Court Confirms Minneapolis Sick Leave Ordinance Not Enforceable Against Employers Based Outside of City

Last week, a court upheld the Minneapolis paid sick leave ordinance, but ruled that it is only enforceable against employers within the city’s limits. Minneapolis’s paid sick leave ordinance was passed in 2016 and was immediately challenged by the Minnesota Chamber of Commerce, which argued that the Minneapolis ordinance conflicts with state law and cannot be enforced against employers who do not have a physical presence in the city. That challenge resulted in a temporary injunction of the ordinance against employers located outside of the City of Minneapolis, but employers located within the city had to comply and offer the mandated paid sick leave.  Now, the court has made the temporary injunction permanent. Employers should keep their eye on the status of the Minneapolis paid sick leave law to see if the City appeals the court’s decision or amends the ordinance in a way to cover more employees working in Minneapolis for employers that don’t have a physical presence in the city.

Meanwhile, the State of Minnesota has tried to stop the Minneapolis ordinance and the City of Saint Paul’s paid sick leave ordinance by proposing a state-wide bill that would preempt local governments from passing wage and benefit ordinances, such as these cities’ paid sick leave laws and Minneapolis’ minimum wage ordinance. The preemption bill has been introduced unsuccessfully in the last three legislative sessions, leaving Minneapolis’ and St. Paul’s paid sick leave laws intact for now.

Jackson Lewis monitors state and local wage and benefits laws, including paid sick and family leave laws. We regularly assist employers in creating comprehensive, multi-state compliance programs, taking into consideration federal, state, and local laws that may cover an employee’s single absence.

What Am I Doing Wrong?? Common FMLA Mistakes.

What did I do wrong?” and “Am I doing this correctly?” are frequent questions from clients regarding FMLA administration. This is the fifteenth in a series highlighting some of the more common mistakes employers can inadvertently make regarding FMLA administration.

Not properly communicating with an employee who is about to exhaust the 12 week leave period.

 The FMLA allows eligible employees of a covered employer to take job-protected, unpaid leave for up to a total of 12 workweeks in any 12 months. Employers should keep in mind that failure to properly communicate with an employee who is about to exhaust the 12 weeks of leave, and terminating the employee, can pose legal risk.

In Ashby v. Amscan, Inc., 2017 U.S. Dist. LEXIS 33576 (W.D. Ky. March 9, 2017), the employee requested FMLA leave when she fell at her home and fractured her ankle. The employee was given a full release to return to work with no restrictions soon after she exhausted her twelve weeks of FMLA leave. Immediately upon her return to work, the employee was terminated for exceeding the allotted twelve weeks of leave by four days. The court determined that that the employer interfered with the employee’s FMLA rights when it terminated her. The court stated that the employer had a duty to inform the employee of her rights under the FMLA, which included warning the employee that her leave period was coming to a close.

In Dusik v. Lutheran Child & Family Servs. of Ill., 2017 U.S. Dist. LEXIS 62119, (N.D.Ill. April 24, 2017) the employee advised her employer that she would need three to six months of leave following a torn ACL and meniscus in her knee that required surgery. The employer advised the employee that her FMLA leave would begin on March 31, 2015, but did not communicate with the employee after that point regarding her leave. The employer terminated the employee on July 15, 2015, because she had exhausted her FMLA leave. The court stated that the employer interfered with the employee’s FMLA rights, and retaliated against her for engaging in those rights, because the employer was “suspiciously non-communicative” as the employee approached the end of her FMLA leave.

When an employee is about to exhaust FMLA leave, employers should consider communicating with the employee regarding the leave and return-to-work status. Employers should also consider the interaction between the FMLA and ADA, and explore whether additional leave can be provided as a reasonable accommodation under the ADA.

‘Safe Time’ Amendments to New York City Paid Sick Leave Effective May 5, 2018

Amendments to the New York City “Earned Safe and Sick Time Act” (ESTA) went into effect on May 5, 2018. Eligible employees under the ESTA will be able to use paid time off for circumstances resulting from the employee or a covered family member of the employee being the victim of family offense matters, sexual offenses, stalking, or human trafficking.

Additionally, New York City employers are required to provide an updated notice of employee rights to employees within 30 days of the effective date, by June 4, 2018. The notice is available here. Further, employers will need to update existing policy language to comply with the “safe time” amendments.

For more information on the amendments, see our articles, New York City Council Expands Earned Sick Time Law to Include Safe Time and Mayor Signs Law Adding Safe Time to NYC Earned Sick Time.

