Tags: New employment laws/amendments, compliance, FLSA, wage hour, employment, employer, employee, employee rights, business, DOL, New Laws, Department of Labor, overtime, salary
This simple presentation provides background as to the ideals behind the recent DOL overtime and salary basis changes. Changes are effective in December of this year so employers need to look at their job descriptions, look at the hours worked, and engage in some analysis as to their business needs in order to remain complaint with the updated regulations.
From Hultman Sensenig + Joshi: Reading this blog does not create an attorney client relationship nor is legal advice given in this blog. The overtime issues are very serious for employers and we do suggest reviewing your policies and procedures to prepare for the upcoming changes – and enforcement efforts. Let us know if we can help you.
The EEOC issues updated guidance on ADA related leave – as if there weren’t enough updates to deal with in 2016!May 10, 2016 at 11:57 pm | Posted in ADA, discrimination, EEOC, Employee, Employer, Employment Law, FMLA, harassment, Legal, New employment laws/amendments, retaliation | Leave a comment
Tags: ADA, disability, discrimination, employee, employer, employment law, FMLA, handbook, New employment laws/amendments, policies, policy, workers compensation
Directly from the EEOC’s website:
Employer-Provided Leave and the Americans with Disabilities Act
The U.S. Equal Employment Opportunity Commission (EEOC) enforces Title I of the Americans with Disabilities Act (ADA). The ADA prohibits discrimination on the basis of disability in employment and requires that covered employers (employers with 15 or more employees) provide reasonable accommodations to applicants and employees with disabilities that require such accommodations due to their disabilities.
A reasonable accommodation is, generally, “any change in the work environment or in the way things are customarily done that enables an individual with a disability to enjoy equal employment opportunities.” That can include making modifications to existing leave policies and providing leave when needed for a disability, even where an employer does not offer leave to other employees. As with any other accommodation, the goal of providing leave as an accommodation is to afford employees with disabilities equal employment opportunities.
The EEOC continues to receive charges indicating that some employers may be unaware of Commission positions about leave and the ADA. For example, some employers may not know that they may have to modify policies that limit the amount of leave employees can take when an employee needs additional leave as a reasonable accommodation. Employer policies that require employees on extended leave to be 100 percent healed or able to work without restrictions may deny some employees reasonable accommodations that would enable them to return to work. Employers also sometimes fail to consider reassignment as an option for employees with disabilities who cannot return to their jobs following leave.
This document seeks to provide general information to employers and employees regarding when and how leave must be granted for reasons related to an employee’s disability in order to promote voluntary compliance with the ADA. It is consistent with the EEOC’s regulations enforcing Title I of the ADA, as well as the EEOC’s 2002 Revised Enforcement Guidance: Reasonable Accommodation and Undue Hardship Under the Americans with Disabilities Act (a link to the Guidance appears at the end of this document).
Equal Access to Leave Under an Employer’s Leave Policy
Employees with disabilities must be provided with access to leave on the same basis as all other similarly-situated employees. Many employers offer leave — paid and unpaid — as an employee benefit. Some employers provide a certain number of paid leave days for employees to use as they wish. Others provide a certain number of paid leave days designated as annual leave, sick leave, or “personal days.”
If an employer receives a request for leave for reasons related to a disability and the leave falls within the employer’s existing leave policy, it should treat the employee requesting the leave the same as an employee who requests leave for reasons unrelated to a disability.
Example 1: An employer provides four days of paid sick leave each year to all employees and does not set any conditions for its use. An employee who has not used any sick leave this year requests to use three days of paid sick leave because of symptoms she is experiencing due to major depression which, she says, has flared up due to several particularly stressful months at work. The employee’s supervisor says that she must provide a note from a psychiatrist if she wants the leave because “otherwise everybody who’s having a little stress at work is going to tell me they are depressed and want time off.” The employer’s sick leave policy does not require any documentation, and requests for sick leave are routinely granted based on an employee’s statement that he or she needs leave. The supervisor’s action violates the ADA because the employee is being subjected to different conditions for use of sick leave than employees without her disability.
Example 2: An employer permits employees to use paid annual leave for any purpose and does not require that they explain how they intend to use it. An employee with a disability requests one day of annual leave and mentions to her supervisor that she is using it to have repairs made to her wheelchair. Even though he has never denied other employees annual leave based on their reason for using it, the supervisor responds, “That’s what sick leave is for,” and requires her to designate the time off as sick leave. This violates the ADA, since the employer has denied the employee’s use of annual leave due to her disability.
Employers are entitled to have policies that require all employees to provide a doctor’s note or other documentation to substantiate the need for leave.
Example 3: An employee with a disability asks to take six days of paid sick leave. The employer has a policy requiring a doctor’s note for any sick leave over three days that explains why leave is needed. The employee must provide the requested documentation.
Granting Leave as a Reasonable Accommodation
The purpose of the ADA’s reasonable accommodation obligation is to require employers to change the way things are customarily done to enable employees with disabilities to work. Leave as a reasonable accommodation is consistent with this purpose when it enables an employee to return to work following the period of leave. As noted above, requests for leave related to disability can often fall under existing employer policies. In those cases, the employer’s obligation is to provide persons with disabilities access to those policies on equal terms as similarly situated individuals. That is not the end of an employer’s obligation under the ADA though. An employer must consider providing unpaid leave to an employee with a disability as a reasonable accommodation if the employee requires it, and so long as it does not create an undue hardship for the employer. (See below for a discussion of undue hardship.) That is the case even when:
the employer does not offer leave as an employee benefit;
the employee is not eligible for leave under the employer’s policy; or
the employee has exhausted the leave the employer provides as a benefit (including leave exhausted under a workers’ compensation program, or the FMLA or similar state or local laws).
Reasonable accommodation does not require an employer to provide paid leave beyond what it provides as part of its paid leave policy. Also, as is the case with all other requests for accommodation, an employer can deny requests for leave when it can show that providing the accommodation would impose an undue hardship on its operations or finances.
Example 4: An employer provides 10 days of paid annual leave and four days of paid sick leave each year to employees who have worked for the company fewer than three years. After three years, employees are eligible for 15 days of paid annual leave and eight days of paid sick leave. An employee who has worked for only two years has used his 10 days of paid annual leave and now requests six days of paid sick leave for treatment for his disability. Under its leave program, the employer must provide the employee with four days of paid sick leave but may refuse to provide paid leave for the two additional days of sick leave because the employee has not worked long enough to earn this benefit. However, the employer must provide two additional days of unpaid sick leave as a reasonable accommodation unless it can show that providing the two additional days would cause undue hardship.
Example 5: An employer’s leave policy does not cover employees until they have worked for six months. An employee who has worked for only three months requires four weeks of leave for treatment for a disability. Although the employee is ineligible for leave under the employer’s leave policy, the employer must provide unpaid leave as a reasonable accommodation unless it can show that providing the unpaid leave would cause undue hardship.
Example 6: An employer’s leave policy explicitly prohibits leave during the first six months of employment. An employee who has worked for only three months needs four weeks of leave for treatment of a disability and the employer tells him that if he takes leave, he will be fired. Although the employee is ineligible for leave under the employer’s leave program, the employer must provide unpaid leave as a reasonable accommodation unless it can show that providing the unpaid leave would cause undue hardship. If the employer could provide unpaid leave without causing an undue hardship, but fires the individual instead, the employer will have violated the ADA.
Example 7: An employer’s leave policy does not cover employees who work fewer than 30 hours per week. An employee who works 25 hours per week and who has not worked enough hours to be eligible for leave under the FMLA requests one day of leave each week for the next three months for treatment of a disability. The employer must provide unpaid leave as a reasonable accommodation unless it can show that providing the unpaid leave would cause undue hardship.
An employer may not penalize an employee for using leave as a reasonable accommodation. Doing so would be a violation of the ADA because it would render the leave an ineffective accommodation; it also may constitute retaliation for use of a reasonable accommodation.
Example 8: An employee who is not covered by the FMLA requires three months of leave due to a disability. The employer determines that providing three months of leave would not cause undue hardship and grants the request. Instead of giving the employee an unsatisfactory rating during her next annual performance appraisal because she failed to meet production quotas while she was on leave, the employee’s supervisor should evaluate the employee’s performance taking into account her productivity for the months she did work.
Leave and the Interactive Process Generally
Communication after an Employee Requests Leave
As a general rule, the individual with a disability – who has the most knowledge about the need for reasonable accommodation – must inform the employer that an accommodation is needed. When an employee requests leave, or additional leave, for a medical condition, the employer must treat the request as one for a reasonable accommodation under the ADA. However, if the request for leave can be addressed by an employer’s leave program, the FMLA (or a similar state or local law), or the workers’ compensation program, the employer may provide leave under those programs. But, if the leave cannot be granted under any other program, then an employer should promptly engage in an “interactive process” with the employee — a process designed to enable the employer to obtain relevant information to determine the feasibility of providing the leave as a reasonable accommodation without causing an undue hardship.
The information required by the employer will vary from one employee to another. Sometimes the disability may be obvious; in other situations the employer may need additional information to confirm that the condition is a disability under the ADA. However, most of the focus will be on the following issues:
the specific reason(s) the employee needs leave (for example, surgery and recuperation, adjustment to a new medication regimen, training of a new service animal, or doctor visits or physical therapy);
whether the leave will be a block of time (for example, three weeks or four months), or intermittent (for example, one day per week, six days per month, occasional days throughout the year); and
when the need for leave will end.
Depending on the information the employee provides, the employer should consider whether the leave would cause an undue hardship (see below).
An employer may obtain information from the employee’s health care provider (with the employee’s permission) to confirm or to elaborate on information that the employee has provided. Employers may also ask the health care provider to respond to questions designed to enable the employer to understand the need for leave, the amount and type of leave required, and whether reasonable accommodations other than (or in addition to) leave may be effective for the employee (perhaps resulting in the need for less leave). Information from the health care provider may also assist the employer in determining whether the leave would pose an undue hardship. An employee requesting leave as a reasonable accommodation should respond to questions from an employer as part of the interactive process and work with his or her health care provider to obtain requested medical documentation as quickly as possible.
Communication During Leave and Prior to Return to Work
The interactive process may continue even after an initial request for leave has been granted, particularly if the employee’s request did not specify an exact or fairly specific return date, or when the employee requires additional leave beyond that which was originally granted.
Example 9: An employee with a disability is granted three months of leave by an employer. Near the end of the three month leave, the employee requests an additional 30 days of leave. In this situation, the employer can request information from the employee or the employee’s health care provider about the need for the 30 additional days and the likelihood that the employee will be able to return to work, with or without reasonable accommodation, if the extension is granted.
However, an employer that has granted leave with a fixed return date may not ask the employee to provide periodic updates, although it may reach out to an employee on extended leave to check on the employee’s progress.
Example 10: An employee with a disability is granted three months of leave to recover from a surgery. After one month, the employer phones the employee and asks how the employee is doing and whether there is anything the employee needs from the employer to help the employee recover and return to work. That is an acceptable request for information. Additionally, a week prior to the end of the employee’s leave, the employer again reaches out to the employee to ask whether the employee is able to return to work at the end of leave and if any additional accommodations are required. This is also an acceptable request for information.
Maximum Leave Policies
The ADA requires that employers make exceptions to their policies, including leave policies, in order to provide a reasonable accommodation. Although employers are allowed to have leave policies that establish the maximum amount of leave an employer will provide or permit, they may have to grant leave beyond this amount as a reasonable accommodation to employees who require it because of a disability, unless the employer can show that doing so will cause an undue hardship.
