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HPSS Construction Law News
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NLRB Reverses Course Again on Independent Contractor Test
In 2019, the NLRB issued its decision in the SuperShuttle DFW, Inc. case, emphasizing the importance of entrepreneurial opportunity in applying the traditional multi-factor test for determining whether workers should be classified as employees or independent contractors, reversing existing precedent which had favored classification as employees, and therefore unionization. On June 13 of this year, the NLRB once again reversed course, demonstrating a clear preference of the current administration toward potential unionization.
In Atlanta Opera, the NLRB held that the traditional multi-factor test must be applied, and that entrepreneurship was no longer to be viewed as an “animating principle”. Rather, the Board will evaluate whether workers are properly classified as independent contractors in light of all of the traditional common law principles, with no one factor being decisive. Based on the consideration of all the factors in this case, the Board determined that the stylists were employees and not independent contractors and therefore had the right to unionize.
This decision continues the pattern of NLRB decisions adhering to political preferences of the particular administration in power. Note, however, that NLRB decisions are subject to appeal and the D.C. Circuit, which has jurisdiction over NLRB decisions, has previously ruled against the standard applied in this case on more than one occasion, as it favors the emphasis on entrepreneurial opportunity used in the SuperShuttle case. Note also that the dissent in the Atlanta Opera case argued that there was no need to overturn the SuperShuttle standard, because the facts were such that the Atlanta Opera workers would be found to be employees even under that standard.
We expect litigation on these issues to continue. In the meantime, employers need to be aware of the standards that are now being applied, especially in light of the emphasis being demonstrated by the Board and its general counsel. Attention should be paid to whether workers are properly classified as independent contractors, and adjustments should be made where necessary. As we noted in our update in 2019 when the SuperShuttle case was announced, these decisions do not necessarily impact DOL and income tax issues related to worker classification, but the Atlanta Opera decision does indicate the emphasis of the administration in general, which is clearly in favor of union employees and against employers’ business interests.
If you have any questions about the misclassification issue, please contact Scott Calhoun or Philip Siegel. You can e-mail Scott by clicking here, and you can e-mail Philip by clicking here.
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DOL Publishes New FLSA, FMLA, and EEOC Posters
It’s time to get some new posters. The U.S. Department of Labor (“DOL”) has updated workplace posters regarding the Fair Labor Standards Act (“FLSA”), the Family Medical Leave Act (“FMLA”), and the Equal Employment Opportunity Commission’s (“EEOC”) “Know Your Rights: Workplace Discrimination is Illegal” poster.
The new FLSA poster was updated to reflect employers’ obligations under the Providing Urgent Maternal Protection for Nursing Mothers (“PUMP”) Act which took effect in December 2022. Under the PUMP Act, covered employers are required to provide nursing employees with a reasonable break time and place (other than a bathroom) to express milk free from intrusion and shielded from view.
The new FMLA poster has been redesigned and has new language about “covered employers,” namely a private employer that had at least 50 employees during at least 20 workweeks in the current or previous calendar year.
The new EEOC “Know Your Rights: Workplace Discrimination is Illegal” poster was just updated on June 27, 2023 when the Pregnant Workers Fairness Act went into effect. Under the new Pregnant Workers Fairness Act, covered employers (private employers with at least 15 employees) are required to provide reasonable accommodations to an employee’s known limitations related to pregnancy, childbirth, or related medical conditions, unless the accommodations will cause an undue hardship.
These posters are available on the DOL websites or updated “all-in-one” posters can be purchased from third-party vendors.
If you have any questions regarding these new posters, please do not hesitate to call or email either Philip Siegel or Ben Lowenthal. You can e-mail Philip by clicking here, and you can e-mail Ben by clicking here.
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The U.S. Supreme Court Changes Raises the Standard For Denying a Religious Accommodation Request | |
In a unanimous decision, the U.S. Supreme Court announced a higher standard for employers to measure the burden a worker’s religious accommodation imposes on its business. In the case Groff v. DeJoy, the Court revisited the standard to be used by employers in those instances where an employee seeks a religious accommodation.
