Employment Law Trends: 2015
With President Obama’s State of the Union address now behind us, it is time to examine the employment law trends for 2015. Last year we predicted that the same topics would continue to dominate the news in 2015, and that has turned out to be true.
Here are the employment law developments we believe are most directly affecting Washington employers this year.
Seattle Mayor Ed Murray announced a new minimum wage law last year that takes effect in April 2015. Under the new law, employees of large companies (more than 500 employees) will earn a minimum of $11.00 per hour beginning this April. Employees of small companies (500 or fewer employees) will earn a minimum of $10.00 per hour if they receive wages only. If, instead, the employee receives compensation in addition to wages (including commission, piece-rate, and bonuses) the employer has to pay a minimum compensation of $11.00 per hour. The minimum wage will continue to rise each January until it reaches $15.00 per hour for all employees, and then it will adjust with the rate of inflation. The City of Seattle has hired wage police to enforce violations, and penalties will be assessed. Therefore, it is important that affected businesses are familiar with the requirements of the law and the various deadlines for raising employees’ wages.
Minimum wage raises are not likely to be restricted to Seattle for long. Washington’s Legislature is reexamining the state’s minimum wage, as are numerous other states and municipalities.
Affordable Care Act
President Obama signed the Affordable Care Act (often referred to as “Obamacare” or “ACA”) on March 23, 2010. Under the law, large employers (those with at least 50 full-time equivalent employees) are required to offer health insurance to their employees that covers at least 60% of covered health care expenses for a typical population, and the employees cannot be required to pay more than 9.5% of their family income for the employer coverage. Starting this year, large employers will have annual reporting responsibilities concerning whether and what insurance they offer to their full-time employees. The penalty for failure to comply with the ACA is $3,000 annually for each full-time equivalent employee receiving a tax credit, up to a maximum of $2,000 multiplied times the number of full-time employees minus 30, and the penalty will increase each year by the growth in insurance premium. With the new reporting requirements and steep penalties, now is the time to make sure you understand how the ACA affects your business.
Social Media Policies
The National Labor Relations Board (“NLRB”) continues to exercise its authority over the non-unionized workplace under section 7 of the National Labor Relations Act. Section 7 recognizes the rights of non-union employees to communicate regarding the workplace and potentially organize. The NLRB has been continually restricting social media policies that it deems are overbroad because they interfere with the ability of employees to communicate about the workplace. Employers can draft policies to protect legitimate interests, but the policies must be tailored to a specific interest without being so overbroad that they interfere with employee section 7 communication rights. Some employers are choosing not to adopt such policies at all. What is best for your business depends on the actual interests you are trying to protect.
The United States Equal Employment Opportunity Commission (“EEOC”) issued new guidelines on pregnancy discrimination issues in July 2014. These guidelines address pregnancy as an accommodation issue. Most pointedly, if an employer offers light duty accommodation for employees, it must also be available for pregnant workers if needed and requested. Other accommodations that might be required include allowing more frequent work breaks, seating, and permitting a water bottle at the work station. The United States Supreme Court is currently examining the issue of providing light duty in Young v. UPS. We expect a decision and further guidance this spring.
Last year, the Washington Supreme Court in Kumar v. Gate Gourmet held that employers subject to the Washington Law Against Discrimination (employers with 8 or more employees) may be liable for failing to accommodate an employee’s religious practices. In that case, the plaintiffs alleged that their employer would not allow them to bring their own food to work for security reasons, but also would not alter the mandatory provided meals to accommodate the employees’ religious beliefs. As under federal law (applicable to employers with 15 or more employees), an alleged failure to accommodate religious beliefs requires an employee to establish (1) a bona fide religious practice that conflicts with the workplace policy; (2) notice to the employer of that conflict; and (3) threatened or actual discriminatory treatment by the employer. An employer may defend against such suit by showing that it offered a reasonable accommodation for the employee’s religious belief, or that any accommodation would impose an undue hardship on the employer. Employers, particularly those with 8 or more employees, need to be aware of enhanced obligations in this regard.
Sexual Harassment Policies
On January 14, 2015, the United States Equal Employment Opportunity Commission (“EEOC”) issued a press release regarding its position that sexual harassment remains a major issue in the American workplace. EEOC Chair, Jenny Yang, announced the establishment of a task force directed to examine best practices to educate employers and employees on workplace standards that further eradicate sexual harassment at work. One of such best practices is an emphasis on a comprehensible harassment policy. Having a policy against harassment is insufficient if it is not readily understandable by the relevant workforce. If, for example, your workforce is made up of teenagers, it is unlikely that they have a clear understanding of the technical legalese that comprises many harassment policies. Employers should analyze their workforce and communicate their harassment policies in language meaningful to that workforce.
The increasingly widespread use of noncompete provisions in employment agreements has led to an equally increasing resistance to enforcing such agreements. Although enforceability has always depended on the reasonableness of such agreements, a federal court in the Eastern District of Washington has further questioned their enforceability in Genex v. Contreras. In that case, the former employer sought to enforce restrictive covenants in their former employees’ employment agreements. The court refused to enforce those covenants, noting that such covenants are less reasonable when applied to lesser skilled workers (such as the bovine inseminators who were the employees at issue) or nonprofessionals. Moreover, the court noted that such covenants must be understandable by the employee to be reasonable. But most importantly, the court questioned whether at-will employment could ever be adequate consideration for a restrictive covenant. It is unknown how wide of an impact this decision will have. However, it demonstrates the basic position we have repeatedly emphasized in numerous employment situations for our clients: be reasonable, be mindful, be understandable in your policies.