Example 11: An employer covered under the FMLA grants employees a maximum of 12 weeks of leave per year. An employee uses the full 12 weeks of FMLA leave for her disability but still needs five additional weeks of leave. The employer must provide the additional leave as a reasonable accommodation unless the employer can show that doing so will cause an undue hardship. The Commission takes the position that compliance with the FMLA does not necessarily meet an employer’s obligation under the ADA, and the fact that any additional leave exceeds what is permitted under the FMLA, by itself, is not sufficient to show undue hardship. However, there may be legitimate reasons that establish undue hardship, such as the impact on an employer’s operations from the leave already taken and/or from granting additional leave. Also, the employer may consider whether other reasonable accommodations may enable the employee to return to work sooner than the employee anticipates, as long as those accommodations would be consistent with the employee’s medical needs.
Types of Maximum Leave Policies
Maximum leave policies (sometimes referred to as “no fault” leave policies) take many different forms. A common policy, especially for entities covered by the FMLA, is a flat limit of 12 weeks for both extended and intermittent leave. Other varieties exist though. Some maximum leave policies have caps much higher than 12 weeks. Others, particularly those not covered by the FMLA, set lower overall caps. Employers also frequently implement policies that limit unplanned absences. For example, a policy might permit employees to have no more than five unplanned absences during a 12-month period, after which they will be subject to progressive discipline or termination.
Employees with disabilities are not exempt from these policies as a general rule. However, such policies may have to be modified as a reasonable accommodation for absences related to a disability, unless the employer can show that doing so would cause undue hardship.
Example 12: An employer is not covered by the FMLA, and its leave policy specifies that an employee is entitled to only four days of unscheduled leave per year. An employee with a disability informs her employer that her disability may cause periodic unplanned absences and that those absences might exceed four days a year. The employee has requested a reasonable accommodation, and the employer should engage with the employee in an interactive process to determine if her disability requires intermittent absences, the likely frequency of the unplanned absences, and if granting an exception to the unplanned absence policy would cause undue hardship.
Communication Issues for Employers with Maximum Leave Policies
Many employers, especially larger ones and those with generous maximum leave policies, may rely on “form letters” to communicate with employees who are nearing the end of leave provided under an employer’s leave program. These letters frequently instruct an employee to return to work by a certain date or face termination or other discipline. Employers who use such form letters may wish to modify them to let employees know that if an employee needs additional unpaid leave as a reasonable accommodation for a disability, the employee should ask for it as soon as possible so that the employer may consider whether it can grant an extension without causing undue hardship. If an employer relies on a third party provider to handle lengthy leave programs, including short- and long-term disability leave programs, it should ensure that any automatic form letters generated by these providers comply with the employer’s obligations under the ADA.
Employers who handle requests under their regular leave policy separately from requests for leave as a reasonable accommodation should ensure that those responsible communicate with one another to avoid mishandling a request for accommodation. For example, an employer may hire a contractor to handle its long-term disability program, but have its human resources department handle all requests for leave as a reasonable accommodation. The employer should ensure that the contractor is instructed to forward to the human resources department, in a timely manner, any requests for additional leave beyond the maximum period granted under the long-term disability program, and to refrain from terminating the employee until the human resources department has the opportunity to engage in an interactive process. The human resources department should contact the employee as soon as possible to explain that it will be handling the request for additional leave as a reasonable accommodation, and that all further communication from the employee on this issue should be directed to that department.
An employer and employee should continue to communicate about whether the employee is ready to return to work or whether additional leave is necessary. For example, the employee may contact a supervisor, human resources official, or anyone else designated by the employer to handle the leave to provide updates about the employee’s ability to return to work (with or without reasonable accommodation), or about any need for additional leave.
If an employee requests additional leave that will exceed an employer’s maximum leave policy (whether the leave is a block of time or intermittent), the employer may engage in an interactive process as described above, including obtaining medical documentation specifying the amount of the additional leave needed, the reasons for the additional leave, and why the initial estimate of a return date proved inaccurate. An employer may also request relevant information to assist in determining whether the requested extension will result in an undue hardship.
Return to Work and Reasonable Accommodation (Including Reassignment)
Employees on leave for a disability may request reasonable accommodation in order to return to work. The request may be made by the employee, or it may be made in a doctor’s note releasing the employee to return to work with certain restrictions.
100% Healed Policies
An employer will violate the ADA if it requires an employee with a disability to have no medical restrictions — that is, be “100%” healed or recovered — if the employee can perform her job with or without reasonable accommodation unless the employer can show providing the needed accommodations would cause an undue hardship. Similarly, an employer will violate the ADA if it claims an employee with medical restrictions poses a safety risk but it cannot show that the individual is a “direct threat.” Direct threat is the ADA standard for determining whether an employee’s disability poses a “significant risk of substantial harm” to self or to others. If an employee’s disability poses a direct threat, an employer must consider whether reasonable accommodation will eliminate or diminish the direct threat.
Example 13: A clerk has been out on medical leave for 16 weeks for surgery to address a disability. The employee’s doctor releases him to return to work but with a 20-pound lifting restriction. The employer refuses to allow the employee to return to work with the lifting restriction, even though the employee’s essential and marginal functions do not require lifting 20 pounds. The employer’s action violates the ADA because the employee can perform his job and he does not pose a direct threat.
Example 14: An employee with a disability requests and is granted two months of medical leave for her disability. Three days after returning to work she requests as reasonable accommodations for her disability an ergonomic chair, adjusted lighting in her office, and a part-time schedule for eight days. In response, the company requires the employee to continue on leave and informs her that she cannot return to work until she is able to work full-time with no restrictions or accommodations. The employer may not prohibit the employee from returning to work solely because she needs reasonable accommodations (though the employer may deny the requested accommodations if they cause an undue hardship). If the employee requires reasonable accommodations to enable her to perform the essential functions of her job and the accommodations requested (or effective alternatives) do not cause an undue hardship, the employer’s requirement violates the ADA.
Issues Related to the Interactive Process and Return to Work
If an employee returns from a leave of absence with restrictions from his or her doctor, the employer may ask why the restrictions are required and how long they may be needed, and it may explore with the employee and his doctor (or other health care professional) possible accommodations that will enable the employee to perform the essential functions of the job consistent with the doctor’s recommended limitations. In some situations, there may be more than one way to meet a medical restriction.
Example 15: An employee with a disability has been out on leave for three months. The employee’s doctor releases her to return to work, but imposes a medical restriction requiring her to take a 15-minute break every 90 minutes. Taking a rest break is a form of reasonable accommodation. When the employer asks the purpose of the break, the doctor explains that the employee needs to sit for 15 minutes after standing and walking for 90 minutes. The employer asks if the employee could do seated work during the break; the doctor says yes. To comply with the ADA, the employer rearranges when certain marginal functions are performed so that the employee can perform those job duties when seated and therefore not take the 15-minute break.
If necessary, an employer should initiate the interactive process upon receiving a request for reasonable accommodation from an employee on leave for a disability who wants to return to work (or after receiving a doctor’s note outlining work restrictions). Some issues that may need to be explored include:
the specific accommodation(s) an employee requires;
the reason an accommodation or work restriction is needed (that is, the limitations that prevent an employee from returning to work without reasonable accommodation);
the length of time an employee will need the reasonable accommodation;
possible alternative accommodations that might effectively meet the employee’s disability-related needs; and
whether any of the accommodations would cause an undue hardship.
In some situations, the requested reasonable accommodation will be reassignment to a new job because the disability prevents the employee from performing one or more essential functions of the current job, even with a reasonable accommodation, or because any accommodation in the current job would result in undue hardship. The Commission takes the position that if reassignment is required, an employer must place the employee in a vacant position for which he is qualified, without requiring the employee to compete with other applicants for open positions. Reassignment does not include promotion, and generally an employer does not have to place someone in a vacant position as a reasonable accommodation when another employee is entitled to the position under a uniformly-applied seniority system.
Example 16: A medical assistant in a hospital required leave as a reasonable accommodation for her disability. Her doctor clears her to return to work but requires that she permanently use a cane when standing and walking. The employee realizes that she cannot perform significant parts of her job while using a cane and requests a reassignment to a vacant position for which she is qualified. The hospital violates the ADA if it fires the employee rather than reassigning her to a vacant position for which she is qualified and in which she could perform the essential functions while using a cane.
When assessing whether to grant leave as a reasonable accommodation, an employer may consider whether the leave would cause an undue hardship. If it would, the employer does not have to grant the leave. Determination of whether providing leave would result in undue hardship may involve consideration of the following:
the amount and/or length of leave required (for example, four months, three days per week, six days per month, four to six days of intermittent leave for one month, four to six days of intermittent leave each month for six months, leave required indefinitely, or leave without a specified or estimated end date);
the frequency of the leave (for example, three days per week, three days per month, every Thursday);
whether there is any flexibility with respect to the days on which leave is taken (for example, whether treatment normally provided on a Monday could be provided on some other day during the week);
whether the need for intermittent leave on specific dates is predictable or unpredictable (for example, the specific day that an employee needs leave because of a seizure is unpredictable; intermittent leave to obtain chemotherapy is predictable);
the impact of the employee’s absence on coworkers and on whether specific job duties are being performed in an appropriate and timely manner (for example, only one coworker has the skills of the employee on leave and the job duties involved must be performed under a contract with a specific completion date, making it impossible for the employer to provide the amount of leave requested without over-burdening the coworker, failing to fulfill the contract, or incurring significant overtime costs); and
the impact on the employer’s operations and its ability to serve customers/clients appropriately and in a timely manner, which takes into account, for example, the size of the employer.
In many instances an employee (or the employee’s doctor) can provide a definitive date on which the employee can return to work (for example, October 1). In some instances, only an approximate date (for example, “sometime during the end of September” or “around October 1”) or range of dates (for example, between September 1 and September 30) can be provided. Sometimes, a projected return date or even a range of return dates may need to be modified in light of changed circumstances, such as where an employee’s recovery from surgery takes longer than expected. None of these situations will necessarily result in undue hardship, but instead must be evaluated on a case-by-case basis. However, indefinite leave — meaning that an employee cannot say whether or when she will be able to return to work at all – will constitute an undue hardship, and so does not have to be provided as a reasonable accommodation.
In assessing undue hardship on an initial request for leave as a reasonable accommodation or a request for leave beyond that which was originally granted, the employer may take into account leave already taken — whether pursuant to a workers’ compensation program, the FMLA (or similar state or local leave law), an employer’s leave program, or leave provided as a reasonable accommodation.
Example 17: An employee has exhausted her FMLA leave but requires 15 additional days of leave due to her disability. In determining whether an undue hardship exists, the employer may consider the impact of the 12 weeks of FMLA leave already granted and the additional impact on the employer’s operations in granting three more weeks of leave.
Example 18: An employee has exhausted both his FMLA leave and the additional eight weeks of leave available under the employer’s leave program, but requires another four weeks of leave due to his disability. In determining whether an undue hardship exists, the employer may consider the impact of the 20 weeks of leave already granted and the additional impact on the employer’s operations in granting four more weeks of leave.
Example 19: An employer not covered by the FMLA initially grants an employee intermittent leave for a disability. After six months, the employer realizes that the employee is using far more leave than expected and asks for medical documentation to explain the additional use of leave and the outlook for the next six months. The documentation reveals that the employee could need as much leave in the coming six months as he already used. As a result of the increased number of absences, the employer has had to postpone meetings necessary to complete a project for one of the employer’s clients, in turn causing delays in meeting the client’s needs. In addition, the employer has had to reallocate some of the employee’s job duties, resulting both in increased workloads and changes in work priorities for coworkers that are interfering with meeting the needs of other clients. Based on this information, the employer determines that additional intermittent leave as described in the doctor’s letter would be an undue hardship.
