Fair Labor Standards Act (FLSA) – Keeping Accurate Records
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Please click the post title above or the \”Read More\” link to view this important 2-minute video.
Please click the post title above or the \”Read More\” link to view this important 2-minute video.
Please click the post title above or the \”Read More\” link to view this important 2-minute video
The compensability of work-related mental disabilities unaccompanied by physical illness has been a controversial topic in workers’ compensation law. Workers’ compensation claims based on mental injuries caused by mental stimuli have been coined “mental-mental” claims, in contrast to “physical-mental” (physical impact causing mental injury) and “mental-physical” claims (mental stimulus causing physical injury). What do these legal terms actually mean? Here are a few cases for illustration: “Mental-mental” claim based on accidental injury In Belcher v. T. Rowe Price, 329 Md. 709, 621 A.2d (1993), the employee, a secretary for T. Rowe Price Foundation, worked on the top floor of an office building located next to a construction site. One morning a three-ton beam broke loose from its crane and crashed through the roof of T. Rowe Price’s building, landing with a deafening noise only five feet from Belcher’s desk. The power in the building went out, pipes and wires were ripped apart, and debris covered Belcher. Thereafter, Belcher experienced panic attacks, nightmares, and chest pains which were diagnosed as symptoms of PTSD. Belcher was entitled to workers’ compensation for her injuries because they resulted from an accidental personal injury under the terms of the Maryland Workers’ Compensation Act. The Court explained that when a mental injury is precipitated by an “unexpected and unforeseen event that occurs suddenly or violently,” a worker may recover for that mental injury if the injury is “capable of objective determination.” “Mental-mental” claim based on occupational disease – unsuccessful case In Davis v. Dyncorp,336 Md. 226, 647 A.2d 446 (1994), Davis was a computer operator employed by Dyncorp. Davis alleged that he was continually subjected to serious harassment by his co-workers. The sustained harassment, Davis contended, caused PTSD which prevented him from returning to work. In contrast to Belcher, Davis maintained that he was entitled to compensation because he suffered an occupational disease, not an accidental personal injury. The Court held that Davis’s claim did not constitute an occupational disease under the Maryland Workers’ Compensation Act because the alleged disease was not “due to the nature of an employment in which hazards of the occupational disease exist.” The Court concluded that “nothing peculiar to Davis’s duties as a computer operator … made him more susceptible to harassment than in any other kind of employment.” “Mental-mental” claim based on occupational disease – successful case In Means v. Baltimore County, 344 Md. 661, 689 A.2d 1238 (1997). the Court was faced with the question of whether a claimant’s PTSD, unaccompanied by physical disease, may be compensable as an occupational disease. The Court held that, under the particular facts of that case, PTSD could be compensable as an occupational disease. Means made a mental-mental claim – she alleged that a mental stimulus (the memory of the traumatic accidents) caused a mental injury (PTSD). The claimant was a paramedic and her condition was caused by her on-the-job exposure to a series of fatal accidents. First, the Workers’ Compensation Commission concluded that the claimant had not suffered from an occupational disease arising out of and in the course of her employment. On appeal to the circuit court, the court granted summary judgment in favor of the employer on the ground that, as a matter of law, PTSD may not form the basis of an occupational disease claim. The Court of Appeals reversed and held that the non-physical nature of the claim did not automatically exclude it from coverage under the Workers’ Compensation Act. The Court distinguished the case from the Davis case by noting that, unlike the computer operator in the Davis case, the general nature of Means’s employment as a paramedic exposed her to events that could potentially cause PTSD. The Court held that, if Means could present sufficient evidence to meet the statutory requisites of the Workers’ Compensation Act, her PTSD could be compensable under the Act as an occupational disease. At Luchansky Law, we focus on helping employers understand the Maryland Workers’ Compensation Act and the steps they need to take to minimize the risk of litigation and liability. If you are interested in discussing recent Maryland Workers’ Compensation law that may affect your business, or need to discuss threatened or actual litigation, call Bruce Luchansky or Judd Millman at 410.522.1020.
