Over the past several years, many municipalities have taken labor and employment matters into their own hands, passing local laws requiring a higher minimum wage or paid sick leave beyond that required by the state or federal government.  Florida and Pennsylvania are pushing back on these local laws.

On February 12, 2015, Philadelphia instituted an ordinance requiring employers with 10 or more employees to provide 40 hours of paid sick leave in a calendar year.  Less than a year after its implementation, on December 30, 2016, two senators of the Pennsylvania state legislature issued a memorandum announcing their intent to propose a bill that would override municipal laws of this kind.  The senators cited concerns of uniformity and the burden on local businesses as their motivation.  On January 25, 2017, SB 128 was introduced in the Pennsylvania legislature.

Read what this bill would preclude municipalities from at http://blog.hrusa.com/blog/push-back-on-local-minimum-wage-and-paid-sick-leave/.

In May 2016, North Carolina governor Pat McCrory signed into law a bill (HB2) that required transgender people to use restrooms corresponding to their biological sex.  On May 13, 2016, the Obama administration’s Justice Department and the Department of Education responded by sending letters to U.S. public school districts directing them to allow students to use the restrooms (and locker rooms) that matched their gender identity, even if it is different than their gender assigned at birth, and provided additional, detailed guidance on various issues including locker/bathrooms, overnight accommodations, correct gender pronouns, disclosures, and correction of records. (See https://www2.ed.gov/about/offices/list/ocr/letters/colleague-201605-title-ix-transgender.pdf)

The letter advised school districts that it interpreted Title IX regulations to require that, when a school is notified that a “student will assert a gender identity that differs from previous records or representations, the school will begin treating the student consistent with the student’s gender identity” instead of their birth-gender.  Title IX is the federal law that prohibits sex discrimination in education and education-related activities.  Tying this guidance to Title IX was important because State and local rules cannot limit or override the requirements of Federal laws (34 C.F.R. § 106.6(b)) and a violation of Title IX implicates lawsuits and a threat of loss of federal aid.  (34 C.F.R §§ 106.4 and 106.31(a).)

To read the full article, visit the HRUSA blog at: http://blog.hrusa.com/blog/trump-withdraws-transgender-bathroom-guidance/

A California appellate court ruled this week in Vaquero v. Stoneledge Furniture, LLC (No. B269657, filed February 28, 2017) that employees paid on commission are entitled to separate compensation for rest breaks.  In a decision that frustrates employers that view the employment relationship through the lens of contract law, the Vaquero Court held that Stoneledge’s commission plan that paid sales associates a percentage of sales or a guaranteed draw in excess of minimum wage against earned commissions failed to properly compensate sales associates for rest breaks and non-productive time. J. Schoendienst 20

In Vaquero, two former sales associates filed a class action complaint challenging Stoneledge’s commission plan. Sales associates were paid on a commission basis.  If the sales associate failed to earn at least $12.01 per hour in commissions for the week Stoneledge paid the sales associate a “draw” against future commissions equal to $12.01 per hour worked (“guaranteed minimum”).  In such circumstances, the commission paid the following week would be reduced by the difference between the commission earned and the draw paid in the prior week.  For example, if a sales associate worked 40 hours and earned $300 in commissions for the week, the sales associate would be paid $480.40 ($12.01 x 40) and would have a $180.40 ($480.40 – $300) draw against any commission earned in the following week. The trial court granted Stoneledge’s motion for summary judgment on the grounds that the commission plan paid at or above minimum wage for all hours worked, including rest breaks.

On appeal, the Vaquero Court reversed the trial court and held that the commission plan failed to adequately compensate sales associates for two reasons.  First, the commission plan did not compensate for rest breaks taken by sales associates who earned commissions instead of the guaranteed minimum because commissions cannot be earned during rest breaks.  Second, for sales associates whose commissions did not exceed the guaranteed minimum, the company clawed back (by deducting from future paychecks) the guaranteed minimum which compensated sales associates for hours worked, including rest breaks which effectively reduced the rest break compensation or the contractual commission rate.  Ultimately, the Vaquero Court rejected the commission plan because it credited the compensation earned during hours in which the sales associates could earn a commission towards rest breaks and other non-productive time, which must be separately compensated.

