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Working Families Flexibility Act: Choice between overtime pay or unguaranteed time off

April 6th, 2017  |  Pamela Wolf  |  Add a Comment

On April 5, the House Education and the Workforce Subcommittee on Workforce Protections held a hearing on what proponents say is a commonsense proposal that would help Americans better balance work, family, and personal needs. The Working Families Flexibility Act, H.R. 1180, would amend the FLSA to let private-sector employers offer workers the choice of paid time off or cash wages for overtime hours. But those who oppose the measure argue that the bill would weaken overtime rights for low-income workers who are already struggling to keep pace with the economy and offers no guarantee that the promised time off actually would be made available.

Brief tour of the bill. Under H.R. 1180, employees would have the choice of being paid time and one-half for overtime hours as required by the FLSA, or compensatory time off at the same rate. The employee would have to agree to any compensatory time-off arrangement, either via a collective bargaining agreement made on behalf of the employee, of if not represented by union, through a written or otherwise verifiable record of an agreement made before the work is performed, which is “entered into knowingly and voluntarily by such employees and not as a condition of employment.”

Use. Employees who request the use of accrued compensatory time off “shall be permitted by the employee’s employer to use such time within a reasonable period after making the request if the use of the compensatory time does not unduly disrupt the operations of the employer.”

Accrual. Employees would not be permitted to agree to or receive compensatory time off unless they have worked at least 1,000 hours for the employer during 12 months of continuous employment before the date of agreement or receipt of compensatory time off. Employees would not be able to accrue more than 160 hours of compensatory time.

Unused comp time. By January 31 each year, employers would be required to pay employees monetary compensation for any unused compensatory time off for the preceding calendar year. Employers would have the option of using a 12-month period other than a calendar year, in which case payout would have to be made not later than 31 days after the end of the 12-month period. Employers would also be able to provide monetary compensation for an employee’s unused compensatory time in excess of 80 hours at any time after giving the employee 30 days’ notice.

Withdrawal. Employers also would be able to discontinue their compensatory time policy at any time upon 30 days’ notice to employees, unless a CBA provides otherwise. Employees would be able to withdraw from the agreement at any time also, but to get monetary compensation for unused compensatory time off, they would have to make a written request and the employer would have 30 days to pay.

Good or bad for workers? As is often the case, there is disagreement about whether the measure would serve the best interests of workers. Proponents pointed out that for more than 30 years, public-sector employees have been able to accrue “comp time” for working overtime hours. But outdated federal rules prevent private-sector workers from receiving the same flexibility. “This simply isn’t right, and it isn’t fair,” said Subcommittee Chairman Bradley Byrne (R-Ala.) at the hearing. “Private-sector workers should be afforded the same freedom to do what’s best for themselves and their families. For many Americans working paycheck to paycheck, earning extra overtime pay is the choice that’s best for them. But the federal government shouldn’t assume that’s the best choice for all workers.”

Subcommittee Democrats, see it differently, though, suggesting that instead of paying workers for their overtime work, H.R. 1180 would let employers pocket employees’ overtime pay in return for a vague promise that employees may be able to take compensatory time off at some point in the future.

“This bill ought to be named the Betrayal of Working Families Act because it once again violates the Trump administration’s promise to empower vulnerable Americans,” Subcommittee Ranking Member Mark Takano (D-Calif.) said in a statement. “The bill gives employers the right to deny low-income workers the overtime pay they’ve earned, while giving their employees nothing but vague promises in return. At a time when there is so much this Committee can do to support working families, it is disappointing that we are even considering legislation that would take us in the opposite direction.”

Parity and flexibility. One invited witness pointed to the parity between government workers and private employees, as well as the flexibility that H.R. 1180 would provide. “Many Wellstone employees work side-by-side with Huntsville Police Department officers, who do benefit from the option of receiving overtime pay or comp time,” said Leslie Christ, chief resource officer of an Alabama nonprofit focused on behavioral health. “It is difficult for employees to understand why the rules are different for public or governmental agencies when they work so hard for our community.”

Christ went on to explain how hard it was to inform an expectant mother that she couldn’t accrue comp time. “She incurred significant overtime and asked me if she could ‘waive’ the overtime to ‘credit’ her that time … I had to explain to her that we were unable to do so because it was against the law,” Christ said. “It was difficult conveying this message to this single mom-to-be, who felt she should be allowed the option to choose for herself whether to take the overtime pay or paid leave when her child was born.”

