The National Labor Relations Board (“Board”) recently created another potential pitfall for employers who misclassify employees as independent contractors. Most employers know that, if they misclassify an employee as an independent contractor, they may be subjected to fines, penalties and other types of liability. Such employers also can be sued by the misclassified employee and
The EEOC’s Final Rules On Employer Wellness Programs
The U.S. Equal Employment Opportunity Commission (“EEOC”) recently issued two final rules confirming that employers can offer limited incentives (in the form of a reward or avoidance of a penalty) to encourage employees and their spouses to participate in workplace wellness programs. Under these new rules, employers who offer wellness programs will be allowed to
New Guidance from the DOL Regarding Joint Employment
In an effort to clarify the circumstances that may create a joint-employment relationship, the U.S. Department of Labor issued an Administrator’s Interpretation this week. This Administrator’s Interpretation, which can be found at this link, analyzes joint employment under the Fair Labor Standards Act (“FLSA”) and the Migrant and Seasonal Agricultural Worker Protection Act. 
Joint
More ERISA Complications
In passing the Employee Retirement Security Act of 1974 (“ERISA”), Congress sought to make it as easy and economical as possible for employers to provide benefits to their workers; for example, pensions, health insurance, life insurance and long-term disability (LTD) insurance. However, because many of the statutes that govern benefit plans are so complicated, and since the regulations issued by the U.S. Department of Labor frequently are so convoluted, one must wonder if that goal will ever be realized. A new decision by the Ninth Circuit may bring a bit more clarity to ERISA waters, but it also likely will make it more complex and costly for employers to offer LTD benefits to employees.
In Prichard v. Metropolitan Life Ins. Co., Ninth Circuit Case No. 12-17355, an employer outlined the LTD benefits it offered to employees in a document called a Summary Plan Description (“SPD”). So far so good, as this is a widespread practice. In so doing, the employer did not create a separate document known as a plan instrument. Instead, the employer treated the SPD as the plan instrument – which also is a generally permissible and somewhat common practice. As one would expect, the employer also obtained an insurance certificate from the carrier who would administer claims and provide benefit payments to eligible disabled employees.
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Arbitration Agreements Can Backfire on Employers
It is no secret that arbitration agreements may greatly reduce the risks that many employers face in disputes with employees. For example, when used correctly, such agreements can curb exposure to class actions by forcing employees to arbitrate disputes on an individual basis instead of a class basis. See, e.g., Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014).
However, when such an agreement either contains certain language or fails to include other language, it may result in a class action or a representative action being litigated in front of an arbitrator instead of a court. This can be problematic for many reasons, not the least of which is that an arbitrator’s hourly charges typically are paid by the employer – and those fees can add up quickly in a complicated matter involving numerous parties.
Thus, instead of decreasing the cost of defending a class action or a representative action, a poorly drafted arbitration agreement could result in greatly escalating such costs. A pair of recent decisions from the California Court of Appeal for the Fourth Appellate District (in San Diego) underscore the need for employers to use great care in drafting such agreements to avoid such outcomes.
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