Please contact a Jackson Lewis attorney with any questions about the New York City Earned Safe and Sick Time Act and related employer policies.

A fully Qualified Promise is No Promise

As law students learn early in first year contracts, not every statement is an enforceable promise. That point formed the basis of a recent decision from the United States District Court for the District of Vermont. See Noel v. Walmart. The case concerned the termination of a pharmacist who suffered from trypan phobia (a fear of needles that causes nausea, dizziness and fainting at the sight of a needle) because he could not administer immunizations for Walmart customers—something that Walmart had determined to be an essential job function.
Taken alone, that determination is not necessarily newsworthy. Vermont is in the Second Circuit and in 2017 the Second Circuit Court of Appeals, in a nearly identical case, upheld a pharmacy’s determination that giving immunization shots was an essential job function and that because the pharmacist could not administer the injections, he was not qualified and was not entitled to an accommodation. The Vermont District Court is required to follow Second Circuit precedent.

The wrinkle in the Noel case is that after Walmart had notified Noel in April of 2016 that administering injections was now a minimum qualification of his job, he applied for, and was granted, an accommodation and was told he would not have to do so. He received a letter on July 19, 2016 stating that administering immunizations “is not considered to be an essential function of . . . [Plaintiff’s] position.” However, the letter also contained a clear qualification: “[t]his approval is subject to further review in case your job description is revised in the future” and that “the company reserves the right to revisit the approval of Plaintiff’s accommodation at any time.”

In October of 2016, Walmart informed Noel that it was changing his job description and that administering injections was an essential function of the job. When he told his employer that he could not do this he was told that he would be fired. In November, 2016 Walmart published a new job description specifically stating that it was an essential job function.
The only real distinction between Noel’s case and the binding Second Circuit precedent was the July 19, 2016 letter which, Noel argued, precluded Walmart from arguing that administering injections was an essential job function. The District Court disagreed:
The July 19, 2016 letter was a mere conditional exemption, explicitly subject to revision at any time. By contrast, Walmart currently asserts that administering immunizations is an essential function, and it has previously indicated so in its company-wide announcement on April 8, 2016 and the company-wide job description on November 17, 2016.
The Court went on to dismiss Noel’s claims. It is not clear whether the result would have been different had the July 19, 2016 letter not contained language that it was subject to revision at any time. The Court gave significant deference to the employer’s determination of an essential function. The conditional language, however, gave the Court an easy hook on which to hang its hat. Employers should consider using similar language to protect against an argument that its exemption from a job duty has become permanent when that was not the employer’s intent.

Are You Interfering With FMLA Rights If You Offer The Option to Work During Leave?

Employees who take leave to care for a family member often have the ability to continue working during their leave if the caretaking obligations do not consume all of their time.  If the employee asks to work limited hours while taking time off to care for a family member that is generally treated as a request by the employee for reduced schedule or intermittent leave.  But what happens if the employee requests a continuous leave and the employer tells the employee she can continue working a limited schedule if she wants to?  What if the employee interprets the “offer” as a “request?”  This issue was recently addressed by the Fifth Circuit Court of Appeals in D’Onofrio v. Vacation Publications (5th Cir. Apr 23, 2018).

The case involved a sales representative who requested FMLA leave to care for her husband.  It turns out that was not the real reason for the employee’s leave.  Her husband acquired a franchise for a competing business and Ms. D’Onofrio requested the FMLA leave so that she could attend the training program.  At the conclusion of her “leave” she was planning to go work with her husband.  When Ms. D’Onofrio requested her FMLA leave, the Company believed it was a valid request for leave and offered her two options: (1) she could go on unpaid FMLA leave or (2) she could log in remotely a few times per week and continue to service her existing accounts so that she could keep the commissions from those accounts while on leave.  She chose the latter option.

Shortly after the leave began the Company learned Ms. D’Onofrio was not responding to emails and voicemails.  The Company decided to bring the clients in house and Ms. D’Onofrio was locked out of her company accounts.  She also learned that the Company sent an email to clients stating she was no longer working there.  Unbeknownst to Ms. D’Onofrio that email was sent in error.  When the Company e-mailed her that her FMLA leave expired Ms. D’Onofrio responded that she was not returning because she believed that she had been terminated.

