Category Archives: Hiring

OMB Stays Use of New EEO-1 Form

In 2016, the Equal Employment Opportunity Commission (EEOC) proposed and then approved a new EEO-1 Form for the collection of certain workforce data. In particular, the new form would require all employers with 100 or more employees, and federal contractors with 50 or more employees, to now annually report certain pay and hours worked data, in addition to data regarding workforce ethnicity, race, and gender. This new form was set to become effective with a March 31, 2018, filing date deadline.

The required submission of compensation data was received by employers with expected controversy. In addition to the increased administrative burden, employers recognized that the compensation data could be used by the EEOC to charge and investigate allegations of discriminatory practices.

Well, those employer concerns are now tabled. On August 29, 2017, the Office of Management and Budget (OMB), issued a Memorandum to the EEOC Acting Chair, Victoria Lipnic, stating that OMB is “initiating a review and immediate stay of the effectiveness of those aspects of the EEO-1 form that were revised on September 29, 2016.” In doing so, OMB noted that the EEOC had released data file specifications for employers to use in submitting the new data, but these specifications were not part of the prior public comment process and were not accounted for in previous burden estimates.  Further, the OMB Memorandum stated:

OMB has also decided to stay immediately the effectiveness of the revised aspects of   the EEO-1 form for good cause, as we believe that continued collection of this information is contrary to the standards of the PRA (Paperwork Reduction Act).  Among other things, OMB is concerned that some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.

So for now employers should continue to use the prior EEO-1 form, rather than the new form. The March 31, 2018, filing deadline remains the same.

Takeaway: OMB has stayed indefinitely the EEOC’s use of its new EEO-1 form. Employers should instead continue to submit data under the prior form.

For Minnesota Employers: All Quiet on the 2017 Capitol Front

The 2017 Regular and Special Sessions ended with an almost record lack of impact for Minnesota employers. There were no changes to Minn. Stat. § 181.01 et seq the state general employment statute or Minn. Stat. § 363.01, the State Human Rights Act. Stability is a good thing.

The one potential change – a law that would have restricted municipalities from setting their own workplace standards (such as regarding sick leave) was vetoed by Governor Dayton as promised.

Takeaway: Minnesota Employers do not need to update policies or handbooks due to any changes in state law coming out of this legislative session. Now, that’s good news!

DOL Withdraws Independent Contractor and Joint Employer Guidance

The United States Department of Labor (DOL) issued a press release on June 7, 2017, announcing the withdrawal of two significant guidance statements issued during the Obama Administration.

In July 2015, the DOL released Administrator’s Interpretation No. 2015-1 regarding the potential misclassification of employees as independent contractors. This guidance emphasized the applicability of the economic realities test to determine proper classification under the Fair Labor Standards Act (FLSA) and noted that most workers are employees under the FLSA’s broad definitions.

In January 2016, the DOL released Administrator’s Interpretation No. 2016-1 emphasizing the potential applicability of joint employer status. This guidance analyzed both horizontal and vertical joint employment. Horizontal joint employment generally involves the relationship between related corporate entities, such as a parent company and a subsidiary. Vertical joint employment generally involves the relationship between unrelated companies upon both of which the employee may be economically dependent. The DOL emphasized that joint employment should be defined expansively under the FLSA.

Despite withdrawing both of these guidance statements (they are no longer posted on the DOL website), the press release stated that the DOL will continue to fully and fairly enforce all laws within its jurisdiction.

Takeaway: By withdrawing its previously issued guidance on independent contractors and joint employment, the DOL may be signaling more relaxed enforcement in these areas. Nonetheless, employers should continue to follow applicable law in assigning independent contractor status and assessing joint employer responsibility.

“Pre-emption”: On a One-Way Ticket to Nowhere?

A “Pre-emption” or a uniform labor standards bill is a reaction in the Minnesota Legislature to the passage of sick time ordinances in Minneapolis and St. Paul. The idea is that Minnesota Employers’ obligations to employees regarding time-off and other similar obligations should be the same state-wide out of principles of fairness in competition and conformity. Also, the burden to metro-area employers in the current ordinances could well be altered or at least reduced if pre-emption bill passed by which state law pre-empts local ordinances and state-wide views pre-empt metro views of good public policy regarding private employer sick leave obligations.

