Posts filed under ‘HR’

HR Beware: Cuomo Proposes To Ban Use Of Salary History

Yesterday, the Governor introduced proposed legislation that would prohibit employers in New York  State from inquiring about a job applicant’s salary history unless certain conditions are met.

Under the Governor’s program bill, employers would be prohibited from relying on or inquiring about a job applicant’s salary history. The prohibition would not apply when a job applicant voluntarily and without prompting discloses this information.

The Governor’s proposal follows on the heels of similar legislation which has already been enacted in localities including Albany. Supporters of these measures point out that women tend to get lower salaries than their male counterparts at the very start of their careers and that this pay gap grows over time. As the Governor argues in the accompanying memorandum, that his proposal would help eliminate the gender pay gap by making it illegal for employers to inquire about an applicant’s prior salaries.

Whether or not you agree or disagree with proposals such as this one, if we are going to have a state-wide law then it would be in everyone’s interest that it preempt competing local legislation. To the extent possible, employers should deal with uniform standards, particularly when it comes to something as nuanced and fact sensitive as the job hiring process. In addition, the Governor’s bill drafters deserve kudos for concise and straightforward drafting which would help avoid unnecessary litigation.

Joint Agency Statement Issued On Cyber Insurance

In my experience, the more people you have standing around the barbecue, the less flavor the meat ends up having. Similarly, the more regulators involved in drafting guidance, the blander and more obtuse the final product becomes. Yesterday’s joint statement issued by the Federal Financial Institutions Examination Council (FFIEC), which includes the NCUA, is no exception. According to the regulators, this guidance imposes no new regulatory expectations on financial institutions; nevertheless, I would certainly incorporate it into your due diligence protocols or at least document that you have discussed the guidance as opposed to just placing it in the to-do bin on your desk. Remember that my quick synopsis is not intended as a substitute to read the statement.

NCUA has indicated that cyber security is a top examination priority this year. So it is no coincidence that they and their fellow regulators feel the need to provide guidance on the propriety of the cyber security insurance. It stresses that while financial institutions are under no obligation to purchase such insurance it may, under appropriate circumstances “offset financial losses resulting from cyber incidents.” As a result, one of my takeaways is that depending on the size and sophistication of your credit union, it makes sense for you to periodically examine if now is the time to get cyber insurance or change the insurance you already have. For instance, the guidance points out that some insurance will only guard against so-called first-party losses which generally include the cost of direct losses to your institution. In contrast, third-party insurance can help guard against indirect claims such as one brought by a small business which suffered huge losses when a hacker compromised their account.

Another important takeaway from the guidance is the reminder that insurance doesn’t eliminate, but simply compliments a cyber security program. I’m always a little concerned when I come across some credit unions that think insurance translates into “someone else’s problem.” I’ve said it before and I’ll say it again, no matter what third-party you use to get your work done, your credit union remains ultimately responsible.

April 11, 2018 at 9:13 am Leave a comment

Things To Consider When Considering Interns

Image result for intern as slave cartoonHere’s a cheery thought for a Monday morning as you struggle to wake up after being needlessly deprived of an extra hour of sleep. According to Federal Labor law, an employee is someone who an employer “suffer[s]” or “permit[s]” to work (29 USC 203 (1)).

So what does that make the lowly intern? The core legal question is under what circumstances must an unpaid intern be properly classified as an employee under the Fair Labor Standards Act and paid for his or her services? The Obama Administration’s Department of Labor and some high-profile lawsuits involving some high-profile media companies scared the bageebees out of many employees who simply decided that having an unpaid college student around for the summer time wasn’t worth the legal risk. Plus, I know based on some of the phone conversations I have eavesdropped on involving credit unions and our HR Consultant, some credit unions have wanted to make extra sure that their intern truly is an intern. As someone who believes that a well-structured internship can be an enormous benefit to young people who ideally learn how to conduct themselves in an office and get a sense of the profession they think they are interested in getting involved with, I think the legal complexity around interns is another example of regulation run amuck.

So, I was happy to see this past January that the Department of Labor issued updated guidance intended to codify greater flexibility for employers looking to hire an intern. Under Fact Sheet #71, the following criteria are to be considered when examining if an individual is an employee as opposed to an intern: “(1) The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa. (2)The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions. (3) The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit. (4) The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar. (5) The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning. (6) The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern. (7) The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.”

I’ve read up on what some HR professionals have been saying and it’s not entirely clear how big of an impact these criteria are going to have since they closely mirror the framework already being used by Federal courts including the 2nd Circuit which has jurisdiction over New York. (See: Benjamin v. B & H Educ., Inc., 877 F.3d 1139) The new guidance underscores that you have more flexibility than you might think. No single criterion on our list is dispositive. Secondly, the key point is to look at the economic reality of your internship program. The courts that have examined the issue have reviewed what the intern receives in exchange for his work. Ultimately, the courts look to the economic reality of the relationship, with special emphasis placed on criteria (3) and (6). As one court has explained, “The purpose of a bona-fide internship is to integrate classroom training with practical skill development in a real world setting.” In other words, the more closely your internship program can be coordinated with a local school, the safer you are.

