Posts filed under ‘HR’
In a previous life, I was working in the legislature when New York became one of the first states to mandate the schools do more to not only respond to but prevent school yard bullying. I was skeptical that Government could do anything about bullying. After all, some kids are just jerks.
A generation later bullying hasn’t been eliminated but it’s no longer acceptable for school administrators to sit idly by as students get taunted and teased. Kids are much more sensitive to the fact that other kids are being mistreated and are much more likely to tell a teacher or administrator than they would have been a generation ago. I was wrong. New policies and new approaches made a difference.
What’s the tie-in? In June the chairs of a task force appointed by the EEOC to investigate work force harassment issued a report with several recommendations. Bond Shoeneck & King suggested in their blog yesterday that HR people should give it a read: They have a point. Although the report is designed to prevent harassment, and as such includes recommendations that go beyond existing legal requirements, it has been my experience that today’s recommendations become tomorrow’s mandates. Plus, while you probably won’t agree with all of its conclusions and recommendations, it does have some ideas worth considering.
This brings me back to my bullying discussion. Anyone who doesn’t know for example that sexual harassment is illegal is beyond help. The bigger question is what is the best approach to minimizing it? We’ve all sat through those sessions on preventing harassment replete with nervous snickers from the back of the room and awkward sideways glances. While they are good to have from a legal perspective, I was pleasantly surprised that the report’s authors acknowledged that “much of the training done over the last 30 years has not worked as a prevention tool – it’s been too focused on simply avoiding legal liability. We believe effective training can reduce workplace harassment, and recognize that ineffective training can be unhelpful or even counterproductive. However, even effective training cannot occur in a vacuum – it must be part of a holistic culture of non-harassment that starts at the top.”
One of their suggested improvements intrigues me: “Workplace civility trainings focus on establishing expectations of civility and respect in the workplace, and on providing management and employees the tools they need to meet such expectations. The training usually includes an exploration of workplace norms, including a discussion of what constitutes appropriate and inappropriate behaviors in the workplace. The training also includes a heavily skills-based component; including interpersonal skills training, conflict resolution training, and training on effective supervisory techniques.”
Would this really make a difference? I don’t know but providing a mechanism for employee’s to understand and discuss workplace norms and expectations is worth a shot. Done properly, employees would better understand that a harassment free workplace is not simply based on obeying the law but on proactively treating those around you with a baseline of respect and professionalism, expecting the same in return, and not being afraid to intervene when these norms aren’t being followed.
Am I concerned that we may be seeing the scope of harassment claims expanding ever so slightly? You bet. But it’s clear that there are workplaces where employees and employers just don’t get the message. If our kids can foster create school environments where bullying is frowned upon than maybe we should expect more of ourselves to foster harassment free environments in the workplace
There were several foreclosures and transfers in May and June with one medallion going for as low as $405,000 and another selling for $610,000. Remember that this is an industry where, until a couple of years ago, foreclosures were as rare as a show of humility by Donald Trump.
Keith Leggett predicted in his Credit Union Watch blog that “These transactions indicate that credit unions with New York City taxi medallion loans will likely see an increase in delinquencies, troubled debt restructured loans, and charge-offs.” We really won’t know the full extent of the damage until we know whether or not medallion prices are at their nadir. Stay tuned
NY Fine tunes Direct deposits You may want HR to take a look at regulations proposed by NYS’s Department of Labor addressing , among other things, the use of Direct Deposit by employers
Fed OK’s KeyCorp\First Niagara Merger
The inevitable consolidation of the financial services industry is on track to continue as the Federal Reserve Board approved the merger of Buffalo based First Niagara into Ohio based KeyCorp.
Two days ago Bloomberg news reported that Senator Schumer, who had expressed reservations about the merger, signaled he was no longer opposed after KeyCorp agreed to cut no more than 250 jobs and to hire at least 500 people in the next three years. The deal will make KeyCorp the 26th largest bank in the US and will have a direct impact on New York. The Albany Times Union reported that the merger will result in the closure of 30 branches with 18 closing as early as October .
By the way, in reviewing the impact that the merger would have on financial services in the Buffalo area the Fed noted that “nine credit unions exert a competitive influence in the Buffalo market. Each institution offers a wide range of consumer banking products, operates street-level branches, and has broad membership criteria that include almost all of the residents in the market.”