Consider the laborer who requests not to be assigned work on the weekends for religious reasons. Employers faced with a request for this religious accommodation need to consider whether accommodating the request would impose an “undue burden” on the company. The term “undue burden” may be familiar to employers who have had to address requests for accommodations under the Americans with Disabilities Act (“ADA”).
Employers faced with a request for an accommodation under the ADA could deny the request if the request would impose an “undue burden” on the company. In the ADA context, “undue burden” was defined as “significant difficulty or expense”. To the contrary, until the Groff case, employers could deny a request for a religious accommodation if the request would cause the company “more than a de minimis cost”, a much lower burden. The Groff case changes that standard in the context of requests for religious accommodations.
In the Groff case, Gerald Groff objected to delivering packages for Amazon on Sundays and requested an accommodation allowing him to avoid working that day on religious grounds. The employer denied his request, and Gross consequently quit his job and brought a claim under Title VII alleging he was wrongfully denied his request for a religious accommodation. The Supreme Court ruled in favor of Groff. Significantly, the Court held that an employer may only deny a religious accommodation request if the burden of granting the request would result in “substantial increased costs in the conduct of its business.”
Employers will need to take into account all relevant facts when determining whether a request for a religious accommodation will result in substantial increased costs. Certainly, the nature of the business, the size of the business, and the operating costs of the business will be relevant factors in the analysis. But the days of having to show only that such a request would result in more than “de minimis” costs to deny the request are now behind us, and employers need to be mindful of the new standard to avoid religious discrimination claims.
If you have any questions about how to respond to a request for religious accommodation and whether that request would result in “substantial increased costs” in the conduct of your business, contact Philip Siegel. You can e-mail Philip by clicking here, or you can reach him directly at (404) 469-9197.
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What’s Happening with OSHA?
The answer: a whole lot.
On May 1, OSHA began a National Emphasis Program focused on reducing fall-related injuries and fatalities. This is of particular importance to roofing contractors. Under the Program, OSHA compliance officers are authorized to stop and conduct an inspection anytime they see someone working from heights. There is no requirement that the OSHA compliant officer first observe a violation or imminent danger. Of course, this means roofing contractors can expect an increase in OSHA inspections. Be sure your supervisory employees in the field know how to respond if an OSHA compliance officer arrives on site.
OSHA is also moving forward with its final rule on its electronic tracking of workplace injuries and illnesses. OSHA provided its final rule to the Office of Information and Regulatory Affairs, which is the next step in the process to publishing a final rule. The final rule proposed by OSHA is anticipated to require establishments with 100 or more employees in certain designated industries, including construction, to annually electronically submit information from their OSHA 300, 301, and 300A.
OSHA also remains committed to publishing a workplace rule to address heat-related illnesses. OSHA is in the process of gathering input from diverse stakeholders and experts. On May 31, the National Advisory Committee on Occupational Safety and Health (“NACOSH”) discussed a report from its Heat Work Group on proposed recommendations regarding potential elements of a rule. NACOSH accepted a motion to forward those recommendations to OSHA, along with a sample exposure control plan/heat illness prevention plan. OSHA also recently initiated a Small Business Regulatory Enforcement Fairness Act panel review, the next step before a proposed standard is published. While we wait for a rule to be published, contractors are reminded to provide sufficient training and to develop and implement a written Heat Illness Prevention Plan, in accordance with OSHA’s published guidance. If you need assistance preparing a Heat Illness Prevention Plan consistent with OSHA’s published guidance, please contact Philip Siegel. You can e-mail Philip by clicking here, or you can reach him directly at (404) 469-9197.
Construction contractors of all trades are also reminded to best prepare themselves for defending an OSHA citation by identifying all hazards its employees are exposed to and addressing those hazards in accordance with OSHA guidelines. Contractors should be focused on those elements of a safety program that support the unforeseeable employee misconduct defense: (1) having a work rule on all applicable hazards; (2) providing training on all hazards its employees are exposed to; (3) inspecting job site to ensure its employees are complying with safety rules; and (4) administering swift and effective discipline when violations are discovered.