Employers must be aware of the rapidly changing body of law on the misclassification of workers. Classification of workers as independent contractors rather than employees is covered by a wide range of federal and state laws. Making the wrong decision about the classification of an employee can expose an employer to liability under wage and hour laws, antidiscrimination statutes, the National Labor Relations Act and state laws on payroll tax obligations, workers’ compensation and unemployment insurance. This article focuses on recent developments in wage and hour law. Traditional business models and practices are coming under fire in wage and hour litigation and labor cases. Department of Labor (“DOL”) enforcement of the Fair Labor Standards Act (“FLSA”) is a significant factor in wage and hour law, and the DOL is making the misclassification of employees an enforcement priority. Industry custom is not a defense to a company’s noncompliance with wage and hour laws. The DOL is concerned that some employers still are trying to circumvent their minimum wage and overtime obligations by labeling employees as independent contractors, and the DOL has prosecuted cases involving misclassification of cable installers, nurses, construction workers and others. The DOL also has concluded memoranda of understanding with 26 states permitting federal and state agencies to work together. Currently, the major wage and hour cases are being decided based on whether individual workers are employees or independent contractors under the FLSA or state laws. The 80 year old test courts have typically applied to FLSA cases has become less rigid. Although determining whether an individual is an employee or independent contractor usually is an issue of law for a court to determine, judges are increasingly leaving it to juries to decide factual disputes that can be critical to such a determination. A July interpretation of the FLSA by the administrator of the Wage and Hour Division (Administrator’s Interpretation No. 2015-1) (135 DLR AA-1, 7/15/15), evidences the DOL’s commitment to enforcing the FLSA and the department’s confidence that the federal wage and hour law supports a vigorous enforcement effort against employers that have misclassified individuals as independent contractors. The FLSA definition of employee status is broader than the definitions in most statutes. The DOL’s July interpretation applies the FLSA’s definition of to the 80 year old test courts have traditionally used to determine employee status under the FLSA. The bottom line is, the DOL will no longer just tally the number of factors indicating or rebutting a claim of independent contractor status. Instead, the department will take a close look at whether an alleged independent contractor is economically dependent on a principal, or whether the individual is independent—that is, whether the individual is in business for himself or herself. This broadens the scope of employment relationships covered by the FLSA. Moreover, the Obama administration has expressed concern that the American middle class is being squeezed by economic conditions. Noncompliance with minimum wage and overtime laws is part of that, and the misclassification of workers as independent contractors will remain a target of DOL enforcement. When dealing with independent contractor issues, employers should remember that there are different tests applied under various federal and state laws. Employers need to be alert to changes in the law and avoid being overconfident about business practices that have been followed for years. At Luchansky Law, we focus on helping employers understand the changes in the law and the steps they need to take to minimize the risk of litigation and liability. If you are interested in discussing recent changes in the law that may affect your business, or need to discuss threatened or actual litigation, call Bruce Luchansky or Judd Millman at 410.522.1020.
Maryland courts are increasing their application of the law of personal liability to business owners in certain cases. Business owners need to be aware of this trend and, rather than seek to insulate themselves from decisions regarding employee compensation, they need to step up and make sure that such decisions are being made correctly. Last week, the United States District Court for the District of Maryland denied a business owner’s Motion to Dismiss, where the claim was brought against the business owner personally. That means that the business owner will have to litigate a case in which a former employee is seeking to hold the owner personally liable for an $825,000 commission. In Macsherry v. Sparrows Point, LLC et al, No. 1:2015cv00022 – ELH (D. Md. 2015), the plaintiff filed suit against his former employer – the company itself, and the President of the company personally. The plaintiff sought to recover a commission owed to him from a $110,000,000 real estate transaction and based his claim on (among other theories) the Maryland Wage Payment and Collection Law (“MWPCL”). The parties disputed whether the plaintiff legitimately stated a claim under the MWPCL, specifically focused on whether the plaintiff adequately alleged that the President – sued personally – was legally plaintiff’s “employer” as defined by the MWPCL. The Plaintiff’s Arguments The plaintiff alleged that the President – individually – was