Have Yourself a Merry Little Party: How to Minimize Office Holiday Party Liability

This post was written by Cindy S. Minniti, Mark S. Goldstein, and Kimberly M. Mitchell.

Over the next few weeks, office holiday parties will invade restaurants, bars, and conference rooms across the nation. This oft-anticipated tradition may be the only time each year that all employees nosh, sip, and dance in one place. What could possibly go wrong? Plenty! This article will discuss some of the workplace issues that can arise from a holiday party gone awry, and suggest measures for minimizing the corresponding risk.

Remind Employees of Your Policies

Most company holiday parties go off without a hitch, save a few embarrassing or awkward moments. On occasion, though, serious allegations arise in the aftermath of corporate holiday gatherings. In fact, allegations of sexually explicit conduct and religious discrimination tend to spike at this time of year.

Because of these concerns, it is important for employers to reinforce their employment policies before the festivities begin. Prior to the holiday party, send an email or post a notice reminding employees of your policies governing personal conduct, discrimination, and workplace harassment. Employers may also want to provide specific examples of unacceptable holiday party conduct, such as adult-themed gifts or mistletoe props. These reminders may discourage employees from behaving badly and can prove important in defending harassment lawsuits, should one arise.

It is also important for companies to create an inclusive environment while the festivities are underway. During the party, for instance, avoid religious-themed music, decorations, or customs. Provide food and drink options suitable for all guests, including those with religious-based dietary restrictions.

Moderate the Flow of Alcohol

In some jurisdictions, employers may be liable for injuries caused by employees who consume alcohol at company functions. Accordingly, consider moderating the flow of alcohol by providing employees with drink tickets instead of unlimited access to the bar. By doing so, employers set their expectations with respect to drinking and remind employees when they have reached their limit. Also consider designating a few members of management to identify and secure safe transportation for employees who appear overly intoxicated.

Curb Unofficial Holiday Parties

Employers may also be liable for conduct that occurs during unofficial holiday gatherings paid for with company credit cards. To curb inappropriate use of company funds and your potential exposure, remind corporate-card-carrying employees of your business-expense reimbursement policy. Consider requiring them to obtain advance approval for any holiday gatherings where employees may be in attendance, and to describe their party plans, including venue, guests, date, and time.

Promptly Respond to Complaints

In the event of post-party complaints, promptly investigate and effectively resolve the claims. If you discover evidence substantiating the complaint, take immediate action to correct the harassing behavior. These actions may absolve or at least reduce corporate liability.

In the unfortunate event that you have to discipline or terminate an employee based on conduct that occurred during a holiday party, make sure that such action is consistent with prior action taken in comparable situations. Inconsistent action, even if well-intended, may be problematic.

What Does This Mean for My Company?

Office holiday parties boost morale and camaraderie, but can also be a nightmare for your human resources department if your company is not properly prepared. Consider, therefore, implementing the steps outlined above for a fun and compliant holiday season.

This article can also be viewed on Forbes.com.

New York's 5 Gifts for Employers in 2015: What State and City Employers Need To Know Heading into the New Year (Day 4)

This post was written by Cindy S. Minniti and Mark S. Goldstein.

Each day this week, we will “unwrap” one of five pressing employment law issues on the 2015 horizon for New York state and city employers. Previously, we covered the minimum wage hike, the anticipated enforcement of two new NYC laws, and the revamped NYC Commission on Human Rights. Today’s topic is the unsettled status of unpaid interns.

Finally, in 2015 – after what has felt like an endless wait – the federal Court of Appeals for the Second Circuit in Manhattan is expected to weigh in on the great intern debate: are company-sponsored unpaid internship programs lawful, or must interns be paid just like regular employees? The court has scheduled oral argument in tandem appeals for January 15, 2015, and should issue a ruling before year’s end.

As we have previously reported on this site, unpaid internship programs were once considered a long-standing, stable facet of the U.S. business landscape, as well as a valuable option for students seeking to gain real-world experience and to open doors in their sought-after career field. But in recent years, these programs have come under intense scrutiny and fierce legal attack. A veritable flood of class and collective action lawsuits have been filed against employers across a broad swath of industries. Propelled by an ever-enterprising employee-plaintiffs’ bar, and facilitated by the soft job market following the 2008 recession, these suits have attempted to hold companies liable under the federal Fair Labor Standards Act (FLSA) and parallel state laws, under the theory that companies unlawfully withheld minimum wages and overtime pay, while reaping the benefits of interns’ “free” labor. The suits seek not only back pay with interest, but also hefty attorneys’ fees, and have become so costly for employers to defend that several high-profile companies have elected to discontinue their internship programs altogether.

In its highly anticipated decision, the Second Circuit is expected to set the contours for when (if ever) a company must pay student (and other) interns. The court also will likely clarify whether, and if so, how much, deference federal courts should afford to policy positions of the United States Department of Labor (USDOL) on this issue. The USDOL contends that an intern must be classified as an employee under the FLSA (i.e., must be paid) unless all of the following six criteria are satisfied: (1) the internship is similar to training given in an educational environment; (2) the internship experience is for the benefit of the intern; (3) the intern does not displace regular employees; (4) the employer derives no immediate advantage from the intern’s activities; (5) the intern is not necessarily entitled to a job at the conclusion of the internship; and (6) the employer and the intern understand that the intern is not entitled to wages. The New York State Department of Labor, for its own part, has articulated 11 criteria (several of which are duplicative of the USDOL’s six) that must be met for a valid internship program.

