Posts filed under ‘HR’
Today’s blog highlights two recent decisions, one that will interest your Compliance/IT department and another that will peak the curiosity of your HR folks.
A decision by the 9th Circuit yesterday underscores yet again the broad reach of the Telephone Consumer Protection Act (TCPA). We recently did a blog on this, but I get the sense that most people, including financial institutions, are still in denial. Chances are your credit union has to comply with the TCPA.
In Flores v. Adir Int’l, LLC, No. CV1500076ABPLAX, 2015 WL 4340020, at *4 (C.D. Cal. July 15, 2015, defendant repeatedly received generic text messages from the debt collector, even after he requested that the texts no longer be sent. He sued under the TCPA, which makes it illegal to contact consumers without their permission with the use of an automatic telephone dialing system (ATDS). He argued that the unsolicited texts demonstrated that the debt collector was using an ADTS to contact him, without his permission and was therefore violating the law. In tossing this claim the Federal District Court held that “Plaintiff’s own allegations suggest direct targeting that is inconsistent with the sort of random or sequential number generation required for an ATDS.” In other words the district court assumed, as have many businesses, that the TCPA outlaws automated dialing.
Yesterday, the court of appeals for the 9th Circuit on the west coast reversed this decision. In a concise memorandum it explained why the district court got it wrong. Dialing equipment does not need to dial numbers or send text messages “randomly” in order to qualify as an ATDS under the TCPA. Rather, “the statute’s clear language mandates that the focus must be on whether the equipment has the capacity “‘to store or produce telephone numbers to be called, using a random or sequential number generator.”
By the way, this decision has nothing to do with the fact that the persistent texter was a debt collector. As explained in a previous blog, unless you use “old fashioned” roto- dialers at your credit union, chances are your system qualifies as an ATDS. Every time a member is contact the TCPA is in play.
Second Circuit Allows “ Gender Stereotyping” claim To Move Forward
This is the one that your HR person should take a look at. The court of appeals for the 2nd Circuit, which has jurisdiction over New York, yesterday ruled that an employee could bring a successful discrimination claim by proving he was victimized by “ gender stereotyping “ in the work place.
Matthew Christenson, an openly gay man sued his employer, an International Advertising Agency, alleging that his supervisor engaged in a pattern of humiliating harassment targeted at his “femininity and sexual orientation.” The harassment included graphic illustrations on an office white board.
The case has drawn attention because Christenson explicitly asked the court to rule that employers can be sued for discrimination based on sexual orientation under Title VII of the Civil Rights Act of 1964. The second circuit was unwilling to go this far, but allowed the case to go forward if the employee could prove he was the victim of gender-stereotyping.
In a splintered 1989 decision, the Supreme Court held that an employer who made an employment decision based on the belief that a woman could not be aggressive, had acted on basis of gender discrimination under Title VII. (Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S. Ct. 1775, 104 L. Ed. 2d 268 (1989).
Remember that discrimination on the basis of sexual orientation is already illegal based on New York State law.
Don Draper beware!
Although efforts to repeal and replace the Affordable Care Act are getting all the attention, as New York employers, credit unions have much more immediate concerns. The State is now accepting comments on proposed regulations implementing paid family leave.
Beginning January 1, 2018 the state will start phasing in the new mandate under which employees will be eligible to receive some pay during the time they are away from their job in order to bond with a child, care for a close relative who has a serious health condition, or help care for family of someone who is called to active duty. For example, starting in 2018, an eligible employee would receive 50% of their salary for a maximum of 8 weeks during a 52 week period. When it is fully phased in by 2021, employees could receive up to 12 weeks of paid family leave in an amount equal to 67% of their salary. However, the payment benefits are capped to a percentage of the State’s average weekly wage. To be eligible, an employee must have been with a covered employer full time for 26 weeks or part time for 175 days. Covered employers are those covered by the Workers Compensation Law.
If all goes according to plan, employees will pay for the expanded benefit through payroll deductions analogous to contributions that support the Workers Compensation Fund. I have my doubts, but the time for questioning the wisdom of the proposal is over and the time for getting your HR person focused on compliance has begun.
As with all complicated regulations, the devil is always in the details, particularly when we are dealing with an area of law that interacts with existing federal mandates. Please feel free to reach out to the Association if you spot something that needs clarification. By the way, my kids just got their second consecutive snow day. I understand completely why states like North Carolina and Georgia get crippled by snow storms but something is wrong when upstate New York can’t handle a two-footer. Are we becoming a state of wimps?
From the National Labor Relations Board’s (NLRB) intrusion into everything from an employer’s rights to regulate employee conduct, to the expansion of non-exempt employees, no area has had a more direct impact on your workplace. And no area may see a more radical shift under the Trump Administration.