Crystal Frey, vice president of human resources for a Maryland real estate business, shared how comp time would help employees juggling school, family, and work. “I was recently approached by a non-exempt leasing consultant who was facing numerous life-changing events at one time, including the birth of her child, her upcoming marriage, and the completion of her college degree … If comp time had been an option available to her, I believe it would have given her even more access to paid leave.”

Urging Congress to pass the Working Families Flexibility Act, Frey said, “It is troubling that Congress has not yet extended this same benefit to hardworking private-sector employees. In the 21st century workplace, it’s time to give private-sector non-exempt employees the opportunity to choose for themselves whether to receive cash wages or paid time off for working overtime.”

Built-in protections. While opponents say the bill lacks necessary worker protections, Leonard Court, a labor attorney with years of experience, reminded members, “The bill is carefully drafted to ensure that employees retain maximum flexibility in being able to choose whether to take the comp time option, whether to continue exercising it, when they may seek a cash-out of their banked time, and to protect them from any coercion or undue influence from the employer as to whether they exercise the comp time option.”

Court added, “The Fair Labor Standards Act’s 40-hour workweek as the threshold for earning overtime compensation remains totally untouched.”

Christ explained how the bill puts workers in control. “If an employee opted to participate in a comp-time arrangement but later realized that overtime pay was a greater need, the employee would have the right to discontinue participating in the comp time program after given written notice,” Christ said.

Smoke and mirrors? Not everyone sees the bill as pro-worker. Vicki Shabo, Vice President of the National Partnership for Women and Families, testified about the legislation’s impact on workers. Speaking in opposition to H.R. 1180, Shabo said “the so-called Working Families Flexibility Act … will harm rather than help America’s working families. People today are struggling to meet their job and family obligations, to make ends meet and to save for the future. For most people, there is no “either-or choice” to be made between time and money. Both are absolutely critical to survival, security, and the pursuit of better opportunities.”

Shabo said there is no question that working people and families need updated workplace policies and higher wages, noting also that in some cities and states, successful policies are in place to offer just that. “Unfortunately, H.R. 1180 would do the opposite. This legislation is based on smoke and mirrors,” she said. “It pretends to offer the time off people need when they need it but, in fact, it offers a pay cut for workers without any attendant guarantee of time. It also sets up a dangerous, false dichotomy between time and money when, in fact, working families need both.”

“Quite simply, H.R. 1180 would be a step in the wrong direction for approximately 59 million hourly, full-time workers as well as for salaried, non-exempt workers who are eligible for overtime pay,” Shabo continued. “Instead of providing working people and their families with the time off and the financial stability they need to care for themselves and their loved ones, this ‘flexibility’ bill offers forced choices and false promises.”

Bills that would not trade pay for time off. Subcommittee Democrats noted that several concrete solutions that would strengthen wage and hour laws rather than weaken them already have been offered. For example, the Healthy Families Act, Schedules that Work Act, and the Family and Medical Insurance Leave Act would provide families with paid time off from work and fair schedules without forcing workers to forfeit overtime pay or work excessive hours to spend time with their families.

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President nullifies DOL unemployment drug testing rule

April 4th, 2017  |  David Stephanides  |  1 Comment

On March 31, President Trump signed a congressional joint resolution of disapproval (H.J. Res. 42) that nullifies a Department of Labor Employment and Training Administration final rule. Seen by some as a limitation on states’ ability to require those who apply for unemployment benefits to submit to drug testing, that rule established, for state unemployment compensation program purposes, occupations that regularly conduct drug testing.

The DOL regulations, which were finalized on August 1, 2016, and effective September 30, 2016, implemented the Middle Class Tax Relief and Job Creation Act of 2012 amendments to the Social Security Act. They permit states to enact legislation that would allow state unemployment compensation agencies to conduct drug testing on UC applicants for whom suitable work (as defined under the state law) is available only in an occupation that regularly conducts drug testing (as determined under regulations issued by the Secretary of Labor). States may deny UC to an applicant who tests positive for drug use under these circumstances.

Earlier, the White House had signaled its support for H.J. Res. 42, saying that the final rule it would nullify “imposes an arbitrarily narrow definition of occupations and constrains a State’s ability to conduct a drug testing program in its unemployment insurance system.”