A pre-emption bill is working its way through the legislature in these final session days, but the report “from the front” is that Governor Dayton will veto any pre-emption bill that makes it to his desk.

Takeaway: Minnesota Employers should prepare for the continued existence of different paid time-off standards throughout the State.

California Law and Venue for California Employees

Companies that have employees in various states often seek uniformity in developing employment agreements by using choice of governing law and venue provisions based on the state in which the company is headquartered or registered. For example, a Minneapolis-based company might select Minnesota law to govern its employment agreements, even though some of those employees are located in other states.

Employers who seek this consistency should be aware of a new California law which provides that employees who primarily reside and work in California cannot as a condition of employment be required to (1) adjudicate outside of California a claim arising in California or (2) be deprived of the substantive provisions of California law with respect to a controversy arising in California. This law applies to contracts entered into, modified, or extended on or after January 1, 2017.

Any provision of a contract violating this new prohibition is voidable at the request of the employee, after which any disputes will be governed by California law and will be adjudicated in California. This option to void contrary choice of law or venue provisions does not apply to contracts in which the employee was in fact individually represented by legal counsel in negotiating the terms of the agreement. A court may award reasonable attorney fees to an employee who must enforce their rights under this new law.

Takeaway: Employers based outside of California should be aware that contracts with California employees with choice of governing law and venue provisions outside of California are voidable and should measure expectations accordingly.

The Next Wave: Minnesota Metro and the $15 Minimum Wage

Moving beyond earned sick leave and safe time ordinances, it is very likely that this year the Minneapolis and St. Paul City Councils will take on the possibility of a $15 minimum wage ordinance. Such a municipal minimum wage exceeds state ($7.75 for small employers and $9.50 for large employers) and federal ($7.25) minimum wage, of course. The municipal earned sick leave and safe time ordinances passed by both cities in 2016 were the first wave in a national movement for employee rights that began in other major cities (such as San Francisco and Seattle) where the $15 minimum wage was then the next wave. Indeed, a task force on the $15 minimum wage ordinance has just formed in Minneapolis. State minimum wage initiatives stalled out in the last legislature sessions, so the major municipalities are taking the initiatives.

Arguments in favor of the $15 an hour minimum wage ordinances sound in quality of life and attraction of entry level employees in a high employment rate economy. And although $15 an hour may not be a realistic living wage, especially for a family, it reduces the need of low wage employees to work several jobs, creating a very human reason for metropolitan areas to have a higher minimum wage. Indeed, many Twin Cities metropolitan area employers already pay a minimum of $12 plus an hour, so the change is not extreme.

And the possibility of such ordinances passing as a second wave of employee rights municipal legislation has likely increased with the employer community’s inability to hold back the first wave sick leave and safe time ordinances in 2016. Having spent a lot of effort unsuccessfully in 2016 in broad opposition to the first wave, it is a strong possibility that employers opposing the second wave of the $15 minimum wage in 2017 will need to focus their efforts on exemptions and credits. Tip credits, student work study, training wages, gradual phase-in periods are examples of such possible exemptions in the ordinances that reduce the impact of this next wave.

Takeaway: Minneapolis and St. Paul employers are wise to anticipate in their business models, budgets for payroll and benefits and staff planning the passage of a $15 municipal minimum wage ordinance and follow closely the passage and specific provisions of this next wave of employee-protection ordinances. You don’t want to wind up like the old story of King Canute who tried to order the waves to hold back (unsuccessfully). Minnesota Employer will keep you updated.

