In a victory for Home Care employers, the U.S. District Court for the District of Columbia issued consecutive decisions which struck down two regulations issued by the U.S. Department of Labor (“USDOL”) that would have eviscerated the “companionship exemption” contained in the Fair Labor Standards Act (“FLSA”). The two USDOL regulations enacted in late 2013 were prevented from taking effect, as scheduled, on January 1, 2015, by two related decisions on December 22, 2014 and January 14, 2015, which vacated both regulations on the ground that they “conflicted with the [FLSA] statute itself.”  Each of the two challenged regulations would have imposed greater overtime obligations on Home Care employers, by sharply reducing the reach of the FLSA “companionship exemption,” which, for 40 years, had excluded most Home Care work from federal overtime laws. Specifically, the exemption excludes from federal minimum wage and overtime obligations companionship and live-in “services which provide fellowship, care and protection to a person who, because of advanced age or physical or mental infirmity, cannot care for his or her own needs,” unless the work is performed by a Registered Nurse or similarly trained professional. In the first of the two decisions, the District Court struck down a USDOL regulation that would have eliminated the companionship exemption unless the Home Care worker is employed directly by the patient or household itself, rather than by an Agency.  Since the vast majority of Home Care workers are employed by Home Care Agencies, this new regulation would have had sweeping impact, had it taken effect.  In striking down the regulation, the Court held that “Congress intended the exemption to apply to all employers who provide companionship and live-in domestic services. . . .”  It curtly rejected the new regulation as contrary to the statute, noting that “Congress surely did not delegate to the [USDOL] here the authority to issue a regulation that transforms defining statutory terms . . . based on who cuts a check, rather than what work is being performed.” Shortly thereafter, on January 14, 2015, the Court addressed a second USDOL regulation which redefined – and significantly narrowed – the type of work that would be covered under the companionship exemption, restricting it to only those companions who provide “care” or assist with “activities of daily living” during less than 20% of their total hours.  Since Home Care is routinely intended to provide significant assistance with activities of daily living (such as driving, meal preparation, dressing, feeding and bathing), this regulation virtually eliminated the companionship exemption.  The Court rejected the regulation on the ground that it contradicts the FLSA itself.  The statutory exemption refers to “care” and services for the elderly and disabled “who are unable to care for themselves.”  The Court determined that the USDOL regulation would “write out of the exemption the very ‘care’ the elderly and disabled need . . . .”  In a closing flourish, the Court scolded the USDOL for usurping Congressional authority:

Redefining a 40-year-old exemption out of existence may be satisfyingly efficient to the Department of Labor, but it strikes at the heart of the balance of power our Founding Fathers intended to rest in the hands of those who must face the electorate on a regular basis.

Taken together, the two decisions wholly restore the previously-existing companionship and live-in exemptions from federal minimum wage and overtime laws.  An appeal to a higher federal court may well follow, so the two decisions may not be the final word on the USDOL Regulations.  It remains prudent to continue to follow this issue closely for further development, and to consult counsel if needed. In addition, Home Care Agencies in New York should take note that, even in the absence of the applicability of federal minimum wage and overtime laws, New York law requires that home care employees be paid a minimum wage of $8.75 per hour, and requires that hours over 40 in a work week be paid at 1½ times the State minimum wage (i.e., $13.125 per hour) rather than 1½ times the employee’s regular rate.

