New York Labor and Employment Law Report : New York Employment Lawyer & Attorney : Bond Schoeneck & King Law Firm : NY Labor Relations, Employee Benefits

The Wage & Hour Defense Institute (WHDI) of the Litigation Counsel of America is an invitation only group comprised of highly talented and experienced wage and hour defense attorneys from across the United States. To further its goal of being a resource for employers, the WHDI annually updates its State-By-State Wage and Hour Law Summary. The Summary is an excellent reference tool for employers with employees in multiple states. The Summary  addresses multiple topics on a state-by-state basis, including whether each state: (1) follows the federal exemptions; (2) uses special overtime rules; (3) has a higher minimum wage rate; (4) accepts the fluctuating work week method for calculating overtime; and (5) has meal and/or rest period rules. A copy of the Summary is available here.

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Many employers are justifiably confused as to whether they may accept a receipt notice showing that an employee has applied for a particular document that is acceptable for I-9 employment eligibility verification purposes. With U.S. Immigration and Customs Enforcement (“ICE”) serving an additional 1,000 Notices of Inspection to employers for I-9 audits in June 2011 alone, it is a good time to refresh your understanding about the use of receipts for initial verification, reverification and to correct errors found in the course of self-audits.

As a general rule, a receipt notice showing an application for an initial period of employment or for an extension of an expiring employment authorization period is not acceptable during the initial I-9 verification or a subsequent reverification. There are, however, exceptions. An employer must accept a receipt during the I-9 process in place of one of the otherwise accepted documents – known as a List A, List B or a List C document – set forth on the instructions accompanying the Form I-9 in the following circumstances:
 

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The Securities and Exchange Commission’s final rules (the “Rules”) clarifying Dodd-Frank whistleblower rewards and protections take effect on August 12, 2011. The Rules govern the payment of rewards to eligible individuals who report violations of the federal securities laws which lead to a successful enforcement action by the SEC in which monetary sanctions of over $1 million are collected. The SEC promulgated the Rules pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), which requires the SEC, in certain cases, to award to qualifying whistleblowers no less than 10%, and no greater than 30%, of the total monetary sanctions collected because of the whistleblower’s information. The Rules detail, among other things, how the SEC will evaluate an individual’s right to a reward and, if qualified, the amount to be awarded. Significant aspects of the Rules are summarized in brief below. For a more extensive discussion, click here.

Notably, a whistleblower can submit information to the SEC anonymously through counsel, and a whistleblower’s identity is kept confidential. Moreover, a whistleblower need not have “clean hands” to receive an award. While the culpability or involvement of a whistleblower is a factor in determining the amount of an award, a culpable whistleblower, in the absence of a criminal conviction, is not per se precluded from receiving an award.

The Rules also clarify the anti-retaliation protections afforded whistleblowers under Dodd-Frank. Whistleblowers who do not qualify for a reward are still protected by the anti-retaliation provisions as long as the individual has a “reasonable belief that the information he is providing relates to a possible securities law violation … that has occurred, is ongoing, or is about to occur.” 

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Federal contractors should be aware that the Office of Federal Contract Compliance Programs (OFCCP) recently issued a much anticipated directive impacting certain affirmative action programs. The new directive, which became effective on June 14, 2011, outlines the procedures for developing and maintaining a “Functional Affirmative Action Program” (FAAP).  The directive ends OFCCP’s year-long moratorium on processing contractor requests to develop or renew FAAP agreements.

FAAPs are affirmative action programs covering a particular business function or business unit rather than covering a particular establishment or worksite. For example, covered contractors may develop an FAAP for all marketing associates across multiple offices in different states, instead of having to create affirmative action programs for each individual establishment where those associates work. Unlike establishment-based programs, covered contractors cannot implement FAAPs without first obtaining OFCCP approval and then entering into an agreement with the Agency.
 

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Although many tend to think the days of intentional gender or race discrimination in hiring are long gone, the U.S. Equal Employment Opportunity Commission recently held a public meeting focusing on this very topic. Why is the EEOC focusing on discriminatory hiring? According to the EEOC’s press release, disparate treatment in hiring is widespread despite the fact that many employers today invest a significant amount of time and effort in diversifying their workforce in order to gain a competitive edge. The EEOC’s General Counsel, P. David Lopez, believes that minorities are unlawfully denied employment opportunities due to employers’ efforts to conform to discriminatory customer preferences, hiring managers’ reliance on prohibited stereotypes about certain jobs, and the use of narrow recruiting procedures which fail to attract a diversified applicant pool.

Over the past two years, failure to hire complaints have comprised only 6% of all charges filed with the EEOC. The most common were age discrimination cases. Yet, a plaintiff’s employment lawyer and several EEOC officials who testified at the meeting claimed that such discrimination is underreported and urged the EEOC to invest additional resources in investigation of systemic, pattern and practice cases of discriminatory hiring. A management-side attorney who testified at the hearing acknowledged the value of employer training in this area, but advised against implementing a “one size fits all” approach to mandatory training or other EEOC programs. The attorney also recommended that the Commission update its 1998 Best Practices of Private Sector Employers report.
 

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In yesterday’s post, we began a discussion of how New York’s Marriage Equality Act may impact employee benefit plans. We continue the discussion here with Part II.

How Does the Legislation Affect Self-Insured Health Plans and Other Self-Insured Welfare Benefit Plans?

