Within the last year, the National Labor Relations Board's Acting General Counsel – who decides which unfair labor practice charges to prosecute against employers and unions – has taken a great interest in employee use of social media and employer responses to such use. For example, last October, he issued a complaint against AMR?of Connecticut for terminating an employee after she referred to her supervisor on Facebook as a "scumbag," a "dick," and a "17" (AMR's?code for a psychiatric patient). While that case settled before it was litigated, the NLRB's Acting General Counsel also has issued numerous other complaints against employers for disciplining employees in response to their off-duty posts on social media complaining about their employers, their supervisors, their wages, and other working conditions. Social media cases have become such a "hot button," the Acting General Counsel has mandated that these cases be submitted to his Division of Advice for a determination of whether or not a complaint should issue.

Like the AMR?matter, most of the cases in which a complaint has been authorized have settled before trial. Therefore, without these cases being heard by the NLRB, it has been very difficult for employers to ascertain how to comply with federal labor law during this burgeoning era of social networking. On August 18, 2011, however, the Acting General Counsel released a report, entitled Report of the Acting General Counsel Concerning Social Media Cases, which summarizes the theories behind many of the social media cases he and the Division of Advice have addressed within the last year. The Report also discusses general parameters employers should consider when creating and enforcing their social networking policies. Although the Report is not by any means the last word on the subject, and, while the NLRB has yet to rule on the myriad issues relating to employee use of social media under the National Labor Relations Act, the Report does provide some guidance for employers to follow when treading through these murky waters.

Employees May Not Be Disciplined for Social Networking Activity Protected by the NLRA

Section 7 of the NLRA?protects employees who engage in "concerted activities for the purpose of collective bargaining or other mutual aid or protection." Importantly, this federal statute does not just protect employees who engage in union activities or work in a unionized environment. It also protects other forms of employee conduct undertaken for their "mutual aid or protection" including, for example, a group of non-union employees complaining to management about their wages or working conditions, participating in a strike or work stoppage, or attempting to enlist public support to improve their terms or conditions of employment. The NLRB's?standards for determining whether an employee, or group of employees, is engaged in protected Section 7 activity have evolved over many years. With the explosion of social networking sites such as Facebook and Twitter, questions have arisen as to the extent to which an employee's online postings fall under NLRA?protection. The Acting General Counsel's Report illustrates how the NLRB's traditional principles for determining whether employees are engaged in "protected, concerted activity" will apply to employees' social networking activities and their employers' social networking policies.

Under the NLRA, conduct is considered "protected" and "concerted" where an employee: acts together with or on the authority of other employees; seeks to initiate, induce, or prepare for group action; or brings "truly group complaints" to the attention of management. Section 7 of the NLRA also protects an employee's activities if they are the logical outgrowth of work-related concerns expressed by employees collectively. On the other hand, conduct is not protected, concerted activity if the employee is engaging in activity "solely by and on behalf of the employee himself." Similarly, employee comments that are "mere griping" as opposed to "group action" do not fall within Section 7. The Report generally follows this framework in evaluating whether an employee's social media conduct is protected, concerted activity.

Cases where the Acting General Counsel's Division of Advice found that an employee's online posts constituted protected, concerted activity involved topics such as: employee job performance; staffing levels; protests of supervisory actions; criticisms of an employer's promotional event that employees believed would negatively impact their sales commissions; and shared employee concerns about their employer's income tax withholding practices. As the Report makes clear, online postings that could be considered a "direct outgrowth" of earlier employee discussions or complaints, or an invitation to coworkers to engage in further action or complaints over their working conditions, will most likely be viewed as protected, concerted activity. In those cases where the Division found an employee's use of social media to be protected, the electronic discussions typically came after face-to-face employee discussions or shared concerns about their working conditions.

