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

Making Lemonade Out of Lemons
Making Lemonade Out of Lemons

Are you tired of lawyers commenting already on the new overtime rules?

(The answer should be no, of course, since you’re reading this blog and thus have room for one more view.)

But I think it’s fair to say that we haven’t seen a feeding frenzy like this on employment law in many, many years.  And with the massive publicity of this rule comes an opportunity, as I’ll explain too.

So, dear readers, deep breath time.   We’ll get through it together.

There’s already been lots of pixels spilled about how employers can “solve” their overtime issues that will arise under this rule by making various changes in their workplace.

For example, employers can increase an employee’s salary to $47,476 annually if that employee otherwise meets the duties test, to keep an employee “exempt” from overtime.

Or the employer can limit the overtime that the employee can work, explaining that it is concerned with controlling costs.

But in all the analysis, I think one big thing has been overlooked: Employers can use this announcement as an opportunity to review and re-classify all sorts of employees — even if they are not directly impacted by the new rule.

Too often, employers who discover that they have misclassified employees believe that they are in a conundrum. Keep their head down and hope no one notices, or properly classify the employee and keep their fingers crossed that they don’t get sued for back pay.  Neither option is a great one for employers who need to get into compliance. (I once proposed an amnesty proposal to solve this dilemma.)   Sometimes, employers have legitimate reasons why an employee has been classified as non-exempt but wants to avoid any future issues. Perhaps in other situations the employee isn’t working overtime anyways.

But here is where the opportunity comes in: As I highlighted at the start, the new overtime rule has received unprecedented amounts of publicity in the workplace. No doubt most of your employees have now heard something about it.  So, some won’t be surprised if they are notified that things are changing for their position as a result of the new rule.

While the rule doesn’t provide amnesty for employers who make such changes, the new rule does remove some of the suspicions employees may have about the changes — even when those changes are perfectly legal.  Employees may be more understanding.  Employers can explain truthfully that the new rule has required them to review the classification of all of its employees and the changes are as a result of the rule.

So, yes, the rule may be difficult to comply with. But don’t miss out on the opportunities that may arise from this rule as well.  Full compliance with the law will be so much cheaper than paying for a massive wage-and-hour suit.  And as I’ve said before, compliance is the ultimate goal. You should not be looking for ways to circumvent the law.

So ultimately, perhaps you’ll view the new overtime rule as more about lemonade than lemons, as the saying goes.

presentsIf you like to open your presents on Christmas Eve, the U.S. Department of Labor is for you. Last night, the DOL posted the final revised rule on overtime on its website ahead of its planned announcement this afternoon.

What a gift for employment lawyers!  Needless to say, I was up late unwrapping all my “gifts.”

Remember: These changes apply only to the so-called white-collar exemptions: Executive, Administrative and Professional.  So, if the employee falls within a different exemption, this rule does not apply.

And, as I’ll explain below, for Connecticut employers, the challenges are just beginning.  The rule applies to all employers covered by the FLSA (FLSA covers employers engaged in interstate commerce and gross volume of $500,000.00 in sales) but Connecticut employers will also have to worry about state law as well.

Here are the highlights (the DOL has released a chart comparing all the changes as well):

  • As expected, the new rule changes the salary basis to $47,476 annually ($913/week) — slightly less than the proposed rule last year. In plain English, anyone who makes less than this amount must be paid overtime for any hours over 40 in a work week — regardless of his or her duties.
  • This threshold will change every three years, and will be tied to the salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South.
  • The new rule makes no changes to the duties test.   If an employee had duties that fell within the executive exemption, for example, they will still be exempt — that is, if their minimum salary now meets the threshold of $47,476.
  • The rule increases the “highly compensated employee” exception to the exemption to $134,004 – and that too will change every three years. (But note that Connecticut law does not have such an exception.)
  • The rule becomes effective December 1, 2016. Note that December 1 is a Thursday, so employers will have to make sure that the entire pay period is compliant with the new rule.
  • The new rule will now permits employers to use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.  This is a brand new element and should help employers meet that threshold (a bit).

The USDOL also released guidance for non-profits and higher education to address concerns in those areas.  Those employers should review that guidance specifically.

For Connecticut employers, though, take a deep breath before jumping in.  Connecticut has its own state law and regulations that are now in conflict with this federal rule. And as the CTDOL notes in its guide to wage & workplace laws: “The laws that provide the higher or stricter standard shall apply.”

What does that mean here? We’ll have to wait and see if the Connecticut Department of Labor updates its guidance for starters.  It is challenging for Connecticut to update its regulations so, for now, we can only hope that the CTDOL might at least shed some light on how it might enforce the state rules. (There is a helpful chart that it has used in the past, for example, that could be updated.)

But here, on first glance, are three other items of concern I have for now:

  1. The salary test in Connecticut does not contain an allowance to consider nondiscretionary bonuses.  Will that change (at least as a matter of enforcement) now that the federal regulations allow employers to consider that? And how should the deduction rule be applied in such an instance? Would Connecticut recognize an increased salary basis but without such bonuses as the more “protective” of the law?
  2. The CTDOL has previously recognized a “no man’s land” (its words) where the interaction of the rules is confusing; how will it deal with a similar (and much larger) no man’s land where the salary is higher, but the duties test has been met?
  3. Connecticut does not have an exemption for highly compensated employees. The new federal rule does not change state law and thus the HCE exemption will still not apply here.  Will the CTDOL reconsider that in light of the increased threshold at a federal level?