So let me get this straight. According to the Banking industry, Credit union competition is a bad thing which is why, for instance, NY municipalities shouldn’t be allowed to place taxpayer money in credit unions; but if it helps banks become larger, credit union competition is a good thing. Got it.
Just how much money will those 250 new employees be making? JP Morgan CEO Jamie Dimon announced Tuesday that the bank would be raising the minimum salary of its employees from $12 to $16.50 an hour depending on where they work. Dimon explained that “Wages for many Americans have gone nowhere for too long.” What a guy!
Score on for Bernie Sanders on this one.
Hilary Clinton has inspired me.
This morning, as I was scrubbing the home server I have so I can pick and choose which of my communications are private and which are worthy of public disclosure, I realized that her handling of email can be instructive for all of us.
The truth is, that, with smartphones, it is getting harder and harder to delineate between work communications and private ones. Ambiguity is a breeding ground for litigation. If you don’t have policies and procedures for dealing with work related emails on personal devices here two reasons why you should:
Violations of the Fair Labor Standards Act: With the Department of Labor’s decision to increase the minimum salary threshold for a supervisor to be considered non- exempt, credit unions may well be faced with situations where that branch manager who responds to work related emails late into the night is suddenly a non-exempt salaried employee. Anytime she spends responding to that email is time counted against her 40 hour work week and overtime pay.
Appropriate Record retention policies: Of course, no matter how big or small you are you should have a policy that addresses electronic storage of information; regulators expect them and If you are ever sued by an employee, or investigated be an agency, your credit union is going to expected to have policies in place explaining what information is stored electronically, how it is stored and for how long. These policies will vary in size depending on the size, complexity and legal exposure of your credit union but everyone should have one. It’s something I would certainly work on with your attorney
A good example of why is Small v. Univ. Med. Ctr. of S. Nevada, No. 2:13-CV-00298-APG, 2014 WL 4079507, at *5 (D. Nev. Aug. 18, 2014). The university was sued by non-exempt employees who claimed that their work time was not being appropriately credited in violation of the Fair Labor Standards Act. When they sued they asked for the production of electronically stored information including any documents and data relating to time worked, labor allocation, and budgeting. The university initially responded that it didn’t send workplace requests to private phones and made no effort to access this information In fact, additional investigation revealed that several custodians were sent work requests on personal phones. The court concluded that personal phones had to be searched for relevant information. In addition, the University was sanctioned for having inadequate electronic storage procedures.
We have been dealing with email for two decades now and the days when you could simply neglect to properly classify these communications are over. The blending of personal devices into the workplace is inevitable and you should make sure that you have policies and procedures in place to demonstrate you are addressing issues raised by their proliferation.
It’s alive! The U.S. Department of Labor finalized regulations increasing the minimum salary level for an employee to be exempt from overtime pay requirements from $455 a week to $913 a week. This means that when the regulations become effective in December, unless your supervisors make at least that amount, they must be paid the overtime rate of time and one-half for each hour they work over 40.
In addition, under current law there was an exception from overtime pay for highly compensated employees (HCE) who make at least $100,000 annually but whose duties don’t qualify them for exempt classification. This regulation increases the HCE threshold to $134,000. Check with your HR person on this one as there are exceptions that apply to certain professions.
The minimum salary threshold will be updated every three years beginning in 2020. It will be adjusted so that it is equal to the 40th percentile of full-time salaries for workers in the lowest wage region (which is currently the South). As originally proposed, the exempt employee threshold would have been adjusted annually to equal the 40th percentile of full-time salaried workers nationally. This would have resulted in a threshold of over $50,000, which is the number I used in a recent blog. Nevertheless, if and when this regulation becomes effective, it will mark the first time that the exempt employee threshold is automatically updated on a periodic basis.
Why do I say “if and when this regulation becomes effective?” I’ve always thought that this regulation was, in part, politically motivated. I strongly suspect that it will become a major campaign issue with the Donald pledging to annul the regulation and Hillary pledging to ensure that it goes forward untouched.
But with the regulation now finalized, you must find out, if you don’t already know, how many of your currently exempt employees make less than this threshold, how much overtime they work, and if it makes more sense to bump their salaries so that you may continue to classify them as exempt employees, pay them overtime or make sure they don’t work more than 40 hours a week.