Recently, one of the social media cases in which the Acting General Counsel issued a complaint against an employer was tried before an Administrative Law Judge (ALJ) of the NLRB. The employer, Hispanics United of Buffalo (HUB), had discharged five employees because they posted comments on Facebook about a coworker who had repeatedly criticized their job performance in conversations and text message exchanges with several of them. The Acting General Counsel argued that the employees' Facebook posts constituted protected, concerted activity and, therefore, that HUB unlawfully fired these employees for making these posts. In response, HUB contended that it discharged the employees on the grounds their posts constituted bullying and harassment in violation of its harassment policy. In his decision, which issued on September 2, 2011, the ALJ?agreed with the Acting General Counsel that the employees' terminations violated Section 7. The ALJ?concluded that the employees' Facebook communications were protected, concerted activity because they implicated a mutual work-related concern – their reaction to a coworker's criticisms of their job performance. The ALJ?found that the discussions alone were sufficient to constitute protected, concerted activity even though there was no express evidence the employees intended to take further action or were trying to change their working conditions. According to the ALJ, it was enough that the employees discussed matters affecting their employment amongst themselves. The ALJ?further decided that the employees did not engage in conduct that forfeited the NLRA's?protection. He pointed out that they posted their comments on a Saturday, a nonwork day, and that none of them used HUB's computers in making these posts. He also concluded that the evidence failed to establish that any of the employees' posts constituted harassment of their coworker.

In contrast, as the Acting General Counsel's Report discusses, an employee who complains about work on Facebook or Twitter, but only with family, friends, or other non-coworkers, is not engaged in protected, concerted activity. For example, in one case, the Division of Advice found that a bartender who made negative comments on Facebook about his employer's tipping policy was not engaged in concerted activity because he directed his comments to his relative and only made them by and on behalf of himself. Similarly, the Division concluded that an employee who made inappropriate comments to her non-coworker friends on Facebook about her employer's mentally disabled clients was not engaged in concerted activity. In another case, a reporter's Twitter postings critical of his newspaper's sports department headlines and a local TV station did not relate to his or other employees' working conditions, nor did he discuss or seek to discuss his concerns with any of his coworkers. As such, these tweets were not "concerted." The Division also found that an employee who posted negative comments about her employer on her senator's Facebook page was not acting in concert with her coworkers and, thus, her posts were not "concerted."

Additionally, individual gripes about the workplace posted online do not constitute concerted activity even if such posts result in coworkers expressing emotional support or sympathy. In one case discussed in the Report, an employee posted several complaints on Facebook about his store's management. The comments were not specifically directed to fellow employees, even though some who read the posts told him to "hang in there." The Division concluded that the employee's posts were not concerted activity because he was merely complaining about his individual situation and was not attempting to induce group action.

Moreover, even if comments are "concerted," they may still be deemed "unprotected" based on their opprobrious content. However, with the current NLRB, this is a very difficult standard for employers to meet. Indeed, the Report discusses two cases where the Division of Advice concluded that employees' use of expletives and other derogatory remarks in their postings when referring to their supervisors and management was not so egregious as to lose the NLRA's?protection. One such case is the AMR case mentioned above, where the employee referred to her supervisor on Facebook as a "scumbag," a "dick," and a psychiatric patient. In the other case, an employee referred to one of the employer's owners on Facebook as "such an asshole," and her coworker asserted that the owners could not even do paperwork correctly.

Employer Policies Governing Social Networking by Employees Must Be Narrowly Tailored

The Report further underscores the importance of employers drafting social networking policies that are not overbroad and do not infringe on employee Section 7 rights while using social media. In Lutheran Heritage Village-Livonia, 343 NLRB?646 (2004), the NLRB?articulated a two-step approach to determine whether an employer's handbook or work rule violates the NLRA. First, if the rule explicitly restricts protected activity, it is unlawful. Second, if the rule does not explicitly restrict protected activity, it is still unlawful if: (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights. Over the years, the NLRB has applied this analysis to invalidate employer work rules and policies governing many forms of employee conduct both on and off the job.

