July 1, 2019

2019 Nevada Employment Legislation Updates

by Dora Lane

Over the last two years, the Nevada Legislature has passed a substantial number of laws affecting Nevada employers. Some of the most notable employment laws that recently passed are summarized below.

AB 132 (Pre-Employment Marijuana Drug Testing, effective January 1, 2020)

Starting with one of the most controversial bills, AB 132 addresses pre-employment marijuana screening of job applicants. When the recreational marijuana initiative passed in 2016 (effective 2017), it specifically stated that it did not prohibit “[a] public or private employer from maintaining, enacting, and enforcing a workplace policy prohibiting or restricting actions or conduct otherwise permitted under this chapter.” AB 132 provides that, subject to certain exceptions, it is unlawful for any employer in Nevada to “fail or refuse to hire a prospective employee because the prospective employee submitted to a screening test and the results of the screening test indicate the presence of marijuana.” AB 132 also provides that if an employer requires an employee to submit to a screening test within the initial 30 days of employment, the employee has the right to submit to an additional screening test (at the employee’s expense) to rebut the results of the initial test. The employer is required to accept and give appropriate consideration to the results of the second test.

For the full text of the bill, click here.

June 28, 2019

Avoiding Pitfalls When Trying to Offer Benefits That Exceed the FMLA’s Mandate

By Matthew Cecil

On March 14, 2019 the Department of Labor issued an opinion letter considering whether employers violate the Family Medical Leave Act (FMLA) by expanding the amount of leave given to an employee before designating the leave as protected by the FMLA. This article considers two common FMLA pitfalls addressed in the Department of Labor’s March 14, 2019 Opinion Letter (FMLA2019-1-A): (1) communicating benefits to employees that exceed FMLA requirements; and (2) waiting to designate leave as protected by the FMLA.

Communicating Information to Employees About FMLA Benefits and Benefits That Exceed the FMLA

The FMLA requires employers to provide covered employees with up to 12 weeks of job-protected, unpaid leave each year for qualifying family and medical reasons (or up to 26 weeks for qualifying military caregiver leave).

June 20, 2019

U.S. DOL Proposes New Joint Employer Test

By: Mark Wiletsky

Employers often struggle to determine whether they might be considered “joint employers” with other entities under the Fair Labor Standards Act (FLSA). The U.S. Department of Labor (DOL) is proposing new guidance on this topic, providing much-needed clarity for employers across the country.

DOL’s Proposed Rule Would Clarify Joint Employer Test Under the FLSA

In today’s economy, businesses often work together to provide services or products to consumers and other entities. For example, companies sometimes rely on staffing agencies to augment their workforces, and organizations contract with vendors to provide services such as landscaping, building maintenance, and cleaning. These and other business arrangements create the significant—and often difficult to assess—risk that the associated entities may be deemed “joint employers” under the FLSA, even if they are independently owned and operated. If associated entities are considered joint employers, each may be liable for paying minimum wage and overtime to employees, which can pose huge liability concerns where one entity fails to comply with applicable wage and hour law.

Unfortunately, determining whether two or more entities are in fact joint employers is no easy task. Different courts have formulated different tests for joint employer status, and the tests are often complicated and indeterminate.

June 14, 2019

Employers Pay Attention: New Marijuana-Related Bill Passes Nevada Legislature

A number of employment-related bills passed this 2019 legislative session. One of these bills is AB 132, revising certain sections of NRS Chapter 613 as it relates to unlawful employment practices.

To put things in perspective, when the recreational marijuana initiative passed in 2016 (effective 2017), it specifically stated that it did not prohibit “[a] public or private employer from maintaining, enacting, and enforcing a workplace policy prohibiting or restricting actions or conduct otherwise permitted under this chapter.” See NRS 453D.100(2)(a). AB 132 provides that, subject to the exceptions listed below, it is unlawful for any employer in Nevada to “fail or refuse to hire a prospective employee because the prospective employee submitted to a screening test and the results of the screening test indicate the presence of marijuana.” AB 132 creates exceptions to this mandate if the prospective employee is applying for a position:

As a firefighter, as defined in NRS 450B.071;
As an emergency medical technician, as defined in NRS 450B.065;
That requires the employee to operate a motor vehicle and for which federal or state law mandates that the employee submit to screening tests; or
That, in the employer’s determination, could adversely affect the safety of others.

