Category Archives: Colorado

November 30, 2015

Unlimited Vacation Policy: Is It Right For Your Company?

By Mark Wiletsky and Emily Hobbs-Wright

Paid vacation time is a perk that can attract and retain the best and brightest employees. It can also impact your balance sheet, as earned but unused vacation days remain a liability until used or paid out. A small, but growing number of companies are trying a new approach, offering unlimited vacation to certain segments of their workforce. Netflix, Best Buy, Virgin America, LinkedIn, General Electric, and others have adopted unlimited vacation policies, or “discretionary time off (DTO),” as it is sometimes called.

Colorado employers, along with organizations in other states, may be wondering whether to scrap existing paid time off or vacation policies and replace them with unlimited vacation. That is especially true given the recent—and sometimes conflicting—information from the Colorado Department of Labor and Employment concerning “use-it-or-lose-it” policies. To help you decide whether unlimited vacation policies are right for your organization, we’ll highlight the pros and cons. But first, some background.

Legal Implications For Vacation Pay

Generally, employers are not required by law to provide paid vacation time to employees. If you choose to provide paid time off for vacation purposes, you get to decide what your vacation policy will be. This includes specifying how much paid vacation you’ll provide, any eligibility requirements, which categories of employees are entitled to it, when it accrues or is “earned,” in what increments it may be taken, the request and approval procedures, whether it carries over from year to year, and other vacation procedures.

That said, state laws will factor into the implementation of your vacation policy. For example, many states classify accrued vacation as compensation or wages and will specify that earned vacation pay may not be forfeited. Such provisions mean that unused, earned vacation must be paid out upon separation of employment. These state laws also can prohibit “use-it-or-lose-it” vacation policies where an employee who fails to use his or her accrued vacation time within a specified time frame loses the accrual of paid time.

By way of example, Colorado wage law states that vacation pay earned in accordance with the terms of any agreement is considered “wages” or “compensation.” Colorado employers who provide paid vacation to employees must pay all vacation “earned and determinable” upon separation of employment. Although the Colorado Department of Labor and Employment recently indicated that a “use-it-or-lose-it” vacation policy is permissible, the Department also noted that such a policy may not operate to deprive an employee of earned vacation time. The Department will look to the terms of the agreement between the employer and employee to determine when vacation pay is “earned.”

Pros – Why Unlimited Vacation May Make Sense

Some organizations have implemented a single paid time off (PTO) policy, allowing employees to accrue a set amount of paid time off to be used for virtually any purpose, such as vacation, sick time, attending kid’s school events, going to appointments, etc. Getting away from traditional (and separate) vacation and sick time policies is believed to offer employees more flexibility while cutting down on administrative headaches for employers. Unlimited vacation, or DTO, goes even further. Here are the potential benefits of an unlimited vacation policy:

More Flexible Work Schedules – employees can take advantage of more flexibility to manage their work and personal time; often a great recruiting and retention tool
Avoid Keeping Accrued Vacation On Your Books – in many states, because vacation time is no longer “earned,” you arguably will no longer need to pay out any unused vacation time upon separation of employment, effectively eliminating the liability of carrying accrued vacation time on your balance sheet
No Cost/Little Cost Perk – if employees take about the same amount of time off under an unlimited vacation policy as under a traditional accrued vacation and sick time policy, employers do not experience any additional cost for the program; as long as the perk is not abused, there may be little financial cost to the company
Increased Productivity – reports suggest that employees become more efficient and productive while at work in order to ensure that they suffer no ramifications when utilizing their time off under the unlimited vacation policy
Morale Booster – trusting that employees can properly manage their time on and off the job can build morale and loyalty; it can shift the focus from putting in hours to getting results
Streamlining of Record Keeping Practices – by eliminating the need to track vacation accruals and usage, you may cut down on the administrative headaches associating with a traditional vacation policy

Cons – Why Unlimited Vacation May Not Work

An unlimited vacation policy may not be appropriate for all organizations. Depending on the nature of your business and the make-up of your workforce, you may determine that the following risks negate any good that could come from an unlimited vacation policy:

