The Wage and Hour Division of the U.S. Department of Labor (DOL) held public listening sessions on October 30, 2018 to gather views on the Part 541 white collar exemption regulations, the 2016 “Overtime Rule.” Sessions were held in Atlanta, GA, Seattle, WA, Kansas City, MO, Denver, CO, Providence, RI, and Washington DC. A review of the actual transcripts reveals that many different interests presented comments, including human resource professionals, small business, nonprofits, employees, employers, attorneys, and large businesses. Full renditions of the transcripts by city can be found here.

The DOL posed these questions for addressing at the Listening Sessions: Continue Reading Key Takeaways from the Recent Overtime Rule Listening Sessions

Workplace violence is high on every HR professional’s list of worst nightmares regardless of the source – an employee, former employee, angry customer, or random third party. Of course, there are a host of security measures employers can undertake in an effort to prevent or mitigate violent incidents on their premises. While there is no substitute for good security measures, we are occasionally asked about what legal steps an employer can take where it is concerned that a particular person may engage in violence or inappropriate behavior on the premises – for example, a disgruntled former employee, a customer who is obsessed with an employee, or an angry ex-spouse of an employee. Unlike some jurisdictions, South Carolina does not have workplace violence restraining orders that allow an employer to obtain a restraining order on behalf of an employee that needs protection. However, depending on the circumstances, there are some legal options an employer can take to help protect its employees. Continue Reading Legal Measures for Protecting Employees from Workplace Violence

Following the April 3, 2018 YouTube workplace violence tragedy, many news sources reported that there were 500 workplace homicides in 2016, the most recent workplace homicide statistic from the Bureau of Labor Statistic. The Bureau of Labor report, found here, noted this was “an increase of 83 cases from 2015” and that the “2016 total was the highest [number of workplace homicides] since 2010.” The report also revealed that 409 (82 percent) were homicides to men and 91 (18 percent) were homicides to women.” Further, “homicides represented 24 percent of fatal occupational injuries to women in 2016 compared with 9 percent of fatal occupational injuries to men.” Continue Reading YouTube Shooting Raises Questions on Firearms in the Workplace

Sexual Harassment Complaint Form

The latest headlines confirm the 2016 findings published by the Equal Employment Opportunity Commission (EEOC) that workplace harassment too often goes unreported. The EEOC reports that “approximately 70% of the individuals who experienced harassment never even talked with a supervisor or manager,” meaning that they didn’t report it to their employer. The EEOC found the most common response of any employee who experienced sexual harassment was not to report it but to avoid the harasser, or ignore or attempt to forget the behavior. The reason for not reporting it was that the victim feared they would not be believed, they would be blamed or ostracized, or that they would be retaliated against.

As an “employer’s lawyer” I am often faced with advising clients when these claims are made under an anti-harassment and non-discrimination policy. The victim’s concerns about reporting are legitimate – historically those feared reactions to a sexual harassment report have often borne fruit. Over the years, I believe employers have become much more sensitive to this issue. However, even the most diligent employers on this issue often find themselves noncompliant with Title VII, the law that applies to any employee’s claim of harassment or discrimination. I continue to be surprised that there are many employers who don’t know if they are subject to this law, don’t have a policy prohibiting harassment or discrimination, and don’t follow the EEOC’s guidance as to the specific investigation that has to be performed. So in the wake of all of the press on sexual harassment, it is a good time to take stock of your compliance practices.

Here are some helpful things to keep in mind:

  • Title VII is applicable to employers with 15 or more employees.
  • Title VII requires employers to have a written anti-harassment, anti-discrimination policy with two or more avenues for reporting.
  • The policy must not only reference sexual harassment, but all forms of harassment.
  • The policy must define what is illegal harassment and discrimination.
  • An employer must respond to any complaints under the policy, whether verbal or written.
  • An employer must perform a very specific investigation outlined by the EEOC and the investigation must be timely.
  • An employer must then take any discipline that the investigation’s outcome requires.
  • An employer must then communicate the outcome of the investigation to the employee, although the employer need not tell of the specific discipline if discipline is imposed.
  • An employer must then follow up with the victim to make sure retaliation is not occurring whether or not the underlying investigation resulted in a finding that harassment or discrimination occurred.
  • Retaliation can take many forms.
  • During an investigation, an employer should not change any terms or conditions of the alleged victim’s employment or relocate the victim to make the victim more comfortable – only the alleged offender can be moved or sent out on administrative leave.