The Second Circuit’s ruling will likely be based as much on politics and policy as on any technical FLSA statutory analysis. The USDOL has filed an amicus brief in the two intern cases pending before the court, urging that it “defer to the [the agency’s] longstanding six-part trainee test.” Other interested organizations, such as the United States Chamber of Commerce and the National Employment Law Project, have also vocalized their contrary positions, urging the court to rule in favor of the companies in the pending cases.

Many deem the Second Circuit’s decision to be the most important wage-and-hour decision expected in 2015, and it is anticipated to have significant impact on the future structure and use of internship programs not only in New York, but nationwide as well. Stay tuned here for future reports about developments in this hot legal story for 2015.

What Does This Mean for My Company?

New York employers can and indeed should expect a bevy of changes over the next year. From the minimum wage increase to expanded protections for pregnant employees to the use of unpaid labor, the New York employment law landscape remains in flux and is as dynamic as ever. Employers should therefore consult with experienced counsel immediately to discuss these issues and prepare a cogent plan of action to face them head-on.

Be sure that this is a New Year’s resolution that you actually keep!

New York's 5 Gifts for Employers in 2015: What State and City Employers Need To Know Heading into the New Year (Day 3)

This post was written by Cindy S. Minniti and Mark S. Goldstein.

Each day this week, we will “unwrap” one of five pressing employment law issues on the 2015 horizon for New York state and city employers. On Monday and Tuesday, respectively, we covered the minimum wage hike and the anticipated enforcement of two new NYC laws. Today’s topic is the reemergence of NYC’s equal employment opportunity agency.

As we head into 2015, NYC employers can expect increased visibility and enforcement initiatives from the recently overhauled NYC Commission on Human Rights (NYCCHR or Agency) – the administrative agency tasked with enforcing the NYC Human Rights Law (NYCHRL). Responding to pressure from Public Advocate Letitia James, on November 21, 2014, Mayor Bill de Blasio appointed an employee-plaintiffs’ side attorney, Carmelyn Malalis, as the Agency’s new chair. Ms. Malalis replaces Patricia Gatling, a holdover from the Bloomberg administration. De Blasio also appointed eight new NYCCHR commissioners, commenting that he expects the revamped Agency to “be a robust enforcer of our fundamental civil rights.”

One initiative that NYC employers can expect from the newly populated NYCCHR is an aggressive, continued push to combat discriminatory job postings on Craigslist and other websites. Even before the addition of de Blasio’s newest pro-employee appointees, the Agency had already, in recent months, been ramping up scrutiny of online job postings that arguably express a preference for applicants with particular demographic characteristics – such as females for a food server job (by posting an opening for a “waitress” rather than “waiter/waitress” or “food server”).

Upon discovering a potentially biased job posting, the NYCCHR will reportedly then try to build a case against the posting employer by sending “tester” resumes by email. Next, using tracking software, the Agency can determine which “tester” applicant emails the employer opens. In the case of a “waitress” job posting, for instance, if the employer opens the email from a “tester” applicant who is female, but not from one who is male (traits the Agency would make obvious through the email addresses it uses), the Agency may use this fact as evidence that the posting employer was indeed motivated by gender bias in hiring for the food server position. Despite modest pushback – one state senator recently criticized the NYCCHR for these surreptitious procedures – the Agency’s practice persists.

NYC employers should keep an eye out for these and other NYCCHR tactics to strengthen its enforcement of the NYCHRL – already one of the nation’s most expansive anti-discrimination laws – in 2015 and beyond.

What Does this Mean for My Company?
New York employers can and indeed should expect a bevy of changes over the next year. From the minimum wage increase to expanded protections for pregnant employees to the use of unpaid labor, the New York employment law landscape remains in flux and is as dynamic as ever. Employers should therefore consult with experienced counsel immediately to discuss these issues and prepare a cogent plan of action to face them head-on.

Be sure that this is a New Year’s resolution that you actually keep!

New York's 5 Gifts for Employers in 2015: What State and City Employers Need To Know Heading into the New Year (Day 2)

This post was written by Cindy S. Minniti and Mark S. Goldstein.

Each day this week, we will “unwrap” one of five pressing employment law issues on the 2015 horizon for New York state and city employers. Yesterday, we covered the minimum wage hike. Today will cover the anticipated enforcement of two new NYC laws.

Two of the major 2014 storylines for the NYC business community were implementation of the city’s paid sick leave law and amendment of the NYC Human Rights Law (NYCHRL) to require accommodations for pregnant employees. In 2015, NYC employers should expect these two laws to emerge from their infancy and get some teeth.

The Earned Sick Time Act: On April 1, 2014, the NYC Earned Sick Time Act (ESTA) took effect, requiring employers with five or more workers to provide paid sick leave to all employees who perform more than 80 hours of work in NYC in a calendar year. Employers with fewer than five workers are required to provide comparable unpaid sick leave benefits. Recently, the NYC Department of Consumer Affairs (DCA), the agency that enforces ESTA, issued instructive ESTA FAQs and outlined the requirements for ESTA-compliant written sick leave policies.

In late October, DCA Commissioner Julie Menin testified before the NYC Council that, in the months since ESTA implementation, the agency has received more than 350 ESTA complaints. According to the DCA, professional service firms have been the subject of the most complaints (35 percent of the total), with retail industry employers the subject of 18 percent of the total. Most complaints have stemmed from an employer’s alleged failure to provide proper notice of ESTA to new and existing employees. Although the DCA had not levied a single fine against an employer as of late October 2014, it has issued warnings of “imminent fines” to at least five companies, and NYC businesses should expect the complaints to continue, and actual fines to be issued, in the coming year.