Perception That Unlimited Vacation Means No Vacation – some employees may feel that taking away a specific accrual for vacation means that they’ve lost an important perk, especially if they believe that the company or their supervisor will not truly allow them time off when they want it
Additional Cost If Abused – if overall time off exceeds previous accrual amounts, and that additional time off is not offset by increased productivity, the perk may cost you more and be less predictable than an accrual-based vacation policy
Less Black and White – whether an employee is “abusing” unlimited vacation can be rather subjective; one employee may produce excellent work product while taking six weeks off per year while another employee fails to meet expected output taking only three weeks of vacation; as a result, supervisors may struggle with how to handle discipline and performance issues and create a perception of unfair or, even worse, discriminatory treatment
Not Tested, So Liabilities Unknown – it is unclear how state agencies and courts will handle potential wage claims based on an unlimited vacation policy
Scheduling Uncertainties – it can be difficult to cover shifts, schedule projects and meet production deadlines when employees have greater flexibility to use unlimited time off
Pay Issues For Non-Exempt Workers – an unlimited vacation policy would be difficult to apply to non-exempt hourly employees (e., employees who are eligible for overtime pay) as you need to track all hours worked and ensure that you pay minimum wage and an overtime premium according to applicable state and federal law

Bottom Line: Use Caution

If your workforce utilizes exempt employees (i.e., employees who are not eligible for overtime) who have a great deal of autonomy, such as in technology and creative fields, an unlimited vacation policy may attract and incentivize your employees. If you employ mostly non-exempt hourly workers, have a lot of turnover, or need more predictability in covering shifts and positions, an unlimited vacation policy may not work for you. Your best bet is to compare the pros and cons with the nature of your business to evaluate whether this new type of employee perk is appropriate for your organization. If in doubt, it’s always a good idea to consult with your employment counsel.

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November 16, 2015

Overtime Pay Changes May Be Delayed Until Mid-to-Late 2016

By Mark Wiletsky

The Department of Labor (DOL) does not expect to issue its final rule changing the overtime exemptions until mid-to-late 2016, according to a recent report in the Wall Street Journal. The report states that Solicitor of Labor, Patricia Smith, provided the new timeline at an American Bar Association Labor and Employment Law conference in Philadelphia last week. The final rule is expected to greatly expand the number of employees who are eligible for minimum wage and overtime pay. If the final rule is delayed until mid-to-late next year, the changes probably won’t go into effect until sometime in 2017.

Why The Delay?

In March 2014, President Obama directed the DOL to update its regulations defining which white collar employees are exempt from the minimum wage and overtime pay requirements of the Fair Labor Standards Act (FLSA). It took over a year – until July 6, 2015 – for the DOL to issue its proposed changes. The proposed rules raise the salary threshold for white collar exemptions to the 40th percentile of weekly earnings for full-time salaried workers nationwide, or an estimated $970 per week/$50,440 per year. The salary threshold for highly compensated exempt employees would go up from $100,000 to about $122,148 per year. The proposed rules include a mechanism for automatic annual increases to the salary thresholds. See an earlier blog post for a more detailed explanation of the proposed changes.

After the proposed rules came out in July, businesses and organizations flooded the DOL with an estimated 290,000 comments. Solicitor Smith reportedly told the ABA conference attendees that the large volume of comments and the complex nature of the changes were the cause of the delay in issuing the final rules. Another explanation could be politics and the desire to wait to issue the new rules until after next year’s presidential election.

Next Steps

Employers may have more time to prepare for the expected overtime pay changes, but the timing remains uncertain despite the Solicitor’s comments. Plan to review the employees you currently consider to be exempt and note those positions and persons that are being paid close to the salary threshold. Those will be the ones who may no longer be exempt after the salary thresholds go up. Although no changes to the duties requirements were part of July’s proposed rule, the DOL asked for comments on the duty rules. Accordingly, the FLSA white collar exemption duty requirements could change after the final rules come out. We will keep you posted on any new developments.

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November 12, 2015

Are Your Background Check Disclosure Forms FCRA-Compliant?

