FLSA, FMLA, and ADA Update John E. Pueschel Womble Carlyle - - PowerPoint PPT Presentation

FLSA, FMLA, and ADA Update

John E. Pueschel Womble Carlyle Sandridge & Rice, LLP April 8, 2016

Key Issues and Legal Trends

• FLSA

– Proposed Changes to Overtime Regulations for “White Collar” Workers

• FMLA

– Family Responsibilities

• ADA

– Pregnancy – Unpaid Leave as Accommodation

Fair Labor Standards Act

Developments and Trends

FLSA – Brief Refresher

The Fair Labor Standards Act (“FLSA”) is the primary federal law governing wages and hours in employment.

• Establishes a federal minimum hourly wage rate
• Establishes overtime pay
• Restricts the employment of minors (child labor)
• Requires equal pay for men and women
• Establishes recordkeeping requirements

4

Current “White Collar” Exemptions

FLSA provides an exemption from the minimum wage and overtime pay requirements for certain executive, administrative, and professional employees.

• Duties test
• Salary level test
• Salary basis test

Proposed Changes to Salary Level Test

• Current minimum salary employee must earn to be exempt:

– $455 per week, or $23,660 per year – Last updated in 2004

• DOL proposes to set the standard salary level at the 40th percentile of

weekly earnings for full-time salaried workers – Amount will be adjusted annually – Assuming these regulations become final in 2016, the minimum salary is estimated to be $970 per week, or $50,440 per year.

Proposed Changes for Highly Compensated Employees

• Current Regulations

– Employee must earn total annual compensation of $100,000 or more (at least $455 per week) – Employee’s primary duty must include office or non-manual work – Employee must perform at least one of the exempt duties or responsibilities

• f

an exempt executive, administrative,

• r

professional employee.

• Proposed Regulations

– Would increase total annual compensation requirement needed to exempt HCEs to the annualized value of the 90th percentile of weekly earnings of full-time salaried workers (at least $122,148 annually)

Automatic Yearly Adjustment Mechanism

• DOL proposes to “establish a mechanism for automatically

updating the salary and compensation levels going forward to ensure that they will continue to provide a useful and effective test for exemption.”

• Two proposed adjustment mechanisms:

– Fixed Percentile Approach – CPI-U Approach

Fixed Percentile Approach

• Would annually update the thresholds based on fixed

percentiles of earnings for full-time salaried workers – Would maintain the minimum salary threshold at the 40th percentile of the weekly wages of all full-time salaried workers – Would maintain the salary threshold for HCEs at the 90th percentile of the weekly wages of all full-time salaried workers – Bureau of Labor Statistics publishes weekly earnings deciles quarterly, so employers could plan for changes

CPI-U Approach

• Would update the thresholds based on changes to the

Consumer Price Index for All Urban Consumers (“CPI-U”)

• CPI-U measures changes in price of a “basket of goods and

services” bought by the average consumer

• Primary index used by government for:

– Federal income tax brackets – Treasury inflation-indexed debt securities’ interest rates – Federal poverty levels, which determine eligibility for many government assistance programs

Focus of Department of Labor

• Extending Overtime Protections

– “Today the Department of Labor has announced a proposed rule that would extend overtime protections to nearly 5 million white collar workers within the first year of its implementation.”

• Increasing Salary Levels

– “Failure to update the overtime regulations has left an exception to

• vertime eligibility originally meant for highly-compensated executive,

administrative, and professional employees now applying to workers earning as little as $23,660 a year. For example, a convenience store manager, fast food assistant manager, or some office workers may be expected to work 50 or 60 hours a week or more, making less than the poverty level for a family of four, and not receive a dime of overtime pay.”

http://www.dol.gov/whd/overtime/NPRM2015/

Areas Unaddressed by Proposed Changes

• Duties test
• Whether nondiscretionary bonuses may serve

to satisfy a portion of the standard salary requirement

Duties Test

The DOL did not propose specific regulatory changes to the duties test, but did seek comments on the following issues:

• Should employees be required to spend a minimum amount of

time performing work that is their primary duty in order to qualify for the exemption?