Among other claims Ms. D’Onofrio alleged that her FMLA rights were interfered with because her employer asked her if she wanted to work during her leave.  The Court held that “giving employees the option to work while on leave does not constitute interference with FMLA rights so long as working while on leave is not a condition of continued employment.” (Emphasis added).  The Court noted that the FMLA permits voluntary acceptance of work by employees on medical leave, but an employer may violate employee’s FMLA rights by coercing her to work while on leave.  In this case there was no evidence of coercion and the Court found there was no interference.

While this case did not present a surprising outcome given the facts before the Court, it emphasizes the need for caution when having a discussion with an employee taking leave about performing any work during that leave.  If an employer is going to offer the employee the ability to continue working, the employer must document that discussion and emphasize that it is completely voluntary.  The employee should sign an acknowledgment that he/she is choosing to work voluntarily and without coercion.  Additionally, if the employee chooses to work while taking leave, the employer should give the employee the option to change his/her mind and opt out of the agreement to continue working.

Paid Sick Leave Goes to Court

This week, in Austin, Texas, several business groups and staffing organizations sued the City of Austin to prevent its paid sick and safe leave law from going into effect on October 1, 2018.  As detailed in a previous post, the Austin ordinance requires employers to provide employees who work at least 80 hours in Austin in a calendar year to accrue paid sick leave at the rate of one hour for every 30 hours worked, up to 64 hours annually (48 hours for employers with 15 or fewer employees).

The plaintiffs argue the Austin ordinance violates minimum wage laws:  “The Texas Minimum Wage Act prohibits municipalities, such as the city of Austin, from regulating the wages of employees of private businesses, incorporating the standards of the federal Fair Labor Standards Act into state law, but further preempting any municipal ordinances from going beyond those standards.”  By requiring employers to pay employees for time away from work, the plaintiffs argue it effectively requires employers to pay more than the minimum wage.  The plaintiffs also contend the law violates the Texas constitution.

This lawsuit is one to watch as the issue is quickly becoming a race to appeal to hearts of Texans.  Indeed, there are efforts underway in other major Texas cities, including Dallas and San Antonio, to pass paid sick leave laws similar to Austin’s new ordinance.  Opponents of efforts to mandate paid sick leave at the state and local level tend to cite to the compliance burden on employers, who have to navigate an increasingly complex web of state, federal, and local laws governing paid and unpaid leaves.

Other cities and states outside of Texas considering similar paid sick leave laws will pay particular attention to the outcome of the Austin lawsuit.  Similarly, this is not the first challenge to paid sick leave laws. For example, airlines recently filed suit against Washington and Massachusetts, alleging their paid sick leave laws violate U.S. Constitution commerce clause and that the 1978 Airline Deregulation Act preempts them.

Jackson Lewis will monitor these lawsuits as they work their way through the courts. Jackson Lewis’s workthruIT tool is an excellent source of information about the nation’s paid sick leave laws. We regularly assist employers in creating comprehensive policies and leave administration, taking into consideration federal, state, and local laws that may cover an employee’s single absence.

IRS Issues Guidance FAQs Regarding the Paid Family Leave Federal Tax Credit

This week, the Internal Revenue Service (IRS) issued FAQ guidance regarding the employer tax credit for paid family and medical leave. As a reminder, the Tax Cuts and Jobs Act of 2017 (the Act) provides a tax credit to employers that voluntarily offer paid family and/or medical leave to employees. The FAQs clarify some of the requirements in Section 45S of the Act that an employer’s paid family and/or medical leave policy must include. The FAQs also clarify other details, such as the basis for the credit and the tax credit’s impact on an employer’s deduction for wages paid to an employee who is on a qualifying leave.

For information on how to determine if your company can take advantage of the paid family and medical leave tax credit, read our earlier article on this topic. You can estimate your company’s potential annual tax savings using the Jackson Lewis Paid Family Leave Tax Credit Calculator.

Are You Preparing for Washington Paid Family and Medical Leave?

By the end of this year, employers with employees in the state of Washington must be ready to comply with last summer’s newly-enacted a paid family and medical leave law. Since the law’s passage, Washington has been busy fine-tuning the program and providing updates. Recently, Washington announced that employers with employees in the state of Washington can begin submitting their voluntary paid family leave plans this summer through the state’s online portal. However, employers must first decide whether to offer the paid family leave benefits through a voluntary plan, or use the state program and remit employee contribution premiums.

