First Quarter 2020

 

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In This Issue:

Quick Hits

Employment Form Changes That Will Affect Your Business

Could Your Business Benefit from the Work Opportunity Tax Credit?

House Passes Bill That Would Change Rules for Credit Report Use in Employment Decisions

It May Be Time to Update Your Workplace Posters

New Law Affects Workplace Retirement Accounts

Regulatory Update

Regular Rate Calculation Under Fair Labor Standards Act ("FLSA") Changes

Joint Employment Requires FLSA Compliance by Both Companies

New Rules for Company Email Accounts Give Employers Latitude

CNN Agrees to Record-Setting Settlement

In the News

Taco Bell Beefs Up General Manager Salary

Do as I Say Not as I Do? Workplace Toxicity Shows Up in Surprising Places

Workplace Trends

What to Expect This Year in Labor & Employment Trends

Links of Note

How's Work?

Who Moved My Cube?

The Human Touch

Strangest Thing We've Heard of Late

Déjà Vu All Over Again

Published or Quoted Elsewhere:

Timing Works Out Well for Goldstein

Wisconsin Law Journal

Concealed Carry Concerns

Ozaukee Press

Packing Heat: Local Businesses Torn on Concealed Carry Law

Fox Point Patch

Social Media and the Workplace

(SBDC Front Page)

Are Unpaid Internships Legal?

(Dime Crunch)

Loose Lips Sink Ships – Things That Can Get Educators in Legal Hot Water!

(Teachers.Net Gazette)

The Focus on Misclassification

(SBDC Front Page)

Hiring in the New Economy

(SBDC Front Page)

Understanding and Bridging
the Generational Gap>

(WORK Spring, 2009)

What is the Role of an
Attorney on the Board?

(Compasspoint Board Café - February 28, 2008)

Also published in Blueavocado.org - June 17, 2008

How Do I Handle an
Underperforming Staff Person?

(Wisconsin Lawyer - Vol. 81,
No. 2, February 2008)

Previous Issues

Quick Hits

Employment Form Changes That Will Affect Your Business

The IRS has updated Form W-4 in an attempt to “reduce the form’s complexity” and improve “the transparency and accuracy of the withholding system.” While you do not need to use the new form for existing employees, you must use it for employees hired after January 1, 2020, and for adjustments made to any employees' withholdings.

The U.S. Citizenship and Immigration Services has updated Form I-9, effective January 31, 2020. The new form contains clarifications related to authorized representatives and acceptable documents, as well as updates to contact information, the process for requesting paper forms, and the DHS Privacy Notice. As with the W-4, you do not need to use the new form for existing employees, but you must use it for employees hired after January 31, 2020, and when making any adjustments.

Could Your Business Benefit from the Work Opportunity Tax Credit?

The Work Opportunity Tax Credit (“WOTC”), established in 1996, has been extended through December 2020. The WOTC is a federal tax credit designed to incentivize employers to hire individuals from specific groups who often face barriers to employment (e.g., qualified veterans, ex-felons). The WOTC has successfully facilitated the hiring of such individuals and has taken on new significance in this tight job market.

House Passes Bill That Would Change Rules for Credit Report Use in Employment Decisions

On January 29, the U.S. House of Representatives passed legislation (U.S. 3621) which amends the Fair Credit Reporting Act. The bill prohibits employers from using credit reports to make most employment decisions and from asking financial history questions during the hiring process. The legislation now moves to the Senate (where it doesn't appear to have the votes to pass). Stay tuned.

It May Be Time to Update Your Workplace Posters

In Wisconsin, labor law posters purchased prior to November 2019 are no longer compliant as Unemployment Insurance information was updated late last year. While you can pay for a new poster (and vendors like LaborLawCenter include a compliance-checking tool), all requisite information can be found and printed for free through the Wisconsin Department of Workforce Development or the U.S. Department of Labor (“DOL”). If you have any questions about the posters or particular developments, contact Adam at 414-446-8800 or adam@goldsteinsc.com.