By Mark Wiletsky

A rash of class action lawsuits is forcing employers to defend their background check disclosure and authorization forms. The current focus is on disclosure forms that include extraneous information. Here’s what you need to know to lessen your risk of a similar class action lawsuit.

FCRA Disclosure Requirement

If you obtain background check reports from a third party, such as a consumer reporting agency that provides employment-related screening services, you need to comply with the Fair Credit Reporting Act (FCRA). The FCRA, among other things, requires that employers disclose to applicants/employees that a consumer report may be obtained for employment purposes before requesting the report. Specifically, an employer or prospective employer must provide “a clear and conspicuous disclosure” in writing to the individual on whom the report is to be conducted and that disclosure must be “in a document that consists solely of the disclosure.”

It is this stand-alone disclosure requirement that is now the subject of many class action lawsuits. Applicants (and their class-action counsel) scrutinize the background check disclosure forms used by employers and if there is any extraneous information included on the form, they file a lawsuit alleging that the employer violated the FCRA by failing to provide a stand-alone disclosure. The applicants can allege a statutory FCRA violation without suffering any actual damages, seeking recovery of between $100 and $1,000 for each member of the class of applicants who were provided the same form. They also seek punitive damages for willful violations of the FCRA.

Extraneous Information on FCRA Forms

The text of the FCRA does not define what it means to be a “document that consists solely of the [required] disclosure.” It does, however, state that the required written authorization from the applicant/employee may be included with the disclosure. Consequently, employers may combine the FCRA disclosure with the authorization/consent requirement, but any other information on the form may jeopardize compliance.

As these cases proceed through the courts, judges have found certain types of additional information on the FCRA disclosure form to be problematic, including:

Imbedding the FCRA disclosure within a job application
Release of liability, e.g., “I hereby release [employer] and any of its authorized agents from liability”
Acknowledgement of no discrimination, e.g., “I fully understand that all employment decisions are based on legitimate non-discriminatory reasons”
Ramifications of falsified information, e.g., “I understand that submission of false information on this or any employment forms may result in non-selection or termination if hired”
State-specific notices, e.g., notices specific to California or New York applicants, etc.
Statements about how background information will be gathered and from which sources
Procedures for how to dispute information on the reports, including time frames for challenging the accuracy of any report
Name, address and contact information of the consumer reporting agency

In most cases, the courts have refused to dismiss these lawsuits at an early stage, allowing the class representatives to proceed with their allegations of FCRA violations based on these types of extraneous information in disclosure forms. It is unclear whether a judge or jury will ultimately conclude that an FCRA violation exists in these cases, but the affected employers face significant risk of liability as well as the time, expense and public notoriety related to defending these actions in court.

Don’t Rely On Your Screener

If you think you are out of danger because you rely on FCRA forms provided by your background screening company, think again. Consider the recent class action filed against Big Lots in Philadelphia. The national chain of retail stores used a “Consent to Request Consumer Report & Investigative Consumer Report Information” form provided by its background check provider, Sterling Infosystems, that did not contain the required disclosure language. Instead, the form included allegedly extraneous information, including an implied liability waiver, a full page of state-specific notices, and information about how background information will be gathered and how disputed information may be challenged.

The class action seeks to hold Big Lots liable for its alleged violation of its FCRA disclosure obligations, and it will be up to Big Lots to try to hold Sterling Infosystems liable for providing non-compliant forms. However, because many background screening providers limit their liability in their service contracts, sometimes to only two or three months’ worth of screening costs, you may be left without much recourse.

Review Your FCRA Forms

Take the time to review your background check disclosure and authorization forms now. Make sure your FCRA disclosure and authorization is not imbedded or buried in your employment application. If your disclosure forms include extraneous statements, such as liability waivers, state-specific disclosures, or other background check procedures, your forms may not meet the FCRA requirement to be a stand-alone disclosure. Consider removing the extra wording from the FCRA disclosure forms and move them to a different, non-FCRA-related document. These sorts of class actions can be easy pickings, so taking action now will go a long way toward avoiding being hauled into court.

