8th Circuit Court of Appeals Holds that Miscalculation of FMLA Entitlement Interfered with Employee’s FMLA Rights

August 2016

Eligible employees are entitled to 12 weeks of FMLA leave per year for qualifying reasons.  But how are those 12 weeks counted?  Incorrectly answering this question got an employer in trouble when it only counted the employee’s straight time in determining how many hours of FMLA leave the employee was entitled to take.

In a recent decision, the 8^th Circuit Court of Appeals (which covers Minnesota) held that an employer unlawfully interfered with an employee’s FMLA rights when he was terminated for excessive absenteeism after the employer claimed he had exhausted his FMLA leave.  When a need for overtime arose, employees could volunteer, and the employer would schedule overtime based on the volunteers.  Once an employee was scheduled for this overtime, it was no longer voluntary.  This means that missed scheduled overtime shifts due to a reason covered by the FMLA were properly counted against his 12 week FMLA entitlement.  But, it also means that his overtime should have been taken overtime into account when calculating how many hours of leave he was entitled to take, i.e., he was entitled to more than the 480 hours (12 weeks * 40 hours/week) he would have been entitled to if he did not work any overtime. 

If an employee works the same number of hours each week, it is not too difficult to calculate both their FMLA entitlement and their FMLA usage, but it becomes more difficult where, as in this case, the employee’s schedule varies.  However, the Department of Labor’s regulations interpreting the FMLA provide for what to do in such a situation, stating that if an employee’s schedule varies to such an extent that the employer cannot determine with any certainty how many hours the employee would otherwise have worked if they hadn’t taken FMLA leave, then the employee’s average hours over the past 12 months should be used in calculating the employee’s leave entitlement. 

For questions regarding administration of FMLA leave, contact James Sherman at jasherman@wesselssherman.com or 952-746-1700.

Minnesota Supreme Court to Decide Who Makes the Call on a $15/hour Minimum Wage Rate for the City of Minneapolis

August 2016

Following a trend of cities such as Seattle, Los Angeles and San Francisco, Minneapolis is considering creating a $15/hour minimum wage for employees working in the city.  Who gets to decide the issue, however, is the subject of considerable debate that has gone all the way to the Minnesota Supreme Court. 

Advocates for a higher minimum wage collected the signatures required to place the question on the November ballot, as an amendment to the city charter, but the Minneapolis City Council opposed the measure, instead wanting the discretion to decide the issue as an ordinance passed by the Council.  A state trial court judge sided with the advocates, and ruled that the question should be included on the ballot to be voted on by the residents of Minneapolis.  Given the obvious time constraints, the Supreme Court has agreed to decide the issue on appeal directly from the trial court.

The Court’s decision in this case could have far reaching effects, for Minneapolis and other Minnesota cities.  If the Court rules that the city charter can be amended for this sort of issue, advocacy groups may be encouraged to take further measures to establish other terms of employment that apply only locally, through the referendum process.  Some Council members (and no doubt many business owners) have expressed concerns about the economic impact of addressing the minimum wage at the city-level, including that establishing a much higher minimum wage rate of $15 in Minneapolis, when the state minimum wage is $9.50 for large employers, could potentially make the city less competitive with surrounding communities.  If the Supreme Court decides to leave this decision to the voters, hopefully they will become fully informed of all sides of the issue before deciding on such an important issue.

Employers Who Treat the DOL’s New Overtime Rule Lightly, do so at Their Own Peril!

August 2016

James B. Sherman, Esq. 

By now most everyone is aware of the Department of Labor’s new overtime regulations.  Effective December 1, 2016 the minimum salary necessary for exempt status in the so-called “white collar” positions (executive, administrative and professional), increases drastically from $23,660 to $47,476, or $913 per week.  Any white collar employee currently exempt from overtime pay, must be paid 1 ½ times his or her “regular rate of pay” if their salary does not meet this new minimum as of the 1^st of December.  For employers, the impact of the DOL’s new rule and the many issues and decisions it presents – some with significant consequences to their bottom line – should not be ignored or underestimated.  Those that fail to address the many nuances and details of this fast approaching change to their wage and hour practices, may encounter serious problems, as well as lost opportunities, even before the end of the year.

