I.BACKGROUND

The federal Family Medical Leave Act (“FMLA”) applies to all private employers who have 50 or more employees for each working day of 20 or more (not necessarily consecutive) calendar workweeks in the current or preceding calendar year.  FMLA requires covered employers to allow eligible employees to take up to 12 weeks of unpaid leave for the birth or adoption of a child, to care for a child, parent, or spouse who suffers from a “serious health condition,” if the employee’s own serious health condition makes them unable to perform one or more essential functions of the job, or for certain qualifying exigencies.  An eligible employee under FMLA has been employed by the employer for 12 months and has worked 1,250 hours during the preceding 12 months.

            Under the Hawaii Family Leave Law (“HFLL”), employers with more than 100 employees (determined in a manner similar to FMLA) must comply with both FMLA and HFLL.  Generally, HFLL does not cover eligible employees that take leave for their own serious health condition, but only leave taken for an employee’s in-laws, grandparents and reciprocal beneficiaries.  HFLL provides only four weeks of leave instead of FMLA’s 12 weeks.  An employee eligible for leave under HFLL need only to have been employed for six months for the covered employer, regardless of the number of hours worked.

II.FMAL REVISIONS ARE EXTENSIVE

            The changes to FMLA effective January 16, 2009, were extensive and designed to reflect revisions, clarifications, and general reorganization of the regulations. 

Generally, Hawaii employers required to comply with both FMLA and HFLL need to use caution when deciding whether to implement federal law in connection with HFLL.  HFLL regulations make clear that HFLL incorporates federal definitions and interpretation of leave law, unless federal law is less favorable to the employee.  Some regulations may be adopted by Hawaii employers, because they would be viewed as a reasonable interpretation of Hawaii law.   Unfortunately, there are many unresolved issues that will need to be addressed by statutory and regulatory amendments.  

III.REVISIONS, CLARIFICATIONS AND IMPACT

            The more significant FMLA revisions include the following:

A.  Eligibility:  The new FMLA regulations state that the 12 months of employment need not be consecutive, but employers need not count a break-in-service of seven years or more in determining whether an employee has been employed for at least 12 months.

Impact on Hawaii Employers:  HFLL regulations explicitly state that the six-month period of employment must be consecutive.  Accordingly, Hawaii employers covered by HFLL are not required to implement the eligibility provision to their HFLL practices.

B.  Incapacitation:  The new regulations state that the employee must be incapacitated for more than three full calendar days and show “continuing treatment” by a health care provider as defined by FMLA in order to be eligible for leave under the “absence plus treatment” definition of “serious health condition.”  In addition, in order to qualify for leave under the “continuing treatment” definition, the employee must have been treated within the first 30 days of incapacity, must also have seen a health care provider within the first seven days of incapacity, and such “visits” to the health care provider must be in person.

Impact on Hawaii Employers:  This clarification will in many cases result in uncertainty whether leave taken by an employee in connection with continuing treatment of a family member is FMLA-protected leave during the first 30 days of incapacity. 

The Hawaii Department of Industrial Relations (“DLIR”) has expressed its intent to follow FMLA regulations with respect to definitions related to the term “serious health condition.”  In the absence of clarification of the term “continuing treatment” under HFLL by DLIR, the new FMLA definition will also likely apply to Hawaii employers required to comply with both FMLA and HFLL.  Also, despite advances in the area of telemedicine on-line consultations, under the new FMLA regulations only in-person visits to health care providers constitutes treatment.

            C.  Pregnancy:  The FMLA regulations now clarify that only a spouse may receive FMLA leave to care for a pregnant woman.  Thus, a boyfriend, fiancé or even the father (if not also a spouse of the expectant mother) of the unborn child is not eligible to take such leave.