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November 4, 2015

2016 Colorado Minimum Wage Going Up To $8.31 Per Hour

By Emily Hobbs-Wright

Minimum wage workers in Colorado will see a one percent increase in their hourly wage in 2016. The Colorado Division of Labor has proposed to increase the minimum wage from the current $8.23 per hour to $8.31 per hour beginning January 1, 2016. The minimum wage for tipped employees will increase from $5.21 to $5.29 per hour.

The Colorado Constitution mandates that the state minimum wage rates be automatically adjusted for inflation each year. The new wage rates for 2016 reflect that the consumer price index (CPI) for the Denver-Boulder-Greeley urban area for the first half of 2015 went up overall by one percent from the first half of 2014. The Bureau of Labor Statistics noted that higher costs for housing, up 5.5%, were largely responsible for the overall increase. Food prices rose 1.5 percent and other items were up 3.2%. Despite a 21.7% decrease in energy costs, the overall CPI for urban consumers was up one percent.

Proposed Minimum Wage Order Number 32 will be up for comment at a public hearing on November 9, 2015, after which the Division of Labor will issue its final rule. Information about the hearing and submitting written comments is available on the Division’s website.

As a reminder, Colorado’s state minimum wage rates apply if either of the following two situations applies to an employee:

1. The employee is covered by the minimum wage provisions of Colorado Minimum Wage Order Number 32; or

2. The employee is covered by the minimum wage provisions of the Fair Labor Standards Act.

If in doubt about the application of Colorado’s wage laws, be sure to consult with your employment counsel.

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October 29, 2015

NLRB To Revisit Whether Graduate Teaching Assistants May Collectively Bargain

By Steve Gutierrez

Seeking to overturn long-standing precedent, the National Labor Relations Board (NLRB or Board) recently agreed to review whether graduate students who work as teaching or research assistants at universities are “employees” for purposes of voting for a union. The United Auto Workers (UAW) is seeking to represent student employees at The New School, a not-for-profit operator of higher education institutions in New York. Like a dog with a bone, the current NLRB is unwilling to give up on finding coverage for grad student assistants, despite two rejections of the representation petition by the Regional Director.

Is It Work or Educational?

The UAW petitioned to represent all student employees who provide teaching or research services at The New School. The proposed bargaining unit includes teaching assistants, fellows and tutors, as well as research assistants and associates.

The facts related to these positions are as follows:

About 350 individuals work in the proposed bargaining unit
The positions typically require between 10 and 20 hours of work per week
Each graduate assistant position typically lasts for one 15-week semester, but many graduate assistants are renewed for multiple semesters
The New School provides approximately $5 million annually to grad students in these positions
Each faculty member is allotted up to $5,100 per year to be used for student assistants
Teaching assistants are paid $4,500 per semester; teaching fellows receive $5,500 per semester, and tutors are paid an hourly rate, typically $17.00 per hour
Research associates can receive stipends of up to $40,000 per year due to grants from the federal government
Graduate assistants must provide I-9 forms to be eligible for the positions
Payments to the graduate assistants are made through a payroll account and taxes are withheld
Payments are disbursed biweekly but do not vary based on the number of hours worked (except for tutors)
Graduate assistants are not required to track, and the university does not monitor the amount of time spent on their duties
Applicants for these positions must maintain a minimum GPA
Some are selected using a formal process of interviews and appointment letters from the Human Resources department while others are offered positions more informally directly from a professor
Selection for the position is not dependent on financial need

When the UAW first petitioned to represent this group of student employees in December 2014, the Regional Director for the New York region dismissed the petition based on the NLRB’s 2004 decision in Brown University, which held that graduate student assistants were not “employees” under the National Labor Relations Act, and therefore, could not be unionized. The 2004 Board had decided that the graduate assistants had a primarily academic relationship with their school, not an economic, work-related one. Case closed, right? Wrong.

Will Graduate Assistant Precedent Be Overturned?