The Pregnancy Accommodation Amendment: Several months before ESTA’s January 2014 implementation, an amendment to the already-expansive NYCHRL took effect. It requires that NYC employers provide reasonable accommodations for an employee’s pregnancy, childbirth, or related medical condition. Such accommodations may include, among other things, bathroom breaks, leaves of absence for childbirth-related disabilities, breaks to facilitate increased water intake, periodic rest for those who stand for long periods, and assistance with manual labor. NYC employers also must distribute, to all new hires upon commencement of employment, written notice of the right to be free from discrimination on the basis of pregnancy, childbirth, or a related medical condition.

The advent of pregnancy accommodation requirements in NYC appears to be part of a larger, national movement to expand the rights of pregnant workers. In July 2014, for example, the Equal Employment Opportunity Commission issued guidance suggesting that the federal Pregnancy Discrimination Act requires accommodations for pregnant employees in certain circumstances. And the U.S. Supreme Court recently heard oral argument in a case presenting a similar issue. Given the high-profile support for pregnant workers’ rights on the national stage, NYC officials can be expected to vigorously enforce the NYCHRL pregnancy accommodation amendment in the coming months.

What Does this Mean for My Company?

New York employers can and indeed should expect a bevy of changes over the next year. From the minimum wage increase to expanded protections for pregnant employees to the use of unpaid labor, the New York employment law landscape remains in flux and is as dynamic as ever. Employers should therefore consult with experienced counsel immediately to discuss these issues and prepare a cogent plan of action to face them head-on.

Be sure that this is a New Year’s resolution that you actually keep!

New York's 5 Gifts for Employers in 2015: What State and City Employers Need To Know Heading into the New Year (Day 1)

This post was written by Cindy S. Minniti and Mark S. Goldstein.

2014 was a hectic year for labor and employment practitioners in New York, yielding mixed results for employers and, in many instances, presenting more questions than answers. Among the highlights, an expanded paid sick leave law – amended on the eve of implementation by Mayor Bill de Blasio – took effect in New York City. And in Albany, state legislators, following the lead of their NYC counterparts, enacted workplace protections from discrimination and harassment for unpaid interns.

Now, however, with 2014 almost fully behind us, it is time for New York state and city employers to look toward 2015 and some of the more pressing employment law issues on next year’s horizon. That is why, starting today, and each day this week, we will “unwrap” one of the five most noteworthy issues poised to impact New York employers in the new year. Today’s topic is the minimum wage.

On December 31, the statewide minimum wage for non-exempt (i.e., hourly) employees will rise from $8.00 per hour to $8.75 (and then to $9.00 December 31, 2015). Just as significantly, the minimum weekly salary for certain exempt employees – executives and administrators – will increase December 31: from $600.00 to $656.25 (and then to $675.00 December 31, 2015).

Wages for tipped employees in the hospitality industry are also impacted. For food service workers, the tip credit – which permits employers to pay tipped employees less than the minimum wage so long as the employees earn enough gratuities to make up the difference – will increase from $3.00 to $3.75 per hour (and to $4.00 December 31, 2015). This means that the “tipped minimum wage” for such workers will remain at $5.00 per hour, provided that tips plus wages equal or exceed the applicable minimum wage (i.e., $8.75 per hour as of December 31, 2014). Critically, the minimum overtime rate for these workers will increase to $9.375 per hour. For non-food service workers (other than those at resort hotels), the tip credit will rise from $2.35 to $3.10 per hour, although the tipped minimum wage for such workers will stay steady at $5.65 per hour.

Certain meal and lodging credits, as well as uniform maintenance pay for employers that do not maintain required uniforms, are also scheduled to increase. The minimum wage spike also means a spike in the “spread of hours” pay rate owed to employees when they work (1) more than 10 hours in a given day, or (2) on a split shift, where the number of hours between the start and end of their workday exceeds 10.

Employers should monitor the New York Department of Labor’s website for an updated minimum wage poster that must be displayed in the workplace.

What Does This Mean for My Company?

New York employers can and indeed should expect a bevy of changes over the next year. From the minimum wage increase to expanded protections for pregnant employees to the use of unpaid labor, the New York employment law landscape remains in flux and is as dynamic as ever. Employers should therefore consult with experienced counsel immediately to discuss these issues and prepare a cogent plan of action to face them head-on.

Be sure that this is a New Year’s resolution that you actually keep!

NLRB Passes Quickie Election Rules

As expected, the National Labor Relations Board again adopted new Rules for union representation cases, significantly reducing the period between the filing of a petition and a union election. While the NLRB characterizes its actions as modernizing its processes, the real impact is to deny employers an adequate opportunity to stage an anti-union campaign prior to employee voting. The final Rules are effective April 14, 2015.

Specifically, the NLRB approved the following procedural changes:

  • Petitions can be filed and transmitted electronically. All filings may be transmitted between the parties and the Board electronically, and notices from the Board may be served electronically as well.
  • The regional director generally will set a pre-election hearing for eight days after the Petition is filed. Hearings on post-election issues generally will be set for 14 days after the filing of objections.
  • Parties may now wait until after an election is held to file a request to review decisions made in the pre-election hearing. As a result, there will be no automatic stay of an election after the regional director issues a decision and direction of election.