In early December, the U.S. Department of Labor's Office of Federal Contract Compliance Programs ("OFCCP") announced the issuance of its final rule implementing Executive Order 13672, which amends Executive Order 11246 by prohibiting Federal contractors from discriminating against employees or applicants based on their sexual orientation or gender identity.  The final rule was published in the Federal Register on December 9, 2014, and will become effective April 8, 2015. The OFCCP did not release a notice of proposed rulemaking.  According to an OFCCP FAQ:  “President Obama’s Executive Order was very clear about the steps the Department of Labor was required to take, and left no discretion regarding how to proceed.  In such cases, principles of administrative law allow an agency to publish final rules without prior notice and comment when the agency only makes a required change to conform a regulation to the enabling authority, and does not have any discretion in doing so.” The regulations will apply to employers that enter into or modify Federal contracts on or after April 8, 2015.  Contractors will need to revise the equal employment opportunity clause in new or modified subcontracts or purchase orders, “ensuring that applicants and employees are treated without regard to their sexual orientation and gender identity, and by updating the equal opportunity language used in job solicitations and posting updated notices.”  OFCCP and EEOC are working together to update the EEO is the Law Poster; Federal contractors should continue to use the existing poster until a new one is finalized. Executive Order 13672 and the new final rule are in addition to the pre-existing prohibition on gender identity discrimination, which is a form of sex discrimination in violation of Executive Order 11246.  OFCCP memorialized this in an Agency Directive dated August 19, 2014. The regulations also make a change to the visa reporting provision.  Contractors that are unable to obtain a visa for an employee and believe that it is because of the employee’s sexual orientation or gender identity will be required to report it to the OFCCP and the State Department. The final rule does not require contractors to:  (1) make changes to Affirmative Action Plans; (2) collect data or set placement goals on the sexual orientation or gender identity of applicants or employees; or (3) solicit voluntary self-identification of applicants’ or employees’ sexual orientation or gender identity.  In addition, there is no change to the current religious exemption. The Department of Labor’s Wage and Hour Division has published on its website a list of frequently asked questions and President Obama's Press Secretary has published a fact sheet about Executive Order 13672.

Happy New Year!  On December 29, Governor Cuomo signed the bill eliminating the requirement under the Wage Theft Prevention Act that employers in New York provide annual wage notices to their employees.  Although the bill currently provides that it will go into effect 60 days after it is signed (which would mean that it would take effect after the February 1 deadline to provide the wage notices for 2015), the Governor's approval memo accompanying the bill specifically notes that an agreed-upon chapter amendment will "accelerate the effective date of the notification rule changes in section 1 of the bill to remove the notice requirement on employers for the 2015 calendar year." We will provide an update once the expected chapter amendment is enacted in January.

Effective December 22, 2014, employers in New York must grant leave to employees who also serve as volunteer emergency responders during times when the Governor has declared a state of emergency.  Employees eligible for such leave include volunteer firefighters and volunteer ambulance service personnel who have given their employer prior written documentation regarding their volunteer status or whose duties as a volunteer firefighter or member of a volunteer ambulance service are related to the declared emergency.  In general, the leave may be unpaid, but the employee may choose to use any form of paid leave to which he or she would be entitled under the employer's policies.  The full text of the new law can be found here. Following an employee’s return from such leave, an employer may request a notarized statement from the head of the volunteer fire department or volunteer ambulance service, certifying the period of time that the employee responded to an emergency. An employer may be eligible for a waiver of the leave requirements if it can show that granting an employee leave would cause an undue hardship on the employer’s business.  An undue hardship is defined as an accommodation requiring significant expense or difficulty, including a significant interference with the safe or efficient operation of the workplace or a violation of a bona fide seniority system.  Factors to be considered in determining whether granting a leave constitutes an undue hardship include, but are not limited to:

1. the identifiable cost, including the costs of loss of productivity and of retaining or hiring employees or transferring employees from one facility to another, in relation to the size and operating cost of the employer;
2. the number of individuals who will need the leave; and
3. for an employer with multiple facilities, the degree to which the geographic separateness or administrative fiscal relationship of the facilities will make granting the leave more difficult or expensive.

It is believed that the latest version of the bill was signed into law because, unlike prior versions of the bill, it creates an exception for employers who can show that complying with the leave requirements would impose an undue hardship. Although there have not been many reported instances in which employers in New York have terminated employees for missing work to respond to emergencies, supporters of the new law claim that volunteer emergency responders are sometimes reluctant to request leave to respond to an emergency.  This law is intended to allow volunteer emergency responders to request leave during a declared state of emergency without fear of repercussions at work.