• Should the DOL reconsider its decision to eliminate the long/short

duties test structure?

• Should there be a limitation on the amount of nonexempt work?

Nondiscretionary Bonuses in Salary Level Requirement

The DOL is considering whether to permit nondiscretionary bonuses and incentive payments to count toward a portion of the standard salary level test for the “white collar” exemptions.

• Amount would be limited to 10 percent of the standard weekly

salary level.

• Because the salary basis requirement is designed to ensure that

“exempt workers receive a minimum level of compensation on a consistent basis,” “employees would need to receive the bonus payments monthly or more frequently.”

Business Impact

• DOL estimates approximately 4.6 million workers would lose

their exemption (and thus be eligible for overtime pay) under proposed regulations, unless employers increase their pay.

• DOL estimates that the “average annualized direct employer

costs will total between $239.6 and $255.3 million per year.”

• DOL also states that this “proposed rulemaking will also

transfer income from employers to employees in the form of higher earnings. Average annualized transfers are estimated to be between $1.18 and $1.27 billion, depending on which of the two updating methodologies is used.”

http://www.dol.gov/whd/overtime/NPRM2015/faq.htm.

Business Impact

Look at workers to make sure classifications are correct under new regulations!

“For workers who usually work 40 hours a week or less, the DOL assumes that employers will reclassify these workers as overtime- eligible and will pay the same weekly earnings for the same number of hours worked. While these employees will become overtime eligible, employers can continue to pay their current salaries and need make no adjustments as long as the employees’ hours do not exceed 40 hours in a workweek.” 80 FR 38562.

Business Impact

Look at workers to make sure classifications are correct under new regulations!

“For employees who work overtime, employers may: (1) Pay the required overtime premium for the current number of overtime hours based upon the current implicit regular rate of pay; (2) reduce the regular rate of pay so total weekly earnings and hours do not change after overtime is paid; (3) eliminate overtime hours; (4) increase employees’ salaries to the proposed salary level; or (5) use some combination of these responses.” 80 FR 38562-63.

Timeline

• DOL’s Fall 2015 Semiannual Regulatory Agenda indicates that

the timeline for publishing the final rule is July 2016

• However, the final rule might come at any time. In an

interview with Bloomberg BNA on December 16, 2015, Labor Secretary Thomas Perez stated, “I'm confident we’ll get the final rule out by the spring of next year.”

Family & Medical Leave Act

Developments and Trends

FMLA – Brief Refresher

• The FMLA is a federal law that requires covered employers to

provide up to 12 weeks of unpaid, job-protected leave to eligible employees per year

• Upon return to work, the eligible employee must be

reinstated to the same or equivalent position

• Additional protections for military

Who is eligible for benefits under the FMLA?

• The FMLA applies to private employers with 50 or more

employees (within a 75-mile radius)

• Eligible employees must satisfy the following:
• Work for their employer at least 12 months
• Work at least 1,250 hours in the last 12 months AND
• Have a qualifying reason for taking FMLA leave

What is a qualifying reason for taking FMLA leave?

• For incapacity due to pregnancy, prenatal medical care, or

child birth

• To care for the employee’s child after birth, or placement for

adoption or foster care

• To care for the employee’s spouse, son, daughter, or parent

who has a serious health condition

• For a serious health condition that makes the employee

unable to perform the employee’s job

• Military caregiver leave and qualifying exigency leave

FMLA: Serious Health Condition

An illness, injury, impairment, or physical or mental condition involving one or more:

• In-patient care
• Incapacity for more than three consecutive calendar days

that includes two or more treatments by health care provider, or one visit and a regimen of continuing treatment

• Chronic condition
• Prenatal treatment or pregnancy

FMLA: Use of Leave

• Types of Leave
• 1. Continuous
• 2. Intermittent
• Scheduled
• As needed
• Interaction with other Leave

Employee Responsibilities

• Must provide 30 days notice if need to take leave is

foreseeable

• Otherwise, notice as soon as practicable

Employer Responsibilities

• Eligibility Notice
• Rights and Responsibilities Notice

Certification

• Employees may be required to provide a certification and

periodic recertification supporting the need for leave

FMLA Protections

• Employer may not restrain employee from exercising

FMLA right (referred to as “interference” or “denial” of claims)

• Employer may not discriminate against or retaliate

against employee exercising FMLA right (Or stated simply, an employer cannot deny qualifying leave requests, and cannot take adverse action against an employee because of the request or because he or she took protected leave.)

