Legislative Update: Can Illinois Employers Still Have a “Use it or Lose it” Vacation Policy?

May 2016
By Anthony J. Caruso, Jr., Esq.

It is my belief that the answer is YES!

The Illinois Department of Labor, noting its well-established regulation under 56 Ill. Adm. 300.520(e) states:

“An employment contract or an employer’s policy may require an employee to take vacation by a certain date or lose the vacation, provided that the employee is given a reasonable opportunity to take the vacation. The employer must demonstrate that the employee had notice of the contract or policy provisions.”

To complicate things, effective August 22, 2014, the Illinois Department of Labor ADDED a new regulation on vacation policies. 56 Ill. Adm. 300.520(h) WITHOUT CHANGING, MODIFYING, OR REVISING THE EXISTING “USE IT OR LOSE IT” regulation as stated above. The new regulation 300.520(h) confusingly states as follows:

“An employer cannot effectuate a forfeiture of earned vacation by a written employment policy or practice of the employer.”

Based upon statutory interpretation, the Illinois Department of Labor should have deleted the “Use it or Lose it” authorizing regulation if it was no longer valid. Rather, the likely interpretation is that the new forfeiture regulation forbids OTHER types of forfeiture policies or practices by employers of earned vacation. For example, the following policies are prohibited under the new regulation 300.520(h):

• Employee’s failure to give two weeks’ notice prior to resigning results in employee forfeiting earned vacation.
• Employee forfeits earned vacation if terminated for performance or misconduct.

Therefore, the “Use it or Lose it” vacation policy is still likely valid; however, the IDOL has not issued a written legal advisory opinion. At some point, there may be a legal clarification by the courts. I would suggest that Illinois employers have a clear legal argument to continue to have a “Use it or Lose it” policy. The policy should clearly state that the employee will be given a reasonable opportunity to take the earned vacation before losing it. The policy should also indicate that it is in compliance with the Illinois Department of Labor Vacation Regulation under 56 Ill. Adm. 300.520(e).

Questions? Contact Anthony J. Caruso, Jr. of Wessels Sherman’s St. Charles office at (630) 377-1554 or via email at ancaruso@wesselssherman.com

Minnesota Employee Handbook Updates for 2016

An employee handbook needs to be a living document that is continually reviewed and updated to reflect the rapidly changing state, federal and local laws, as well as changes that new technology brings to the way workplaces operate.  There are many reasons you may wish to revise your handbooks if you have not done so within the past few years, including new laws that require specific handbook provisions, new or revised clauses that may be advisable due to new laws or agency actions, or increased agency scrutiny of certain types of clauses.

The following is a discussion of several types of clauses that should be reviewed for one or more of these reasons.

1.  Accommodation policy that includes making accommodations for pregnant employees

• As part of the Women’s Economic Security Act (WESA) Minnesota passed a law that specifically requires providing reasonable accommodations for eligible pregnant workers, even beyond those that may be required under the ADA.  Such accommodations may include providing additional break time, seating, changes to facilities, equipment or furniture, providing a leave of absence even after 12 weeks of FMLA leave, light duty, acquiring/modifying equipment or devices, job restructuring, part-time or modified work schedules, or reassignment to a vacant position.
• Additionally, employers are required to provide reasonable break time and a private place to express breast milk at work.
• In connection with these policy changes, managers should be trained on these accommodation requirements so they don’t illegally refuse to provide accommodations.

2.  Make sure FMLA policies do not exclude same-sex spouses in the definition of a spouse

• Under the Supreme Court’s rulings, same-sex spouses are entitled to the same legal protections as opposite-sex spouses, including FMLA leave to care for a spouse with a serious health condition, etc.

3.  Medical marijuana

• Minnesota employers may not discriminate against or penalize an employee or applicant based on the person’s status as a legal medical marijuana user or for a legal medical marijuana user’s positive drug test for medical marijuana, unless the individual used, possessed, or was impaired by medical marijuana on the premises of the place of employment or during the hours of employment. 

4.  The NLRB’s scrutiny of policies

The National Labor Relations Board (NLRB) in particular has taken a special interest in handbook provisions over the past several years.  The NLRB invalidates policies that explicitly prohibit employees from engaging in protected activities under Section 7 of the National Labor Relations Act (NLRA); i.e., “concerted activity” for the purpose of collective bargaining or other mutual aid or protection.  In other words, if employees work together to try to address or complain about their wages, hours, or any other terms and conditions of employment, that activity will generally be legally protected as concerted activity.  In addition, even if a policy does not explicitly prohibit this activity, today’s NLRB will still find it to be unlawful if:

• Employees would in it its opinion “reasonably construe the rule to prohibit  concerted activity;
• The rule was enacted in response to concerted activity; or
• The rule was actually applied to restrict concerted activity.