These thoughts spring from my observations over the years to the current day regarding employers’ policies and practices. The Fourth Circuit Court of Appeals, our jurisdiction, will not enforce a policy if it is not effective and the steps above are required for an employer to argue its policy is effective.  It is not sufficient to merely have the policy.

Additionally, it is crucial that the leaders in an employer’s organization set the example. Off-color jokes should be prohibited and certainly should not be made by those in charge. Offenders should be dealt with swiftly. Supervisors and leaders truly are held to a higher standard of behavior in the workplace because they set the example. So often employers don’t wish to take any action towards the offender because the offender is so integral to the organization’s success. However, that is exactly the type of situation that creates the possibility for vulnerability on this front as we are seeing in the news today. If employers wish to avoid liability in cases of this nature, they must follow the process diligently and timely, and not be afraid to take discipline when it is required, no matter whom the alleged offender is.

There are several ways that employers can keep their unemployment insurance (UI) tax rate down. First, it is beneficial to learn how the South Carolina Department of Employment and Workforce (“SCDEW”) determines the employer’s experience for tax rate assignment.

Generally, employees are entitled to UI if not working through no fault of their own, including lack of work, reduction of hours, reasons other than cause or misconduct, quit for good cause “in connection with employment,” and substandard performance beyond claimant’s control. SCDEW maintains an account for each employer and records data on unemployment claims to determine the employer’s “experience for rate assignments.” UI benefits paid to an eligible individual will be charged against the account of the most recent employer.

SCDEW calculates the experience rating by taking the total benefits charged against an employer’s account in an applicable time period and divides the employer’s taxable payroll during that same period. In other words, a higher benefits ratio indicates a higher usage of the unemployment system, which results in higher taxes. Generally, an employer will receive an experience rating as of June 30th if it has completed a minimum of 12 consecutive months from the date in which it accomplished liability.

Each year, SCDEW ranks employers based on their benefit ratio percentage. Each employer is then categorized equally among twenty (20) rate classes, with each class consisting of five percent (5%) of the taxable wages of all employers eligible for a rate computation. New employers are assigned to rate class twelve (12). SCDEW then determines the tax rate for the following calendar year by estimating the amount of benefits payments, loan payments, loan interest payments and the “trust fund solvency target.”

Nonprofit organizations and state and local government entities are considered employers liable for payment in lieu of contribution, meaning that they may elect to make payments to the SCDEW. This payment can be made in one of two ways: (1) at the end of each calendar quarter, SCDEW can bill each organization for an amount “equal to full amount of regular benefits plus one-half of the amounts of extended benefits paid during that quarter”; or (2) pay two percent (2%) of the quarterly taxable payroll of that organization within 30 days after the close of each calendar quarter. At the end of the year, SCDEW will then determine whether the total payments for each year made by the organization is less than, or in excess of, the total amount mentioned in the first option. The organization is liable for the unpaid balance if it is less than the amount above. If in excess, all or part of the excess may either be refunded or retained in the fund as part payment for the next year.

So what can an employer do in order to keep the UI tax rate down?

First, implement clear policies and keep records to ensure that sufficient evidence of cause or misconduct can be produced. For instance, be sure to maintain records of employee orientation, trainings, negative counseling, etc.

Second, respond timely. When employees file, employers have the opportunity explain the reason why the claimant is no longer employed. To prevent improper payment, the employer has to respond within 10 calendar days of the notification of appeal tribunal’s decision.

