Articles Posted in Employment

In Stein v. Atlas Industries, Inc., No. 17-3737 (6th Cir. 2018) (Unpublished Opinion), the following took place.  A few years back, Robert Stein, an employee of Atlas Industries, Inc. (“Atlas”), had two misfortunes.  First, his son became very ill, and barely survived.  Second, Stein tore his meniscus.  That injury required surgery, so Stein took medical leave to have an operation and recover.  About ten weeks into his recovery, Stein went for a checkup.  There, Stein says that he was told that he would not be released to work until August 10.  However, Stein concedes that he was given a release slip from the doctor’s office that released him to work as of July 20, but to perform only office work until August 10.  Stein gave that release slip to Atlas’s workers’ compensation office.  After that visit, the doctor’s office notified Atlas that Stein could return to work with light-duty restrictions in just two days.  As a result of all this, Atlas expected Stein to return to work the following Monday, but Stein thought he was on leave for several more weeks.

On Monday, Stein neither showed up for work nor called in.  Tuesday and Wednesday were no different—Atlas heard nothing from Stein.  So on Thursday, Atlas fired him.  Company policy, his bosses said: Employees who missed three workdays without notification to Atlas were subject to automatic termination.  No exceptions.  Stein sued, claiming that Atlas violated the Family and Medical Leave Act (the “FMLA”) and ERISA by firing him.  The district court granted Atlas summary judgment, and Stein now appeals.

The Sixth Circuit Court of Appeals (the “Court”) reviewed the case.  The Court noted that the FMLA guarantees eligible employees up to twelve weeks of unpaid, job-protected leave to recover from a serious medical condition.  Stein claims that by firing him while he was on leave after his knee surgery, Atlas interfered with the exercise of his FMLA rights and retaliated against him for exercising them.  However, said the Court, the FMLA provides that an employee who has a serious health condition can take up to twelve weeks of leave per year. See 29 U.S.C. § 2612(a)(1)(D).  But the FMLA does not grant an unconditional right to leave.  To qualify, an employee must comply with his employer’s usual and customary notice and procedural requirements, including internal call-in policies. 29 C.F.R. § 825.302(d).  Having failed to so comply; Stein cannot prevail on his claims of interference in violation of the FMLA.  His claim of retaliation in violation of the FMLA also fails, since he could not establish a causal connection between the retaliatory action (the firing) and the protected activity (the right to FMLA leave).  There was no temporal proximity between the firing and the start of Stein’s absence from employment, as he was terminated ten weeks after that absence began.  As such, the Court affirmed the district court’s summary judgment as it pertains to the FMLA claim.

The Internal Revenue Service (“IRS”) has issued FAQs, which provide guidance on the new tax credit, available under section 45S of the Internal Revenue Code (the “Code”), for paid leave an employee takes pursuant to the Family and Medical Leave Act (the “FMLA”).  Here are the FAQs:

Q: What is the employer credit for paid family and medical leave?

A: This is a general business credit employers may claim, based on wages paid to qualifying employees while they are on family and medical leave, subject to certain conditions.

The U.S. Department of Labor (the “DOL”) has released a Field Assistance Bulletin (the “FAB”) in order to provide guidance concerning the Wage and Hour Division’s (“WHD”) enforcement of tip credit rules under the Fair Labor Standards Act (“FLSA”), after Congress amended FLSA Section 3(m) in the Consolidated Appropriations Act, 2018.  The FAB says the following.

The FLSA prohibits employers from keeping tips received by their employees, regardless whether the employer takes a tip credit under 29 U.S.C. § 203(m).  The FLSA also provides that portions of WHD’s regulations codified at 29 C.F.R. §§ 531.52, 531.54, and 531.59 that barred tip pooling when employers pay tipped employees at least the full FLSA minimum wage and do not claim a tip credit will have no further force or effect (until any future action by the WHD Administrator).  WHD expects to proceed with rulemaking in the near future to fully address the impact of the 2018 amendments.