Policies that have come under fire for these reasons include confidentiality policies; policies regarding employee conduct toward the company and supervisors; policies regarding employee conduct towards co-workers; policies regarding third party communications; policies restricting use of company logos, copyrights, and trademarks; policies restricting photography and recording; policies restricting employees from leaving work; conflict of interest rules; and social media policies.

5.  Wage disclosure protection

As part of the WESA, Minnesota passed a new law that prohibits employers from:

• Requiring nondisclosure by an employee of his or her wages as a condition of employment;
• Requiring an employee to sign a waiver or other document which purports to deny an employee the right to disclose the employee’s wages; or
• Taking any adverse employment action against an employee for disclosing the employee’s own wages or discussing another employee’s wages which have been disclosed voluntarily.

Employers are required to include in their handbooks a clause laying out employees’ rights and remedies under this law.

6.  No fault attendance policies

• Certain laws, such as the FMLA and the ADA can provide legal protection for certain employee absences, so no fault attendance policies that penalize employees after a certain number of absences, no matter what the reason, may need to be modified to allow for exceptions for legally-protected absences.

If your business has not updated its handbook within the past few years, it should be a top priority for 2016.  For a free quote to update your handbook, contact Wessels Sherman attorneys in our Minnesota office at (952) 746-1700 or email jasherman@wesselssherman.com.

Five Essential New Year Resolutions Every Employer Should Have for 2016 - 1

1.  Avoiding “joint employer” status and liability under newly adopted federal agency standards –

Last year, the National Labor Relations Board (NLRB) overhauled the test to determine whether two (or more) employers are “joint employers” for purposes of labor law, with its Browning-Ferris Industries decision.  The new test makes it much easier to establish joint employer status and is now being used to pursue claims against McDonald’s Corp. for the actions of its franchisees.  The NLRB’s test is being used to hold multiple employers liable for unfair labor practices committed by one, as in the case of McDonald’s Corp. as a joint employer with its franchisees.  Joint employer status may also be used to impose collective bargaining and union contract obligations, as well as determining whom can be subjected to picketing and other strike activity or economic pressure, from unions. 

The Department of Labor (DOL) recently issued its own definition of “joint employers,” amid allegations from some United States Congressmen of collusion between the two agencies.  Although some of the factors in the two tests are similar (the DOL definition is actually broader than that of the NLRB), the consequences of finding a joint employer relationship by the different agencies differ significantly.  The DOL’s guidance is relevant for the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA).  Under these laws, the hours worked for joint employers will be aggregated for purposes of determining if an employee has worked overtime during a workweek.  In either case, both joint employers will be jointly liable for any violations under these laws.  

Because of the severe ramifications at stake and the current heightened focus on the issue, we highly recommend that employers make the New Year’s resolution of auditing any potential joint employment relationships with the help of someone knowledgeable in these areas.   

NLRB Proclaims Confidentiality Requirements Unlawful

November 2015
By Alan E. Seneczko

Having reviewed countless employee handbooks over the past 30+ years, I have found that it is not uncommon for employers to maintain policies that require employees to keep investigations of complaints of sexual harassment and other disciplinary matters confidential. Although the reasons for doing so often vary, most employers contend that this requirement is necessary due to the sensitivity of the subject matter and to protect the identity of potential witnesses. According to the NLRB, such generalized concerns are not enough to prevent such a policy from unlawfully infringing on employees’ right to discuss the terms and conditions of their employment with their fellow employees.

In The Boeing Company, 382 NLRB No. 195 (Aug. 27, 2015), the Board reviewed Boeing’s requirement that all employees involved in human resources investigations not discuss the matter with any other employee, except company officials conducting the investigation or their union representative. The Board found that such a blanket confidentiality policy violated Section 8(a)(1) and unlawfully interfered with employees’ Section 7 right to engage in concerted activity. In doing so, it rejected Boeing’s contention that the policy was necessary to protect witnesses, victims or employees under investigation from retaliation or harassment; to prevent the spread of unfounded rumors; to ensure the integrity of the investigation; and, to encourage employees with complaints to come forward. The Board disagreed, holding that an employer may only prohibit employee discussion of an investigation when its need for confidentiality with respect to that specific investigation outweighed employees’ Section 7 rights. In other words, in order to maintain such a requirement, an employer must be able to demonstrate legitimate concerns about witness intimidation or harassment, the destruction of evidence or other misconduct that might compromise the integrity of its investigation.

With this and all of its other recent decisions concerning employee handbook provisions, “no gossip” policies, interpersonal relations, and social media postings, the NLRB is continuing its aggressive and expanding effort to regulate all aspects of the workplace – and an employer’s ability to manage it, regardless of whether it is a union or non-union environment. Although the NLRB may not be knocking on your door today, it would be prudent to keep these concepts in mind the next time you are reviewing your employee handbook and other policies.

Questions? Please contact Attorney Alan E. Seneczko at (262) 560-9696, or email alseneczko@wesselssherman.com.