June 13, 2019

What’s Up In New Mexico Workplace Law

By Little v. West

Gov. Michelle Lujan Grisham signed bills into law from the 2019 legislative session that will impact private employers in New Mexico. Below is a summary of several bills that change the law applicable to private employers. Employers should consult with legal counsel and consider reviewing and updating employment policies, procedures and handbooks.

‘Right to work’

House Bill 85 rejects “right to work” as a matter of statewide policy and instead establishes that an employer or union in New Mexico can require membership in a union as a condition of employment. HB 85 also prohibits local governments in New Mexico from enacting “right to work” ordinances, invalidating the “right to work” ordinances several counties enacted.

June 5, 2019

Federal Courts Have Jurisdiction Over Title VII Discrimination Claims Even Where Administrative Remedies Have Not Been Exhausted

by Steve Gutierrez

The United States Supreme Court ruled unanimously on June 3, 2019 that Title VII’s charge-filing requirement is not jurisdictional. In Fort Bend County, Texas v. Davis, Justice Ginsberg delivered the Court’s unanimous decision noting that while Title VII requires a complainant to first file a charge of discrimination with the Equal Employment Opportunity Commission (EEOC), the charge-filing precondition is not a jurisdictional requirement that can be raised at any stage of a proceeding. Rather, the charge-filing prerequisite is ranked among the claim processing rules that must be timely raised for it to apply.

The complainant in the Fort Bend, Lois M. Davis,case timely filed her initial charge of discrimination for retaliation after she claimed her supervisor retaliated against her by curtailing work responsibilities. Complainant alleged the supervisor wanted to punish her for a complaint she made against her supervisor’s friend who resigned following an investigation into a sexual harassment complaint. While her charge of discrimination was pending, Ms. Davis was instructed by her supervisor to report to work on a Sunday. Ms. Davis told her supervisor that she could not come in on Sunday, that she had a commitment at her church, and offered to have another employee replace her. Ms. Davis’ supervisor was insistent and told her that if she did not report to work on Sunday she would be terminated. Ms. Davis went to church instead of work and was promptly terminated. Thereafter, Ms. Davis attempted to supplement the allegations of her original Charge of Discrimination by adding to the intake questionnaire the word “religion.”

April 16, 2019

The Past and Future of the NLRB’s “Quickie Election” Rules

By Steven Gutierrez

The National Labor Relations Board is charged with holding union elections whenever petitioners demonstrate that a sufficient number of employees in a particular workplace wish to become unionized. The NLRB’s “quickie election” rules have changed how this process plays out, and how employers should respond.

Slow Start to “Quickie Election” Rules

Seems like 2011 was a long time ago. That was when the National Labor Relations Board (NLRB) first proposed and implemented sweeping new rules designed to speed up the union election process. Business groups, including the U.S. Chamber of Commerce and others, sought to enjoin implementation of what became known as the “quickie election” rules by suing the NLRB in federal district court in Washington, D.C. Just two weeks after the rules became effective, a judge in that case invalidated the rules, finding that the Board had lacked a three-member quorum needed to adopt the rules. But the issue did not die there.

March 6, 2019

IRS Attempts to Tighten Rules for Business Meal Exclusions

By William Colgin and John Ludlum

Internal Revenue Code Section 119 (Code Section 119) allows employees to exclude from income the value of any meals furnished by or on behalf of their employer if the meals are furnished on the employer’s business premises for the convenience of the employer. Whether meals are furnished for the convenience of the employer is one of fact to be determined by analysis of all the facts and circumstances in each case. Treasury Regulation 1.119-1 provides that meals furnished by an employer to the employee will be regarded as furnished for the convenience of the employer if such meals are furnished for a substantial non-compensatory business reason of the employer.

Many companies provide meals to their employees, but the rules for excluding this benefit from income are complex and have detailed administration requirements. The taxpayer bears the burden of proving entitlement to such an exclusion. An employer who is claiming exclusion from income and wages for meals furnished to employees for the convenience of the employer must provide substantiation if requested concerning the business reasons. A recent IRS Technical Advice Memorandum issued on February 15, 2019, (“TAM 201903017”) underlines how difficult it can be to prove to the IRS administratively a substantial non-compensatory business reason and provides guidance for employers looking to claim the exclusion.

February 14, 2019

U.S. DOL Eases Restriction on Tipped Employees

Katarina Harris

By Katarina Harris

Employers in the hospitality industry have long struggled to follow U.S. DOL guidance limiting circumstances under which they may take a “tip credit” toward their employees’ federal minimum wage. New U.S. DOL guidance eases that restriction.