an “employer” and therefore liable, by virtue of his leadership role, direction and control over employment decisions, including the payment of wages to Plaintiff generally and the payment of the particular commission at issue. Additionally, HR had directed the plaintiff to the President “with questions regarding his wages and the commission at issue”. Finally, the President was the individual who hired plaintiff, signed the contract governing the plaintiff’s employment, made the decision to terminate plaintiff’s employment and generally supervised and controlled all employees including plaintiff. The President of the Company’s Arguments The President asserted that the plaintiff “attempts to dispense with corporate formalities and hold the President responsible for the alleged obligations of the corporate entities, Maryland law however, does not permit this.” Further, the President maintained that he engaged in conduct on behalf of the corporate entities which does not create individual liability under Maryland law. Finally, the President argued that the allegations did not plausibly demonstrate that the President either entered into an employment relationship or a contract with plaintiff individually. Instead, at most, the plaintiff’s allegations reveal that the president merely carried out limited and remote supervisory tasks in his capacity as a member of the LLC. The Court’s Ruling The Court engaged in an extensive analysis of the legal question presented. The Court noted that in MWPCL cases, “the usual corporate boundaries do not necessarily insulate” company owners. The court concluded that the term “employer” is a broad concept, and its meaning is not restricted by traditional corporate protections. Looking to the “totality of the circumstances” the Court analyzed the “economic realities of the President’s relationship with the employee” and ultimately denied the President’s Motion to Dismiss. The claim against the President – individually – was allowed. At Luchansky Law, we focus on helping employers understand the steps they need to take to minimize the risk of personal liability. Occasionally, personal liability is unavoidable. In that case, Luchansky Law’s employment attorneys will use their extensive courtroom experience to represent your company and zealously advocate on your behalf. If you are interested in discussing personal liability avoidance procedures, or need to discuss threatened or actual litigation, call Bruce Luchansky or Judd Millman at 410.522.1020.
In an increasingly litigious world, employers must be extremely careful to avoid creating potential liability for themselves where none otherwise would exist. One common mistake that employers make when discharging an employee is that different management employees may give different reasons for why an employee was discharged. Those conflicting reasons alone may be enough to enable an employee to claim successfully that the real reason he was fired was because of unlawful discrimination. Let me explain. Assume that a discharged employee claims that he was fired on the basis of a protected classification (such as age, race, or national origin), and that the discharge, therefore, constituted unlawful discrimination. The employer is given an opportunity to demonstrate that the employee actually was fired for a legitimate business reason. However, once the employer does so, the employee is given an opportunity to prove that the reason given by the employer was pretextual, and that the real reason for the discharge was discriminatory. In evaluating whether the employer’s stated reason was pretextual, the courts often will consider whether the employer provided different and conflicting reasons for the discharge. For example, in a recent case in Alabama, an African American painter claimed that he was discharged because of his race. The evidence showed that the employer initially told the employee that he was not being called to work because business was slow. Later, the employer stated that he was being discharged for insubordination. Eventually, the employer claimed that the former employee had failed to return company property. Based in great part on these conflicting reasons given for the discharge, the court denied the company’s motion for summary judgment – which meant that the company was heading to a jury trial. (Mack v. Colorworks Painting Co., N.D. Ala., 2:13-cv-02263-HGD, 10/21/15) The lesson of this cautionary tale is obvious. Before an employer makes the decision to discipline or discharge an employee, management must make sure that all supervisory personnel are aware of the actual reason for the discipline or discharge. Of course, that presupposes that the decision-maker himself clearly determines the basis for the decision before the decision is implemented. In other words, employers – get your story straight and keep it straight. At Luchansky Law, we focus on helping employers understand the steps they need to take to minimize the risk of litigation. Occasionally, litigation is unavoidable. In that case, Luchansky Law’s employment attorneys will use their extensive courtroom experience to represent your company and zealously advocate on your behalf. If you are interested in discussing litigation avoidance procedures, or need to discuss threatened or actual litigation, call Bruce Luchansky or Judd Millman at 410.522.1020.
