Sometimes, government is thought of as the enforcer of rules.  But sometimes, the government is also in the business of helping businesses too.

The latest example of this is an Employer Resource Guide put out a few weeks ago by the Connecticut Department of Labor. You can download it directly here.  

According to its introduction:

This employer resource guide was created to educate all employers on the wide array of programs, services, and incentives available in Connecticut. This guide will be  periodically updated, and automatically emailed to all registered employers in CTHires, ( www.cthires.com), the Department of Labor’s no cost online job bank. In addition, a link to the resource guide will be available on the Department of Labor’s website, http://www.ctdol.state.ct.us/employerresourceguide.pdf.

For some larger employers, much of the information contained here may not be news. But for others, there are programs that the government runs that may be helpful. For example, if you are struggling financially and may need to do layoffs, the Department’s Rapid Response Team can provide some assistance. There are also shared work programs, which I’ve talked about before, which allow employers to maintain some staff on reduced hours, while affording the employees the opportunity to collect unemployment compensation too.

Overall, the guide provides some very useful materials on programs that sometimes fall below the radar.  If you haven’t taken a look recently at the Department of Labor’s offerings, it’s well worth a few minutes of your time to see if there is a program that matches your company’s needs.

Last week I talked about the new state law regarding pregnancy discrimination that is going into effect on October 1, 2017.  In that post, I mentioned a new notice that was required to comply with the law.

Although there is no set form that is required to be used, the Connecticut Department of Labor has created one that is available for employers to use that will comply with the state law.  It is free to download here.  

Because the content is useful, I’m using it down below so that employers can cut and paste it into a handbook or into a notice to be given to employee upon starting work too.  One can quibble with some of the word phrasings that are used, but overall — and stating the obvious — if you use this, you’ll be in compliance according to the state.

Covered Employers

Each employer with more than 3 employees must comply with these anti-discrimination and reasonable accommodation laws related to an employee or job applicant’s pregnancy, childbirth or related conditions, including lactation.

Prohibition of Discrimination

No employer may discriminate against an employee or job applicant because of her pregnancy, childbirth or other related conditions (e.g., breastfeeding or expressing milk at work).

Prohibited discriminatory conduct includes:

  • Terminating employment because of pregnancy, childbirth or related condition
  • Denying reasonable leave of absence for disability due to pregnancy (e.g., doctor prescribed bed rest during 6-8 week recovery period after birth)*
  • Denying disability or leave benefits accrued under plans maintained by the employer
  • Failing to reinstate employee to original job or equivalent position after leave
  • Limiting, segregating or classifying the employee in a way that would deprive her of employment opportunities
  • Discriminating against her in the terms or conditions of employment

    *Note: There is no requirement that the employee be employed for a certain length of time prior to being granted job protected leave of absence under this law.

Reasonable Accommodation

An employer must provide a reasonable accommodation to an Employee or job applicant due to her pregnancy, childbirth or needing to breastfeed or express milk at work.

Reasonable accommodations include, but are not limited to:

  • Being permitted to sit while working
  • More frequent or longer breaks
  • Periodic rest
  • Assistance with manual labor
  • Job restructuring
  • Light duty assignments
  • Modified work schedules
  • Temporary transfers to less strenuous or less hazardous work
  • Time off to recover from childbirth (prescribed by a Doctor, typically 6-8 weeks)
  • Break time and appropriate facilities (not a bathroom) for expressing milk

Denial of Reasonable Accommodation

No employer may discriminate against employee or job applicant by denying a reasonable accommodation due to pregnancy.

Prohibited discriminatory conduct includes:

  • Failing to make reasonable accommodation (and is not an undue hardship)**
  • Denying job opportunities to employee or job applicant because of request for reasonable accommodation
  • Forcing employee or job applicant to accept a reasonable accommodation when she has no known limitation related to pregnancy or the accommodation is not required to perform the essential duties of job
  • Requiring employee to take a leave of absence where a reasonable accommodation could have been made instead
    ** Note: To demonstrate an undue hardship, the employer must show that the accommodation would require a significant difficulty or expense in light of its circumstances.

Prohibition of Retaliation

Employers are prohibited from retaliating against an employee because of a request for reasonable accommodation.

Notice Requirements

Employers must post and provide this notice to all existing employees by January 28,2018; to an existing employee within 10 days after she notifies the employer of her pregnancy or related conditions; and to new employees upon commencing employment.

