Second Quarter 2013



In This Issue:

In the News

Two Prominent Employers are Going Against the Grain Relative to Workplace Policies

Local Wisdom

Learning the Social Media Lesson the Hard Way

Legislative and Regulatory Update

The New I-9 Form

Health Care – Incentivizing Wellness

New and Updated Federal Legislation

New & Anticipated State Legislation

Litigation Update

Meyer’s Family Restaurant

kgb USA, Inc.

The Strangest Things We’ve Heard of Late

Published or Quoted Elsewhere:

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 - June 17, 2008

How Do I Handle an
Underperforming Staff Person?

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

Previous Issues

In the News

Two Prominent Employers are Going Against the Grain Relative to Workplace Policies

Harley Davidson announced that there will no longer be music on the factory floor – no headphones, no radios, no music piped in via loudspeaker. A memo from Harley’s Vice President of Manufacturing reads in part: “Too many distractions and potential hazards still exist in the workplace that impact our performance every day. We all share responsibility for identifying and eliminating things that do not support continuous improvement.”

Yahoo’s new CEO Marissa Mayer created an international incident by taking a hard line on workplace flexibility – eliminating the once coveted telecommuting arrangements enjoyed by many Yahoo employees. In making this shift, the company is stating a belief that face-to-face interaction among employees fosters collaboration and innovation and outweighs the benefits of working from home (e.g. less overhead, greater employee flexibility, and arguably increased employee productivity).

Employer take-away: What is striking about these recent developments is that they take place in completely different work environments – manufacturing and technology/social media. How we balance productivity, collaboration, innovation, and employee satisfaction is more art than science. Time will tell whether Harley and Yahoo represent outliers or the start of a movement to pull back on employee flexibility.

Local Wisdom

A quick shout out to Stella & Chewy’s CEO Jen Guzman. Stella & Chewy’s is a Milwaukee-based manufacturer of raw, natural pet food. Guzman was recently interviewed for the New York Times Corner Office column regarding how she hires and manages her team (drawing, in part, on her experience as an elite rower).

Learning the Social Media Lesson the Hard Way

Applebee’s restaurant recently found itself in the middle of an online controversy (just type Applebee’s into Google and watch Google fill in “social media meltdown”). Applebee’s terminated a server for posting a photo of her customer’s receipt. The customer had crossed off the 18% gratuity and written in “I give God 10% why do you get 18?” The Internet backlash that followed was made worse when it was revealed that Applebee’s stated reason for the termination (violating the customer’s privacy rights) was undermined by evidence that Applebee’s had itself posted a complimentary comment by another customer just two weeks prior.

Rutgers University suffered embarrassment of its own when a tape surfaced of Basketball Coach Mike Rice physically and verbally abusing players at practice. When the dust settled, Rutgers’ athletic director, basketball coach, and assistant basketball coach were all fired or forced to resign, and Rutgers was out millions of dollars in severance payments. What is striking about this case is that the issue had been previously raised with Rutgers’ athletic director and, as a result, Rice had been suspended for three games and fined $50,000.00. Apparently, legal counsel had advised against stronger action so as not to provoke a contractual battle with Rice or draw negative attention just as Rutgers was negotiating to join the Big 10.

Employer take-away: Social media has created a new front on workplace issues. Getting all the facts early on, making the right call, and sizing up all potential ramifications is more important than ever.

Legislative & Regulatory Update

The New I-9 Form

On March 8, 2013, the United States Citizenship and Immigration Services (USCIS) issued a new I-9 Form (Employment Eligibility Verification Form). An I-9 must be completed for all new employees, no later than the first day of employment. Employers must use the new I-9 beginning May 7, 2013 (next Tuesday).

You need not complete a new I-9 for current employees who have a properly completed I-9 on file unless and until re-verification of work authorization is required.

For more information on the new I-9, see the new Handbook for Employers Guidance for Completing Form I-9 or the USCIS’ I-9 Central.

Employer take-away: This new form is the latest indication that the Federal government is stepping up enforcement of work authorization. I-9 audits are becoming more frequent, and E-Verify could be mandatory in the not-too-distant future.

