Bello Welsh LLP

CLIENT ALERT – Updates to Fair Credit Reporting Act Effective July 21, 2011

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Effective July 21, 2011, changes to the Fair Credit Reporting Act (“FCRA”) now require employers to disclose additional information to employees and job applicants when using credit information to make an adverse employment decision. The new disclosure requirements, resulting from the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), mandate that an employer making an adverse employment decision, based in whole or in part upon an employee’s or applicant’s credit score, disclose new information to the affected person including a numerical credit score, a range of possible credit scores, the key determinative factors of that score, and the contact information for the consumer reporting agency that created the report. The new disclosure requirements under Dodd-Frank are in addition to the existing disclosure requirements under the FCRA. Employers are advised to update their new hire and employee background check documentation to ensure it adheres to federal disclosure requirements.

Bello Welsh LLP

CLIENT ALERT – Connecticut Passes Paid Sick Leave Act

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The Connecticut Paid Sick Leave Act, which is awaiting signature by the Governor, will require employers employing 50 or more people within the state to provide qualified employees with one hour of paid sick leave for every 40 hours worked by the employee, up to a maximum of 40 hours per year. The Act, which would go into effect on January 1, 2012, applies only to service workers who are paid an hourly wage or who are otherwise not exempt from FLSA coverage. Connecticut would become the first state in the U.S. to require paid sick leave for eligible employees, following major cities including San Francisco and Washington D.C. that have passed mandatory paid sick leave legislation in recent years.

Bello Welsh LLP

CLIENT ALERT – EEOC Implements Regulations under the Genetic Information Nondiscrimination Act 01/19/11

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The federal Genetic Information Nondiscrimination Act (GINA) prohibits discrimination against employees and job applicants on the basis of genetic information. GINA also limits employers’ ability to obtain genetic information and imposes obligations for keeping such information confidential. The EEOC recently issued regulations defining “genetic information” broadly to include not only genetic testing information, but also information about the manifestation of a disease in an individual’s family. The regulations specify that employers may not intentionally “request” such information, including by:

  1. conducting an Internet search in a way that is likely to result in the obtainment of genetic information;
  2. actively listening to third-party conversations or searching an individual’s personal effects for the purpose of obtaining genetic information; or
  3. requesting information about an individual’s current health status in a way that is likely to result in the obtainment of genetic information.

Employers may avoid liability if genetic information is obtained inadvertently, such as in response to a general health inquiry, or as a response to an otherwise lawful inquiry where the employer specified that genetic information should not be provided. Employers can take advantage of this protection by using the following “safe harbor” language in conjunction with requests for medical information:

The Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers and other entities covered by GINA Title II from requesting or requiring genetic information of an individual or family member of the individual, except as specifically allowed by this law. To comply with this law, we are asking that you not provide any genetic information when responding to this request for medical information. “Genetic information” as defined by GINA, includes an individual’s family medical history, the results of an individual’s or family member’s genetic tests, the fact that an individual or an individual’s family member sought or received genetic services, and genetic information of a fetus carried by an individual or an individual’s family member or an embryo lawfully held by an individual or family member receiving assistive reproductive services.

This language should be used when:

  1. making an otherwise lawful request for documentation to support an employee’s request for reasonable accommodation;
  2. requesting medical information from an individual under the FMLA or other state or federal law relating to the employee’s request for leave or return to work;
  3. seeking documentation to support a request for leave not governed by federal, state, or local laws, as long as the request complies with the Americans with Disabilities Act and other laws limiting an employer’s access to medical information.

The regulations also set out several exceptions to the prohibition on acquiring genetic information, as well as additional guidance on maintaining confidentiality of genetic information that the employer acquires.