Leave as a reasonable accommodation includes the right to return to the employee’s original position. However, if an employer determines that holding open the job will cause an undue hardship, then it must consider whether there are alternatives that permit the employee to complete the leave and return to work.
Example 20: An employer is not covered under the FMLA. An employee with a disability requires 16 weeks of leave as a reasonable accommodation. The employer determines that it can grant the request and hold open the job. However, due to unforeseen circumstances that arise after seven weeks of leave, the employer determines that it would be an undue hardship to continue holding the job open. The job is filled within three weeks by promoting a qualified employee. Meanwhile, the employer determines that the employee on leave is qualified for the now-vacant position of the promoted employee and that the job can be held open until the employee returns to work in six weeks. The employer explains the situation to the employee with a disability and offers the newly-vacant position as a reasonable accommodation.
The EEOC has issued a number of documents that discuss how the ADA addresses various leave issues:
Revised Enforcement Guidance: Reasonable Accommodation and Undue Hardship Under the Americans with Disabilities Act, http://www.eeoc.gov/policy/docs/accommodation.html (see “Leave” under “Types of Reasonable Accommodations”)
Enforcement Guidance on Pregnancy Discrimination and Related Issues, http://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm (see section II.B., ADA and Reasonable Accommodation)
The Family and Medical Leave Act, the Americans with Disabilities Act, and Title VII of the Civil Rights Act of 1964, http://www.eeoc.gov/policy/docs/fmlaada.html (see “Comparison of ADA and FMLA Leave” and “ADA Compliance When the FMLA Also Applies”)
Enforcement Guidance: Workers’ Compensation and the ADA, http://www.eeoc.gov/policy/docs/workcomp.html (see “Return to Work Decisions” and “Reasonable Accommodation”)
The Americans with Disabilities Act: Applying Performance and Conduct Standards to Employees with Disabilities, http://www.eeoc.gov/facts/performance-conduct.html (see “Attendance issues”)
Additional information on the requirements of the ADA and section 501 of the Rehabilitation Act can be found on EEOC’s website, http://www.eeoc.gov.
 This document also applies to Federal employees protected under section 501 of the Rehabilitation Act, which has the same non-discrimination requirements as the ADA.
 29 C.F.R. pt. 1630 app. §1630.2(o).
 Employers also may have to provide leave mandated by Federal, state, or local laws. For example, the Federal Family and Medical Leave Act (FMLA) requires employers with 50 or more employees to provide up to 12 weeks of leave per year to eligible employees. The FMLA covers private sector employers with 50 or more employees in 20 or more workweeks in the current or preceding calendar year. The law also covers local, state, or Federal government agencies, as well as public or private elementary or secondary schools, regardless of the number of employees. An eligible employee must: (1) have worked for a covered employer for at least 12 months, (2) have worked at least 1,250 hours during the 12-month period immediately preceding the leave, and (3) work at a location where the employer has at least 50 employees within 75 miles. More information on the FMLA is available at http://www.dol.gov/whd/regs/compliance/whdfs28.pdf. The EEOC previously issued a Fact Sheet concerning the interaction of FMLA, ADA, and Title VII rights, available at https://www.eeoc.gov/policy/docs/fmlaada.html.
 All examples assume that the employee’s medical condition meets the broad definition of disability found in the ADA. For more information on the definition of disability, see http://www.eeoc.gov/laws/regulations/adaaa_fact_sheet.cfm.
 The examples used in this document assume that the leave requested is “reasonable,” as that term is defined under U.S. Airways v. Barnett, 535 U.S. 391 (2002), and as discussed in the EEOC’s Revised Enforcement Guidance: Reasonable Accommodation and Undue Hardship under the Americans with Disabilities Act, http://www.eeoc.gov/policy/docs/accommodation.html. The examples also assume that leave is the only effective reasonable accommodation, meaning it alone meets the employee’s needs. But, as part of the interactive process an employer may discuss with an employee whether an alternative form of reasonable accommodation would meet the employee’s needs. In some situations, a combination of leave and other reasonable accommodations (for example, part-time work, telework, a number of breaks, and removal of marginal functions) may enable an employee to return to work sooner and therefore require less leave.
 Penalizing an employee for use of leave as a reasonable accommodation may also raise a disparate treatment issue if the employer grants similar amounts of leave to non-disabled employees but does not penalize them.
 See consent decree in EEOC v. Brookdale Senior Living Communities, Inc. (D. Colo. No. 14-cv-02643-KMT)(resolved August 17, 2015). EEOC alleged that the company refused an employee’s request to return to work after leave for fibromyalgia because she was unable to return to work without restrictions or accommodations. See also consent decree in EEOC v. Americold Logistics (W.D. Ky. No. 4:12-cv-47-JHM)(resolved June 14, 2013). In this case, the EEOC alleged that the employer refused to explore or to provide reasonable accommodation that would allow an employee with chronic lumbar back pain to return to work and instead fired the employee because she was not 100% healed. See also Kauffman v. Petersen Health Care VII, LLC, 769 F.3d 958 (7th Cir. 2014)(permitting an employer to require that an employee be 100% healed would negate the ADA’s requirement that an employer provide reasonable accommodation if it enables an employee to perform his job).
 See Question 29 in EEOC’s Revised Enforcement Guidance: Reasonable Accommodation and Undue Hardship Under the Americans with Disabilities Act, http://www.eeoc.gov/policy/docs/accommodation.html.
For more information on the requirements and limitations of reassignment, see EEOC’s Revised Enforcement Guidance: Reasonable Accommodation and Undue Hardship Under the Americans with Disabilities Act, http://www.eeoc.gov/policy/docs/accommodation.html.
From Hultman Sensenig + Joshi: So many changes this year for employers from the various agencies – DOL and EEOC have issued many new policies for employers to review and incorporate into handbooks and manuals. The EEOC’s Guidance is informative and helpful as the examples are concrete and provide some real insight into how the EEOC views ADA related leave. Reading this blog does not result in an attorney client relationship between the reader and this blogger, nor is legal advice being given by the sharing of the educational information found in this blog.
Tags: business, compliance, EEOC, employee, employee rights, employment law, exempt, handbook, LGBT, New employment laws/amendments, policy, Transgender
Directly from the EEOC’s website:
U.S. Equal Employment Opportunity Commission sent this bulletin at 05/02/2016 03:11 PM EDT
Fact Sheet: Bathroom Access Rights for Transgender Employees Under Title VII of the Civil Rights Act of 1964
“Transgender” refers to people whose gender identity and/or expression is different from the sex assigned to them at birth (e.g. the sex listed on an original birth certificate). The term transgender woman typically is used to refer to someone who was assigned the male sex at birth but who identifies as a female. Likewise, the term transgender man typically is used to refer to someone who was assigned the female sex at birth but who identifies as male. A person does not need to undergo any medical procedure to be considered a transgender man or a transgender woman.
In addition to other federal laws, the U.S. Equal Employment Opportunity Commission (EEOC) enforces Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race, color, national origin, religion, and sex (including pregnancy, gender identity, and sexual orientation). Title VII applies to all federal, state, and local government agencies in their capacity as employers, and to all private employers with 15 or more employees.
In Macy v. Dep’t of Justice, EEOC Appeal No. 0120120821, 2012 WL 1435995 (Apr. 12, 2012), the EEOC ruled that discrimination based on transgender status is sex discrimination in violation of Title VII, and in Lusardi v. Dep’t of the Army, EEOC Appeal No. 0120133395, 2015 WL 1607756 (Mar. 27, 2015), the EEOC held that:
denying an employee equal access to a common restroom corresponding to the employee’s gender identity is sex discrimination;
an employer cannot condition this right on the employee undergoing or providing proof of surgery or any other medical procedure; and,
an employer cannot avoid the requirement to provide equal access to a common restroom by restricting a transgender employee to a single-user restroom instead (though the employer can make a single-user restroom available to all employees who might choose to use it).
Contrary state law is not a defense under Title VII. 42 U.S.C. § 2000e-7.
In G. ex rel. Grimm v. Gloucester Cty. Sch. Bd., — F.3d –, 2016 WL 1567467 (4th Cir. 2016), the United States Court of Appeals for the Fourth Circuit reached a similar conclusion by deferring to the Department of Education’s position that the prohibition against sex discrimination under Title IX requires educational institutions to give transgender students restroom and locker access consistent with their gender identity.
Gender-based stereotypes, perceptions, or comfort level must not interfere with the ability of any employee to work free from discrimination, including harassment. As the Commission observed in Lusardi: “[S]upervisory or co-worker confusion or anxiety cannot justify discriminatory terms and conditions of employment. Title VII prohibits discrimination based on sex whether motivated by hostility, by a desire to protect people of a certain gender, by gender stereotypes, or by the desire to accommodate other people’s prejudices or discomfort.”
Like all non-discrimination provisions, these protections address conduct in the workplace, not personal beliefs. Thus, these protections do not require any employee to change beliefs. Rather, they seek to ensure appropriate workplace treatment so that all employees may perform their jobs free from discrimination.
Further information from other federal government agencies includes: A Guide to Restroom Access for Transgender Workers, issued by the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA), https://www.osha.gov/Publications/OSHA3795.pdf, and Guidance Regarding the Employment of Transgender Individuals in the Federal Workplace, https://www.opm.gov/policy-data-oversight/diversity-and-inclusion/reference-materials/gender-identity-guidance/, issued by the U.S. Office of Personnel Management.
If you believe you have been discriminated against, you may take action to protect your rights under Title VII by filing a complaint:
Private sector and state/local government employees may file a charge of discrimination by contacting the EEOC at 1-800-669-4000 or go to https://www.eeoc.gov/employees/howtofile.cfm.
Federal government employees may initiate the complaint process by contacting an EEO counselor at your agency; more information is available at https://www.eeoc.gov/federal/fed_employees/complaint_overview.cfm
From Hultman Sensenig + Joshi: The EEOC and the DOL have been very active lately with issuing new guidelines. Employers should take note as to all of this activity and respond proactively by reviewing policies and procedures and looking at inclusivity in the workplace. As you consider such policies, consider the costs of litigation – and the impact of being the employer that makes a splash in the local media for alleged discriminatory practices. Reading this blog does not create an attorney client relationship nor is legal advice being provided by your reading this blog.
The DOL just released a new FMLA Employer Guide. Webinars will also be scheduled by DOL so this will be a great opportunity to hear directly from the Agency as to its interpretation of the FMLA and how it intends for its guidance to be interpreted.
With a new guide also comes a new FMLA poster so please update your postings!
I am hoping that if you cut and paste this address, you will be taken to the new FMLA Guide: <a href=”http://dol.gov/whd/fmla/employerguide.htm”><img src=”http://dol.gov/whd/images/employerguide-tn.jpg” alt=”FMLA Employer Guide” border=”0″ width=”150″ height=”193″ /></a>.
From Hultman Sensenig + Joshi: The federal government is “en fuego” these days with issuing new guidance, interpretations, and rules, especially DOL! There is no better time than now to review your handbooks, your policies and procedures, your forms, and train your staff as to how to address the many issues covered by this blog, and all of the new changes in the world of employment law. By reading this blog, there is no legal advice provided and there is no attorney client relationship created. If you would like to confer and create an attorney client relationship, please reach out at email@example.com.
Tags: business, compliance, EEOC, employee, employee rights, employer, employment, employment law, handbook, New employment laws/amendments, policy
Directly from the EEOC and found on their website:
What You Should Know About EEOC and the Enforcement Protections for LGBT Workers
EEOC interprets and enforces Title VII’s prohibition of sex discrimination as forbidding any employment discrimination based on gender identity or sexual orientation. These protections apply regardless of any contrary state or local laws.