As discussed in the Report, the Division of Advice applies Lutheran Heritage's?two-step analysis in determining whether employer social networking policies were lawful. In one case, the Division concluded that a social media policy was overbroad and therefore unlawful because it prohibited employees from posting pictures of themselves in any media, including the internet, that depicted the company in any way, including by wearing a company uniform or corporate logo. Applying the Lutheran Heritage test, the Division opined that the rule could be interpreted as prohibiting an employee from engaging in protected activity, such as posting a picture of employees carrying picket signs depicting the company's name or wearing a t-shirt or other apparel portraying the company's logo in connection with a protest over working conditions. The Division concluded that another portion of the employer's policy prohibiting employees from making disparaging comments when discussing the company or the employee's superiors, coworkers, or competitors also was unlawful because the rule was ambiguous and did not contain any limiting language informing employees that it did not apply to Section 7 activity.

Similarly, in two other cases, the Division of Advice concluded that employer policies were unlawfully overbroad because the rules could reasonably be construed to prohibit an employee from engaging in activity protected by Section 7. Those policies prohibited employees from using a blog or the internet to engage in "inappropriate discussions" about the company, management, or coworkers or talking about company business on their personal accounts; posting anything that they would not want their manager or supervisor to see or that would put their job in jeopardy; disclosing inappropriate or sensitive information about the employer; posting any pictures or comments involving the company or its employees that could be construed as inappropriate; and using the company name, address, or other information on their personal profiles. The Report pointed out that none of these rules set forth any definition, guidance, or examples as to what communications were specifically prohibited or any limitations on what was covered.

In another case, the Division determined that a hospital's social media policy was overly broad to the extent that it prohibited employees from: using any social media that may "disregard the rights and reasonable expectations as to privacy or confidentiality of any person or entity;" posting any communication that "constitutes embarrassment, harassment or defamation of the hospital or of any hospital employee, officer, board member, representative, or staff member;" and making any statements that "lack truthfulness or that might damage the reputation or goodwill of the hospital, its staff, or employees." In a case involving a supermarket chain, the Division found unlawful the employer's new social media and communication policy that precluded employees from revealing personal information about their coworkers without their consent and from using the employer's logos and photographs of the employer's store without written authorization because these rules impermissibly prohibited employees from discussing their wages and other working conditions with their coworkers and others and from portraying the employer's logo in connection with any protests involving their working conditions.

Although, as noted above, the Report indicates that the overbroad?social networking policies did not contain any definitions, guidance, examples, or other limiting language to inform employees that the policies do not apply to Section 7 activity, it remains an open question whether an otherwise overly broad social media policy will withstand NLRB?scrutiny if it contains a disclaimer that the policy does not apply to or will not be interpreted as infringing upon Section 7 rights. Concerning for employers is the NLRB's recent decision in Jurys Boston Hotel, 356 NLRB?No. 114 (2011), where the NLRB?set aside the results of an election decertifying?a union merely because the employee handbook contained overbroad?rules prohibiting employee solicitation, distribution, loitering, and the wearing of buttons and insignia. In that case, the handbook had a general NLRA?disclaimer. In addition, the employer clarified, during the election campaign, that the rules did not apply to NLRA?protected activity and the rules were not enforced against any employees. However, the disclaimer and the clarification were not enough in the eyes of the NLRB.

Nonetheless, social networking policies that are narrowly tailored and precisely written, using clearly defined terms to avoid any ambiguity, are more likely to be deemed lawful. For example, the Division of Advice found that an employer's policy prohibiting employees from "pressuring their coworkers to connect or communicate with them through social media" was valid as it "was narrowly drawn" and "sufficiently specific in its prohibition" as to clearly apply "only to harassing conduct." Therefore, the policy "could not reasonably be interpreted to apply more broadly to restrict employees from attempting to 'friend' or otherwise contact colleagues for the purposes of engaging in protected concerted or union activity." Similarly, the Division found that a grocery store chain's rule restricting employee contact with the media was lawful where the stated purpose of the rule "was to ensure that only one person spoke for the company," and the rule could not reasonably be interpreted to prohibit employees from speaking with reporters on their own behalf with respect to their working conditions.

Implications for Employers

The current Acting General Counsel of the NLRB?appears to be taking a very aggressive approach to employers' social media policies and attempting to find cases to present to the NLRB?from which the Board can fashion specific rules and guidelines in this arena. In so doing, the Acting General Counsel appears to be expanding the law to give employees extremely broad latitude to use social media to communicate about their employers, supervisors, wages, and working conditions. Although the Report provides helpful guidance for employers on how to craft their policies in a manner that avoids infringing on employees' Section 7 rights, the actual limits on an employer's ability to regulate its employees’ social networking activities have yet to be fully developed or addressed by the NLRB or by the federal appellate courts that will review its decisions.