To expedite any pre-election hearings and avoid attempted delay tactics, the NLRB revised its substantive filing and appeals requirements:

  • Petitions must be accompanied by a Statement of Position, both of which should be served on all parties contemporaneously with filing.
  • Non-petitioning parties must file and serve a Position Statement prior to the pre-election hearing.
  • Pre-election hearing issues will be limited to those that are necessary to determine whether an election should be held. Arguments on issues deemed unnecessary, such as eligibility and inclusion issues affecting only a small percentage of the appropriate voting unit, are postponed until after the election.
  • The NLRB has wide discretion to decide which post-election regional decisions it will review.

The NLRB also altered the obligations of employers in responding to and handling representation petitions:

  • The NLRB regional office will serve a Notice of Hearing and a Notice of Petition for Election. The employer is required to post a Notice of Petition for Election within two business days of the region’s service of the Petition.
  • One day prior to the pre-election hearing, employers will be required to provide a list of prospective voters with their job classifications, shifts, and work locations to all parties, including to the NLRB’s regional office.
  • Voter lists, which must be submitted within two days of the regional director’s approval of an election agreement or a decision directing an election, must now include personal phone numbers and email addresses, if available to the employer.

Given the expedited election process, employers must focus on year-round anti-union avoidance programs, rather than rely on anti-union campaigns that begin after the filing of a representation petition.

This article can also be viewed on Forbes.com.

NLRB: Employees May Usurp Employer Email Systems for Non-Work-Related Communications

In its long-awaited decision in Purple Communications, Inc., the National Labor Relations Board valued employees’ communication rights over employer property rights. Here, the NLRB invalidated a company policy prohibiting employee use of its employer-provided email system for non-work-related messages. Further, the NLRB concluded that employee use of email for protected communications during non-working time is presumptively an employee right for any employee provided access to a company’s email systems.

The NLRB noted two limitations to this employee right: (1) The NLRB affirmatively held that companies are not required to provide email access to employees. Rather, the right attaches once the employer has granted that access. (2) An employer may justify a comprehensive prohibition of non-work-related emails by demonstrating that special circumstances make the ban necessary to maintain production or discipline. Without a justification for a complete ban, an employer can consistently enforce uniform controls over its email system to the extent such controls are necessary for maintaining production and discipline.

The NLRB declined to address email access by third parties or other types of electronic communications systems, as they were not at issue in the case.

Once again, an NLRB ruling will force employers to revisit their personnel policies and revise electronic-use policies that universally prohibit non-work-related messaging through employer-provided email systems.

This article can also be view on Forbes.com.

NY Employers Still Must Provide Annual Wage Notices (At Least for Now)

In June, we reported on a bill passed by the New York State Legislature that proposed significant changes to the state’s labor laws. Among other things, the bill would have eliminated the requirement that employers furnish wage notices to employees between January 1 and February 1 every year. At the time, it was expected that Governor Andrew Cuomo would sign the bill shortly. But nearly six months after passing both legislative houses, the bill has not even been delivered to the Governor. Long story short? New York employers must provide the annual wage notices, as they have in previous years, to all existing employees between January 1 and February 1, 2015. Whether the bill is eventually signed by Governor Cuomo, and in what form, remains to be seen.

Copies of the requisite notice, which must be provided in both English and each employee’s primary language, can be found on the New York State Department of Labor’s website.

Holiday Pay - What Are Your Minimum Legal Requirements?

This post was written by Michael Smith, Joel S. Barras, Séverine Martel, Marie Brunot, Jan Weißgerber, Desmond Liaw, and Anita Pui Ling Wan.

Welcome to the first in a series of blogs covering global employment law issues. Each month we will be sending you information about key employment law topics from our offices across the globe. The first of our topics is:

Holiday Pay – What Are Your Minimum Legal Requirements?

United Kingdom

In the United Kingdom, all workers are entitled to 5.6 weeks’ paid annual leave each year. A worker is either an employee or someone who contracts to perform work personally, but who cannot be regarded as genuinely self-employed (usually, a casual worker would be caught by this definition). If a worker works a standard five-day week, this means that he or she will be entitled to 28 days’ paid leave per year. This total includes public holidays. Workers who work a different number of days per week will have their entitlement adjusted accordingly.

Workers must be paid for their holidays as and when they take them. Employers should not pay a supplement to workers’ normal wages to cover holiday pay (known as rolled-up holiday pay) and not pay when holidays are actually taken. Nor can employers pay workers in lieu of holidays, except on termination of employment. A great deal of controversy has arisen recently as to how to calculate holiday pay. Traditionally, employers have paid only basic salary while workers are on holiday. However, recent decisions of the Court of Justice of the European Union and the UK Employment Appeal Tribunal (see our blogs here and here) mean that, in the future, any sums workers earn by way of commission and overtime may need to be included when calculating holiday pay. This could substantially increase the cost to employers of workers’ holidays.

United States

In the United States, there is no federal law that entitles employees to vacation, paid or unpaid. Several states regulate voluntary payment for vacation, however. For instance, in Massachusetts, if an employer chooses to provide its employees with paid leave, that paid time off is considered wages; thus, withholding vacation payment is tantamount to illegally withholding wages. Similar laws govern paid vacation policies in California and a number of other states. Employees in those states must be paid for any accrued but unused vacation time upon termination of employment.

A variety of states provide for vacation time for public employees, but no state requires a private employer to offer vacation time. All laws regarding pay for unused leave apply only to employers who voluntarily offer paid time off. Therefore, if the employer does not offer paid leave, employees need not be paid for any unused time off.

