ATTEND CFA CONVENTION IN SANDUSKY, OHIO FOR MORE FROM DAVID WHITLOCK ABOUT EMPLOYER ISSUES

As we are now about halfway through 2014, it is a perfect time to take the temperature of your employment compliance. There are a number of important changes in the law as well as compliance matters that you need to stay on top of. Here is a summary of the major ones.

FIRST, it is important to note that the Equal Employment Opportunity Commission (EEOC) has stepped up enforcement in several areas. These include age and disability discrimination, especially. In part this is because the baby boomer generation is reaching or passing retirement age, and in part this is because older workers are more prone to injury or disease. Because of the often strenuous nature of work in the concrete industry, employers must be especially careful when dealing with injury or disability issues.

The EEOC is also stepping up enforcement with respect to the Genetic Information Non-discrimination Act (GINA). The statute requires employers to avoid making employment-related decisions based upon genetic characteristics. Because this is a relatively new statute, EEOC is more aggressively enforcing claims against employers to create law and make employers better aware.

EEOC is also using litigation to regulate how employers are using criminal background checks. In essence, EEOC takes the position that you cannot use criminal background as the basis for not hiring someone unless you can demonstrate a clear correlation between the job and the crime. EEOC takes the position that an employer relying upon a criminal background check needs to demonstrate an individualized analysis of the relationship between a prior criminal record and the job requirement of the applicant or employee. The individual analysis may require employers to give the employee or applicant an opportunity to explain negative information in a background report. Note that you should never rely upon arrest information alone. EEOC takes the position that arrest records are meaningless and should never be relied upon.

SECOND, don’t ignore the elephant in the room – the Affordable Care Act (a/k/a Obamacare). Although the IRS announced that employers will not pay a penalty for failure to provide minimum essential coverage that is affordable and meets minimum value until January 1, 2015, the law specifically states that employers need to implement that coverage by January 1, 2014. This provision applies to “large” employers which is defined to mean employers with at least 50 full-time (FTE) and full-time-equivalent employees (FTEE). Remember that the ACA counts anyone who works 30 hours per week as a FTE. To determine how many equivalents you have, add up all the hours worked by non-FTEs and divide the total by 120. The whole number remainder is the number of FTEEs. If that, plus the FTEs, exceeds 50, you’re considered “large.”.

Now make the “pay or play” decision: Are you going to providing healthcare coverage that meets the law’s requirements (“play”), or are you going to “pay” the penalty for not doing so? If you haven’t already talked to your broker to obtain rates on your health insurance coverage, you need to do so ASAP. This is necessary so that you can decide which option makes the most business sense. Remember also that you only pay a penalty for not offering coverage to FTEs; this is why some employers are looking at ways to reduce the “pay” cost by outsourcing functions, using staffing companies, and reducing hours. Some companies in the concrete world are finding that reducing hours also decreases injuries and worker comp exposure (and costs), improves safety performance, and eliminates overtime costs.

THIRD, if you are a federal contractor or subcontractor you may run into the new affirmative action requirements in 2014. New requirements regarding utilization of disabled and Vietnam-era veterans are now in place. In essence, the Office of Federal Contract Compliance Programs (OFCCP) now requires that you strive to reach 7% utilization of these categories. The new rules also create a lot of paperwork and reporting obligations. You will certainly want to review your affirmative action plan to ensure that you are in compliance with these new rules.

FOURTH, the misclassification issue is still an active (and expensive) problem. Tax collectors at the state and federal level are looking for income they missed during the economic downturn. That comes from finding employers who have been treating workers as independent contractors — rather than employees — in order to avoid paying withholding, Social Security, Medicare, worker comp, etc. Today, states are much more aggressively auditing employer payrolls and practices. The concrete industry is especially vulnerable because government agencies believe that use of “1099” labor is rampant, particularly among smaller employers. Of more concern is the fact that at least 17 states have entered into arrangements with the federal government to share information. This means that if you are audited at either the state or federal level and found to have misclassified workers, the other level will soon be knocking on your door – effectively, a double whammy! Make certain that you are correctly classifying your workers. The bottom line is that if you tell the worker what to do and how to do it, then that worker is more than likely an employee rather than an independent contractor.

FIFTH, misclassification problems can also lead to wage or claims, but such wage claims can also arise independently. A growing number of plaintiff’s attorneys are willing to bring wage and hour claims against employers who do not correctly pay overtime, and typically, if an improper overtime pay practice is discovered, the claim quickly becomes a class/collective lawsuit. The claim nearly always asserts that the pay practice is deliberate and intentional as that leads to double damages plus attorney fees. The most common wage and hour complaints involve improper payment of overtime, working off the clock, automatic deduction for meal periods, and working before or after clocking in or out. The best advice for all employers is to make sure that your time records are very accurate and that employers must make you aware of any effort to work outside of normal “clocked” hours.

SIXTH, the National Labor Relations Board continues to attempt to regulate nonunion employers that the Board claims are interfering with employees’ Section 7 rights under the National Labor Relations Act. In essence, Section 7 of the Act protects employees engaging in protected, concerted activities for their mutual aid in connection with organizing or representation by a collective-bargaining agent. “Protected” conduct/activity relates to terms and conditions of employment. “Concerted” activities are undertaken by or in behalf of someone other than an individual. Thus, the Board seeks to prevent employers from limiting or stepping on employee communications or actions that have anything to do with terms or conditions of employment. The Board’s regulation extends to handbook policies, social media policies, and even “at will” language.

In recent decisions, the Board has taken the position that an employer cannot require employees to keep confidential information related to an ongoing investigation. In addition, the Board maintains that an employer cannot instruct employees not to discuss their compensation or bonuses. The Board also takes the position that employers cannot regulate what employees do with their personal social media. The bottom line is that concrete industry employers need to periodically review and update their employment policies and/or employee handbook.

SEVENTH, plaintiff’s attorneys are routinely investigating whether persons involved in vehicle accidents were using cell phones or texting while driving. Every concrete employer needs to have an absolute zero-tolerance policy in place that strictly forbids the use of any communications device while driving. This is especially the case with respect to employees driving company equipment, but should also apply when employees use their own vehicles on company business or when driving to and from work or a job site.

EIGHTH, prudent employers will put into place a properly drafted drug and alcohol policy. Think of it this way: if you do not have a good policy, guess who is going to apply for work at your place of business. Given the physical and demanding nature of work in the concrete industry, can you really afford the risk of having someone on your job site whose impaired in any fashion? If you have not had your policy reviewed recently, now’s a good time to bring it up to date.

NINTH, even if you do not have an employee handbook, consider putting in place an arbitration provision that prevents employment related disputes from being resolved in court. As you are probably aware, the litigation process is time-consuming and expensive. Arbitration, however, provides a less expensive, faster, and often more sympathetic forum for resolving employee complaints. These are state specific agreements and are easier to enforce in some states rather than others. If you cannot impose an arbitration agreement, consider at least a jury waiver provision so that if you wind up in court, the matter is tried before the judge only. This helps avoid the runaway jury verdict.

FINALLY, be aware that there are other things happening out there: OSHA is issuing new regulations making life more difficult for concrete industry employers. . . Immigration reform remains an uncertainty while enforcement continues. . . Restrictive covenants can still help you. . .

You still don’t want to hire LUZIRS (Lazy, Undisciplined, Zer0-interest, Irresponsible, Rude, Slackers) . . . and above all – Stay Alert. Why? Because Lerts live longer!!!