Through investigation, conciliation, and litigation of charges by individuals against private sector employers, as well as hearings and appeals for federal sector workers, the Commission has taken the position that existing sex discrimination provisions in Title VII protect lesbian, gay, bisexual, and transgender (LGBT) applicants and employees against employment bias. The Commission has obtained approximately $6.4 million in monetary relief for individuals, as well as numerous employer policy changes, in voluntary resolutions of LGBT discrimination charges under Title VII since data collection began in 2013. A growing number of court decisions have endorsed the Commission’s interpretation of Title VII.
The information provided below highlights what you should know about EEOC’s outreach and enforcement in this area.
Examples of LGBT-Related Sex Discrimination Claims
Some examples of LGBT-related claims that EEOC views as unlawful sex discrimination include:
Failing to hire an applicant because she is a transgender woman.
Firing an employee because he is planning or has made a gender transition.
Denying an employee equal access to a common restroom corresponding to the employee’s gender identity.
Harassing an employee because of a gender transition, such as by intentionally and persistently failing to use the name and gender pronoun that correspond to the gender identity with which the employee identifies, and which the employee has communicated to management and employees.
Denying an employee a promotion because he is gay or straight.
Discriminating in terms, conditions, or privileges of employment, such as providing a lower salary to an employee because of sexual orientation, or denying spousal health insurance benefits to a female employee because her legal spouse is a woman, while providing spousal health insurance to a male employee whose legal spouse is a woman.
Harassing an employee because of his or her sexual orientation, for example, by derogatory terms, sexually oriented comments, or disparaging remarks for associating with a person of the same or opposite sex.
Discriminating against or harassing an employee because of his or her sexual orientation or gender identity, in combination with another unlawful reason, for example, on the basis of transgender status and race, or sexual orientation and disability.
See How to File a Charge of Employment Discrimination for information about filing a Title VII charge of sex discrimination in employment related to gender identity or sexual orientation bias. There is a different complaint process for federal employees.
Applicable Federal Law
EEOC is responsible for enforcing federal laws that make it illegal to discriminate in employment against a job applicant, employee, or former employee because of the person’s race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. These federal laws also prohibit employers from retaliating against workers who oppose discriminatory employment practices – for example, by reporting incidents of sexual harassment to their supervisor or human resources department – or against those who participate in an employment discrimination proceeding – for example by filing an EEOC charge, cooperating with an EEOC investigation, or participating in an employment discrimination lawsuit.
While Title VII of the Civil Rights Act of 1964 does not explicitly include sexual orientation or gender identity in its list of protected bases, the Commission, consistent with Supreme Court case law holding that employment actions motivated by gender stereotyping are unlawful sex discrimination and other court decisions, interprets the statute’s sex discrimination provision as prohibiting discrimination against employees on the basis of sexual orientation and gender identity.
Over the past several years the Commission has set forth its position in several published decisions involving federal employment. These decisions explain the legal basis for concluding that LGBT-related discrimination constitutes sex discrimination under Title VII, and give examples of what would be considered unlawful. In so ruling, the Commission has not recognized any new protected characteristics under Title VII. Rather, it has applied existing Title VII precedents to sex discrimination claims raised by LGBT individuals. The Commission has reiterated these positions through recent amicus curiae briefs and litigation against private companies.
Sex Discrimination – Transgender Status
In Macy v. Dep’t of Justice, EEOC Appeal No. 0120120821, 2012 WL 1435995 (April 20, 2012), the Commission held that intentional discrimination against a transgender individual because that person’s gender identity is, by definition, discrimination based on sex and therefore violates Title VII.
The Macy decision explains that allegations of gender identity/transgender discrimination necessarily involve sex discrimination. Such cases can be viewed as sex discrimination based on non-conformance with gender norms and stereotypes under the Supreme Court’s 1989 decision in Price Waterhouse v. Hopkins, and based on a plain reading of the statute’s “because of . . . sex” language.
Applying Macy, the Commission has also held that an employer’s restrictions on a transgender woman’s ability to use a common female restroom facility constitutes disparate treatment, Lusardi v. Dep’t of the Army, EEOC Appeal No. 0120133395, 2015 WL 1607756 (Mar. 27, 2015), that intentional misuse of a transgender employee’s new name and pronoun may constitute sex-based discrimination and/or harassment, Jameson v. U.S. Postal Service, EEOC Appeal No. 0120130992, 2013 WL 2368729 (May 21, 2013), and that an employer’s failure to revise its records pursuant to changes in gender identity stated a valid Title VII sex discrimination claim, Complainant v. Dep’t of Veterans Affairs, EEOC Appeal No. 0120133123, 2014 WL 1653484 (Apr. 16, 2014).
Sex Discrimination – Sexual Orientation
In Baldwin v. Dep’t of Transportation, EEOC Appeal No. 0120133080 (July 15, 2015), the Commission held that a claim of discrimination on the basis of sexual orientation necessarily states a claim of discrimination on the basis of sex under Title VII.
The Baldwin decision explains that allegations of sexual orientation discrimination necessarily involve sex-based considerations. First, discrimination on the basis of sexual orientation necessarily involves treating an employee differently because of his or her sex. For example, a lesbian employee disciplined for displaying a picture of her female spouse can allege that an employer took a different action against her based on her sex where the employer did not discipline a male employee for displaying a picture of his female spouse. Sexual orientation discrimination is also sex discrimination because it is associational discrimination on the basis of sex. That is, an employee alleging discrimination on the basis of sexual orientation is alleging that the employer took the employee’s sex into account by treating him or her differently for associating with a person of the same sex. Finally, discrimination on the basis of sexual orientation is sex discrimination because it necessarily involves discrimination based on gender stereotypes, including employer beliefs about the person to whom the employee should be attracted.
In FY 2015, EEOC received a total of 1,412 charges that included allegations of sex discrimination related to sexual orientation and/or gender identity/transgender status. This represents an increase of approximately 28% over the total LGBT charges filed in FY 2014 (1,100). EEOC resolved a total of 1,135 LGBT charges in FY 2015, including through voluntary agreements providing approximately $3.3 million in monetary relief for workers and achieving changes in employer policies so that discrimination would not recur. This reflects increases of 34% in the number of resolutions over FY 2014 (847) and 51% in the amount of monetary relief over FY 2014 ($2.19 million). Please refer to the chart which shows charges received or resolved during FY 2015, shown at https://www.eeoc.gov/eeoc/newsroom/wysk/enforcement_protections_lgbt_workers.cfm
Conciliation and Litigation
When the Commission finds reasonable cause to believe that discrimination has occurred, it seeks to resolve the matter voluntarily through informal means of conciliation, conference, and persuasion. If the Commission is unable to secure a voluntary resolution, it has authority to file suit in federal court. In several cases, the Commission has filed LGBT-related lawsuits under Title VII challenging alleged sex discrimination. Read about examples of pending and resolved EEOC litigation involving Title VII sex discrimination claims brought on behalf of LGBT individuals, as well as EEOC amicus briefs filed in suits brought by private individuals raising these issues.
Federal Sector Enforcement
In the federal sector, EEOC has implemented its priority for covering LGBT individuals in a variety of ways:
Tracking gender identity and sexual orientation appeals in the federal sector
Issuing 20 federal sector decisions in FY 2015, including finding that gender identity-related complaints and sexual orientation discrimination-related complaints can be brought under Title VII through the federal sector EEO complaint process. For example, in Larita G. v. U.S. Postal Service, EEOC Appeal No. 0120142154 (Nov. 18, 2015), EEOC reversed the Agency’s dismissal of a hostile work environment claim on the basis of sexual orientation because such an allegation is necessarily an allegation of sex discrimination under Title VII.
Establishing an LGBT workgroup to further EEOC’s adjudicatory and oversight responsibilities
Issuing guidance, including instructions for processing complaints of discrimination by LGBT federal employees and applicants available on EEOC’s public web site
Providing technical assistance to federal agencies in the development of gender transition policies and plans
Providing LGBT related outreach to federal agencies through briefings, presentations, and case law updates
Training and Outreach
EEOC is addressing LGBT legal developments in numerous outreach and training presentations to the public. During FY 2015, field office staff conducted more than700 events and reached over 43,000 attendees where LGBT sex-discrimination issues were among the topics discussed. In the federal sector during FY 2015, there were approximately 53 presentations delivered to over 4,400 federal sector audience members. These events reached a wide variety of audiences, including employee advocacy groups, small employer groups, students and staff at colleges and universities, staff and managers at federal agencies and human resource professionals. To assist in this outreach, EEOC is distributing a brochure, Preventing Employment Discrimination Against Lesbian, Gay, Bisexual or Transgender Employees.
The Commission has issued various technical assistance publications on LGBT issues, including:
Fact Sheet on Recent EEOC Litigation Regarding Title VII & LGBT-Related Discrimination, http://www.eeoc.gov/eeoc/litigation/selected/lgbt_facts.cfm
Examples of Court Decisions Supporting Coverage of LGBT-Related Discrimination Under Title VII, http://www.eeoc.gov/eeoc/newsroom/wysk/lgbt_examples_decisions.cfm
Federal Sector Cases Involving LGBT Individuals http://www.eeoc.gov/federal/reports/lgbt_cases.cfm
Brochure on Preventing Employment Discrimination Against Lesbian, Gay, Bisexual, or Transgender Employees, http://www.eeoc.gov/eeoc/publications/brochure-gender_stereotyping.cfm.
OPM-EEOC-OSC-MSPB Guide: Addressing Sexual Orientation and Gender Identity Discrimination in Federal Civilian Employment http://www.opm.gov/LGBTGuide
Useful resources from other agencies include:
OPM Guidance on Employment of Transgender Individuals http://www.opm.gov/policy-data-oversight/diversity-and-inclusion/reference-materials/gender-identity-guidance/
U.S. Department of Labor/OSHA Guide to Restroom Access for Transgender Workers, https://www.osha.gov/Publications/OSHA3795.pdf
U.S. Department of Justice Memorandum on Treatment of Transgender Employment Discrimination Claims Under Title VII of the Civil Rights Act of 1964, http://www.justice.gov/file/188671/download
Be aware of other laws that also may apply:
Federal contractors and sub-contractors are covered by a separate, explicit prohibition on transgender or sexual orientation discrimination in employment pursuant to Executive Order 13672 and implementing regulations issued and enforced by the U.S. Department of Labor’s Office of Federal Contract Compliance. For more information, see Frequently Asked Questions on E.O. 13672 Final Rule, http://www.dol.gov/ofccp/LGBT/LGBT_FAQs.html
State or local fair employment laws may explicitly prohibit discrimination based on sexual orientation or gender identity. Contact information for state and local fair employment agencies can be found on the page for EEOC’s field office covering that state or locality. On the other hand, if a state or local law permits or does not prohibit discrimination based on sexual orientation or gender identity, the EEOC will still enforce Title VII’s discrimination prohibitions against covered employers in that jurisdiction because contrary state law is not a defense under Title VII. Applicants and employees in those jurisdictions should contact the EEOC directly if they believe they have been subjected to sex discrimination based on sexual orientation or gender identity.
For more go to: https://content.govdelivery.com/accounts/USEEOC/bulletins/1456e7e
From Hultman Sensenig + Joshi: The EEOC continues to confirm its commitment to equality for all and will pursue this commitment through litigation. Employers should review their policies and especially their handbooks to ensure whether recent rulings regarding marriage equality and other rights being granted by the Court are addressed. There is no attorney client relationship created through the reading of this blog, nor is any legal advice being rendered.