Here are some examples:
Concerted Activity: The NLRB arbitrates disputes that involve both union activity and nonunion activity that implicates so called concerted activity. Traditionally this jurisdiction was understood as protecting the rights of nonunionized workers to ban together to address issues of concern in the work place and ultimately not be deterred from forming a union. In contrast, under the Obama Administration’s appointees, concerted activity has been used to regulate everything from punishment of an employee for Facebook postings critical of the boss, to workplace restrictions on sharing salary information. This shift has made your workplace policy manual a tripwire for litigation and made it more difficult to impose common sense restrictions on employee behavior. Let’s hope the NLRB will take a second look at these decisions.
Regulation of Mortgage Originators: For more than a decade now, the courts and the Labor Department have grappled over whether or not mortgage originators are exempt employees. Talk to any veteran of the mortgage industry and they will scoff at the notion that mortgage originators are anything other than exempt employees. After all, if a member calls at 4:55pm wanting to apply for a mortgage loan, no employee in their right mind would tell the applicant to call back tomorrow because their shift is almost over. Nevertheless, the Obama Administration’s Labor Department overruled an interpretation provided by the Bush Administration and opined that in-house mortgage originators are non-exempt employees who must receive overtime. The Supreme Court upheld the right of the Department of Labor to issue this interpretation. The good news is, what the Department of Labor giveth it can taketh away. I hope there will be quick action to reconsider this interpretation so that common sense can once again prevail in the mortgage industry.
Exempt-Employees: The most prominent Labor Department regulation increased the threshold of exempt employees to slightly more than $47,000, and indexed the threshold for inflation. Although it was supposed to take effect late last year, the regulation has been tied up in litigation and it is unlikely to survive the incoming Trump Administration without substantial revisions. Remember that even without the Federal changes, New York State has updated its own exempt-employee regulations
Obligations of Fiduciaries: Last but not least, in April, regulations imposing fiduciary obligations on financial advisors are scheduled to take effect. The outgoing Department of Labor recently issued a memorandum providing questions and answers about the new regulation. This one doesn’t have much of a direct impact on most credit unions. It does, however, on the individuals who provide investment advice to the trustees of your 401(k) plans. By tightening conflict of interest requirements and the fiduciary obligations of outside advisors, there are subtle changes to how your 401(k) plan is overseen. Expect to see changes made to this regulation.
This extensive to-do list underscores how antiquated our labor laws have become. They were created at a time when a good chunk of the workforce was unionized and it was relatively easy to distinguish the white collar worker in the executive suite from the blue collar worker on the assembly line. The most constructive thing the Trump Administration’s Labor Department can do is advocate for changes to the National Labor Relations Act and the Fair Labor Standards Act so that classifications such as exempt and non-exempt employees can reflect the modern workplace.
On Thursday, McKinsey & Company released a report analyzing the future impact of automation on the global workforce. The report is unique in that it tries to assess the impact that technology will have on occupational tasks rather than entire occupations. Its conclusion is that “given currently demonstrated technologies, very few occupations-less than 5%- are candidates for full automation, however, almost every occupation has partial automation potential.” The result is that while you may not be replaced by a machine, you certainly will have to want to work with one, if you want to stay employed. Just how big of change is taking place? Researchers estimate that half of the world’s occupations, representing $16 trillion in wages could be automated.
Automation may impact those of us in the financial services industry more quickly than other professions. For example, 51% of all work time is spent collecting data, processing data and operating machinery. Needless to say, a lot of data processing and collection will happen at your credit union today. And although you may not deal with much heavy machinery, many of the tasks employees will take on today are the type of predictable and repetitive duties ideal for automation.
One more thing. If you think your professional status insulates you from automation’s impact guess again. Many tasks performed by professionals such as lawyers, including contract review and document preparation, can actually be performed by increasingly intelligent computers. “Dear God!”
The report optimistically predicts that, while technology will transform the workplace, it won’t do so at the speed or level of job displacement that some pundits suggest. For a more pessimistic view as to where this is all headed, read a book I have previously mentioned called “The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies .” It argues that technological innovation is increasing exponentially. As a result, assumptions about what technology can and can’t do are short-sided. It wasn’t too long ago that people laughed at the idea of a fully automated car, but now the question is not if such technology will be available but when driverless cars will become as common as smart phones. By the way, what is a smart phone?
Mortgage Consummation Bill Set To Become Law
A bill clarifying that a mortgage is consummated at closing in New York State is on the verge of becoming law. The legislation, (S.7183/Savino A.9746/Richardson) was sent to the Governor on November 16. The Governor has 10 days excluding Sundays to veto a bill after it has been sent to him or it automatically becomes a law. (N.Y. Const. art. IV, § 7). This means that we should know by tomorrow morning at the latest whether or not the bill has been approved by the Governor. He is expected to approve it.
Overtime Regs Blocked
Black Friday came early for employers. In case you missed it, on Tuesday a Federal District Court in Texas blocked the Department of Labor from implementing regulations that would have increased the number of employees eligible for overtime effective December 1, 2016.