Incidentally, there is some good news in all this. Up to 10% of the standard salary level can come from non-discretionary bonuses, incentive payments and commissions, provided they are paid at least quarterly. Furthermore, the final regulation makes no changes to the way in which employers classify exempt and non-exempt employees based on the duties they perform. Many of us were concerned that the Department would institute a rigid test under which employers would have to document that a supervisor spends at least 50% of her time carrying out supervisory responsibilities. This would have harmed many small credit unions.
Finally, when you are done reading this blog, it’s time to reach out to your HR professional so that you can understand precisely how this regulation will impact your credit union. On that note, get to work and enjoy your day.
Credit unions are not just financial institutions; they are small businesses. This means, of course, that even regulations that have nothing to do with banking can pose challenges to their bottom line. While we can’t prevent the federal government from churning out mandates, the more we can plan ahead, the more we can mitigate compliance expenses.
What triggered this didactic diatribe? Most importantly, the U.S. Department of Labor will be finalizing regulations this year that will increase the minimum salary level for employees to be considered exempt from $455 a week to $970 a week, which equals at least $50,440 annually. This is a big deal for credit unions as it is for all businesses. For example, if you currently have an exempt supervisor who makes $44,000 a year, you will have to decide whether to 1) increase his wage; 2) pay overtime or 3) limit overtime. These types of decisions take time, so my first point in writing this blog this morning is to remind you that if you haven’t started reviewing how your costs may be affected by this regulation, you should.
The second point of this blog is to point out just how out of touch federal regulators can sometimes be with reality. During a hearing of the Senate Committee on Small Business and Entrepreneurship last week, I assumed I had simply misunderstood the testimony of D. McCutchen, who pointed out that the DOL estimates that it will only take businesses about one hour of a midlevel employee’s time to familiarize themselves with these regulations. Sure enough, you can find that estimate in the preamble to the proposed regulations under the Department’s assessment of regulatory familiarization costs.
As up and coming Republican U.S. Senator Tim Scott of South Carolina explained, this analysis was “hogwash.” It also makes me wonder yet again how many of the regulators overseeing workplace conduct in this country have actually ever had a job in the private sector.
Bathroom Access For Transgender Employees Under Federal Law
Given the amount of attention the federal government guidance on the use of facilities by transgendered students received last week, I figured now is a good time to point out that the EEOC recently released a fact sheet on bathroom access rights for transgender employees. The fact sheet, among other things, reminds employers that:
“Gender-based stereotypes, perceptions, or comfort level must not interfere with the ability of any employee to work free from discrimination, including harassment. As the Commission observed in Lusardi: “[S]upervisory or co-worker confusion or anxiety cannot justify discriminatory terms and conditions of employment. Title VII prohibits discrimination based on sex whether motivated by hostility, by a desire to protect people of a certain gender, by gender stereotypes, or by the desire to accommodate other people’s prejudices or discomfort.”
How much can you, or should you, discipline employees for comments they make on their own social media accounts, like Facebook? That is the question I have been asking myself since reading this article in the CU Times reporting that MTC Federal Credit Union based in Greenville, South Carolina fired one of its loan officers for using a racial slur on Facebook.
The CU Times reports that Gerri Cannon admitted to posting the slur, but also contended that she is not a racist and has retained a lawyer. As I like to point out, retaining a lawyer doesn’t mean you have a case. Ms. Cannon’s dilemma provides an important teaching moment for credit union employers and employees alike.
The first thing I always hear in these cases is that the employee’s free speech rights are being violated. But they aren’t. The First Amendment restricts government conduct, not the conduct of private citizens. Hudgens v. N. L. R. B., 424 U.S. 507, 513, 96 S. Ct. 1029, 1033, 47 L. Ed. 2d 196 (1976). This means that Ms. Cannon has a right to post just about anything she wants on Facebook and MTC FCU has every right to fire her for it.
The second question that always gets raised in these situations is that the Employee Handbook didn’t ban the specific conduct. But to answer this question, we need to take a little detour. As most of you know, New York, like most other states, is an at-will employment state. This means that unless otherwise specified, employment is for an indefinite period of time and may be “freely terminated by either party at any time for any reason or even for no reason.” Lobosco v. New York Tel. Co., 96 N.Y.2d 312, 316, 727 N.Y.S.2d 383, 751 N.E.2d 462 (2001). There is a misconception on the parts of employees and employers that a handbook creates a contract which modifies at-will employment. And, in fact, there have been cases in which a poorly drafted handbook restricted the ability of employers to get rid of an employee. Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 465-66, 443 N.E.2d 441, 445 (1982).