Employers should continue to closely monitor legal developments in this area and review and, where appropriate, revise their social networking policies with the assistance of experienced labor counsel. If an employer’s social media policy, or for that matter any personnel policy, work rule, or employee handbook provision, contains any language that could be construed to infringe on its employees’ ability, during their nonwork?time, to communicate with their coworkers, a union, the public, or others about their wages or other terms or conditions of employment, the employer should revise the policy to make it clear it does not apply to activity protected by Section 7. In addition, before taking disciplinary action against employees because of their social networking activities, employers and their labor counsel should consider whether the employees’ activity constitutes protected, concerted activity under the NLRA.

Authors: Mark Robbins and Jennifer Mora

Is an unlicensed law school graduate working as a law clerk required to be paid overtime under California law? On August 17, 2011, the California Court of Appeal held such an employee can be exempt from overtime requirements under the “learned professional” exemption.

Plaintiff’s Complaint

After graduating from law school, but before passing the bar examination, Matthew Zelasko-Barrett worked as a law clerk for Brayton-Purcell, LLP, a law firm in Novato, California with approximately 180 attorneys. Barrett performed duties similar to those of junior attorneys at Brayton, including drafting pleadings, discovery demands and responses, legal research, interviewing witnesses, assisting in deposition preparation and interacting with opposing counsel on discovery matters. As a law clerk, Barrett was treated as an exempt employee, paid a salary, and was not paid any overtime.

Barrett ultimately passed the bar examination and became an associate attorney. After leaving Brayton, Barrett filed a complaint, alleging that as a law clerk he had been misclassified as an exempt employee, and should have been paid at hourly overtime rates for all overtime hours worked. Barrett did not challenge his status as an exempt employee during the time he was employed as an associate attorney.

Trial Court Finds Barrett Was Properly Classified As Exempt

The trial court granted summary judgment in favor of Brayton, finding that Barrett had been properly classified as an exempt employee under the professional exemption. Barrett appealed the trial court’s ruling.

Court Of Appeal Holds That Unlicensed Law Clerks May Be Classified As Exempt Professionals

Under Industrial Welfare Commission Wage Order 4-2001, an employee may qualify as exempt from overtime under the professional exemption in one of two ways: (1) if the employee “is licensed or certified by the State of California and is primarily engaged in the practice of … law” (the “enumerated professions exemption”); or (2) “is primarily engaged in an occupation commonly recognized as a learned or artistic profession” (the “learned professions exemption”). According to the Wage Order, the learned professions exemption applies to an employee who is primarily engaged in the performance of work requiring knowledge of an advanced type in a field or science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education.

Barrett argued that since he was employed in a law-related capacity, he could qualify as exempt only under the enumerated professions exemption, and, since he was not licensed during his employment as a law clerk, he did not qualify for that exemption. The Court of Appeal rejected this argument, relying on the Ninth Circuit’s decision regarding unlicensed accountants in Cambell?v. Pricewaterhouse Coopers, LLP 642 F.3d 820 (9th Cir. 2011), click here to read. The Court of Appeal concluded that there was no ambiguity in the language of the Wage Order, which allows employees working in a law-related capacity to qualify under either the enumerated professions exemption or the learned professions exemption. The court found that Barrett’s law school educational background satisfied the learned professions exemption.

Barrett also argued that he did not customarily and regularly exercise discretion and independent judgment in the performance of his duties as a law clerk, and therefore was not exempt under either the enumerated professions exemption or the learned professions exemption. Barrett contended that his work always was supervised, corrected and approved by a supervising attorney, that the ultimate decision to craft an argument was made by the supervising attorney, and that he could not sign pleadings, make court appearances, or provide advice to clients.