Developments: Definition of “Spouse”

• DOL amended regulatory definition of spouse so that eligible

employees in legal same-sex marriages may take FMLA leave to care for their spouse or family member, regardless of where they live (Effective March 27, 2015)

• Obergefell v. Hodges (U.S. Supreme Court, June 26, 2015)
• Held right to marry is a fundamental right under the Due Process

and Equal Protection clauses of the Fourteenth Amendment and same-sex couples may not be deprived of that right

• Held states must recognize lawful same-sex marriages
• DOL regulation had been enjoined in Texas, Arkansas, Louisiana, and

Nebraska, but preliminary injunction was dissolved after Obergefell

• Now: All married couples will be covered, regardless of where they

were married or where they live

Developments: (Finally) Revised FMLA Forms

• The DOL has revised the official FMLA Forms
• New forms bear an expiration date of May 31, 2018.
• The new forms have a GINA disclaimer in the Instructions

to Health Care Providers:

“Do not provide information about genetic tests, as defined in 29 C.F.R. § 1635.3(f), genetic services, as defined in 29 C.F.R. § 1635.3(e), or the manifestation of disease or disorder in the employee’s family members, 29 C.F.R. § 1635.3(b).”

(Finally) Revised FMLA Forms

New forms can be found at http://www.dol.gov/whd/fmla/

1. WH-380-E Certification of Health Care Provider for Employee’s Serious Health Condition 2. WH-380-F Certification of Health Care Provider for Family Member’s Serious Health Condition 3. WH-381 Notice of Eligibility and Rights & Responsibilities 4. WH-382 Designation Notice 5. WH-384 Certification of Qualifying Exigency for Military Family Leave 6. WH-385 Certification for Serious Injury or Illness of Covered Service Member -- for Military Family Leave 7. WH-385-V Certification for Serious Injury or Illness of a Veteran for Military Caregiver Leave

Developments: Family Responsibilities

Expansion of family members for whom care may require FMLA leave?

Employee took FMLA leave to stay with her adult daughter who had

• cancer. During the absence, the employee also spent her time caring for

her daughter’s children, the employee’s grandchildren. The employee was not reinstated, and she sued. (And she won.) The Court did not limit its ruling on the reinstatement issue, because the employer argued she should not have been granted leave in the first place because care of grandchildren is not covered.

Gienapp v. Harbor Crest, 756 F.3d 527 (7th Cir. June 24, 2014)

Care of grandchildren covered?

[The conceded facts] require us to frame the issue as whether a combination of assistance to one’s daughter, plus care of grandchildren that could take a load off the daughter’s mind and feet, counts as “care” under the Act. To this the answer must be yes. Harbor Crest has never contended that Gienapp’s assistance to other members of the family could not have given her daughter a mental boost. A person who knows that her family is well looked after has an important resource in trying to recover from a medical challenge. Doubtless some forms of familial assistance are too tangential to hold out a prospect of psychological benefits to a covered relative, but Harbor Crest does not contend that Gienapp’s aid was too slight to qualify. Gienapp v. Harbor Crest (7th Cir. June 24, 2014)

Developments

• Is paid FMLA coming?

2015 State of the Union: “It’s time we stop treating child care as a side issue, or a women’s issue, and treat it like the national economic priority that it is for all of us.”

• Six weeks of paid leave for federal employees?
• Federal funding for state paid family leave programs?

Trends

• Increase in FMLA lawsuits, locally.
• FMLA remains among the most difficult employment law in terms
• f compliance, especially in larger workforces.
• Frequent employer mistakes:

– Eligibility. – Notice requirements. – Medical certifications. – Counting of leave. – Counting FMLA leave as occurrences under attendance policies.

• Key employer challenge: Managing intermittent leave.

