Martha Zackin

New Earned Sick Time Notice and Updated Safe Harbor Regulation

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By Alexandra D. Thaler

With just weeks to go before the Massachusetts Earned Sick Time law goes into effect on July 1, 2015, the Massachusetts Attorney General’s Office is continuing to issue guidance and documentation relevant to the law, including the required notice posting and an update to its safe harbor regulation.

The AGO’s current draft regulations provide that this Notice of Employee Rights (and not an employer-drafted alternative), must be both posted in a conspicuous location at Massachusetts worksites and distributed to employees.  The English language version of the required poster is now available here.  The AGO’s notice contains the basic outlines of the law’s requirements, including, among other things, minimal required rates of accrual and carry-over, permissible reasons for use, employee notice obligations, and contact information for the AGO (as required by the authorizing legislation).  It also reminds employees that sick time cannot be used as an excuse to be late for work, and that misuse of sick leave may result in discipline. Read more →

Martha Zackin

Supreme Court Backs EEOC in Religious Accommodation Case

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By Martha J. Zackin

In a much anticipated decision, the United States Supreme Court today held that Abercrombie & Fitch violated the prohibition against religious discrimination, as set forth in Title VII of the Civil Rights Act of 1964, by refusing to hire a Muslim applicant who wore a headscarf (a hijab) during a job interview.  In so holding, the Court rejected Abercrombie & Fitch’s argument that an employer cannot be liable for discrimination unless it can be shown that the employer had actual knowledge of the applicant’s need for a religious accommodation.  Instead, the Court stated, an employer violates Title VII if its actions are motivated by a desire to avoid accommodating a religious practice even if the employer is not certain that an accommodation will be needed.  Importantly, the Court left for another day the question whether an employer may be liable under Title VII if it has neither knowledge nor suspicion that an applicant or employee may require a religious accommodation.

Read more →

Martha Zackin

Massachusetts Attorney General’s Office Issues Proposed Earned Sick Time Regulations

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Last November, voters approved a ballot initiative granting earned sick leave to Massachusetts employees.   As we wrote in an earlier article, beginning on July 1, 2015, employees working in Massachusetts are entitled to earn up to forty hours of paid sick leave per calendar year.  Employers with ten or fewer employees are not required to pay employees during this leave but must provide unpaid leave to their employees.

Many questions were left unanswered by the text of the statute.  On April 27, 2015, the Massachusetts Attorney General’s Office released long-awaited proposed regulations.   Although the proposed regulations offer some guidance to employers, questions remain that we hope will be addressed in the final regulations that will be implemented in June shortly before the law goes into effect.  A summary of the guidance offered and the challenges that remain is provided below.

In the meantime, the AG’s Office is seeking public comment regarding the proposed regulations.  Six public hearings are scheduled to take place across the Commonwealth during May and June.  Written comments must be received by 5:00 p.m. on June 10.  Dates and times of the public hearings, and a description of the process by which the AGO will accept written comments, may be found here.  We plan on submitting written comments and welcome your input in presenting any questions you may have.

Guidance:

Employer size.  The new law provides that employers with eleven or more employees must provide up to 40 hours per year of paid sick leave.  For the purpose of determining employer size, employers must include all of their employees, including full time, part-time, seasonal and temporary employees, and interns.  Although sick time benefits need only be provided to individuals working “primarily” in Massachusetts, all employees are counted in determining whether an employer has eleven employees for purposes of the law, whether those employees work within the Commonwealth or outside of Massachusetts.

Eligibility. An employee is eligible to accrue and use earned sick time if his or her “primary place of work” is in the Commonwealth of Massachusetts.  According to the proposed regulations, if an employee works more hours in Massachusetts than in any other state (where, for example, an employee works 40% of his or her hours in Massachusetts, 30% in New Hampshire, and 30% in Maine), then Massachusetts is the employee’s “primary place of work” and all hours work count for accrual purposes.  Employees with a break in service of less than one year return to work with full credit for prior service and prior unused accruals.