Now maybe, just maybe, you can get someone into your office to go on those coffee runs. Just joking.

March 12, 2018 at 9:07 am Leave a comment

When Does The ADA Require Granting Unpaid Leave?

Image result for employee on long term leaveLet’s say you have an employee recovering from back surgery who is nearing the expiration of his medical leave. He requests an additional two to three months of unpaid leave under the Americans With Disabilities Act to recover. Are you violating the Americans With Disabilities Act if you don’t provide this accommodation? Historically, the answer to that question would have been probably, but recent cases decided by the Court of Appeals for the 7th Circuit indicate that employers may have more flexibility in this area than previously thought.

First, let’s remember that under the Americans With Disabilities Act, it is illegal to discriminate against a qualified individual on the basis of a disability. A qualified individual is an individual who with or without reasonable accommodation can perform the essential functions of a job (42 USC 1211). The question is, under what circumstances does a request for long-term unpaid leave constitute a reasonable accommodation?

In Severson v. Heartland Woodcraft, Inc., 872 F.3d 476, 33 AD Cases 1113 (7th Cir. 2017), an employee sued under the ADA after his request for an addition 2-3 months of unpaid leave was denied. Crucially, the Equal Employment Opportunity Commission joined in his lawsuit. It argued that the company’s actions were inconsistent with its own “long standing interpretation” of the ADA, under which it had interpreted a reasonable accommodation to include the provision of unpaid leave, at least for a set duration of time.

But in Heartland as well as another case, Golden v. Indianapolis Hous. Agency, No. 17-1359, 2017 BL 371274, 33 AD Cases 1219 (7th Cir. Oct. 17, 2017), the Court of Appeals for the 7th Circuit has flatly rejected this interpretation. For example, in upholding Heartland Woodcraft’s decision to fire the employee, the Court held that a “reasonable accommodation” is one that allows the disabled employee to “perform the essential functions of the employment position.” § 12111(8) . If the proposed accommodation does not make it possible for the employee to perform his job, then the employee is not a “qualified individual” as that term is defined in the ADA.” Since there are no conditions under which the employee could return to work, he is not a qualified employee.

Does this mean that no accommodation for time off under the ADA needs to be accommodated? Not at all. In making its rulings, the 7th Circuit pointed out that “[t]ime off may be an apt accommodation for intermittent conditions. Someone with arthritis or lupus may be able to do a given job even if, for brief periods, the inflammation is so painful that the person must stay home…Intermittent time off or a short leave of absence—say, a couple of days or even a couple of weeks”—may be appropriate in certain circumstances. “But a medical leave spanning multiple months does not permit the employee to perform the essential functions of his job.”

Does this ruling mean that you can change your policies immediately? Not without talking to your attorney please. For one thing, the 7th Circuit does not have jurisdiction over New York. For another thing, these cases leave open the question of just how much time has to be requested before an employee no longer gets ADA protection. Finally, the involvement of the EEOC and the Court’s split with that agency’s traditional interpretation, increases the likelihood that you may see this issue end up before the Supreme Court.

But I’m bringing this to your attention because I’m told by our own in-house HR consultant that the issue addressed in these cases is one with which credit unions frequently have to deal and the cases were recently highlighted in this employment law blog by Bond Schoeneck & King.

December 4, 2017 at 9:10 am Leave a comment

Albany County Latest To Ban Wage History Inquiries

Image result for job interviewWith apologies for the late start, I wanted to give a heads up to all of you HR people out there, particularly if you are situated in Albany County.

On November 6th, Albany joined the growing list of localities, including NYC that ban employers from inquiring about a job applicant’s salary history. You should update your policies and give a heads up to your interviewers immediately. The law takes effect 20 days after it is filed with the Secretary of State. Once I get a precise date, I will update the blog.

The purpose of the bill is to attack the problem of gender and race wage disparity. Proponents of legislation such as this argue, for example, that females who have taken time off to raise children are often disadvantaged when they re-enter the work force.

The Albany County measure makes it illegal to screen job applicants based on their wage and benefit history; request or require a job applicant disclose his or her wage or salary history as a condition of a job interview or seek the salary history of any job applicant from any current or former employer. The only flexibility given to employers is that a job applicant may provide written authorization to a prospective employer to confirm prior wages but only after a job offer, including proposed compensation, has been extended.

For those of you outside the Albany area, keep in mind that as localities across the state pass more and more of these measures, we are more and more likely to see state-wide legislation passed.

On that note, enjoy your day and console yourself in the knowledge that at least the Giants aren’t playing in Monday night football.