Do you have a methodical and consistent practice for completing, retaining and re-verifying I-9’s (if and when an employee’s work authorization documents expire)? Do you keep I-9’s in a separate file? Do you make copies of the documents that were presented? Contact Kris Franceschi (414-446-8800, for a free consultation on these and other I-9-related issues.

Health Care – Incentivizing Wellness

So much to talk about on the health care front, and yet so much is still uncertain. One recent development is the growing number of employers that want to take advantage of wellness incentives in the Patient Protection and Affordable Care Act (PPACA).

CVS Pharmacy recently announced that its employees will be required to submit weight, body fat levels, blood glucose levels, and other vital statistics to its health insurance carrier or face a monthly $50 fine.

One interesting point about the CVS initiative is that it does not neatly fit into either of PPACA’s two categories of wellness incentives. In other words, the fine does not relate to precise benchmarks for weight, body fat, or blood glucose. Is the hope that employees will become more mindful of their health by simply knowing their numbers? Is the insurer collecting metrics for future pricing?

On the flip side, PPACA allows health insurers to charge premiums that are up to 50% higher for smokers and, conversely, provide a 50% premium reduction for smoking cessation.

Employer take-away: Mere mention of PPACA continues to prompt anger, frustration, and confusion among business owners – and for good reason. Whatever you ultimately decide, it is important to act intentionally and strategically. Specific to the smoking issue, while it remains unlawful to discriminate against smokers, state and federal laws create new and additional hurdles for this category of employees.

Contact us if you wish to arrange an in-person, flat-fee PPACA consultation. Feel free to invite your insurance agent, accountant, or other key consultants or personnel. Alternatively, please consider joining us for one of our upcoming PPACA Breakfast Briefings.

New and Updated Federal Legislation

  • On April 9, Alabama Representative Martha Roby introduced the Working Families Flexibility Act. The Act, if passed, would allow employees to trade overtime in for compensatory time (at 1 ½ hours worked).
  • The Department of Labor has updated its FMLA Advisor. The update reflects FMLA Final Rules implemented by the DOL’s Wage & Hour Division effective March 8, 2013.

New and Anticipated State Legislation

  • On April 9, the Wisconsin State Senate passed a bill that permits employers to create work-share programs. Utilizing such a program, employers can lower the hours of a group of employees instead of laying people off. The bill, which is designed to provide flexibility and curtail unemployment exposure, was previously passed by the State Assembly and is awaiting the Governor’s signature.
  • Two Wisconsin lawmakers are preparing a bill that would block employers from requiring prospective employees to turn over their social media passwords as part of the hiring process. Similar legislation has already been enacted in nine states and is pending in thirty-five others.

Litigation Update

  • Meyer’s Family Restaurant of Greenfield, has entered into a settlement to pay just over $116,000 to settle allegations that it failed to pay employees overtime, failed to keep proper records of hours worked, and paid cash to employees in some instances.
  • kgb USA, Inc. (a provider of directory assistance) has been ordered to pay $1.3 million for violations of minimum wage laws. The employees at issue worked from home and were (mis)classified as independent contractors and paid piece rate for the number of inquiries to which they responded.

The Strangest Things We’ve Heard of Late

An unnamed company became suspicious when it noticed a spike in access to its private network tracing back to China. What it discovered was that a company employee (“Bob” – a family guy in his 40’s) had outsourced his own job, writing software code, to a Chinese consulting firm. Forensic IT revealed “Bob’s” self-described work schedule:

9:00 a.m. Arrive and surf Reddit for a couple of hours. Watch cat videos.

11:30 a.m. Take lunch.

1:00 p.m. E-bay time.

2:00–ish p.m. Facebook updates – LinkedIn.

4:30 p.m. End of day update e-mail to management.

5:00 p.m. Go home.

According to the news article, “All told, it looked like he earned several hundred thousand dollars a year, and only had to pay the Chinese consulting firm about fifty grand annually.”

In the interim, Bob received excellent reviews – including notes that his code was clean, well-written, and completed on a timely basis.

Employer take-away: How accurate are your performance reviews, and how well do you know your “top performers?”

If you would like more information about any of the cases, laws, or other developments cited, feel free to contact Mark J. Goldstein S.C.

Upcoming Events


Thinking strategically about PPACA


Thinking strategically about PPACA


Thinking strategically about PPACA


FMLA Compliance

For more information on upcoming events, click here.