The Broadway play Urinetown’s theme has become a hashtag #freetopee for transgendered individuals seeking to use a public restroomApril 17, 2016 at 8:05 pm | Posted in discrimination, EEOC, Employee, Employer, Employment Law, harassment, Legal, LGBT, OSHA, retaliation | Leave a comment
Tags: bathroom, dignity, discrimination, EEOC, employee, employer, free to pee, harassment, lawsuit, LGBT, millennial, OSHA, respect, Transgender
The issue of what bathroom a transgendered individual should use has become a hot topic for debate for public schools, for politicians, for businesses and for the LGBT community.
When you have a culture of respect, treating everyone with respect and dignity is the goal. What steps have you taken as a business owner or as manager to help achieve that goal when an employee tells you they are taking steps to become the other gender, and how can you help them with that as related to use of the company bathroom? Be prepared as the EEOC is making the issue of “gender” something they plan to explore through litigation – do you really want to be on the other side of that lawsuit as compared to planning in advance for the day when an employee asks, “Can we talk in private?”
Of all of the government agencies, OSHA has provided guidance on the issue of creating gender neutral bathrooms: https://www.osha.gov/Publications/OSHA3795.pdf
The EEOC has a webpage devoted to the issue of how it believes the LGBT community should be protected from discrimination: https://www.eeoc.gov/eeoc/newsroom/wysk/enforcement_protections_lgbt_workers.cfm.
As of last month, the EEOC issued a Fact Sheet summarizing its litigation on LGBT issues: https://www.eeoc.gov/eeoc/litigation/selected/lgbt_facts.cfm
Actual links to the policies above are provided at the bottom of this blog.
From Hultman Sensenig + Joshi: The above and this blurb is not legal advice, nor does reading this blog create any attorney client relationship between the reader and this law firm. Employers should be very aware of the impact this issues has on job seekers looking for a place that shares their values. Creating or reviewing current policies in place regarding discrimination and harassment for the LGBT community, and determining how inclusive such policies are, may solidify a corporate culture based upon respect and help an employer avoid bad press and EEOC litigation in the future. Discussing this issue with your team – and your employment counsel – is a good first step.
New litigation to stop the proposed DOL increases for the salary basis test – uncertainty continues to reign!March 21, 2016 at 5:18 pm | Posted in DOL, Employee, Employer, Employment Law, FLSA, New employment laws/amendments, wage & hour | Leave a comment
Tags: DOL, exempt, non-exempt, salary
Below is the opening text for a Bill entitled “The Protecting Workplace Advancement and Opportunity Act (S. 2707 and H.R. 4773)” which Bill is attempting to halt the proposed DOL salary basis increase for exempt employees. The Bill’s purpose is to nullify the proposed rule and require DOL to conduct further analysis of the impact on small businesses, non-profits and public employers of raising the salary basis test from $23,660 annually to $50,440.00 annually. Yes, that new amount is double the current amount!
114th Congress, 2d Session .H.R. _______
To require the Secretary of Labor to nullify the proposed rule regarding defining and delimiting the exemptions for executive, administrative, professional , outside sales, and computer employees, to require the Secretary of Labor to conduct a full and complete economic analysis with improved economic data on small businesses, nonprofit employers, Medicare or Medicaid dependent health care providers, and small governmental jurisdictions, and all other employers, and minimize the impact on such employers, before promulgating any substantially similar rule, and to provide a rule of construction regarding the salary threshold exemption under the Fair Labor Standards Act of 1938, and for other purposes.
For the full Bill text, please go to: http://edworkforce.house.gov/uploadedfiles/intro_bill_pwaoa.pdf
The U.S. Department of Labor issues more guidance regarding Agricultural related employee v. contractor relationships! When the DOL issues this type of detailed guidance, employers should review carefully!January 21, 2016 at 8:43 pm | Posted in agriculture, discrimination, Employee, Employer, Employment Law, FLSA, H2-A, harassment, Harvesting, Legal, New employment laws/amendments, retaliation, Unemployment, wage & hour, Workers' Compensation | Leave a comment
This is directly from the U.S. DOL’s webpage – hot off the press!
Administrator’s Interpretation No. 2016-1 (PDF)
January 20, 2016
Issued by ADMINISTRATOR DAVID WEIL
SUBJECT: Joint employment under the Fair Labor Standards Act and Migrant and Seasonal Agricultural Worker Protection Act.
Through its enforcement efforts, the Department of Labor’s Wage and Hour Division (WHD) regularly encounters situations where more than one business is involved in the work being performed and where workers may have two or more employers. More and more, businesses are varying organizational and staffing models by, for instance, sharing employees or using third-party management companies, independent contractors, staffing agencies, or labor providers. As a result, the traditional employment relationship of one employer employing one employee is less prevalent.1 WHD encounters these employment scenarios in all industries, including the construction, agricultural, janitorial, warehouse and logistics, staffing, and hospitality industries.
The growing variety and number of business models and labor arrangements have made joint employment more common.2 In view of these evolving employment scenarios, the Administrator believes that additional guidance will be helpful concerning joint employment under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201, et seq., and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), 29 U.S.C. 1801, et seq.3
Whether an employee has more than one employer is important in determining employees’ rights and employers’ obligations under the FLSA and MSPA. It is a longstanding principle under both statutes that an employee can have two or more employers for the work that he or she is performing. When two or more employers jointly employ an employee, the employee’s hours worked for all of the joint employers during the workweek are aggregated and considered as one employment, including for purposes of calculating whether overtime pay is due. Additionally, when joint employment exists, all of the joint employers are jointly and severally liable for compliance with the FLSA and MSPA.4 Where joint employment exists, one employer may also be larger and more established, with a greater ability to implement policy or systemic changes to ensure compliance. Thus, WHD may consider joint employment to achieve statutory coverage, financial recovery, and future compliance, and to hold all responsible parties accountable for their legal obligations.
Certainly, not every subcontractor, farm labor contractor, or other labor provider relationship will result in joint employment. This Administrator’s Interpretation (AI) provides guidance on identifying those scenarios in which two or more employers jointly employ an employee and are thus jointly liable for compliance under the FLSA or MSPA.5 This AI first discusses the broad scope of the employment relationship under the FLSA and MSPA. It then discusses the concepts of horizontal and vertical joint employment and relevant joint employment regulations.
Horizontal joint employment exists where the employee has employment relationships with two or more employers and the employers are sufficiently associated or related with respect to the employee such that they jointly employ the employee. The analysis focuses on the relationship of the employers to each other. This AI explains that guidance provided in the FLSA joint employment regulation – which focuses on the relationship between potential joint employers – is useful when analyzing potential horizontal joint employment cases.
Vertical joint employment exists where the employee has an employment relationship with one employer (typically a staffing agency, subcontractor, labor provider, or other intermediary employer) and the economic realities show that he or she is economically dependent on, and thus employed by, another entity involved in the work. This other employer, who typically contracts with the intermediary employer to receive the benefit of the employee’s labor, would be the potential joint employer. Where there is potential vertical joint employment, the analysis focuses on the economic realities of the working relationship between the employee and the potential joint employer. This AI explains that guidance provided in the MSPA joint employment regulation is useful when analyzing potential vertical joint employment. The structure and nature of the relationship(s) at issue in the case, reflecting potentially horizontal or vertical joint employment or both, should determine how each case is analyzed.
I. The FLSA and MSPA Broadly Define the Employment Relationship and Thus the Scope of Joint Employment
The scope of employment relationships subject to the protections of the FLSA and MSPA is broad. The FLSA defines “employee” as “any individual employed by an employer,” 29 U.S.C. 203(e)(1), and “employer” as including “any person acting directly or indirectly in the interest of an employer in relation to an employee,” 29 U.S.C. 203(d). The FLSA’s definition of “employ” “includes to suffer or permit to work.” 29 U.S.C. 203(g). The “suffer or permit” definition of employment is “‘the broadest definition that has ever been included in any one act.’” U.S. v. Rosenwasser, 323 U.S. 360, 363 n.3 (1945) (quoting statement of Sen. Hugo Black, 81 Cong. Rec. 7657 (1938)). MSPA defines “employ” in exactly the same way as the FLSA, and the scope of employment relationships under MSPA is thus the same as it is under the FLSA. See 29 U.S.C. 1802(5) (“The term ‘employ’ has the meaning given such term under [the FLSA, 29 U.S.C. 203(g)].”); 29 C.F.R. 500.20(h)(1); see also 29 C.F.R. 500.20(h)(2)-(3) (the terms “employer” and “employee” under MSPA are also given their meaning as found in the FLSA).
The FLSA and MSPA both “specifically cover ‘joint employment’ relationships.” Antenor v. D & S Farms, 88 F.3d 925, 929 (11th Cir. 1996). The FLSA regulations explicitly state that a single worker may be “an employee to two or more employers at the same time.” 29 C.F.R. 791.2(a); see also Baystate Alt. Staffing, Inc. v. Herman, 163 F.3d 668, 675 (1st Cir. 1998) (“The FLSA contemplates several simultaneous employers, each responsible for compliance with the Act.”). The MSPA regulations provide that MSPA’s definition of the term “employ” includes the FLSA’s joint employment principles. See 29 C.F.R. 500.20(h)(5); see also Antenor, 88 F.3d at 929 (MSPA makes clear that a worker can be jointly employed by more than one entity at the same time). “Joint employment under the Fair Labor Standards Act is joint employment under the MSPA.” 29 C.F.R. 500.20(h)(5)(i) (emphasis omitted).6
The concept of joint employment, like employment generally, “should be defined expansively” under the FLSA and MSPA. Torres-Lopez v. May, 111 F.3d 633, 639 (9th Cir. 1997); see also Misclassification AI, 3-4. The concepts of employment and joint employment under the FLSA and MSPA are notably broader than the common law concepts of employment and joint employment, which look to the amount of control that an employer exercises over an employee. See Antenor, 88 F.3d at 933. Unlike the common law control test, which analyzes whether a worker is an employee based on the employer’s control over the worker and not the broader economic realities of the working relationship, the “suffer or permit” standard broadens the scope of employment relationships covered by the FLSA. See Walling v. Portland Terminal Co., 330 U.S. 148, 150-51 (1947) (FLSA’s definitions are “comprehensive enough to require its application” to many working relationships which, under the common law control standard, may not be employer-employee relationships); Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 326 (1992) (FLSA’s “suffer or permit” standard for employment “stretches the meaning of ‘employee’ to cover some parties who might not qualify as such under a strict application of traditional agency law principles.”). The test for joint employment under the FLSA and MSPA is thus different, for example, than the test under other labor statutes, such as the National Labor Relations Act, 29 U.S.C. 151 et seq., and the Occupational Safety and Health Act, 29 U.S.C. 651 et seq. Indeed, in FLSA and MSPA cases, “courts have found economic dependence under a multitude of circumstances where the alleged employer exercised little or no control or supervision over the putative employees.” Antenor, 88 F.3d at 933 n.10.
Moreover, prior to the FLSA’s enactment, “suffer or permit” or similar phrasing was commonly used in state laws regulating child labor and was “designed to reach businesses that used middlemen to illegally hire and supervise children.” Antenor, 88 F.3d at 929 n.5. A key rationale underlying the “suffer or permit” standard was that an employer should be liable for the child labor if it had the opportunity to detect work being performed illegally and the ability to prevent it from occurring. See, e.g., People ex rel. Price v. Sheffield Farms-Slawson-Decker Co., 225 N.Y. 25, 29-31 (N.Y. 1918). Thus, the “suffer or permit to work” standard was designed to expand child labor laws’ coverage beyond those who controlled the child laborer, counter an employer’s argument that it was unaware that children were working, and prevent employers from using “middlemen” to evade the laws’ requirements.