In the latest example of dramatic changes to well-developed principles of federal labor law and policy, the National Labor Relations Board ("NLRB" or Board") issued its long-awaited decision in Pacific Lutheran University last week.  For a description of the Board's decision and its potential impact on union organizing at colleges and universities, please click here for our article on the Bond Higher Education Law Report.

The minimum wage for employees in New York will increase from $8.00 per hour to $8.75 per hour effective December 31, 2014.  The minimum wage for New York employees will increase again to $9.00 per hour effective December 31, 2015. Employers in New York should also keep in mind that the minimum salary under state law for employees to qualify for the executive and administrative exemptions will increase from $600.00 per week to $656.25 per week effective December 31, 2014.  The minimum salary under state law to qualify for the executive and administrative exemptions will increase again to $675.00 effective December 31, 2015.

New York employers who have already begun preparing to send out annual wage notices to their employees under the Wage Theft Prevention Act can safely stop their preparations.  The bill eliminating the annual wage notice requirement was delivered to the Governor yesterday and it is expected that the Governor will sign it.  The bill, as currently drafted, provides that the legislation will go into effect 60 days after it is signed into law, which would mean that it would take effect after the February 1 deadline to provide the wage notices for 2015.  However, Bond's Government Relations lawyers brought this concern to the attention of the Governor's office in early December, while the Governor's office and the Legislature were discussing potential chapter amendments to the bill, and it is our understanding that one of the agreed-upon chapter amendments that will be enacted early in the next legislative session will eliminate the annual wage notice requirement immediately.  So, we expect that employers will not have to issue the notices in 2015. We will provide an update as soon as the Governor signs the bill, and another update once the expected chapter amendments are enacted in January.  This is certainly great news for employers in New York, who will no longer have to engage in the costly and time-consuming process of issuing wage notices to all employees between January 1 and February 1 of each year.

Recent activity by the National Labor Relations Board has significantly changed the landscape of union organizing campaigns and representation elections.  Attorneys from Bond, Schoeneck & King's Labor and Employment Department will conduct two free webinars this week to explain these recent developments and their impact on employers.  Each webinar is scheduled for 45 minutes. Ray Pascucci will conduct a webinar on December 17 at 3:00 p.m. to review the Board's final rule on "quickie" union representation elections and provide some practical recommendations to prepare for the possibility of a fast-track union organizing campaign.  Andy Bobrek will conduct a webinar on December 18 at 11:00 a.m. to review the Board's decision in Purple Communications, Inc., holding that employees have a presumptive right to use their employer's e-mail system during non-working time to communicate about union organizing and discuss their terms and conditions of employment.  

On December 15, the National Labor Relations Board's final rule amending the current procedures for handling union representation elections (which has become known as the "quickie" or "ambush" election rule) was published in the Federal Register.  The final rule will become effective on April 14, 2015. Although Board Chairperson Mark Pearce hailed the new representation election procedures as "a model of fairness and efficiency for all," the new procedures provide unions with a significant advantage in representation elections in a number of ways.  Among other things, the new rule shortens the time period between the filing of a petition and the scheduling of an election, requires employers to provide the union with a list of employees in the proposed bargaining unit earlier in the process, requires employers to provide to the union personal telephone numbers and e-mail addresses for employees in the proposed bargaining unit, and limits the issues that may be litigated by employers in a pre-election hearing.  The impending implementation of the final rule makes it even more important for employers to be able to recognize potential union activity as early as possible and to have a plan in place to respond quickly to a union representation petition once it is filed. This is the second time the Board has issued a final rule amending union representation election procedures.  The Board's first final rule was issued on December 22, 2011, but it was declared to be invalid by the U.S. District Court for the District of Columbia on May 14, 2012, because the Board lacked a quorum when it voted on the final rule.  The Board initially appealed the District Court's decision, but subsequently withdrew its appeal and re-issued its proposed rule in February of 2014. The final rule was approved by Board Chairperson Mark Pearce and Board Members Kent Hirozawa and Nancy Schiffer.  Board Members Philip Miscimarra and Harry Johnson dissented and voted against the issuance of the final rule.  The final rule:

