DISCUSSION OF RELEVANT EMPLOYMENT LAW TOPICS

SEPTEMBER 16, 2015

PREPARED EXCLUSIVELY FOR

New Jersey Association of Healthcare Recruiters

PRESENTED BY:Luke P. Breslin, Esq.Jackson Lewis P.C.

(973) 451-6302breslinl@jacksonlewis.com

www.jacksonlewis.com

1

MORNING AGENDA

• Hiring and Religious Practices

• Paid Sick Leave Laws in NJ

• Wage and Hour Update

2

HYPOTHETICAL #1 (Is This a Religion?)

A retail clothing company had a “Look Policy” requiring employees to look and feel the store in their clothing and appearance. The policy applied to all employees, but job applicants are not required to be in compliance while interviewing for a position. An employee identifying herself as a Muslim applied for a job. She had been wearing a head scarf for several years, but it is not required by the Quran. She did not pray five times per day (as required by the Quran) but a few times per month. She fasted during Ramadan. The company did not hire the employee because of the head scarf. Their defense was the employee did not have a legitimate religious belief.

Is this a protectable religious belief?

3

Religious Discrimination and Accommodation Decision

10th Circuit decision: o an unsuccessful Muslim job applicant need not inform the

company that she wore a headscarf for religious reasons

Supreme Court reversed the 10th Circuit o In order to prevail on a disparate treatment claim, a job applicant

only needs to show that the need for a religious accommodation was a motivating factor in a challenged employment decision— not that the employer had knowledge of the need for such an accommodation.

4

Overview of Paid Sick Leave Laws in New Jersey

Copyright 2015 – Jackson Lewis P.C.

Presented by:

June 17, 2015

How are Employee Absences Affecting Your Organization?

An August 2014 Study by the Society for Human Resource Management (SHRM) found:

o Management spends an average of 4.2 hours weekly dealing with absences. This includes obtaining replacements, adjusting schedules or training replacement/covering employees.*

o Total is approximately 210 hours or 5.3 weeks annually.*

6

*See Executive Summary Total Financial Impact of Employee Absences in the U.S Study by Society

for Human Resource Management (SHRM) with Kronos Incorporated published August 2014

Impact of Absences

Direct costs: The direct cost of paid time off in 2013 was 8.1% of payroll.

*Indirect costs: o Replacement worker is almost 30% less productive;

o Other employees at work are less productive because they are multi-tasking; and,

o Supervisor is 15% less productive with replacement employee.

*See Executive Summary Total Financial Impact of Employee Absences in the U.S Study by Society

for Human Resource Management (SHRM) with Kronos Incorporated published August 2014

7

Why Paid Sick Leave?

39% of workers do not have access to paid sick leave.o 70% of low-wage workers do not have access.

Sick workers cost $160 billion per year in lost productivity due to reduced performance at work.

An estimated $1 billion in healthcare costs could be saved annually with paid sick leave.

8

PSL in 24 Jurisdictions

Connecticut;California;California cities: San Francisco, San Diego, Long Beach, Oakland;Washington, D.C.;Massachusetts;New York City;Seattle, Washington;Tacoma, Washington;Oregon (awaiting Governor’s signature);Oregon Cities: Portland, Eugene;Philadelphia, PA; andNew Jersey cities: Jersey City, Newark, East Orange, Paterson, Passaic, Irvington, Bloomfield, Montclair, Trenton.

9

Structure of PSL Laws

All use a similar approach:Eligible employees:o Employer size in city;

o Work within city for certain number of hours.

o Regularly work in the city or “occasional” worker.

Accrual formula: 1 hour PSL for every X hours worked.

Reasons for leave:o Eligible employee or family member’s

illness – family member defined broadly;

o Victim of domestic violence or sexual assault. – employee or family member.

Employer and employee notice requirements.

Employer right to medical documentation to justify PSL use.

Carry over: Many require carry over of accrued, unused time.

Employer’s current PTO policies may satisfy if meet all other elements of law (like accrual, carry over, uses of leave).

Collective bargaining issues.

Pay at end of employment: Usually not required.