Third, respond adequately and effectively. Your response may come to light in subsequent litigation, so be careful how you respond and consider consulting legal counsel. If the employee was terminated, employers should generally provide SCDEW with the name and title of the employee, a description of the final events leading to termination (with dates and times), a list of warnings given to employee during final year of employment (with dates and times), and how the employee’s actions impacted the company’s operation.

Finally, understand the eligibility and appeals process. Not participating in the appeals process can adversely affect taxes.

About the author: Demetrius Pyburn is employed at Haynsworth Sinkler Boyd, P.A. in Greenville, SC. He is a graduate of the University of South Carolina School of Law in Columbia, SC, Class of 2017 and anticipates becoming a member of the South Carolina Bar in November 2017.

The ruling in the AARP v. EEOC case may be detrimental to employers and their healthcare plans because the EEOC may either reduce the percentage of its allowable inducement (or penalty) below 30% of the employee cost for participation in any employer-sponsored “wellness” program to be considered voluntary or possibly return to its former position that any reward or penalty renders participation involuntary.

The Americans with Disabilities Act (ADA) permits an employer to conduct voluntary medical examinations including voluntary medical histories, including health risk assessments, as part of an employee health program. The Genetic Information Nondiscrimination Act (GINA) also permits the voluntary collection of genetic information. Prior to May 2016 when the EEOC issued its “wellness regulations,” the EEOC’s position was that the ADA also prohibited penalizing or rewarding any employee for completing a health risk assessment that sought medical or disability-related inquiries or participating in any health insurance program, such as a “wellness” program, on the grounds that the reward for doing so rendered participation involuntary. On May 16, 2016 when the EEOC passed its “wellness” regulations, the EEOC concluded that the ADA would not be violated if any incentive or penalty for participation in a “wellness” program was valued at 30% of the employee-cost of plan participation or less. We addressed the EEOC’s 2016 regulations in this blog post.

The AARP’s lawsuit against the EEOC alleged that employees who cannot afford to pay a 30% increase in premiums will be forced to disclose their protected information on health risk assessments or participate in the “wellness” programs when they would otherwise choose not to do so, thereby rendering the award for participation or penalty for refusal to participate involuntary and, thus, prohibited by the ADA. The AARP also alleged that the incentives allowed by the “wellness” regulations were inconsistent with its previous position on incentives.

The 36 page opinion is lengthy but, in short, the D.C. Circuit Court concluded neither the ADA nor GINA defined the term “voluntary” and that the statutes were ambiguous on this point. The federal court went on to conclude that the EEOC’s definition of voluntary in its “wellness” regulations as a 30% employee cost or less for providing medical information as part of a “wellness” program was unreasonable and not adequately explained. The EEOC’s reliance on the Health Insurance Portability and Accountability Act (HIPAA) was unjustified because: 1) HIPAA was promulgated to prevent health insurance discrimination and does not contain an explicit voluntary requirement as ADA and GINA do; and 2) HIPAA expressly permits use of any amount of incentives for participation in “wellness” programs, only applying the rule that the reward may not exceed 30% of the employee and dependents’ total cost of healthcare coverage if the “wellness” program requires satisfaction of a health-related factor to receive the award. Nor was the Court persuaded by the EEOC’s reliance on what it termed current insurance rates to justify the 30% incentive level when the regulation did not elaborate on what those rates are, how the EEOC evaluated them or what bearing they have on the voluntary aspect crucial to the analysis.

For several years prior to the EEOC’s May 15, 2016 regulations, employers, plan administrators, health insurers and brokers hoped that the EEOC would reconcile its position with the Affordable Care Act and HIPAA, which expressly permitted employers to monetarily incentivize employees to participate in wellness programs. While the EEOC’s “wellness” regulations were replete with a number of caveats and conditions, they did at least determine that providing a reward for participation was no longer proof that participation was involuntary. The D.C. District Court’s August 24, 2017 ruling has the potential to result in a setback on the EEOC’s step forward towards that goal.

The opinion can be accessed in its entirety here.