In March 2015, the Board reviewed the initial dismissal of the petition and sent it back to the region for a hearing. The Hearing Officer heard testimony and received evidence during a seven-day hearing, but in late July, the Regional Director found that Brown University still controlled, and dismissed the petition again.

The UAW requested (again) that the Board review the dismissal of its representation petition. On October 21, 2015, on a 3-1 vote, the Board granted the request for review, finding that it “raises substantial issues warranting review.”

The vote goes along political lines, with the three democratic members voting to review the graduate assistant issue and the sole republican member dissenting. (Note: the Board is currently short one member.) In his dissent, member Philip Miscimarra wrote that the sole basis for the UAW to seek review is its desire to have the Board overrule Brown University. Miscimarra believes there is no reason to overturn Brown University, pointing, in part, to the prevailing view for more than 40 years that graduate student assistants are not statutory employees, except for a four-year period from 2000-2004 when the ruling flip-flopped in favor of finding they were employees.

Is another flip-flop likely? It very well could be, given that the current majority of the Board continues to look to expand the reach of the NLRA. But even if the Board should find that graduate student assistants are statutory employees, it will need to address an argument by The New School that they are “casual” or “temporary” employees which would still deny them union representation.

We will continue to follow this case and pass along any developments as they occur.

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October 20, 2015

Colorado Vacation Policies: Use-It-Or-Lose-It Policy Hinges On When Vacation Is “Earned”

In recent weeks, the Colorado Division of Labor indicated that it was taking a new position when enforcing wage claims based on an employer’s vacation policy. The specific issue has revolved around whether a use-it-or-lose-it vacation policy—i.e., a policy where an employee cannot roll-over some or all earned vacation from year to year—is lawful in Colorado.

In response to inquiries about its position on such policies, the Division recently posted FAQs on its website stating that a use-it-or-lose-it vacation policy does not necessarily run afoul of the Colorado Wage Protection Act. But if an employee challenges the validity of the policy, the determining factor will focus on when the vacation pay is earned.

Division of Labor Leaves Many Questions Unanswered

According to Colorado’s Wage Protection Act, vacation pay “earned in accordance with the terms of any agreement” are “wages.” As a result, many Colorado employers have in place use-it-or-lose-it vacation policies, in which an employee may accrue a certain amount of vacation or paid time off (PTO) each year, but some or all of that vacation time will not roll-over into the following calendar year. The reason for such policies is simple: it avoids employees banking large sums of vacation or PTO, which is typically paid out upon separation from employment. Until recently, the Division had not taken a formal position on such policies.

However, given the recent changes to the Wage Protection Act, the Division is responsible for adjudicating wage claims, albeit the jurisdiction is limited to claims for $7,500 or less. In light of that change, and as many people likely saw, the Division issued guidance informally in recent weeks concerning use-it-or-lose-it vacation policies. After numerous legal alerts were sent out, the Division took a step back, as reflected in a Denver Post article.

Earlier this week, in an effort to clear up the confusion, the Division issued two FAQ’s, as noted above. Those FAQs specifically address whether Colorado employers may have use-it-or-lose-it provisions in their vacation policies. The Division answered that question yes, as long as any such policy is included in the terms of an agreement between the employer and employee. That clarification seems helpful, as it states that use-it-or-lose-it vacation policies are permissible under the Wage Protection Act.

The first FAQ, however, goes on to state that a use-it-or-lose-it policy may not deprive an employee of earned vacation time and/or the wages associated with that time. It also states that any vacation pay that is “earned and determinable” must be paid upon separation of employment. The terms of an agreement between the employer and employee will determine when vacation pay is earned.

This part of the FAQ is less helpful. It raises many questions about how an employer may structure a use-it-or-lose-it vacation policy in a way that will not deprive employees of any earned vacation. The Division’s position appears to be that once vacation is “earned,” it cannot be lost.

The second FAQ addresses what factors the Division will use to determine whether a specific use-it-or-lose-it policy is permissible. The Division first will look to whether the policy states when vacation pay is earned. If the policy does not state or is ambiguous as to when vacation pay is earned, the Division will consider the following factors in determining whether the use-it-or-lose-it policy is permissible:

The employer’s historical practices
Industry norms and standards
The subjective understandings of the employer and employee
Any other factual considerations which may shed light on when vacation time becomes “earned” under the agreement in question.