The Court of Appeal also rejected this argument, concluding that such limitations and oversight did not negate the fact that Barrett’s responsibilities required discretion and independent judgment. The court cited 29 Code of Federal Regulations section 541.207(e), which states:

The term ‘discretion and independent judgment’ … does not necessarily imply that the decisions made by the employee must have a finality that goes with unlimited authority and a complete absence of review. The decisions made as a result of the exercise of discretion and independent judgment may consist of recommendations for action rather than the actual taking of action. The fact that an employee’s decision may be subject to review and that upon occasion the decisions are revised or reversed after review does not mean that the employee is not exercising discretion and independent judgment within the meaning of the regulations …

The court found that, even though Barrett lacked final decision-making authority, his duties in collecting and assimilating evidence, performing legal research, and drafting legal memoranda required him to exercise a significant level of discretion, and that his tasks were not “routine mental, manual, mechanical or physical work.”

What Brayton Means for Employers

Brayton is the first California appellate court decision holding that an unlicensed professional may qualify for the professional exemption even though the profession also is enumerated in the licensed professional section of the exemption. However, as this court did, employers also need to make sure that all other requirements of the exemption in question are satisfied, including whether the employee exercises discretion and independent judgment. In this regard, the court in Brayton concluded that the discretion and independent judgment test can be satisfied even if the decisions made by the employee are subject to review by others.

By: Fred Sanderson

Today, the National Labor Relations Board announced that it has issued a final rule requiring employers to notify employees of their rights under the National Labor Relations Act (NLRA). The rule is scheduled to take effect on November 14, 2011.

The poster is required to be placed in a conspicuous place readily seen by employees. The final rule also imposes a requirement that employers post the notice on an intranet or internet site if personnel rules and policies are customarily posted there. There are also requirements for printing the poster in languages other than English.

The? poster is required to state that employees have the right to act together to improve wages and working conditions, to form, join and assist a union, to bargain collectively with their employer, and to refrain from any of these activities. It provides examples of unlawful employer and union conduct and instructs employees how to contact the NLRB with questions or complaints.? Specific language is provided in the final rule.

This new posting requirement applies to nearly all private-sector employers subject to the NLRA, which excludes agricultural, railroad, and airline employers. NLRA rights apply to both union and nonunion workplaces and all employers subject to the NLRB’s jurisdiction will be required to post the notice.

The NLRB issued a press release regarding the final rule.

As the NLRB makes information available,?HR Allen Consulting Services?will provide customers with additional guidance regarding this new posting requirement, including a compliance fact sheet.

You can order your updated poster for $38.95 by clicking the link below.

ORDER POSTER

By: HR California/Copyright California Chamber of Commerce

On August 17, 2011, the Ninth Circuit held, in Oliver v. Ralphs Grocery Company, et al., that plaintiffs in disability access lawsuits under Title III of the Americans with Disabilities Act ("ADA") must allege in their complaint all of the architectural barriers which form the basis for the ADA claim. A plaintiff cannot rely on an expert's report created later in discovery identifying such barriers, but must specifically plead each and every barrier in the complaint so as to afford the defendant fair notice and an opportunity to respond.

Oliver marks yet another decision from the Ninth Circuit imposing more stringent pleading requirements on plaintiffs in disability access lawsuits. The Ninth Circuit held earlier this year that a plaintiff must specifically allege that he or she personally encountered a barrier at a place of public accommodation and must further allege how his or her disability was affected by at least one of the barriers. Such allegations are necessary to satisfy the requirement for standing that a plaintiff have suffered an injury-in-fact.

The Facts of Oliver

Oliver, an individual who uses a wheelchair for mobility, filed suit in December 2007 under the ADA and parallel California state laws. He alleged he encountered 18 architectural barriers which denied him full and equal access at a Food 4 Less store owned and operated by defendant Ralphs?Grocery Company ("Ralphs").

In an effort to make moot Oliver's claim for injunctive relief, Ralphs?immediately began renovations at the store. After a court-imposed deadline to amend the complaint lapsed, Oliver sought to allege additional architectural barriers, but the court denied his request as untimely. A year into litigation, Oliver filed with the court an expert's report which identified a number of additional architectural barriers which were not alleged in the complaint. Oliver actually conceded that his delay in disclosing the additional alleged architectural barriers was strategic. He hoped to preclude Ralphs' ability to remove the barriers prior to trial thereby mooting his injunctive relief claim.