This blog has previously covered the potential pitfalls of classifying workers as independent contractors. While classifying a worker as a “1099” offers many potential benefits on the business side, it can expose the company to significant tax liability, statutory penalties, and monetary damages.

The difficulty for employers is determining which workers may be properly classified as independent contractors. The IRS, Department of Labor, and South Carolina courts all have different tests. On August 9, 2017, the South Carolina Court of Appeals issued a decision that provides some insight on how South Carolina courts make the determination. Continue Reading New South Carolina Decision Impacts How Employers Classify Workers

picture of new I-9 Form as of July 17, 2017Last month, the U.S. Citizenship and Immigration Services published a new version of the I-9 Employment Eligibility Verification Form. The Form I-9 is used by employers to verify the identity and employment authorization of all new hires. The new version of the Form I-9 is identified by a revision date of 07/17/17N and must be used no later than September 18, 2017.

The following minor changes contained in the now current version of the Form I-9 are intended to facilitate completion and reduce errors:

  • The Consular Report of Birth Abroad (Form FS-240) is now a valid List C acceptable document.
  • The prior certifications of report of birth issued by the U.S. Department of State (Form FS-545, Form DS-1350 and Form FS-240) are now consolidated in List C.
  • All List C documents with the exception of the Social Security Card have been renumbered.
  • The U.S. Department of Justice, through its Immigrant and Employee Rights (IER) Section enforces the anti-discrimination provisions of the Immigration and Nationality Act. The Form I-9 instructions now reference the IER rather than the Office of Special Counsel for Immigration-Related Unfair Employment Practices.

The changes are also reflected in the most current version of the Handbook for Employers – Guidance for Completing Form I-9 (M-274) which is available online at: https://www.uscis.gov/book/export/html/59502/en.

David Donovan of South Carolina Lawyers Weekly posted an article, “The Pence Policy: Male-Female Interaction Rule May Have Pitfalls for Employers”, which addresses how Vice President Pence’s policy to never eat alone with a woman other than his wife might disadvantage women if the policy was employed in the workplace because of lost mentoring or career-advancement opportunities.  While the reader may well think the association of Vice President Pence’s policy to gender discrimination is far-fetched, the possible consequence of unintentional discrimination is not so tenuous.

If a workplace is predominately staffed with male supervisors and those supervisors are discouraged from fraternizing with members of the opposite gender, then female employees will be excluded from informal mentoring opportunities, ideas shared over lunch or other social events. This dichotomy not only applies to the male-female demographic, but any demographic where the majority is a certain race, national origin, or religion, and the minority is not.

A take-away from the best diversity training I’ve ever heard was that we all tend to associate with those who are like us. We choose to go to lunch or to have social interaction with those folks we most identify with and, as a result, those who are not like us aren’t included.  I do not discredit Vice President Pence’s policy and can understand his reasons for following it. When a manager, supervisor or executive adopts a policy like the one espoused by Pence, how can employers insure against unintentional employment discrimination?

Mr. Donovan consulted me in the context of lost training opportunities when researching his article. If an employer streamlines or standardizes its training process and implements it during work hours as part of a formal program, the employer is avoiding the effects of unintentional discrimination as well as creating a defense to any such claims.  Putting processes in place for training is wise for other reasons as well, including a consistent outcome or quality of the service or product offered by the company.  Employers’ lawyers (including me) often advise against one-on-one meetings between supervisors and subordinates when the purpose of the meeting is for counseling or discipline.  However, supervisors should be encouraged to train subordinates consistently and equally.  While formal training can be standardized, day-to-day observations as to how a specific employee might improve are, by necessity, individualized.

Supervisors should strive to engage in efforts to improve subordinates equally and can do so without compromising principles similar to those expressed by Vice President Pence. Communicate discreetly but in the open with a subordinate.  Include comments about how subordinates might improve on their annual or other periodic reviews. Include areas for improvement under discussions at department meetings without identifying those employees who provided the examples for improvement.  There are surely many more opportunities for a supervisor to ensure that all of the subordinates in the supervisors’ department are receiving the same or similar advantages.