Complaint Process

CHRO:

Any employee aggrieved by a violation of these statutes may file a complaint with the Connecticut Commission on Human Rights and Opportunities (CHRO). Complainants have 180 days from the date of the alleged act of discrimination, or from the time that you reasonably became aware of the discrimination, in which to file a complaint. It is illegal for anyone to retaliate against you for filing a complaint. CHRO main number: 860-541-3400 CHRO website: www.ct.gov/chro/site/default.asp CHRO link “How to File a Discrimination Complaint”: http://www.ct.gov/chro/taxonomy/v4_taxonomy.asp? DLN=45570&chroNav=|45570|

DOL:

Additionally, women who are denied the right to breastfeed or express milk at work, or are discriminated or retaliated against for doing so, may also file a complaint with the Connecticut Department of Labor (DOL). DOL phone number: 860-263-6791 DOL complaint form: For English: http://www.ctdol.state.ct.us/wgwkstnd/forms/DOL-80%20fillable.doc For Spanish: http://www.ctdol.state.ct.us/wgwkstnd/forms/DOL-80S%20fillable-Spa.doc

As Connecticut employers of a certain size know, Connecticut implemented Paid Sick Leave recently which affords employees up to five days off a year.   Now, federal contractors (including those in Connecticut) have another layer to deal with. As my colleague Ashley Marshall explains below, paid sick leave will now be a requirement later this year.  Thanks too to my partner Gary Starr who helped pull this together today on short notice.

marshall If we travel back in time to September 2015, President Obama signed Executive Order 13706 (EO) which established a mandate on federal contractors to give their employees up to 56 hours (7 days) of paid sick leave each year.

Today, the Secretary of Labor has issued regulations to implement President Obama’s Executive Order that established a mandate on federal contractors to give their employees up to 56 hours (7 days) of paid sick leave each year.  The regulation goes into effect on November 29, 2016.

Here are some of the highlights:

  1. The Final Rule covers new contracts and replacements for expiring contracts with the fdoctorederal government that result from solicitations on or after January 1, 2017.
  2. Employees will accrue 1 hour of paid sick leave for every 30 hours worked on or in connection with a covered federal contract.
  3. Paid sick leave is capped at 56 hours (7 days) in a year.
  4. Employees may use paid sick leave for their own illnesses or other health care needs, for the care of a loved one who is ill, for preventive health care for themselves or a loved one, for purposes resulting from being the victim of domestic violence, sexual assault, or stalking, or to assist a loved one who is such a victim.
  5. The Final Rule allows for coordination with existing paid time off policies and labor agreements
  6. Employers may require that employees using paid sick leave provide certification from a health care provider of the employee’s need for leave if they use 3 or more days of leave consecutively.

A few other tidbits:

  • Whether an employee has to work a certain number of hours  for coverage depends on whether they work “on” a covered contract or “in connection” with a covered contract.
  • Employees that work “on” a covered contract are those that are performing the specific services called for by the contract. They are covered, regardless of the number of hours worked in a year and regardless of whether they are full or part time.
  • Employees that work “in connection” with a covered contract are  those that perform work activities that are necessary to the performance of the contract, but are not directly engaged in the specific services called for in the contract.  An employee who spends less than 20% of his or her hours working “in connection” with a covered contract in a particular workweek is not covered.

As with many new benefits, employees may try to take advantage of the new regulation, particularly since no medical excuse needs to be provided until the employee is out of work 3 or more days.  Employers are going to need to be vigilant against abuse.

The Final Rule will be published in the Federal Register September 30, 2016, and will go into effect exactly 60 days after its publication. More information can be found on the U.S. Department of Labor’s website in its Fact Sheet and Overview.

starrAs I return from some time off, my colleagues, Gary Starr and Chris Engler, have dug a bit deeper into the Connecticut Supreme Court decision from last week and issued this alert which we have also sent to clients. 

A deeply divided Connecticut Supreme Court recently issued a long-awaited decision, Standard Oil v. Administrator, regarding who is an independent contractor.  The reason this is significant is that companies that utilize the services of independent contractors are not responsible for, among other taxes, unemployment compensation contributions.  The Board of Review of the Employment Security Appeals Division has long interpreted the statute liberally and in this case concluded that the first two prongs of the “ABC” test required that the workers be treated as employees.  The Connecticut Supreme Court overturned that ruling, finding that the workers were indeed independent contractors.

(For background on the cases, see my prior posts here and here.)

The ABC test requires a company seeking an exemption from the tax to meet all aspects of the statute.

