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2008 Hot Topics in Labor & Employment Law

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  1. 2008 Hot Topics in Labor & Employment Law Presented by: Labor & Employment Group Norris McLaughlin & Marcus, P.A. Somerville, NJ 08876-1018 908-722-0700 www.nmmlaw.com 17 June 2008

  2. 2008 Hot Topics in Labor & Employment Law • New Jersey Paid Family Leave Act, Keith McDonald • Potpourri of Employee Privacy Issues, Karen Thompson • Electronic Discovery 2008: Coming to a HR Department Near You, Fernando Pinguelo • Emergent Tax Issues in Employment Law, Charles Bruder • Developments in Harassment Law, David Cassidy • Family and Medical Leave Act, Proposed Regulations Changes, Pat Collins

  3. Please help yourself to food and drinks Please let us know if the roomtemperature is too hot or cold Bathrooms are located past the reception desk on the right Please turn OFF your cell phones Please complete and returnsurveys at the end of the seminar

  4. Paid Family Leave in New Jersey Presented by: Keith D. McDonald Norris McLaughlin & Marcus, P.A. Somerville, NJ 08876-1018 908-722-0700 kdmcdonald@nmmlaw.com

  5. What Is It? • A new state law that provides New Jersey employees with six weeks of paid leave over a 12-month period to care for: • a newborn or newly-adopted child; or • an ill child, parent, spouse or domestic partner.

  6. How Much? • Employees taking leave will receive up to two-thirds of their wages, capped at $524 a week. • A one-week waiting period is required before paid leave kicks in.

  7. Important Dates • January 1, 2009 • The new law takes effect. • Payroll deductions begin. • July 1, 2009 • Payments become available to eligible employees.

  8. How Is It Funded? • Employee funded. • Increase to employee TDB taxes starting January 1, 2009. • Increase will range from $.34 - $.64 per week depending on annual income, costing no worker more than $33 per year.

  9. Who Is Eligible? • Available to all New Jersey employees who pay into the state’s Temporary Disability Benefits system • Test - worked at least 20 weeks or earned at least 1000 times the hourly minimum wage during the prior year.

  10. Who Is Eligible? (cont.) • Paid family leave through the TDB system will be available regardless of the number of employees. • Differs from FMLA and NJFMLA, which require 50 or more employees.

  11. Temporary Disability Benefits • Existing TDB system only provides paid leave to employees who are unable to work because of their own disability, illness or injury suffered outside of the job. • This includes disability due to pregnancy and recovery after giving birth.

  12. Temporary Disability Benefits (cont.) • New law expands benefits to employees that need to take leave for an illness or injury to a family member, or to bond with a newborn or adopted child, regardless of whether the individual suffers from a disability or illness resulting from child birth.

  13. Paid Family Leave vs. Other Family Leave Statutes • Paid family leave does not affect the protections provided by the NJFLA and FMLA. • An employee that qualifies for leave under the NJFLA and FMLA and paid family leave can receive paid leave for six of the 12 weeks of unpaid leave. • Employers can require employees to exhaust their paid family leave benefits and NJFLA and FMLA benefits concurrently.

  14. Job Protection • Unlike the NJFLA and FMLA, paid family leave does not offer job protection for employees. • If an employee qualifies for paid family leave and not leave under the NJFLA and FMLA, the law does not require that the employer reinstate the employee after taking paid family leave.

  15. Job Protection (cont.) • Other considerations for small employers • Disability discrimination under NJLAD or ADA • Retaliation claim under common law retaliation principles • Risks of litigation

  16. Employer Notice Requirements • Conspicuous posting and copy of the notification. • Notice must be issued: • (1) not later than 30 days after the notification form is provided by the Department of Labor; • (2) at the time of hire; • (3) whenever an employee provides notice that the employee is taking covered leave; and • (4) at any time, upon an employee’s first request for a copy of the notice.

  17. Employee Notice Requirements (cont.) • Employees must provide at least 30 days notice when seeking paid family leave to care for a newborn or newly-adopted child. • No prior notice is required when an employee seeks paid family leave to care for an ill child, parent, spouse or domestic partner.

  18. Effects on Current Policies • Employers have the option to require employees to use up to two weeks of available sick pay, vacation pay, or other fully paid leave before receiving the paid family leave benefits. • Policy must be written.