Would a supervisor telling you this about an employee on FMLA give you a migraine?

“It was difficult. I know in her last performance review, it was difficult to give her an adequate performance review without her being at work as much as, as often as she missed. When she was at work, she was very effective and I alluded to that in her performance review, but the fact that she did miss a lot of work did play in the fact that she wasn’t as effective as she could have been just by the fact she wasn’t there.” Alexander v. Boeing Company (July 28, 2014, W.D. Wash.)

Americans with Disabilities Act

Developments and Trends

Americans with Disabilities Act: Eligibility

1. Individual with physical or mental impairment that substantially limits a major life activity, or with a history of or being regarded as having such impairment AND 2. Who is qualified to perform the essential functions of the job, either with or without reasonable accommodation

ADA: What is a Disability?

• A physical or mental impairment that substantially limits one or

more major life activities

• “Substantially limits”

– EEOC guidance is that this is a “lower degree of functional limitation than the standard previously applied by courts.” – “An impairment does not need to prevent or severely or significantly restrict a major life activity to be substantially limiting. Nonetheless, not every impairment will constitute a disability.” – Decided without regard to mitigating measures (except for ordinary glasses or contacts). – If it is episodic or in remission, it is a disability if it would substantially limit a major life activity when active.

ADA: Essential Functions of the Job

• Have detailed, updated job descriptions
• Courts typically give deference to employer’s judgment
• Amount of time spent on the function
• Consequences of not having someone to perform the function
• Collective bargaining agreement
• Actual experience of other employees
• Ability to show modified duties of job not enough
• Disability cannot interfere with employee’s ability to get necessary

certification/license

• Note: Employees are subject to same performance standards

ADA: Reasonable Accommodation

• Changes or alterations to the position to allow the employee to perform

essential functions of the job unless undue burden

• This can include

– Job restructuring – Modified work schedules – Reassignment to vacant position – Equipment (assistive equipment or modification to existing equipment) – Changing exams or training – Providing interpreters or readers

• Remember: This can result in preferential treatment for disabled

employee.

• Remember: It has to be reasonable. It does not have to be the

employee’s requested accommodation.

ADA: What is the Employee’s Obligation?

Does the employee have to request a reasonable accommodation? – Not in those words – Be attentive to the suggestion that he or she might need one Does the employee have to make the request in writing? – Not initially – Can ask to have this formalized, but this does not stop the process Does the employee need to document the disability? – Yes Can you ask for more information? – Yes! And should! What if the employee fails to provide it or refuses to provide it? – That can be the end of their request Does the employer have to accept the accommodation the employee requests? – No, but EEOC has stated cannot require employee to go on leave if something would allow them to work DOCUMENT, DOCUMENT, DOCUMENT

Pregnancy and the ADA

EEOC Guidance on Pregnancy Discrimination

EEOC Guidance

• On July 14, 2014 the EEOC issued new Enforcement

Guidance on Pregnancy Discrimination and Related Issues.

• First comprehensive update of the EEOC’s position on

discrimination against pregnant workers since 1983.

• The Guidance addresses:

– Pregnancy Discrimination Act – Americans with Disabilities Act – Other legal requirements, including FMLA – “Best Practices”

EEOC Guidance (continued)

• PDA: An employer may not discriminate against an employee

because of pregnancy; and pregnant women must be treated the same as other persons similar in their ability or inability to work.

• EEOC Interpretation: If an employer offers light duty to anyone,

the employer must offer light duty to pregnant employees. An employer’s policy of providing light duty only to employees with

• n- the-job injuries violates the PDA.

EEOC Guidance (continued)

• Pregnancy itself is not a disability under the ADA.
• Pregnant employees may have impairments related

to their pregnancies that qualify as disabilities.

• The cause of the impairment is not relevant in

determining whether the impairment is a disability.

EEOC Guidance (continued)

Parental leave (which is distinct from medical leave associated with childbearing or recovering from childbirth) must be provided to similarly-situated male and female employees on the same terms.