The Department of Labor issued a statement saying “The rule contradicted clear congressional intent—it narrowly limited the circumstances under which drug testing may be carried out and constrained a state’s ability to conduct a drug testing program under the act.” Acting U.S. Secretary of Labor Ed Hugler commented that “The Department of Labor supports the president’s nullification and looks forward to examining additional flexibilities for states relative to the drug testing of persons seeking unemployment benefits.”

The 2012 law amended the Social Security Act to add a new subsection permitting states to drug test unemployment compensation applicants as a condition of eligibility and deny jobless benefits for failing the test, under two specific circumstances:

  • If they were terminated from employment with their most recent employer because of the unlawful use of a controlled substance.
  • If the only available suitable work for an individual was in an occupation that regularly conducted drug testing.

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Rule 23: A primer

March 31st, 2017  |  Lisa Milam-Perez  |  Add a Comment

One of the fun parts of my job is collaborating with the smart people at Jackson Lewis on its Class Action Trends Report. The newest issue has just been released. It’s a primer of sorts on Rule 23 written by lawyers in the firm’s Class Action & Complex Litigation Practice Group.

The issue takes a closer look at the fine points of Rule 23 and the procedural requirements for certifying a class, with an eye toward defeating class certification–which, as Jackson Lewis notes, “is where the most vigorous defense can reap the greatest reward.”

It’s an important time to stay abreast of Rule 23 and class action developments in general, with recent amendments to the Federal Rules of Civil Procedure, and still more revisions in store. Also, Congress has just introduced legislation that would enact even more sweeping changes–a measure that has considerable prospects for success given our Republican-controlled everything. Jackson Lewis talks about these developments, too.

Read the latest issue here: Class Action Trends Report,

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Access Board issues guidance on International Symbol of Accessibility

March 28th, 2017  |  Deborah Hammonds  |  Add a Comment

In response to questions that have been raised on the use of alternative symbols, the Access Board has released guidance on the International Symbol of Accessibility (ISA). For almost 50 years, the ISA has been recognized worldwide as a symbol identifying accessible elements and spaces. Some cities and states have adopted a different symbol and the guidance explains how use of a symbol other than the ISA impacts compliance with the Americans with Disabilities Act (ADA) and the Architectural Barriers Act (ABA).

Standards under the ADA require that the ISA label certain accessible elements, spaces, and vehicles, including parking spaces, entrances and restrooms. Similar requirements are contained in standards issued under the ABA for federally funded facilities.

“Consistency in the use of universal symbols is important, especially for persons with limited vision or cognitive disabilities,” Marsha Mazz, Director of the Access Board’s Office of Technical and Information Services, said in a March 27 statement. “In addition to the ADA and ABA Standards, many codes and regulations in the U.S. and abroad also require display of the ISA.”

While the ADA Standards do not recognize specific substitutes for the ISA, they do generally allow alternatives to prescribed requirements that provide substantially equivalent or greater accessibility and usability under a provision known as “equivalent facilitation.” However, in the event of a legal challenge, the entity pursuing an alternative has the burden of proof in demonstrating equivalent facilitation. Under the ABA Standards, use of a symbol other than the ISA requires issuance of a modification or waiver by the appropriate standard-setting agency.

The ISA bulletin is available on the Access Board’s website along with other issued guidance on the ADA Standards and the ABA Standards.

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ALJ dismisses OFCCP individual sexual orientation bias claim due to voluntary compliance, rejects jurisdictional claims

March 24th, 2017  |  Cynthia L. Hackerott  |  Add a Comment

A DOL ALJ has dismissed, due to the defendant company’s agreement to comply with the agency’s request for an on-site investigation, what is apparently the OFCCP’s first enforcement action based on an individual complaint of sexual orientation discrimination. In a previous decision issued ten days before the dismissal, the ALJ rejected arguments by the defendant, AccuWeather, Inc. that it was not a federal contractor subject to the OFCCP’s jurisdiction. (OFCCP v AccuWeather, Inc., March 13, 2017, DOL OALJ Case No 2017-OFC-11)

Weather forecasting service AccuWeather, Inc. of State College, PA provides a wide-range of enterprise solutions to media, business, government as well as news, weather, content and video for third party websites. According to the OFCCP’s administrative complaint, filed on or about January 19, 2017, the agency received a complaint from a former AccuWeather employee alleging that she was subjected to a hostile work environment and ultimately terminated due to her sexual orientation. She also claimed that a Vice President of AccuWeather called her derogatory names on the basis of her sexual orientation, and that this VP, along with people who worked under him, interfered with her work performance by cutting her out of communications and refusing to follow her instructions.