            Impact on Hawaii Employers:  Hawaii regulations explicitly state that an employee may care “for the employee’s child, spouse or reciprocal beneficiary, or parent with a serious health condition.” The provision appears consistent with FMLA’s requirement that the father must be the spouse of a pregnant woman in order to qualify for protected leave.  HFLL regulations, however, do permit family leave to be taken where the unmarried mother and father are “reciprocal beneficiaries.”

            D.  Birth of Child:  The FMLA regulations now clarify that both mother and father may take up to 12 weeks of leave to care for a newborn child with a serious health condition even if both are employed by the same employer.  However, they are limited to 12 weeks total for a health newborn.  Also, intermittent leave is permitted under FMLA only as agreed to by both employee and employer.

            Impact on Hawaii Employers:  HFLL regulations permit intermittent leave under all circumstances and four weeks to be taken by both the mother and father.  Since the FMLA regulations directly contradict Hawaii law and the Hawaii DLIR will interpret HFLL in a manner most favorable to the employee, HFLL will likely continue to permit eligible employees to take intermittent leave under all circumstances.

            E.  Intermittent Leave/Reduced Schedule:  The new regulations state that employees must make a “reasonable effort” to schedule treatment so as not to disrupt unduly an employer’s operations.  Also, an employer may transfer an employee where leave is foreseeable based on planned medical treatment.

            Impact on Hawaii Employers:  The revision to FMLA is significant insofar as the “reasonable effort” standard replaced the word “attempt.”  HFLL is silent on the issue.  Therefore, Hawaii employers that are required to comply with HFLL should approach the issue of an employee scheduling treatments cautiously.  This is one of many significant new FMLA regulations that need to be addressed by the Hawaii legislature and/or DLIR.

 As to the new transfer provision, the DOL balked at permitting a transfer where leave is “unforeseeable.”  The DOL viewed such transfers as potentially retaliatory.  HFLL permits the employer to only “offer” modification of an employee’s job and duties and only where the employee requires intermittent leave.  In addition, HFLL explicitly states that an employee must agree to the transfer proposed by the employer.  Finally, the “alternative transfer or modified position” must have “equivalent pay and benefits of the employee’s regular job, even if the employer must increase the pay and benefits.”

            F.  Substitution of Paid Leave:  An employee who elects to use paid leave with covered FMLA leave must now follow the employer’s policy for that paid leave.   However, the employer must have a written policy with respect to the paid leave issue before it can take any action related to the employee’s failure to follow such policy.

Accordingly, under the new FMLA regulations an employer may require an employee to take a full vacation day under its written vacation policy to the extent all employees are treated consistently, even though the employee wishes to use paid vacation time for two hours of treatment.

            Impact on Hawaii Employers:    HFLL is currently silent on the issue and it is uncertain whether the Hawaii DLIR will adopt the same position as FMLA.  Employers covered by both HFLL should of course use caution in applying the new provision to HFLL leave.   Hawaii employers should note that HFLL expressly permits employees’ use of paid sick leave, up to ten days per year, to the extent paid sick leave is offered as a benefit by the employer. 

            G.  Rights and Responsibilities:  There are significant changes to the substantive content and timing of notices required by FMLA and the new regulations added an entirely new third form called a “Designation Notice.”  Discussion of the content of each of the three notices/forms is beyond the scope of this article.  Nevertheless, it is critical that employers covered by FMLA immediately print the forms from the DOL’s website and incorporate them into their FMLA policies, procedures and employee handbook. 

            Impact on Hawaii Employers:  It is unclear the extent to which DLIR will adopt, either formally or informally, the FMLA forms or form-related regulations regarding the timing and content of notices.  This is an area that will be difficult for Hawaii employers with 100 or more employees to navigate given the current lack of guidance in HFLL regulations.  Unfortunately, there is no indication that DLIR intends to update HFLL regulations in the near future.

            This should be an area of great concern for employers covered by both FMLA and HFLL.  For example, the new FMLA regulations state that an employer may require notice of the need for unforeseeable leave “as soon as practicable.”  HFLL currently requires an employee to give “at least verbal notice to the employer within two working days,” a significant difference which will make it difficult for Hawaii employers with over 100 employees to navigate between the two sets of laws.

