Connecticut Employment Law Blog : Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

Department of Labor Commissioner Patricia Mayfield -- who had signaled that she was retiring as of February 1st -- died yesterday at her home in Waterbury of an undisclosed illness.  In her place, Linda Agnew, of West Hartford, will serve as acting commissioner.

The Hartford Courant has a full report on her life and accomplishments here.  And the Waterbury Republican-American does an admirable job providing some personal anecdotes about Ms. Mayfield as a person and leader. 

Ms. Mayfield has had to manage the agency in difficult economic times. Yet despite the challenges, in recent years there has been a noticeable uptick in the amount of outreach that the DOL has done to the public and to businesses. 

Indeed, as she noted in her website page, she touted the ability of the DOL to serve as a partner to the business community for "job-related consulting services, apprenticeship programs, recruiting services through the job bank and the One-Stop Centers, OSHA assistance, regulations, wage and workplace standards, rapid response to company downsizing or closure, shared work programs, and labor market information." 

The DOL's ramped-up use of the shared work program --- while not new -- has been ramped up over the last 2 years in response to the desire from employers to minimize job losses and keep continuity in their business operations.  That program has no doubt kept hundreds, if not thousands, of people from losing their jobs entirely.

Governor Rell's statement goes a long way to explaining what made Ms. Mayfield special:

Her distinguished career with the state of Connecticut stood as an outstanding example of dedicated public service and consummate professionalism...Pat Mayfield deeply cared for the people she served, and she made a difference in the lives of countless Connecticut citizens.

Well said.

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Several weeks after the passage of an extension of the COBRA subsidy provisions, the United States Department of Labor has finally released its model notices for employers to use.  

All of them are available here. 

There are three such forms, a General Notice form, a Premium Assistance Extension Notice, and an Updated Alternative Notice. 

The Department of Labor describes the differences and the uses for each of them:

• Plans subject to the Federal COBRA provisions must provide the updated General Notice to all qualified beneficiaries (not just covered employees) who experienced a qualifying event at any time from September 1, 2008 through February 28, 2010, regardless of the type of qualifying event, and who have not yet been provided an election notice. This model notice includes updated information on the premium reduction as well as information required in a COBRA election notice.

Note: Individuals who experienced a qualifying event (that was a termination of employment) in December 2009 but who were not eligible for COBRA coverage until January 2010 were likely not provided proper notice. These individuals should get the updated General Notice AND the full 60 days from the date the updated notice is provided to make a COBRA election.

• Plan administrators must provide notice to certain individuals who have already been provided a COBRA election notice that did not include information regarding ARRA, as amended. This model Premium Assistance Extension Notice includes information about the changes made to the premium reduction provisions of ARRA by the 2010 DOD Act. Listed below are the affected individuals and the associated timing requirements.

-- Individuals who were "assistance eligible individuals" as of October 31, 2009 (unless they are in a transition period - see below), and individuals who experienced a termination of employment on or after October 31, 2009 and lost health coverage (unless they were already provided a timely, updated General Notice) must be provided notice of the changes made to the premium reduction provisions of ARRA by the 2010 DOD Act by February 17, 2010;
-- Individuals who are in a "transition period" must be provided this notice within 60 days of the first day of the transition period. An individual's "transition period" is the period that begins immediately after the end of the maximum number of months (generally nine) of premium reduction available under ARRA prior to its amendment. An individual is in a transition period only if the premium reduction provisions would continue to apply due to the extension from nine to 15 months and they otherwise remain eligible for the premium reduction.

Note: To some extent, the groups listed above overlap - creating a situation where an individual may be entitled to multiple notices. Providing the Premium Assistance Extension Notice by the earliest date required will satisfy the notice requirement(s).

• Insurance issuers that provide group health insurance coverage must send the updated Alternative Notice to persons who became eligible for continuation coverage under a State law. 

A lot to take in at once, but employers who have done a reduction in force recently or who have had former employees whose COBRA subsidy eligibility had expired should start preparing these notices as soon as possible.

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This year, the U.S. Department of Labor has taken great strides to modernize the office and better serve the public.  The new website is only part of that.

This week, the DOL has begun a series of webchats with the public discuss the 2010 regulatory agenda and other issues facing the Department of Labor. They continue through Wednesday. You can find them all here.

You can also submit questions to the DOL via Twitter using the hashtag #dolregs to designate your post.  (If you have no idea what a hashtag is, check out this article). 

While the chats themselves are fairly ornery (after all, the DOL isn't going to announce new policies in a webchat just yet), they do provide some nuggets of information to employers. For example, in Monday's webchat, DOL Secretary Hilda Solis only briefly touched on the Employee Free Choice Act, saying that it was in Congress's hands.  Some have interpreted this as a less-than-ringing endorsement of the bill. 

In the Wage & Hour chat, the DOL reiterated that it is in the midst of training up to 250 new investigators who will ramp up enforcement of various wage and hour laws. Industries that employ "vulnerable workers" will be targeted and will include include agriculture, restaurants, janitorial, construction and car washes, among others.

During the webchat, I had an opportunity to inquiry about the DOL's efforts to update their FLSA recordkeeping regulations to address the storage of electronic records, particularly those that may be stored in the cloud. In response, the DOL indicated it is still identifying priorities for its agenda:

While we have not yet issued a proposed rule, we intend to propose regulations on FLSA recordkeeping to promote transparency and encourage greater compliance. We would encourage you to submit your comments through the formal comment process, so they can be properly considered, when the rule is proposed. You can find WHD's proposed regulations at www.regulations.gov.

These webchats are hardly perfect.  Because they are recorded, it's obvious the DOL is taking a rigid approach to its responses. Nevertheless, more transparency is better than none and hopefully, it is another step in the DOL's embrace of social media to provide more information to the public in an unfilted fashion.

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The Connecticut Department of Labor recently announced a new series of seminars for employers on a variety of the "basics" of Connecticut employment law.  They will be held on :

• November 13, 2009 - Introduction to Employment Law
• December 11, 2009 - Complying with Connecticut Drug Testing Laws
• January 8, 2010 - Complying with Connecticut's Family & Medical Leave Act
• February 5, 2010 - The Essentials of Connecticut Wage and Hour Law
• March 12, 2010 - Unemployment Insurance 101

The cost of each seminar is just $25 and the programs run for about 2 hours.  You can find all the details and register at the Department's website here. 

Kudos to the DOL to providing a low-cost service to employers to educate them on some of the basics of employment law. 

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Last week, we held our monthly webinar on the interplay between the state and federal FMLA rules and featured Connecticut Department of Labor Principal Attorney Heidi Lane as a guest speaker.  We had another huge crowd for program.

As we have done before, we have recorded the webinar and uploaded the presentation materials for those that might have missed it. Specifically, you can download for personal use only:

• The presentation slides from the Connecticut Department of Labor;
• Pullman & Comley slides detailing the key differences between state and federal FMLA as well as some action steps employers can take in response;
• And the recorded webinar (note, because of its size and bandwidth restrictions, there are limited number of downloads for a while. So check back again later if you cannot download it immediately) .