DOL Opinion Letter Retracts “80/20 Rule”

In a new opinion letter released November 8, 2018, the U.S. Department of Labor (DOL) decided to eliminate the “80/20 Rule” which had previously limited employers’ ability to take a “tip credit” toward their employees’ federal minimum wage. This retraction comes as a relief to many employers in the hospitality industry, as the previous rule effectively required employers to track and account for the time their employees spent on non-tipped tasks, such as rolling silverware, filling salt-shakers, and other types of daily “side work.” Under the 80/20 Rule, an employer could not take a tip credit for non-tip-generating duties performed by a tipped employee if the amount of time spent on such duties exceeded twenty percent of the employee’s overall work. Tracking and monitoring this time was a tedious and difficult task for employers, resulting in higher risk from wage and hour lawsuits.

“Dual Job” and “Dual Task” Rules Sowed Confusion

Under the federal Fair Labor Standards Act (FLSA), employers must currently pay employees a minimum wage of $7.25 per hour. State wage and hour laws may impose different and higher minimum wage requirements. However, if an employee qualifies as a “tipped” employee under federal regulations, his or her employer may pay the employee just $2.13 per hour in cash wages and take a “tip credit” arising from the employee’s actual tips to cover the remainder of the federal minimum wage. This credit may total $5.12 per hour.

However, the FLSA distinguishes between tipped employees who perform non-tip-generating duties and those considered to have “dual jobs.” For employers, this distinction is critical to avoiding wage and hour lawsuits. If an employee is employed in both a tipped occupation (e.g., as a server), and in a non-tipped occupation (e.g., as a janitor), for the same employer, the employer may only take the tip credit for that employee’s work in the tipped occupation. For all work performed in the non-tipped occupation, the employer must pay the employee his or her federal minimum wage in cash wages.

The old 80/20 Rule took this functional distinction even further. It effectively distinguished between “dual jobs” and those involving “dual tasks.” Even if a tipped employee was not engaged in a “dual job”—for instance, if he or she worked solely as a server—the employer could still not take a tip credit for any work the employee performed which was related to, but not directed toward, producing tips—at least if the employee spent more than 20% of his or her time on such duties. This was the old 80/20 Rule.

Employers Found “80/20 Rule” Unworkable

Many employers found the old 80/20 Rule burdensome, if not completely unworkable. It effectively required employers to track tipped employees’ time spent on non-tip-generating duties. It also opened the door to wage lawsuits requiring detailed fact-finding in order to reconstruct exactly how much time, minute-by-minute, a tipped employee spent on particular tasks. Even worse, the rule did not specify which tasks were considered “related” to tip-generating occupations, as opposed to constituting distinct, non-tipped work. If a customer dropped silverware on the floor and asked a server for a new set, was the time spent rolling a new set of silverware related to tip-generating work? Would the answer be different if the server rolled extra sets of silverware at the beginning of his or her shift before the first customers arrived? Issues like these created a fertile field for litigation.

New DOL Opinion Letter Revives Old Guidance

In January 2009, the DOL issued an opinion letter which briefly rescinded the 80/20 Rule. However, the DOL retracted this rescission just two months later after a new administration came into office. The 80/20 Rule remained in force at all times thereafter.

In its November 2018 opinion letter, the DOL has now reissued its previous January 2009 guidance rescinding the 80/20 Rule. In this new letter, the DOL acknowledges that its previous guidance created some “confusion and inconsistent application” of the tip credit. The letter also quotes a federal circuit court’s observation that, under the old 80/20 Rule, “nearly every person employed in a tipped occupation could claim a cause of action against his employer if the employer did not keep perpetual surveillance or require them to maintain precise time logs accounting for every minute of their shifts.”

Given the practical difficulties caused by the 80/20 Rule, the DOL announced in its new opinion letter that the agency no longer “intend[s] to place a limitation on the amount of duties related to a tip-producing occupation that may be performed” by a tipped employee, at least if such non-tipped duties are performed “contemporaneously with the duties involving direct service to customers.” The related, but non-tip-producing, duties may also be performed “for a reasonable time immediately before or after” a tipped employee performs his or her direct-service duties without imperiling the credit. For employers, this means no more logging, tracking, and monitoring tipped employees’ daily activities.