Take Aways For Use-It-Or-Lose-It Vacation Policies

Because of the many unanswered questions related to the validity of use-it-or-lose-it vacation policies, Colorado employers should exercise caution. Points to consider include:

The Division’s jurisdiction is limited to claims of $7,500 or less
The Division’s interpretation of the Wage Protection Act and vacation policies may or may not be accepted by courts, and
To avoid any potential challenge, consider a maximum accrual policy instead of a use-it-or-lose-it policy (e.g., once an employee hits a certain accrual, the employee will not earn more vacation or PTO until the employee falls below the maximum)

The best practice if you want to maintain a use-it-or-lose-it vacation or PTO policy is to review your policy with experienced employment counsel to determine if/how to revise your policies in light of the new guidance from the Division.

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September 23, 2015

HHS Proposes To Ban Discrimination in Health Programs

By Patricia Dean

Under a newly proposed rule from the Department of Health and Human Services (HHS), consumers cannot be discriminated against or denied health services or health coverage because of their race, color, national origin, sex, age, or disability. The proposed rule is called Nondiscrimination in Health Programs and Activities and is intended to provide equal access to health care services to individuals who historically have been vulnerable to discrimination, including discrimination based on gender identity. The new rule would also require language assistance for people with limited proficiency in the English language.

The proposed rule applies to any health program administered by HHS, that receives funding in any part from HHS, such as providers who treat Medicare patients, and to all plans offered through the Marketplaces. Read our full alert about this proposed rule here.

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September 11, 2015

Broader Joint-Employer Test Leads to Teamsters Win At Browning-Ferris

By Steve Gutierrez

In a previous article, we noted that the NLRB’s recent Browning-Ferris ruling was significant for those employers who use temporary or staffing agencies to provide workers. The Board set a new, broader test for joint-employer status that does not require the purported joint employer to exercise control over the workers in question. Instead, if the company has the right to exercise control over the terms and conditions of certain workers, it can be deemed a joint employer even if it never actually exercises that control. Now we can see the significance of the impact.

Based upon the joint-employer determination, the impounded ballots of the workers of Leadpoint Business Services, the entity that staffed Browning-Ferris’s California recycling plant, were counted as part of the bargaining unit, which provided a 73-17 margin in favor of representation by the Teamsters. Depending on the outcome of any objections filed by the company, the NLRB will certify the union as the collective bargaining representative for the recycling center’s workers. This allows the unit to collectively bargain over the terms and conditions of employment at that facility.

Bargaining Over Terms Of Contingent Workers

Think about this: Browning-Ferris does not “employ” the workers placed at its facility by staffing agency, Leadpoint. It doesn’t hire, pay, provide benefits to, or fire them. Yet, it will be required to sit down at the bargaining table across from the Teamsters to negotiate the terms and conditions of employment of those contingent workers over which it retains authority to control. That is the result of being found a joint employer of the bargaining-unit workers.

Extension of Joint-Employer Test to Other Contexts?

Joint-employer status is a critical determination for companies that use contingent workers as well as for franchises. And, it can apply not only in the union context, but also in other employment law contexts, such as for pay purposes under the Fair Labor Standards Act or for discrimination under Title VII. Even though the standards and policy behind a joint-employer relationship under other employment laws may differ from those behind the National Labor Relations Act, this new, broader test will likely be asserted in these other contexts in order to bring in franchisors and companies that use contingent workers as potentially liable parties.

Appeal Over Joint-Employer Test Coming?

Because of the high stakes involved in this ruling, it would not be surprising if Browning-Ferris (which is part of Republic Services, Inc.) appealed the NLRB’s ruling, taking its case to the applicable court of appeals. Another option is that after the union is certified, Browning-Ferris could refuse to bargain with the Teamsters which would lead to more proceedings before the Board, and ultimately, the courts. Given that the Board has already ruled in favor of the union on this matter, the company will likely have a better chance seeking review by circuit judges. Either way, this matter is probably not over.