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National Labor Relations Board Decision and General Counsel Guidance on Severance Agreements
On February 21, 2023, in the case of McLaren Macomb, the National Labor Relations Board (“NLRB”) ruled that the broad confidentiality and non-disparagement provisions in the severance agreements at issue violated the employees’ right to engage in concerted activities for the purposes of collective bargaining or other mutual aid or protection. In the decision, the NLRB found that confidentiality and non-disparagement requirements in the severance agreement were unlawful because employees could interpret the provisions as prohibiting them from discussing their workplace experiences, which the NLRB viewed as central to the exercise of employee rights under the National Labor Relations Act (the “Act”).
Thereafter, on March 22, 2023, the NLRB’s general counsel, Jennifer Abruzzo, issued a memorandum that provided guidance on questions that employers had presented since the issuance of the McLaren Macomb decision. While the memorandum states that entering into severance agreements with employees is not prohibited, the decision and the guidance from the NLRB’s general counsel will require employers to re-examine their severance agreements as previous forms may now be considered unlawful and, in the NLRB’s general counsel’s opinion, the NLRB may apply the McLaren Macomb decision retroactively. Further, employers may need to re-examine confidentiality and non-disparagement provisions in employee handbooks, policies, and employment agreements to determine whether the McLaren Macomb decision makes such provisions unlawful or if such provisions are at risk of being deemed unlawful if the NLRB rules in future cases in the manner that is consistent with the NLRB’s general counsel’s guidance memorandum. NLRB General Counsel memorandum GC-2023-05 can be found here.
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What is a “Salary” Exempting an Employee from Overtime under the Fair Labor Standards Act
This term, the Supreme Court of the United States, in Helix Energy Solutions Group Inc. et al., found that an executive earning approximately $200,000.00 per year was not exempt from overtime because he was paid a daily rate rather than on a “salary basis.” The Supreme Court found that a day rate under the Department of Labor’s (DOL) regulations did not constitute a “salary,” which the Supreme Court defined as “a steady stream of pay, which the employer cannot much vary and the employee may thus rely on week after week.” This begs the question, “What is a ‘salary’ under the DOL’s regulations for purposes of the Fair Labor Standards Act overtime exemption?”
The DOL provides guidance to answer this question in Fact Sheet #17G which can be found here. The DOL’s fact sheet provides that to qualify for the exemption, an employee generally must be paid not less than $684 per week. The fact sheet further provides that “[b]eing paid on a ‘salary basis’ means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis.” And, “[t[he predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work.” Additionally, an exempt employee must receive the full salary for any week in which the employee performs work but does not need to be paid for any work week in which they perform no work. The DOL’s fact sheet also states that, “If the employer makes deductions from an employee’s predetermined salary, i.e., because of the operating requirements of the business, that employee is not paid on a “salary basis.” And, “[i]f the employee is ready, willing and able to work, deductions may not be made for time when work is not available.” Although the above outlines the basic requirements, other exceptions and intricacies can apply and must be considered.
Notably, to qualify as an employee exempt from overtime, the employee must not only be paid on a “salary basis” of not less than $684 per week, the employee must also qualify under an applicable “job duties” test. The DOL provides guidance on the “job duties” test in Fact Sheet #17A which can be found here.
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Firm News
We are very proud to announce that Hendrick, Phillips, Salzman & Siegel has been recognized as one of the Top 50 Construction Law Firms by Constructive Executive Magazine. for 2023. The magazine developed The Top 50 Construction Law Firms™ ranking by asking more than 600 U.S. construction law firms to complete a survey. The data collected included: 1) 2022 revenues from the firm’s construction practice; 2) number of attorneys in the firm’s construction practice; 3) percentage of firm’s total revenues derived from its construction practice; 4) number of states in which the firm is licensed to practice; 5) year in which the construction practice was established; and 6) number of construction industry clients served during fiscal year 2022. e ranking was determined by an algorithm that weightedthe aforementioned factors in descending order of importance.
We are also excited to announce that Jason Kamp recently joined the Firm. Jason is an experienced and skilled attorney specializing in providing legal counsel and representation to clients in the construction industry. With a deep understanding of construction law and extensive industry knowledge, Jason has successfully handled numerous complex construction-related cases and transactions. Over the years, Jason has represented clients from various sectors, including developers, contractors, subcontractors, architects, and engineers.
Lastly, Philip Siegel began his three year term as chapter counsel to the Associated Builders and Contractors of Georgia.
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