France

In France all workers are entitled to five weeks’ paid annual leave. Saturday is a business day in France, and workers accrue 2.5 business days of annual leave per month of work, which amounts to a total of 30 days of annual leave (i.e., five weeks under the French system).

This total excludes public holidays, of which there are 11 per year, and rest days (known as “jours RTT”), which may be granted where employees have worked more than 35 hours per week.

Holiday pay must be calculated according to whichever of the following options is the most favourable to the employee:

  • One-tenth of the total gross salary received by the employee within the “reference year” (i.e., from 1 June to 31 May); or
  • The same salary as if the employee had been working

Germany

In Germany, employees’ minimum paid annual leave entitlements depend on their usual number of working days per week. Paid annual leave amounts to at least 20 days in the case of employees working a five-day week, or 24 days for employees who work six days per week. In practice, employees’ actual vacation entitlements (based on employment contracts or the provisions of collective bargaining agreements) are much higher and regularly amount to 26 to 30 days per year for employees with a five-day working week.

As in the UK, a supplement or vacation bonus is not required in addition to the normal salary paid when the employee takes holiday. Also like in the UK, employers cannot pay employees in lieu of holidays, except on termination of employment. In a continuing employment relationship, holiday claims expire at the latest on 31 March of the year following the calendar year to which the holiday entitlement relates.

Recently in Germany, the question of forfeiture of holidays in cases where an employee was incapable of working during the entire calendar year received significant attention. Pursuant to several decisions of the Court of Justice of the European Union and the German Federal Labour Court, vacation claims of sick employees will not be forfeited sooner than the expiry of 15 months after the vacation year’s end. Well-drafted vacation clauses in employment contracts can avoid the extensive accumulation of vacation claims of employees on long-term sick leave. A review of contract templates can therefore help an employer improve its position.

Hong Kong

In Hong Kong, the Employment Ordinance (Cap. 57) (the “EO”) only grants paid annual leave to employees who have been employed for not less than 12 months (this is called “statutory annual leave”). The number of days granted depends on the employee’s number of years’ service. For example, an employee who has been working for at least one year, but less than three years, will be granted seven days of annual leave.

The preferred approach taken by many Hong Kong employers is to provide in the employment agreement an agreed number of annual leave days (this is called “contractual annual leave”). Since statutory annual leave is an employee’s minimum entitlement, contractual annual leave must exceed statutory annual leave.

Employers cannot pay employees in lieu of annual leave, except on termination of employment. However, the EO allows an employee to choose to accept payment in lieu of that part of his/her leave entitlement that exceeds 10 days. For example, an employee who is entitled to 12 days' annual leave can take 10 days' leave and accept payment of the equivalent wages for the two days' leave.

The daily rate of annual leave pay is the average daily wages earned by the employee in the 12 months preceding the annual leave (or the shorter period if he/she was employed for less than 12 months). “Wages” should not be taken to mean basic salary only, as the EO has defined it to include, inter alia, commission, overtime pay, tips and service charges.

Medical Marijuana and the Workplace: What Employers Need to Know Now

John A. DiNome, Amanda D. Haverstick, and Hadley Perkins have posted a new article on Forbes.com.

As an increasing number of states edge towards marijuana legalization, there is little guidance about what the new laws mean for employers. Many companies are grappling with whether, and how, their employment policies and practices should be modified to take into account state legalization of medical marijuana. Because federal law continues to prohibit marijuana use, distribution, and possession for any reason, potential confusion for employers is amplified. This article addresses the most definitive guidance for employers that can be gleaned from state marijuana laws and recent court decisions applying them in the workplace.

To read the full article, please visit Forbes.com.

Gender equality and pay

This post was written by Thomas McLaughlin and Laura E. Philips.

This summer, 30 female managers, backed by the Transport Salaried Staff Association, launched an equal pay claim against Network Rail. The managers allege that they are being paid between £3,000 and £4,000 less a year than male colleagues doing the same job. The TSSA claims that if these 30 claimants are successful, 3,000 female employees of Network Rail could be eligible for pay rises, costing Network Rail in excess of £10 million per year.

This claim highlights that the gender pay gap, although narrowing, is still very much present in 2014. This is particularly evident looking at recent figures released by the House of Commons Library which show that in 1997 the pay gap between men and women was 27.5 per cent, over the following years it narrowed steadily, but in 2013 it rose slightly from 19.6 per cent to 19.7 per cent.

Legislating for Change – Equality Act 2010

Publication of Pay Information

Some commentators argue that Section 78 of the Equality Act 2010 could be part of the solution.

Section 78 (which is not yet in force) enables the government to issue regulations requiring employers who have 250 or more employees to publish information about the difference in pay between female and male employees.

If the section is brought into force, the regulations made under it will be able to specify what information is to be supplied about the employer and employee, as well as the form and timing of any publication. Additionally, an employer may be required to publish this information annually (but no more frequently). If an employer does not comply with the publication requirements, they could face civil enforcement procedures or be liable for a criminal offence, punishable by a fine of up to £5,000.

The Explanatory Note to Section 78 says the government wants large private and voluntary sector employers to voluntarily publish information about the difference between pay for men and women as opposed to being required to provide information by regulation. In order to facilitate this, and to encourage employers to improve gender equality by means of greater transparency, the government developed 'Think, Act, Report' which provides employers with a framework to help identify issues in relation to pay, to address inequalities and to share their findings with other companies.

In order to allow time for voluntary participation to gain momentum, the government decided that it would not create regulations under this section before April 2013, and then only if sufficient progress on voluntary reporting had not been made.