Stay tuned and we will let you know what develops further. What we do know, is the NLRB will not sit idle and we should expect it to use its power to push the envelope in favor of the nation’s unions.

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September 8, 2015

Colorado’s Parental Leave For Academic Activities Ended September 1

By Emily Hobbs-Wright

The school year is upon us and working parents will once again find themselves juggling job duties and school functions. The juggling may be a bit more difficult for some parents this year, as those that work for larger Colorado employers are no longer guaranteed time off to attend their kid’s school activities. As of September 1st, Colorado employers with 50 or more employees are no longer required by law to provide parents time off to attend academic activities for their school children. The Parental Involvement in K-12 Education Act (Academic Leave Act) automatically repealed on that date, relieving covered employers of providing that leave.

Colorado Senate Committee Shot Down Extension of Academic Leave Act

In effect since 2009, the Academic Leave Act required employers with 50 or more employees to provide its full-time employees up to 6 hours in any one-month period, and up to 18 hours per academic year, of unpaid leave from work to attend a child's academic activities. C.R.S. §8-13.3-101 et seq. Part-time workers were entitled to pro-rated leave based on the amount of hours worked. Covered academic activities included attending parent-teacher conferences, and meetings related to special education needs, truancy, dropout prevention and disciplinary concerns.

The 2009 law specified that it would repeal on September 1, 2015. This past legislative session, Representatives John Buckner and Rhonda Fields introduced a bill that sought to extend the Academic Leave Act indefinitely. House Bill 1221 also attempted to expand the law to:

include pre-school activities, rather than just K-12;
add more covered activities to include attending meetings with a school counselor and attending academic achievement ceremonies; and
require school districts and charter schools to post on their websites and include in their district/school-wide communications information to parents and the community at large about the leave requirement.

The bill passed the House and was sent to the Senate. The Senate committee to which it was assigned voted 3-2 to kill the bill. By doing so, the bill never got to a vote in the full Senate and died. The result is that the Academic Leave Act was not extended and the original repeal date of September 1, 2015 remains.

Action Items

With the repeal of the Academic Leave Act and no federal law mandating this type of leave, Colorado employers with more than 50 employees no longer need to offer parents of school-age children leave to attend covered school functions. You may, of course, choose to voluntarily continue to offer parents time off to attend their child’s school functions. If you do, decide whether you will continue to offer it under the same terms as was mandated by law or if you wish to set your own parameters about eligibility, amount of leave, notice requirements, whether documentation of the activity is required, etc. Then, update your policies and let employees know about any changes.

If you choose not to offer parents time off to attend their child’s academic activities, update your policies and procedures to delete that type of leave. Revise your employee handbook and any intranet policies to reflect that academic leave is no longer available. Inform supervisors and managers so that they know how to handle any requests or questions. Importantly, communicate to employees that the academic leave provision was repealed and let them know about any other time off policies, if any, that may apply to allow them to attend school functions.

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August 28, 2015

NLRB Throws Out Years of Joint-Employer Precedent – Adopts Two-Part Test For Joint-Employer Status

By Brian Mumaugh

The National Labor Relations Board (NLRB or Board) has thrown employers a curve by overruling 30 years of long-standing decisions that narrowed the circumstances under which a joint-employer relationship could be found to exist. In a closely-watched decision, the Board revised its joint-employer standard, dictating a broader two-step test that will result in entities that use contingent workers more likely being deemed joint employers for union representation purposes. Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015).

Two-Part Joint Employer Test

In its 3-to-2 decision, the Board reaffirmed a 1982 joint-employer standard under which the Board will find that two or more statutory employers are joint employers of the same employees if they share or codetermine the essential terms and conditions of employment. First, the Board will determine whether the putative employer has a common-law employment relationship with the employees in question. If that relationship exists, the Board then will determine whether the employer possesses sufficient control over the employees’ essential terms and conditions of employment to permit meaningful collective bargaining.