In the meantime, given these developments, employers who pay the full FLSA minimum wage are no longer prohibited from allowing employees who are not customarily and regularly tipped—such as cooks and dishwashers—to participate in tip pools.  The FLSA prohibits managers and supervisors from participating in tip pools, however, as the FLSA equates such participation with the employer’s keeping the tips.  As an enforcement policy, WHD will use the duties test at 29 C.F.R. § 541.100(a)(2)-(4) to determine whether an employee is a manager or supervisor for purposes of section 3(m).  The FLSA also provides enforcement authority in FLSA sections 16(b) and 16(c) to, among other things, recover all tips unlawfully kept by the employer, in addition to an equal amount in liquidated damages.

Yesterday (June 7) I receive an announcement from the DOL, that the DOL is withdrawing it’s informal guidance on joint employment and independent contractors. This withdrawal could impact coverage of individuals under an employee benefit plan. Here is what what the announcement says:

U.S. Secretary of Labor Alexander Acosta today announced the withdrawal of the U.S. Department of Labor’s 2015 and 2016 informal guidance on joint employment and independent contractors.  Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law. The department will continue to fully and fairly enforce all laws within its jurisdiction, including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.

Yesterday’s blog summarized the changes to the DOL’s overtime payment rules. The primary change is the increase in the salary dollar threshold for being treated as exempt from the overtime rules. Apparently, a large number of states and other organizations don’t like these changes, and have filed suit to block them. The the U.S Secretary of Labor has issued the following News Release, containing the DOL’s response to these suits:

WASHINGTONU.S. Secretary of Labor Thomas E. Perez issued the following statement on the filing of lawsuits by a group of states, the U.S. Chamber of Commerce and other organizations in the Eastern District of Texas challenging the update to the Fair Labor Standards Act’s overtime rules for white-collar, salaried workers:

 “We are confident in the legality of all aspects of our final overtime rule. It is the result of a comprehensive, inclusive rule-making process. Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics. Partisan lawsuits filed today by 21 states and the U.S. Chamber of Commerce seek to prevent the Obama administration from making sure a long day’s work is rewarded with fair pay. The overtime rule is designed to restore the intent of the Fair Labor Standards Act, the crown jewel of worker protections in the United States. The crown jewel has lost its luster over the years: in 1975, 62 percent of full time salaried workers had overtime protections based on their pay; today, just 7 percent have those protections – meaning that too few people are getting the overtime that the Fair Labor Standards Act intended. I look forward to vigorously defending our efforts to give more hardworking people a meaningful chance to get by.”

The U.S. Department of Labor (the “DOL”) has issued a “Final Rule”, which revises its overtime pay regulations. The DOL has also issued FAQs which discusses the Final Rule. Highlights of the FAQs include the following:

The Final Rule.  The Final Rule updates the regulations for determining whether white collar salaried employees are exempt from the Fair Labor Standards Act’s minimum wage and overtime pay protections. They are exempt if they are employed in a bona fide executive, administrative or professional capacity, as those terms are defined in the Department of Labor’s regulations at 29 part 541.

Qualifying For The Exemptions.  To qualify for exemption, a white collar employee generally must:

Memorandum: According to a U.S. Department of Labor News Brief (8/13/2015), officials from the U.S. Department of Labor and the Alaska Department of Labor and Workforce Development have signed a three-year Memorandum of Understanding (the “MOU” ) intended to protect employees’ rights by preventing their misclassification as independent contractors or other non-employee statuses. Under the agreement, both agencies may share information and coordinate law enforcement.

Background: The MOU represents a new, combined federal and state effort to work together to protect the employees’ rights and level the playing field for responsible employers by reducing the practice of misclassification. Alaska is the 25th state agency to join this effort with the U.S. Labor Department. Alabama, California, Colorado, Connecticut, Florida, Hawaii, Illinois, Idaho, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Hampshire, New York, Rhode Island, Texas, Utah, Washington, Wisconsin and Wyoming agencies have signed similar agreements.