            Both FMLA and HFLL permit a covered employer to require certification of the serious health condition at issue.  However, FMLA now requires the employer to provide a Notice of Eligibility and Rights within five business days after receiving notice of the need for protected leave, and a Certification of Health Care Provider. 

Under the new regulations the employee requesting family leave must return the Certification of Health Care Provider (there are now separate forms for the employee and family member) within 15 calendar days after receiving it.  On the other hand, HFLL regulations state that an employee may be required to return a completed certification within two days after commencement of leave. 

            H.  Employee’s Failure to Provide Notice:  One of the more controversial new FMLA provisions states that an employer may now delay or even deny covered leave for an employee’s failure to provide notice consistent with the employer’s written notice rule or procedure.

Under the new FMLA regulations, in theory the employer is permitted to better plan for staffing and operational needs by requiring an employee eligible for protected leave to comply with notice procedures.  Employees will be encouraged to comply with notice requirements knowing that the failure to do so could result in denial of protected leave.

            Impact on Hawaii Employers:    Hawaii law contradicts the new FMLA provision insofar as employers under HFLL are permitted to only “delay” and not deny covered leave for noncompliance.  Thus, Hawaii employers cannot “deny” HFLL leave under these circumstances.

I.  Certification Contents:  Under FMLA, the covered employer has unprecedented rights to obtain medical information related to the leave request.  For example, the employer may now request the diagnosis of the medical condition requiring protected leave.

Impact on Hawaii Employers:  Under HFLL the employer is prohibited from seeking the type of information employers under FMLA are now permitted to obtain.  While the employee seeking protected leave to care for a spouse, for example, arguably waives rights to maintain the medical diagnosis private under the new FMLA regulations, the fact is Hawaii law still limits to a large degree the information the employer is entitled to receive.  Under HFLL, there is no explicit right for the employer to know the diagnosis of the serious health condition of a covered employee’s spouse when such employee requests leave under HFLL.

J.  Incomplete Certification:  Under the new FMLA regulations an employer may deny or delay protected leave where the employee fails to provide a complete certification after the employer gives written notice that the initial certification was incomplete or insufficient.  

            Impact on Hawaii Employers:  As stated previously, under HFLL an employer may only “delay” giving protected leave for an employee’s failure to comply with notice requirements.  In addition, for incomplete and insufficient certifications, an employer must “provide the employee a reasonable opportunity to remedy such deficiency.”

            K.  Bonuses:  The new FMLA regulations allow for the denial of a “perfect attendance” bonus/award to employees who take leave under FMLA.

Impact on Hawaii Employers:  HFLL regulations do not allow this.  Thus, unless and until HFLL regulations are amended or clarified, Hawaii employers covered by both HFLL and FMLA should use caution in denying perfect attendance and other awards to employees who take leave under HFLL.

IV.CONCLUSION

While DLIR regulations state that its regulations and interpretation of law applies where a specific state regulation provides more protection to the employee than federal law, there is still a great deal of uncertainty how FMLA regulations are to be interpreted vis a vis HFLL given the relative dearth of guidance in the DLIR’s own regulations.

Roman Amaguin, Esq.; romanamaguin@yahoo.com; www.amaguinlaw.com

It is well established now under federal Title VII law that an employer is liable for actionable sexual harassment caused by a supervisor with “immediate (or successively higher) authority over the employee.”  However, in cases where the employee does not suffer a “tangible employment action,” such as discharge, demotion, or an unfavorable reassignment, there is an affirmative defense that an employer may raise to avoid Title VII liability and damages.  

Under such affirmative defense whether an employer has an anti-harassment policy is relevant evidence.  Also important is effective supervisory training and training of employees on the harassment policy and complaint procedure.