November 13, 2017 at 10:07 am 1 comment

3 Things You Need To Start Your Credit Union Day

  1. New York City Employment History Ban takes effect. This one just impacts the credit unions in NYC but it’s the type of thing that could get consideration in next year’s legislative session. Yesterday, a local law took effect banning employers in New York City from inquiring about an applicant’s compensation history. Specifically, Local Law No. 67 prohibits employers from inquiring about the salary history of a job applicant or relying on salary history in determining salary benefits or other compensation including in the negotiation of contracts. The draft is provided that where a job applicant “voluntarily and without prompting” discloses his or her salary history, then an employer may consider past compensation.  I can see the lawsuits already. Captain Obvious here: for those of you in the city who haven’t already provided additional training to persons who conduct job interviews on your behalf, do so ASAP.
  2. CFPB introduced a new tool to help track mortgage delinquencies. Love it or hate it, what the CFPB does, it tends to do well. Yesterday it introduced a new part of its website that will allow people to track mortgage delinquency rates on the local, state and national levels. I can’t help but think that if such a tool had been available about 11 years ago, more policy makers and lenders would have been better positioned to prevent the worst of the Great Recession.
  3. Here’s a weird story courtesy of the CU Times that I looked into: The Illinois Division of Financial Institutions recently issued a cease and desist order against 1st Provision Credit Union located in Ottawa, Illinois. What makes this story odd is that 1st Provision is not chartered by either the state of Illinois or NCUA. Is this a case of incredibly sloppy paperwork or is there more to come about this story?


November 1, 2017 at 8:55 am Leave a comment

Can’t Find Employees? You’re Not Alone

If you’re having trouble finding and retaining good employees, then you’re not alone. That’s my takeaway from this article in today’s American Banker which quotes a leading HR professional as suggesting that banks have to get more creative in how they go about attracting new hires as the competition for new employees gets more intense across many industries.

There’s more going on here than a historically low unemployment rate. The banking industry is disproportionately benefiting from a growing economy which of course puts pressure on employee wages. According to the latest survey released by Crowe & Horwath, which has been tracking employment in the banking industry for 36 years, for the first time since the great recession more than half the banks surveyed said they planned to increase total employment during the coming year. In fact, only 35% of banks surveyed plan to maintain their current staffing levels.

As you can see from the chart accompanying today’s blog, the result has been rising salary demands for bank employees ranging from CEO’s to administrative assistants, with the best performing employees receiving salary increases of more than 5%.

Now I know some of you are reading this blog and saying, “Henry, we can’t compete against the salaries offered by banks so this news doesn’t really affect us.” But the reality is that the same trends impacting banks are certainly impacting credit unions. Furthermore, credit unions must also find tech savvy millennials who are in demand in a host of industries.

Even if you don’t have to compete with a community bank down the street for employees, this is very much an employee market.

I Know You’re In There

By the way, starting at 5p.m. tonight, I’ll be going around the neighborhood with my 8-year-old so don’t be one of those neighbors who forget to pick up candy on the way home, shut the blinds, lock the door and pretend not to be home. I know you’re in the basement watching the Wheel of Fortune. My daughter needs all the free candy she can get.

October 31, 2017 at 9:05 am Leave a comment

What You Can Learn From Harvey Weinstein

As you’re drinking your morning coffee, looking out over your staff and wondering how to squeeze a few more basis points of profit out of your credit union, it may seem like you don’t have much to learn from the downfall of The Weinstein Company, but that’s wrong. This is one of the watershed moments in sexual harassment law, much like the Anita Hill/Clarence Thomas testimony that lead to an infusion of female politicians and an increased emphasis on sexual harassment litigation.

The downfall of Weinstein and top executives at Fox News demonstrates that an environment that lets sexual harassment fester and go unchecked has the ability to take down a company. As a result, here are some key takeaways for Board Directors and top Executives:

  1. Selective ignorance is no excuse. While it isn’t realistic for a Board to know of all the actions taken by all its management officials, selective ignorance is no longer an excuse. What destroyed Weinstein’s company is not so much Weinstein’s actions, as repugnant as they are, but the reality that the Board either knew or should have known about his shenanigans and chose to do nothing about it. Your average credit union CEO is not a Hollywood mogul but when a Board member has enough credible information about misconduct, they need to investigate.
  2. A company’s culture starts at the top. Under NCUA regulations, examiners are responsible for determining whether a credit union has put adequate anti-discrimination policies and procedures in place (For example, take a look at Chapter 7 of NCUA’s Examiner Guide). And remember, that policies by themselves don’t go far enough unless you demonstrate that employees know, for instance, who they can reach out to if they have concerns about sexual harassment.
  3. Mad Men is no excuse. When the most recent allegations against Weinstein first surfaced in a New York Time’s article, one of his attorneys at the time, Lisa Bloom, described Harvey as acknowledging mistakes but explaining, “He is an old dinosaur and learning new ways.” This is what I call the Mad Men Defense. The TV show depicted a Madison Avenue ad firm in the 1960’s. Back then, the type of conduct engaged in by Weinstein would not have even raised an eyebrow. Fortunately, people have lost patience with the argument that individuals over the age of 50 shouldn’t be expected to know that sexual harassment is no longer acceptable.
  4. Sexual harassment is serious stuff. If allegations have the power to bring down successful companies, they certainly can damage your credit union.

Expect to see an increased emphasis on sexual harassment on the part of employees, not just employers. Now is a good time for your HR person to double-check those policies and procedures and make sure that everyone, including the credit union’s Directors, know the responsibilities they have and the roles they must play.

October 16, 2017 at 9:25 am Leave a comment

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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