In sum, the expansive definition of “employ” as including “to suffer or permit to work” rejected the common law control standard and ensures that the scope of employment relationships and joint employment under the FLSA and MSPA is as broad as possible.
II. Horizontal and Vertical Joint Employment Analyses in FLSA and MSPA Cases
The FLSA and MSPA regulations provide relevant and complementary guidance on joint employment. The structure and nature of the relationship(s) at issue should determine whether a particular case should be analyzed under horizontal or vertical joint employment, or both.7
Joint employment may exist when two (or more) employers each separately employ an employee and are sufficiently associated with or related to each other with respect to the employee. See 29 C.F.R. 791.2. This type of joint employment is sometimes referred to as horizontal joint employment. In a possible horizontal joint employment situation, there is typically an established or admitted employment relationship between the employee and each of the employers, and often the employee performs separate work or works separate hours for each employer. Thus, the focus of a horizontal joint employment analysis is the relationship between the two (or more) employers. The FLSA regulation provides guidance on horizontal joint employment. See, e.g., Chao v. A-One Med. Servs., Inc., 346 F.3d 908, 917-18 (9th Cir. 2003) (citing FLSA regulation). Examples of horizontal joint employment may include separate restaurants that share economic ties and have the same managers controlling both restaurants, see Chao v. Barbeque Ventures, LLC, 2007 WL 5971772, at *6 (D. Neb. Dec. 12, 2007), or home health care providers that share staff and have common management, see A-One Med. Servs., 346 F.3d at 918.
Joint employment may additionally exist when an employee of one employer (referred to in this AI as an “intermediary employer”) is also, with regard to the work performed for the intermediary employer, economically dependent on another employer (referred to in this AI as a “potential joint employer”).8 See 29 C.F.R. 500.20(h)(5); A-One Med. Servs., 346 F.3d at 917 (describing vertical joint employment as possible in circumstances where “a company has contracted for workers who are directly employed by an intermediary company”). This type of joint employment is sometimes referred to as vertical joint employment. The vertical joint employment analysis is used to determine, for example, whether a construction worker who works for a subcontractor is also employed by the general contractor, or whether a farmworker who works for a farm labor contractor is also employed by the grower.9 Unlike in horizontal joint employment cases, where the association between the potential joint employers is relevant, the vertical joint employment analysis instead examines the economic realities of the relationships between the construction worker and the general contractor, and between the farmworker and the grower, to determine whether the employees are economically dependent on those potential joint employers and are thus their employees. The MSPA regulation provides a set of factors to apply an economic realities analysis in vertical joint employment cases. Although they do not all apply the same factors, several Circuit Courts of Appeals have also adopted an economic realities analysis for evaluating vertical joint employment under the FLSA. Regardless of the exact factors, the FLSA and MSPA require application of the broader economic realities analysis, not a common law control analysis, in determining vertical joint employment.
The joint employment approaches described in the FLSA and MSPA regulations interpret the same definition of employment. MSPA borrowed the FLSA’s definition of the term “employ” “with the deliberate intent” of adopting the FLSA’s joint employer doctrine “as the ‘central foundation’ of MSPA and ‘the best means by which to insure that the purposes of this MSPA would be fulfilled.’” 29 C.F.R. 500.20(h)(5)(ii) (quoting MSPA’s legislative history); see also 29 C.F.R. 500.20(h)(5)(i) (“Joint employment under the Fair Labor Standards Act is joint employment under the MSPA.”) (emphasis omitted). Therefore, the FLSA regulation is useful when analyzing potential horizontal joint employment cases, whether arising under the FLSA or MSPA. Likewise, the factors identified in the MSPA regulation are useful when analyzing potential vertical joint employment cases, whether arising under MSPA or the FLSA.10 This is not to say that the MSPA joint employment regulation itself applies in FLSA cases; however, the MSPA joint employment regulation and its economic realities factors are useful guidance in an FLSA case because of the shared definition of employment and the coextensive scope of joint employment between the FLSA and MSPA.11 For the reasons explained above, including the common definitions, using the joint employment factors identified in the MSPA regulation in an FLSA case is consistent with both statutes and regulations. It is also consistent with WHD’s prior guidance. See Home Care AI, 3 (economic realities factors identified in the MSPA regulation should be considered when determining joint employment under the FLSA, citing 29 C.F.R. 500.20(h)); May 11, 2001 WHD Opinion Letter (identifying MSPA regulation’s economic realities factors as relevant factors when determining joint employment under the FLSA, citing 29 C.F.R. 500.20(h)) (available at 2001 WL 1558966). Many potential joint employment cases arising under the FLSA will involve vertical joint employment, and an economic realities analysis of the type described in the MSPA joint employment regulation should be applied in those cases.
A. Horizontal Joint Employment and the Association of Potential Joint Employers
Horizontal joint employment should be considered when an employee is employed by two (or more) technically separate but related or overlapping employers.12 For example, the horizontal joint employment analysis would apply where a waitress works for two separate restaurants that are operated by the same entity and the question is whether the two restaurants are sufficiently associated with respect to the waitress such that they jointly employ the waitress; or where a farmworker picks produce at two separate orchards and the orchards have an arrangement to share farmworkers. In these scenarios, there would already be an established employment relationship between the waitress and each restaurant, and between the farmworker and each orchard. This joint employment analysis focuses on the relationship of the employers to each other.
In cases where joint employment is established, the employee’s work for the joint employers during the workweek “is considered as one employment,” and the joint employers are jointly and severally liable for compliance, including paying overtime compensation for all hours worked over 40 during the workweek. 29 C.F.R. 791.2(a).
Example:13 Casey, a registered nurse, works at Springfield Nursing Home for 25 hours in one week and at Riverside Nursing Home for 25 hours during that same week. If Springfield and Riverside are joint employers, Casey’s hours for the week are added together, and the employers are jointly and severally liable for paying Casey for 40 hours at her regular rate and for 10 hours at the overtime rate. Casey should receive 10 hours of overtime compensation in total (not 10 hours from each employer).
In determining whether a horizontal joint employment relationship exists, the focus should be on the relationship (and often the degree of association) between the two (or more) potential joint employers with respect to the employee and all of the relevant facts of the particular case. See 29 C.F.R. 791.2(a). According to 29 C.F.R. 791.2(b), “[w]here the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist” in situations such as: (1) arrangements between the employers to share or interchange the employee’s services; (2) where one employer acts directly or indirectly in the interest of another employer in relation to the employee; or (3) where the employers are associated “with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer.” Id. at 791.2(b). In Schultz v. Capital International Security, Inc., for example, the court looked to the FLSA regulation and concluded that security workers were jointly employed by a security firm and the individual that the workers were hired to protect because the two employers were associated with respect to the employment of the workers and shared common control over them. See 466 F.3d 298, 306 (4th Cir. 2006) (“the entire employment arrangement fits squarely within the third example of joint employment in the regulation”).
Specifically, the court explained that the employers were both involved in the hiring of the workers, played some role in scheduling, discipline, and terminations, and shared responsibility for supplying the workers with equipment. See id.
The following facts may be relevant when analyzing the degree of association between, and sharing of control by, potential horizontal joint employers:
who owns the potential joint employers (i.e., does one employer own part or all of the other or do they have any common owners);
do the potential joint employers have any overlapping officers, directors, executives, or managers;
do the potential joint employers share control over operations (e.g., hiring, firing, payroll, advertising, overhead costs);
are the potential joint employers’ operations inter-mingled (for example, is there one administrative operation for both employers, or does the same person schedule and pay the employees regardless of which employer they work for);
does one potential joint employer supervise the work of the other;
do the potential joint employers share supervisory authority for the employee;
do the potential joint employers treat the employees as a pool of employees available to both of them;
do the potential joint employers share clients or customers; and,
are there any agreements between the potential joint employers.
See, e.g., 29 C.F.R. 791.2(b); June 14, 2005 WHD Opinion Letter (identifying a number of the above facts as relevant in finding joint employment) (available at 2005 WL 6219105); April 11, 2005 WHD Opinion Letter (identifying a number of the above facts in finding joint employment) (available at 2005 WL 2086804); Barbeque Ventures, 2007 WL 5971772, at *1, 5-6 (separate legal entities who employed employees at five different restaurants were joint employers given common ownership, management and control; the same manager owned one legal entity, was the majority owner and manager of the other entity, and supervised the Area Director for all five restaurants).
This is not an all-inclusive list of facts that could potentially be relevant to the analysis. Moreover, not all or most of the foregoing facts need to be present for joint employment to exist. Rather, these facts can help determine if there is sufficient indication that the potential joint employers are associated with respect to the employee and thus share control of the employee.
Joint employment does not exist, however, if the employers “are acting entirely independently of each other and are completely disassociated” with respect to an employee who works for both of them. 29 C.F.R. 791.2(a). In that event, each employer may disregard all work performed by the employee for the other when determining its own responsibilities under the law. See id. There are many workers who have multiple jobs with multiple employers who are not joint employers. For example, a high school teacher may also work a part-time job as an instructor for a standardized test preparatory company; the high school and the preparatory company would not be joint employers. In sum, the focus of the horizontal joint employment analysis is the degree of association between the two potential joint employers even if they are formally separate legal entities and the degree to which they share control of the employee.
Example: An employee is employed at two locations of the same restaurant brand. The two locations are operated by separate legal entities (Employers A and B). The same individual is the majority owner of both Employer A and Employer B. The managers at each restaurant share the employee between the locations and jointly coordinate the scheduling of the employee’s hours. The two employers use the same payroll processor to pay the employee, and they share supervisory authority over the employee. These facts are indicative of joint employment between Employers A and B.
In contrast, an employee works at one restaurant (Employer A) in the mornings and at a different restaurant (Employer B) in the afternoons. The owners and managers of each restaurant know that the employee works at both establishments. The establishments do not have an arrangement to share employees or operations, and do not otherwise have any common management or ownership. These facts are not indicative of joint employment between Employers A and B.
B. Vertical Joint Employment and Economic Dependence on the Potential Joint Employer
The vertical joint employment inquiry focuses on whether the employee of the intermediary employer is also employed by another employer – the potential joint employer. In vertical joint employment situations, the other employer typically has contracted or arranged with the intermediary employer to provide it with labor and/or perform for it some employer functions, such as hiring and payroll. There is typically an established or admitted employment relationship between the employee and the intermediary employer. That employee’s work, however, is typically also for the benefit of the other employer.
In contrast to the horizontal joint employment analysis, where the focus is the relationship between the employers, the focus in vertical joint employment cases is the employee’s relationship with the potential joint employer and whether that employer jointly employs the employee. Examples of situations where vertical joint employment might arise include garment workers who are directly employed by a contractor who contracted with the garment manufacturer to perform a specific function, see Zheng v. Liberty Apparel Co., 355 F.3d 61, 71-72 (2d Cir. 2003); nurses placed at a hospital by staffing agencies, see Barfield v. N.Y. City Health & Hosps. Corp., 537 F.3d 132, 143-49 (2d Cir. 2008); or warehouse workers whose labor is arranged and overseen by layers of intermediaries between the workers and the owner or operator of the warehouse facility, see Carrillo v. Schneider Logistics Trans-Loading & Distrib., Inc., 2014 WL 183956, at *9-15 (C.D. Cal. Jan. 14, 2014). See also A-One Med. Servs., 346 F.3d at 917; Lantern Light, 2015 WL 3451268, at *3 (where company has contracted for workers who are directly employed by an intermediary, court applies vertical joint employment analysis to relationship between company and workers); Berrocal v. Moody Petrol., Inc., 2010 WL 1372410, at *11 n.16 (S.D. Fla. Mar. 31, 2010) (vertical joint employment may exist when “an employer hires laborers through a third party labor contractor”).