Training and educational programs for all employees take on an even higher degree of importance under Hawaii state law, HRS Chapter 378.  State law currently is interpreted by the Hawaii Civil Rights Commission (“HCRC”) as mandating strict liability for sexual harassment committed by supervisors. 

While the Hawaii Supreme Court has not addressed the HCRC’s interpretation of HRS Chapter 378 a recent Illinois Supreme Court decision upheld a Illinois Human Rights Commission ruling addressing a regulation similar to the HCRC’s–that an employer was strictly liable for a supervisor’s harassing conduct under Illinois state law even though the supervisor did not even have direct supervisory authority over the Complainant.

The April 16, 2009 Illinois decision will certainly be persuasive authority to a Hawaii Supreme Court faced with interpreting the HCRC’s regulation.  Accordingly, it is critical that Hawaii employers understand the importance of having an effective policy and company-wide training program on not only a defense to a sexual harassment claim, but prevention.

I.          The Importance of Having an Effective Harassment Policy

A.                The Faragher/Ellerth Defense

Having an effective sexual harassment policy and training program will greatly increase the chance of avoiding liability under the affirmative defense for sexual harassment claims recognized by the U.S. Supreme Court in Faragher v. City of Boca Raton, 524 U.S. 775 (1998) (“Faragher”) and Burlington Industries v. Ellerth, 523 U.S. 742 (1998) (“Ellerth”). 

Where alleged harassment by a supervisor does not culminate in an adverse (“tangible”) employment decision, the employer may avoid liability by showing that: (1) the employer exercised reasonable care to prevent and promptly correct any harassing behavior; and (2) the plaintiff unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer to avoid harm.  “A tangible employment action constitutes a significant change in employment status such as hiring, firing, failing to promote, reassignment with significantly different responsibilities or a decision causing a significant change in benefits.”  Ellerth, supra.

The importance of the Faragher/Ellerth defense was significantly increased by the U.S. Supreme Court’s decision in Pennsylvania State Police v. Suders, 542 U.S. 129 (2004), which held that the defense is available in constructive discharge cases unless the plaintiff quits in a reasonable response to an employer-sanctioned adverse action of an official nature, such as a demotion or a cut in pay.

A zero-tolerance harassment policy must fit the environment and employees.  The Ellerth court stated:

While proof that an employer had promulgated an antiharassment policy with complaint procedure is not necessary in every instance as a matter of law, the need for a stated policy suitable to the employment circumstances may appropriately be addressed in any case when litigating the first element of the defense.  The policy should be written in plain English, so that all employees regardless of their educational level or background can understand it … [a] policy should include a clear and precise definition of unlawful harassment so that employees know what type of conduct is prohibited by the policy and will be able to recognize that conduct should it occur.

Accordingly, if the alleged harasser has supervisory authority over the victim, the employer will be held automatically liable for any harassment committed by the supervisor unless the employer is able to successfully raise the affirmative defense. 

B.        Tips On Drafting a Zero-Tolerance Policy and Complaint Procedure. 

(1)               Write in simple English.

(2)               Include a clear definition and examples of prohibited conduct and make it broad enough to prohibit all forms of harassment.

(3)               State the company’s “zero-tolerance” philosophy in the policy regarding all forms of harassment,

(4)               Designate at least two specially trained managers who will be responsible for investigating harassment complaints for the company. 

(5)               Determine the complaint procedure that will be used to investigate complaints of harassment by supervisory employees, co-workers and outsiders. 

(6)               Provide a “clear chain of communication,” allowing employees to step outside of the normal hierarchy in the event the supervisor is the harasser and consider having a toll-free number employees can call.

(7)               State that employees who report prohibited conduct will be protected from retaliation.

(8)               State that the employer will promptly investigate the matter in an objective and discrete manner.

(9)               Provide the form of disciplinary action to which offenders can expect to be subjected.

(10)           State that the employer will also take remedial action.

(11)           Train your management employees and line employees on the policy and procedure. 