On-site investigation access denied. On October 25, 2016, the OFCCP sent a letter to the contractor to schedule an on-site complaint investigation starting on November 8, 2016. On November 2, the contractor send a letter responding that it would not permit the agency to conduct an on-site complaint investigation because it asserted that the company was not a federal contractor. The OFCCP discussed the issue with the company via phone on November 2 and 10, but the company reaffirmed that it was denying access, and it’s legal counsel reiterated this position in a November 10 letter.  That same day, the OFCCP issued a Notice to Show Cause why the agency should not initiate enforcement proceedings. On December 15, the company’s legal counsel sent a letter responding to the Notice to Show Cause by reaffirming the company’s refusal to produce requested documents and or permit access to its facility to conduct an on-site investigation In the complaint, the OFCCP asserts that this denial violated Executive Order (EO) 11246.

Contracts at issue. In its answer to the administrative complaint, AccuWeather maintained its assertion that it is not a federal contractor subject to OFCCP jurisdiction, arguing that it fell under the exemption at 41 CFR Sec. 60-1.5(a)(1) for contractors that hold government contracts of less than $10,000. The company requested dismissal of the complaint on that basis. The OFCCP countered, as it had also alleged in the complaint, that AccuWeather had federal contracts totaling in excess of this threshold amount, specifically, with the Defense Logistics Agency (DLA) for $11,845 (effective May 20, 2015, with a completion date of May 23, 2020) and the Department of the Navy for 74,107.41 (effective June 24, 2015, with a completion date of June 20, 2018). On March 3, ALJ Richard A. Morgan issued an order finding that the OFCCP had proper jurisdiction in this case because AccuWeather, Inc. was a federal contractor within the meaning of the EO 11246 and its implementing regulations.

As to the DLA contract, to which the defendant acknowledged it was a party, it argued that contract did not exceed $10,000 because the base amount of the contract was $2,369 for the first year, and the additional three years of option contract in the amount of $2,369 per year should not be considered as aggregate in valuing the contract. The base value of the Navy contract was $23,976 with two subsequent option year extensions, the first valued at $24,695 and the second valued at $25,436. AccuWeather did not deny that this contract exceeded the $10,000 jurisdictional threshold. Yet, the defendant asserted that it was not a party to the Navy contract because AccuWeather, Inc. was not a party to that contract, but rather, the specified contract was between a related company, AccuWeather Enterprise Solutions (AWES), and the Navy.

Jurisdiction established. The ALJ, however, found that the alleged distinctions between AccuWeather, Inc. and AWES were neither noted or accepted by the contracting representative of the Department of the Navy who issued the Navy contract to “AccuWeather, Inc.”  Based on the evidence submitted by the parties, the court pointed out that the contractor-identifying “Commercial and Governmental Entity” (CAGE) number belonging to AccuWeather, Inc. was also used on all the Navy contract documents, and that CAGE number was assigned only AccuWeather, Inc. Indeed, AWES was not registered in the System for Awards Management as a government contractor. Further, there was no acknowledgement by the government contracting agency of a modification to the Navy contract subsequent to AWES’ claimed scratching out of AccuWeather, Inc. on the contract and handwriting in AWES. As the OFCCP’s counsel pointed out, if this alleged scratch out could be  viewed as a request to modify the contract, that modification was never agreed to in writing by the government. Moreover, the option year one modification of the Navy contract was sent to AccuWeather, Inc. and signed by a representative “on behalf of AccuWeather, Inc.”

Therefore, even assuming that there were significant distinctions between AccuWeather Inc. and AWES based on the services that they provide as well as legal distinctions in the formation and operation of these companies, the ALJ found no evidence to support that these distinctions were made known to, or acknowledged by the representatives of the government agency that prepared the Navy contract or the DLA contract. “At the very least, there was a blurring of these distinctions by the defendant which was never adequately clarified by the defendant and was never corrected or acknowledged by the contracting agency,” the ALJ wrote.

Finding that OFCCP jurisdiction was established under the Navy contract, the court deemed it  unnecessary to address whether the DLA contract fell within the $10,000 exemption and whether the value of the option extensions should be considered in the aggregate.