Employer Need Not Exercise Control Over Employees

Over the past 30 years, joint-employer cases have defined the degree of control that an employer must assert over the workers to be deemed a joint employer. Those cases, including Laerco and TLI, required that the putative employer actually exercise control over the terms and conditions of employment to be deemed a joint employer. In addition, exercising that control had to be direct and immediate, not of a limited and routing nature. Simply possessing the authority to exercise control, without actually exercising that control, was not enough under long-standing Board law.

That requirement is now gone. The Board ruled, in Browning-Ferris, it will no longer require that a joint employer exercise its authority to control the terms and conditions of the employees’ employment. The proper inquiry will be whether the statutory employer “possesses sufficient control over the work of the employees to qualify as a joint employer with” another employer. In addition, control exercised indirectly, such as through an agent or intermediary, may be sufficient to establish joint-employer status.

BFI Deemed A Joint Employer With Temp Agency

After articulating its revised test, the Board applied it to the BFI case at hand. The case arose after a union sought to include certain workers at the BFI Newby Island Recyclery in a bargaining unit during a union election. The workers were employed by Leadpoint Business Services, a temporary labor services agency, and were assigned to work at BFI’s recycling plant as sorters, screen cleaners and housekeepers. The contract between BFI and Leadpoint specifically stated that Leadpoint was the sole employer of the workers and there was no employment relationship between BFI and those workers.

The Board concluded that BFI was a joint employer of the workers with Leadpoint. Contributing factors leading the Board to determine that BFI is a common-law employer and shares or codetermines essential terms and conditions of employment include:

BFI retained the right to require that Leadpoint meet or exceed BFI’s own standard selection procedures and tests, requires drug tests and prohibits Leadpoint from hiring workers deemed to be ineligible for rehire by BFI;
BFI retained the right to reject any worker that Leadpoint refers to its facility “for any or no reason” and to discontinue the use of any personnel that Leadpoint assigned to it;
BFI managers had requested the immediate dismissal of certain workers due to misconduct and Leadpoint dismissed them from BFI’s facility shortly afterward;
BFI controlled the speed of the material streams and specific productivity standards for sorting;
BFI managers assigned specific tasks that need to be completed, determined where workers are to be positions and exercised near-constant oversight of workers’ performance;
BFI identified the number of workers it needs, the timing of the shifts and when overtime is necessary, even though Leadpoint selects the specific employees who will do the work;
Despite Leadpoint determining pay rates, administering payroll and benefits and retaining payroll records, BFI prevented Leadpoint from paying employees more than BFI employees in comparable jobs and used a cost-plus model under the contract;
After a new minimum wage law went into effect, BFI and Leadpoint entered into an agreement for BFI to pay a higher rate for the services of Leadpoint employees.

As a result of finding that BFI was a joint employer of these workers, the Board ordered the Regional Director to open and count the impounded ballots cast by the employees in the petitioned-for unit. If the employees voted for union representation, BFI will have to collectively bargain over the terms and conditions of employment over which it retains the right to control.

Implications For Employers

The Board seeks to prevent companies from insulating themselves from the application of labor laws by using temporary or other contingent workforces and this new standard will further their goal. This new, broader standard for joint-employer status will make it easier for unions to include contingent workers into bargaining units at the facilities for which they are providing services. In addition, as pointed out by the dissent, this change “will subject countless entities to unprecedented new joint-bargaining obligations that most do not even know they have, to potential joint liability for unfair labor practices and breaches of collective-bargaining agreements, and to economic protest activity, including what have heretofore been unlawful secondary strikes, boycotts and picketing.”

If your organization uses contingent workers, you should review your existing labor services agreements and, to the extent possible, renegotiate any terms that reserve your right to control the terms and conditions of the contingent workers’ employment. You also should attempt to eliminate any functional oversight and decision-making to ensure that you are not exercising any control, whether directly or indirectly, over the contingent workers. The reservation of the right to dictate any terms or conditions of employment, or the actual exercise of that control in any way, is likely to lead you to be deemed a joint employer of those workers.

We will keep you posted of further developments, including any appeals of this decision.

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