• Permits electronic filing of representation election petitions and electronic transmission of election notices, voter lists, and other documents (which is intended to speed up processing);
• Requires that pre-election hearings be scheduled as early as eight days after the hearing notice is served on the parties (currently, pre-election hearings can begin up to two weeks after a petition is filed);
• Limits the issues that can be raised by an employer at a pre-election hearing only to those that are necessary to determine whether it is appropriate to conduct an election, and defers all other issues until the post-election stage (currently, employers can litigate any issues regarding voter eligibility and inclusion within the proposed bargaining unit at a pre-election hearing);
• Requires employers to provide to the Board and the union, at least one business day before the pre-election hearing, a "Statement of Position" identifying any issues they intend to raise regarding the petition and a list of employees in the proposed bargaining unit with their job classifications, shifts, and work locations (currently, employers are not required to provide a list of employees in the proposed bargaining unit until after an election is directed or an election agreement is approved);
• Eliminates the right to file post-hearing briefs after a pre-election hearing unless the Regional Director determines that they are necessary, and instead provides only for oral closing arguments at the conclusion of the hearing;
• Provides that an employer's request for Board review of a Regional Director's decision will not stay the election, unless the Board orders otherwise; and
• Requires employers to provide the Excelsior list of voter information to the union within two business days after an election is directed or an election agreement is approved, and requires employers to include employees' personal telephone numbers and e-mail addresses on the list if that information is available (currently, the time frame to provide the list is seven days after an election is directed or an election agreement is approved and the list need only include names and home addresses).

Currently, the general time period from the filing of the petition to the representation election is approximately five to six weeks.  The amendments contained in the final rule will likely shorten that time period to approximately two to three weeks, which will give employers much less time to communicate with employees regarding the drawbacks of unionization, to explain the realities and risks of the collective bargaining process, and to dispel the myth that unionization will automatically result in better wages and benefits.  Accordingly, it will be even more important for employers to train their supervisors to recognize and report some early warning signs of union activity and to develop a plan to respond quickly to a union representation petition once it is filed. Ray Pascucci, one of my colleagues in the Labor and Employment Department of Bond, Schoeneck & King, will be conducting a webinar on the Board's final rule on Wednesday, December 17, at 3:00 p.m.  Ray will review each element of the final rule and provide some practical recommendations to prepare for the possibility of a fast-track union organizing campaign.  More details will follow.

