Governor Pritzker Signs the Workplace Transparency Act, Imposing Many New Obligations on Employers
Last month Governor Pritzker signed into law S.B. 75, the Workplace Transparency Act. The Act, aimed at addressing harassment in the workplace, imposes many new obligations on employers. Here are some of them:
Mandatory Sexual Harassment Training. It is now mandatory for all employers, no matter their size, to provide sexual harassment training to their employees at least once a year. Failure to conduct this annual sexual harassment training could result in a $500 fine to businesses with four employees or fewer for the first offense, $1,000 for the second offense, and $3,000 for each offense after that. For businesses with more than four employees the fines double.
The training must include a summary of state and federal laws prohibiting sexual harassment along with the remedies available to sexual harassment victims. It must also explain what the employer will do to investigate and prevent sexual harassment. An explanation of sexual harassment and examples of what constitutes sexual harassment must also be included. The Department of Human Rights will develop a model sexual harassment training program.
Limits the use of confidentiality provisions for sexual harassment. Strict confidentiality in any settlement agreement for sexual harassment is only valid if the provision is expressly consented to by the alleged victim of sexual harassment and the alleged victim has a chance to hire an attorney and have the attorney review the settlement agreement. It also provides the alleged victim with 21 days to consider the settlement agreement and 7 days to revoke his or her signature.
All employers must report the number of times their employers were found to have engaged in sexual harassment by a court or other proceeding. This must be reported to the Illinois Department of Human Rights by July 1, 2020, and then each July 1 thereafter. The Department of Human Rights can also request that employers disclose the number of private settlements for sexual harassment over the previous five years.
Victims of gender violence can take unpaid leave from work to seek help. The law expands the Victims Economic Security & Safety Act to allow victims of gender-motivated violence to seek medical assistance, counseling, and legal assistance.
The law makes sexual harassment and discrimination against independent contractors illegal.
All restaurant and bar employees must receive an anti-harassment and discrimination policy. This policy must be available in both English and Spanish and must discuss sexual harassment issues specific to employees in bars and restaurants.
All hotel and casinos must create sexual harassment policies specific to their industry and install panic buttons. The policies must have language that states that an employee complaining of sexual harassment is allowed to leave work or any area in the workplace if he or she feels threatened. It provides these employees with paid time off to file a police report against the sexual harasser. Panic buttons must be installed by July 1, 2020.
Alleged victims and harassers cannot be represented by the same union representative in a disciplinary proceeding.
The law takes effect on January 1, 2020. This is less than three months away, so employers should start preparing to comply with it. Ancel Glink
offers sexual harassment training at an affordable price, so feel free to reach out to us
if you would like to inquire about this service.
Failure to Pay Insurance Premium Not a COBRA Qualifying Event
Let’s say that you have an employee who is on an FMLA leave of absence but is failing to pay their employee share of the health insurance premium. Failure to pay the health insurance premium, or the employee’s portion of such, can result in discontinuation of coverage for the employee, but if the employee loses coverage due to non-payment of their share of the premium, are they then entitled to continue coverage under COBRA?
Last week the 6th Circuit Court of Appeals considered this question in the case of Morehouse v. Steak N Shake
. In that case, the plaintiff suffered a work-related injury and was placed on FMLA and was receiving workers compensation. Her health insurance continued and the parties agreed that the employer would withhold the employee’s premium contribution from her worker’s comp payments. This worked fine until the worker’s comp carrier discontinued benefits and the employee failed to pay her share of the premium. Eventually, the employer canceled her health insurance. The employee sued, arguing among other things, that she was entitled to a COBRA notice upon cancelation of her insurance and the opportunity to continue her coverage pursuant to that entitlement.
Plaintiff argued that she experienced a qualifying event under COBRA when her payments began being deducted from her worker’s compensation payments. The district court in Ohio agreed with the plaintiff
and awarded damages to her. Steak 'n Shake appealed. The 6th Circuit held that the plaintiff did not experience a qualifying event under COBRA because she had insurance until she stopped paying for it. The fact that her portion of the premium was being deducted from her worker’s comp benefits was of no consequence and did not change the terms or conditions of her coverage triggering COBRA eligibility.
Employers should note that employees who suffer cancelation of health insurance are not entitled to rights under COBRA, but it is certainly a best practice to provide more than one reminder to employees in jeopardy of losing insurance coverage due to non-payment of premium.
DOL Clarifies FLSA Requirements When Employee Works for Both Police and Fire
As most public employers know, the Fair Labor Standards Act
, which requires employers to pay time and one-half overtime for work over 40 hours in a week, also contains a partial exemption for police and fire personnel. Rather than determining overtime based on the hours worked in a week, the Act allows employers to calculate overtime based on as many as 28 consecutive days. The exemption, often referred to as the 7(k) exemption because it is found in Section 207(k) of the Act, provides that fire personnel are entitled to overtime rate of pay after working 212 hours in a 28-day period or the same ratio for fewer days and police personnel earn overtime after working 171 hours in a 28-day period or the same ratio for fewer days.