Anti-retaliation provision.10

Just Say No!The “Kibosh” States

In response to growing number of municipalities throughout the country, various states (10+) have enacted or proposed legislation colloquially referred to as “Kibosh” laws.

These laws state that cities or municipalities in a particular state cannot enact local paid sick leave laws.

Stated intent is to avoid a patchwork of different rules with respect to paid sick leave time thus stifling economic growth and job creation.

In September 2014, NJ Assembly Bill No. 3702 was introduced. To-date, the bill has not progressed past the Assembly Labor Committee.

11

12

Paid Sick Leave Laws Around New Jersey

Currently there are nine (9) jurisdictions throughout New Jersey that have enacted a PSL.

Jurisdiction Effective DateJersey City January 24, 2014Newark May 29, 2014Passaic January 1, 2015Paterson January 7, 2015East Orange January 7, 2015Irvington January 8, 2015Montclair March 4, 2015Trenton March 4, 2015Bloomfield June 30, 2015

13

NJ Paid Sick Leave Laws, Continued

Jersey City was the first jurisdiction to enact a PSL, followed shortly thereafter by Newark.

The recent slew of jurisdictions enacting a PSL in NJ has slowed, likely due, in part, to the pending legislation for a state-wide PSL in NJ.

There is very little guidance from the municipalities on their PSLs, so we are left with interpreting the specific language of the ordinances.

NJ Paid Sick Leave Laws, Continued

Generally speaking, many of the PSLs in NJ are very similar or identical.

Jersey City’s ordinance varies most from other jurisdictions.

Nevertheless, some minor differences do exist with PSLs in remaining jurisdictions.

14

Permissible Uses of PSL time

In all jurisdictions in New Jersey, accrued paid (or unpaid) sick leave time may be used for the following purposes:

o An employee’s mental or physical illness, injury, or health condition;

o An employee’s need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition;

o An employee’s need for preventive medical care;

o Care of a family member with a mental or physical illness, injury or health condition;

o Care of a family member who needs medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition;

o Care of a family member who needs preventive medical care;

o Closure of the employee’s place of business by order of a public official due to a public health emergency;

o An employee’s need to care for a child whose school or place of care has been closed by order of a public official due to a public health emergency;

o Care for a family member when it has been determined by the health authorities having jurisdiction or by a health care provider that the family member’s presence in the community would jeopardize the health of others because of the family member’s exposure to a communicable disease, whether or not the family member has actually contracted the communicable disease.

15

16

Jersey City PSL

Individuals working for an employer with ten (10) or more employees shall accrue paid sick leave time, while individuals working for an employer with less than ten (10) employees shall accrue unpaid sick leave time.Employee must work in Jersey City at least 80 hours per year to be eligible.Employees accrue one (1) hour of paid or unpaid sick leave time for every thirty (30) hours worked.Employers are not required to provide more than forty (40) paid or unpaid sick leave hours in a calendar year.Employees begin accruing sick leave hours at the commencement of their employment, but may not use it until the 90th calendar day of their employment.Employees may carry over up to forty (40) of accrued but unused sick leave hours in a given year. Employer with policies that provide the same or more amount of sick leave time are not required to provide additional leave time. No financial reimbursement at cessation of employment.Employers may loan sick leave time in advance of accrual.

17

Jersey City PSL, continued

Sick leave time must be provided upon oral request of an employee.Notice is to be provided by employee “as soon as practicable.” Accrued time may be used in the smaller of hourly increments or the smallest increment the employer’s payroll system uses to account for absences.For use of sick time on more than three (3) consecutive days, an employer may require reasonable documentation from a health care professional indicating that the sick leave time was used for purpose covered by the ordinance. An employer may not require that the documentation explain the nature of the illness.Rebuttable presumption of unlawful retaliation if employer takes adverse employment action within ninety (90) days of employee exercising rights under ordinance.Employer must provide written notice and display poster advising of employee rights under this ordinance in any language that is the first language of 10% of the workforce. Notices/Poster drafted by the City. Employer must maintain three (3) years of records documenting hours worked by employees and paid sick leave time taken. Must present to DHHS upon request. The ordinance shall apply on the date of the expiration of a CBA for employees covered by a CBA in effect on the effective date. Private right of action permitted. Violations of the notice, poster, etc. provisions may result in a fine up to $1,250 or 90 days community service.