But this is very much the exception to the rule. As a federal court noted earlier this year New York’s Court of Appeals has pointed out, “[r]outinely issued employee manuals, handbooks, and policy statements should not be lightly converted into binding employment agreements. This is especially true where the handbook contains an express disclaimer.” Rumsey v. Ne. Health, Inc., 89 F. Supp. 3d 316, 340-41 (N.D.N.Y. 2015), aff’d, No. 15-833, 2016 WL 336196 (2d Cir. Jan. 28, 2016), as corrected (Jan. 29, 2016).
Does this mean that a credit union can just ignore its handbook? Not at all. A more typical case than the one involving MTC FCU involves a discharged employee who argues that she was unfairly disciplined by her employer because of her race. For instance, let’s say that a credit union routinely looks the other way when it hears about inappropriate comments on employee Facebook pages. If that same credit union turns around and fires a pregnant or minority employee who makes such a comment, the unequal treatment can be used as evidence of discrimination on the part of the employer. Redford v. KTBS, LLC, No. 5:13-CV-3156, 2015 WL 5708218 (W.D. La. Sept. 28, 2015), on reconsideration in part, No. CV 13-3156, 2016 WL 552960 (W.D. La. Feb. 10, 2016).
One more thing to keep in mind when monitoring employee social media conduct is to make sure you are not violating federal labor laws. As I’ve mentioned in previous blogs, the NLRB is aggressively protecting the right of employees to engage in “concerted activity” using social media. This means that an employee’s complaints about his workplace may in fact be protected. It also means that you must be sure that your social media policies are not so poorly written that they can be read as prohibiting employees from taking to Facebook to talk about workplace concerns.
Needless to say this is one of those fast evolving areas that creates confusion and legal actions. This is one of those areas where a review of your handbook and a call to your attorney make a lot of sense.
On that note, enjoy your day.
I have many important lessons to impart to you this morning:
Most importantly, if you live in the Northeast, never ever move the snow blower to the back of the garage before May even if it has been such a freakishly warm winter that golf courses are already open.
Second, always record any sporting event that starts after nine PM on the off-chance that you will sleep through one of the greatest endings in college basketball history.
Third, you should all take the time to read a legal opinion letter on the custodial powers of federal credit unions recently issued by the NCUA.
In response to an inquiry from Paul T. Clark of the Seward & Kissel Law Firm, NCUA’s General Counsel said that a federal credit union is authorized, at a member’s direction, to place funds, which initially have been deposited into the FCU, into an FDIC account and to serve as custodian for that account, provided that several conditions are met. It is an important clarification of the flexibility FCUs have to serve members without crossing the line between acting as custodians of funds to becoming trustees and broker dealers.
Why is this flexibility important? Unfortunately, the letter does not explain what the firm was seeking to do with this authority, but I can think of situations where a credit union and its member may want the flexibility to move funds into a FDIC account without leaving the credit union. For example, as explained in a legal opinion letter from 2009, the CDARS service enables a bank to accept large deposits from its customers and, on behalf of the customer, spread the deposits in excess of FDIC insurance limits to other FDIC-insured banks, so the funds are fully insured. In its 2009 letter, NCUA authorized the participation of credit unions in this program but that opinion dealt specifically with credit unions authorized to accept public funds. (https://www.ncua.gov/Legal/OpinionLetters/OL2009-1022.pdf#search=cdars). NCUA’s most recent letter makes it clear that federal credit unions are authorized to place funds in FDIC accounts while still being the custodian of a member’s accounts. This letter also makes it easier for credit unions to place a portion of a member’s money into a trust.
But be careful when using this letter. The General Counsel stresses that credit unions “generally” don’t have trust powers or broker dealer authority. Why is this distinction important? Because, as explained by Blacks’ Law Dictionary, a trustee must “protect and preserve the trust property, and to ensure that it is employed solely for the beneficiary, in accordance with the directions contained in the trust instrument.” In contrast, a custodian is simply responsible for holding funds, making sure they are available and making sure that only authorized persons have access to them.
Which leads us to my fourth important lesson of the day. I have a sneaking suspicion that there are many credit unions that confuse custodial and trust powers. My simple rule of thumb is that if you find yourself reading a trust document to understand the credit union’s responsibilities, you are probably doing more than you can or should. All you need to do is properly label the account and make sure that only authorized trustees can access it. It is the trustee’s job to make sure the account is properly administered.
Here is where you can access the letter: