Delaware Employment Law Blog

Delaware's neighbor to the south has amended its state wage law, clarifying that accrued but unused leave is payable upon termination only if provided by written policy, which was communicated to the employee at the time of hire. 

This had been the long-standing position of the Maryland Division of Labor & Industry.  But then came Catapult Technology, Ltd. v. Wolfe, a 2007 decision by the Maryland appellate court, which held that accrued but unpaid leave is a "wage" under the state's wage and hour law.  As a result of unreported decision, the Division of Labor changed its position and announced that employees could file a claim for unpaid vacation or sick time upon discharge or resignation.  The new state law provides an important statutory defense to employers--but only employers that have written vacation-payout policy. 

Delaware employers do not a similar statutory defense but it is well established that vacation payouts are not required unless the employer and employee had an arrangement to the contrary. 

To avoid any potential dispute regarding what was or was not agreed to at the time of hire, employers should take the following steps:

1. Determine exactly what your vacation policy will be.  Will employees be able to roll time over from year to year?  If so, is there any limit on the amount of time that can be accrued?  And, finally, what happens to any accrued but unused time when the employee leaves the company?  Payout can also depend on whether the employee was voluntarily or involuntarily discharged. 
2. Next, put your policy in writing and communicate it to all employees.
3. Finally, do not make exceptions to the policy unless there truly are extenuating circumstances and, even then, document the reasons for breaking from the norm.

After being diagnosed with a malignant brain tumor, long-time advocate of the American worker, U.S. Senator Ted Kennedy, will be released from the hospital today.  Kennedy was hospitalized Saturday morning after suffering a seizure at his family's compound at Hyannisport, Massachusetts.  Following the news of his sudden illness, politicians from both parties spoke highly of the Democratic Senator, including both democratic presidential candidates, Senators Barack Obama and Hilary Clinton. As Washington regulars reflect on Kennedy's contributions during his more than 40 years in public service, U.S. employers may be interested in the initiatives that would have the greatest impact on the American workplace. 

Kennedy's Current Workforce Initiatives

Senator Kennedy is a major employee advocate and many of his initiatives are focused on this goal.  This passage from his senatorial website demonstrates Kennedy's perspective:

The minimum wage is at an all-time low, the Family and Medical Leave Act is under attack, and workers are being stripped of their overtime pay, unemployment insurance, and pensions. The United States must recommit itself to supporting working families to ensure a strong and prosperous America for future generations.

Specifically, Kennedy seeks to achieve these objectives through various proposals.  Here are five of Kennedy's proposals that would have the greatest impact on employers. 

1.   Union Rights

Senator Kennedy is a long-time union supporter.  On the agenda just this month was the Public Employer-Employee Cooperation Act, which focuses on collective bargaining rights for public safety employees.  Currently, 26 states permit public employees to form bargaining unions.  The Cooperation Act would require the other 24 states to do the same. 

2.   Minimum Wage

Kennedy is one of the Senate's most vocal advocates for an increased federal minimum wage. This subject is a sensitive one for most U.S. employers.  If the national minimum wage did increase, it would likely trigger at least some changes in the way employers look at immigration reform, which is also on the Senator's list of proposals.

3.   Immigration Reform:  Illegal Immigrants

Another one of Senator Kennedy's major initiatives is targeting immigration.  Last year, immigration-reform legislation was passed but, according to Kennedy, fell short of achieving the goals it was intended to address. Kennedy has continued to advocate for revisions to the legislation, focusing on these main points:

1. Tougher Border Enforcement.  These changes would include border-enforcement patrols double the current size.  It would also target illegal immigrants currently in the U.S.  Employers who hire illegal workers would be subject to increased enforcement, as well.
2. Earned Legalization.  This initiative would target illegal aliens already in the U.S., giving them opportunities to earn citizenship.  This effort is based on the argument that massive deportation would be seriously disruptive to communities and business in the States.

4.  Immigration Reform:  The Future for Foreign Workers

Temporary-Worker Program.  As many employers are fully aware, getting specialty workers from other countries is a daunting task.  This third prong of Senator Kennedy's proposal is forward looking.  In the future,temporary employees from abroad would be given easier access to come to the U.S. for temporary work with the goal of working towards permanent employment and citizenship. 

5.  IDEA Reform

Another initiative on Kennedy's agenda has been increased funding for the Individuals with Disabilities Education Act (IDEA).  The Senator's position is that, although the goals and purposes of the IDEA are on-track, the lack of federal funding has prevented it from being fully utilized by the states.

Information about these and other initiatives can be found on the Senator's official website.

Employers in Delaware and beyond have at least a small obsession with the Fair Labor Standard Act (FLSA). And rightly so, given the current litigation climate. The posts in the employment and human resources blogospheres reflect the interest in everything related to compensable time.  There were so many great posts over the weekend, in fact, that it's safe to say we'll never get around to devoting an entire post to each one.  Instead, here are the Top 5 issues we think are most important for employers to have on their radars.

Compensatory Time

The Employers' Law Blog and the Washington Labor & Employment Wire both have posts on the new comp-time bill proposed in the House last week.  The Employers' Law Blog has a short post alerting employers of a proposed amendment to the Fair Labor Standards Act (FLSA).  The Family-Friendly Workplace Act was introduced on May 14, 2008.  The Act would permit private employers to "pay" employees in compensatory time for overtime hours worked.  Traditionally this option has been available primarily to public sector employees.  The post, Comp Time in the Private Sector?, is a quick read to ensure your up to speed on the current state of law as well as the potential changes.  The Washington L&E Wire's post offers more comprehensive coverage for those who want the full scoop.

Interns

It's that time of year.  High-school students are looking for summer work.  College students are looking for internships. Ah, interns.  Students seek experience and hands-on-training.  Employers seek enthusiastic, eager, and inexpensive additions to the workforce.  Over the past two or three weeks, I've received several questions about intern compensation and this comprehensive article covers the whole spectrum of issues. The article, How to Protect Yourself From the Hidden Dangers of Unpaid Internships, posted on the Labor and Employment Law Blog, is  a good post for those who want a bit more detail.

The (Non-)Compensable Commute

Another hot topic this week was the decision from the Second Circuit, Singh v. City of New York, which addressed whether carrying documents to and from work was compensable commuting time.  Thankfully, the answer is "No."  Some of the blogs to discuss this important decision include, The California Wage Law Blog, Wait a Second!, the 2d Circuit Civil Rights Blog, The Connecticut Employment Law Blog, and the New York Public Personnel Blog.

Administrative Exemption to Overtime

The U.S. Department of Labor (DOL) issued a new Administrator-signed opinion letter that addresses the administrative exemption.  The letter is discussed at The Laconic Law Blog and back at The Washington Labor & Employment Wire.

FLSA Blog

Although technically, this isn't an FLSA topic, it's still worthy of the Top 5.  This blog regularly posts on current FLSA issues so it's almost guaranteed that a Top 5 topic will show up sooner or later at the Fair Labor Standards Act Blog.

And Don't Forget . . .

Of course, I can't leave our own Scott A. Holt off the list. Scott blogged on two really interesting FLSA issues this week, "Keeping Your Employees In the Loop Via Blackberry May Lead to Overtime Litigation," and "Overtime Lawyer Champion of the Middle-Class Worker."

Overtime lawsuits are the hottest employment lawsuit trend.  Nevada lawyer Mark R. Thierman is a demigod in this corner of the legal world.  Thierman has won hundreds of millions of dollars from companies in unpaid wages.   Beginning in the mid-1990's, Thierman filed the first in a series of lawsuits against California employer after having spent most of his career as a management-side employment attorney. 

The federal Fair Labor Standards Act (FLSA) requires the payment of overtime and minimum wage for most workers. About 115 million employees—86% of the workforce—are covered by federal overtime rules, according to the U.S. Department of Labor (DOL). Plenty of wage and hour lawsuits are filed on behalf of the traditional working class, be they truckers, construction laborers, poultry processors, or restaurant workers. In fact, some would say that wage and hour suits have generated a cottage industry for plaintiffs' lawyers.  But no one has been more successful than Thierman in collecting overtime for employees who are far from the factory floor or fast-food kitchen.

His biggest settlements over the last two years have been on behalf of stockbrokers, many of whom earn well into the six figures. Thierman has teamed up with other lawyers to extract settlements totaling about a half-billion dollars from brokerage firms, including $98 million from Citigroup's Smith Barney and $87 million from UBS Financial Services Inc. (As is typical in settlements, the companies do not admit liability.) With those cases drawing to a close, he and other attorneys already are pursuing new claims on behalf of computer workers, pharmaceutical sales reps, and accounting firm staff.

BusinessWeek.com has a great article titled, "Wage Wars," detailing Thierman's Robin-Hood style ventures and the wave of overtime litigation sweeping major corporations across the country.  Since 2000, overtime litigation has exploded nationwide. The U.S. Chamber of Commerce decried the "FLSA litigation explosion" and its having become the "claim du jour" for plaintiffs' attorneys.

Thierman shrugs at such concerns. The alternative, in his view, would be to have the laws enforced by a government bureaucracy.  Thierman professes to be helping the little guy: "I'm interested in the middle class—those are my folks."

[H/T to George's Employment Blawg and the Ohio Employment Law Blog]