IRS reduces Standard Mileage Rates for 2016. The IRS announced on December 17, 2015, that it is reducing the standard mileage rate for business from 57.5 cents per mile to 54 cents per mile for the 2016 calendar year. The rate for medical or moving purposes is reduced from 23 cents per mile to 19 cents per mile. The reimbursement rate for miles driven in service of charitable organizations remains the same at 14 cents per mile.
FLSA cases continue to grow. The number of lawsuits filed for wages owed for both regular and overtime work hours continue to rise. In 2015, the number of FLSA lawsuits that were filed rose nearly 8%. I expect even more to be filed in 2016. Among the issues:
- The use of Bring Your Own Device (BYOD) for work. Employees who use their personal smart phones/tablets/etc. for work have a tendency to use them before and after hours as well as during regular working hours. For non-exempt employees who are working more than 40 hours a week, they are most likely entitled to overtime.
- Misclassification of employees as Independent Contractors. The longstanding issue of misclassification of employees as independent contractors is in the crosshairs of the DOL, IRS and state revenue departments. As Uber expands into Birmingham and surrounding communities, there may be questions raised as to whether the drivers are employees or independent contractors. This issue is currently being litigated in California. Expect more lawsuits filed by alleged employees who claim to have been misclassified as independent contractors. Employers can be subject not only to back wages and overtime claims, but also for unpaid retirement benefits, health benefits, workers' compensation claims and unemployment compensation claims.
- Misclassification of non-exempt employees as exempt. Another longstanding issue, these claims continue to result in numerous lawsuits around the country.
- Failure to pay overtime. Numerous employers continue to fail to keep accurate records of time worked, and fail to properly account for overtime due and owing to employees.
- Minimum wages. Numerous states and cities around the country have enacted laws setting the minimum wage above the $7.25 required by the federal government. To date, Birmingham is the only city in Alabama that I am aware of that has passed such a law, which sets the minimum wage in Birmingham at $8.50 an hour effective July 1, 2016, and $10.10 an hour effective July 1, 2017.
- The implementation of the proposed change in the minimum threshold salary for overtime exception, from $23,660 to $50,400 has been delayed. You can read the details of the proposed changes in my pervious blog post. I anticipate this change being in place during 2016, and will post about it when it happens.
- Unpaid interns continue to be a hot topic. There have been a number of cases decided in 2015 that found employees were misclassified as unpaid interns. I anticipate that 2016 will continue to see its fair share of cases involving unpaid interns. Employers who utilize interns should consult with their legal counsel to make sure that they are in compliance with the law and whether they should be paid wages and receive benefits. Employers should also consider utilizing written Intern Contracts, which set forth the description of what they will be doing, and implementing arbitration and class/collective action waiver clauses.
Practice pointer. Employers should regularly review the classification of their workers, both as to employees and independent contractors and as to exempt or non-exempt employees. Job descriptions are vital in making this determination, and should also be reviewed on a regular basis. With very few exceptions, non-exempt employees are entitled to overtime for any work performed during a week that is in excess of 40 hours. Comp time, extra vacation time, etc. are generally not permitted to take the place of overtime wages. Lawsuits under the FLSA subject employers to back wages, liquidated damages, attorney's fees and more.
NLRB remains aggressive. The NLRB continues to aggressively pursue its interpretation of the laws and regulations it enforces. This includes:
- “Quickie elections” for union representation. In 2015, the NLRB implemented rules that would make it easier and quicker for employees to unionize. As evidenced by the successful unionization at the VW plant in Tennessee, and the increased push to unionize in the automotive industry in the south, including in Alabama, the new rules appear to favor unions over employers.
- Disciplinary action cannot be based on union organizing activities. The 11th Circuit recently decided the case of National Labor Relations Board v. Allied Medical Transport, Inc., Case No. 14-15033. Two drivers for Allied were actively involved in union organizing activity, and the campaign to unionize was successful. After the election, these 2 employees were terminated allegedly because they had fare discrepancies. The NLRB investigated, and the Administrative Law Judge found in favor of Allied. However, the NLRB rejected the ALJ's determination, and found that at least 2 other employees who had similar fare discrepancies, who were not involved in union activities, were not terminated. The NLRB determined that the 2 employees who were terminated were retaliated against because of their involvement with union activities. The 11th Circuit upheld the NLRB's finding, relying on several facts, including the termination shortly after the union elections, the anti-union animus of Allied and the employees' strong support of the union. This case emphasizes the importance of consistent enforcement of disciplinary policies and procedures.
- Social media policies and disciplinary action for social media activity continue to be a focus of the NLRB. Employers need to be aware that “protected concerted activity” is in fact protected by the law, whether in a union setting or in a non-unionized work place. The NLRB is taking a very liberal and broad approach in its interpretation of “protected concerted activity”. According to the Second Circuit, a mere “like” on Facebook can constitute “protected concerted activity”. In the case of Three D, LLC v. NLRB, the court ruled that Three D improperly discharged 2 employees after they “liked” a Facebook post that criticized how Triple D withheld taxes from employees. The court found that the comments, although disloyal and/or defamatory, were not so disloyal or defamatory to lose protection under the National Labor Relations Act, and that the comments were made to seek and provide mutual support. The outcome of many of the cases is determined by how employers enforce, or don't enforce, their policies and procedures. If policies and procedures are not enforced on a regular and consistent basis, but become the reason for disciplinary action related to social media activity, it is likely that the NLRB, as well as courts and juries, will find that the reason for the disciplinary action is the “protected concerted activity” and not a violation of the employer's policies and procedures.
- Employers who have a “no recording in the workplace” rule in place should re-examine that policy in light of a recent NLRB ruling. Whole Foods had a policy that prohibited recording in the workplace without prior approval. The NLRB found this rule to be in violation of the law in that it restricted “protected concerted activity”, such as recording instances of harassment, unsafe working conditions and picketing activities.
Practice pointer. The NLRB has been successful in pursuing employers due to the failure to consistently enforce policies and procedures for all employees. This is just another reminder that employers must consistently enforce their policies and procedures for all employees. Failure to do so may result in exposure to lawsuits, attorney's fees and low employee morale. Inconsistent enforcement of rules can lead to liability in all areas of employment law, including Title VII, FMLA, FLSA, OSHA, and workers' compensation.