Our next webinar is set for October 14th at noon with a new topic to be announced soon. 

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UPDATED 8/27/09

Continuing our weekly series on "The Basics" of different employment laws, this week we'll look at a great resource set up by the Connecticut Department of Labor that provides employers with useful information about the "basics" of various wage and workplace laws in Connecticut.

This relatively new document (which can be accessed either online or downloaded as a PDF) entitled "A Guide to Wage and Workplace Standards Division and Its Laws", is designed to answer some basic questions for employers on everything from overtime requirements to record-keeping.

The Department of Labor's Director, Gary Pechie, describes the motivation behind the project in a message:

One of our primary goals has been to deliver our services efficiently and in a timely manner and what better way than through our Website? It provides a wealth of information as well as permitting employers to access our services such as requesting sample deduction forms, keeping records other than at the place of employment, and requesting permission to pay other than weekly by simply e-mailing us.

Notably, the guide contains a "key points" that employers (and employees) should take away from the guide. Many of these points should be familiar to employers; if not, then the guide should quickly be a must-read on how to get into compliance under state law.  The key areas are: 

• Employers are required to pay non-exempt employees at least the minimum wage.
• Employers are required to pay non-exempt employees time and one-half their regular rate of pay for hours worked over 40 in a week.
• Employers are required to maintain true and accurate time records on all non-exempt employees.
• Discussion of the definition of executive, administrative and professional employees (exempt employees). Salary by itself does not make an employee exempt from minimum wage, overtime, and record-keeping.
• Requirement to pay wages weekly and/or how to obtain a waiver of this provision.
• Deductions, other than those permitted by state or federal law, must be on a form approved by the Labor Commissioner.

I applaud the Department's efforts to try to make this information accessible and understandable to a wide segment of public. 

My only complaint is that it is nearly impossible to find on the Department's website. It is buried deep in the Wage & Workplace Standards page under a simple "General Information" tab.

Because I know there are several DOL employees who are avid readers of the blog, here's my open request to them: How about moving this information front and center so EVERYONE can take advantage of this great resource?

[UPDATE 8/27/09 - Kudos to the Department of Labor! They now feature a link to the publication prominently at the top "Wage and Workplace Standards" page. You can still view the document here.]

And for employers, consider yourself warned -- Don't miss out on this free resource put out by the Department. (For another great resource, check out the "cheat sheets" on various employment laws put out by Martk Toth of the excellent Manpower Employment Blawg.)

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Last month, I discussed the topic of furloughs, which have become an attractive option to employers in lieu of layoffs.

Recently, the United States Department of Labor issued a "fact sheet" that provided additional guidance for employers to some frequently asked questions on the topic. 

As the Employer Law Report said,  "While the fact sheet contains no new law or interpretation, in these economic times, it is extremely helpful for employers to have the DOL’s prior guidance on these issues consolidated in one sheet."

Among the questions that the guidance seeks to address:

• If an employer is having trouble meeting payroll, do they need to pay non-exempt employees on the regular payday? (Yes)
   
• Is it legal for an employer to reduce the wages or number of hours of an hourly employee? (Yes, if minimum wage and overtime laws are followed)
   
• Does an employer need to pay an hourly employee for a full day of work if he or she was scheduled for a full day but only worked a partial day due to lack of work? (No)
   
• In general, can an employer reduce an otherwise exempt employee’s salary due to a slowdown in business? (Not for back work, though an employer and prospectively reduce future compensation so long as other tests are met.) 
   
• Can an employer reduce the leave of a salaried exempt employee? (Yes, though in Connecticut, consider whether such leave is akin to accrued vacation.) 
   
• Can a salaried exempt employee volunteer to take time off due to lack of work? (Yes, which allows an employer to deduct for a full day absence, but the voluntary nature of this will be challenged greatly.)  

Employers in Connecticut should continue to be aware that state labor laws may apply as well. (There are other options for companies facing difficult economic times, as well, such as the shared work program.) But the newest guidance provided by the U.S. Department of Labor will be a good start for employers having to deal with this thorny issue.

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 A few months ago, I noted that Connecticut's Department of Labor has had a long-standing (but, until recently, little-used) work-share program under the title of the Shared Work program.  

The Connecticut DOL describes it as:

a voluntary program providing an alternative to layoffs for employers faced with a temporary decline in business. Rather than laying off a percentage of the work force to cut costs, an employer may reduce the hours and wages of all or a particular group of employees. The employees whose hours and wages are reduced can receive partial unemployment insurance benefits to supplement their lost wages. These partial benefits are made possible through special eligibility regulations governing the Shared Work Unemployment Compensation Program.

On Tuesday, The New York Times profiles the Connecticut program and others saying that "many are turning to a novel but unheralded program that cuts their costs while sparing their workers’ jobs."

Putting aside for the moment the specious claim of "many", the article does say that as many as 5000 Connecticut employees are in the program, up from just 250 a year ago.  

So, does it work?  Well, the answer is not that clear cut yet, at least according to the article. But some executives believe in the benefits:

Several executives that use work-sharing explained companies’ choices. Needing to cut payroll by 10 percent for six months, recession-plagued managers could lay off 10 percent of their workers, perhaps incurring anger and heavy severance payments. Or they could use work-sharing, avoiding severance payments and the expense of rehiring and retraining later.

“Just the ability to hang on to people in tough times and not force them out the door is good for morale,” said David Edgar, vice president for human resources at Reflexite, a manufacturer based in Avon, Conn., that makes reflective material for highway signs, motorcycle helmets and roadwork vests.

The Connecticut DOL does indicate that it believes employers can recognize the following advantages to using the program:

• Retain all workers
• Maintain the continuity in your skilled work force.
• Be prepared for business upswings because your work force remains in place.
• Avoid the time and expense of training new employees when business turns around.
• Foster better morale in your employees because you avoid the insecurity, unrest, and bumping characteristic of most layoffs.

For employers who are continuing to struggle through this recession, having more options is never a bad thing.

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UPDATED

Over the last 24 hours, it seems that every politician is decrying the use of Connecticut wage and hour laws as apparent support for AIG's payout of various retention payments. Connecticut Attorney General Richard Blumenthal's comments are among the most pointed, according to Capitol Watch:

"I have significant doubts about the validity of AIG's claims that they are required by Connecticut law to pay these outrageous bonuses,'' Blumenthal said. "AIG is shamelessly shielding itself behind the Connecticut Wage Act -- a joke of a justification for squandering scarce taxpayer resources.''

One reporter has even called Connecticut's wage laws, an "obscure" law.  But that would likely be news to the Connecticut Department of Labor which features that law prominently in the materials about the subject in its website. 

So, what IS the law that everyone keeps referencing? Well, the main provision is Conn. Gen. Stat. Sec. 31-72. That law states, in part:

When any employer fails to pay an employee wages in accordance with the provisions of sections 31-71a to 31-71i, inclusive, ...., such employee ... may recover, in a civil action, twice the full amount of such wages, with costs and such reasonable attorney's fees as may be allowed by the court...  