Self-insured health plans and other self-insured welfare benefit plans that are subject to ERISA will not be subject to the new requirements imposed by the Legislation. ERISA preempts the Legislation insofar as it applies to self-insured ERISA plans (ERISA’s preemption provisions, however, generally do not apply to insured plans, which is why the Legislation will affect insured plans differently than self-insured ERISA plans). If no changes are desired in how a self-insured ERISA plan operates, an employer should still review any definition of spouse that appears in that plan in order to make sure it does not need to be revised. ERISA plans are required to be administered in accordance with their written terms, and employers will want to make sure any definition of spouse conforms to how each such plan is operated.

Even though a self-insured ERISA plan is not subject to the requirements of the Legislation, an employer with such a plan can voluntarily decide to provide comparable benefits to same-sex spouses. The tax status of such benefits generally will not be identical to the tax status of the benefits provided to opposite-sex spouses under such a plan, because the Code provides favorable tax treatment for eligible opposite-sex spouses but not for same-sex spouses (an exception applies if the same-sex spouse satisfies the Code requirements for being a dependent of the participating employee, but that exception can be difficult to satisfy). If an employer does decide to provide comparable benefits to same-sex spouses, the language of the applicable plan should be revised accordingly.

Certain governmental and church self-insured plans are exempt from ERISA. Such plans will not be covered by ERISA’s preemption provisions and, therefore, will have to comply with the Legislation (subject to a possible exception for plans maintained by Religious Organizations). Such plans should, therefore, be reviewed to determine whether the definition of spouse may need to be amended to include same-sex spouses who are married in New York State.
 

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On June 24, 2011, Governor Cuomo signed the Marriage Equality Act  which will allow same-sex couples to be married in New York and to have, with certain exceptions, the same legal protections available to opposite-sex couples married in New York. The effective date of the Legislation is July 24, 2011, giving New York employers only a month to comply. For that reason, New York employers should immediately take the following steps to ensure their employee benefit plans, programs and policies (collectively, “Benefit Plans”) will comply with the Legislation:

• review the requirements imposed by the Legislation to determine how they will affect your existing Benefit Plans;
• determine what, if any, changes must be made to your Benefit Plans
• Begin implementation of necessary changes by preparing any necessary amendments to the affected Benefit Plans, coordinating with any applicable insurer or third party administrator about the changes being made, obtaining any necessary approval from the applicable Board of Directors or Board of Trustees, and preparing any necessary summary of material modification(s) or revised summary plan description(s);
• continue implementation by revising all other materials describing employee benefits (benefit summaries, benefit web pages, benefit forms, employee handbooks, etc.); and
• review any domestic partner policy, and any other employer policy that might be affected by the Legislation, (including an analysis of whether any changes are needed to help address potential discrimination claims, such as those that might be brought by opposite-sex domestic partners in certain circumstances).

What Are the Major Changes Made By the Legislation?

The major changes made by the Legislation include the following:

• no application for a marriage license in New York State will be denied on the ground that the parties are of the same sex;
• a marriage that is otherwise valid will be valid regardless of whether the parties to the marriage are of the same sex or different sex; and
• no government treatment or legal status, effect, right, benefit, privilege, protection or responsibility relating to marriage in New York State will differ based on the parties to the marriage being or having been of the same sex rather than a different sex.

The law contains special compliance exceptions for religious entities, benevolent organizations, and not-for-profit corporations that are operated, supervised or controlled by religious entities as defined in the Legislation
 

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On June 30, 2011, Governor Cuomo signed into law one of the most sweeping and restrictive property tax caps in the country. It applies to “taxes imposed on real property” by all local governmental entities (counties, cities, towns, villages and special districts) and by public school districts. The law will take effect in the 2012 fiscal year for local governments and in the 2012-13 fiscal year for school districts, and is currently scheduled to expire in June of 2016. However, for what appear to be purely political reasons, it will remain in effect beyond its scheduled expiration date as long as the “temporary” New York City rent control and regulation laws remain in place.

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The National Labor Relations Board has once again exercised its rarely used “rule-making” powers, this time to propose a shorter timetable for representation elections. On June 22, 2011, the Board published a notice of proposed rulemaking to change and tighten its procedures “prior and subsequent to conducting a secret ballot election to determine if employees wish to be represented for purposes of collective bargaining.”

The proposed rule:

• Establishes electronic filing of election petitions and other documents (intended to speed up processing).
• Requires pre-election hearings to begin seven days after a petition is filed (currently, up to two weeks).
• Defers litigation of all “eligibility” issues if they involve less than 20 percent of the bargaining unit until after the election. (These issues would be decided post-election if needed.)
• Eliminates pre-election appeals of rulings by NLRB Regional Directors.
• Reduces the time in which an employer must provide an electronic list of eligible voters from seven days to two days.

These proposed procedures will permit much quicker elections, and, in some cases, could result in union representation elections within as little as two to three weeks after a union files its election petition. Under current practice, an employer has a 42-day time period to give employees its position on unionization prior to a vote. Many employers believe that this six-week period after an election petition is filed is critical to an employer’s ability to make its case against union representation (because the Union has typically been actively campaigning before it files the election petition). The Board’s proposed change appears to be purposefully designed to improve the odds of a favorable election outcome for unions, a view expressed in dissent by Board Member Brian Hayes.

Comments on the proposed rule from interested parties must be received on or before August 23, 2011. After the comment period, the Board may revise the proposed rule, or may issue it as a final rule as early as September 2011.
 

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