  • Part A focuses on the company’s direction and control over the workers.
  • Part B looks at whether the work was performed at the company’s place of business or whether the work performed is integral to the company’s business.
  • Part C, which was not at issue in the case, is focused on whether during and after providing services to the company, the independent contractor held himself out as offering the same services to others and has continued in the business of providing the same services.

Installers/technicians performed installation and repair work on oil furnaces and security systems that were sold by Standard Oil.  Standard Oil treated them as independent contractors.

The Connecticut Supreme Court found that the installers/technicians owned their own tools and vehicles, were licensed and certified, and were not supervised at their worksites by a representative of Standard Oil.  The work of the installers/technicians was not inspected by the company, either during or after the work.  The installers/inspectors were allowed to hire their own assistants.  The installers/technicians were free to accept or reject any assignment without adverse consequences and determined when they were available to work, but once they accepted an assignment, they had to perform the work within the time frame set by the customer and the company.  The installers/technicians performed the same work as part of their own businesses.  The company provided no employee benefits.  The installers/technicians were not required to be trained by the company nor were they required to display the company’s logo on their clothing or vehicles.  They were not paid by the hour.  Each signed an independent contractor agreement.  Based on these factors the Court concluded that the company satisfied the exemption under Part A.

There was a significant dispute between the majority and dissent opinions on whether Part B was satisfied.

The focus of the dispute and the critical factor was whether the work was performed at the company’s “place of business.”  This was a matter of statutory interpretation that involved analyzing the plain words, examining the language in the context of the broader statute, and reviewing the legislative history and case law from other states.

The majority’s ultimate conclusion was that “the meaning of ‘places of business’ in the present context should not be extended to the homes in which the installers/technicians worked, unaccompanied by the [company’s] employees and without . . . supervision.”  Thus, the company satisfied the criteria for the exemption under Part B.

This decision is welcome news for companies that use independent contractors.

But while there is euphoria in the ultimate decision, it is important to realize that Part C was not at issue in the case, but may be for other companies who use independent contractors.

Additionally, the Department of Labor may seek to have the statute amended to reverse this decision and to compel companies to pay into the unemployment compensation trust fund.

For companies who use independent contractors it is critical to obtain and follow legal advice to make sure such relationships can hold up under scrutiny of the ABC test, while also recognizing that federal agencies use other criteria in determining whether the worker is an employee or independent contractor.

GavelConnecticut has pretty strict rules that employers must follow if they want to take deductions off of an employee’s salary.  Typically, an employer must seek CTDOL approval for all sorts of deductions, which I covered back in a 2012 post.

But what happens if an employer makes a mistake on a paycheck and overpays an employee. What then?

That situation is not uncommon. Most of the time, employees will note the mistake and return the money to the employer — no questions asked.

But I’ve heard of other instances where the employee cashes the check and then, say, buys a used car with the mistake.  Or the employee just says no. What then?

Well, I’ve received informal indications from the CTDOL that in those cases, the agency allows for the use of deductions to recover clerical errors.  The employer may try to work out an agreement or payment schedule to recover the money in an orderly manner.

I would add that the employer should really be sure that whatever deductions are made from future salary payments leave enough that the employer is really paying minimum wage for the week.  That should avoid any issue with a claim that minimum wage laws aren’t be followed.

In short, employees don’t get to profit from employer paycheck mistakes and employers are free to engage in a bit of self-help to recover the funds … if it’s really necessary.

Sharon Palmer, the Commissioner of the Connecticut Department of Labor, will retire at the end of this year, news that was first reported by the CT Mirror website.

According to CT Mirror:

In an interview, she described her decision to retire as driven by age and circumstance, not politics or a consequence of overseeing the Department of Labor at a difficult juncture. She laughed and added, however, “It’s tired me out, that’s for sure.”

Governor Dannel Malloy issued a press release announcing the retirement and commending the service of Commissioner Palmer:

Governor Dannel P. Malloy today announced that Connecticut Department of Labor Commissioner Sharon M. Palmer has opted to retire from the agency at the end of this year.  Commissioner Palmer began her position as the head of the department in August 2012 and was reappointed earlier this year when the Governor began his second term in office.

“I have always known Sharon to be an advocate for helping others, and have been impressed with her focus on workforce and education issues in our state, because both create good jobs and deliver a strong economy for Connecticut,” Governor Malloy said.  “Under Sharon’s tenure, many successful employment programs and services were developed and launched. I thank her for her unwavering dedication and her service.”