New Law Affects Workplace Retirement Accounts

The recently passed law, Setting Every Community Up for Retirement Enhancement, is designed to encourage individuals to contribute to retirement savings accounts. There are tax incentives for small businesses that automatically enroll employees in retirement plans or join multiple employer plans. There are also eligibility rule changes that open employer-sponsored plans to more part-time workers (by reducing the required number of hours worked).

Regulatory Update

Regular Rate Calculation Under Fair Labor Standards Act (“FLSA”) Changes

In December 2019, the DOL published its final rule regarding the FLSA’s regular rate requirement, effective January 15, 2020. While the rule should not drastically affect how employers calculate regular rate, it does exempt certain benefits (e.g., wellness programs and tuition reimbursements) from the regular rate calculation.

Business Takeaway: The DOL established guidelines that address some of the more frequently asked questions of the past few years. As so much time has passed since the last update to regular rate requirements (over 50 years ago), this is a welcome clarification that better reflects how companies operate today.

Joint Employment Requires FLSA Compliance by Both Companies

When an individual is employed by two or more entities at the same time, the entities may be “joint employers,” meaning both entities are responsible for FLSA compliance. Recently, the DOL updated the balancing test used to determine whether a joint employment relationship exists and whether the businesses share FLSA liability. The DOL now considers the following four factors:

  1. whether the employer has the power to hire or fire the employee;
  2. whether the employer supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;
  3. whether the employer determines the employee’s rate and method of payment; and
  4. whether the employer maintains the employee’s employment records.

These factors are weighted based on the circumstances of each case, meaning not all need be satisfied. The DOL also clarified that a few factors that were previously part of the analysis should no longer be considered (e.g., having a franchisor business model).

Business Takeaway: Businesses who share employees (or have employees who straddle/perform work for various entities) should take care to understand joint employment. If you have questions about joint employer relationships, contact Corey at 414-446-8800 or corey@goldsteinsc.com.

New Rules for Company Email Accounts Give Employers Latitude

In December, the National Labor Relations Board (“NLRB”) ruled that employers may bar employees from using company email for non-business purposes, overturning Obama-era NRLB decisions. In Purple Communications, Inc. (2014), the NLRB held that employees had a “presumptive right” to use employers’ email and other information technology; however, in Caesars Entertainment d/b/a Rio All-Suite Hotel and Casino (2019), the NLRB decided that employees do not have such a right related to non-work-related communications.

Business Takeaway: Your business has considerable discretion regarding how to handle work-provided email and other IT resources. Establishing and consistently enforcing your policies is the challenge. To find out more about computer, internet, and other information technology policies, contact Julia at 414-446-8800 or julia@goldsteinsc.com.

CNN Agrees to Record-Setting Settlement

In the NLRB’s largest monetary settlement to date, CNN has agreed to pay $76 million in back pay, stemming from CNN’s decision to terminate its contract with Team Video Services (“TVS”) in an attempt to become a nonunion workplace. The NLRB originally found that CNN not only violated the National Labor Relations Act, but also that CNN was a joint employer with TVS. The case was ultimately remanded relative to the joint employer and back pay issues, and the settlement was reached through the NLRB’s Alternative Dispute Resolution Program.

Business Takeaway: CNN’s 2003 decision to cut ties with TVS became problematic after CNN replaced the TVS workers “without recognizing or bargaining with the two unions that had represented the TVS employees.” As indicated by the employer (CNN), and the large settlement number ($76 million), this case serves as a reminder that all businesses are susceptible to costly employment errors, and that the exposure is real. If you have questions about unionized workers, contact Mark at 414-446-8800 or mark@goldsteinsc.com.

In the News

Taco Bell Beefs Up General Manager Salary

In various (currently undisclosed) locations, Taco Bell will be implementing a $100,000 annual salary for general managers in an effort to upgrade on-site management and measure the results. This marks a 25-50% increase from current salaries for on-site managers. Taco Bell cites high turnover and issues in recruiting/retention as reasons for the change, recognizing that a talented manager can greatly influence a store’s success, including better hiring and onboarding and reduced turnover.

Business Takeaway: As we have discussed over the last few months, companies in nearly all industries are facing challenges attracting and retaining talent. Companies have implemented varied measures to address these challenges—from forgoing drug tests and offering drug/alcohol abuse treatment options to implementing higher salaries and improved benefits (e.g., paid parental leave, flexible schedules). As to the results of Taco Bell’s pilot program, stay tuned.