Employers and employees alike may suffer severe misunderstandings about employment discrimination law. The recent Supreme Court case of E.E.O.C. v. Abercrombie & Fitch Stores, Inc., 135 S. Ct. 2028, 2031, 192 L. Ed. 2d 35 (2015), pinpoints one such misunderstanding. Most employers and employees know that Title VII of the Civil Rights Act of 1964 prohibits an employer from refusing to hire a job applicant on the basis of religion. What employers and employees misunderstand, though, is whether this applies only where the employer has knowledge of the applicant’s religion. In the case of E.E.O.C. v. Abercrombie & Fitch Stores, Inc, the EEOC sued on behalf of Samantha Elauf, a practicing Muslim, who applied for a position in an Abercrombie store. At her job interview, Ms. Elauf wore a headscarf, as she usually does consistent with her religion’s requirements. Ms. Elauf received a rating that qualified her to be hired, however, the interviewer was concerned that Ms. Elauf’s headscarf would conflict with the store’s “Look Policy.” The “Look Policy” prohibits “caps”—a term the Policy does not define—as too informal for Abercrombie’s desired image. The interviewer spoke with the store manager to clarify whether the headscarf was a forbidden “cap.” The interviewer received no answer so she approached the district manager. PAY ATTENTION – KEY FACT: The interviewer informed the district manager that she believed Ms. Elauf wore the headscarf because of her faith. The district manager told the interviewer that Ms. Elauf ’s headscarf would violate the Look Policy, as would all other headwear, religious or otherwise, and directed the interviewer not to hire Ms. Elauf. In discussing the case, the Supreme Court pointed out that the law does not impose a knowledge requirement. The law states that an employer must reasonably accommodate an employee’s religion, without undue hardship on the business. On the other hand, it should be noted that the Americans with Disabilities Act prohibits an employer’s failure to make “reasonable accommodations to the known physical or mental limitations” of an applicant. Title VII contains no such limitation. Instead, the intentional discrimination prohibited by Title VII covers certain motives, regardless of knowledge. Motive and knowledge are separate concepts. An employer who has actual knowledge of the need for an accommodation does not violate Title VII by refusing to hire an applicant if avoiding that accommodation is not his motive. Conversely, an employer who acts with the motive of avoiding accommodation may violate Title VII even if he has no more than an unsubstantiated suspicion that accommodation would be needed. Thus, the Court stated, the rule is straightforward: An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions. If you have further questions regarding this article or if you believe that your employer – or employee – may implicate this situation, contact the experienced employment lawyers at Luchansky Law today.
One of the benefits of being a high level State employee is job security. Employees in the State Personnel Management System within the Executive Branch may not be fired without just cause – and if these employees are fired, they are granted appeal rights. But even these high level State employees must be careful – the State makes employees jump through specific hoops to exercise these rights, and if you miss a hoop, you could lose your rights. This article describes one such hoop that is virtually invisible and easy to miss. In the case of Fisher v. Eastern Correctional Institute, 425 Md. 699, 43 A.3d 338 (2012), Vanessa Fisher was terminated from her position at the Eastern Correctional Institution in December 2008. Fisher timely appealed to the head of her principal unit. Her appeal letter concluded: “I await your response.” On February 5, 2009, having received no response, Fisher sent a second letter inquiring into “the status of this proceeding.” On July 29, 2009, Fisher wrote again noting the lack of response and requesting a decision at the “earliest convenience.” Fisher added: “If I have not received your decision by August 7, 2009, I shall assume you have decided to uphold the termination, albeit without written opinion, and file an appeal to the Office of Administrative Hearings.” On August 20, 2009, Fisher sent a letter to the Secretary of the Department of Budget and Management stating that she had assumed from the lack of response that “her appeal has been denied.” Fisher’s case eventually made its way up to Maryland’s highest court, the Court of Appeals. The Court engaged in a thorough analysis of the statutory language at issue, which I will kindly leave out here as it contains a boatload of legalese. An initial reading of the statutes at issue suggests that Fisher did not have to take any further action after her initial appeal. Although Fisher made strong arguments for her interpretation of the statutes, the Court ruled against her. The bottom line is, after an employee files the initial appeal, the employee must assume at the end of the fifteen-day period that the appeal has been denied and must take any further appeal within ten days thereafter. Fisher’s apparent vigilance in pursuing her appeal was unfortunately not successful. Don’t let this happen to you. The important lesson learned from this case is to never assume that “once the ball is in their court, I can rest on my laurels,” waiting for the government to make the next move. When dealing with government agencies, one must be vigilant every step of the way to avoid devastating procedural pitfalls. Contact the experienced Employment Lawyers at Luchansky Law today to help you navigate the complexities in pursuing your case.