Reminder: New I-9 Form Beginning January 22, 2017

Happy New Year! As a reminder of a previous post, employers must use the new I-9 form beginning January 22, 2017. A copy of the original post is below:

On November 14, 2016, the U.S. Citizenship and Immigration Services (USCIS) published a new Form I-9. The following are key changes in the revised form:

  • The new form is available in paper or hardcopy form or in a fillable computer form.
  • Completion of the form on a computer is now enhanced by prompts, drop-down menus and calendars.
  • While this new “smart” form makes completion on a computer easier, the form as provided cannot be electronically signed. Instead, it must be printed for signature.
  • The instructions for completion have been separated from the form itself. Employers should not forget to make the instructions available to employees when they are completing Section 1.
  • The form is a bit longer. The reformatting created a new “Additional Information” space in Section 2 in which employers can note comments that were previously squeezed into margins.
  • A separate page has been created for the preparer and/or translator certification and may be completed by multiple individuals.

Beginning January 22, 2017, employers must only use the new form. In the meantime, employers may use either the prior or new version.

Takeaway: The USCIS has published a new Form I-9 which MUST be used as of January 22, 2017. Employers should familiarize themselves with the new form and plan for implementation.

Taking on Structural Barriers to Hiring

The St. Paul Chamber of Commerce is seeking to fund a study on structural barriers to hiring. The focus is on job requirements that may not be necessary to fulfilling job duties but have the practical effect of creating a barrier for applicants otherwise qualified to do the job. For example, a driver’s license requirement for a job accessible by public transportation is such a structural barrier. Educational requirements may be another such example of an unnecessary barrier to hiring. Such structural barriers are bad for business and for the community. This is a rising movement.

Minnesota Employers dealing with the current low unemployment economy have a business reason for analyzing such structural barriers which usually are found in job description requirements. And it can only be a salutary process since any employment lawyer will attest that an accurate and updated job description is key to any defense of a discrimination, workers compensation, unemployment compensation or other wrongful termination claim. The process of review can be in partnership or in conjunction with a legal best practices review to have accurate and non-discriminatory job description.

Takeaway: The movement to eliminate structural barriers to hiring is strengthened by the hiring motivations in a low unemployment environment and put the spot light on job descriptions. Legal counsel can certainly assist in reviewing the legal implications of changing a job description to reduce unnecessary barriers to hiring while preserving legitimate and legally-enforceable job requirements.

New Form I-9 Released

On November 14, 2016, the U.S. Citizenship and Immigration Services (USCIS) published a new Form I-9. The following are key changes in the revised form:

  • The new form is available in paper or hardcopy form or in a fillable computer form.
  • Completion of the form on a computer is now enhanced by prompts, drop-down menus and calendars.
  • While this new “smart” form makes completion on a computer easier, the form as provided cannot be electronically signed. Instead, it must be printed for signature.
  • The instructions for completion have been separated from the form itself. Employers should not forget to make the instructions available to employees when they are completing Section 1.
  • The form is a bit longer. The reformatting created a new “Additional Information” space in Section 2 in which employers can note comments that were previously squeezed into margins.
  • A separate page has been created for the preparer and/or translator certification and may be completed by multiple individuals.

Beginning January 22, 2017, employers must only use the new form. In the meantime, employers may use either the prior or new version.

Takeaway: The USCIS has published a new Form I-9 which MUST be used as of January 22, 2017. Employers should familiarize themselves with the new form and plan for implementation.

Massachusetts Limits An Employer From Asking Applicants About Salary History

An applicant’s wage history is often a factor employers consider in making hiring decisions. In fact, it is not uncommon for an employment application to ask how much a candidate made at their previous positions.  Various good faith reasons may support this question.  For example, how much an applicant was paid may indicate, beyond job title, how significant his or her job duties and experience have been.

Past wage history may also determine how much the new employer is willing to offer the candidate to entice their employment. The Massachusetts legislature recently considered this issue and determined that setting compensation based on wage history can unfortunately perpetuate market wage disparities based on gender or race.  In response, Massachusetts enacted a new pay equity law that prohibits employers from seeking wage history information from applicants.  A copy of the new law can be found here.

Pursuant to this new law, it will considered an unlawful act for an employer to:

  • Screen job applicants based on their wage, including benefits or other compensation or salary histories, including by requiring that an applicant’s prior wages, including benefits or other compensation or salary history satisfy minimum or maximum criteria; or request or require as a condition of being interviewed, or as a condition of continuing to be considered for an offer of employment, that an applicant disclose prior wages or salary history.
  • Seek the salary history of any prospective employee from any current or former employer; provided, however, that a prospective employee may provide written authorization to a prospective employer to confirm prior wages, including benefits or other compensation or salary history only after any offer of employment with compensation has been made to the prospective employee.