However, despite the current voluntary reporting scheme in place, Section 78 continues to gain increasing media interest due to the on-going gender pay gap issue. For example, Grazia is petitioning for Section 78 of the Equality Act 2010 to be enacted as it feels that the gap is still not being addressed effectively. The petition is being championed by Grazia’s editor-in-chief Jane Bruton, who states that the fact that women essentially earn 80p for every pound that men receive is an issue that needs to be redressed, and swiftly.

Equal Pay Audit

Alongside this, the Equality Act 2010 (Equal Pay Audits) Regulations 2014 came into force on 1 October 2014. These regulations state that employers who lose a claim for equal pay or sex discrimination in relation to pay will be required to carry out an equal pay audit, unless a specific exemption applies (for example, the disadvantages of an audit would outweigh its benefits, or the employer is a “new business”).

The Employment Tribunal will decide the scope of the audit (which may include the entire workforce) and the minimum requirements for an audit will be as follows:

  • The audit must include information relating to the pay of the affected individuals.
  • The audit should identify any differences in pay and the reasons for those differences, including the reasons for any potential equal pay breach that is identified.
  • The audit should include the employer’s plan to prevent equal pay breaches occurring or continuing.

Employers will be required to publish the audit on their website within 28 days of completion and notify employees (other than in exceptional circumstances). The audit must then remain on the website for a minimum of three years after initial publication. Evidence of publication must be provided to the Employment Tribunal within 28 days; a failure to do so may be considered contempt of court.

If the Employment Tribunal finds that an employer has failed to meet the requirements of the audit, or the employer fails to provide evidence of the audit, the Employment Tribunal may fine the employer up to £5000.

Practical Points for Employers

  • The Equality Act 2010 has put the spotlight on the gender pay gap, and therefore employers must not ignore equal pay issues.
  • If it is not existing practice, it is advisable to conduct a voluntary audit of current remuneration practices and identify any potential issues before they arise.
  • Voluntary audits need not be published or distributed to employees, and are considered good business practice. Note, however, that they may be disclosable in any subsequent litgiation.
  • Employers should be aware that being ordered to carry out an audit may have adverse consequences in addition to the administrative cost, such as further equal pay claims due to increased employee awareness.
  • Employers may also wish to join the voluntary publication of information scheme to demonstrate their transparency and align themselves with best practice in the market.

Shared Parental Leave Regulations come into force

The Shared Parental Leave Regulations are now in force. Parents of children who are due to be born or adopted on or after 5 April 2015 will be entitled to 50 weeks of shared leave, and have the opportunity to request leave either simultaneously or consecutively, in continuous or discontinuous blocks.

Background

The UK Government set out in its Programme for Government that it would 'encourage shared parenting from the earliest stages of pregnancy - including the promotion of a system of flexible parental leave'. Today the new system comes into force, and employers may expect requests for Shared Parental Leave for parents of children due to be born or adopted on or after 5 April 2015.

Additional Paternity Leave, which currently allows mothers or primary adopters to transfer leave‎ to their partners, will remain in force in respect of children due to be born or adopted prior to 5 April 2015.

What does the new right entail?

The default position for parents remains that they are entitled to 52 weeks' maternity/adoption and 2 weeks' paternity leave. However, if the mother or primary adopter opts to curtail their maternity/adoption leave period, the remaining leave can be divided between the parents. Please note that it remains compulsory for a mother to take 2 weeks’ maternity leave following the birth of her child and her maternity leave can only be shared after that time (so, in theory, up to 50 weeks of the maternity leave may be shared).

The parents then have the right to request whichever pattern of leave they wish, although this is subject to the employers of both agreeing to that pattern.

How does Shared Parental Leave differ from Additional Paternity Leave?

  • Shared Parental Leave is more flexible and can be tailored to each family's requirements as long as these fit with the parents' employers;
  • parents can take leave at the same time;
  • parents can take leave in a number of blocks;
  • fathers/partners are able to take a far longer period of leave up to a maximum of 50 weeks (compared to up to 26 weeks from the 20th week after the baby was born under the Additional Paternity Leave provisions).

What notifications are required?

The administration of the Shared Parental Leave right is more complex than‎ the previous system. To qualify for the right, employees must provide the following notices to their respective employers:

  • Notice to curtail maternity leave;
  • Notice of entitlement and intention to take Shared Parental Leave; and
  • Period of leave notice.

There are complex provisions in place relating to when the curtailment notice may be revoked. There is also the potential for three separate period of leave notices to be issued.

Are employers bound to provide the requested leave?

Where the eligibility requirements are satisfied and notices are provided within the relevant timescales, an employer must agree to any request by an employee to take continuous leave in one block. Where the employee requests to take leave in a number of discontinuous blocks, the employer is able to refuse this request without giving reasons.

What about pay?

Employees who are eligible will be entitled to up to 37 weeks’ statutory shared parental pay which may be shared between parents.

It will be interesting to see whether employers choose to make enhanced pay available to those on Shared Parental Leave, if they currently enhance maternity pay. The Civil Service announced in October that they were intending to enhance shared parental pay, and other employers may follow suit. There is an argument that failure to do so may lead to indirect sex discrimination claims. The point was raised, unsuccessfully, in the case Shuter –v- Ford Motor Company (3203504/13) in relation to the Additional Paternity Pay provisions, but this failed in large part due to the particular factors of the workforce in question.

Anything else?

In a similar way to other family leave rights, there is a right not to be unfairly dismissed or subject to a detriment as a result of taking or intending to take SPL.

