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SHRM Newsletter: Top Ten “Hot” Topics In Current HR Law

03/18/2010

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This is Utah SHRM Legal-mail no. 2010-5 prepared for Salt Lake SHRM, the Human Resources Association of Central Utah (HRACU), the Northern Utah Human Resources Association (NUHRA), the Color Country Human Resources Association (CCHRA), the Bridgerland Society for Human Resource Management and Utah at-large members of the national Society for Human Resource Management (SHRM). 

CONTENTS:
- TOP TEN “HOT” TOPICS IN CURRENT HR LAW
1.   LITIGATION THREATS CONTINUE
2.   MORE DISCRIMINATION CHARGES
3.   INDEPENDENT CONTRACTOR ENFORCEMENT
4.   THE UTAH LEGISLATURE
5.   UTAH LOCAL GOVERNMENT LEGISLATIVE ACTIVITY
6.   ECONOMIC STIMULUS LEGISLATION
7.   OTHER LEGISLATIVE PROPOSALS
8.   ONGOING IMMIGRATION ISSUES
9.   THE BERMUDA TRIANGLE
10.  RISKS FROM SOCIAL MEDIA AT WORK


TOP TEN “HOT” TOPICS IN CURRENT HR LAW:  I presented legislative and legal updates to the Salt Lake SHRM chapter and the Employers Council within the past two weeks.  Here are the issues we discussed.

1.   LITIGATION THREATS CONTINUE:  There are lots of employment lawsuits ou there right now.  Claims typically increase in times of economic uncertainly (for example see item #2 below).  Some claims are due to the large number of layoffs in 2008-09.  But also note that in 2009, FLSA overtime lawsuits  (over 5,500) increased almost 8% over the previous year.  On average only about 1,500 FLSA lawsuits were filed each year in the 1990s.  Large verdicts and settlements also continuing.  For example:

National Steakhouse- $20 million re: glass ceiling issues
* Another restaurant chain- $1 million re: failure to hire male servers
* National grocery chain- $9 million for race, color, national origin and retaliation
   claims
* National retailer- $12 million for sex bias in job placement

That’s over $40 million bucks that might have been better spent elsewhere.  A recent survey found the average employment law claim verdict up 60% in 2008.  Your employment decisions carry great risk today.  Make them well.

2.   MORE DISCRIMINATION CHARGES:  This is confirmed by the Equal Employment Opportunity Commission” (EEOC) 2009 statistics.  Annual filings last year were at near-record levels with over 93,000 charges (the second highest ever behind only the 2008 total).  The EEOC  recovered over $376 million from employers in claim damages and settlement.  The EEOC found no reasonable cause on about 60% of charges; reasonable cause on about 5% of charges filed.  Records were also set in specific categories:

  • New records set for the number of charges filed alleging disability bias (10% higher than in 2008), religious discrimination and national origin bias.
  • As in past years, the most frequently-filed charges alleged race bias, retaliation and sex discrimination.

Why the record number of EEOC charges? The EEOC has suggested that several factors account for the near-record amount of claims:

  • economic conditions;
  • increased workforce diversity;
  • greater employee awareness of rights; and
  • streamlined EEOC filing procedures.

3.   INDEPENDENT CONTRACTOR ENFORCEMENT:  During the past year I have received more questions about this issue than at any time in my 25 years of practice. The proposed federal budget includes new incentives and resources for enforcement. State governments, mainly via the unemployment compensation system, also cracking down on misclassification.  Governments are more proactive primarily because they are seeking additional sources of revenues for shrinking public budgets. Remember the distinctions! The distinction between an employee and independent contractor hinges on several factors, but primarily on how much control the business exercises over a worker’s activities.  Here is a useful description of the distinction from the IRS website:  http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

4.   THE UTAH LEGISLATURE:  This year, the Utah Legislature passed some laws that will impact employers.  The state now mandates drug testing (including random testing) for state construction contractors and their subcontractors.  There are changes in the general drug testing statute and the involvement of a medical review officer is now required if an employer wants to limit its liability for drug testing activities.  State law now also mandates the use of E-Verify (or a comparable system) for private employers with 15 or more employees.  A proposed constitutional ban on affirmative action by state entities did not pass.

5.   UTAH LOCAL GOVERNMENT LEGISLATIVE ACTIVITY:  Local governments are getting into the act of regulating employment relationships. A new Salt Lake City ordinance bans sexual orientation bias by businesses within city limits.  It will become effective in April of 2010. Salt Lake County, West Valley City and Park City are considering similar ordinances. Salt Lake County also has enacted a meet and confer ordinance requiring consultation with county employees on regarding certain terms and conditions of employment.

6.   ECONOMIC STIMULUS LEGISLATION:  There were over a million jobs lost in the last 20 months.  Much of the government response to these circumstances has been to try to mitigate the impact on the economy of these lost jobs. For example, the COBRA subsidy continued throughout 2009 and recently was extended to the end of March of 2010. Jobless benefits recently were extended. A jobs bill working through Congress includes temporary payroll tax break for companies that hire the jobless.  There also has been stimulus spending seeking to increase/save jobs.  These activities have distracted Congress from other possible new employment laws discussed below.

7.   OTHER LEGISLATIVE PROPOSALS:  There also is other proposed legislative activity.  Proposals include: health care reform; expand FMLA more; paid FMLA; add to list of protected classes (sexual orientation); prohibit employment arbitration; mandate paid sick leave; reduce abuse of independent contractor status; make it easier to unionize, etc.  The results of 2008 election seemed likely to accelerate this employment legislative process, but it has not happened yet, probably due to the focus on the economy and the health care reform debate.

8.   ONGOING IMMIGRATION ISSUES:  There is still no national resolution to this issue. The Federal government has taken a piecemeal approach, for example with some increased I-9 enforcement. Certain federal contractors must now use E-Verify (the federal employment verification system).  Some states are pursuing their own initiatives (like Utah and the E-Verify mandate).  Once again, the key question is when will the Feds act?  There is no national consensus right now.

9.   THE BERMUDA TRIANGLE:  Same as last year!  FMLA/ADA/Worker’s Compensation day-to-day compliance - the “Bermuda Triangle” of employment law.  More so than ever before, employers face legal liability for not properly dealing with employees who have health problems.  Hang in there!

10.  RISKS FROM SOCIAL MEDIA AT WORK:   What are the risks?  Discrimination; harassment; defamation; employee disparaging of the business; disclosure of confidential information (e.g. in a social media status update); privacy issues; inappropriate use of information.  Recent guidance from the Federal Trade Commission also indicates employees must disclose employment relationships when commenting on their employer’s products/services on social media. What are the solutions?  Policies, training and enforcement…remember to adapt and apply the old (and still applicable) laws to the new media and you should be fine.  See you on Facebook!

Written by: Employment Attorney, Michael Patrick O'Brien
Utah State and Salt Lake SHRM legal director
Email: mobrien@joneswaldo.com
Phone: 801-534-7315
Website: www.joneswaldo.com
 

Legal-mail is a legal and legislative update service sent out about twice a month to various Utah SHRM members and chapters. As a courtesy to SHRM, the Utah law firm of Jones Waldo Holbrook & McDonough P.C. underwrites the costs of the service. If you have any questions or comments, please contact Michael Patrick O'Brien.

Disclosure: These updates are merely updates and are not intended to be legal advice. Receipt of this information does not create an attorney-client relationship.