More information on misclassification and the effort are available at http://www.dol.gov/misclassification/.

In Hansler v. Lehigh Valley Hospital Network, 14-1772 (3rd Cir. 2015), Deborah Hansler (“Hansler”) had requested intermittent leave from her former employer, Lehigh Valley Health Network (“Lehigh Valley”), under the Family Medical Leave Act of 1993 (the “FMLA”). Specifically, Hansler had submitted a medical certification requesting leave for two days a week for approximately one month. As alleged in the complaint, the medical certification refers to the length of her requested leave but not the nature or duration of her condition. A few weeks later, after she took several days off work, Lehigh Valley terminated Hansler’s employment without seeking any clarification about her medical certification, as required by law. Lehigh Valley cited excessive absences and informed her that the request for leave had been denied. Hansler sued Lehigh Valley for violations of the FMLA, but the district court dismissed the complaint on the basis that the medical certification supporting Hansler’s request for leave was “invalid.”

After reviewing the case, the Third Circuit Court of Appeals (the “Court”) concluded that, in failing to afford Hansler a chance to cure any deficiencies in her medical certification, Lehigh Valley violated the FMLA. The Court said that when, as here, a medical certification submitted by an employee is “vague, ambiguous, or nonresponsive,” the employer must, under 29 C.F.R. § 825.305(c), provide the employee an opportunity to cure the deficiency within seven days. Accordingly, the Court reversed the district court’s dismissal of the case, and remanded the case for further proceedings.

In Bonkowski v. Oberg Industries, Inc., No. 14-1239 (3rd Cir. 2015), the plaintiff, whose employment had been terminated, was attempting to invoke the protections of the Family and Medical Leave Act (the “FMLA”). The district court had ruled that the plaintiff was NOT entitled to this protection, because he did not show that he had a “serious health condition” under 29 U.S.C. § 2611(11)(A), i.e., “an illness, injury, impairment, or physical condition that involves (A) inpatient care in a hospital, hospice, or residential medical care facility,” and therefore was not entitled to leave (or protection) under the FMLA. The plaintiff appeals this ruling.

The crux of this case is an interpretation of the regulation at 29 C.F.R. § 825.114, which defines the terms “inpatient care”-for purposes of determining if a serious health condition exists- as “an overnight stay in a hospital, hospice, or residential medical facility, including any period of incapacity as defined in 29 C.F.R. § 825.113(b), or any subsequent treatment in connection with such inpatient care.” The Third Circuit Court of Appeals (the “Court”) concluded that “an overnight stay” under this regulation means a stay in a hospital, hospice, or residential medical care facility for a substantial period of time from one calendar day to the next calendar day as measured by the individual’s time of admission and his or her time of discharge. The Court said that, since the plaintiff was admitted and discharged on the same calendar day, he did not have an overnight stay, and thus did not have a serious health condition. Accordingly, the Court affirmed the district court’s ruling.

In Employ Concerned Home Care Providers, Inc. v. Cuomo, No. 13-3790-cv (Second Cir.2015), the Second Circuit Court of Appeals (the “Court”) faced the following matter. A section of the New York Public Health Law known as the “Wage Parity Law” sets the minimum amount of total compensation that employers must pay home care aides in order to receive Medicaid reimbursements for reimbursable care provided in New York City and Westchester, Suffolk, and Nassau Counties (the “surrounding Counties”). N.Y. Pub. Health Law § 3614-c. The questions presented on to the Court on appeal are whether the Wage Parity Law is preempted by the National Labor Relations Act (“NLRA”), or the Employee Retirement Income Security Act of 1974 (“ERISA”), or is unconstitutional under the Fourteenth Amendment’s Due Process and Equal Protection Clauses. The Court ruled that the Wage Parity Law is neither preempted nor unconstitutional.