Accrual and breaks in service. Nonexempt employees accrue earned sick time at a minimum rate of one hour of earned sick time for every 30 hours of work, including overtime hours. Exempt employees will be assumed to work 40 hours per week, provided that their job description or other terms and conditions of employment do not specify a lower number of hours per week.  In such a case, earned sick time accrues based on that specified number of hours per week.  In addition, employees who are rehired after a break in service of up to one year keep all previously accrued earned sick time, and their employment is deemed to have commenced as of the start of employment prior to the break in service.

Calendar Year.  Employees are eligible to earn up to 40 hours of earned sick time per “calendar year.”  The term “calendar year” is defined in the proposed regulations as “any consecutive 12-month period of time as determined by an employer.”  By way of example, the proposed regulations explain that employers may choose a year that runs from January 1 through December 31, a tax year, the employer’s fiscal year, or the year running from an employee’s anniversary date of employment.  Employers must apply the choice of “calendar year” uniformly, and must inform employees by written notice at the time of hire what constitutes a “calendar year.”

Increments.  Employers must allow employees to use earned sick time in increments of one hour or the smallest increment the employer’s payroll system uses to account for absences or use of other time.  If the employee’s absence at a specific time requires the employer to hire or assign a replacement worker, however, and if the employer does so, the employer may require the employee to use up to a full shift of earned sick time.

Rate and time of payment.  When used, earned paid sick time must be paid on the same schedule as when regular wages are paid.  Employers cannot delay payment pending receipt of written verification or documentation of the use of earned sick time.   Employees are paid at a rate equal to his or her hourly base rate wage, which rate does not include commissions, overtime, or other premium rates.    The proposed regulations provide guidance on how to calculate payment for employees who are paid on commission or who receive different pay rates depending on the tasks performed or hours worked.  In no event may an employer pay an employee a rate less than the effective minimum wage.

Carryover.  Employers must allow employees to carryover up to 40 hours of accrued but unused earned sick time from one calendar year into the next, unless the employer provides a lump sum of 40 hours of earned sick time at the start of employment and at the start of each subsequent calendar year.  Even if hours are carried over, employers are not required to allow employees to take more than 40 hours of earned sick time per calendar year.

Documentation.  The regulations seem to prohibit an employer from requiring medical verification until and unless an individual has been absent for 24 consecutive business hours.  Employees who do not have a healthcare provider may be required to provide a signed written statement that the hours were used for an authorized purpose.   Employees who take earned sick leave for fewer than 24 consecutive business hours may be asked to submit written verification that they have used earned sick time for an allowable purpose.  In no case may an employer ask employees to explain the nature of the illness or the details of the domestic violence that underlies the need to take the earned leave.  The AG’s Office will be releasing a model form that employers may use; we will provide a copy when it becomes available.

Notification.  Employers may require up to seven days’ advance written notice of foreseeable leave, provided a written policy is in place that so requires.  Employers may require employees to follow existing call-out requirements, including the requirement that an employee provide notification each day he or she is absent.  If the need for leave is unforeseeable, the employee must notify the employer of the need for leave “as soon as practicable,” and must comply with the employer’s normal policies and call-out procedures with respect to notifications of unforeseeable absences, “provided that such requirements do not interfere with the purposes for which the earned sick time is needed.”  The proposed regulations also contemplate situations where notification is not feasible, such as accidents and sudden illness, and suggest that failure to provide notification in such circumstances must be excused.

Notice and Record Keeping Provisions.  Employers must provide employees with written notice as to what constitutes a “calendar year” for accrual purposes.  Employers must provide employees with a copy of notice to be prepared by the Attorney General’s Office summarizing the law and regulations,  and must also post a notice of the law and regulations in a conspicuous location accessible to employees in every establishment where employees who are entitled to earned sick time work. Employers are expected to maintain records of accrual and use of sick time for a period of three years and provide a copy of the records upon demand by the AG.