In plain English, what this means is that if an employer does not pay an employee "wages", that employee can sue the company and MAY recover twice the amount of wages that should have been paid. 

And what's a "wage"? Well, Conn. Gen. Stat. Sec. 31-71a(3) defines it as "compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation."  As I've discussed in prior posts, some (but not all) bonuses are treated as "wages" and therefore, employees may sue under this statute. 

That view was confirmed in a quote from an unnamed Department of Labor official in today's Courant: 

"Our first step is to determine if the bonus is a wage," said a state Department of Labor official.  "If it's a wage, it's based on performance, production and efficiency"" the official said. "It has to tie directly to your performance, that you met certain standards and certain goals in order to turn that into a wage. ... Companywide performance is less likely to be a wage."

What's left unanswered in the whole debate though is why Connecticut's wage and hour laws should NOT apply here.  Is Connecticut now saying that retention payments are never "wages" or just not in this case?  Is it simply the amounts of the payments that make such payments intolerable here?

Of course, that's not to say that of an employee's right to be paid under a contract is absolute. But existing laws don't make it easy to get around that right.  Slate has a good column that suggests several legal theories that may be out there to attempt to break or avoid such contracts.  (And, as I said yesterday, I'll leave it to others to opine on whether the payments here were proper or not.)  The New York Times has a very good series of columns about whether the contracts can be broken as well. 

One thing is certain: The debate over these payouts is far from over. And Connecticut's wage laws are likely to never be the same again.

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There are a lot of sleepy Connecticut basketball fans this morning, with the game against Syracuse last night (and this morning) going into SIX overtimes.  Those of us staying up until nearly 1:30 a.m. to watch the second-longest game in NCAA basketball history will remember that game for a long time. 

With overtime on my mind, it's a good time to address two simple issues that sometimes arise in Connecticut:

• What's the difference between daily overtime and weekly overtime?
• And does Connecticut have a "daily" overtime rule?

"Daily" overtime is a concept that a non-exempt employee who works more than 8 hours in a day (or perhaps on a weekend day or holiday) is due an overtime rate of time-and-a-half of regular hour rate.  Some states have imposed this rule."Weekly" overtime is the more commonly understood concept that an non-exempt employee is only due an overtime rate of pay after working more than 40 hours during a week.

Connecticut's Department of Labor quite succinctly states that Connecticut does not have an "daily" overtime rule, absent some contractual arrangement.  Instead, Connecticut follows a weekly overtime rule, that can be found at Conn. Gen. Stat. Sec. 31-76b. 

Thus, if there were non-exempt employees in Connecticut who had to work late last night because of the basketball game, they are only going to be eligible for overtime if they work more than 40 hours during this week (or there was some other type of contract, like a collective bargaining agreement, that mandated it).

And if you see some people napping around the office today, have some sympathy for them too. Staying up late didn't help UConn's cause; they lost 127-117. 

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The Connecticut Department of Labor late today posted brand-new guidance (available here) comparing the new federal FMLA regulations with the existing Connecticut regulations.   For employers struggling to adopt the new FMLA regulations with Connecticut's FMLA rules, this document is a must-read because there are some very real and significant differences now that will arise --- at least until those differences are handled via statutory and regulatory amendments.   

A little background first: the 30 page document is the work of Attorneys Heidi Lane and Jennifer Devine in the Office of Program Policy who enforce the CFMLA on a daily basis.  The document, as noted in the cover, is an attempt to provide Connecticut employers with as much information as possible to modify their policies.

But as the cover also explains, there is likely to be a formal rule-making change (with appropriate notice period) this year to address some of the differences that are now arising between federal and Connecticut regulations.  The Department will also be holding a seminar on the interplay between federal and Connecticut regulations on February 26, 2009 for a nominal fee of $25.

Overall, the document notes that some changes can be adopted immediately because they conform to the "practice" of the Department of Labor or are a "reasonable interpretation". Other provisions cannot, particularly because Connecticut's FMLA statute and regulations are just different. A rule of thumb is that where the state regulations are more favorable to the employee, those state provisions will be followed. 

Because of that "rule of thumb", employers now need to be very cautious in adopting the new federal regulations. Indeed, all of the regulatory changes that were favorable to employees (or at least neutral) will be followed by the CTDOL, but all of the federal FMLA changes that were favorable to employers will not.  [This is not the Department's fault, per se, but rather the way Connecticut's statute has been written.] So, that change to the "perfect attendance" bonus rule under federal law? Out. That provision allowing employers five business days to give notice to affected employees, instead of two? Gone as well.

So what are some of the highlights?

• The CTDOL will allow for the adoption of the new FMLA notice, designation and certification forms (available here) with certain very notable exceptions. In particular, forms WH-381 (Eligibility Notice) and WH-382 (Designation notice) will need to be provided to employees within TWO business days, not the five allowed under the new federal regulations. Expect a change to the state regulations to make it consistent with federal law, but until that happens, Connecticut employers still need to follow the 2 day limitation.
  
  In addition, "key employee" and "fitness for duty" provisions differ from the new FMLA regulations. Employers should review the specific regulations and consider eliminating some of the language on the forms to conform with Connecticut law.
   
• The new federal regulations also dictate that employees must provide notice of their absences consistent with their employer's policy. However, the CT DOL indicates that Connecticut law is not as strict and merely requires"timely verbal or other notice". Thus, until this regulation is amended, Connecticut employers applying CTFMLA will need to show more flexibility.
   
• As for the certification forms (WH-380E and WH-380F), those can be used with one notable exception. The new forms have a section where the doctor is to indicate a "diagnosis"; the CT DOL states that an employer may not request a diagnosis under CTFMLA. A formal change to Connecticut regulations will be needed to adopt this particular change. These forms must also be given to employees within TWO business days, not five as allowed under FMLA.
   
• Overall, the CTDOL adopts the changes to the definitions of "serious health condition" that dictate that employees visit doctors within certain specified periods of time.
   
• While the new FMLA regulations allow for the denial of a "perfect attendance" bonus/award to employees who take FMLA, Connecticut regulations do not allow this. Thus, until the regulations are amended in Connecticut, employers in CT cannot deny perfect attendance awards to employees who take CTFMLA leave.
   
• The federal FMLA regulations permit an employer to contact the employee's health care provider in limited circumstances, but the Connecticut rules do not. This distinction will remain.
   
• For "fitness for duty" requests, the CTDOL notes that employees need only provide a "simple statement of an employee's ability to return to work". While the federal regulations allow for a more detailed certification, the CTDOL has indicated that it cannot follow this provision.

The document is a vital piece of information for employers' compliance efforts and I applaud the department's efforts in providing employers this information in a fairly short period of time.

But it now highlights the fact that the legislature and CTDOL should act quickly to eliminate some of the awkward differences that will now arise between federal and state FMLA.

For employers, continue to seek appropriate legal counsel on implementing the federal regulations but make sure that any analysis includes application of Connecticut regulations where appropriate.

