Employment Law Update

Michael Patrick O’Brien
March 31, 2010 | COMMENTS

The proposed federal budget includes new incentives and resources for the United States Departments of Treasury (i.e. the IRS) and Labor to increase enforcement efforts against businesses that misclassify workers as independent contractors. State governments, via the unemployment compensation system, also are cracking down on misclassification. Governments are more proactive on this issue now, than in recent memory, primarily because they are seeking additional sources of revenues for shrinking public budgets. The distinction between an employee and independent contractor hinges on several factors, but primarily on how much control the business exercises over a worker's activities. A useful description of the employee/contractor distinction can be found at the IRS website online here.

Million-dollar Overtime Bill

The US Department of Labor (DOL) has settled an overtime claim against the Dallas , Texas facility of a national poultry processor. The employer has agreed to pay $1 million in unpaid overtime and to pay workers for “donning and doffing,” i.e. putting on and taking off required work gear. The company also had failed to keep proper records of hours worked, deemed to be another violation of the Federal Fair Labor Standards Act (FLSA). FLSA requires the payment of minimum wage ($7.25/hr) and overtime wages to non-exempt employees.

EEOC to Redefine Age-Bias Defense?

The Federal Equal Employment Opportunity Commission (EEOC) has proposed a new rule that would redefine an important defense to certain age discrimination claims. The defense at issue applies to what are called “disparate impact” claims, or claims that certain employer actions have an adverse impact on older workers. Under current law, an employer can defend an adverse impact claim by proof that the policy at issue was based on a reasonable factor other than age (“RFOA”). The proposed EEOC regulations seek to flesh out the RFOA defense with defining factors such as: (1) whether the employer took steps to assess any adverse impact on older workers; (2) the extent older workers are harmed; and (3) what other options were considered or available. The proposed regulations also require employers to bear the burden of factually proving the RFOA defense. Comments on the proposed regulations are due by about April 18, 2010.

The Employment Law Update is a legal and legislative update service sent out about twice a month to various members of the Utah League of Credit Unions HR Council. The author, Utah law attorney Michael Patrick O'Brien, is also the Legal and Legislative Director for Utah SHRM (Society for Human Resource Management). These updates are merely updates and are not intended to be legal advice. Receipt of this information does not create an attorney-client relationship. Contact O'Brien at 801-534-7315 or mobrien@joneswaldo.com or visit www.joneswaldo.com. Reprinted with permission.