EEOC Guidance Continued

The EEOC “suggests”:

– implementing a strong policy against pregnancy discrimination; – training managers; – responding to complaints promptly and effectively; – evaluating restrictive leave policies for any disproportionate impact on pregnant workers; – consulting with pregnant workers to develop a plan for covering job duties during anticipated absences; and – explicitly stating that reasonable accommodation procedures are available to employees with pregnancy-related impairments.

Young v. United Parcel Service

(U.S. Supreme Court 2015)

Young v. UPS: Background

• Young worked for UPS as a delivery driver. The job

required her to lift up to 70 pounds.

• Young became pregnant, and her doctor placed her
• n a 20-pound lifting restriction.
• She requested light duty and was denied.
• UPS policy provided temporary light duty only for

drivers who were injured on the job (i.e., workers’

• comp. injuries).

Young v. UPS: Background

• Young exhausted all of her FMLA leave.
• UPS did not fire her, but required her to take an

extended, unpaid leave of absence.

• During this extended leave, she lost her medical

coverage.

• After the birth of her child, Young was reinstated to

her position.

Young v. UPS: Background

• Young sued UPS, alleging sex and disability discrimination

under the ADA and the PDA.

• UPS moved for summary judgment, arguing that 1)

Young could not show that UPS’s decision was based on her pregnancy or that she was treated differently than a similarly- situated co-worker, and 2) that UPS had no

• bligation to offer accommodations under the ADA

because Young’s pregnancy did not constitute a disability.

• The district court agreed with UPS and dismissed Young’s
• claim. The Fourth Circuit affirmed. Young petitioned the

Supreme Court for review.

Young v. UPS: The Arguments

• Young argued for a "most favored nation

status" for pregnant employees.

• UPS argued that an employer should be

permitted to treat pregnant employees just like other workers with off the job injury.

Young v. UPS: The Legal Question

Must women affected by pregnancy, childbirth,

• r related medical conditions be treated the

same for all employment-related purposes as

• ther persons not so affected (i.e., not

pregnant) but similar in their ability or inability to work?

Young v. UPS: The “Answer”

No, BUT courts must consider the extent to which an employer’s policy treats pregnant workers less favorably than non-pregnant workers with similar inabilities to work and determine whether if there is a legitimate reason for doing so.

Young v. UPS: The Decision

• No clear winner or loser – unclear legal standard.
• The case was remanded for consideration by the

lower courts.

• Plaintiff employee must show:
• 1. She belongs to the protected class (i.e., pregnant);
• 2. She sought an accommodation;
• 3. The employer did not accommodate her; and
• 4. The employer accommodated others similar in their

ability or inability to work.

So where does that leave us?

• Not really sure - even the EEOC is unsure of

the legal standard.

• Pregnancy is still not a disability, but

complicating medical conditions may be.

• May you have a “workers’ comp. only” light

duty policy after Young?

• EEOC is revising the EEOC Guidance in

response to Young.

Other ADA Trends and Developments

• Working Remotely as an Accommodation

– EEOC pushing as an accommodation, but courts are generally resistant. – EEOC v. Ford Motor Company (6th Cir. April 10, 2015) (telework not a reasonable accommodation

• n facts of that case).

– If denying remote work, employers need to make the case on why job location is important (team work, supervision, etc.).

Other ADA Trends and Developments

• Mandatory Reassignment to Open Positions

– In June 2015, the EEOC announced a $1M settlement in its litigation with United Airlines to end the employer’s practice of not automatically reassigning disabled workers to open positions. – EEOC v. United Airlines (7th Circuit 2013) held that requiring disabled employees (who could not perform their current jobs) to compete for vacant positions for which they were qualified violated the ADA.

Other ADA Trends and Developments

• Social Anxiety Order a Disability

– Jacobs v. N.C. Admin. Office of the Courts (4th Circuit- March 12, 2015): Deputy Clerk at courthouse informed supervisor of Social Anxiety Disorder and requested not to work front desk. – The Fourth Circuit held a reasonable jury could conclude that Social Anxiety Disorder was a disability

• Key Takeaways

– Documentation was lacking. – Reasons for termination were constantly changing – No good faith interactive process – Front desk duties not an essential function

Questions and Discussion