This new law will not be effective until January 1, 2018.

Takeaway: Employers hiring applicants in Massachusetts should be aware of this new law and take steps to edit their employment application forms and processes as necessary prior to January 2018.  Employers should continue to monitor this issue as similar laws might well be enacted in other states.

Can An Employer Refuse To Hire An Applicant For Being Too Obese?

Maybe – the Eighth Circuit Court of Appeals recently held that refusing to hire an employee due to his or her obesity does not constitute disability discrimination under the Americans with Disabilities Act (ADA) unless certain conditions are met.

In Morriss v. BNSF Railway Co., the employer maintained a policy that it would not hire an employee for a safety-sensitive position if the employee’s body mass index (BMI) was over 40.  After receiving a conditional offer of employment, the plaintiff underwent two pre-employment physical examinations for a safety-sensitive position.  At the first examination, his BMI was 40.9.  At the second examination, his BMI was 40.4.  Following the examinations, the employer revoked the offer of employment and stated that the employee was not qualified for the position “due to significant health and safety risks associated with Class 3 obesity ([BMI] of 40 or greater).”  The employee then sued.

On appeal, the Eighth Circuit Court of Appeals upheld the district court’s dismissal of the plaintiff’s claims on summary judgment.  The Eighth Circuit agreed with the lower court’s decision that the plaintiff failed to prove that his obesity was a disability protected by the ADA.

The ADA defines the term “disability” to include a “physical or mental impairment that substantially limits one or more of the major life activities” of an individual.  29 C.F.R. § 1630.2(g)(1).  The ADA further defines the phrase “physical or mental impairment” to include “any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more body systems, such as neurological, musculoskeletal, special sense organs, respiratory (including speech organs), cardiovascular, reproductive, digestive, genitourinary, immune, circulatory, hemic, lymphatic, skin, and endocrine.”  29 C.F.R. § 1630.2(h)(1).

In Morriss, the plaintiff was unable to show that his obesity was a “disability” because he could not show that it was the result of an underlying “physical or mental impairment.”  In rejecting the plaintiff’s discrimination claim, the court explained that:

[A]n individual’s weight is generally a physical characteristic that qualifies as a physical impairment only if it falls outside the normal range and it occurs as the result of a physiological disorder.  Both requirements must be satisfied before a physical impairment can be found.  In other words, weight outside the normal range—no matter how far outside the normal range—must be the result of an underlying physiological disorder to qualify as a physical impairment under the ADA.

The plaintiff in Morriss was unable to satisfy this definition of disability because even his own doctor testified that he did not suffer from any medical condition that caused his obesity or any medical condition associated with obesity, such as diabetes, hypertension, cardiac disease, or sleep apnea.

Takeaway:  Obesity does not qualify as a disability under the ADA unless it is both outside the normal range of weight and is the result of an underlying physical impairment.

Are Your Employees Looking For New Jobs?

Yes – your employees are probably looking for new jobs. According to a recent article, the number of online job searches spikes in January.

The most popular day for online job searches on Monster.com is the first Wednesday after New Year’s Day. On that day, there are typically 70% more online job searches than average. But it’s not just that day. Rather, Monster.com reports that at least half of the most active online job search days occur in January.

Another job search site, Glassdoor.com, also reports that January is the busiest month for job-searching. Glassdoor.com recently conducted a survey, which found that 45% of U.S. adults are either actively looking for a new job or plan to do so within the next 12 months.

Employees’ interests in finding new jobs comes at a good time for them, too. In many markets, employers have more openings than they can fill, making candidates with relevant experience a valuable commodity.

Takeaway: Employers should expect that their employees may be looking elsewhere for work and should take steps to retain their most talented employees, if necessary. Conversely, for employers who are struggling to find quality candidates, now may be a good time to renew hiring efforts.