What’s the Takeaway for Employers in Connecticut?

For employers in Connecticut, do not just blindly adopt the new federal rule into your workplace.

For example, increasing the base salary to avoid overtime obligations under the federal rule may not matter if the employee does not meet the duties test under Connecticut law for the same exemption.

This is one of those situations that will require a case-by-case look at specific positions and the interaction between state and federal law.  Unfortunately, you’ll probably want to consult heavily with various HR consultants or lawyers specializing in employment law.

So, as a said before, stay calm. You can do this.  You have until December.

 

GA2It’s been a long-time coming but the General Assembly finally approved of a measure that would allow employers to pay employees on a bi-weekly basis without receiving prior CTDOL approval.

The provision, part of a set of “technical” revisions to various Department of Labor matters, is long overdue.

Several employers had moved to a bi-weekly payroll scheme without realizing that they needed approval from the CTDOL beforehand.  That approval won’t be required anymore (assuming this bill is approved by the governor).

I’ve previously discussed the requirement so now employers who have been wary about seeking such approval, can just move ahead on their own.

Senate Bill 220 also makes lots of technical changes to the unemployment compensation scheme and even to drug testing (getting rid of the suggesting that the DOL develop some regulations in this area).  These probably won’t be of interest to most employers, but it’s worth a look through the bill summary to see if something else touches on your industry.

The measure will become effective when the Governor signs the overall bill.  (Other provisions in the bill go into effect October 1, 2016.)

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.

24242102739_3a7ae99d52_mThe state agencies that employers have to deal with the most on employment law issues made two announcements this week regarding their leadership ranks.

The Commission on Human Rights & Opportunities has announced that Michele Mount has been named the Chief Human Rights Referee. Ms. Mount has been a Human Rights referee for the CHRO for the last four years or so.

For employers that go through hearings at the CHRO, the elevation of Ms. Mount won’t change things all that much, but administratively, it’ll be interesting to see if she brings about any changes to that area of the CHRO.

At the Connecticut Department of Labor, interim commissioner Dennis Murphy is moving over to the Department of Motor Vehicles.  By most accounts, Mr. Murphy brought some much needed stability to the DOL and often worked behind the scenes to get things done.  He leaves on February 12th.

Governor Malloy then appointed former Hamden mayor Scott Jackson to head up the CTDOL. Kurt Westby, former political director for 32BJ and a long-time AFL-CIO board member, has been appointed deputy Labor Commissioner.

“I’ve known both Scott and Kurt for a number of years. I am confident that with their extraordinary qualities and skill-sets – they will work with the diverse group of stakeholders to move the Department of Labor forward,” Governor Malloy said. “Scott is a friend and an exceptional public servant. Kurt has spent his career trying to improve the lives of Connecticut residents. I believe they both will work together successfully to ensure that the state’s workforce is successful while enabling and our business community to thrive.”

Of course, much of the CTDOL’s work is done by staff who have been there far longer than any political appointee.    Again, for employers, the selections will likely not impact employers much.

Jackson will start February 3, 2016.

Good luck to all the new appointees.  There’s lots of work left to be done.

 

 

 

 

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.

Governor Malloy with current CTDOL Commissioner Sharon Palmer

You’ve no doubt heard lots about how the U.S. Department of Labor is cracking down on independent contractors.  I’ve recapped it before and my former colleague, Jonathan Orleans, has a new post regarding Uber & electricians.

But in my view, there is a larger, more important battle now being fought in Connecticut and you may not be aware of it.  I touched on it briefly in a post in July but it’s worth digging a little deeper.  Disappointingly, I have not seen anything written about this in the press (legal or mainstream).

A case recently transferred to the Connecticut Supreme Court docket threatens to cause lots of havoc to company usage of independent contractors in Connecticut. The Connecticut Department of Labor has taken an aggressive stance in the case which is leading to this big battle.

The case is Standard Oil of Connecticut v. Administrator, Unemployment Compensation Act and is awaiting oral argument.  You can download the state’s brief here and the employer’s brief here.  The employer’s reply brief is also here.

The employer (Standard Oil) argues in the case that it uses contractors (called “installers/technicians”) to install heating oil and alarm systems and repair and service heating systems at times of peak demand.  The state reclassified the installers/technicians as employees and assessed taxes and interest.  At issue is the application of the ABC Test which is used in Connecticut to determine if these people are employees or independent contractors.

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

In the Standard Oil case, the employer is challenging the findings on various elements of this test. One of them – Part B , the “places of business” — is potentially far-reaching, according to the briefs filed in the case.  The issue is whether the customers’ homes are “places of business”; if they are, then the consultant cannot be said to be performing services “outside” the employer’s places of business.  The employer argued that viewing customers’ homes as places of business “does nothing to further the Act’s purpose and its practical implications are damning to Connecticut industry….”

Indeed, the employer argues that “it will be impossible for [the employer]-or any Connecticut business–to ever utilize the services of an independent contractor.”

Continue Reading The Real Battle over Independent Contractors and the ABC Test In Connecticut