Labor and Employment Law Roundup – The Year in Review


Employers have been buffeted over the last several years by significant changes in labor and employment laws at the federal, state and local levels, and 2015 was no exception. As the year draws to a close, here is a recap of some of the more significant developments.

Affordable Care Act
In King v. Burwell, the U.S. Supreme Court determined that Congress intended for a federally-facilitated marketplace to be included in the phrase “an Exchange established by the State” in the Patient Protection and Affordable Care Act (“ACA”). The result is that in the states without a state-operated exchange:

  • Tax credits under Section 36B of the ACA are available to individuals who purchase health insurance on a federally-created health care exchange.
  • “Applicable large employers” (employers with 50 or more full-time and full-time equivalent employees) in the states without a state-operated exchange that fail to offer group health plan coverage to full-time employees are subject to ACA rules regarding employer shared responsibility, including potential penalties for ACA non-compliance.

Employee Misclassification
In July, the U.S. Department of Labor issued a Memorandum stating that “Most workers are employees under the FLSA [federal wage and hour law]” when it issued Administrators Interpretation No. 2015-1: The Application of the Fair Labor Standard Act’s “Suffer or Permit” Standard in the Identification of Employees Who are Misclassified as Independent Contractors. The guidance explains that the “suffer or permit to work” definition in the statute is extremely broad and covers more workers as employees than would be covered if the analysis were limited to the employer’s control over the worker. The DOL guidance implicates other federal statutes that apply the FLSA’s definition of “employ,” including the Family and Medical Leave Act.

Employment Discrimination

  • ADA – Telecommuting as a Reasonable Accommodation 
    According to the Circuit Court of Appeals for the Sixth Circuit, technological advances leading to changes in the way business is conducted do not automatically render work-at-home arrangements “reasonable accommodations” under the ADA.  Although the Court did not rule out telecommuting as a required accommodation in every circumstance, it stressed the relevance of the employer’s judgment as to which job functions are, in fact, essential. This ruling provides employers who mandate on-site attendance with some comfort in denying work-at-home arrangements as “unreasonable” accommodation requests.
  • Pregnancy Discrimination and Reasonable Accommodations
    In Young v. UPS, the U.S. Supreme Court examined whether UPS’ policy of only providing light duty to employees with work-related injuries violates the Pregnancy Discrimination Act (“PDA”). Although the Supreme Court did not decide the ultimate issue in the case, the Court articulated a standard for evaluating such cases. In short, employer policies providing a benefit to certain — but not all – non-pregnant employees, while failing to offer the same benefit to pregnant workers, will likely be challenged and struck down as unlawful.
  • Religious Discrimination and Reasonable Accommodations
    In EEOC v. Abercrombie and Fitch Stores, Inc., the U.S. Supreme Court held that to prove religious discrimination, a job applicant who wore a head scarf to a job interview was not required to advise the employer of her need for an accommodation. She only had to show that the prospective employer’s desire to avoid providing a religious accommodation was “a motivating factor” in the decision not to hire her. This means that unlike other anti-discrimination statutes, Title VII does not impose a knowledge requirement and employers cannot defend on the basis that a candidate did not specifically inform the employer of a need for an accommodation.

FLSA / Wage Hour Law
In August, the DOL proposed to drastically increase the annual salary threshold for the “white collar exemptions” under the FLSA by over 100 percent – from $23,500 to $49,950. Additionally, the new salary level would be indexed to rise every year. The new salary requirements are expected to take effect sometime in 2016 or 2017.

States and municipalities continue to enact “ban the box” legislation, which restricts employers from seeking information regarding a job applicant’s criminal history during certain points in the hiring process. While there are several variations, most “ban the box” laws prevent employers from requiring that a job applicant disclose his or her criminal history on a job application. Some, though not all, “ban the box” laws permit employers to inquire about an applicant’s criminal history during the interview process. Within Saul Ewing’s footprint, the following jurisdictions have implemented laws restricting inquiries into an applicant’s criminal history: Connecticut, Delaware, Maryland, Massachusetts, New Jersey, New York and Philadelphia. Employers in Philadelphia should take note that Mayor Nutter just signed legislation significantly expanding the City’s “ban the box law” to prevent employers from conducting a criminal background check on applicants before extending a conditional job offer. These new restrictions take effect in March 2016.

Joint Employer

  • National Labor Relations Act:  In a major departure from decades of contrary case law, in Browning-Ferris, Industries, Inc., the Board announced a new standard for determining whether separate employers will be considered “joint employers” with regard to employees over whom they share or co-determine terms and conditions of employment. The Board’s decision expands potential liability under the NLRA for employers who utilize temporary or contingent labor provided by staffing agencies or other labor suppliers, as well as franchisors.
  • “Joint Employer” status under Title VII and the PHRA
    In Fausch v. Tuesday Morning, Inc., the Third Circuit concluded that the defendant exercised a sufficient degree of control and supervision over an employee supplied by a temporary staffing agency such that the defendant could be held liable for plaintiff’s discrimination claims. Although the court did not expand the joint-employer test (as the NLRB did in Browning Ferris), the ruling makes clear that a company utilizing staffing agency workers will almost always be a joint employer of those employees under state and federal anti-discrimination laws. Legal review and negotiation of staffing agency contracts to include strong indemnification language is recommended.

NLRA / Traditional labor Law

  • NLRB’s “Ambush Election” Rule - The NLRB’s highly controversial changes to the rules governing the processing of representation election petitions filed with the agency took effect in April. As expected, initial representation elections are occurring much more quickly under the new rules in most cases, on average, within 25 days of the filing of the petition, down from an average of 42 days under the previous rules.
  • Continued Strict Scrutiny of Employer Work Rules – In March, the NLRB General Counsel issued a Memorandum detailing several cases in which the Board had invalidated a wide range of employer rules regarding workplace decorum, confidentiality and employees’ use of social media.

Occupational Safety and Health Act (OSHA)

  • New Recordkeeping Requirements – OSHA has updated its list of employers that are required to maintain occupational injury and illness records, removing some and adding others.
  • New Reporting Requirements – The list of severe work-related injuries and illnesses that must be reported to OSHA has been expanded to include:
    • New 24 Hour Deadlines for:
      • Inpatient hospitalizations
      • Amputations
      • Loss of an eye
    • New reporting times triggered by work-related incidents for:
    • Fatalities within 30 days after a work-related incident, inpatient hospitalizations, amputations, eye loss within 30 days after an incident

Click here for more information on the OSHA website.

Philadelphia Paid Sick Leave Ordinance – Requires covered employers to provide most employees with up to five paid sick days per year.

A Look Ahead to 2016 – Employers can expect more changes in 2016, including the aforementioned changes to salary threshold for the FLSA’s white collar exemptions, changes to Philadelphia’s “ban the box” law, and long-awaited changes to the Department of Labor’s rules regarding the use of consultants during union organizing campaigns, among other changes. We will preview all of that and more in our next piece: Labor and Employment Outlook for 2016, coming in January.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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