  19. Effects on Current Policies (cont.) • Employers can require that paid family leave benefits run concurrent with employer paid leave. • Employers can require that the 6 weeks of paid family leave be reduced by the amount of fully paid leave provided by the employer. • If an employee is required to use up to two weeks of employer paid leave, there is no one-week waiting period.

  20. Intermittent Leave • Leave taken to care for a newborn or newly-adopted child must be taken on a continuous basis unless the employer agrees to permit the employee to take intermittent leave. • Intermittent leave is permitted to take care of a family member, however, the employee must make reasonable effort to schedule leave as to not unduly disrupt employer’s operations.

  21. Recommendations • Evaluate and update current leave policies to reflect the new paid family leave benefits. • Prepare notification procedures and posting requirements. • Provide training to human resource personnel about the new law.

  22. A Potpourri of Employee Privacy Issues Presented by: M. Karen Thompson Norris McLaughlin & Marcus, P.A. Somerville, NJ 08876-1018 908-722-0700 mkthompson@nmmlaw.com

  23. Disclaimer Comments apply to employers in the private sector only. Due to constitutional protections against unreasonable governmental actions, comments should not be assumed to apply to governmental entities in all cases.

  24. Employees’ Right to Privacy of Personal, Confidential and Financial Information Employers’ Right to Protect Assets, Promote Their Business and Maintain Secure Workplaces Tension Between Competing Interests vs.

  25. Sources of Privacy Rights Constitutional: a) Fourth Amendment to U.S. Constitution b) Applicable state constitutions Statutory: a) Federal Laws and regulations b) State Laws and regulations Common Law of Privacy – Restatement of Torts, Invasion of Privacy Contractual: Collective Bargaining Agreements

  26. Sources of Privacy Rights Hennessey v. Coastal Eagle Point Oil Co., 129 N.J. 81 (1992) defined a right to privacy based on New Jersey’s constitution and common-law as a public policy right: “The right of an individual to be . . .protected from any wrongful intrusion into his private life which would outrage or cause mental suffering, shame or humiliation to a person of ordinary sensibilities.” Right of privacy extends to the workplace and employees can sue for infringement.

  27. Sources of Privacy Rights Factors courts will apply to determine infringement include: • Balance employee’s individual right to privacy against competing public interest (e.g. public health or safety). • Was there a legitimate expectation of privacy by employee? • Was advance notice provided to the employee? • Extent of the intrusion - was least intrusive method used? • Effect on employee dignity. • Was there a legitimate business purpose for the intrusion? • Was there nondisclosure of private information except for necessary and legitimate purposes?

  28. Health Information and Inquiries Health Insurance Portability and Account- ability Act (HIPAA), 29 U.S.C. § 1181 et seq.- • requires employers to protect “individually identifiable health information” that they maintain or transmit that relates to an employee’s present or future physical or mental condition or care, including payments for health care.

  29. Americans with Disabilities Act (ADA), 42 U.S.C. §12101 et seq. (15 or more employees) • Prohibits inquiries/testing about medical conditions unless job-related and consistent with business necessity, including pre-hire inquiries of non-disabled applicants (O’Neal v. City of Albany, 293 F.3D 998 (7th Cir. 2002)). • Permits post-offer medical examinations if all persons in job category are examined. • Medical records/information acquired, including through workers’ compensation claims, must be kept confidential and separate from personnel records . • Voluntary medical exams that are part of an employee health program need not be job-related or consistent with business necessity. • No protection for illegal drug users under the ADA, but may be protected post-rehabilitation.

  30. Family Medical Leave Act (FMLA), 29 U.S.C. §2611 et seq. (50 or more employees) • Entitles employers to require a medical certification from employees. • Entitles employers to request clarification of the certification, but only through their own doctors. • Entitles employers to require a second medical opinion at their cost. • Prohibits seeking more information than that requested on Certification of Health Care Provider form; direct contact with employee’s doctor. • Employer may require employees on sick leave, including FMLA leave, to report to a hot line when they leave their homes (Callison v. City of Philadelphia, 430 F.3d 117 (3d Cir. 2005)).