Employers with commissioned employees are safest providing a guaranteed minimum plus commissions, rather than a draw against commissions.  It is unclear how broadly this decision will be interpreted.  For example, it is unknown whether a commission formula that reduces the earned commissions by the guaranteed minimum would be deemed to result in the non-payment of rest breaks and non-productive time or whether such a formula is permitted when the employer provides supplemental commission compensation.

Time will tell whether this decision will restrict an employer’s ability to factor the amount of a guaranteed minimum into its commission formula.  Employers with commission compensation plans should consult with employment counsel to ensure that the plan properly compensates employees for non-productive time and rest breaks and that the plan does not constitute a forfeiture of previously earned wages.

In a decision just two weeks after Valentine’s Day, the Ninth U.S. Circuit Court of Appeals (“Ninth Circuit”) has ruled that hugs and kisses may decrease, rather than increase, feelings of affection in the workplace.  Specifically, the Ninth Circuit overturned a lower court decision dismissing a lawsuit filed by a county correctional officer who alleged that the county sheriff had sexually harassed her in violation of federal and California law.  A copy of the decision in is available at this link. Brenden-Begley-05_web

The plaintiff in that case alleged that the sheriff had, among other things, sexually harassed her by “greeting her with unwelcome hugs on more than one hundred occasions, and a kiss at least once, during a 12-year period.”  The district court agreed with the defendants “that such conduct was not objectively severe or pervasive enough to establish a hostile work environment, but merely innocuous, socially acceptable conduct.”  However, the Ninth Circuit was not so enamored with that view.

The appellate court said it is wrong to think “that courts do not consider hugs and kisses on the cheek to be outside the realm of common workplace behavior.”  Additionally, the Ninth Circuit ruled that the sheriff’s conduct did not have to be both “severe and pervasive’” because, for liability to attach, the conduct only had to be either severe or pervasive.

The appellate court was troubled by evidence indicating that the sheriff “hugged female employees much more often than male employees” and that he may have “hugged female employees exclusively.”  Without confirming whether it would be acceptable if the sheriff had hugged men as frequently, the Ninth Circuit said that such evidence could allow “a reasonable juror” to grant a verdict in favor of the plaintiff.  According to the opinion, “A reasonable juror could find, for example, from the frequency of the hugs, that [the sheriff]’s conduct was out of proportion to ‘ordinary workplace socializing’ and had, instead, become abusive.”

The take away from this is not that any hug or kiss in the workplace automatically leads to liability.  Instead, the decision holds that courts must “consider whether a reasonable juror would find that hugs, in the kind, number, frequency, and persistence described by [the plaintiff] create a hostile environment.”  In issuing that ruling, the Ninth Circuit did not provide any guidance as to what kind of hugs and kisses, or what number of them, or what frequency of them is across the line for purposes of sexual harassment.  Thus, employers would be well advised to consult with legal counsel to determine if changes to their policies or workplace practices are recommended.

The Equal Employment Opportunity Commission (EEOC) recently reported that between fiscal years 2012 and 2015, private sector charges of harassment increased to account for 30% of all charges of discrimination received by the EEOC.  These numbers indicate that harassment liability and prevention continue to be important.  The EEOC’s most recent guidance on harassment focused primarily on sexual harassment and vicarious employer liability for harassment by supervisors, both published in the 1990’s.

Although not yet in its finalized form, the 75-page proposed guidance indicates the enforcement priorities of the EEOC and gives some helpful explanations and examples for employers.

Here are some of the highlights from the proposed guidance: http://blog.hrusa.com/blog/eeoc-harassment-guidance-receives-much-needed-update/