With political finger-pointing at a fever pitch, the federal government effected a partial operational shutdown on October 1, 2013. The closures continue into a second week with no end in sight. Several employment related agencies are affected.

The Department of Homeland Security (DHS) provides a free, web-based system (E-Verify) that permits employers to check a new hire’s Form I-9, Employment Eligibility Verification information against federal government databases to verify eligibility to work in the United States. With a few exceptions, employer use of the E-Verify system is optional.

E-Verify will not be available during the government shutdown. This however does not absolve employers from requiring each new hire to complete the Form I-9, Employment Eligibility Verification within three business days of employment to establish he or she is either an American citizen or authorized to work in the United States. See, our blog “New Employment Eligibility Verification Form I-9.”

When E-verify shows an inconsistency, the new hire is in “temporary nonconfirmation status” (TNC). DHS then requires the employer and subject employee to promptly take steps to establish the inconsistency is an error, i.e., the new hire is actually authorized to work in the U.S., or is actual evidence the worker is not authorized. While the E-Verify system is out of operation, all TNC status cases remain pending and employers may not take adverse action against any worker due to such TNC status (e.g., terminate the person for supposedly being unauthorized when eligibility has not been established one way or the other).

The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws protecting employees and job applicants from racial, gender, and several other types of discrimination. The agency is closed during the shutdown, with limited services available. While the EEOC will examine new charges and continue to litigate lawsuits on a limited basis, it has cancelled scheduled mediations and will not be conducting investigations or processing Freedom of Information Act requests. It has also cancelled outreach and education events and will not have staff available to answer questions or respond to public initiated correspondence.

The Administrative Office of the United States Courts has announced that the federal courts will remain open through October 17 by use of fees and other revenue sources. This includes the federal courts’ electronic filing system. After October 17, the chief judge of each district court must decide which employees and services are “essential” to the court’s constitutional duty to hear and decide cases. By law, “essential” employees continue to work during a lapse in government spending and “non-essential” workers are laid off.

Contact us or call one of our attorneys, Tim Bowles or Cindy Bamforth for further guidance.

No Immediate Consequences for Late Notice But Businesses Should Still Comply Promptly

The October 1, 2013 Notice Deadline: The federal Patient Protection and Affordable Care Act (ACA or “Obamacare”) requires the state-by-state creation of the so-called “Health Insurance Marketplace” (“Marketplace” for short, also called the “Exchange”), a virtual one-stop shopping mall for access to private coverage. California’s exchange is “Covered California”: http://www.coveredca.com/. Each state exchange started offering such insurance options on October 1, 2013.

Also by October 1, all employers subject to another federal law –the Fair Labor Standards Act (FLSA) – were to give each of its workers a written notice of the existence of the Health Insurance Marketplace. The FLSA generally kicks in for companies grossing $500,000 or more annually and which are engaged in interstate commerce. “Interstate commerce” is a very broad term. A local farmer selling at the local Saturday market may not be considered engaging in interstate commerce. A local market selling goods originating from other states definitely is. The U.S. Department of Labor offers an online self-assessment for companies to determine if they are subject to the FLSA: http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp.

No Penalty Currently for Employers Who Missed that October 1 Date: While no business is comfortable missing a deadline, the U.S. Department of Labor has confirmed there are no penalties or fines for having missed this October 1, 2013 ACA notice date. See, http://www.dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html. Thus, while the notification is a legal requirement, it is in effect optional. However, since this optional status could be temporary, employers covered by the FLSA who have yet to comply should arrange to issue these notices as soon as possible.

Content of the ACA Notice: This required, yet optional, written notice must include three points: 1) inform the employee of the existence of the Marketplace/Exchange, including a description of its services and how the employee may contact the Marketplace for assistance; 2) describe how the employee may be eligible for a premium tax credit if he/she purchases a qualified health plan through the Marketplace; and 3) inform the employee that if he/she purchases a qualified health plan through the Marketplace, he/she may lose the employer contribution (if any) to any health benefits plan the employer offers as well as lose certain federal tax advantages.

The U.S. Department of Labor has published two templates for such notice, one for FLSA-covered employers who do not have a current health plan for their workers (see, http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf), the other for such employers who do offer such a plan for some or all of their workers (see, http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf).