Allowable substitution of paid time off.   An employer may choose to frontload 40 hours of sick leave at the start of employment and at the beginning of every subsequent “calendar year” rather than tracking accrual rates throughout the year.  Moreover, employers may substitute paid time off for earned sick leave if the PTO policies provide that time off:

    • accrues at a rate of no less than one hour of PTO for every 30 hours of work;
    • is paid at an employee’s same hourly rate, as defined by the regulations;
    • is accessible on the same basis, meaning that time may be taken for the authorized uses under the statute;
    • comes with the same notice requirements to employees; and
    • affords employees with the same job protections as provided under the statute.

Discipline.  Employers may discipline employees who are committing fraud or abuse by engaging in an activity that is inconsistent with allowable purposes for leave or by exhibiting a clear pattern of taking leave on days when the employee is scheduled to perform duties perceived as undesirable.   The proposed regulations clearly state that employers may consider an employee’s use of earned sick leave when offering an attendance bonus or reward, and that an employee’s failure to qualify for such a bonus or reward does not constitute interference with the employee’s rights under the law.

Payout at end of year or upon termination.  Employers are not required to pay employees accrued but unused earned sick leave at the end of the year or upon termination.  The proposed regulations provide, however, that an employer who chooses to pay employees for unused earned sick leave at the end of a calendar year may do so, provided the employer makes available at least sixteen hours of paid sick time as of the start of the next calendar year.

Transition year.  For 2015, paid leave provided prior to July 1 will be credited toward the paid leave required beginning on July 1 provided such leave was made available under terms consistent with the law and regulations.

Challenges:

Interaction with other leave policies.  The proposed regulations state that earned sick leave is in addition to time off provided by the FMLA, the Massachusetts Parental Leave Act, the Massachusetts Domestic Violence Leave Act, the Small Necessities Leave Act, “and the like,” which suggests that earned sick leave may not be used concurrently with any of these other types of leave.  In other words, the proposed regulations suggest that an employee who qualifies for FMLA leave and earned sick leave, for example, would be entitled up to a total of thirteen weeks of job-protected leave (or twenty-seven weeks, if the need for the leave qualified the employee for military-related family leave).  This interpretation presents a marked difference in the way in which Massachusetts has implemented leave laws, and we are hoping that the Attorney General’s Office will provide further clarity on this important issue.

Notification.  Practical issues abound under the proposed regulations guidance regarding employee notification.  If employers cannot require an employee to provide medical verification before he or she is absent for 24 consecutive scheduled business hours, it will be a struggle to enforce existing attendance policies and to prevent fraud.  Moreover, the proposed regulations leave many questions unanswered, including whether the prohibition against requesting medical verification applies generally or only when employees seek to use earned sick leave.  We plan on alerting the Attorney General to these and other problems attendant to the proposed regulations, and hope that the Attorney General’s Office will offer further clarification and practical guidance.

Discipline.  Although the proposed regulations allow employers to discipline employees who engage in an activity that is not consistent with allowable purposes for leave or who engage in a “clear pattern” of taking leave when the employee is scheduled to perform duties perceived as undesirable, the proposed regulations do not provide any guidance as to what would constitute a “clear pattern.”  It unclear, therefore, whether employers may discipline employees who exhibit clear patterns of arriving late on Mondays or leaving early on Fridays without facing a claim of retaliation or interference under the law.

Penalties.  The Attorney General may bring an enforcement action against employers, their officers, agents, superintendents, foremen, or employees thereof, or staffing agencies or work site employers, all of whom may face both criminal and civil penalties for violation of the law.  Penalties vary based upon whether the violation is willful or not willful, with even first-time willful violations punishable by $25,000, up to one year of imprisonment, or by both.  Repeat willful violations are punishable by a fine of not more than $50,000, by imprisonment or up to two years, or by both.  Non-willful violations are punishable by a fine of not more than $10,000 or by imprisonment for not more than six months for first offenses.  Subsequent non-willful violations are punishable by a fine of not more than $25,000, by imprisonment for not more than one year, or by both.  As has been the case with the Wage Act, we do not believe it likely that the Attorney General will bring criminal proceedings absent egregious and repeated violations.  That said, the threat is real and raises the stakes substantially.