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UPDATED 1/16/09

We had a great turnout today for our breakfast roundtable on the new FMLA regulations. I want to particularly thank several blog readers for coming. 

But in case you missed it, you're not out of luck.  Here's some of what we discussed and what you need to know for Friday - the date the new FMLA regulations become effective. 

• Connecticut rules still apply - Connecticut has its own FMLA law and that hasn't changed with the new federal FMLA regulations. Thus, at least in the short term, it's going to be a bit of a mess to determine which regulations should apply. A rule of thumb is that where the state law or regulation provides more protection to the employee than federal law, state laws are going to apply.  You can find the CTFMLA regulations here, and a comparison of the CTFMLA regulations with the old federal regulations here for a bit of guidance. I'll try to tackle the intersection between the Connecticut regulations and federal regulations further in an upcoming post. [UPDATE: The CTDOL released guidance on January 15, 2009 comparing the two; I have summarized it in a post here.]
   
• The new regulations haven't changed the underlying statute - Despite all the fuss over the new regulations, the underlying FMLA statute hasn't changed (save for some new servicemember and exigency leave provisions). Thus, if you are an employer that wasn't covered under the FMLA before, you're not going to be covered now.  The DOL has a website devoted to answering these types of questions available here.
   
• Don't forget the DOL's website as a resource - I'll let you in on a little secret that we talked about at the presentation; when lawyers have questions, they often go to look at the same resources that are the public has access to as well. Sometimes, we just know where to look. Well, now you can too. 
  
  The DOL has a website devoted just to the new FMLA regulations. What's on there? Lots, including:
  • The full text of the Final Regulations 
  • A Fact Sheet on the Final Regulations 
  • A Fact Sheet that just discusses the non-military (or regular FMLA) regulations
  • A Fact Sheet that just discusses the military regulations
  • A Revised FMLA Poster that employers should use in handbooks, intranets or bulletin boards
  • Even more importantly, the DOL site as the new and revised forms that need to now be used including:
    • WH-380-E Certification of Health Care Provider for Employee’s Serious Health Condition
    • WH-380-F Certification of Health Care Provider for Family Member’s Serious Health Condition
    • WH-381 Notice of Eligibility and Rights & Responsibilities
    • WH-382 Designation Notice
    • WH-384 Certification of Qualifying Exigency For Military Family Leave
    • WH-385 Certification for Serious Injury or Illness of Covered Servicemember -- for Military Family Leave
  • The most helpful feature may seem the least obvious, a list of FAQs (or Frequently Asked Questions) for both the Military regulations and the Non-Military regulations

• Start using the new forms, certifications and postings on Friday - To simplify (and perhaps oversimplify so look at the new regulations for more details), there are new rules on when notices should be given and what they should contain. Here are some highlights:
  • Form WH-381 must be given to employees within 5 business days of the leave request.
  • If the employer will require the employee to certify the leave, the appropriate certification form (either WH-380-E, 380-F, 384, 385), should be given to the employee (along with the notice form) also within 5 business days of the leave request.
  • Once a designation has been made, there is a new designation notice (WH-382) that also must be provided; this must be done within 5 days of the designation determination. A new form should be provided if the designation changes over time. 
  • Lastly, to the extent that you are not providing each employee with a copy of their rights individually, the employer should also use the new FMLA poster available here. 

• Update your FMLA policies - To the extent that you have a policy on FMLA, the policy should be revised to at least include the information in the notice above. 
   
• Don't overlook the new military leave regulations - Although the statute regarding new military leave has been in place for a while, the regulations implementing and interpreting the statute are new.  If you have employees who have family members who are injured servicemembers, or if you have employees who have been called to active duty, you need to familiarize yourself with these rules.  The rules allow for broader leave that employers may be accustomed to.

Finally, if you need more information about the FMLA, you can check out my previous posts on the subject here.

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Over the holiday break, I took a look at various stories that I had "starred" in Google Reader for later reading and followup in the blog. (You ARE using a RSS Feed Reader to subscribe to this blog, right?)

The list is long. But part of starting a new year for me is doing a bit of clean up and that means starting the new year off fresh.

But before I do so, I'm going to spend a post or two recapping some of the employment law stories that never quite made it into the blog for one reason or another.

• With the recession firmly in place, it should not be a surprise that the Connecticut Department of Labor has been swamped with calls recently.   In fact, the jobless rate soared to 6.6 percent in November.  A number of people evidently looked for information from the DOL's website, which would be great, except that the website crashed a few times in December due to high traffic.  
• BusinessWeek recently had an interesting article about how some small employers are finding creative solutions to keeping workers to prepare for the next upturn.  A classic story about making lemonade from lemons.  
• World of Work blogged in December about the the deadlock that occurred at the EEOC about implementing new regulations interpreting the ADA Amendments Act. The result: No new regulations interpreting the act, until that stalemate can be broken.  
• I continue to be fascinated by the employment contracts and other agreements that are highlighted by the Footnoted blog.  Michelle Leder and her team dig up interesting filings with the SEC.  For HR professionals, though, these contracts can be a great source of ideas and a good template for other agreements.  Here's one such post by Footnoted.  
• It may be a little late for most (though some firms insist on having holiday parties after the winter break), but this little article lists the top 10 ways to turn your holiday party into a lawsuit.  
• Remember the big sexual harassment verdict against the lawfirm of Baker & McKenzie in 1994? Ok, me neither, but do you ever wonder what happens to some of the attorneys afterwards? In this case, the attorney for the employee has had bar charges filed against him with one judge stating, "I have never, ever seen an attorney more rude and disrespectful on so many levels." (H/T Overlawyered)  
• The Delaware Employment Law Blog recently compiled a list of the top 100 blogs on leadership and management. Great resources for companies from some of the best bloggers around.  
• As I often mention, when lawsuits by former employees get filed, they often get lots of press. But what happens to the lawsuit?  In some cases, the employees lose, such as this case against Timex (subscription may be required).   
• Looking for yet another summary of the new FMLA regulations? I enjoyed this post from the Employer Law Report. 
• Remember the big fuss about the new deferred compensation rules under Section 409A? This post has a good reminder about what employers should be doing about it. 
• I had meant to do a post on workplace investigations, based on this post from HR Daily Advisor, but never got around to it. It has some interesting Q and A including can an employee "plead the fifth" during a workplace investigation.  

Hope you can find a nugget of interest in one of the above links.  

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Although Connecticut's own Rep. Rosa DeLauro was rumored to be on the short list for a Secretary of Labor post, reports Thursday evening suggest that Rep. Hilda Solis - a Democrat from California - has been tapped for that position.

So, what's the immediate feedback from labor and business groups? Well, labor groups issued a press release praising the pick and business groups expressed concern. The New York Times sums it up here:

Ms. Solis has championed a bill, called the Employee Free Choice Act, that is the No. 1 priority of organized labor because it would make it far easier to unionize workers. The business community bitterly opposes the bill. She is the only member of Congress on the board of American Rights at Work, a pro-union group pushing for the bill.

