something entitled the “Affordable Care Act” should really just focus on dealing with the out of control costs of medicine and healthcare, right? Oh, if only it were that simple.

One of the biggest issues in healthcare is simply that many people can’t afford the cost of insurance. Additionally, a number of employers do not provide insurance benefits as a part of employment. The ACA attempts to address this problem. Of course, this is not the only issue addressed under the ACA, but for employers, it is one of the major concerns.

The ACA obligations on employers are implemented in stages. The first obligation is already in effect. This requires employers who provide “applicable employer sponsored coverage” to report the aggregate cost of the employer sponsored coverage on an employee’s Form W-2 for the 2012 year. This means the Form W-2 that is issued in January for the prior year, should reflect the cost of coverage under any group health plan made available to the employee by the employer, and which cost is excludable from the employee’s gross income, or would be excludable if it were employer provided coverage. The reportable premium is not impacted by whether the employer or employee bears the cost of the premium. There is a special rule for self-insured plans. If you have a self-insured plan, you should seek guidance on the proper calculations of the applicable premiums. If an employer is required to file fewer than 250 Form W-2s, then they are not subject to this reporting requirement. More information on this requirement can be found in IRS Notice 2012-9. (Specifically, starting on page 6.)