Of greater concern is that the statute creates a private right of action for employees to sue over alleged violations of earned sick time law, with damages identical to those under the Massachusetts Wage Act.  Specifically, prevailing plaintiffs are entitled to mandatory treble damages for any lost wages and other benefits, as well as the costs of the litigation and reasonable attorneys’ fees.  Although the amount of damages available for lost earned sick time are not likely to be substantial, to the extent an employee (or group of employees) bring claims for interference with rights under the law or retaliation of exercising those rights (for example, following termination of an employee who has recently taken sick time), there may be substantial economic exposure.

Recommendations:

Employers should prepare for the July 1 effective date of the Earned Sick Time law by:

  • Review existing leave policies to determine if such policies will comply with the Massachusetts law and the proposed regulations.
  • Work with legal counsel to modify existing policies.
  • Contact their outside payroll providers to ensure that they have the ability to track and record the use of earned sick time.
  • Consider providing suggestions (either directly or through counsel) to the Attorney General’s Office by written comment or by voicing their concerns at the upcoming public hearings.
  • Check back here for updates.
Martha Zackin

SEC Sues Over Employee Confidentiality Agreements

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By Martha J. Zackin

Early in March, the Wall Street Journal reported that the Securities and Exchange Commission had begun to probe “whether companies are muzzling corporate whistleblowers” through the use of confidentiality agreements that may impede employees from disclosing corporate wrongdoing.  As reported, the SEC sent letters to a number of companies asking them to turn over “every nondisclosure agreement, confidentiality agreement, severance agreement and settlement agreement they entered into with employees since Dodd-Frank went into effect, as well as documents related to corporate training on confidentiality…”  The agency “also asked for ‘all documents that refer or relate to whistleblowing’ and a list of terminated employees.”

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Martha Zackin

Supreme Court Rules on Pregnancy Accommodations

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By Martha J. Zackin

Early this week, the United States Supreme Court issued its much-anticipated decision in Young v. United Parcel Service, Inc., finding that UPS may have engaged in pregnancy discrimination by refusing to accommodate an employee’s pregnancy-related lifting restrictions by transferring her to a light duty position.  In so holding, the Supreme Court applied the same legal standard to pregnancy discrimination cases as applies to cases based other categories protected under Title VII (race, sex, religion, ethnicity, and the like).  Specifically, the Court applied the burden-shifting analysis articulated in McDonnell Douglas v. Green and its progeny, pursuant to which the plaintiff first must establish that the facts alleged are adequate to support her claim.  Thereafter, the employer is given the opportunity to articulate a legitimate, nondiscriminatory reason for its action, which reason the plaintiff must show is merely a pretext for discrimination before she may proceed to trial. Read more →

Martha Zackin

NLRB Strikes Down “Overbroad” Confidentiality Agreement

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By Martha J. Zackin

As an employment lawyer, I have had the opportunity to review hundreds of confidentiality and non-disclosure agreements.  Although there are invariably differences from one agreement to the next, virtually all have at least one thing in common- the inclusion of “employee information” within the description of information to be kept confidential.  Such “employee information” typically includes, among other things, salary and pay rates, incentive compensation structures, and disciplinary or investigatory matters.

Over the past few years, the National Labor Relations Board (the Board) has increasingly sought to protect both unionized and non-unionized employees’ rights under Section 7 of the National Labor Relations Act (NLRA), which provides that all employees have the broad right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.”   For example, the Board has found that Section 7 rights are impinged by policies that require employees to be courteous, refrain from discussing internal investigations, prohibit employees from disparaging or defaming the employer, and prohibit gossip and negativity in the workplace.  (click here for a compilation of NLRB-published information pertaining to social media policies and the use of Facebook and Twitter by employees).