There can be a tendency to over simplify the issues involved with a change that more than doubles the minimum salary level for the most common exemptions from overtime.  Despite predictions that the new regulations may impact over 6 million workers come December 1^st, many human resource professionals and consultants are treating this as a singular issue involving the simple decision of whether employees will remain exempt, or must be converted to nonexempt status.  While this certainly is the primary focus there is so much more employers should be taking into account if they care to minimize the impact of the new regulation, not only to profitability but to everything from employee morale to operational efficiencies and meeting the needs of their customers. 

Here is just a short list of issues many employers are overlooking as the new regulations are just around the corner:

·         What will be the cost of converting presently exempt employees, to nonexempt employees entitled to overtime?  How many employees must be converted?  What will be their “regular rate of pay” for purposes of overtime pay at 1 ½ this rate?

·         How many hours of overtime do these employees work?  Many employers assume their employees work little or no overtime, so converting some employees to nonexempt status will be inconsequential – don’t be so sure. Since few employers record hours worked each day by exempt employees, they may not truly know how many hours some employees work.  Also, white collar workers often perform job duties outside of normal business hours; e.g. training, mandatory business events and certain travel that must be treated as “hours worked” under the FLSA.

·         If employees receive an increase in salary to meet the new minimum, can the D.O.L. mandated raise be accompanied by increased expectations and/or job duties?  Yes.

·         Can employees in the same job category be split between exempt and nonexempt based on the new salary requirement, without generating discrimination lawsuits?

·         Is this a good time to address some current classifications of certain positions as exempt that are questionable because the job duties may not satisfy the requirements of any of the white collar exemptions?

The answer to the last of the above questions is “absolutely,” there is no better time to assess and reconsider improperly classified positions, or to redefine job duties to better meet the exemptions.  Failing to fully audit and assess all exempt/nonexempt positions, prior to the December 1, 2016 effective date of the new D.O.L. overtime rule, is a lost opportunity for employers to shore up their defenses at a time when class action wage and hour lawsuits are at an all-time high. 

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James B. Sherman is a named shareholder of Wessels Sherman law firm.  He and fellow shareholder from the firm’s Chicago office.  The two submitted comments on behalf of employers throughout the country, on the D.O.L.’s proposed rules issued last summer, and have since fielded countless questions and presented a number of webinars and live presentations to hundreds of business owners, HR professionals, accountants, consultants (and other lawyers) from numerous states from coast to coast.  For help with questions, auditing wage and hour exposure, risk avoidance, or strategies to minimize the impact of the new overtime regulations that take affect December 1, 2016, contact: James Sherman at jasherman@wesselssherman.com or 952-746-1700.

EEOC Issues New Enforcement Guidance on Workplace Retaliation

August 2016

For the first time since 1998, the EEOC has published updated guidance on workplace retaliation.  Retaliation charges are by far the most common and fastest growing type of claim filed with the EEOC, comprising nearly 45 percent of all charges it now receives. Given the surge in retaliation claims and the additional attention these claims are receiving from the EEOC, employers need to know what activities are protected from retaliation.     

Among other things the new EEOC guidance addresses:

• The scope of employee activity protected by the laws, which includes “participation” in the EEO process—by raising a claim, testifying, assisting or participating in an investigation, proceeding or hearing under these laws—as well as “opposing” discrimination.
• Examples of retaliatory actions that would be likely to deter a reasonable person from engaging in protected activity.
• Guidance on the ADA’s unique prohibition on “interference” with the exercise of rights under the law, which is broader than the anti-retaliation provision.
• Best practices to minimize the likelihood of retaliation violations.

The new guidelines apply to each of the laws enforced by the EEOC, including Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), Section 501 of the Rehabilitation Act, the Equal Pay Act (EPA) and Title II of the Genetic Information Nondiscrimination Act (GINA).  Accordingly, the scope of anti-retaliation laws in the workplace, is very broad. 

To prevent your workplace from becoming another statistic in the significant growth in the number of retaliation claim, or for more information on how this government agency will analyze claims of retaliation under its new enforcement guidance, contact Wessels Sherman at (952) 746-1700.