Employment Law Update

Michael Patrick O’Brien
October 4, 2005

The National Rifle Association (NRA) reportedly has launched a national effort targeting state laws that allow businesses to ban weapons from the workplace. The effort apparently will include a national advertising campaign as well as lobbying efforts to get states to pass laws allowing employees to bring weapons to work.

The NRA is also said to be launching economic boycotts against businesses that prohibit weapons on their premises. That effort arises out of a situation in Oklahoma, where the legislature passed a bill that prohibited an employer from banning weapons in locked employee cars on employer premises. The law also relieved the employer from liability if the gun was taken from the employee's car and used in a crime. One large employer, along with national SHRM, has filed a lawsuit in Oklahoma challenging the law. The NRA is now calling for an economic boycott of that employer. Four states (Oklahoma, Alaska, Kentucky and Minnesota) currently restrict, in one form or another, an employer from regulating weapons on its premises. Utah has a liberal concealed weapons carry law, but court decisions currently give private employers the choice about whether or not to ban weapons from their premises. Public employers probably lack such choices. Utah SHRM has long advocated the concept of employer choice, which is not a pro-gun or an anti-gun position. Rather, it recognizes that employers are in the best position to evaluate company culture, employee morale, safety needs, etc, and decide whether or not to allow weapons at work. Employers also have private property rights that should be considered. This issue may arise again when the Utah Legislature convenes in January of 2006. Stay tuned for details.

The IRS, Employers, and Katrina

In the aftermath of Hurricane Katrina, the Internal Revenue Service (IRS) has issued a guidance on how it will give the most favorable tax treatment possible to organizations that adopt leave-based donation programs to aid hurricane victims. Under these programs, employees donate their vacation, sick or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for the victims of Hurricane Katrina. The IRS says "employees can forgo leave in exchange for employer cash payments made before January 1, 2007, to qualified tax-exempt organizations providing relief for Hurricane Katrina victims. Employees do not have to include the donated leave in their income. Employers will be permitted to deduct the amount of the cash payment." For more information, see http://www.irs.gov/newsroom/article/0,,id=147373,00.html.

Moreover, due to increasing fuel costs caused in part by Hurricane Katrina, the IRS has increased from 40.5 to 48.5 cents per mile the reimbursement rates for business miles driven by employees. According to the IRS, the optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of the extra burden of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage. This new rate is effective only until December 31, 2005. For more information, see http://www.irs.gov/newsroom/article/0,,id=147423,00.html.

Fixed Salary Fluctuating Hours Payment Method Upheld

Under United States Department of Labor (DOL) overtime pay regulations, employers can pay a nonexempt employee under the fixed salary/fluctuating hours method. This method provides that if an employee gets the same amount of salary each week no matter how many hours are works (could be 30 one week, 45 the next) an employer need only pay half time, rather than time and a half, for each hour of overtime worked during that week. This method has been difficult to apply in the past because it seemed to require a detailed agreement between employer/employee on how it was used. However, a court in Northern Illinois recently ruled that this is a valid pay method as long as an employee, although not fully understanding the details of the method, did understand that his/her salary would not fluctuate and covered all hours worked as a base and that thus overtime would only be paid on a half, rather than a time and a half, basis. The regulation outlining this payment method can be found at: http://www.dol.gov/dol/allcfr/ESA/Title_29/Part_778/29CFR778.114.htm.

Marriage, California, and the Terminator

The California Legislature has passed a bill allowing same sex couples to marry. If fully enacted, such a law would have obvious implications on employers, notably in the area of employment benefits. However, Gov. Arnold Schwartzenegger has said he will terminate the law with a veto. . . hasta law vista, baby. Meanwhile, Massachusetts legislators have scuttled efforts to pass laws overturning the state Supreme Court's ruling almost two years ago that same sex couples should be allowed to marry. The issue of same sex marriage is one that changes and evolves on a regular basis and varies from state-to-state. Carefully review the laws of each state where you have employees when deciding how they impact your workplace.

Miscellaneous Items

First, a Tennessee court has ruled that a noncompete agreement cannot be enforced against a doctor because the public good requires that patients have a right of choice in their physician relationships. Second, DOL has ruled that a police officer who quit his job right after completing mandatory training cannot be required to repay the wages earned during that training. DOL ruled that a state law that seemed to require such a repayment would be inconsistent with the Fair Labor Standards Act. Finally, a Missouri Court has ruled that an employee who was injured in a car accident after leaving a company gold tournament should get worker's compensation payments. The court held that travel away from an employer's premises as part of work duties will be considered within the course of employment unless the travel is clearly a personal errand. No word on whether coverage will be provided for the mental distress of losing par on the back nine.

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). Contact him at 801-534-7315 or mobrien@joneswaldo.com or visit www.joneswaldo.com. Reprinted with permission.