Employment Trends Now

As we move into the second quarter of 2018, a few workplace trends to watch for are below:

1) Sexual Harassment.  The #MeToo movement demonstrates that workplace harassment remains a persistent problem.  Thirty-six percent of all Colorado charges filed with the Equal Employment Opportunity Commissions (EEOC) last year related to sexual harassment. Workplace harassment affects all workers and causes a drag on performance.  It’s time to take a hard look at sexual harassment policies, complaint and investigation procedures, and training programs. Best practices to ensure a safe and productive workplace include:

• Ensure sexual harassment prevention starts at the top. The importance of leadership and accountability cannot be overstated.  Create a culture where harassment is not tolerated;
• Provide training that includes clear explanations of what constitutes prohibited conduct and examples so that employees know what behavior to avoid;
• Ensure that each employee knows how to file a complaint. Also provide multiple avenues through which an employee can make confidential complaints;
• Make sure that all complaints receive a prompt, thorough, and impartial investigation;
• Take appropriate corrective action; and
• Don’t retaliate against an employee who makes or supports a claim. More than fifty percent of the charges filed with the EEOC in Colorado include charges of retaliation.

2) Overtime Rules.  Employees whose jobs are governed by the Fair Labor Standard Act (FLSA) are either “exempt” or “non-exempt”. Non-exempt employees are entitled to overtime pay. Exempt employees are not. Determining whether an employee is exempt or non-exempt depends on: a) how much she/he is paid; b) how she/he is paid (hourly vs. salaried); and c) what kind of work she/he does. With few exceptions, to be exempt an employee must be paid at least $23,600 per year ($455 per week) on a salary basis and perform exempt job duties.

Last week, the United States Supreme Court issued a decision in Encino Motorcars, LLC v. Navarro regarding FLSA overtime requirements. This case may have broad national impact because the majority rejected the longstanding principle established through decades of FLSA jurisprudence that overtime exemptions should be narrowly construed. The five Justice majority concluded that “service advisors” fall squarely within the applicable exemption for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” 29 U.S.C. § 213 (b)(10)(A). In the majority’s view, although service advisors do not directly sell vehicles or participate in manual labor, they do sell customers services for the vehicles, and therefore are unmistakably engaged in servicing automobiles, as the sale of such automotive parts and services is integral to the servicing process. The court dismissed the principle that FLSA’s exemption should be narrowly construed. The court stated that the principle “relies on the flawed premise that the FLSA ‘pursues’ its remedial purpose ‘at all cost’.” Instead, the court endorsed the principle of a fair, rather than narrow, interpretation.

It remains to be seen if and how other federal courts will apply the courts instruction to apply a broader interpretation to determine if an overtime exemption applies. Employers will still have the burden of showing that one of the enumerated FLSA exemptions from overtime applies to a particular job or job title, but potentially the ruling in Navarro may provide more employer flexibility in classifying employees.

With regard to the salary level test, the Department of Labor (DOL) predicted in its Fall Regulatory Guidance published December 14, 2017, that it will issue a new proposed overtime rule by October of 2018. The Obama era rule set the salary level for the white-collar exemption at $47,476.  It is expected that the new salary threshold will be set in the low $30,000 range. 

3) Personnel Files.  Effective January 1, 2017, Colorado law permits private sector employees to review their own personnel files once a year.  The law does not apply to public sector employees who have already have access to their personnel files through the Colorado Open Records Act. 

Under the new law, employers must permit current and former employees to inspect and obtain a copy of any part of their personnel files at a time convenient to both the employer and employee.  A former employee may make one inspection of his or her personnel file after termination of employment.

Employers may require that requested access to personnel files take place in the presence of another employee designated by the employer.  The employer may also charge the reasonable cost for the copying to the employee.

The definition of “personnel file” is “the personnel records of an employee. . . that are used or have been used to determine the employee’s qualifications for employment, promotion, additional compensation, or employment termination or other disciplinary action.”  A “personnel file” does not include: documents required by state or federal law to be maintained in a separate file; confidential reports from the employee’s previous employer; documents pertaining to an active criminal investigation; documents pertaining to an active disciplinary investigation; or documents pertaining to an active investigation by a regulatory agency and documents identifying a person who made a confidential accusation against the employee requesting the personnel file.

Best practices to ensure compliance with the new law:

• Develop a procedure to allow an employee access to his/her personnel file;
• Train managers on the procedure; and
• Remove documents which should not be maintained in the personnel files (I-9’s, medical information, reference letters, active investigations etc.). Store these in a different file.

4) Wage Transparency.  It is considered a discriminatory practice to discipline, discharge, discriminate against, coerce, intimidate, threaten or interfere with an employee who inquires about, discloses, compares or otherwise discusses her/his wages.  Colorado employers may not require, as a condition of employment, nondisclosure of an employee’s wages nor may an employer require an employee to sign a waiver denying the employee the right to disclose his or her wage information. The Act applies to private and public employees.