For more information concerning employer’s obligations in this area, contact one of our attorneys Tim Bowles or Cindy Bamforth.

With political finger-pointing at a fever pitch, the federal government effected a partial operational shutdown on October 1, 2013. The closures continue into a second week with no end in sight. Several employment related agencies are affected.

The Department of Homeland Security (DHS) provides a free, web-based system (E-Verify) that permits employers to check a new hire’s Form I-9, Employment Eligibility Verification information against federal government databases to verify eligibility to work in the United States. With a few exceptions, employer use of the E-Verify system is optional.

E-Verify will not be available during the government shutdown. This however does not absolve employers from requiring each new hire to complete the Form I-9, Employment Eligibility Verification within three business days of employment to establish he or she is either an American citizen or authorized to work in the United States. See, our blog “New Employment Eligibility Verification Form I-9.”

When E-verify shows an inconsistency, the new hire is in “temporary nonconfirmation status” (TNC). DHS then requires the employer and subject employee to promptly take steps to establish the inconsistency is an error, i.e., the new hire is actually authorized to work in the U.S., or is actual evidence the worker is not authorized. While the E-Verify system is out of operation, all TNC status cases remain pending and employers may not take adverse action against any worker due to such TNC status (e.g., terminate the person for supposedly being unauthorized when eligibility has not been established one way or the other).

The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws protecting employees and job applicants from racial, gender, and several other types of discrimination. The agency is closed during the shutdown, with limited services available. While the EEOC will examine new charges and continue to litigate lawsuits on a limited basis, it has cancelled scheduled mediations and will not be conducting investigations or processing Freedom of Information Act requests. It has also cancelled outreach and education events and will not have staff available to answer questions or respond to public initiated correspondence.

The Administrative Office of the United States Courts has announced that the federal courts will remain open through October 17 by use of fees and other revenue sources. This includes the federal courts’ electronic filing system. After October 17, the chief judge of each district court must decide which employees and services are “essential” to the court’s constitutional duty to hear and decide cases. By law, “essential” employees continue to work during a lapse in government spending and “non-essential” workers are laid off.

Contact us or call one of our attorneys, Tim Bowles or Cindy Bamforth for further guidance.

No Immediate Consequences for Late Notice But Businesses Should Still Comply Promptly

The October 1, 2013 Notice Deadline: The federal Patient Protection and Affordable Care Act (ACA or “Obamacare”) requires the state-by-state creation of the so-called “Health Insurance Marketplace” (“Marketplace” for short, also called the “Exchange”), a virtual one-stop shopping mall for access to private coverage. California’s exchange is “Covered California”: http://www.coveredca.com/. Each state exchange started offering such insurance options on October 1, 2013.

Also by October 1, all employers subject to another federal law –the Fair Labor Standards Act (FLSA) – were to give each of its workers a written notice of the existence of the Health Insurance Marketplace. The FLSA generally kicks in for companies grossing $500,000 or more annually and which are engaged in interstate commerce. “Interstate commerce” is a very broad term. A local farmer selling at the local Saturday market may not be considered engaging in interstate commerce. A local market selling goods originating from other states definitely is. The U.S. Department of Labor offers an online self-assessment for companies to determine if they are subject to the FLSA: http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp.

No Penalty Currently for Employers Who Missed that October 1 Date: While no business is comfortable missing a deadline, the U.S. Department of Labor has confirmed there are no penalties or fines for having missed this October 1, 2013 ACA notice date. See, http://www.dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html. Thus, while the notification is a legal requirement, it is in effect optional. However, since this optional status could be temporary, employers covered by the FLSA who have yet to comply should arrange to issue these notices as soon as possible.

Content of the ACA Notice: This required, yet optional, written notice must include three points: 1) inform the employee of the existence of the Marketplace/Exchange, including a description of its services and how the employee may contact the Marketplace for assistance; 2) describe how the employee may be eligible for a premium tax credit if he/she purchases a qualified health plan through the Marketplace; and 3) inform the employee that if he/she purchases a qualified health plan through the Marketplace, he/she may lose the employer contribution (if any) to any health benefits plan the employer offers as well as lose certain federal tax advantages.