On December 11, 2014, the National Labor Relations Board ("Board") issued a 3-2 decision (with Board Members Philip Miscimarra and Harry Johnson dissenting) in Purple Communications, Inc., holding that employees have a presumptive right to use their employer's e-mail system during non-working time to communicate regarding union organizing and to engage in other protected concerted activities under Section 7 of the National Labor Relations Act ("Act").  The Board's decision overruled its 2007 decision in Register Guard. Purple Communications' electronic communications policy provided that its electronic communications systems and equipment were "to facilitate Company business" and that "all such equipment and access should be used for business purposes only."  The policy also prohibited employees from using its systems and equipment to engage "in activities on behalf of organizations or persons with no professional or business affiliation with the Company" and to send "uninvited e-mail of a personal nature."  There was no dispute that, under the Board's 2007 Register Guard decision, the policy was perfectly lawful as written. In the fall of 2012, the Communications Workers of America ("Union") filed petitions to represent employees at seven of Purple Communications' facilities.  After an election was held, the Union filed objections to the results of the election at two facilities and an unfair labor practice charge, alleging (among other things) that the electronic communications policy interfered with the employees' Section 7 rights. The Administrative Law Judge, relying on the Board's 2007 Register Guard decision, found the electronic communications policy to be lawful.  The Board majority, however, found that the Register Guard decision improperly placed too much weight on the property rights of employers in their own e-mail systems and too little weight on the Section 7 right of employees to communicate in the workplace about their terms and conditions of employment.  The Board majority also believed that the Register Guard decision failed to recognize the importance of e-mail as a means by which employees engage in protected communications.  Therefore, the Board majority overruled its Register Guard decision and held that employees have a presumptive right to use their employer's e-mail system during non-working time to engage in communications protected by Section 7 of the Act. The Board made clear in its decision that this presumption applies only to employees who have been granted access to the employer's e-mail system in the course of their work and does not require an employer to provide access to its e-mail system to employees who do not otherwise need it.  In addition, the Board held that an employer may rebut the presumption and justify a total ban on non-business use of its e-mail system by demonstrating that "special circumstances make the ban necessary to maintain production or discipline."  Virtually no guidance is provided in the decision regarding what those "special circumstances" might be, but the Board majority stated that "we anticipate that it will be the rare case where special circumstances justify a total ban on non-work e-mail use by employees."  The Board remanded the case back to the Administrative Law Judge for a determination of whether Purple Communications could successfully rebut the presumption and justify the scope of its prohibition on the personal use of e-mail. The restriction that employees may use their employer's e-mail system for Section 7 purposes only during non-working time raises a significant question:  can an employer monitor employee use of its e-mail systems during working time to ensure compliance with this restriction and discipline employees who are found to have engaged in Section 7 activity through e-mail during working time, without risking potential liability for unlawful surveillance or discrimination based on union activities?  According to the Board's decision, an employer may continue to notify employees that they should have no expectation of privacy in their use of the employer's e-mail system and may continue to monitor the use of its e-mail system for legitimate business purposes.  However, the Board stated that this monitoring is lawful only if "the employer does nothing out of the ordinary."  For example, the Board's decision leaves open the possibility that an employer's increased monitoring during a union organizing campaign or an employer's particular focus on employees who are known union activists could result in potential liability under Sections 8(a)(1) or 8(a)(3) of the Act. Members Miscimarra and Johnson both wrote strong dissenting opinions.  In the view of the dissenters, an employer's interests in controlling the use of its own electronic communications system should prevail over employees' interests in using that system for union organizing activities, especially in light of the availability of other electronic communications networks such as employees' own personal e-mail and social media sites. Many employers' electronic communications policies already permit employees to engage in some limited personal use of their e-mail systems as long as that personal use does not interfere with the employee's work duties or the work duties of other employees.  This type of policy may very well be lawful even under the Board's Purple Communications decision, because, on its face, it likely would not be interpreted to prohibit Section 7 protected activity during non-working time.  At this point, however, if your electronic communications policy contains a blanket prohibition on the use of your e-mail system for personal reasons, you may want to consider potential revisions to your policy. Andrew Bobrek, one of my colleagues in the Labor and Employment Department of Bond, Schoeneck & King, will be conducting a webinar on the Board's Purple Communications decision on Thursday, December 18, at 11:00 a.m.  More details will follow.

