business law

Injunction Stalls Overtime Rule: 42 Million Hurry Up & Wait

By: Rachel Dickey & Darryl Durham 

As most Louisville businesses are aware by now, the Department of Labor added a new rule to the Fair Labor Standards Act, doubling the salary threshold for overtime pay from $23,660 to $47,476. Under the proposed rule, employees who are paid $47,476 or less must be paid time and a half for any overtime, unless they come within a special exception to the rule.  That gives employers a couple of options: 1) pay time and half for overtime hours; 2) raise the employee’s pay to an amount over the threshold to avoid paying overtime; 3) limit the employee’s hours to 40 hours per week; or 5) some combination of the above.

This proposed change, which was to go into effect December 1, 2016, impacts over 4.2 million employees across the United States.  

However, the rule was recently challenged in State of Nevada et al v. U.S. Department of Labor, and an emergency preliminary injunction was granted in the case on November 22, 2016, by Judge Amos Mazzant of the Eastern District of Texas.

This injunction hits the pause button on the rule's roll out in all fifty states, even those who were not among the 21 states who joined as plaintiffs.  The Department of Labor’s website indicates that they “strongly disagree with the decision by the court” and insist that the “Overtime Final Rule is the result of a comprehensive, inclusive rule making process.” 

On December 1st, the Department of Justice, on behalf of the Department of Labor, filed a notice to appeal the preliminary injunction and made a motion to expedite the appeal, which was granted.    

For now, employers and employees across Kentucky can well… hurry up and wait.  However, your Louisville business should still be putting a plan in place, should the injunction be lifted.  

OMG! Are You Pregnant? Innocent Interview Questions Gone Wrong

What not to ask.

By: Rachel Dickey

If you’re a Kentucky or Louisville business owner, you know there are a lot of topics that come up during a job interview, and most of them are innocent enough.   But sometimes, even the most innocent questions can have serious employment law implications.  A perfect example, and subject of part one of this series, are the questions, “how many kids do you have and how old are they?”  Questions like this one, particularly when systematically asked to only female applicants, are risky.  Even when posed to both male and female applicants, the EEOC states that it will consider questions like this, and the ones listed below, when determining if a company is violating Title VII of the Civil Rights Act, which prohibits sex-based discrimination. 

Sometimes this information comes out in an interview without solicitation, but remember whether you ask, or they tell, you should not use the information to make your hiring decisions.  Questions like the one posed above, should only be asked after an offer of employment is made and accepted, and only for legitimate business reasons such as insurance.    If, for example, your business is thinking about not hiring someone because they have small kids and you’re concerned that it will take away from their hours, think again.  

FYI the EEOC instructs that the following inquires may be regarded as evidence of intent to discriminate when asked in the pre-employment context:

  • Whether the applicant is pregnant.
  • Marital status of applicant or whether applicant plans to marry.
  • Number and age of children or future child bearing plans.
  • Child care arrangements.
  • Employment status of spouse.
  • Name of spouse.

The Do's and Don'ts of Background Checks.

Background Check 101

By: Darnell McCoy

Many, if not most, businesses, both small and large, view the use of criminal background checks as a vital tool when contemplating new employee hires or internal promotions. As with any employment related matter, there are laws in place which employers must be mindful of when utilizing background checks.

Having said that, businesses should be sure to adopt a careful approach to the use of criminal background checks, as although they can be a key asset in handling personnel matters, they can quickly turn into a liability if the proper procedures are not followed.

Specifically, employers should be mindful of the Fair Credit Reporting Act and Title VII of the Civil Rights Act of 1964.

The Fair Credit Reporting Act (FCRA)

As a reader, you’re probably wondering what a criminal background check has to do with fair credit reporting. The answer is that such a report falls under the broader category of “consumer report” under the FCRA, and therefore is subject to its provisions. Likewise, the agency that an employer engages to provide the report is known as a “consumer reporting agency” (CRA), under the FCRA

So what does the FCRA require of employers? Essentially, it covers the procedural component, with the goal of achieving transparency and clarity between the parties involved. Here are some key points, broken down into the respective stages in the process.

  • Before Obtaining the Report, the employer must:
    • Provide the applicant/employee with notice in the form of an independent document which states that the information revealed by his/her criminal background report may be used in the decision-making process; and
    • Obtain written permission for to use the criminal background report from the applicant/employee.
  • After Obtaining the Report, but Before Taking Adverse Action
    • Before the employer rejects an application, terminates an employee, or takes any other adverse employment action based on the information contained in the report, the employer must provide to the applicant/employee:
      • A copy of the report being relied upon
      • A copy of a document entitled “A Summary of Your Rights Under the Fair Credit Reporting Act”, which will be provided to the employer by the CRA.
  • After Taking Adverse Action
    • The employer must give the applicant/employee additional notice. This “adverse action notice” must include:
      • The name and contact information of the CRA that provided the report.
      • A statement that the CRA was not the decision maker and cannot provide any reasons for the adverse action if contacted.
      • A notice of the applicant/employee’s right to dispute the accuracy or completeness of any information the CRA provided.

Employers must be aware that the use of an individual’s criminal history in making employment decisions may, if not done properly, violate the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964.

The use of criminal background checks can be discriminatory in two ways. The first scenario involves intentional, direct discrimination where an employer holds an applicant of one race to a stricter standard than another with regard to a criminal history item. The second, and much more likely scenario, involves what the EEOC calls “disparate impact discrimination”, which means a policy is being applied across the board to all similar candidates, but it has the effect of disproportionately excluding a particular group. Fortunately, the EEOC has provided guidance which assists businesses in complying with the requirements.

In order to avoid this possibility, employers should develop a targeted screening plan when utilizing criminal records in employment decisions. At minimum, this targeted screening must consider the nature and gravity of the crime, the harm caused, the specific elements of the crime, the degree of the crime (felony or misdemeanor), how long ago the crime was committed, and the nature of the job for which the applicant being considered.

This targeted screening should be based on and consistent with a written policy which includes the following:

  • Essential job requirements for each position for which a criminal background check will be utilized.
  • Documentation for validating the policy.
  • Training for individuals involved in hiring to ensure compliance with Title VII.
  • Offenses that would not be acceptable for the job along with a timeframe for how long
  • the offenses would be considered unacceptable for the position.

Employers that choose to utilize background checks on potential or current employees should follow these guidelines and develop their own policies to ensure that these practices serve as a valuable tool, and not a hindrance, to accomplishing the business’ goals.