“We’re thrilled at the prospect of having Representative Hilda Solis as our nation’s next labor secretary,” said John J. Sweeney, president of the A.F.L.-C.I.O. “We’re confident that she will return to the Labor Department one of its core missions: to defend workers’ basic rights in our nation’s workplaces. She’s proven to be a passionate leader and advocate for all working families.”

Labor leaders say they are very pleased that Ms. Solis joined them in opposing the Central American Free Trade Agreement as well as the pending trade agreement with Colombia.

By contrast, the reaction of business groups to the choice of Ms. Solis ranged from tactful displeasure to sharp dismay.

“We’re disappointed that she supports the Employee Free Choice Act,” said Randel K. Johnson, the vice president of labor policy at the United States Chamber of Commerce. “We expected Obama to pick someone supported by the A.F.L.-C.I.O. She’s not a pick whose philosophy we didn’t expect. We will disagree with her on some issues and work with her on some.”

The Washington Labor & Employment Wire has some more specifics on Rep. Solis's positions, including her support for EFCA and "green collar" jobs. 

For employers in Connecticut, there's likely to be a lot of hype about Rep. Solis' positions supporting labor.  But before you leap, ask yourself this -- can you name the current Secretary of Labor? Chances are, probably not. (It's Elaine Chao.) 

Why? Because the President has dictated and will dictate what the agenda will be and what his priorities are going to be.  Given President-Elect Obama's desire to seek consensus on a variety of issues, time will tell just what that agenda is going to look like.

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Following up on my earlier post about Monday's official release of the new FMLA regulations, the regulations are now available electronically a few days before.

You can download a copy here (though you are forewarned that it is over 700 pages long -- about 2 MB). 

A cursory review of the document shows that the first 550 pages or so contain extensive discussion of the changes in the new rules with the specific feedback received from employer and employee groups.  (My prior post in February summarized the draft regulations.) The actual regulations start on page 556.

For employers, the regulations will provide some helpful guidance in the area of military leaves.  Since the new military FMLA went into effect early in 2008, employers have been left to struggle with how to reconcile the new law with the differences that exist in the military law. The new regulations attempt to resolve those issues.

I'll be posting updates on further specifics as we digest this massive document but as I said before, the new regulations will not take effect until January 16, 2009.

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The Associated Press (through this The Hartford Business Journal article) is reporting that the final revisions to the Family and Medical Leave Act regulations are to be released on Monday (November 17th), and will include new rules defining how families of wounded service members will be able to take unpaid leave to care for them.

Among the other changes, the new regulations will:

• Allow employers to require "fitness-for-duty" evaluations for workers who took FMLA time and are returning to jobs that could endanger themselves or others.
   
• Allow businesses to exclude from perfect attendance awards employees who took FMLA time.
   
• Prohibit an employee's direct supervisor from getting an employee's medical information when a medical certification is needed under FMLA.

The new regulations will be effective January 16th. I'll post an update when more details become available.  The regulations are over 762 pages long so it may take some time to go through.

Expect to hear a lot about this for the next few weeks.

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Earlier today, I noted how the Department of Labor released some proposed regulations by burying them deep in the Federal Register. Now word comes today of a press conference AND press release on a subject that I have to confess, I'm having a hard time wondering what the fuss is about.

Apparently, so does Footnoted author Michelle Leder:

Yesterday, the SEC sent out a media advisory alerting reporters of a press conference set for 2 p.m. today with both Chairman Chris Cox and Labor Secretary Elaine Chao to talk about ways the two agencies would work together “to protect approximately $5.5 trillion in retirement assets of investors nationwide.” It sounded pretty important. But today, after reading the release as well as the memorandum of understanding, I’m awfully glad I didn’t hop on the Acela.

Leder goes on to note that "Clearly, given everything else that’s going on with the state of the economy, two top government officials — one of them a Cabinet member — can come up with more important things to do than agree to continue cooperating."

So what's this "memorandum of understanding" about? The press release noted that the SEC and DOL "agreed  to make permanent their agencies' longstanding relationship of sharing information on retirement and investments".  In doing so, they have agreed upon a formal "Memorandum of Understanding", nicknamed a "MOU". 

What does the MOU require?

• The establishment of regular meeting and points of contact between the two agencies;
• Cross-training of staff;
• DOL Access to Non-Public SEC Examination Information; and,
• SEC and DOL Access to Non Public SEC and DOL Enforcement Information.

Suffice to say, I can't see this making the headlines of any major papers, particularly with an earthquake (even a relatively minor one) dominating the news.

And for everyone outside of the SEC and DOL, I can't see this MOU having any significant impact; it doesn't change any of the rules that employers face. 

If you're interested, the DOL's new proposed regulations still haven't warranted a press release from the DOL either.

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Buried deep, deep, deep in Monday's Federal Register was a quiet announcement that the U.S. Department of Labor was proposing some new wage/hour regulations interpreting the Fair Labor Standards Act of 1938 (download here).  In the "summary" section, the DOL states that the new regulations are needed because the regulations, in some cases, are out of date based on court decisions or subsequent legislation.  The DOL website doesn't even have a press release on it as of Monday evening --- only a link buried deep on a webpage here.

Comments are requested by September 11, 2008, so presumably the DOL is trying to implement these new regulations by the end of the current administration. 

So what topics are covered in these proposed regulations? A few are noteworthy, while several others others are snoozeworthy.

For example, among the more noteworthy items are regulations addressing "compensatory time" and a "fluctuating workweek".  More snoozeworthy items including regulations regarding salesmen who sell boats and regulations regarding workers who work on ditches, canals and reservoirs, where 90% of the water used is for agricultural purposes.

Among the other topics covered

• Updating regulations regarding "tipped" employees and the way the phrase "minimum wage" is used in various statutes;
• Updating regulations defining who an "employee" is and excluding certain volunteers at private non-profit food banks;
• Updating regulations regarding those employees engaged in "fire protection activities";
• Updating regulations to clarify that stock options are excluded from the computation of the regular rate of pay;
• Addressing regulations of "service advisers" working for auto dealers;

Upon first glance, most of the changes suggested by the Department of Labor just incorporate language from laws that have been passed in the last 20-30 years.  But for employers that have a particular interest in one of the above topics, special care should be used to review the language to see if it will have a particular impact on the business.

Lastly, these regulations are mere proposals; while it is somewhat likely that regulations like this will be implemented, they may undergo some significant changes in the final rule. Thus, employers should be cautious about relying on these rules until the final regulations are issued.

I'll continue to review them and post any further comments or thoughts later in the week.

(H/T Fl. Employment Law Blog)

Photo courtesy of Library of Congress.

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Earlier this week, I discussed the benefits of providing notice to employees who may be affected by mass layoffs and plant closings, by complying with the Worker Adjustment and Retraining Notification (WARN) Act.

But what exactly does the WARN Act require and who is covered? Here are some basic answers to some basic questions. As always, those who need more information should seek legal counsel and review the applicable laws.   In addition, some states have additional requirements that must be complied with; this post just discusses the WARN Act.

Who's Covered?