While Palmer’s background was as a teachers’ union president and AFL-CIO offer, her tenure at the CTDOL was marked by the lack of any major new department worker initiatives similar to those announced on a federal level. Instead, the Department has continued to focus on grants and training programs.

Indeed, while the press release says that the department “ramped up efforts to fight misclassification” of workers as independent contractors, we haven’t seen nearly the same publicity or efforts that have been attached to the United States Department of Labor activities.

Malloy said that a search for her successor begins now and presumably one will be named before Palmer’s departure.

Time to find your happy place.
Time to find your happy place.

Whatever happened to summer vacation? You remember, that downtime, when nothing much happened?

First, there were new proposed OT rules. Then, word came out EARLY (I got an alert at 6a!) today that the U.S. Department of Labor issued new “guidance” that will try to limit the misclassification of employees as indpendent contractors.

The goal is nothing less than ensuring that most of these workers qualify as employees under the federal Fair Labor Standards Act.

Here’s the key quote:

In sum, most workers are employees under the FLSA’s broad definitions… The very broad definition of employment under the FLSA as ‘to suffer or permit to work’ and the act’s intended expansive coverage for workers must be considered when applying the economic realities factors to determine whether a worker is an employee or an independent contractor.

It states elsewhere:

This Administrator’s Interpretation first discusses the pertinent FLSA definitions and the breadth of employment relationships covered by the FLSA. When determining whether a worker is an employee or independent contractor, the application of the economic realities factors should be guided by the FLSA’s statutory directive that the scope of the employment relationship is very broad. This Administrator’s Interpretation then addresses each of the factors, providing citations to case law and examples. All of the factors must be considered in each case, and no one factor (particularly the control factor) is determinative of whether a worker is an employee. Moreover, the factors themselves should not be applied in a mechanical fashion, but with an understanding that the factors are indicators of the broader concept of economic dependence. Ultimately, the goal is not simply to tally which factors are met, but to determine whether the worker is economically dependent on the employer (and thus its employee) or is really in business for him or herself (and thus its independent contractor). The factors are a guide to make this ultimate determination of economic dependence or independence.

I’ve talked about the economic realities test before.  This not a new issue.

In fact, the USDOL had a fact sheet in 2014 stating almost the exact same thing.

But the USDOL’s new “interpretation” is certainly going to force employers to take a new look at their relationships to determine whether independent contractors should be better classified as employees.  And it’s going to raise some questions on enforcement as well.

So, to remind you, what are those factors under the “economic realities” test?

  1. Is the work an integral part of the employer’s business?
  2. Does the worker’s managerial skill affect the worker’s opportunity for profit or loss?
  3. How does the worker’s relative investment compare to the employer’s investment?
  4. Does the work performed require special skill and initiative?
  5. Is the relationship between the worker and the employer permanent or indefinite?
  6. What is the nature and degree of the employer’s control?

But, and here’s where we all need to take a deep breath, this type of analysis isn’t all that new or surprising.  Courts have been using it for a while.  And it shouldn’t cause you to drop everything you’re doing today to look at this.

In fact, if you’re in Connecticut, I would actually suggest taking an even deeper breath because the issue is even more complicated than that.

There is a case now pending at the Connecticut Supreme Court — Standard Oil of Connecticut v. Administrator, Unemployment Compensation Act, that is examining whether certain contractors are “employees” under a different test — the ABC Test, and the proper application of that test under Connecticut’s own misclassification laws).

As explained by the CTDOL:

The ABC Test applies three factors (A, B, and C) for determining a worker’s employment status. To be considered an “independent contractor,” an individual must meet  all three of the following factors:
A. The individual must be free from direction and control (work independently) in  connection with the performance of the service, both under his or her contract of hire and in fact;
B. The individual’s service must be performed either outside the  usual course of business of the employer or outside all the employer’s places of business; and
C. The individual must be customarily engaged in an independently established trade, occupation, profession or business of the same nature as the service performed

Yes, in addition to the USDOL’s “Economic Realities” test, the Connecticut Department of Labor uses a different test for unemployment compensation purposes named the “ABC” test.

And don’t even get me started on the IRS’s “20 factor” test.

Are you in your happy place yet?

Maybe it’s time for that vacation after all.

Or, if you’re an employer, just take this latest news in stride. If you have independent contractors, the guidance is really just another reminder that the use of these contractors continues to be heavily disfavored by government agencies.