  31. Pre-Employment Screening – Credit Histories Fair Credit Reporting Act (FCRA),15 U.S.C. § 1681 et seq. – designed to protect the privacy of information prepared by consumer reporting agencies and to guarantee that the information supplied is as accurate as possible. • Consumer reports contain information about personal and credit characteristics, records of arrests for prior seven years, character, reputation and lifestyle and may include interviews with employee’s friends, neighbors and associates. • Person’s credit record is only available for legitimate business needs; employers must get written authorization from applicant and provide specific written notice that report will be requested and may be used. • If applicant refuses to consent, employer may reject applicant. • If report is relied on to refuse employment, employer must disclose the report and provide copy of applicant’s rights under FCRA in writing.

  32. Pre-Employment Screening – Credit Histories Fair and Accurate Credit Transactions Act (FACTA), 15 U.S.C. § 1681(w) (amended FCRA) – requires employers to take reasonable measures to dispose of employees’ credit reports obtained as part of the hiring process, including any background checks on employees as well as applicants which are obtained by the employer.

  33. Pre-Employment Screening – Credit Histories FTC Regulation, 16 C.F.R. 682.1 et seq. - defines “reasonable measures” by example, to include burning, pulverizing or shredding of documents, erasing electronic media, or hiring a third party to destroy data. • Enforcement: Both federal and state authorities may enforce FACTA • Exposure to statutory damages of $1,000 for each separate violation • Exposure to civil suits and class actions for actual damages to employees

  34. In New Jersey, employers may obtain certain criminal conviction records to determine a person’s qualifications for employment. Employers may obtain records of convictions in New Jersey state courts, arrests and pending charges of violations of laws. Requests must be made on prescribed form signed by the subject and accompanied by employer’s certification. If information disclosed will be used to disqualify candidate for employment, then applicant must be provided notice and opportunity to confirm or deny information. Title VII – criminal records can’t be an absolute bar to hiring as it may disparately exclude certain racial groups; must show business necessity to rely on criminal records. Certain states restrict use of criminal histories in hiring decisions. Pre-Employment Screening – Criminal Histories

  35. Pre-Employment Screening – Educational Background • Permitted if education is germane to the position. • Family Educational Rights and Privacy Act (FERPA), 20 U.S.C. §1232g prohibits schools from disclosing educational records without a release from applicant (or parent if minor). • EEOC guidelines – education requirements that disproportionately affect certain groups may violate Title VII unless justified by business necessity.

  36. Pre-Employment Screening - Internet Resources • Google and other search engines. • Social sites (MySpace, Facebook) • No expectation of privacy for information in the public domain • Risks for employer if data obtained about applicants includes factors that shouldn’t be used in making hiring decisions Best Practice: Have third party screen impermissible information from decision makers.

  37. Privacy Issues Regarding Wire and Electronic Communications In 2005, 60% of 840 companies surveyed by American Management Association monitored employees’ e-mails. Reasons to monitor • Employee training • Evaluate communications with customer • Protect against disclosure of trade secrets • Investigate misconduct, claims of harassment/discrimination • Monitor improper use of company systems • Police against illegal activities

  38. Privacy Issues Regarding Wire and Electronic Communications Federal Wiretap Act, 18 U.S.C. §§2510-2522 – Electronic Communications Privacy Act (“ECPA”) imposes civil and criminal liability on any person who “intentionally intercepts”, tries to intercept or procures another to intercept “any wire, oral or electronic communication.” • Applicable to telephone and electronic communications alike. • Expectation of privacy as to telephone communications is irrelevant, but does apply to other oral communications. • Interception can be as simple as listening in on an extension phone or more sophisticated methods.

  39. Privacy Issues Regarding Wire Communications – Telephones Two exceptions to the prohibition against interception of telephone (wire) communications: • If one of the parties consents (may be explicit or implied consent) • Consent may be a condition of employment – obtain signed consent. • Caution – merely telling employees that telephone calls may be monitored may not be enough due to inconsistent decisions. Best Practice: Include consent in handbook with acknowledgement signed by employee; prepare a written policy covering interception and monitoring.

  40. Privacy Issues Regarding Wire Communications - Telephones • Ordinary course of business exception to wire communications: - Applies if the conversation is a wire conversation via telephone equipment. - The interception concerns the operation of the business and - Employer has legitimate business purpose (not required if the employee previously consented). - Monitoring of personal calls is not within this exception and employer must desist after determining call is personal.