The U.S. Department of Labor has published two templates for such notice, one for FLSA-covered employers who do not have a current health plan for their workers (see, http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf), the other for such employers who do offer such a plan for some or all of their workers (see, http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf).

For more information concerning employer’s obligations in this area, contact one of our attorneys Tim Bowles or Cindy Bamforth.

City Settlement of Suit over Former San Diego Mayor Filner’s Conduct is a Case in Point

As relayed in our August 30, 2013 blog, San Diego Mayor Bob Filner left office in disgrace last summer on the heels of multiple allegations of sexual harassment.

In damning defense, Mr. Filner claimed the City never provided him sexual harassment training. This prompted the California Department of Fair Employment and Housing (DFEH) to charge the City with violations of the Fair Employment and Housing Act (FEHA) requirement to provide such training to its supervisory employees, including elected and appointed officials.

Without admitting liability, the City settled the DFEH claim for a reported $250,000 and on its pledge to provide at least two hours of sexual harassment prevention training to all supervisory employees within six months of hire, election or appointment date, and every two years thereafter. The City also agreed to report compliance to DFEH every six months for the next five years.

DFEH Director Phyllis Cheng announced, “This agreement serves as a model for other local government agencies to fully comply with the sexual harassment training required of all supervisors, including elected and appointed officials under the Fair Employment and Housing Act.”

Private employers should also take heed. California Government Code section 12940(k) requires employers, no matter how many they employ, to take “all reasonable steps necessary to prevent discrimination and harassment from occurring.” FEHA also requires California companies with 50 or more employees to provide the same harassment training to its supervisors and executives that the City of San Diego was cited for ignoring.

Failure of a covered employer to comply with those harassment training mandates could be used as evidence of that employer’s failure to take all reasonable prevention steps.

City Settlement of Suit over Former San Diego Mayor Filner’s Conduct is a Case in Point

As relayed in our August 30, 2013 blog, San Diego Mayor Bob Filner left office in disgrace last summer on the heels of multiple allegations of sexual harassment.

In damning defense, Mr. Filner claimed the City never provided him sexual harassment training. This prompted the California Department of Fair Employment and Housing (DFEH) to charge the City with violations of the Fair Employment and Housing Act (FEHA) requirement to provide such training to its supervisory employees, including elected and appointed officials.

Without admitting liability, the City settled the DFEH claim for a reported $250,000 and on its pledge to provide at least two hours of sexual harassment prevention training to all supervisory employees within six months of hire, election or appointment date, and every two years thereafter. The City also agreed to report compliance to DFEH every six months for the next five years.

DFEH Director Phyllis Cheng announced, “This agreement serves as a model for other local government agencies to fully comply with the sexual harassment training required of all supervisors, including elected and appointed officials under the Fair Employment and Housing Act.”

Private employers should also take heed. California Government Code section 12940(k) requires employers, no matter how many they employ, to take “all reasonable steps necessary to prevent discrimination and harassment from occurring.” FEHA also requires California companies with 50 or more employees to provide the same harassment training to its supervisors and executives that the City of San Diego was cited for ignoring.

Failure of a covered employer to comply with those harassment training mandates could be used as evidence of that employer’s failure to take all reasonable prevention steps.

Some Volunteers May be Covered

The California Court of Appeal has decided that the state’s workplace anti-discrimination law did not protect a former Los Angeles Police Department volunteer police reserve officer. Estrada v. City of Los Angeles, published July 24, 2013. However, the result would likely be the opposite for a private business in similar circumstances.

Mr. Estrada, although termed under city rules a “volunteer” for his work with LAPD and although he specifically served without compensation, asserted that he should be considered an “employee” under the California Fair Employment and Housing Act (FEHA) since the City of Los Angeles paid to cover him for workers’ compensation insurance. Mr. Estrada alleged the City of Los Angeles discriminated against him in violation of FEHA due to his physical disability.

If a California business has five or more employees, FEHA protects against any such worker’s termination due to race, national origin, gender, religion, physical or mental disability or any other classification protected from discrimination by that law.