There are also provisions which replicate those relating to maternity leave in relation to the right to return to the same role, if no more than 26 weeks’ leave is taken, or a “suitable and appropriate” role where a longer period of consecutive leave is taken and it is not reasonably practicable for the employee to return to their former role.

Employees are entitled to 20 additional keeping in touch days (known as “SPLIT” days) during the Shared Parental Leave period.

Practical steps

The notification requirements are complicated and so it would be beneficial for employers to put in place a clear Shared Parental Leave policy, including the relevant forms for employees to complete. Providing training to managers would also be useful given the challenges of the new rules. It also is recommended that employers give thought to whether to enhance pay for employees taking Shared Parental Leave.

'Tis the Season: Spruce Up Your Electronic-Use Policies in Time for Cyber Monday

This post was written by Joel S. Barras and Sarah T. Hansel.

As employees return to work the Monday after Thanksgiving, their minds (and electronic devices) may be focused on sales rather than work. Although some reports indicate that the best day for online deals will be Thanksgiving itself, Cyber Monday is still anticipated to be the biggest online shopping day of the year, with consumers spending approximately $2.6 billion online.

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Cyber Monday is a potent reminder of the electronic temptation employees face at work. It is estimated that a staggering 75 percent of employees access social media using their personal devices while at work. Sixty-four percent of employees access non-work-related websites each day, either from their personal devices or work computers. The use of social media platforms often benefit the workplace – for example, increasing collaboration among co-workers and attracting young talent. But if left unchecked, personal electronic use becomes a significant drag on productivity, efficiency and quality of work. Before the New Year is a great time to revisit your electronic-use policies.

1. Understand Your Workforce

Social media and unfettered access to the Internet have permeated much of the United States’ labor force. For these individuals, strict electronic-use policies (no non-work-related Internet access) can detract talent and drive employees to alternative devices during the workday. Aside from the impact on recruitment, retention and morale, it is virtually impossible to fully enforce an absolute ban on personal Internet use on company-provided equipment. In addition, we are awaiting a decision from the NLRB in Purple Communications. The NLRB may require employers to grant employee access to company-provided email and other electronic communications to discuss wages, hours and working conditions.

2. Be Explicit

An important aspect of any employer policy is to state the terms of the policy clearly. Wherever your electronic-use policy falls on the spectrum, articulate it clearly to employees and incorporate it in your employee handbook.

3. If You Decide to Monitor Employee Computer Use – Use Caution

An employer may lawfully monitor all activity on its own system and equipment, provided it has an appropriately worded and effectively communicated policy in place. If you choose to monitor employee computer use, notify employees of the monitoring and inform them that continued employment constitutes their consent to the monitoring.

Be careful not to create unintended liability under discrimination laws. Consider the following scenario: you suspect that an employee is violating your electronic-use policy so you decide to monitor her Internet usage. During the course of your monitoring, you determine that the employee is violating the policy, but also that she suffers from depression. When she files a charge with the EEOC contesting her termination on disability discrimination ground, you must prove that the policy violation and not her disability motivated your decision to discharge her.

Finally, avoid unauthorized access to electronic information. An employer may monitor an employee’s non-work-related social media activity if it properly accesses information in the public domain, but avoid accessing privacy-protected material.

This holiday season, a well-drafted, consistently enforced, employee-consented electronic-use policy may be the best “deal” for your company.

Upstate N.Y. Employers Brace for New Workplace Regulations

This post was written by Cindy S. Minniti and Mark S. Goldstein.

It is no secret that, through the efforts of the New York City (NYC) Council and Mayor Bill de Blasio, NYC has in the past few years become home to some of the nation’s most generous and protective workplace laws. It now appears that the progressive agenda in NYC has worked its way to upstate New York. This article will discuss several of the more progressive workplace measures recently adopted in upstate enclaves.

Buffalo and Rochester Pass “Ban the Box” Laws

Buffalo and Rochester recently enacted background check legislation commonly known by the moniker “ban the box”: regulations that bar certain pre-employment inquiries into a job applicant’s criminal history. Buffalo’s ordinance, which took effect January 1, 2014, bars employers from asking job candidates about their criminal pasts during the application process and prior to the first interview. If the employer does not conduct an interview, it must inform the candidate whether a criminal background check will be conducted before employment commences. The ordinance applies to entities with 15 or more employees.

In Rochester, employers are prohibited from making a criminal history inquiry until after the initial interview or until a conditional offer of employment has been extended. As in Buffalo, if an employer does not conduct an interview, it must inform the applicant whether a criminal background check will be conducted before employment is to begin. The ordinance, which took effect November 18, 2014, applies to all employers with four or more employees. Both cities’ regulations contain several exceptions, including ones for law enforcement agencies.

Any criminal background inquiries made in accordance with the Buffalo or Rochester ordinances must also comply with New York state law, which prohibits employers from taking adverse employment actions based on an applicant's or employee’s criminal conviction, unless: (1) there is a direct relationship between the prior criminal offense and the specific job sought or held; or (2) hiring the individual would pose an unreasonable risk to property or the public. Employers must undertake a fact-based analysis, set forth in Article 23-A of the state’s Correction Law, to evaluate whether there is a direct relationship between the job and the prior criminal activity.

Erie County Requires Certification of Compliance with Equal Pay Laws

On November 6, 2014, Erie County Executive Mark C. Poloncarz signed an Executive Order (the Order) requiring that all proposed county contractors submit an “Erie County Equal Pay Certification indicating their compliance with federal and state Equal Pay Laws prior to entering into a contract with Erie County.” The Order, intended to ensure that men and women receive equal pay for equal work, defines “Equal Pay Laws” as the Equal Pay Act of 1963, Title VII of the Civil Rights Act of 1964, Federal Executive Order 11246 of September 24, 1965, and section 194 of New York State Labor Law.