But if you’ve been reading this blog (see this post, for example, from 2010), you’ve known that, right?

One of the better programs run by the Connecticut Department of Labor that gets almost zero publicity is the “Shared Work” program.  For employers, it’s a useful tool when you’re dealing with a temporary slowdown in work.

I talked about it five (!) years ago in the midst of the recession so I’m not going to rehash it here.

But here’s what’s new:

The CTDOL just released new regulations to make the program available to more employers and released a new brochure about the program as well. As the CTDOL stated in a press release this month:

As a result of recent changes to the state’s Shared Work Program, eligibility criteria for employers qualified to participate in this unemployment insurance program has expanded and now offers companies more opportunities to take part in the program and thus avoid laying off skilled workers.

The state’s Shared Work program, administered by the Connecticut Department of Labor, can provide partial unemployment benefits to employees when a company is experiencing a temporary economic downturn and wants to avoid layoffs. The goal is to retain skilled workers so companies can quickly return to full strength when the business climate has improved.

As of July 1, employers now qualify for the program when faced with the need to reduce the hours of its permanent full-time and/or part-time workforce by 10 to 60 percent. Prior to the change, companies could only qualify if work hours were reduced between 20 and 40 percent, and eligible employees were required to be full-time workers.

According to State Labor Commissioner Sharon M. Palmer, the program now allows a company to apply if it has at least two employees affected by the change in hours worked. Prior to the July 1 change, the minimum requirement for eligibility was four employees. In addition, the Labor Department will also be able to provide a dependency allowance to those employees taking part in the program that have qualifying dependents on their unemployment insurance claim.

In other words, if you were interested in the program before but didn’t think your business qualified, you may want to look at it again.

While not widespread, the program does have the involvement of over 100 employers in the state.  For more information about the program, contact your local counsel or contact the Connecticut Department of Labor.

In helping employers on wage and hour issues, I’m struck sometimes by the occasional failure to maintain proper records on their employees.

For employers, payroll companies now offer to help an employer with such records and can often provide some of the information once the employer shares it with them.

The Connecticut Department of Labor lists eight types of wage & hour records that all employers, regardless of size must keep. They are:

  • The employee’s name and address.
  • The employee’s occupation.
  • The total daily and total weekly hours worked, showing the beginning and ending time of each work period, computed to the nearest unit of 15 minutes.
  • The total hourly, daily or weekly basic wage.
  • The overtime wage as a separate item from the basic wage.
  • Additions to, or deductions from, wages each pay period.
  • Total wages paid each pay period.
  • Working papers/statements of age for each employee under the age of 18.

The employer must maintain these records on their premises, though I haven’t heard of the Department coming down on an employer when such records are maintained electronically in the “cloud” — which is technically off-site.

But employers should consider going beyond the minimum.  If the Department of Labor does decide to do an investigation, it is likely that they will seek the following eight types of documents, at a minimum: Continue Reading Sixteen Types of Wage & Hour Records Employers Need to Keep

A federal court judge this week rejected claims by the Connecticut Department of Labor that a company’s failure to pay a performance based bonus constituted a failure to pay wages.  In doing so, the Court appears to be in line with recent Connecticut Supreme Court precedents rejecting such claims as well.

In State of Connecticut Commissioner of Labor v. Chubb Group of Insurance Companies (download here), the CTDOL alleged that Chubb failed to pay an employee performance-based incentive wages for 2008 pursuant to the company’s Annual Incentive Compensation Plan. Under the Plan, the Organization and Compensation Committee of Chubb‟s Board of Directors “may reduce or eliminate any Award under the plan, . . . .”

As I’ve addressed in previous posts, a key factor in whether a bonus should constitute wages is whether the bonus is discretionary in nature.  The District Court adopted that logic in rejecting the CTDOL’s claims rather easily.

The Plan explicitly provided that the committee may reduce or eliminate any award under the Plan. This language makes the bonus discretionary, both as to whether it should be awarded and, if so, the amount to be awarded.

The Court also rejected claims by the CTDOL that it had the authority to bring the claim by a separate state statute. The problem with such a claim, the court said, is that the authority is still limited to claim to collect unpaid wages. Because the bonus is not a “wage”, there is still no authority for the CTDOL.

For employers, this case should again reinforce the fact that any bonus plans that you have should be reviewed by legal counsel.  Importantly, if the employer wants to provide some discretion in the payment of bonuses, it can reserve that right — but it has to be done carefully and explicitly.