On December 8, the Syracuse Common Council voted 8-1 to pass a “Ban the Box” ordinance.  If the ordinance is signed by the Mayor (or if the Mayor's veto is overridden by the Common Council), the ordinance would prohibit the City of Syracuse and persons or entities that provide goods or services under contract with the City from asking a job applicant about criminal convictions unless and until the applicant has already received a conditional job offer. In passing the ordinance, Syracuse joins at least 60 cities (including Buffalo and Rochester) and 13 states that have taken steps to remove the criminal history question on a job application and delay the background check until later in the hiring process.  The prohibition, in theory, will enable ex-convicts to exhibit their qualifications for a job before being asked about their criminal histories.  As a result, lawmakers hope that this will present opportunities for ex-convicts to obtain employment and thereby reduce the likelihood of criminal recidivism. Syracuse’s version, as mentioned above, applies only to the City itself and any "person, vendor, business enterprise or entity that enters into a service contract or concession agreement with the City, or otherwise supplies goods and/or services to, or on behalf of, the City."  Thus, under the ordinance, neither the City nor its contractors may inquire into an applicant’s criminal history until a conditional offer of employment has been extended.  After a conditional job offer has been extended, an applicant's criminal record can be investigated, but the job offer may be rescinded only if it is done in accordance with the provisions of Article 23-A of the New York Correction Law.  Thus, the City and its contractors may rescind a conditional job offer on the basis of a prior criminal conviction only if hiring the applicant would pose an unreasonable risk to property or safety, or if the conviction bears a direct relationship to the job. If a contractor subject to the ordinance is considering rescinding a conditional job offer based on the applicant's criminal record, the ordinance would require the contractor to send a notice to the applicant that includes the relevant Criminal History Report and highlights the convictions that warrant a rescission of the conditional offer.  If the applicant so chooses, within five days of receiving this notice, he or she can then submit a rebuttal, challenging the accuracy and relevance of the Report.  The contractor is then required to review the rebuttal, and any information contained within it, before making a final decision. The ordinance does not apply to the City of Syracuse Police Department or to any "police officer" and "peace officer" positions.  In addition, the ordinance would give the Mayor of the City of Syracuse the power to temporarily suspend the applicability of the ordinance to any contractor or prospective contractor for up to three months if there is a specific exigent circumstance or public emergency condition that justifies such an action. The incarnation of the ordinance that passed is markedly less sweeping than its failed predecessors, which would have applied the prohibition to all employers within the City of Syracuse.  Mayor Stephanie Miner has yet to say whether she will veto the ordinance.  If she does veto the ordinance, the veto could be overridden if at least six members of the Common Council vote to do so.  If the ordinance is ultimately approved, either with the Mayor's signature or an override of her veto, it will take effect 90 days after it is passed. The ordinance will have a significant impact on City of Syracuse contractors if and when it goes into effect, in no small part because of the civil action authorized by the ordinance against any contractors who are alleged to be in violation of the ordinance.  The ordinance also provides that the court may allow the party commencing such an action against a contractor to recover costs and reasonable attorneys' fees as part of the relief granted.  City of Syracuse contractors should fully acquaint themselves with the particulars of the ordinance, train all personnel involved in the hiring process to avoid once-standard criminal history inquiries until after the interview is complete and a conditional job offer has been extended, and review job applications and other documents used in the hiring process (including online questionnaires) to ensure compliance.

Nearly six months ago, we reported that the New York Legislature passed a bill eliminating the requirement under the Wage Theft Prevention Act that employers provide an annual wage notice to their employees between January 1 and February 1.  We monitored the bill regularly, hoping that we would be able to report that the Governor had signed the bill and that employers would be relieved of this onerous requirement in 2015.  Unfortunately, the bill has not yet been delivered to the Governor, so at least as of now, the annual wage notice requirement remains in effect. Based on the information we have been able to obtain, it appears that the Governor's office and the Legislature are currently discussing potential revisions to the bill that are unrelated to the elimination of the annual wage notice requirement.  Aside from the elimination of the annual wage notice requirement, the bill that was passed on June 19 also increased the penalties for an employer’s failure to provide a wage notice upon hiring a new employee and for an employer’s failure to provide appropriate wage statements to employees, imposed significant consequences on employers who are found to be repeat offenders, and added provisions to the Limited Liability Company Law and the Construction Industry Fair Play Act.  It is our understanding that amendments to some of those other provisions are being contemplated. It is still possible that the bill will be signed by the Governor before the end of the legislative term.  However, if the legislation goes into effect 60 days after it is signed into law (which is how the bill is currently drafted), it is already too late for the law to go into effect in time to relieve employers of the obligation to distribute the annual notice by February 1, 2015.  Our firm has brought this issue to the attention of the Governor's office. At this point, employers in New York should prepare to send the annual wage notice to their employees between January 1 and February 1, 2015.  If the Legislature and the Governor give a nice holiday gift to New York employers by finding a way to eliminate this requirement for 2015, we will certainly let you know.