The FEHA statute specifies that “employees” are entitled to such protections but does not actually define what that word means. Mr. Estrada, although termed under city rules a “volunteer” for his work with LAPD, asserted that he should be considered a FEHA “employee” since the City of Los Angeles paid to cover him for workers’ compensation insurance.

Mr. Estrada had a seemingly strong legal position from prior published California appeals court decisions. Those cases observed that where an employer chooses to cover a volunteer under workers’ compensation, FEHA protections should extend to that person as well.

However, the court concluded that the City of Los Angeles had a countervailing special right, granted by the California Constitution, to regulate and control its internal affairs, including its role as an employer. The city’s rules designated persons appointed to the police reserve as “volunteer workers only and … not deemed … employees of the City …” except for workers’ compensation benefits. The court concluded it could not interfere with the city’s power to define “employee” and “volunteer” in any manner it chose.

Thus, Mr. Estrada only lost his case due to special constitutional rights of “charter cities,” including Los Angeles, as governmental bodies. On the other hand, the decision indicates that a private business with five or more persons on payroll and which chooses to cover its “volunteers” for workers compensation will also be obligated to comply with FEHA for those persons as well.

This Estrada decision is also a reminder to private businesses to ensure they are only classifying those individuals as volunteers who are truly providing some service or assistance without contemplation or receipt of remuneration. A court or agency may well conclude that a person labeled “volunteer” is actually an employee if he/she is actually obtaining or expecting to obtain material benefits from the work. The Estrada Court observed: “Even substantial indirect compensation can satisfy the threshold requirement of remuneration for purposes of employee status under [the anti-discrimination law]. If not direct salary, substantial benefits which are not merely incidental to the activity performed, such as health insurance, vacation or sick pay, are indicia of employment status.” (Emphasis in original.)

For more perspective and help on the distinction between employees and volunteers or on FEHA’s application to California employers, please contact our firm’s attorneys Tim Bowles or Cindy Bamforth.

Some Volunteers May be Covered

The California Court of Appeal has decided that the state’s workplace anti-discrimination law did not protect a former Los Angeles Police Department volunteer police reserve officer. Estrada v. City of Los Angeles, published July 24, 2013. However, the result would likely be the opposite for a private business in similar circumstances.

Mr. Estrada, although termed under city rules a “volunteer” for his work with LAPD and although he specifically served without compensation, asserted that he should be considered an “employee” under the California Fair Employment and Housing Act (FEHA) since the City of Los Angeles paid to cover him for workers’ compensation insurance. Mr. Estrada alleged the City of Los Angeles discriminated against him in violation of FEHA due to his physical disability.

If a California business has five or more employees, FEHA protects against any such worker’s termination due to race, national origin, gender, religion, physical or mental disability or any other classification protected from discrimination by that law.

The FEHA statute specifies that “employees” are entitled to such protections but does not actually define what that word means. Mr. Estrada, although termed under city rules a “volunteer” for his work with LAPD, asserted that he should be considered a FEHA “employee” since the City of Los Angeles paid to cover him for workers’ compensation insurance.

Mr. Estrada had a seemingly strong legal position from prior published California appeals court decisions. Those cases observed that where an employer chooses to cover a volunteer under workers’ compensation, FEHA protections should extend to that person as well.

However, the court concluded that the City of Los Angeles had a countervailing special right, granted by the California Constitution, to regulate and control its internal affairs, including its role as an employer. The city’s rules designated persons appointed to the police reserve as “volunteer workers only and … not deemed … employees of the City …” except for workers’ compensation benefits. The court concluded it could not interfere with the city’s power to define “employee” and “volunteer” in any manner it chose.

Thus, Mr. Estrada only lost his case due to special constitutional rights of “charter cities,” including Los Angeles, as governmental bodies. On the other hand, the decision indicates that a private business with five or more persons on payroll and which chooses to cover its “volunteers” for workers compensation will also be obligated to comply with FEHA for those persons as well.