18

Newark PSL

Requirements very similar to Jersey City law, although does not provide unpaid sick leave time. All paid.

Employers with ten (10) or more employees are more employees are not required to provide more than forty (40) hours of paid sick leave time.

Employers with fewer than ten (10) employees are more employees are not required to provide more than twenty-four (24) hours of paid sick leave time, except child care workers, home health care workers and food service workers (up to 40 hours).

Employees may not carry over more than forty (40) hours of paid sick leave time. Employer shall not carry over accrued, unused paid sick leave time if employee is paid for that time.

19

Newark PSL, continued.

When the need for leave is foreseeable, employee must provide reasonable advance notice of intention to use time. In no event shall an employee be required to provide more than seven days notice. When need to use is not foreseeable, employees must provide notice before their shift or as soon as practicable.

Nothing in this ordinance prohibits employers from requesting that an employee confirm in writing following the use of sick time that sick time was used for authorized purpose under the ordinance.

Employees may use accrued time in increments of less than one (1) day.

Anti-retaliation provision. No provision regarding rebuttable presumption of violation of ordinance, as with Jersey City.

Newark’s ordinance contains similar provisions to Jersey City regarding requesting documentation from a medical care professional, notice/posting requirement, and record-keeping requirements.

Private right of action (Municipal court or Newark DHHS). Fines may be up to $1,000.

20

PSL in remaining NJ Jurisdictions

Remaining jurisdictions include East Orange, Paterson, Passaic, Irvington, Bloomfield, Montclair, Trenton. Each ordinance is very similar to Newark.

These ordinances shall not apply to employees covered by a CBA, “to the extent such requirements are expressly waived in the CBA in clear and unambiguous terms.”

Accrual is similar to Newark (40 hours for 10+ employees; 24 for less than 10 employees).

All maintain notice, positing and record keeping requirements.

Private right of action before Municipal Court or local enforcement agency. Fines up to $2,000 for each day violation occurs. Note: Paterson’s ordinance states a possible penalty of up to ninety (90) days in prison for a violation of the ordinance.

21

Pending Legislation for State-wide PSL in NJ

NJ Assembly Bill No. 2354 introduced in February 2014.

Pending in the Senate Labor Committee.

This legislation provides that employees would accrue one (1) hour of paid sick leave time for every thirty (30) hours worked.

Individuals working for employers with fewer than ten (10) employees would be entitled to accrue up to forty (40) hours, while individuals working for employer with ten (10) or more employees would be entitled to accrue up to seventy-two (72) hours per year.

Reasons for use under this legislation is very similar to reasons provided under NJ municipalities PSL laws.

The legislation states that it provides minimum requirements pertaining to earned sick leave, and shall not preempt any federal, State, or local law that provides greater benefits.

o If enacted, this would effectively preempt all PSLs in NJ municipalities/cities.

Debate over PSLs in NJ rages

In April 2015, an NJ Superior Court Judge threw out a petition by a coalition of business groups challenging the constitutionality of the Trenton PSL.

The pending paid sick leave legislation in NJ was the most heavily lobbied issue in 2014.

22

Where Do I Go From Here?

More PSL laws are coming

New laws likely to have similar structure to those we have discussed.

Try to craft solutions within current PTO policies to avoid additional PTO.

Track paid time off and study for proactive management.

Integration with federal and state laws is the challenge.

23

Modifying Leave Policies

Perhaps the most significant challenge: modifying leave policies to comply with these laws. For example:

o Most employers do not provide leave to part-timers; most paid sick leave laws require this.

o Some employer policies provide for leave accrual based on scheduled hours; most paid sick leave laws require leave based on hours actually worked.

o Many employers do not permit carryover; most paid sick leave laws require carryover.

