Employers Should Prepare Now to Avoid Costly Repercussions

As employers wrap up 2015 and prepare to ring in the New Year, a review of employment practices should be at the top of their lists, says Michael V. Abcarian, managing partner of the Dallas office of Fisher & Phillips. Fisher & Phillips is a national management-side labor and employment law firm.

“The American workplace is in the midst of profound change,” said Abcarian. “There is little doubt that the employment law landscape will change dramatically in 2016, which could land employers in novel court proceedings if they are not staying informed about emerging concepts of workplace rights and responsibilities.”

Below is Abcarian’s Top 10 List of Labor and Employment Issues for 2016:

1. Transgender workplace issues: Transgender-related issues in the workplace took center stage in employment law this year, a phenomenon that will no doubt continue in 2016. Laws addressing practicalities such as which bathroom transgender employees and customers may use, as well as discrimination based upon gender identity, have been implemented in jurisdictions throughout the country. In addition, some federal agencies are interpreting long-standing gender discrimination laws as expressly protecting employees who are transgender. We have already seen many lawsuits this year testing the boundaries of transgender rights in the workplace, and are sure to see more in 2016.
2. Ban-the-box legislation: Currently, no fewer than 19 states and 100 cities and counties across the nation have enacted laws banning employers from inquiring into an applicant’s criminal history too early in the recruiting process. The movement continues to spread and more laws that limit pre-employment inquiries about criminal history will assuredly pass in 2016, with many likely to apply to private employers. Staying abreast of this groundswell is imperative for employers everywhere. 
3. Overtime pay exemptions: The Department of Labor (DOL) recently delayed (until late 2016) the release of its final rule on modifications to the FLSA’s overtime pay exemptions as it sifts through the more than 270,000 public comments. The anticipated release is expected around the same time as the upcoming presidential election, adding further uncertainty as to what the final rule will look like. In June, the DOL proposed to raise the required minimum annual salary for overtime pay exemption to $50,440, more than double the current salary threshold of $23,660. Despite uncertainty, employers should begin preparing now, as they may have as few as 30 days to comply once the final DOL rule is announced.
4. New guidance on employment handbooks: Do you currently require employees to be respectful of others? Do you prohibit employees from discussing pay amongst themselves? Do you prohibit employees from making offensive or derogatory comments about the employer, its supervisors and those with whom it does business? If so, according to the National Labor Relations Board (NLRB), you may have illegal policies on the books. This federal agency has ruled that many historically unchallenged “management rights” policies are now suspect.  Employers must look carefully and in many instances, revise employee handbook language to be more specific, so they do not infringe upon employees’ rights to discuss wages, work hours and workplace conditions.
5. Social media: According to the NLRB, employers cannot ordinarily take action against employees for posting comments or “liking” posts relating to pay, work hours and working conditions. Employers should be cautious when using information from social media in areas like recruiting, as such action may be construed as unlawful.  Employers should comprehensively review what they can and cannot do concerning employees’ social media activity, lest they find themselves winding up in expensive litigation.
6. New definition of joint-employer status: This will remain a topic to be watched, as Congress introduced a bill that may reverse the NLRB’s ruling that a company is considered the joint employer of another if it directly or indirectly determines conditions of employment. If the ruling is not reversed, the new, broad definition may impact many business models, including the relationship between franchisors and franchisees.
7. Trade secrets: Technological advances continue to make it easier for trade secrets to fall into the wrong hands. Employers must have protocols in place to avoid the compromise of proprietary information. Employers should not allow trade secrets to live in the cloud and should limit the number of people that have access to them. Enforcement of non-compete agreements and trade secret litigation are likely to increase in 2016. 
8. New injury and illness reporting requirements: In 2015, the Occupational Safety and Health Administration implemented a rule requiring businesses to report all work-related fatalities, hospitalizations, amputations and losses of an eye. Under the new rule, amputation is broadly defined to encompass any loss of a limb or external body part – even a fingertip without bone loss.
9. Paid sick leave: Currently, four states, the District of Columbia and no fewer than 20 other jurisdictions have passed paid sick leave laws. These laws generally require employers to provide employees with a fixed number of days of paid-time off that may be used if they or a dependent become ill. The number of laws mandating paid sick leave is expected to increase in 2016. Though Texas will not likely pass a paid-sick leave law, some cities and counties in the state may. Texas employers may also encounter these laws if they operate outside of Texas. 
10. The 1099 worker: In July, the DOL issued a guidance that significantly narrows the definition of independent contractors. The new guidance states that independent contractors cannot be economically dependent upon the contracting company, placing a greater burden on employers when so classifying persons providing personal work services to them. Employers should carefully reevaluate whether those they deem to be independent contractors are properly classified, before the DOL may show up to conduct an investigation.

Additionally, Abcarian suggests that employers consult an attorney who can help them determine how new laws and developments may impact their business.  “Navigating the murky waters of employment law can be a difficult task,” said Abcarian. “Employers should enlist the help of an expert to minimize potential liability.”