The Order also requires potential contractors to confirm that they have not been subject to an adverse finding under the Equal Pay Laws within the prior five-year period, and to disclose any pending claims against them under the Equal Pay Laws. In addition, the Order specifies that a contractor’s violation of any of the Equal Pay Laws during the period of its contract with the county, or the filing of a false or misleading Certification, may be grounds for termination of the contract or disqualification of the contractor from future county contracts. Finally, the Order directs the county’s Division of Equal Employment Opportunity to establish a procedure for “compliance monitoring and periodic auditing of certification records.” The Order takes effect January 1, 2015.

What Does This Mean for My Company?

Local legislators are no longer willing to sit back and wait for their federal and state counterparts to enact what they perceive to be necessary workplace regulations. The flurry of legislative activity in upstate New York signals that employers statewide need to brace for continued progressive legislation. Businesses from Buffalo to Montauk should therefore consult with counsel now to ensure compliance with current laws and to prepare for future legislation.

Wellness Programs and Biometric Screening: Lessons From Recent EEOC Attacks

This post was written by Sara A. Begley, Julia Y. Trankiem, and Sarah T. Hansel.

For employers, a healthy workforce can mean improved productivity, lower absence rates, and a reduction in health insurance costs. In an effort to realize these rewards, many employers have implemented wellness programs, including programs that build in incentives for employee participation. One popular type of program asks employees to undergo health screenings, also known as “biometric testing.” Although these tests vary, they typically measure an employee’s blood pressure, cholesterol and glucose levels, and body mass index. Test results are provided only to the employee. If the employee agrees to be tested, he or she is rewarded. If not, penalized. The theory behind such a program is that a well-informed employee is more likely to take proactive steps to improve his or her health. But as three employers have learned recently, programs that request employee biometric testing may be attacked as unlawful under the Americans with Disabilities Act (ADA) and other laws.

The Equal Employment Opportunity Commission (EEOC) has taken issue with the biometric testing portion of three companies’ wellness programs. Of chief interest is the agency’s latest attempt to block implementation of one company’s inclusion of voluntary biometric testing as part of its annual re-enrollment process for employee health care benefits. On October 27, 2014, the EEOC sought a temporary restraining order (TRO) to block implementation, under the theory that the program violated the ADA, which prohibits employers from requiring employees to undergo health exams unrelated to their essential job functions, and the Genetic Information Nondisclosure Act (GINA), which bars employers from requesting information “about the manifestation of a disease or disorder in an employee’s family member.” The two program features at issue in the TRO proceeding were:

(1) the company’s plan to impose stiff penalties on employees who refused to be tested, which could be as much as $4,000 per employee (including surcharges and lost health savings account funds)—which penalties the EEOC claimed rendered the “voluntary” biometric screening tantamount to a compulsory medical examination and a disability-related inquiry, thereby violating the ADA; and

(2) the company’s plan to ask not only employees, but also all spouses of employees enrolled in family benefit plans, to be tested for blood pressure, cholesterol and glucose levels, body mass index, and the presence of nicotine and cotinine, a metabolite of nicotine—which testing the EEOC claimed ran afoul of the GINA.

Although the court has refused to grant the TRO, the case is still ongoing. Given the EEOC’s position about the illegality of certain biometric testing programs, as well as the agency’s apparent interest in challenging them, all employers should review their own health-screening incentive programs to make sure they are in line with applicable laws. Here are some questions to consider:

Does your program comply with the ADA?

First, make sure your program only rewards or penalizes employees for their decision on whether to undergo health screening, not for the results of that screening. Under most circumstances, the ADA prohibits employers from making any disability-related inquiries. This means that unless your inquiry is job-related, you should never ask an employee about the results of his or her health-screening.

Second, be aware of the existing tension between the ADA and the Affordable Care Act (ACA). On one hand, the ADA prohibits an employer from inquiring about an employee’s health conditions. On the other hand, the ACA endorses employee health screenings and the use of incentives to persuade employees to participate. In fact, the ACA specifically contemplates employers’ use of wellness incentive programs, as the statute provides that employers may implement a maximum reward or penalty of up to 30 percent of the total cost of health care coverage (including both employer and employee contributions), and up to 50 percent of that total cost for incentives designed to prevent or reduce employee tobacco use.

While the agencies and courts are sorting out this ADA-ACA tension, and until further guidance is provided to employers on how to reconcile that tension, employers should avoid imposing high penalties on employees for refusing to participate in health screenings. As described above, a wellness program that imposes such penalties may render the program subject to attack under the ADA, even if the penalties fall within ACA-defined permissible parameters.

Does your program comply with GINA?

GINA prohibits employers from: (1) requesting genetic (i.e., DNA) information about an employee, and (2) requesting information “about the manifestation of a disease or disorder in an employee’s family member.” Most wellness programs will not be subject to attack under the first provision, as biometric screenings generally do not include any DNA testing. But a potential for liability lurks in the second, more expansive, GINA prohibition. Presumably, the results of a cholesterol or glucose test—both of which are commonly included in biometric screenings—could indicate “the manifestation of a disease or disorder.” Given the broad protections afforded to family members under GINA, employers are best advised not to penalize an employee for his or her family members’ refusal to undergo a health screening.

Stay tuned here for reports on further developments in this area.