Not all employers are covered. Employers who have 100 or more full-time employees are covered. But employers who have 100 or more full-time AND part-time employees who, in total, work more than 4000 hours per week are also covered.  Most governments are not covered, but some quasi-public and public entities may be covered.

When Does WARN Apply?

As I discussed in my prior post, there are two types of events that are covered  by WARN -- plant closings and mass layoffs. "Employment Losses" within each of them triggers some notice requirements.  All of these terms have a definition though. 

"Plant closings" are a permanent or temporary shutdown of a "single site of employment" (though it can also be one or more facilities or operating units within a single site of employment), so long as the shutdown results in an employment loss at that site for 50 or more full-time employees during any 30-day period.

"Mass layoffs" are a reduction in force (that is also not the result of a plant closing) that results in an employment loss at a single site of employment during any 30- day period for at least 50 employees.  These 50 or more employees must also make-up at least 33 percent total employees (excluding any part-time employees). This will also be satisfied if there are at least 500 employees (excluding any part-time employees) affected by the mass layoff as well.

What Is An "Employment Loss"?

Despite its term, the term "employment loss" is fairly broad.  It means either:

1. a termination of employment for reasons other than a discharge for cause, voluntary departure, or retirement,
2. a layoff longer than six months (which indicates that the employee may return after the "layoff", or 
3. a reduction in hours of more than 50 percent during each month of any six-month period.

What Notice Is Required? 

A WARN notice must be given to each employee at least 60 days before a plant closing or mass layoff.  However, if there is a union, the notice must be given to the union representative of the affected employees. 

In Connecticut, notice must also be provided to the Connecticut dislocated worker unit (see below) and the chief elected official of the local government where the closing or layoff is occurring. 

The Website for the Connecticut Department of Labor has some more specifics on the notice required:

Written notification should be printed on company letterhead, signed by the authorized employer representative, and addressed to:

Rapid Response Unit
Connecticut Department of Labor
200 Folly Brook Boulevard
Wethersfield, CT 06109-1114

This notification should include: the name and address of the employment site where the plant closing or mass lay off will occur; the date(s) of proposed closing or mass layoff; the number of affected workers, and address of their collective bargaining representative and chief elected officer if applicable; and, the name, address, and telephone number of the employer representative to contact regarding the closing or mass layoff.

Interestingly enough, the DOL site also encourages employers to seek legal counsel regarding the notices. 

As with lots of federal laws, there are some exceptions and some tricky questions that arise such as what happens when you have multiple layoffs within a short time that don't trigger WARN individually but would collectively, and what happens in situations that are not foreseeable (plant burns down and must therefore close immediately). 

The U.S. Department of Labor has some additional guidance on this issue for those types of situations in this employer's guide.

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Word came down late yesterday about an important case for employers that have California-based employees. 

The case, Brinker Restaurant Corp. v. Hohnbaum, is the first California appellate case to rule on the parameters of employers' duties under California laws requiring rest and meal periods.  The California Workforce Resource Blog has the details, as does the What's New in Employment Law Blog.  For an employee-based perspective, the Wage Law blog also has a good summary as well.

Why do I bring this up in a Connecticut blog? For a few reasons. First, there are several Connecticut employers that have California employees, whether through sales or otherwise. Second, California tends to be on the cutting edge of some legal issues. With nearly 36 million people (or roughly 10 times the population of Connecticut), those issues just tend to pop up more than in a small state like Connecticut.

Third, the case provides a good opportunity to highlight the Connecticut meal period law -- an underappreciated law that lays out what is necessary and is much different than California.

Connecticut's law is found at Conn. Gen. Stat. 31-51i and states:

(a) No person shall be required to work for seven and one-half or more consecutive hours without a period of at least thirty consecutive minutes for a meal. Such period shall be given at some time after the first two hours of work and before the last two hours.

In plain English, what this means is that if an employee works a 7 1/2 hour shift, they are required to be given a 30-minute break for a meal.  For an employee working 9-5, the meal period must be between 11 a.m. and 3 p.m.

There are exemptions to requiring this meal period but, for the most part, it's going to be good business practice to allow for the meal period anyways.  However, there may be instances where a break is not feasible. The Labor Department recognizes an exemption if one of the following conditions is met:

1. complying with this requirement would endanger public safety;
2. the duties of the position can only be performed by one employee;
3. the employer employs less than 5 employees on that shift at that one business location (this only applies to that particular shift); or,
4. the employer's operation requires that employees be available to respond to urgent conditions, and that the employees are compensated for the meal period.

Note that this meal period applies to both exempt and non-exempt workers.  Employers who do not comply can be subject to some civil penalties.  While the law talks about a meal period, there is no requirement for a "rest" period in addition to this meal period. 

As others will surely note, each state has their own rules on meal period and breaks. Employers should not assume that what will work for one state, will work for another.  In Connecticut, the rules are not particularly onerous for employers and certainly all efforts should be made to comply with these particular rules.  

Photo courtesy Library of Congress , circa 1943 Clinton, Iowa

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Six months ago, I predicted a renewed emphasis on reduction in force laws and regulations with the possibility of an economic slowdown looming.  With six months left to go in the year, I'm still feeling good (if you can feel "good" about such things) about that prediction. 

Is the economy still on the yellow brick road or are we walking deeper into the forest filled with lions, tigers and bears?

The statistics from the Equal Employment Opportunity Commission do not paint a rosy picture.  

The numbers of discrimination claims filed with the EEOC are up.  

And up by a lot.

In fact, the EEOC reported a 21 percent increase in charges for the first quarter of 2008, over the same period last year. 

So what can employers do? I talked a few weeks ago about one aspect of reductions in force -- namely compliance with the OWBPA (Older Worker Benefit Protection Act) and how compliance with that law can avoid one pitfall associated with a reduction in force. 

But another law that is commonly misunderstood is the WARN (Worker Adjustment and Retraining Notification) Act.  WARN is not a mandatory severance law; in other words, it doesn't mean that employers need to give employees severance when they are affected by a mass layoff or plant closing.

What WARN does require is that the employer give notice to employees who may be affected by a plant closing or mass layoff.  The Department of Labor has prepared this fact sheet for employers to answer some of the basic questions.   It is a law that is, frankly, fairly easy to comply with, and yet there are still some employers who are facing class actions for their alleged failure to comply. 

In addition to notice to employees, the employer must also notify the Connecticut Department of Labor of its proposed actions.  The state then posts them in monthly reports available here.  You can view July's report here.

What is fascinating about the reports thus far is that Connecticut has, as of now, avoided some of the mass layoffs that have plagued some of the other states.  The June reports for Connecticut show only 400 or so employees statewide who received WARN notices.  Moreover, numbers released over the weekend show that Connecticut employers have added jobs, not eliminated them.  Whether this trend continues will be an item to watch for in the second half of 2008.

In an upcoming post, I'll highlight some of the particulars of WARN in more detail.  Until then, try to avoid the fields of sleeping flowers.

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This week, I've highlighted some new state laws that affect the employment law arena. This next one (Public Act 08-156) creates a new joint commission and new advisory board in Connecticut to deal with the issue of employee misclassification. 