A threshold question in a vertical joint employment case is whether the intermediary employer (who may simply be an individual responsible for providing labor) is actually an employee of the potential joint employer. Where there is vertical joint employment, there is likely a contract or other arrangement – but not necessarily an employment relationship – between the intermediary employer and the potential joint employer.14 If the intermediary employer is an employee of the potential joint employer, then all of the intermediary employer’s employees are employees of the potential joint employer too, and there is no need to conduct a vertical joint employment analysis. For example, if a farm labor contractor is not actually an independent contractor but is an employee of the grower (i.e., is economically dependent on the grower as a matter of economic reality), then all of the farm labor contractor’s farmworkers are also employees of the grower. See 29 C.F.R. 500.20(h)(4). Likewise, if a drywall subcontractor is not actually an independent contractor but is an employee of the higher-tier contractor, then all of the drywall subcontractor’s workers are also employees of the higher-tier subcontractor. In sum, it is critical to first determine whether the intermediary employer is an employee of the potential joint employer before proceeding with the vertical joint employment analysis.15
Once it is determined that the intermediary is not an employee, the vertical joint employment analysis should be applied to determine whether the intermediary employer’s employees are also employed by the potential joint employer. Because it is an employment relationship analysis under the FLSA or MSPA, the vertical joint employment analysis must be an economic realities analysis and cannot focus only on control. As WHD has explained, the Supreme Court and the Circuit Courts of Appeals apply an economic realities analysis to determine the existence of an employment relationship under the FLSA and MSPA. See, e.g., Home Care AI; Misclassification AI; Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290, 301 (1985) (the test of employment under the FLSA is economic reality); Goldberg v. Whitaker House Co-op, Inc., 366 U.S. 28, 33 (1961) (the economic realities of the worker’s relationship with the employer are the test of employment); 29 C.F.R. 500.20(h)(5)(iii). The particular economic realities factors relied upon differ somewhat depending on the court, and courts routinely note that other additional relevant factors may be considered, but regardless, it is not a control test.
The MSPA regulation, describing seven economic realities factors in the context of a farm labor contractor acting as an intermediary employer for a grower, provides useful guidance to analyze any vertical joint employment case. See 29 C.F.R. 500.20(h)(5)(iv). These factors are probative of the core question of whether the employee is economically dependent on the potential joint employer who, via an arrangement with the intermediary employer, is benefitting from the work. As courts have cautioned, the factors in an economic realities analysis should not be considered mechanically or in a vacuum; rather, they are guides for resolving the ultimate inquiry whether the employee is economically dependent on the potential joint employer. See Antenor, 88 F.3d at 932-33; Misclassification AI, 5-6.16 Accordingly, these factors should be applied in a manner that does not lose sight of that ultimate inquiry or the expansive definition of employment under the FLSA and MSPA. See Antenor, 88 F.3d at 932-33 (“the factors are used because they are indicators of economic dependence” and should be viewed “qualitatively to assess the evidence of economic dependence”).
The seven factors are:
Directing, Controlling, or Supervising the Work Performed. To the extent that the work performed by the employee is controlled or supervised by the potential joint employer beyond a reasonable degree of contract performance oversight, such control suggests that the employee is economically dependent on the potential joint employer. The potential joint employer’s control can be indirect (for example, exercised through the intermediary employer) and still be sufficient to indicate economic dependence by the employee. See Torres-Lopez, 111 F.3d at 643 (“indirect control as well as direct control can demonstrate a joint employment relationship”) (citing pre-1997 MSPA regulation); Antenor, 88 F.3d at 932, 934; 29 C.F.R. 500.20(h)(5)(iv). Additionally, the potential joint employer need not exercise more control than, or the same control as, the intermediary employer to exercise sufficient control to indicate economic dependence by the employee.17
Controlling Employment Conditions. To the extent that the potential joint employer has the power to hire or fire the employee, modify employment conditions, or determine the rate or method of pay, such control indicates that the employee is economically dependent on the potential joint employer. Again, the potential joint employer may exercise such control indirectly and need not exclusively exercise such control for there to be an indication of joint employment.
Permanency and Duration of Relationship. An indefinite, permanent, full-time, or long-term relationship by the employee with the potential joint employer suggests economic dependence. This factor should be considered in the context of the particular industry at issue. For example, if the work in the industry is by its nature seasonal, intermittent, or part-time, such industry condition should be considered when analyzing the permanency and duration of the employee’s relationship with the potential joint employer.
Repetitive and Rote Nature of Work. To the extent that the employee’s work for the potential joint employer is repetitive and rote, is relatively unskilled, and/or requires little or no training, those facts indicate that the employee is economically dependent on the potential joint employer.
Integral to Business. If the employee’s work is an integral part of the potential joint employer’s business, that fact indicates that the employee is economically dependent on the potential joint employer. Whether the work is integral to the employer’s business has long been a hallmark of determining whether an employment relationship exists as a matter of economic reality. See, e.g., Rutherford Food Corp. v. McComb, 331 U.S. 722, 729-30 (1947).
Work Performed on Premises. The employee’s performance of the work on premises owned or controlled by the potential joint employer indicates that the employee is economically dependent on the potential joint employer. The potential joint employer’s leasing as opposed to owning the premises where the work is performed is immaterial because the potential joint employer, as the lessee, controls the premises.
Performing Administrative Functions Commonly Performed by Employers. To the extent that the potential joint employer performs administrative functions for the employee, such as handling payroll, providing workers’ compensation insurance, providing necessary facilities and safety equipment, housing, or transportation, or providing tools and materials required for the work, those facts indicate economic dependence by the employee on the potential joint employer.
See 29 C.F.R. 500.20(h)(5)(iv).
Courts have applied many of the above factors to vertical joint employment scenarios in FLSA cases, though they have not explicitly relied on the MSPA regulation. See, e.g., Carrillo v. Schneider Logistics, 2014 WL 183956, at *6 (applying Ninth Circuit’s joint employment economic realities analysis). In Carrillo, for example, warehouse workers sued the companies that operated the distribution warehouses and the company that owned the warehouses. The owner of the warehouses argued that it was not a joint employer of the warehouse workers. In denying the owner’s motion for summary judgment, the court noted that there was evidence of possible joint employment for the following reasons: the owner exercised control over the warehouse workers’ employment conditions because it approved staffing levels at the warehouse, directed that employees be shifted to an alternative workweek schedule, closely monitored productivity levels, and established various operating metrics; the work was performed on premises owned or leased by the owner, who provided all of the equipment necessary to perform work at its warehouses; the work consisted primarily of conventional manual labor, requiring little skill; and the work was an integral part of the owner’s corporate strategy. See id. at *9-15. As the court did in Carrillo, applying these or similar factors will help to determine whether the employee is economically dependent on the potential joint employer.
As noted, the economic realities factors to apply vary somewhat depending on the court, but any formulation must address the “ultimate inquiry” of economic dependence. In applying any other relevant factors, the broad scope of joint employment under the FLSA and MSPA must be recognized. For example, in analyzing joint employment, the Second Circuit applies six economic realities factors: (1) use of the potential joint employer’s premises and equipment for the work; (2) whether the intermediary employer has a business that can or does shift from one potential joint employer to another; (3) whether the employee performs a discrete line-job that is integral to the potential joint employer’s production process; (4) whether the potential joint employer could pass responsibility for the work from one intermediary to another without material changes for the employees; (5) the potential joint employer’s supervision of the employee’s work; and (6) whether the employee works exclusively or predominantly for the potential joint employer. See Zheng, 355 F.3d at 71-72.
The Ninth Circuit applies factors from different sources: Bonnette v. Cal. Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1983) (four factor test primarily assessing potential joint employer’s control of employment conditions); the pre-1997 version of the MSPA joint employment regulation; and the eight economic realities factors set forth in Torres-Lopez, 111 F.3d at 640-41. See, e.g., Lantern Light, 2015 WL 3451268, at *2-17 (applying both the Bonnette and Torres-Lopez factors and finding that satellite television provider was a joint employer of the installers employed by the company with whom the provider contracted to install its services); Chao v. Westside Drywall, Inc., 709 F. Supp. 2d 1037, 1061-62 (D. Or. 2010) (applying both the Bonnette and Torres-Lopez factors). Thus, there are several formulations of the economic realities factors used to determine the employee’s economic dependence on a potential joint employer that are consistent with the broad scope of employment under the FLSA.
Some courts, however, apply factors that address only or primarily the potential joint employer’s control (power to hire and fire, supervision and control of conditions or work schedules, determination of rate and method of pay, and maintenance of employment records). See, e.g., Baystate Alt. Staffing, 163 F.3d at 675; In re Enter. Rent-A-Car Wage & Hour Emp’t Practices Litig., 683 F.3d 462, 468-69 (3d Cir. 2012). This approach is not consistent with the breadth of employment under the FLSA. “Measured against the expansive language of the FLSA,” addressing only the potential joint employer’s control “is unduly narrow” and “cannot be reconciled with the ‘suffer or permit’ language in the [FLSA], which necessarily reaches beyond traditional agency law.” Zheng, 355 F.3d at 69. Indeed, the Second Circuit explained that, although satisfaction of the four “formal control” factors can be sufficient to establish joint employment, it has “never held ‘that a positive finding on those four factors is necessary to establish an employment relationship.’” Barfield, 537 F.3d at 143 (quoting Zheng, 355 F.3d at 69) (emphasis in original); see also Zheng, 355 F.3d at 69 (“[T]he broad language of the FLSA, as interpreted by the Supreme Court in Rutherford, demands that a district court look beyond an entity’s formal right to control the physical performance of another’s work before declaring that the entity is not an employer under the FLSA.”). As explained above, the FLSA rejected control as the standard for determining employment, and any vertical joint employment analysis must look at more than the potential joint employer’s control over the employee.18
Example: A laborer is employed by ABC Drywall Company, which is an independent subcontractor on a construction project. ABC Drywall was engaged by the General Contractor to provide drywall labor for the project. ABC Drywall hired and pays the laborer. The General Contractor provides all of the training for the project. The General Contractor also provides the necessary equipment and materials, provides workers’ compensation insurance, and is responsible for the health and safety of the laborer (and all of the workers on the project). The General Contractor reserves the right to remove the laborer from the project, controls the laborer’s schedule, and provides assignments on site, and both ABC Drywall and the General Contractor supervise the laborer. The laborer has been continuously working on the General Contractor’s construction projects, whether through ABC Drywall or another intermediary. These facts are indicative of joint employment of the laborer by the General Contractor.
Example: A worker is hired by a farm labor contractor (FLC) to pick produce on a Grower’s farm. The FLC hired and pays the worker. The Grower dictates the timing of the harvest, which fields the worker should harvest, and the schedule each day. The work is unskilled, and any training is provided by the Grower. The Grower keeps track of the amount of produce that the worker picks per hour. The Grower provides the buckets for the produce, transports the produce from the field, and stores the produce. The Grower pays the FLC per bucket of produce picked, and withholds money to cover workers’ compensation insurance. The worker has been continuously working on the Grower’s farm during the harvest seasons, whether through this FLC or another farm labor contractor. These facts are indicative of joint employment of the worker by the Grower.