The court ultimately granted summary judgment against Oliver on his ADA claim (and then declined to exercise supplemental jurisdiction over his state law claims). In doing so, the court refused to consider the architectural barriers identified in the expert's report, holding that Federal Rule of Civil Procedure ("FRCP") 8 requires that each architectural barrier be alleged in the complaint. FRCP 8 requires that a complaint contain a "short and plain statement of the claim showing that the pleader is entitled to relief."

The Ninth Circuit's Decision

In affirming, the Ninth Circuit explained that FRCP 8's "short and plain statement" requirement exists to provide a defendant with "fair notice" of the claim and the "grounds" upon which it rests. Because the grounds for an ADA claim are the alleged architectural barriers, they must all be specifically alleged in the complaint.

That Ralphs had access to Oliver's expert's report before the close of discovery did not change this pleading requirement. As the Ninth Circuit held, "a plaintiff must identify the barriers that constitute the grounds for a claim of discrimination under the ADA in the complaint itself; a defendant is not deemed to have fair notice of barriers identified elsewhere."

Oliver's Significance

Oliver signals that the Ninth Circuit is becoming a less receptive forum for disability access plaintiffs in so-called "drive-by" ADA litigation. While there are strategies that plaintiffs could employ to mitigate or neutralize the effect of this decision, Oliver's?holding does preclude plaintiffs from, as Oliver attempted to do, strategically springing new allegations of architectural barriers on a defendant late in litigation. Accordingly, in cases with relatively few barriers, businesses may be able to remove the alleged barriers and moot the plaintiffs' claims for injunctive relief, the only relief available under federal law.

By: Minh Vu and Eden Anderson

Gov. Jerry Brown vetoed a California Chamber of Commerce-opposed bill that would have increased costs for employers and opened them to potential liability by mandating them to offer commuter benefit programs to employees.

SB 582 (Yee; D-San Francisco) would have authorized metropolitan planning organizations to mandate employers in their jurisdiction to offer one of three options to employees for commuting purposes:

• A pre-tax option where employees can exclude from their taxable wages commuting costs incurred for public transit, as allowed under federal law;


• The employer would directly pay for public transit costs; or


• The employer would offer a vanpool service.

The CalChamber expressed several concerns with the bill:

• Federal law already allows employers to take advantage of the payroll deduction. Some employers already do this on their own accord. Considering this is allowed under federal law and that some companies already use it because it fits their business, there is no need to mandate it on the state or local levels. This is more of a public outreach issue where employers may not be aware they can offer this benefit to their employees.


• There could be employer liability issues. If an employer opts to provide a vanpool (Option 3) and there is a car accident or other incident on board where employees get injured, there could be employer liability issues, including workers’ compensation issues. Under Option 2, because the employer is directly subsidizing the costs, it can be argued that it is employer-controlled and therefore the employer can be held liable. Although very large employers may be able to absorb such costs, small business owners will not be able to do the same.


• The mandate’s impact on small business would be much greater than for large employers. Small businesses are already hurt by the weak economy, and do not need more mandates to further restrict them. There is a cost to implement the program that must be borne by employers large and small. Small employers will find it difficult to absorb the costs.? Although there may be cost savings down the road, this is a business decision and should not be mandated.

Governor Brown stated in his veto message: “While I support the goal of reducing vehicle trips, this bill would impose a new mandate on small businesses at a time of economic uncertainty.”

By: Thomas Vu

In an informal discussion letter, (pdf) the Equal Employment Opportunity Commission’s Office of Legal Counsel reiterates the position that an employer-provided wellness program that offers financial inducements to provide genetic information as part of a wellness program runs afoul of Title II of the Genetic Information Nondiscrimination Act (GINA). Among other restrictions, GINA limits the ability of health insurers and employers to collect genetic information, which includes family medical history. Whether and to what extent employer-provided wellness programs and health surveys that solicit information about family medical history violate GINA and other statutes and regulations is a rising concern for employers.