Case dismissed due to voluntary compliance. Since the defendant did not allege any defense to the complaint outside of the jurisdictional issue, the ALJ ordered the parties to address whether the hearing scheduled for March 21, 2017 should go forward. On March 9, the OFCCP informed the court that the company had agreed to comply with the OFCCP’s requested on-site investigation, and as such, a hearing in the case would not be necessary. The following day, AccuWeather confirmed to the court that it had scheduled an on-site investigation in compliance with the OFCCP’s request. Accordingly, on March 13, the ALJ dismissed the complaint due to AccuWeather’s voluntary compliance, thereby cancelling the March 21, 2017 hearing date.

Sexual orientation discrimination enforcement background. Sexual orientation and gender identity were expressly added to the categories protected from discrimination under EO 11246 on July 21, 2014, when President Obama signed EO 13672 (79 FR 42971- 42972), which applies to covered contracts entered into or modified on or after April 8, 2015, the effective date of the OFCCP’s regulations (79 FR 72985-72995) promulgated under EO 13672). On March 17, 2015, pursuant to the Paper Reduction Act, the Office of Budget and Management (OMB) approved the information collection requirements necessary for implementation of those regulations.

On April 16, 2015, the OFCCP issued Directive 2015-01, entitled “Handling Individual and Systemic Sexual Orientation and Gender Identity Discrimination complaints,” to establish the agency’s policy on accepting and investigating individual and systemic complaints based on gender identity or sexual orientation. The policy set forth in this directive provides that the OFCCP will accept and investigate individual and systemic complaints that allege discrimination on the basis of sexual orientation and gender identity against a federal contractor or subcontractor. It will analyze each complaint to determine whether the alleged discrimination occurred on the basis of sexual orientation or gender identity, as well as on the basis of sex, and will coordinate with, and refer complaints to, the EEOC on a case-by-case basis.

Scope of sex discrimination rules. In addition, the OFCCP published a final rule on June 15, 2016 (81 FR 39108-39169) to replace the guidelines at 41 CFR Part 60-20 with new sex discrimination regulations. While EO 11246, as amended by EO 13672, now covers explicitly covers both sexual orientation and gender identity bias, the final sex discrimination rule reflects the OFCCP’s view that adverse treatment of employees based on failure to conform to particular gender norms and expectations about their appearance, attire, or behavior is unlawful sex discrimination. In contrast, courts have not generally recognized claims based on sexual orientation as cognizable under Title VII. The OFCCP says that it enforces the nondiscrimination obligations under EO 11246 by following Title VII and the case law principles that have developed interpreting Title VII, and the agency notes, in the preamble to the final rule, the weakness of federal court support for the proposition that Title VII’s prohibition against sex discrimination encompasses sexual orientation discrimination not based on sex stereotyping. (The most recent case of note on this point is the Eleventh Circuit’s March 10, 2017 decision in Evans v Georgia Reg’l Hosp.)

Recent enforcement developments. At the end of January 2017, the Trump White House issued a statement indicating that President Obama’s EO 13672 will remain in force. The statement was issued in light of speculation that the Trump Administration might back off of the prior administration’s efforts to advance and protect the rights of the lesbian, gay, bisexual, transgender, and queer community.

On February 21, 2017, the OFCCP published a renewed notice (82 FR 11245-11246) seeking comments regarding its request for OMB approval to update the OFCCP’s complaint form, to add “sexual orientation” and “gender identity” as protected bases, among other updates. The renewed notice notes that “additional substantive information” on this request is contained in its earlier, related notice published on July 1, 2016 (81 FR 43254- 43261). The earlier notice included a supporting statement, a copy of the proposed revised form, and a corresponding instruction sheet. The comment period for the July 2016 notice closed on August 30, 2016. Written comments on the renewed notice are due by March 23, 2017.

The agency reports in the supporting statement that it received 790 complaints from individuals in fiscal year (FY) 2013, 699 complaints in FY 2014, and 769 complaints in FY 2015. Therefore, on average, the OFCCP receives about 753 individual complaints annually.

As previously discussed in an Employment Law Daily piece last year regarding the OFCCP’s sex discrimination regulations, a potential legal impediment to OFCCP enforcement of protections on the basis of sexual orientation or gender identity, such as those included in EO 13672 and its implementing regulations, is the fact that Congress has not explicitly delegated legal authority to the President to protect employees from discrimination based on sexual orientation or gender identity, according to John C. Fox, a former OFCCP official and current president of Fox, Wang & Morgan P.C. in Los Gatos, California.

[Author’s note: This story was originally published in the Employment Law Daily email newsletter on March 20, 2017]

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