But what does an employer do if the worker is both a police officer and a firefighter? It happens in some municipalities that a full-time police officer might also work as a part-time firefighter or the other way around. Or, it might be that the municipality only employs part-time police and firefighters, but some of their employees work both part-time jobs.
In Opinion Letter FLSA 2019-11
, issued last month, the Department of Labor addressed this issue. Noting that if an individual works for separate entities, such as a Fire Protection District and a municipality, the employers, regardless of how closely aligned their agencies are, have no overtime obligation for the employee’s work for the other agency, but do if the employee works in both capacities for a single agency or employer.
To resolve the question of which 7(k) exemption applies, the DOL clarifies that an employer may take advantage of the exemption applicable to the position in which the employee worked the greatest number of hours during the relevant work period. For example, an employee who works 149 hours in a 28-day work period as a firefighter and 23 hours in that same work period as a police officer will be covered by the overtime exemption for firefighters since a majority of the work performed was as a firefighter. Using the 212-hour exemption, the employer would owe no overtime in that example because the employee worked a combined 172 hours in the work period. On the other hand, if the work hours were reversed, and the employee worked 149 hours as a police officer and 23 hours as a firefighter, then the appropriate 7(k) exemption would be that of a police officer-171 hours in a 28-day work period. Therefore, the employer would owe one hour of pay at the overtime rate.
Employers who have workers who serve as both police and fire personnel are best served to operate on the same work period in both departments. Twenty-eight days is the most generous to the employer. Additionally, it is important to review the hours worked at the end of each work period-which likely will not coincide with the actual pay periods-to determine which 7(k) exemption applies.
In a Few Weeks It Will Be Illegal to Ask Job Applicants About Their Salary History
The Equal Pay Act prohibits employers from paying unequal wages to men and women who perform similar jobs. The amendments that Governor Pritzker signed into law now prohibit employers from doing the following four things:
- Screening job applicants based on their salary history;
- Requiring that an applicant’s prior salary satisfy minimum or maximum criteria;
- Requesting the applicant to disclose his or her previous salaries;
- Seeking an applicant’s salary history from a current or former employer.
The new law does not prohibit a job applicant’s previous employer from providing salary information to the applicant’s prospective employer. Nor does it prohibit an applicant from disclosing his or her previous salaries. If the applicant does this, the employer cannot rely on this information to decide whether to hire the employee or determine the employee’s salary.
Employers who violate the law face serious consequences. The job applicant would likely be able to recover the difference between the amount of money he or she would have received if the employer had not violated the law and the amount the applicant currently receives (calculating this may be difficult). Also, the employer would be required to pay the job applicant’s attorneys’ fees and other costs incurred in the lawsuit. The employer also would be subject to thousands of dollars of fines from the Illinois Department of Labor. The law even imposes punitive damages on employers who violate it.
In light of the severity of these consequences, employers need to make sure their HR departments know not to ask for salary history. Update interview procedures and advise those performing interviews of the changes in the law.
Michigan Supreme Court Rules County Retirees Not Entitled to Lifetime Benefits
In a case that has wound its way through the Michigan court system for several years, the state supreme court there recently ruled that retired unionized county employees could not rely on the terms of the collective bargaining agreement to claim lifetime health insurance benefits.
Plaintiffs were approximately 1600 retirees who were previously unionized employees for the county under various CBAs dating back to 1989. They sued the county after it reduced their healthcare benefits in 2009 and 2010, arguing that the CBAs, which were generally three-year contracts, contained provisions expressly granting a right to lifetime and unalterable retirement healthcare benefits. The parties have taken a roller coaster ride through the court system for almost a decade, with the trial court apparently attempting to split the baby by concluding that retirees were entitled to lifetime healthcare benefits, but the county could make reasonable modifications to those benefits. The Court of Appeals held entirely in favor of plaintiffs
, finding that retirees were entitled to lifetime benefits which could only be modified by agreement.
The Michigan Supreme Court took a fresh look at the issue
of whether CBA’s could grant vested, lifetime benefits. It applied the 2015 U. S. Supreme Court case of M & G Polymers USA, LLC v. Tackett
, in which it overruled a history of cases that resulted in, according to the U.S. Supreme Court, “placing a thumb on the scale in favor of vested retiree benefits in all collective-bargaining agreements” holding that the “basic principles of contract interpretation instruct that ‘courts should not construe ambiguous writings to create lifetime promises’ and, absent a contrary intent, that ‘contractual obligations will cease, in the ordinary course, upon termination of the bargaining agreement.’”
The Michigan court found that the provisions granting lifetime retiree benefits in the CBAs did not nullify or supersede the durational clauses of the CBA’s (expressly limiting the agreements to three year durations), finding that they were not necessarily in conflict with each other, therefore concluding that the language of the agreements did not reflect an intent for retiree benefit guarantees to outlast the overall duration of the agreements.
If this seems a bit of tortured logic, blame it on the law of contract interpretation, but be happy to know that another state joins in the conclusion that CBA language alone does not always guarantee lifetime healthcare benefits to retirees.