As discussed in the EEOC letter, which was written in response to a request for guidance on this issue, Title II of GINA does permit employers to gather genetic information about employees and their family members when it offers health or genetic services – including wellness programs – on a voluntary basis. The EEOC issued a final rule implementing the employment provisions of GINA in November 2010. As outlined in the rule and the discussion letter, prior consent to participate in a wellness program must be voluntary, knowing, and written. In addition, “while individualized genetic information may be provided to the individual receiving the services and to his or her health or genetic service providers, genetic information may only be provided to the employer or other covered entity in aggregate form.” The EEOC letter notes that the final rule states that employers may not offer financial inducements for employees to provide genetic information as part of a wellness program. However, the final rule provides that employers may offer a financial inducement for completing a health risk assessment that includes questions about genetic information so long as the employer identifies such questions and makes clear that the employee is not required to answer the questions about genetic information in order to receive the financial inducement.

The EEOC letter further explains that an employer may use the voluntarily-provided information about the employee “to guide that individual into an appropriate disease management program,” provided it opens the program up to all employees if the program includes financial incentives to participate or reach certain health-related outcomes. The EEOC letter declined to address the concern that an example used in the GINA Title II final rule to illustrate this point is at odds with the regulations implementing Title I of GINA, which restricts the use of genetic information by group health plans and health insurance issuers. The reason given in the letter for failing to explain the apparent inconsistency between the two regulations was that the EEOC is not responsible for enforcing Title I. However, the letter states that the Commission’s goal in formulating its position on wellness program incentives and the examples cited was to be consistent with the Title I rules.

The Commission further declined to take a position on whether and to what extent Title I of the Americans with Disabilities Act (ADA) would permit an employer to offer financial incentives to participate in a wellness program that included disability-related inquiries or medical exams, but stated that it would take any comments on this issue under advisement.

Despite the guidance provided in the EEOC letter, much still remains unclear. In October 2010, the Department of Labor’s Employee Benefits Security Administration (EBSA) issued guidance in the form of Frequently Asked Questions (FAQs) that discussed the interaction between GINA’s restrictions and employer-provided group health plans and insurance providers. As previously discussed, this guidance outlines certain constraints placed on insurance plans and issuers in providing incentive-based wellness programs, which appear at odds with the provisions in the Patient Protection and Affordable Care Act that are designed to increase the use and effectiveness of employer-sponsored wellness programs. Specifically, the Affordable Care Act recognizes the value of incentive-based wellness programs by increasing the amount of the reward allowed under the current HIPAA regulations beginning in 2014. As reflected in the Affordable Care Act, incentive-based wellness programs can be an effective tool for employers seeking to reduce health care costs and improve the productivity of their workforce.

Given the complexity and apparent inconsistency of the federal statutes and rules governing wellness programs, employers are cautioned to consider all applicable legal requirements when designing their wellness program.

By: IIyse Schuman

Summer is traditionally a time when employers turn to the teen workforce for temporary help. A recent report shows a big job gain for teens this summer: 714,000 16- to 19-year-olds were hired nationwide in June 2011 according to Chicago outplacement firm Challenger, Gray & Christmas. This is the largest June job gain for teens in four years and a 44 percent increase from last June.

The gains occurred largely in traditional summer jobs in the private sector, such as the retail, leisure and hospitality industries.

In California, the jobless rate for teens is higher than the national average, according to data from the federal Bureau of Labor Statistics. The nationwide jobless rate for 16- to 19-year-olds was 24.5 percent in June. By comparison, California’s unemployment rate for teens is more than 34 percent.

Be mindful that if you decide to hire minors, you must follow certain legal requirements. Minors are entitled to child labor law protections under both state and federal law. Employers make several common mistakes, including:

• Not acquiring the proper work permits before hiring minors


• Not paying the required wages


• Employing minors in prohibited occupations

Employers should also be aware of safety risks that are particular to employing minors. Employers must follow all relevant health and safety laws to keep young workers safe on the job.

Copyright: HR California/Cal Chamber of Commerce

The Department of Labor’s (DOL) Veterans' Employment & Training Service (VETS) announced that? it extended the 2011 deadline for federal contractors to submit their VETS-100/VETS-100A reporting forms.