Recently, the Board added standard confidentiality agreements to the growing list of employer policies it has found to violate Section 7, by invalidating a handbook policy that prohibited employees from disclosing or using “for his or her own benefit or the benefit of others, either during or after employment, employer information including “human resources related information” and information pertaining to “investigations by outside agencies.”  This policy, the Board found in Battle’s Transportation, Inc., was overbroad because employees “would reasonably construe those phrases to encompass terms and conditions of employment or to restrict [them] from discussing protected activity, such as Board complaints or investigations.  The Board also found a company directive that prohibited employees from discussing company business with company clients to be unlawfully vague and overbroad, because “employees would reasonably construe this prohibition to restrict discussion about union-related matters.”

Although the Battle’s Transportation workplace is unionized, it is likely that the Board would similarly strike down an “overbroad” confidentiality agreement within a non-unionized workplace.  Although the fight is far from over, it may make good practical sense to review and modify policies now, before the NLRB comes calling.

Martha Zackin

Professional Employer Organization Fined Near Maximum For I-9 Paperwork Violations

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By Martha J. Zackin

Recently, an administrative law judge upheld a finding by the US Immigration and Customs Enforcement agency (ICE) that Employer Solutions Staffing Group II, LLC (ESSG), a Minnesota-based PEO focused on providing administrative and payroll functions to staffing companies, had violated I-9 regulations by making false attestations on 242 I-9 forms.  The ALJ also upheld the fine of $227,251.75 imposed by ICE for the violations.  A copy of the case may be found here.

In this case – and, perhaps, in other workforces challenged by the realities of remote workers – ESSG had local representatives review identity and eligibility requirement documents and affirm the documents’ authenticity.  These local representatives also sent photocopies of the documents presented to ESSG, for ESSG’s review.  Based on the representatives’ affirmations and review of the photocopied documents, ESSG personnel completed and signed off on Section 2 of I-9 forms relating to newly-hired employees.

The problem is this: by signing on Section 2, the person signing is attesting “under penalty of perjury … that [he or she has] examined the document(s) presented by” the subject employee.  There is no provision within the applicable law or regulations that authorizes an employer to examine photocopies of documents, or to delegate the obligation to conduct an in-person inspection of employee verification documents.  An employer may delegate this obligation to an authorized representative, however, if the employer also delegates to the same authorized representative the obligation to attest to the documents’ authenticity.  In other words, the person signing off on completed I-9 forms must be the same person who reviews the original (not photocopied) documents, and certifies that the documents appear to be genuine and relate to the employee named.

This case is important, and stands for the proposition that the only correct procedure for verifying employee identity and authorization to work in the United States is by in-person inspection of original documents in the presence of the subject employee, with such inspection made by the employer representative attesting to the documents’ authenticity.   In other words, no Skype or other technology will suffice.

Martha Zackin

OFCCP Issues Notice of Proposed Rulemaking, Seeking to Update its Sex Discrimination Guidelines

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By Martha J. Zackin

On January 28, 2015, the Office of Federal Contract Compliance Programs announced a Notice of Proposed Rulemaking, seeking to update its sex discrimination guidelines applicable to federal contractors and subcontractors covered by Executive Order 11246.

According to the press release published to announce its proposal, OFCCP’s “sex discrimination guidelines are woefully out of date and don’t reflect established law or the reality of modern workplaces.”  The proposed rule would rescind existing guidance, and align OFCCP’s regulations with those regulations applicable to Title VII of the Civil Rights Act of 1964. Read more →

Martha Zackin

Massachusetts Extends Parental Leave Rights to Employees Regardless of Gender

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By Sasha Thaler

Since 1972, the Massachusetts Maternity Leave Act (M.G.L. c. 149 s. 105D) has provided eight weeks of unpaid, job-protected leave to full-time female employees who meet certain eligibility requirements, on the occasion of the birth and, more recently, the adoption of a child.  One of former Governor Deval Patrick’s last official acts was to sign into law a revision of the MMLA that extends those rights and job protections to men, beginning on April 7, 2015.

The new Parental Leave Law retains many of the key provisions of the MMLA familiar to most Massachusetts employers: Read more →