QuickBooks Connect is a multi-day event that brings entrepreneurs, small businesses, accountants & developers together to grow, learn & connect with each other to drive business. For more information go to https://quickbooks.intuit.com/connect/
I want to thank Intuit QuickBooks for the opportunity to have participated in the $100,000 App showdown. Over the past month, I have received the support of the community, Macomb OU Incubator, TechTown Detroit, Great Lakes Women’s Business Council, Small Business Administration Emerging Leaders, EverythingHR Clients, QuickBooks customers, family, friends, and my amazing staff. Together we accumulated over 900 votes for EverythingHR. The telephones calls we have received from Intuit QuickBooks customers across the country desiring human resource assistance has reinforced our purpose to provide cost effective human resource products and services to businesses and organizations that DO NOT have the in house expertise to support their most valuable and most expensive asset on their books – EMPLOYEES. This past month has proven that EverythingHR integration with QuickBooks online is not just another app, what separates us from our competition is that we have HR professionals on hand to assist QuickBooks customers with HR-related tasks and questions.
Thank you for your ongoing support.
Felicia G. Harris
President and CEO
Beginning October 4th EverythingHR will host monthly webinars designed to equipment Business Owners and Managers with the tools they need to drive revenue with their most valuable asset - Employees. Each month you will have the opportunity to hear from Employment Attorneys, Immigration Attorneys, HR Professionals, Certified Coaches, and Recruiters. Information on how to register will be released September 18, 2017
Tip pooling restrictions apply only when ‘tip credit’ claimed DOL Tip-Pooling Regulations Ruled Invalid
Employers that pay employees above minimum wage, without claiming a "tip credit," are not obligated to give employees a share of customer tips, according to the 10th U.S. Circuit Court of Appeals, which rejected Department of Labor (DOL) regulations as invalid.
Employees in the food services industry often are compensated through a combination of hourly wages and tips. The Fair Labor Standards Act (FLSA) recognizes this industry standard and provides that employers can claim a tip credit against their minimum-wage obligations on the basis of tips that employees receive.
If an employer wishes to claim the credit, employees must be permitted to retain all of the tips they receive, unless the employee participates in a valid tip pool. The FLSA is silent as to whether these rules apply when an employer does not claim the tip credit. However, in 2011 the DOL issued a regulation purporting to bar all tip-pooling that does not comply with the FLSA's notice and retention requirements, regardless of whether an employer claims the tip credit.
Bridgette Marlow worked for The New Food Guy, a catering company doing business as Relish Catering. For her work, Marlow was paid $12 per hour and $18 per hour for overtime. Relish Catering accepted tips from customers but neither shared those tips with its employees nor offered any explanation to its employees of how those tips were shared. Marlow filed a lawsuit, alleging that the FLSA required her employer to pay her a share of all tips received from catering customers.
The lower court dismissed the case on the pleadings, implicitly stating that the DOL regulation was invalid. Marlow appealed.
On appeal, Marlow argued that Relish Catering's practice of retaining tips violates the FLSA and that she was entitled to a share of any tips the company received from customers. Regardless of what the employee receives in wages, she argued, if an employer retains tips, it can achieve the equivalent of paying out less than minimum wage. If a $15-per-hour employee works 8 hours and receives $120 for that shift, but the employer receives and retains $80 in tips attributable to the employee's work, the employer has really only paid out $40—or $5 per hour—for that shift, or so the argument goes.
The 10th Circuit rejected this argument, finding that the FLSA is concerned with what employees receive, not the source of funds that are used to pay the wage. The appellate court held that if the employer pays an employee at or above minimum wage but does not claim a tip credit against its minimum-wage obligations, there can be no FLSA violation.
Marlow next argued that Relish Catering violated a DOL regulation stating that tips are the property of an employee, regardless of whether the employer claims a tip credit.
The appellate court compared the FLSA with the regulation and concluded that the FLSA's silence did not allow the department to issue this type of rule, which was therefore invalid. Because the regulation was invalid, the claim based on the regulation was dismissed. It is worth noting that the 10th Circuit made no mention of the fact that the 9th Circuit recently considered the same regulation and reached the opposite conclusion.