The deadline is pushed back to November 30, 2011. The VETS’s website states that the DOL planned to begin accepting electronic submissions of VETS-100/100A? forms on August 1, 2011. However, technical problems currently prevent such submissions. The DOL said it believes that it can resolve the problems and go online by October 1, 2011.

To address the delays caused by the technical problems, the DOL stated that it “will not initiate enforcement actions against contractors who submit the VETS-100/VETS-100A from October 1, 2011 through November 30, 2011.”

Federal contractors use the VETS-100/VETS-100A reporting forms to detail the number of protected veteran employees and new hires in their workforce. Regulations require contractors to submit this form by September 30 of each year.

The Vietnam Era Veterans' Readjustment and Assistance Act of 1974 (VEVRAA) requires eligible federal contractors to submit the VETS-100/VETS-100A annual reports to the Secretary of Labor. Please visit the VETS website for more information on VETS-100/VETS-100A? rules and regulations, including a federal contractor fact sheet.

Copyright: HR California/Cal Chamber of Commerce

A California Chamber of Commerce-opposed bill banning most employers from using consumer credit reports for employment purposes passed the Senate Appropriations Committee on Aug. 16, 2011.

AB 22 (Mendoza; D-Norwalk) unfairly limits private employers’ ability to use consumer credit reports for legitimate employment purposes, unless the information in the report is “substantially job-related” and for a “managerial position.”

Employers in California are already significantly limited in their use of information from employee credit reports. Specifically, the federal Fair Credit Reporting Act and California’s Consumer Credit Reporting Agencies Act require an employer to:

(1) Notify the individual that it may obtain a credit report for purposes of the employment action at issue and also provide information about the company utilized by the employer for obtaining a report;

(2)? Have the consent of the employee to obtain the report, and if requested, give the employee a copy of the report as well;

(3)? Provide the individual with a copy of the report and a “Summary of Your Rights Under the Fair Credit Reporting Act” if the employer intends to take an adverse action, such as not hiring the applicant based upon information contained in the credit report; and

(4) If an adverse action is taken, disclose to the individual the credit reporting agency that provided the report as well as provide notice of the individual’s right to dispute any information in the report and also obtain another free report from the credit reporting agency. Existing law provides the needed protections for applicants and/or consumers with regard to employee credit reports.

Finally, although other states, such as Oregon and Illinois, recently enacted legislation limiting the use of employee credit reports, such legislation is not nearly as restrictive as AB 22. The legislation passed in these other states allows employee credit reports to be utilized for any position where a credit report is “substantially job related” and/or is a “bona fide occupational” requirement.

Conversely, AB 22 limits the use of credit reports to “managerial positions” where credit history is “substantially job related,” thus ignoring the other numerous non-managerial positions in the workforce where employees have unsupervised access to employers’ and consumers’ financial information, trade secret information and assets.

AB 22 passed the Senate Appropriations Committee on August 15, 5-2. The bill will be considered next by the entire Senate. See CalChamber’s Top Stories for detailed coverage of AB 22.

By: Jennifer Barrera

Fiction: One government agency’s determination that an employee is an independent contractor for one purpose does not mean that a different government agency will reach the same conclusion.

From the Division of Labor Standards Enforcement:

“The state agencies most involved with the determination of independent contractor status are the Employment Development Department (EDD), which is concerned with employment-related taxes, and the Division of Labor Standards Enforcement (DLSE), which is concerned with whether the wage, hour and workers’ compensation insurance laws apply. There are other agencies, such as the Franchise Tax Board (FTB), Division of Workers’ Compensation (DWC), and the Contractors State Licensing Board (CSLB), that also have regulations or requirements concerning independent contractors.

Since different laws may be involved in a particular situation, such as a termination of employment, it is possible that the same individual may be considered an employee for purposes of one law and an independent contractor under another law. Because the potential liabilities and penalties are significant if an individual is treated as an independent contractor and later found to be an employee, each working relationship should be thoroughly researched and analyzed before it is established.”

Copyright: HR California/Cal Chamber of Commerce