Do as I Say Not as I Do? Workplace Toxicity Shows Up in Surprising Places

Everlane, a primarily web-based fashion retailer dedicated to “radical transparency,” faces accusations of poor working conditions. Despite founder Michael Presyman’s best efforts to create an ethical fashion retailer (with an emphasis on workers' rights), employees’ frustration has led them to consider unionizing, citing unpredictable scheduling and insufficient pay/benefits. Among the allegations: Everlane’s head of HR discouraged employees from unionizing, and a manager attempted to prevent employees from discussing salaries (which is illegal).

In another instance of lofty corporate goals that do not get implemented on the ground, U.S. Bank’s vision statement states: “Our employees are empowered to do the right thing.” A U.S. Bank employee did exactly that by giving $20 to a customer in need, for which she was terminated.

Make no mistake—when done right, concepts like transparency can make a profound difference. For instance, PayScale’s recent report suggests that pay transparency can shrink the gender wage gap, or perhaps make it disappear entirely.

Business Takeaway: Everlane is just the latest example of workplace irony that we have seen in recent months and years—from Planned Parenthood’s pregnancy discrimination issues to Amnesty International’s toxic workplace problem. And although U.S. Bank’s CEO has since taken ownership of that issue, considerable damage has already been done.

While the workplace has changed and will continue to change, we continue to see businesses, even new-age and “progressive” companies, stepping into the same traps that have plagued others for years. This is all the more surprising when these companies have specifically tried to address such issues in their vision, mission, and values statements. If you have questions about setting, changing, or measuring your workplace culture, contact Mark at 414-446-8800 or mark@goldsteinsc.com.

Workplace Trends

What to Expect This Year in Labor & Employment Trends

In 2019, we saw significant trends in the adoption of paid leave (and specifically paid family leave), marijuana legalization, and predictable scheduling laws in both the private and public sectors—trends that will continue through 2020.

As to paid leave, legislation varies from Oregon’s 12 weeks of paid leave (to take effect in 2023) to Nevada’s 40 hours of paid leave (effective January 1, 2020).

With more states legalizing marijuana, expect an increase in associated employee protections (e.g., prohibiting pre-employment marijuana testing). Nevada and New York have already moved to enact laws that prohibit employers from rejecting a job applicant based on a failed marijuana test.

At least one state and several major cities have adopted predictable scheduling laws, most recently in Chicago and Philadelphia, with more municipalities expected to follow suit. Federal legislation has also been introduced.

Business Takeaway: While many of these trends have not been widely adopted, your business may nonetheless soon be affected. For instance, while some localities appear unlikely to even consider paid leave legislation in the near future, individual companies may still implement such policies for purposes of talent attraction and retention. Large companies that operate in multiple cities/states impacted by these changes may also apply such policies to all locations. How would these trends impact your business?

Links of Note

How’s Work?

Esther Perel has a new podcast regarding workplace connections, conflicts, and dynamics. Perel’s approach is a different one, drawing on her years as a marriage therapist.

Who Moved My Cube?

We were recently prompted to revisit Harvard Business Review’s 2011 article regarding proximity, privacy, and permission in physical and virtual work environments. The article contemplates the pros and cons of private, open, casual, and formal work environments, and considers how each type of workspace may be conducive to healthy workplaces and work relationships. How does your work environment rate with respect to the proximity, privacy, and permission criteria?

The Human Touch

A recent, informal study on the differences between Delta Airlines and American Airlines suggests the biggest difference between the companies is the human element. The Delta experience was one of notable customer service, leading to the conclusion that "[a]s everything becomes roboticized, personal touches still have an enormous effect."

Strangest Thing We've Heard of Late

Déjà Vu All Over Again

In Michigan, Sauntore Thomas settled a racial discrimination lawsuit with his former employer. When Thomas attempted to deposit the settlement check at his bank, the bank employee was suspicious, ultimately calling the police to report a fraudulent check. After transferring his remaining funds to a new account at a different bank, Thomas filed a lawsuit against the bank alleging racial discrimination.