Under the Fair Labor Standards Act, non-exempt employees who work more than forty hours a week must receive overtime pay. Regulations set to take effect on December 1, 2016 would have doubled the salary threshold from $455 per week ($23,660 annually) to 921 per week ($47,892 annually). This meant that if your branch manager made less than that amount starting December 1 she would be entitled to overtime.
It also stipulated that the salary threshold would be automatically adjusted every three years to equal the minimum salary level based on the 40th percentile of weekly earnings of full-time salaried workers in the lowest wage region of the country.
The lawsuit brought by a group of states challenged the authority of the US DOL to automatically index the exemption threshold. Not only did a Federal District judge agree with this argument but he imposed a nationwide injunction against its imposition.
He explained that “The State Plaintiffs have established a prima facie case that the Department’s salary level under the Final Rule and the automatic updating mechanism are without statutory authority. The Court concludes that the governing statute for the EAP exemption, 29 U.S.C. § 213(a) (1), is plain and unambiguous and no deference is owed to the Department regarding its interpretation.” Nevada v. United States Dep’t of Labor, No. 4:16-CV-00731, 2016 WL 6879615, (E.D. Tex. Nov. 22, 2016)
Does this mean all that work you did reclassifying your employees was for nothing? Not at all. For one thing, the injunction could be reversed. In addition, the pending regulation provided credit unions the opportunity to examine how their employees should be classified. Finally, as explained by this Bond, Schoeneck & King blog, New York is promulgating state level regulations which will increase the exempt employee threshold.
This is yet another example of the increasing tension between an Executive branch aggressively using its regulatory powers and a Judiciary increasingly unwilling to defer to agency judgements. For those of us who believe that federal agencies have been given too much flexibility over the years to interpret laws as they see fit and not as Congress intended, this is a good thing.
Chris Christie Named Secretary of Transportation
Explaining that no one understands the importance of transportation to a political career better than he does, President- Elect Trump recently named N.J. Governor Chris Christie as his Secretary of Transportation. Trump also announced that Howard Stern will be his Communications Director.
Just joking, I wanted to make sure you were still awake.
According to the WSJ about 8% of employees are “workplace prisoners,” a category described by consultant Aon Hewitt as people who stay at their jobs despite feeling unmotivated, disengaged and generally negative about their employers . (Full Disclosure-I’ve been saving this for a day when I want to get as far away from politics and policy as I possibly can).
We all know that every workplace has a certain number of dissatisfied employees and that’s not all together a bad thing. After all, employees leaving for greener pastures makes it easier to hire people who may be a better fit. But prisoners feel trapped. What intrigues me so much about the this report is that it tried to quantify just how pernicious an influence prisoners can have. It estimated that your longest serving best paid employees are most likely to be the ones most disengaged and least likely to leave. Specifically it reports that “Among workers with 26 years or more at their company, 17.1% are prisoners,” In contrast, your newest employees are the ones most engaged.
Can you get these employees to improve their attitudes? Maybe, maybe not but what Aon suggests is that you emphasize quantifiable and clear expectations.
One of the reasons we have so many prisoners is because new jobs are hard to come by. According to the US DOL, new hires edged down to 5.1 million in September and total separations was little changed at 4.9 million. Within separations, the quits rate was unchanged at 2.1 percent and the layoffs and discharges rate decreased to 1.0 percent.
On that note your faithful blogger is taking a couple of days off but will be back on Tuesday. Enjoy your workday.
With employers pulling out their hair trying to control increasingly high health care costs, health wellness programs that incentivize employees to adopt healthier lifestyles in return for lower healthcare premiums have grown in popularity. Critics have argued that, depending on the incentives provided in these wellness plans, employers could be violating the American’s with Disabilities Act, which bans discrimination against employees on the basis of their disability, as well as the Genetic Information Non Discrimination Act, which bans discrimination based on medical history. This dispute is going to be resolved once and for all as a result of a lawsuit filed on Monday by the AARP.
Many health wellness programs are coupled with health screenings that require employees to disclose personal medical information and medical history. No one disputes that employees can choose to voluntarily provide this information, but critics argue that the incentives provided to participants are so large that they essentially coerce employees into participating. In May of this year, the EEOC issued regulations which authorize incentives worth up to 30% of the cost of the cheapest healthcare plans to employees who agree to participate in wellness plans that include screenings starting in January.
On Monday the AARP filed a lawsuit in the District of Columbia seeking an injunction against the EEOC’s rule (complaint) It argues that a 30% incentive, which can also be applied to a participating spouse, is so large that it will “coerce many of AARP’s members to surrender theirs and their spouses’ information.” It wants the court to freeze the regulation so that healthcare plans cannot start implementing 30% incentive.
The case will provide guidance on what will inevitably be a tricky balance between encouraging employees to get healthy and discriminating against those for whom exercise just isn’t their thing. Even if you don’t offer, or plan to offer wellness programs that include a screaming component, the case provides another example of how regulators and, increasingly, the courts are the only policy makers on the national level. Hopefully, no matter who wins the election Congress will actually start passing meaningful laws again. Somehow I doubt it.