Example: A mechanic is employed by Airy AC & Heating Company. The Company has a short-term contract to test and, if necessary, replace the HVAC systems at Condor Condos. The Company hired and pays the mechanic and directs the work, including setting the mechanic’s hours and timeline for completion of the project. For the duration of the project, the mechanic works at the Condos and checks in with the property manager there every morning, but the Company supervises his work. The Company provides the mechanic’s benefits, including workers’ compensation insurance. The Company also provides the mechanic with all the tools and materials needed to complete the project. The mechanic brings this equipment to the project site. These facts are not indicative of joint employment of the mechanic by the Condos.
As a result of continual changes in the structure of workplaces, the possibility that a worker is jointly employed by two or more employers has become more common in recent years. In an effort to ensure that workers receive the protections to which they are entitled and that employers understand their legal obligations, the possibility of joint employment should be regularly considered in FLSA and MSPA cases, particularly where (1) the employee works for two employers who are associated or related in some way with respect to the employee; or (2) the employee’s employer is an intermediary or otherwise provides labor to another employer.
Whether to apply a horizontal or vertical joint employment analysis (or both analyses) depends on the circumstances of the case. The focus of a horizontal joint employment analysis is the relationship and association between the two (or more) potential joint employers, and the FLSA joint employment regulation provides guidance in evaluating such cases. The focus of the vertical joint employment analysis is the relationship between the employee and the potential employer and whether an employment relationship exists between them. The analysis must determine whether, as a matter of economic reality, the employee is economically dependent on the potential joint employer. The economic realities factors in the MSPA regulation provide guidance for analyzing vertical joint employment cases, although additional or different economic realities factors that are consistent with the broad scope of employment under the FLSA and MSPA may be helpful as well.
WHD will continue to consider the possibility of joint employment to ensure that all responsible employers are aware of their obligations and to ensure compliance with the FLSA and MSPA. As with all aspects of the employment relationship under the FLSA and MSPA, the expansive definition of “employ” as including “to suffer or permit to work” must be considered when determining joint employment, so as to further the statutes’ remedial purposes.
1 For example, a corporate hotel chain may contract out to another business the management, catering, or housekeeping services at one of its hotels. Workers who perform these services at the hotel may wear uniforms with the name of the hotel chain or the other business and may perform tasks dictated by the hotel chain, the other business, or both.
2 WHD considers joint employment in hundreds of investigations every year. WHD has determined, for example, that maritime fabrication facilities jointly employed welders, pipefitters, and other workers hired by staffing agencies; that hotels and hotel operating companies jointly employed housekeeping and guest services workers hired by staffing agencies; and that growers and farm labor contractors jointly employed farmworkers. See also Perez v. Lantern Light Corp., 2015 WL 3451268, at *17 (W.D. Wash. May 29, 2015) (finding that satellite television provider was a joint employer of the installers employed by the company with whom the provider contracted to install its services).
3 In June 2014, WHD issued Administrator’s Interpretation No. 2014-2, “Joint Employment of Home Care Workers in Consumer-Directed, Medicaid-Funded Programs by Public Entities under the Fair Labor Standards Act” (Home Care AI), available at http://www.dol.gov/whd/opinion/adminIntrprtn/FLSA/2014/FLSAAI2014_2.pdf. Although the Home Care AI was directed toward a particular employment scenario in a specific industry, the legal analyses in the Home Care AI and this Administrator’s Interpretation are harmonious and are intended to be read in conjunction with one another.
4 In other words, each joint employer is individually responsible, for example, for the entire amount of wages due. If one employer cannot pay the wages because of bankruptcy or other reasons, then the other employer must pay the entire amount of wages; the law does not assign a proportional amount to each employer.
5 In July 2015, WHD issued Administrator’s Interpretation No. 2015-1, “The Application of the Fair Labor Standards Act’s ‘Suffer or Permit’ Standard in the Identification of Employees Who Are Misclassified as Independent Contractors” (Misclassification AI), available at http://www.dol.gov/whd/workers/Misclassification/AI-2015_1.pdf. In the Misclassification AI, the Administrator also discussed the FLSA’s broad statutory definitions; that AI addressed the issue of the misclassification of employees as independent contractors and provided guidance regarding determining whether a worker is an employee or independent contractor.
6 The Department amended the MSPA joint employment regulation in 1997.
7 Given the potential complexity of employment relationships, aspects of both horizontal and vertical joint employment may be present in a single joint employment relationship. For example, both forms of joint employment could potentially exist where two warehouses share employees and use a staffing agency to provide them with labor.
8 Depending on the industry, the “intermediary employer” in a vertical joint employment relationship could be, for example, a staffing agency, farm labor contractor, subcontractor, or other labor provider, supplier, or broker, and the “potential joint employer” could be a parent corporation, farm owner, higher-tier contractor, or client of the staffing agency or labor provider, supplier, or broker.
9 As discussed below, a threshold determination in those examples would be whether the subcontractor or farm labor contractor itself is an independent contractor or whether it has an employment relationship with the general contractor or grower.
10 Courts have long turned to an economic realities analysis in analyzing vertical joint employment under the FLSA. The MSPA regulation itself cites to FLSA cases in defining joint employment. See, e.g., 29 C.F.R. 500.20(h)(5)(ii) (citing Hodgson v. Griffin & Brand of McAllen, Inc., 471 F.2d 235, 237 (5th Cir. 1973)).
11 In Layton v. DHL Express (USA), Inc., 686 F.3d 1172, 1176-78 (11th Cir. 2012), the court applied an economic realities analysis primarily based on the pre-1997 version of the MSPA joint employment regulation and correctly recognized that “in considering a joint-employment relationship, we must not allow common-law concepts of employment to distract our focus from economic dependency.” Yet, because the case arose under the FLSA, not MSPA, the court declined to use the factors in the current MSPA joint employment regulation despite the fact that the FLSA and MSPA define the scope of employment in the same way. See id. at 1177 (“Although [MSPA] defines joint employment by reference to the definition provided in the FLSA, that does not mean that the reverse holds true—that joint employment under the FLSA is invariably defined by [MSPA] regulations.”).
12 Even where two establishments are sufficiently related that they are part of a single enterprise (as defined in 29 U.S.C. 203(r)(1)) for FLSA coverage purposes, a separate determination is necessary to determine whether the establishments are joint employers. See 29 C.F.R. 779.203; A-One Med. Servs., 346 F.3d at 917 (“Whether two companies constitute a single enterprise for FLSA coverage and whether they are liable as joint employers . . . are technically separate issues.”). As explained by the case law, although the two analyses may require similar fact-finding and have similar considerations, determining that an employer is part of an enterprise to ascertain coverage under the FLSA is different from determining that the employer is a joint employer that is liable for minimum wages and overtime. See, e.g., Patel v. Wargo, 803 F.2d 632, 635 (11th Cir. 1986).
13 The addition or alteration of any of the facts in any of the examples in this AI could change the resulting analysis.
14 The contract between the potential joint employer and the intermediary employer may purport to disclaim or deny any responsibility by the potential joint employer as an employer. However, that type of contractual provision is not relevant to the economic realities of the working relationship between the potential joint employer and the employee.
15 The intermediary employer will be either an independent contractor or employee of the potential joint employer under the FLSA or MSPA. The Misclassification AI discusses the analysis for determining whether a worker is an employee or independent contractor. See also 29 C.F.R. 500.20(h)(4).
16 The vertical joint employment economic realities factors overlap some with the economic realities factors used to determine whether a worker is an employee or an independent contractor, as discussed in the Misclassification AI. However, the exact factors applicable when determining whether a worker is an employee or an independent contractor cannot apply in a vertical joint employment case because they focus on the possibility that the worker is in business for him or herself (and thus is an independent contractor). In a vertical joint employment case, the worker is not in business for him or herself, but is an employee of the intermediary employer, and may also be employed by the potential joint employer.
17 This point holds true for the vertical joint employment analysis in general. It is not necessary for the employee to be more economically dependent on the potential joint employer than the intermediary employer for there to be joint employment. See Antenor, 88 F.3d at 932-33. The focus is the employee’s relationship with the potential joint employer and not a comparison of that relationship with the employee’s relationship with the intermediary employer. See id.
18 Enterprise Rent-A-Car involved whether a parent company was a joint employer of its subsidiaries’ employees. See 683 F.3d at 464. The Third Circuit acknowledged the breadth of employment under the FLSA and that indirect control can show joint employment, but it nonetheless ruled that joint employment in that case was determined by whether the parent exercised significant control. See id. at 467-68. The Third Circuit recognized that the control factors “do not constitute an exhaustive list of all potential relevant facts” and should not be blindly applied; rather, a joint employment determination must consider the employment situation in totality, including the economic realities of the working relationship. Id. at 469 (emphasis in original). The Third Circuit seemed to leave open the possibility that, in a case involving an intermediary employer providing labor to another employer, it would consider applying economic realities factors beyond the control factors applied in Enterprise Rent-A-Car to determine whether that other employer is a joint employer.
Directly from the USCIS.GOV website:
USCIS Seeks Comments on Proposed Changes to Form I-9
USCIS published a notice in the Federal Register on Nov. 24, 2015, to inform the public of proposed changes to Form I-9, Employment Eligibility Verification. The public may provide comments on the proposed changes for 60 days, until Jan. 25, 2016.
Many of the proposed changes to Form I-9 are intended to help reduce technical errors and help customers complete the form on their computer after they have downloaded it from uscis.gov. For instance, the form:
Checks certain fields to ensure information is entered correctly;
Provides additional spaces to enter multiple preparers and translators;
Includes drop-down lists and calendars;
Provides instructions on the screen that users can access to complete each field;
Includes buttons that will allow users to access the instructions electronically, print the form and clear the form to start over;
Provides a dedicated area to enter additional information that employers are currently required to notate in the margins of the form; and
Will generate a quick-response matrix barcode, or QR code, once the form is printed and can be used to streamline audit processes.
Other proposed changes include:
Requiring employees to provide only other last names used in Section 1, rather than all other names used;
Streamlining the certification in Section 1 for certain foreign nationals; and
Separating the instructions from the form to bring the form in line with USCIS’ practices.
Submit a Comment
To view the proposed form and instructions, go to the Form I-9 notice at http://www.regulations.gov. To submit a comment, enter USCIS-2006-0068 in the search box and click the “Comment Now!” button. After completing all the necessary fields, click “Submit Comment.”
After the 60-day period
After the 60-day period ends, USCIS may make changes to the form based on comments received and will publish a second notice in the Federal Register. The public will have an additional 30 days to provide comments on proposed changes. USCIS will notify the public about these comment periods on I-9 Central.
Which Form Should I Use?
Employers must complete Form I-9 for all newly hired employees to verify their identity and authorization to work in the United States. The current version of Form I-9 is available on USCIS’ online I-9 resource center at http://www.uscis.gov/I-9central. Employers must continue to use the current version of Form I-9 until the Office of Management and Budget approves the proposed version and USCIS posts it on I-9 Central.
I-9 Central includes information about employer and employee rights and responsibilities, step-by-step instructions for completing the form, and information on acceptable documents for establishing identity and employment authorization. Subscribe to I-9 Central to receive updates and alerts.
Hultman Sensenig + Joshi thoughts to share: After years of waiting for changes and finally having a revised Form I-9 in March of 2013, the tweaking to the revised Form I-9 continues. Considering the fines are substantial for failure to accurately complete a Form I-9, paying attention to what USICS wants to change gives employers insight into where the Agency sees problems. Remember, employers MUST fill out a Form I-9 for employees so this two page form is significant.
By reading this blog, there is no legal advice being given and no attorney client relationship is being established.
The Department of Labor won’t be releasing their revised rules as to who is eligible for overtime until 2016 – which means that the time between the publication of the rules and the effective date will be short. Have you analyzed your current positions to determine who is truly exempt as compared to non-exempt? It’s time to do that!