The DOL’s new letter also acknowledges the need to provide front-end guidance to employers on which duties are entirely unrelated to tip-producing occupations, and thus not subject to the tip credit. To this end, the letter references a list of “core” and “supplemental” duties for certain tip-producing occupations provided by the Occupational Information Network (O*NET). Employers may consult this list to determinine whether certain tasks are related to tip-producing occupations, in which case they are subject to the tip credit. Conversely, employers may not take the tip credit in relation to any duties which do not appear on this list, unless they are very minimal in duration (i.e., “de minimis”)

Greater Clarity for Hospitality Employers

Although additional uncertainties regarding the tip credit may persist into future—e.g., what is a “reasonable time” immediately before or after a tip-producing activity for purposes of related duties?—the DOL’s new opinion letter provides much-needed guidance to employers in the hospitality industry. Employers need no longer track time spent on tip-producing versus “related” tasks in order to claim the tip credit. Nonetheless, hospitality employers should remain vigilant in distinguishing between “dual jobs,” and those with “dual tasks,” because any time spent in non-tipped occupations remains ineligible for the tip credit. When in doubt, employers should consult experienced employment law counsel for additional guidance.

November 20, 2018

Sexual Harassment Cases Provide Concrete Reason to Change Corporate Culture

Brad Cave

By Brad Cave

Sexual harassment can affect your workplace in many significant ways—for example, by lowering morale, increasing absenteeism and turnover, and decreasing productivity. But those consequences are often difficult to measure and quantify, making it harder to show how they affect your company’s bottom line. Real dollars and cents in the form of jury awards and settlements with employees who have sued their employers for fostering a hostile work environment are more easily understandable and can be persuasive when you need to justify expenditures designed to reduce harassment in your workplace.

A survey of sexual harassment awards and settlements in cases involving the Equal Employment Opportunity Commission (EEOC) in federal courts within the U.S. 10th Circuit Court of Appeals (which covers Wyoming, Colorado, Kansas, New Mexico, Oklahoma, and Utah) offers insight into how much money can be at stake in sexual harassment lawsuits. In addition to the monetary penalties noted in the chart at the bottom of this article, settlement terms often include numerous nonfinancial requirements, such as providing harassment training to supervisors and employees, updating policies and practices, apologizing in writing to the victimized employee, posting notices in the workplace about employees’ right to be free from harassment, and continued EEOC monitoring of your company’s practices.

And keep in mind that in addition to any financial award or settlement, you will incur the costs associated with defending sexual harassment claims. Not only do the attorneys’ fees add up, but supervisors, HR personnel, and others must take time away from their regular tasks to participate in investigations, depositions, and trial preparation. In short, the ramifications of sexual harassment in the workplace are significant, not only in financial terms but also in terms of distractions to your business operations and lost productivity.

Update your approach to sexual harassment

In its newly released statistics for fiscal year 2018, the EEOC reported a 13.6 percent increase in sexual harassment charges over the previous year and a 50 percent increase in lawsuits that include allegations of sexual harassment. In addition, the EEOC noted that its sexual harassment webpage has seen double the number of visits since the #MeToo movement gained momentum one year ago. As employees become more willing to come forward with harassment complaints and public scrutiny continues to damage companies’ reputations, it’s more important than ever to revisit and update your approach to handling and eliminating sexual harassment in your workplace.

On October 31, the EEOC held a public meeting titled “Revamping Workplace Culture to Prevent Harassment” at its headquarters in Washington, D.C. Stakeholders who spoke at the meeting stressed the need for leadership and accountability throughout the organization when workplace harassment is being addressed. According to EEOC Acting Chair Victoria A. Lipnic, “Over the past year, we have seen far too many examples of significant gaps in both areas. Our witnesses [at this meeting] stressed how both leadership and accountability must also be driven throughout an organization from the line employees, to the supervisors, to the CEO, and to the Board.”

Change your culture

So how does an organization change its culture? It has to come from the top. Company leaders and executives must set the tone by assuring employees that sexual harassment will not be tolerated. No one must be exempt from that zero-tolerance approach, no matter how important the individual is to the organization.

Complaints must be taken seriously, and employees who come forward should be treated with respect. If you find that harassment occurred, you must mete out significant consequences for the perpetrator and provide appropriate remedies for the aggrieved employee. Allegations must not be swept under the rug, and the perpetrator shouldn’t be permitted to hide behind a confidential settlement and continue working at the organization, creating the possibility that he or she may harass others in the future.