The recently decided Supreme Court case of Young v. UPS involved a “disparate treatment” claim brought by a pregnant employee pursuant to the Pregnancy Discrimination Act. Young, the employee, claimed that UPS, her employer, acted unlawfully in refusing to accommodate her pregnancy-related lifting restriction. Generally, a “disparate-treatment” claim alleges that an employer intentionally treated a complainant less favorably than employees with the complainant’s qualifications but outside the complainant’s protected class. A plaintiff can prove disparate treatment either (1) by direct evidence that a workplace policy, practice, or decision relies expressly on a protected characteristic, or (2) by using the burden shifting framework set forth in the McDonnell Douglas case, explained below. Liability in a disparate-treatment case depends on whether the protected trait actually motivated the employer’s decision. However, an employer may implement policies that are not intended to harm members of a protected class, even if their implementation sometimes harms those members, as long as the employer has a legitimate, nondiscriminatory, nonpretextual reason for doing so. The Supreme Court, in Young v. UPS, held that an individual pregnant worker who seeks to show disparate treatment through indirect evidence may do so through application of the McDonnell Douglas framework. That framework requires a plaintiff to make out a prima facie case of discrimination by showing actions taken by the employer from which one can infer, if such actions remain unexplained, that it is more likely than not that such actions were based on a discriminatory criterion illegal under Title VII. The burden of making this showing is not as onerous as succeeding on an ultimate finding of fact as to a discriminatory employment action. Neither does it require the plaintiff to show that those whom the employer favored and those whom the employer disfavored were similar in all but the protected ways. Thus, the Court held, a plaintiff alleging that the denial of an accommodation constituted disparate treatment under the Pregnancy Discrimination Act may make out a prima facie case by showing, as in McDonnell Douglas, that she belongs to the protected class, that she sought accommodation, that the employer did not accommodate her, and that the employer did accommodate others similar in their ability or inability to work. The employer may then seek to justify its refusal to accommodate the plaintiff by relying on legitimate, nondiscriminatory reasons for denying her accommodation. But, consistent with the Act’s basic objective, that reason normally cannot consist simply of a claim that it is more expensive or less convenient to add pregnant women to the category of those (“similar in their ability or inability to work”) whom the employer accommodates. If the employer offers an apparently “legitimate, nondiscriminatory” reason for its actions, the plaintiff may in turn show that the employer’s proffered reasons are in fact pretextual. The Court ruled that the plaintiff may reach a jury on this issue by providing sufficient evidence that the employer’s policies impose a significant burden on pregnant workers, and that the employer’s “legitimate, nondiscriminatory” reasons are not sufficiently strong to justify the burden, but rather—when considered along with the burden imposed—give rise to an inference of intentional discrimination. The plaintiff can create a genuine issue of material fact as to whether a significant burden exists by providing evidence that the employer accommodates a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers. This approach, though limited to the Pregnancy Discrimination Act context, is consistent with the Court’s longstanding rule that a plaintiff can use circumstantial proof to rebut an employer’s apparently legitimate, nondiscriminatory reasons for treating individuals within a protected class differently than those outside the protected class. The Court held that the Pregnancy Discrimination Act requires courts to consider the extent to which an employer’s policy treats pregnant workers less favorably than it treats nonpregnant workers similar in their ability or inability to work. And—as in all cases in which an individual plaintiff seeks to show disparate treatment through indirect evidence—it requires courts to consider any legitimate, nondiscriminatory, nonpretextual justification for these differences in treatment. The Court noted that statutory changes made after the time of Young’s pregnancy may limit the future significance of its interpretation of the Pregnancy Discrimination Act. In 2008, Congress expanded the definition of “disability” under the ADA to make clear that “physical or mental impairment[s] that substantially limi[t]” an individual’s ability to lift, stand, or bend are ADA-covered disabilities. As interpreted by the EEOC, the new statutory definition requires employers to accommodate employees whose temporary lifting restrictions originate off the job, such as pregnancy. The Supreme Court “expressed no views on these statutory and regulatory changes.”
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