Bello Welsh LLP

CLIENT ALERT – Illinois Prohibits Employee Credit Checks

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The recently enacted Illinois Employee Credit Privacy Act prohibits most Illinois employers from obtaining credit histories or reports and using them in any employment decision. The law prohibits (1) inquiring about an employee’s or applicant’s credit history; (2) seeking credit reports on employees or applicants from a consumer reporting agency; (3) and discriminating against an individual with respect to any aspect of employment because of his or her credit history or credit report. Employers are still permitted to conduct background investigations pursuant to the Fair Credit Reporting Act, so long as any report does not include credit history information. Certain employers are excluded from the reach of the statute, including financial and insurance institutions, debt collection agencies, and certain public sector employers. In addition, the statute provides a limited exception for positions or groups of employees for which a satisfactory credit history is a bona fide occupational requirement.

Employers with operations in Illinois are advised to revise their hiring and background check practices immediately to exclude seeking credit histories for applicants and employees in any form, including on an employment application, in an interview, or through procurement of credit history reports.

Bello Welsh LLP

CLIENT ALERT – New York Imposes New Wage and Hour Requirements

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New York’s recently enacted Wage Theft Prevention Act (WTPA), which goes into effect April 12, 2011, amends the New York Labor Law’s requirements regarding notifications to employees of their wage rates and related information. The law creates greater protections for employees and subjects employers to increased penalties for non-compliance.

Annual and New Hire Wage Rate Notifications

The WTPA amends N.Y. Labor Law section 195 by requiring employers to provide employees with the following information in writing both at the time of hire, and annually by February 1:

  • employee’s rate(s) of pay, including overtime rate for non-exempt employees
  • basis of pay (whether paid by hour, shift, day, week, salary, piece, commission or otherwise)
  • allowances employer plans to claim from minimum wage (including tip, meal, lodging)
  • regular designated pay day
  • employer’s identifying information (such as employer’s name, address and telephone number)
  • any other information the Commissioner deems “material and necessary”

The notice must be provided in English and in each employee’s designated primary language. Each time the notice is provided, the employer must obtain a signed and dated written acknowledgement from the employee affirming, among other things, that the notice complied with the statutory requirements. Employers must maintain these forms for at least six (6) years. The Commissioner of Labor will be preparing templates that are compliant with the Act.

Pay Period Wage Statements and Payroll Records

The WTPA incorporates prior N.Y. Department of Labor regulations requiring notification of wage-related information with each wage payment. As with the annual notification, this notice must include the employee’s rate of pay, the basis of payment, and any allowances. This notice must also state (i) employee’s name; (ii) dates of work covered; (iii) number of regular and overtime hours worked; (iv) any applicable piece rate and number of pieces completed; (v) gross wages; (vi) deductions; and (vii) net wages. Upon request, employers must furnish a written explanation of how wages were computed. Finally, payroll records must also be maintained for six (6) years.

Increased Penalties Apply to Violations

The WTPA maintains employer liability for all unpaid wages (plus interest) and reasonable attorneys’ fees. However, the amendment raises the liability for liquidated damages from an additional 25% to an additional 100% of any underpayment (in both civil and administrative actions), unless the employer can show a “good faith basis” for believing it was in compliance. In administrative actions, willful or egregious violations may result in a fine of twice the underpayment. The WTPA also increases penalties for retaliation against whistleblowing employees. Further, employers found to have violated the law may be required to post notices of the violation in the workplace. The statute of limitations for actions to recover unpaid wages is six (6) years, which is tolled when an employee files an administrative complaint.

Failures to provide the required notices also carry penalties: $50 or $100 per week in which the violation occurred, capped at $2,500 plus costs and reasonable attorneys’ fees, for each type of violation. Finally, violation of the minimum wage and overtime laws remain subject to criminal penalties.

Conclusions and Recommendations

The WTPA creates important notification requirements and substantially increases penalties for violations of wage payment laws, providing plaintiffs’ counsel with a potent tool for challenging New York employers’ pay practices. Employers should work to create the required notifications and review their wage payment and recordkeeping practices early in 2011 to ensure compliance by the statute’s effective date.