Changing your culture also requires executives, managers, and supervisors lead by example. Their actions and behavior must be irreproachable, never crossing the line into potential gray areas of sexual harassment. Yes, that means that folks in positions of power may need to rethink their jokes and refrain from certain types of banter. But never crossing the line will show the rest of the workforce that inappropriate behavior is unacceptable.

Encourage bystander intervention and reporting

Victims of sexual harassment often feel ashamed or traumatized, leaving them unable or unwilling to report what happened to them. One way to ensure that workplace incidents get reported is to make it every employee’s responsibility to report what they see and hear at the workplace. Tell employees that they are expected to come forward with any inappropriate conduct they witness or become aware of. Include that expectation in your harassment policy, and make sure you have reporting mechanisms to handle reports from bystanders and witnesses.

Another method of involving employees who witness unlawful harassment is to teach bystander intervention techniques. For example, if an employee sees a coworker being inappropriately touched, she may intervene by getting the coworker out of the area and away from the situation. Inventing a meeting the victim must attend or a phone call she needs to take can be a way to defuse the situation. Bystanders need not (and should not) put themselves in harm’s way when they intervene, but the presence of an additional person is often all that’s needed to break up a harmful scenario.

Make harassment training personal and relevant

Many organizations offer their employees harassment training on a regular basis, often annually. But as time passes, the training may become dull, or it may only be offered online, which means employees might multitask during the training or tune it out altogether.

In-person training can go a long way toward getting employees to take workplace harassment seriously. When employees are allowed to interact with the trainer and each other, the concepts often sink in better, and clarifications that may not be possible with online training can be made. Training should involve harassment scenarios that help employees understand the type of conduct that’s unacceptable. It also should cover your policies, reporting mechanisms, and the consequences for violations.

Consider bringing in outside trainers to keep the content fresh. And remember to include leaders in your training to show that they take the issue seriously, helping to reinforce your antiharassment culture.

Make an anonymous hotline available

Consider setting up an 800 number or using a hotline service that allows employees to report potential harassment or workplace misconduct 24/7. The hotline need not be staffed as long as it permits employees to leave a message. Hotlines can be an additional reporting mechanism that feels less threatening or embarrassing to victims.

Why offer so many reporting avenues, including anonymous reporting? Because you can do something about workplace harassment only if you know it’s occurring. Reports of allegedly inappropriate behavior should trigger a prompt and thorough investigation. If you discover that inappropriate conduct occurred, take steps to stop it from happening again, including terminating the person responsible. You cannot have a zero-tolerance policy if you let harassment continue or allow employees to “get away with it.”

Avoiding liability for harassment is worth changing your practices

With sexual harassment settlements topping six and even seven figures, it’s definitely worth your while to update your approach to handling and preventing workplace harassment. Companies that continue to do what they’ve always done, refusing to change in the #MeToo environment, will find themselves in court—or, perhaps worse, in the news. But updating your approach and changing your culture to show employees that your organization won’t tolerate sexual harassment will keep you from having to write those big settlement checks.

Plaintiff and description of defendant	Claims and statutes at issue	Damages, settlement amount, or other relief
EEOC v. hospitality company (District of Colorado, 2016)	Claims: • Sexual harassment (hostile work environment) • Retaliation	Settlement. $1,020,000

EEOC v. packing company (District of Colorado 2015)	Claims: • Sexual harassment (hostile work environment) • Retaliation	Settlement. $450,000
EEOC v. retail meat company (District of Colorado 2015)	Claims: • Sexual harassment (hostile work environment) • Retaliation	Settlement. $370,000 split between 21 women
EEOC v. bakery (District of New Mexico 2013)	Claims: • Sexual harassment (hostile work environment) • Gender discrimination	Settlement. $220,000 split between 19 women
EEOC v. restaurant group (District of New Mexico 2012)	Claims: • Sexual harassment (hostile work environment)	Settlement. $1,000,000
EEOC v. automotive group (District of Colorado 2012)	Claims: • Sexual harassment (hostile work environment) • Retaliation	Settlement. $50,000
EEOC v. pest control company (District of Utah 2011)	Claims: • Sexual harassment (hostile work environment)	Settlement. $160,000 split between class of female employees
EEOC v. corrections company (District of Colorado 2009)	Claims: • Sexual harassment (hostile work environment) • Retaliation	Settlement. $1,300,000 to plaintiff, plus $140,000 in attorney’s fees and costs
EEOC v. auto dealership (District of Colorado 2007)	Claims: • Sexual harassment (hostile work environment) • Retaliation • Gender discrimination	Settlement. $12,500 split between four female employees