Marlow v. The New Food Guy, 10th Cir., No. 16-1134 (June 30, 2017).
Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 4.3 percent, the U.S. Bureau of Labor Statistics reported today.
Employment increased in food services and drinking places, professional and business services, and health care.
Household Survey Data
Both the unemployment rate, at 4.3 percent, and the number of unemployed persons, at 7.0 million, changed little in July. After declining earlier in the year, the unemployment rate has shown little movement in recent months.
Among the major worker groups, the unemployment rates for adult men (4.0 percent), adult women (4.0 percent), teenagers (13.2 percent), Whites (3.8 percent), Blacks (7.4 percent), Asians (3.8 percent), and Hispanics (5.1 percent) showed little or no change in July.
Among the unemployed, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.8 million in July and accounted for 25.9 percent of the unemployed.
The labor force participation rate, at 62.9 percent, changed little in July and has shown little movement on net over the past year. The employment-population ratio (60.2 percent) was also little changed in July but is up by 0.4 percentage point over the year.
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 5.3 million, was essentially unchanged in July. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.
In July, 1.6 million persons were marginally attached to the labor force, down by 321,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
Among the marginally attached, there were 536,000 discouraged workers in July, essentially unchanged over the year. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.1 million persons marginally attached to the labor force in July had not searched for work for reasons such as school attendance or family responsibilities.
Establishment Survey Data
Total nonfarm payroll employment increased by 209,000 in July. Job gains occurred in food services and drinking places, professional and business services, and health care.
Employment growth has averaged 184,000 per month thus far this year, in line with the average monthly gain in 2016 (+187,000).
Employment in food services and drinking places rose by 53,000 in July. The industry has added 313,000 jobs over the year.
Professional and business services added 49,000 jobs in July, in line with its average monthly job gain over the prior 12 months.
In July, health care employment increased by 39,000, with job gains occurring in ambulatory health care services (+30,000) and hospitals (+7,000). Health care has added 327,000 jobs over the past year.
Employment in mining was essentially unchanged in July (+1,000). From a recent low in October 2016 through June, the industry had added an average of 7,000 jobs per month.
Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in July. In manufacturing, the workweek was also unchanged at 40.9 hours, and overtime remained at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.7 hours for the fourth consecutive month.
In July, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $26.36. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent. In July, average hourly earnings of private-sector production and nonsupervisory employees increased by 6 cents to $22.10.
The change in total nonfarm payroll employment for May was revised down from +152,000 to +145,000, and the change for June was revised up from +222,000 to +231,000. With these revisions, employment gains in May and June combined were 2,000 more than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 195,000 per month.
The Department of Labor (DOL) suggested more complex alternatives to the blocked overtime rule of the Obama administration in its July 25 request for information (RFI) on overtime. These alternatives include having multiple standard salary levels for white-collar exemptions from overtime, adjusted for the varying costs of living across different parts of the United States.
The DOL issued the RFI, published in the July 26 Federal Register, in preparation for drafting a proposed rule on the white-collar overtime exemptions. The use of an RFI in the rulemaking process is optional but the DOL chose this option rather than immediately publishing a proposed rule in light of pending litigation over the 2016 overtime rule.
The human resource department has long been the protector of sensitive employee information, keeping it under literal lock and key with restricted access given on a need-to-know basis. Increasingly, this type of information is being stored in web-based formats, accessible to those with the correct credentials from any device with Internet connectivity. Listed below are some best practice approaches to help ensure the security of confidential employee information.
Tighten password use. In addition to securing information online, require employees to put passwords on all devices they use to access sensitive company information. This would include laptops, smart phones and iPads. Passwords help protect information that is left open by locking out the device after a certain period of time. Employers may take this a step further and require regular rotation of passwords and specify a level of complexity for the password (for example, a combination of symbols, letters and numbers).