24

Modifying Leave Policies

There are various approaches to ensuring that existing leave policies comply with these new laws. These include:o Modify existing PTO or sick policies to fully comply with new

laws, including part-timers and carryover.

o Lower the number of PTO, sick or vacation days provided and move those days into a new sick pay policy that minimally complies with these laws, while maintaining separate PTO or vacation policy.

o Continue to allow company-provided sick, vacation or PTO, implement a new sick pay policy, and have sick pay and existing PTO run concurrently.

25

Modifying Leave Policies

Consider a “fail safe” provision: Employees in need of paid leave for one of the purposes listed in

the policy, and denied that leave, should contact the HR Department for an individual review.

26

Wage & Hour Compliance

Copyright: © 2015 Jackson Lewis P.C.

New Jersey State Wage and Hour Law

No such limitations as far as applicability;

Defines “employee” as “any individual employed by an employer”

Applicability seemingly universal to enterprises except with respect to lawful independent contractors.

MISCLASSIFYING EMPLOYEES AS INDEPENDENT CONTRACTORS

• Employment status is defined by law, not by the parties’ agreement.

• Most significant factor is whether the putative employer has control or the right to control the worker, both as to the work done and the manner in which it is performed.

• Case-by-case analysis.

• “Factors” to determine status issued by IRS , EEOC and DOL

• 2011 DOL budget contained $25 million for misclassification initiative

Hot Off The Press

The New Jersey Supreme Court, in Hargrove v. Sleepy’s, LLC, (January 14, 2015), adopted an employee-friendly test to determine whether an individual is properly classified as an independent contractor:

Mattress delivery duties pursuant to an Independent Driver Agreement;

The federal courts certified the question for a determination by the NJ Supreme Court as to the NJ test for an independent contractor under NJ Wage & Hour Law

Hot Off The Press

Several unions, employer organizations, etc. filed amicus briefs regarding the issue – serious attention to the issue

NJ held that the “ABC Test” – the test for eligibility under NJ’s Unemployment Compensation Act – applied in Wage & Hour/independent contractor situations.

NJ Unemployment Compensation Act is social law designed to provide safety-net (i.e. income) for unemployed individuals.

General experience is that individuals are covered under NJ Unemployment Compensation Act (with exceptions).

Hot Off The Press

The “ABC Test”

Such individual has been and will continue to be free from control or direction over the performance of such service;

Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside all of the places of the business; and

Such individual is customarily engaged in an independently established trade, occupation, profession or business.

Department of Labor – Administrator’s Interpretation 2015-1

AI 2015-1 states that the economic realities test is guided by six factors:

o whether the work performed is an integral part of the company’s business;

o whether the worker’s managerial skills affect the worker’s opportunity for profit or loss;

o whether the worker is retained on a permanent or indefinite basis;

o whether the worker’s investment is relatively minor as compared to the company’s investment;

o whether the worker exercises business skills, judgment, and initiative in the work performed; and

o whether the worker has control over meaningful aspects of the work performed.

33

Ask The Right Questions: Independent Contractors

If workers are misclassified – employer will be responsible for federal payroll taxes going back 3 years and liability for state income tax

withholding penalties, unemployment taxes, and disability program taxes.

Wage & Hour Laws

FLSA and NJWHL require an employer to compensate a non-exempt at least the minimum wage for the first 40 hours of work in a workweek;

A premium rate of 1.5 times the hourly rate must be paid for all hours worked in excess of 40 hours in a given workweek;

No specific definition of a workweek.

What Can You Do?

Conduct a wage & hour audit of your company’s policies and procedures:

Start with the handbook;

Include the position descriptions;

Confirm that employees perform the tasks the company requires of them;

Meal Breaks vs. Rest Periods;

Does your handbook make any guarantees or promises regarding breaks?

What Can You Do?

Analyze your company’s timekeeping policies

Does your company utilize a time-clock?

Does your company utilize time-sheets?

Does our policy clearly communicate the obligations of an employee?

ARE YOUR MANAGERS TRAINED????

Understand NJ Law provides far broader protections than the federal law with respect to Wage & Hour issues

Thank You!

38

Workplace law. In four time zones and 49 major locations coast to coast.