Federal and State Law impose a vast framework of laws and rules governing employer obligations and employee rights, creating a spider-web ripe for mistakes, abuse and litigation. On Monday 4/22/2019, Michigan's new Attorney General Dana Nessel announced her intention to crack down on abuse and theft associated with misclassifying workers to avoid paying full wages, overtime and taxes. Although the Attorney General's announcement highlighted the use of employers' use of labor brokers and subcontractors, shell companies and check-cashing businesses to avoid paying workers full wages, overtime and benefits, while dodging federal, state and local taxes, a broader crackdown is likely. The Attorney General is likely to focus her inquiries on sometimes minute distinctions between employee/independent contractor, exempt/ non-exempt employee, work/non-work time. The legislature is preparing to move legislation that will increase associated civil and criminal penalties, strengthen whistleblower protection, audit violators and require employee backpay. Every employer should carefully consider whether its payroll practices and employee classifications will survive scrutiny under a magnifying lens, and whether any risks are cost justified. Get ahead of this potential problem, before it gets ahead of you!
Many 401(k) plans provide that an employee participant can receive a distribution of his or her elective deferrals from the plan on account of a financial hardship. A hardship distribution is only permitted if the employee experiences an immediate and heavy financial need and the distribution is required to satisfy that need. An immediate and heavy financial is defined by the IRS as one or more of the following with respect to the employee or the employee's immediate family: (i) medical expenses; (ii) purchase of a principal residence (employee only); (iii) tuition and related educational expenses; (iv) payment necessary to prevent an eviction or foreclosure of a principal residence; (v) burial expenses; and (vi) repair expenses for damage to the employee's principal residence.
Using the words "you bleeping &#+%" (insert your favorite expletives) is never the best way to motivate your employees. And yet sometimes we still want to say it. How can we encourage our employees to do their best work without losing our cool? If you hope to instill change and growth in your employees consider these six steps when giving criticism:
On December 30, 2015, a federal court in New York dismissed Plaintiff William Henig's claim against the law firm of Quinn Emanuel Urquhart & Sullivan LLP and the legal staffing firm Providus, for overtime wages brought under the Fair Labor Standards Act (FLSA). The court roundly rejected Plaintiff's claims that he was entitled to overtime wages for the routine review of documents, to determine if the documents fell within a privilege or were relevant, noting that an attorney's review of documents constitutes the practice of law. The judge was not persuaded by Plaintiff's argument that the review of documents required no legal analysis. In reaching her decision, Judge Abrams noted that new attorneys often perform repetitive tasks that are "modest in intellectual scope" and "banal." Nevertheless, the court held this still constitutes the practice of law.
Employers routinely require employees to sign a non-compete agreement, in order to prevent them from taking customers, business opportunities, and confidential information to a competitor. "Continued at-will employment" was historically deemed adequate consideration for such agreements in Michigan. An employer could discharge an employee for any reason at any time and, subject to considerations of fairness or equity, still move to enforce that employee's non-compete agreement. No minimum period of employment or other consideration was necessary. This rule was helpful for employers, but sometimes onerous for employees. This long-standing rule may now be in flux.
Hertz Schram is pleased to announce that Gary Remer, one of Michigan's top franchise attorneys, joined the firm to lead our Franchise and Employee Benefit Plan practices. Gary will continue to advise business owners, including franchisors and franchisees, on business entity formation and maintenance, commercial contracts, finance, regulatory compliance and retirement plans.
On July 15, 2015, the Administrator for the Department of Labor ("DOL"), issued the "Administrator's Interpretation No. 2015-1" (hereafter "Interpretation") regarding "The Application of the Fair Labor Standards Act's 'Suffer or Permit' Standard in the Identification of Employees Who Are Misclassified as Independent Contractors." The Interpretation provides an overview of the problem of businesses' misclassification of workers as independent contractors1 instead of employees.
On June 26, 2015, the United States Supreme Court issued its 5-4 decision in Obergefell et al. V. Hodges, Director, Ohio Department of Health, et al. pertaining to 14 same sex couples and two male same sex partners, now deceased, who challenged the constitutionality of the state laws of, Michigan, Kentucky, Ohio and Tennessee. The Supreme Court held that the 14th Amendment to the United States Constitution requires a State to license a marriage between two people of the same sex. The Court also held that the 14th Amendment requires a State to recognize a marriage between two people of the same sex when that marriage was lawfully licensed and performed out-of-state.
A CAUTIONARY TALE: AN EMPLOYEE WHO PRESENTS NO OTHER EVIDENCE OTHER THAN HIS TESTIMONY CONTRADICTING THE EMPLOYER'S TIMESHEETS AND PAY STUBS CREATES A GENUINE ISSUE OF FACT ALLOWING THE OVERTIME CLAIM TO PROCEED TO A JURY
In a case entitled EEOC v New Breed Logistics, the Sixth Circuit Court of Appeals affirmed the district court's denial of the defendant-employer's motions for judgment as a matter of law or a new trial following the jury's determination that New Breed's supervisor engaged in sexual harassment and retaliation under Title VII. During the trial, plaintiff presented evidence, that the appeals court deemed sufficient, showing New Breed's supervisors were cognizant of the sexual harassment when they terminated each employee, and that the employees' "protected activity" constituted "the but-for cause of the adverse employment actions taken against any claimant." Further, New Breed was not entitled to a new trial on the sexual harassment issue because the supervisor's harassment caused a "tangible employment action for which New Breed should be vicariously liable[.]"