  41. Privacy Issues Regarding Wire and Electronic Communications Service Provider Exception of ECPA – permits provider of service to intercept or use electronic communications which are transmitted using its facilities, incident to its business or to protect its rights or property. Employers that provide their own telephone networks or e-mail systems may qualify as providers under this exception.

  42. Privacy Issues Regarding Wire and Electronic Communications New Jersey Wiretapping & Electronic Surveillance Control Act, N.J.S.A. §2A:156A-3 - makes it a crime to “intercept” any wire, electronic or oral communication, or disclose the contents, and follows federal act for interpretation. Exceptions: Same as the federal statute.

  43. Privacy Issues Regarding Wire and Electronic Communications Other State Statutes Provide Broader Protections: • Laws of thirteen states are more stringent than federal law and require the consent of all parties to legally record or intercept an electronic and/or wire communication: California, Connec- ticut, Delaware, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, Pennsylvania and Washington. • Caveat: Even if only one of the parties is located in one of those states, you still must obtain consent of all participants. • Notification at outset of conversation that it may be recorded may constitute implied consent; obtaining employees’ signature acknowledging receipt of policy to monitor may constitute consent.

  44. Electronic Communications Monitoring – E-mails “Interception” of an electronic communication occurs when the communication is acquired after its transmission by the sender, but before its receipt by the intended recipient - no violation under ECPA if post-receipt e-mails are monitored • United States v. Councilman, 418 F.3d 67 (1st Cir. 2005) – e-mail monitoring programs which provide real time interception capabilities may violate Wiretapping Act

  45. E-mail and Internet Use Monitoring Analysis: reasonable expectation of privacy in data on workplace computers balanced against employer’s interest in maintaining legitimate use of its systems. Other considerations: • Is the computer shared with or accessible to others? • Is it password protected? • Is personal use of work computers permitted? • Is there a regular monitoring program in place? • Are there policies governing IT personnel’s actions? • Is the monitoring “event based?” • Does illegal activity occurring outweigh all privacy concerns? Best Practice: Promulgate policies that use of company systems is for business use and may be monitored.

  46. E-mail and Internet Use Monitoring Statutory Protections: • Connecticut & Delaware: require advance notice of electronic monitoring (e-mails, telephone and Internet, etc.); exception in Connecticut for illegal activities or hostile work environment; monetary penalties for violation. • New York – Bill introduced 5/15/08 regarding electronic monitoring, requires prior written notice upon hiring and once annually to all employees, informing them of the types of electronic monitoring that may occur.

  47. E-mail and Internet Use Monitoring Employer’s Duty to Monitor: • When employer has technical and legal ability to monitor employees’ e-mail and Internet activities, may have a duty to act to monitor to protect interests of third parties. Doe v. XYC Corp., 382 N.J.Super. 122 (App.Div. 2005) • Employer had authority to consent to FBI’s search of employee’s workplace computer, even though employee had reasonable expectation of privacy. United States v. Zeigler, 474 F.3d 1184 (9th Cir. 2007)

  48. Protection of Employee Records and Personal Information • Thirty-nine states have statutes protecting employee personal information. • Private right of action and penalties available in many states for violations. • Most statutes require documentation of steps taken to implement data security practices. Best Practice: Implement policies to ensure protection and steps to be taken in event of a breach.

  49. Protection of Employee Records and Personal Information New Jersey: Identity Theft Prevention Act, N.J.S.A. 56:11-44 et seq.- • Protects “personal information” defined as last and first name or initial, plus SSN, DLN, State ID nos., bank, account information. • Applies to any entity conducting business in NJ however organized. • Protects consumers, whether employees, job applicants, contractors. • Requires timely destruction of personal information. • Requires notification of security breach to employees and NJSP. • Limits use and display of SSNs. • Substantial penalties for non-compliance.

  50. Protection of Employee Records and Personal Information New York: Confidentiality of Social Security Account Numbers, N.Y. Gen. Bus. § 399-dd – • Places limits on use and disclosure of an individual’s SSN by persons, firms, partnerships, associations or corporations. • Prohibits intentional communication of individual’s SSN to general public. • Requires businesses to implement safeguards and limit unnecessary employee access to SSNs. • Prohibits businesses from requiring transmittal of unencrypted SSNs over the Internet. • Restricts businesses’ ability to print SSNs on mailings, etc. • Civil penalties enforceable only by Attorney General.