Educate employees on policy. Create a policy that discusses the use of mobile devices, both corporately owned and personal. Educate new employees on this policy early in employment and communicate it to all employees regularly. The policy should address employee responsibility regarding sensitive information accessed on mobile devices and protocols the company will follow if sensitive information is breached. This policy may also require employees to disclose personal devices they use to access confidential corporate information.
Engage IT staff to enforce and monitor. While employees should take personal responsibility for accessing this information, employers should also equip IT with the tools necessary to monitor employee access to sensitive information. When it is suspected that information is being used or accessed inappropriately, have protocols in place to give certain IT staff the authority to restrict access until the matter is investigated thoroughly.
Use technology solutions. Technology exists to help employers guard sensitive data, regardless of the device that is used to access it. This includes systems that prohibit employees from copying and pasting material from a secure web browser into a document on a personal laptop. Other technology can remotely delete data from a device should it be lost or stolen, or if an invalid password is entered a certain number of times. Employers should also consider investing in IT development, so that the company is aware of new cyber threats and employees are trained to handle them.
Understand relevant laws. A number of states have enacted laws that require notification to individuals whose sensitive personal information has been breached. Additionally, many foreign countries have stringent rules regarding employers monitoring employees' personal devices. HR professionals should understand all relevant laws and bring their organization's policies into compliance.
A Well Drafted Job Description/Attendance Policy Proved to be Critical in Defending a Disability Discrimination Claim By: JAMES M. REID
In Williams v. AT&T Mobility (6th Cir 2017), the United States Court of Appeals for the Sixth Circuit ruled that the employer’s termination of the employee was not a violation of the Americans With Disabilities Act because regular attendance was an essential function of the job and the employee could not perform that function. The court relied in part on EEOC v Ford Motor Co. (6th Cir 2015), which reasoned that “[r]egular, in person attendance is an essential function . . . of most jobs, especially the interactive ones.” In addition, this employer listed regular attendance as an essential job function and prepared a strict attendance policy in advance of any attendance issues with this employee.
In this case, the employee suffered from depression and anxiety that caused her to miss work. During her approximately 8 years of employment with the employer, her job duties included answering incoming calls and assisting customers while being logged in to her work computer. Although the employee had attendance issues throughout her employment, she missed approximately 7 months straight due to depression and anxiety attacks. Thereafter, she had sporadic attendance and remained on short term disability leave for several additional months. When the employee returned, she was warned that she would be terminated if she continued to have unexcused absences pursuant to the employer’s attendance policy. While the employer was evaluating whether her additional absences were excused, medical evidence revealed that “she could not function at work in a call center environment” and “could not focus mentally due to mental illness.” As a result of being incapable of having regular attendance, her employment was terminated.
The employee sued the employer for: (1) failing to accommodate her disability; (2) failing to engage in the interactive process; (3) disparate treatment; and (4) retaliation. As to the first claim, the employee “failed to propose any reasonable accommodation that would have allowed her to perform the essential functions of the job” since she “could not work at all for significant periods of time”. Since the employee could not prove she was qualified to perform the job with or without a reasonable accommodation, the court did not have to address her interactive process and disparate treatment claims. Regarding her retaliation claim, the employee was unable to show any “causal connection” between her accommodation requests and employment termination. The court acknowledged that “there are some jobs that a person with disabilities is simply unable to perform.”
This case gives helpful guidelines to allow employers to plan in advance and proceed with termination if the employee is unable to perform the essential job functions with or without a reasonable accommodation. However, these accommodation cases are very fact specific. By way of example, this case may have been decided differently if the employee was: (1) able to have regular attendance with flexible scheduling, modified break times, and/or additional leave; or (2) in a position that did not require regular attendance at the worksite as an essential function of the job. Employers are encouraged to plan in advance by seeking the advice of counsel when creating job descriptions, drafting handbook policies, or responding to employee requests for accommodations.
James M. Reid IV, Esq.
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University of Pittsburgh Medical Center (UPMC) maintained a human resource database containing current and former employees' names, dates of birth, social security numbers, tax information, addresses, salaries, and bank information. Hackers breached the database and stole financial information for 62,000 individuals and used the information to file fraudulent tax returns and steal tax refunds. In Dittman v. UPMC, the plaintiffs brought a class action alleging UPMC was negligent in securing the data and breached an implied contract. A divided panel of the Pennsylvania Superior Court ruled that UPMC did not owe a legal duty to its current and former employees to protect their personal and financial information from hacking.