For employers, this new structure means that it is more likely that enforcement of misclassification laws (in other words, whether employees are classified properly as exempt or non-exempt from wage/hour, tax and workers' compensation laws) will occur.  As noted below, there appears to be a particular emphasis on employers in the construction industry, so that particular category of employer ought to be aware of this new law.

What's the new structure?

First, effective July 1, 2008, a joint commission will be established made up of representatives of the Department of Labor, the Commission on Revenue Services, the Workers' Compensation Commission, the Attorney General's Office, and the Chief State's Attorneys office.

What will be their role?

They are to meet at least four times a year (probably in conference rooms not very different from the one pictured). 

Their main goals will be to:

• review the problem of employee misclassification by employers for the purposes of avoiding their obligations under state and federal labor, employment, workers' compensation and tax laws;
• coordinate the civil prosecution of violations of state and federal laws relating to employee misclassification, and 
• report any suspected violation of state criminal statutes to the Chief State's Attorney.

What else is required of the Commission?

By February 1, 2010 (and each year after that) the Commission will report on the commission's actions for the preceding calendar year and include any recommendations for administrative or legislative action.

The new law also creates a companion "Employee Misclassification Advisory Board" to advise the commission on misclassification specifically in the construction industry.  The Board will be made up of six members, each representing differing interests in the construction industry. 

A summary of the new law by the legislature is also available here. And interestingly, the General Assembly passed identical portions of this law in another public act (P.A. 08-105) as well.  Apparently, you can never have enough joint commissions (though obviously, they will be combined here). 

What steps can an employer consider in response to this law?

This new law emphasizes the fact that issues regarding employee misclassification are not going to disappear anytime soon. Because of this, employers can take this opportunity to audit themselves and determine if they continue to have an exposure under wage and hour laws.  If necessary, correcting issues regarding classification of workers ought to be considered; taking such steps before a problem occurs may allow the employer to escape the broad enforcement capabilities now presented in this new law.

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This week, the U.S. Department of Labor updated their website and provided some new online tools to help employers figure out which recordkeeping, reporting and notice requirements apply to them. 

According to the DOL:

The new FirstStep Recordkeeping, Reporting and Notices elaws Advisor has been integrated into a FirstStep suite of advisors that also includes the revised and expanded FirstStep Poster Advisor and FirstStep Employment Law Overview Advisor.

"These Internet tools will make it easier for small business employers to learn about and comply with the federal laws that apply to them," said Secretary of Labor Elaine L. Chao.

However, employers in Connecticut using these tools should be cautious.  There are additional requirements that employers in Connecticut that may apply and some are stricter than the federal rules.

Because of this, employers should use the department's online tools as a resources, but should followup with an attorney or the Connecticut Department of Labor about additional requirements that may apply.

(H/T Delaware Employment Law Blog)

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The State Senate late yesterday approved a bill that would increase the minimum wage in 2009 and 2010.  The bill (H.B. 5105), had previously passed the House and now moves to Governor Rell for her signature.

CT News Junkie reports that Gov. Rell has some reservations about the bill:

Gov. M. Jodi Rell is still uncertain about whether she would sign it. Rell’s spokesman Adam Liegeot said in an emailed statement, “While the governor understands the needs of minimum wage workers, she does not want to take any action that will negatively impact businesses and jobs in Connecticut, especially during this troubled economy. Governor Rell will take her time and review this bill closely before deciding what action to take.”

The bill, if signed, will increase in the minimum wage from $7.65 an hour to $8 an hour starting in January 2009 and $8.25 an hour in January 2010.  Assuming a 40-hour-work week, the average wage increase for those making minimum wage will be a little over $700 annually.

For most employers in the state, the bill will not have any impact because many workers receive more than the minimum wage.  For others who rely on workers at minimum wage, the bill could have a real impact; $700 or so per worker per year could affect those with thin profit margins.  However, others will certainly be able to afford the modest increase.

Although the bill did not have full bipartisan support, it did pass the General Assembly overwhelmingly. I would expect the Governor to sign the bill because a veto would likely be overturned by the General Assembly.

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With the signing of the National Defense Authorization Act for FY 2008 (NDAA) earlier this week, the new amendments to the FMLA for care of military members are now effective immediately.  For a full text of the FMLA, with the new amendments, the Department of Labor has posted it here.

For a refresher to my prior posts, the Act now permits a "spouse, son, daughter, parent, or next of kin" to take up to 26 workweeks of leave to care for a "member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness."

Its important to note that the caregiver protection provides more than double what is provided when an employee takes "traditional" FMLA leave.  Employees are entitled to only one 26-week leave period to care for a wounded servicemember during the employee’s employment. The leave may be taken on an intermittent or reduced-schedule basis, but all 26 weeks must be used during a single 12-month period. 

The Act also provides up to 12 weeks of leave for employees who have a family member called up to or engaged in active military duty.  In detail, the Act provides up to 12 weeks of FMLA leave for an employee with a spouse, son, daughter or parent who: (1) is on active duty in the Armed Forces in support of a contingency operation; or (2) has been notified of an impending call or order to active duty in the Armed Forces in support of a contingency operation. A "contingency operation" is an action or operation against an opposing military force.

An employee may take active duty leave for "any qualifying exigency" related to the family member’s call-up, and the leave may commence as soon as an individual receives notification of being called to active duty. The term "any qualifying exigency" was not defined, and will likely be clarified in future regulations published by the Department of Labor ("DOL").

Recall too that the normal definitions of the FMLA still apply. Thus, the employer must employ at least 50 part-time or full-time employees for each working day during 20 or more workweeks of the current or previous calendar year to be subject to the statute. In order to be eligible for FMLA leave for example, employees must still have at least 12 months of service with the employer  and must have worked at least 1,250 hours during the 12 months preceding the start date of the leave

Because these changes expand the ways that an employee may be entitled to protected leave, employers should familiarize themselves with the law and also review their obligations under USERRA as well.  Employers can consider updating their policies and procedures and also ensuring that their postings (such as a USERRA DOL poster) are current as well. Notifying human resources of this new law will also be critical to ensuring proper compliance with this law. 

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The New York Times reported late last week that the Department of Labor is considering new regulations to the Family and Medical Leave Act that would address concerns that employers have had about some employees are abusing the leave.  (H/T The Word on Employment Law)

Under the new rules being discussed, employees would have to call in to request FMLA leave before taking it, as opposed to the present situation where employees can take off two days before requesting leave.  The regulations will also address the new military leave provisions that I've mentioned previously.

As these regulations are likely to undergo some further discussion and revisions, I'll await serious analysis until we see what is actually being proposed -- rather than just discussed at this stage.  FMLA Blog has some thoughts worth reviewing.

Senator Chris Dodd (D-Conn.), who authored the original FMLA bill, is already concerned about the path being carved out and issued a statement today expressing those concerns.