This Estrada decision is also a reminder to private businesses to ensure they are only classifying those individuals as volunteers who are truly providing some service or assistance without contemplation or receipt of remuneration. A court or agency may well conclude that a person labeled “volunteer” is actually an employee if he/she is actually obtaining or expecting to obtain material benefits from the work. The Estrada Court observed: “Even substantial indirect compensation can satisfy the threshold requirement of remuneration for purposes of employee status under [the anti-discrimination law]. If not direct salary, substantial benefits which are not merely incidental to the activity performed, such as health insurance, vacation or sick pay, are indicia of employment status.” (Emphasis in original.)

For more perspective and help on the distinction between employees and volunteers or on FEHA’s application to California employers, please contact our firm’s attorneys Tim Bowles or Cindy Bamforth.

U.S. Supreme Court Decision Slims Down

Super-Sized Supervisor Definition

Under federal and California law, employer liability for workplace harassment can depend entirely on the legal definition of a “supervisor.” The U.S. Supreme Court has recently clarified that definition under Title VII of the Civil Rights Act of 1964 in Vance v. Ball State University (June 24, 2013).

Narrow Definition for “Supervisor” under Federal Law: Indiana’s BSU employed catering assistant Maetta Vance, an African-American female. She sued employer BSU alleging her white female supervisor Saundra Davis created a racially hostile work environment in violation of Title VII. That federal law makes it an unlawful employment practice for an employer to discriminate – and by extension, to harass – a worker because of his/her race, color, religion, sex, or national origin. Vance alleged Davis would glare at her, slam pots and pans in her vicinity and “intimidate” her. She claimed Davis would often give her “weird” looks and would stand there with her catering cart “smiling.”

The case focused whether BSU could be held automatically (vicariously) liable even if BSU had had no notice of Davis’s actions and thus no opportunity to investigate and halt any unlawful conduct. If Davis had been Vance’s supervisor for purposes of Title VII, then BSU could be vicariously liable for such harassment. If, however, Davis was Vance’s co-worker, then BSU would only be liable if it negligently controlled working conditions (e.g., if the university had some notice of the alleged hostile environment and yet had done nothing effective to stop it).

As the lower court held BSU had responded reasonably to the incidents of which it was aware, BSU’s liability in this case depended solely on whether Davis was a supervisor or merely a co-worker.

Before this Vance decision, the federal courts defined whether an alleged harasser was a “supervisor” under Title VII in either of two ways. Some courts held an employee is not a supervisor unless he or she has the power to hire, fire, demote, promote, transfer, or discipline the alleged victim. Other courts adhered to the Equal Employment Opportunity Commission’s (EEOC) more open-ended approach which ties supervisor status to the ability to exercise “significant discretion” over the alleged victim’s daily work.

BSU argued it could not be held vicariously liable for the alleged harassment because Davis did not have the power to hire, fire, demote, promote, transfer, or discipline Vance. Vance argued Davis was a supervisor because Davis had the authority to control Vance’s daily activities and evaluate her performance, thus falling within the EEOC’s open-ended definition of a supervisor.

The U.S. Supreme Court agreed with BSU in holding an employee is a “supervisor” under Title VII only if the employer empowers that person to take “tangible employment actions” against the other, e.g., authority to hire, fire, demote, promote, transfer, or discipline. Thus, BSU was not liable with respect to Davis’ alleged conduct.

California’s Broader Definition of Supervisor is Likely Unaffected: Although this is an important decision affecting workplace harassment cases brought under Title VII, it will likely have little to no impact on employment discrimination cases brought under California’s Fair Employment and Housing Act (FEHA).

FEHA specifically defines “supervisor” more broadly as any person having the authority to hire, transfer, discharge other employees, or the responsibility to direct them, adjust their grievances, or effective to effectively recommend tangible employment actions. Thus, under FEHA, a person such as Davis tasked with the responsibility to direct an employee’s daily duties (i.e. a team leader) is a “supervisor” even if lacking direct authority to hire, fire, promote or transfer the employee.

Minimally, all American employers no matter where located should train their supervisors to recognize and prevent harassing conduct and closely monitor co-worker interactions to ensure a safe, harassment-free working environment.

For help to employers on how to structure, administer or enforce proper policies and handbooks to avoid expensive lawsuits, please contact our firm’s attorneys Tim Bowles or Cindy Bamforth.