The Superior Court balanced the value of employers storing employee data electronically against the risk of data breaches and hacking, concluding that: "Although breaches of electronically stored data are a potential risk, this generalized risk does not outweigh the social utility of maintaining electronically stored information." This practical rationale acknowledged that because "there is no true way to prevent data breaches altogether," it is "unnecessary to require employers to incur potentially significant costs to increase security measures." Further, the Superior Court refused to create a judicially-imposed duty of care for employers, finding that companies do not need extra incentive to protect their current and former employees' confidential information. It was noted that Pennsylvania already has statutory safeguards, the Breach of Personal Information Notification Act, in place to prevent the disclosure of confidential employee information.
This decision, and its implications on how courts will likely handle cases involving breaches of human resource databases in the future, should be encouraging to employers. However, employers should take reasonable steps to address hacking issues because, as the Superior Court's opinion illustrates, courts will apply a balancing test which weighs numerous factors on a case-by-case basis to data breach suits. That is, the factual circumstances of a particular data breach may result in a court finding that the employer owed a duty of reasonable care to its current and former employees.
In light of Dittman v. UPMC, employers maintaining confidential employee information electronically should:
• Realize that hackers may target your Human Resources database;
• Talk to your electronic security and IT personnel regarding the risks of hacking and data breach;
• Obtain and maintain the best electronic data security you can afford;
• Institute monitoring protocols to ensure that in the event of a data breach you will be made aware of such breach promptly; and
• Know your legal obligations regarding notification of current and former employees in the event of a data breach.
If you have any questions about employer obligations regarding data breaches of electronically stored employee information, contact Andrew Ruxton at (412) 394-2573 | firstname.lastname@example.org, or another member of Clark Hill's Labor and Employment Practice Group.
Minimum Wage: By 2022, California's mandatory minimum hourly wage will be $15 for businesses with more than 25 employees. Starting Jan. 1, 2017, minimum hourly pay will rise from $10 to $10.50, an extra $20 per week for full-time employees. There's no state-mandated increase in hourly wages in 2017 for businesses that employ 25 or fewer workers. In 2018, however, they must pay workers $10.50 per hour. Some municipalities have taken this matter into their own hands. San Diego's minimum wage will jump to $11.50 per hour, effective Jan. 1. On Oct. 1, Berkeley's rate became $12.53 per hour and will rise to $13.75 an hour on Oct. 1, 2017. Los Angeles set a minimum hourly rate of $10.50 last July 1. It will become $12 per hour on July 1, 2017.
Marijuana Legalization: The California Marijuana Legalization Initiative permits residents to grow up to six plants for personal use and allows people over age 21 to possess up to one ounce of marijuana. HR professionals should review their employee handbooks and policies to make sure the language covers the use of recreational marijuana. Reminding workers that although California has legalized marijuana possession and use, neither is permitted on the job or on company property.
Parental Leave: California law provides up to 12 weeks of protected leave only for workers at businesses with at least 50 employees.
Extra Hours for Part-Time Employees: San Jose voters in November approved Measure E, which takes effect March 8, 2017. It will require businesses with at least 36 employees to offer more hours to their part-time employees before hiring additional workers, provided the extra hours wouldn't trigger overtime pay. That initiative inspired the Opportunity to Work Act (A.B. 5), introduced Dec. 5 as the 2017 legislative session began. The act contains language similar to San Jose's measure but sets the bar for employers at a minimum of 10 employees.
It also bans retaliation against workers who exercise their rights under the would-be law by filing a complaint with the state or filing a lawsuit. Retaliation includes "reporting or threatening to report the actual or suspected citizenship or immigration status of an employee, former employee or family member" to any government agency.
Felicia G. Harris
EverythingHR News is designed to inform business owners, HR professionals and managers about employment law news and emerging workplace trends.
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