“I am concerned by the reports that the Department of Labor may impose new regulations that will make it more difficult for workers to take advantage of the leave FMLA provides. Over the past 15 years, FMLA has helped more than 50 million families during critical moments in their lives, and any effort to scale back these protections is simply unacceptable.

“As I have said time and time again, if there is any problem with FMLA, it is that it doesn’t go far enough. That is why I support new ways to expand this legislation so more Americans can benefit from its provisions. Most recently, I authored a provision to expand FMLA benefits for up to six months for family members of wounded military personnel. As this disastrous war drags on with no end in sight, it is critically important that we ensure that the brave men and women of our armed forces receive the care and support they need when they return home. Allowing their family to be there during the often lengthy rehabilitation process without the constant fear of losing their job is one of the best things we can do for our troops. I hope the Department of Labor keeps these concerns at the forefront as they draft their new regulations.”

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Are unions are dying breed? The answer to that question often depends on your perspective.  

As we've seen in Connecticut, if unions are "dying", they are not going down without a fight.

But statistics just released by the U.S. Department of Labor tell a more complete story.  The statistics show a leveling off of the decline in union membership that's been ongoing for the last two decades. 

The percentage of workers who belonged to a union in 2007 was 12.1 percentage, up slightly from the 12.0 percent in 2006.  (For comparison, union membership in 1983 was at approximately 20 percent.)

Indeed, unions can claim a 300,000+ union membership increase in 2007.  The full statistics are available from the U.S. Department of Labor on their website. 

The numbers for Connecticut also tell a noteworthy story:

• In 2006, 247,000 Connecticut workers belong to a union -- or 15.6 percent of the workforce.  This is higher than the national average.
• That number increased slightly in 2007 to 253,000 workers -- also 15.6 percent of the workforce.
• It is unclear from the survey whether this 6,000 worker increase includes the 2600 dealers who voted to unionize at Foxwoods last fall. As readers know, the election results are being appealed now.

For unions, the numbers in Connecticut show a relatively stable unionized workforce and should give them some solace that they are holding their own. And for employers, the numbers are a good reminder that unions still maintain sizable support in the state. 

Unions may be down overall from where they were decades ago, but they remain an important influence in today's workplace. Whether the numbers will decrease over time depends on so many factors -- including the possible passage of the Employee Free Choice Act -- that it would be irresponsible to predict what will happen.

But, the next time you read an article about how unions are going the way of the "horse and carriage", just remember that the statistics don't tell that story -- at least not yet.

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The Second Circuit released an important decision today that sets forth some new groundrules for employers and particularly placement agencies to be aware of in paying employees overtime.  In doing so, the court has distinguished the long-standing Supreme Court case of Tennessee Coal Co. v. Muscoda Local No. 123 (321 U.S. 590) (1944) and, according to the Court's own reasoning, has created a split in the circuits.

The short issue of the case is whether employees must be paid overtime wages for work that their employer has prohibited and does not desire. The Court indicates that this is a matter of first impression and answers the question in the affirmative.

The case, Chao v. Gotham Registry, Inc. (available here) is ostensibly about a decision denying a contempt order against an employer.  While the Court upholds the decision denying the contempt order, it does by finding that the employer was dealing with a novel question and that it should not be punished for coming to a wrong conclusion.

The Court's analysis is lengthy but it has summarized the facts and its decision here:

A typical Gotham [employer] placement begins when one of its client hospitals requests a nurse to fill a temporary vacancy or to support hospital personnel during a peak period. Gotham then offers the assignment to a nurse on its register, and the nurse who accepts the position reports directly to the hospital. The nurse is required to sign in and out on daily time sheets, which are compiled and reviewed by the hospital and forwarded to Gotham each week. Gotham is not permitted to go on hospital premises to verify the nurse's hours or otherwise supervise his or her performance. The hospital  pays Gotham an hourly fee multiplied by the number of hours worked by the nurse and Gotham pays most of this money to the nurse.

Until the early 1990s, Gotham did not pay its nurses overtime wages for hours worked in excess of 40 hours in any workweek because it viewed the nurses as independent contractors. After the Department of Labor commenced an enforcement action in 1992 against the staffing agency asserting that its practice of paying nurses straight-time wages for overtime hours violated the Act, Gotham consented to treat the nurses on its register as employees for purposes of the Act. ...

As Gotham's clients do not pay Gotham a premium for overtime hours in all cases, Gotham's promise to abide by the Act quickly proved expensive. After seeking advice of counsel, the staffing agency adopted a policy designed to check unauthorized overtime or, failing that, insulate itself from claims for time and one-half compensation for unauthorized hours. Gotham's overtime policy is printed on the time sheets completed by its nurses and reads: "You must notify GOTHAM in advance and receive authorization from GOTHAM for any shift or partial shift that will bring your total hours to more than 40 hours in any given week. If you fail to do so you will not be paid overtime rates for those hours."

In the course of their assignments at client hospitals, Gotham nurses are sometimes asked to work overtime by hospital staff. Nurses who agree to work an unscheduled shift will on occasion contact Gotham first to request approval in compliance with Gotham's rule. If Gotham authorizes an assignment, the nurse is guaranteed premium wages for any resulting overtime. But three out of four approval requests are denied. At other times, nurses accept unscheduled shifts without obtaining the staffing agency's approval. When these nurses report their overtime for the preceding week, Gotham attempts to negotiate with the hospital to procure an enhanced fee for the overtime hours already worked. If Gotham succeeds -- as it does ten percent of the time -- it pays the nurse time and one-half wages for the unauthorized overtime hours. Otherwise, the nurse receives straight-time wages for the extra hours worked.

It is this scenario that gives rise to the Secretary's contention that Gotham's overtime practices violate 29 U.S.C. § 207(a) and, by extension, the 1994 consent judgment....

 The Secretary challenges that portion of the district court's March 20, 2006 judgment that denies her petition for 8 civil contempt against Gotham. That court believed the unauthorized hours did not constitute work under the Act or, if these were working hours, the legal question was too much in doubt to warrant civil contempt. On this appeal the Secretary presents us with two questions: first, whether Gotham's overtime practices violate the Act; and second, if so, whether the violation provides an adequate basis for civil contempt. We think the trial court erred in labeling the nurses' overtime hours as anything other than work and answer the first question in the affirmative. But because we believe Gotham acted on a reasonable interpretation of then unsettled law, we answer the second question in the negative, and affirm the district court's judgment on the alternative ground that the Secretary did not meet her burden to prove contempt.

There is also a thoughtful concurrence by Chief Judge Jacobs as well.  He chides the majority for its reasoning:

I cannot sign the majority opinion because it holds  that Gotham’s practice violates the FLSA--though Gotham could not be expected to know this until so advised by the majority’s ambitious, consequential and dubious rulings.

As this case is analyzed, I'm sure much will be written about this in the upcoming days.  For now, the key takeaway from the case is that for placement agencies in particular that may not pay overtime based on a similar policy to Gotham, those agencies should review those policies and practices and get legal advice. 

I'll post more later in the week as the analysis comes in.

UPDATE: The Second Circuit Blog has another summary of the case available here.

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