By way of background, in 2007 Washington previously passed a paid family and medical leave law but never funded the program. After a decade of trying to enhance or repeal the 2007 law, in July 2017, Washington passed Senate Bill 595c a bill that expanded upon the original concept in the 2007 law and provided funding to the Employment Security Department (ESD). The law will be effective soon: employers must start payroll deductions, premium remittance, and reporting obligations on January 1, 2019. Employees can apply for paid family leave benefits beginning on January 1, 2020.

Washington paid family and medical leave law provides partial wage replacement to an employee who needs leave due to the employee’s or a covered family member’s illness or injury, to bond with a newborn or newly placed child, and for certain military connected events. Wage replacement benefits range from a weekly minimum of $100 to a weekly maximum of $1,000, adjusted annually, with the exact benefit determined by the employee’s earned wages, state median income, and other factors. The length of benefits depends on the leave reason:

  • Medical Leave: employee’s own serious health condition – 12 weeks per 52 consecutive calendar weeks
  • Family Leave: care for a family member with a serious health condition, bonding, or military exigency – 12 weeks per 52 consecutive calendar weeks
  • Combined paid family and medical leave benefits maximum – 16 weeks per 52 consecutive calendar weeks
  • Extended medical/pregnancy leave: Combined maximum leave extended to 18 weeks if the employee experiences a serious health condition with a pregnancy that results in incapacity

Employers with employees in states like California, New Jersey, Rhode Island, and New York know that setting up a paid family and/or medical or disability program and complying with the state-mandated law is no easy task. In Washington, employers have options and should begin weighing them now to prepare for January’s employer obligations. If an employer wants to offer paid family and medical leave benefits directly to employees outside of the state program, they can do so, but must meet certain criteria and receive approval from ESD.

Jackson Lewis attorneys have assisted employers with their voluntary programs and statutory benefit law compliance in other states and are ready to help employers with Washington’s fast-approaching paid family and medical leave law.

New Jersey Legislature Passes Paid Sick Leave Bill

On April 12, 2018, the New Jersey State Senate, by a vote of 24-12, passed the New Jersey Paid Sick Leave Act (the “Act”). The Act, which passed the Assembly last month by a 50-24 margin, requires businesses of all sizes to provide up to 40 hours of paid sick leave to employees during an employer-established benefit year. The Act, which Governor Phil Murphy pledged to sign, expressly preempts municipal paid sick leave ordinances passed in cities and towns such as Newark, Morristown, and Paterson, in an effort to provide uniform obligations to businesses operating within the State. Read more about the Act here.

Must an Employer Pay for Frequent FMLA Breaks?

Is it compensable time when an employee takes frequent, 15-minute breaks each hour due to the employee’s serious health condition? Today, the United States Department of Labor (DOL) answered this question in a hot-off-the-press opinion letter, verifying that FMLA-covered breaks are not compensable.

In today’s opinion letter, the DOL confirmed that frequent, 15-minute breaks taken each hour and necessitated by an employee’s serious health condition is uncompensated time because the breaks are taken for the employee’s, not the employer’s benefit. The DOL noted, however, that employees who take FMLA-protected breaks must receive as many compensable rest breaks as their coworkers receive:  “For example, if an employer generally allows all of its employees to take two paid 15-minute rest breaks during an 8-hour shift, an employee needing 15-minute rest breaks every hour due to a serious health condition should likewise receive compensation for two 15-minute rest breaks during his or her 8-hour shift.”

The opinion letter sets forth the legal principles behind the compensability of short rest breaks that primarily benefit an employer and distinguished FMLA-leave to take frequent breaks as primarily for the employee’s benefit due to his or her serious health condition. The DOL cited both the unpaid nature of FMLA leave and a case where the court found an accommodation of frequent rest breaks due to an employee’s back pain need not be paid.

In 2010, the DOL stopped issuing opinion letters in exchange for more broad-based Administrator Interpretations. Then in June 2017, the DOL announced it would reinstate issuing opinion letters and updated its website to assist employers and employees in requesting a letter. The DOL has issued 19 opinion letters since reinstating the practice, all related to the Fair Labor Standards Act (FLSA). Today’s opinion letter was also issued pursuant to the FLSA, but addresses a topic that employers struggle with when administering unpaid, intermittent FMLA – whether and how to legally reduce pay when an employee is intermittently absent.

Opinion letters can be a great tool for employers to navigate tricky FMLA and FLSA compliance issues. Receiving an opinion letter can later  establish a good faith defense against liability. If you have a tricky FMLA question, Jackson Lewis attorneys can help untangle the web of leave of absence laws and regulations and assist in drafting a request for an opinion letter when warranted.

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