(12)           Have each employee sign an acknowledgment form that they have received a copy of the policy and procedure, and that they have received training on the harassment policy. 

C.        The Faragher/Ellerth Defense and Hawaii Law

Like Title VII, the Hawaii Employment Practices Act prohibits discriminating against individuals in virtually all aspects of employment.  However, it remains an open question whether an employer, under Hawaii state law, can assert the Faragher/Ellerth affirmative defense. 

Currently, under regulations promulgated by the HCRC, the state agency charged with the enforcing and interpreting Hawaii’s Employment Practices Act, strict liability would apply to a supervisor’s harassment of a subordinate regardless of whether tangible action is taken:

§12-46-109 Sexual harassment.

(a)        Harassment on the basis of sex is a violation of chapter 378, HRS. Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct or visual forms of harassment of a sexual nature constitute sexual harassment when:

(1)        Submission to that conduct is made either explicitly or implicitly a term or condition of an individual’s employment; or

(2)        Submission to or rejection of that conduct by an individual is used as the basis for employment decisions affecting that individual; or

(3)        That conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment.

(b)        In determining whether alleged conduct constitutes sexual harassment, the commission will look at the record as a whole and at the totality of the circumstances, such as the nature of the sexual advances and the context in which the alleged incidents occurred. The determination of the legality of a particular action will be made from the facts, on a case by case basis.

(c)        An employer shall be responsible for its acts and those of its agents and supervisory employees with respect to sexual harassment regardless of whether the specific acts complained of were authorized or even forbidden, and regardless of whether the employer or other covered entity knew or should have known of their occurrence. The commission will examine the circumstances of the particular employment relationship and the job functions performed by the individual in determining whether an individual acted in either a supervisory or agency capacity.

(d)       With respect to conduct between employees, an employer shall be responsible for acts of sexual harassment in the workplace where the employer or its agents or supervisory employees knows or should have known of the conduct and fails to take immediate and appropriate corrective action. An employee who has been sexually harassed on the job by a co-worker should inform the employer, its agent, or supervisory employee of the harassment; however, an employee’s failure to give such notice may not be an affirmative defense.

D.        Problem Areas for Employers

* Inadequate complaint procedure

* Failure to disseminate policy

* Employer on notice of harassment

 * Failure to promptly investigate

 * Failure to take appropriate disciplinary action

 * Failure to apply it even-handedly

 * Failure to review and revise when necessary

 * Failure to provide training

E.         Illinois Supreme Court Decision a Foreshadowing of Hawaii Law?

In Sangamon Cty Sheriff’s Dep’t v. The Illinois Human Rights Comm’n, Nos. 105517, 105518 cons. (Ill. Apr. 16, 2009), decided on April 16, 2009, the Illinois Supreme Court gave the HCRC direct support of the HCRC’s own interpretation of HRS Chapter 378.

The Sangamon decision holds Illinois employers strictly liable for sexual harassment by any of their management or supervisory personnel, and, as noted by the dissent, “imposes a standard of liability which appears to be without precedent in any jurisdiction of the United States.”

In that case employee Feleccia filed a sexual harassment claim against employer Sangamon County Sheriff’s Department and Ron Yanor, who was a supervisor, but was not Feleccia’s direct supervisor.  The Illinois Human Rights Commission ruled that the Sheriff’s Department was strictly liable for Yanor’s conduct under the Act because Yanor was a supervisor. The Illinois appellate court reversed, and Feleccia and the Commission appealed to the Illinois Supreme Court.

The Illinois Supreme Court reversed and confirmed the Commission’s decision. In a 4-2 ruling, the Illinois Supreme Court agreed that the Sheriff’s Department could be held strictly liable in such circumstances.  The basis of the decision was the plain and ordinary meaning of the statute, which states that “an employer shall be responsible for sexual harassment of the employer’s employees by nonemployees or nonmanagerial and nonsupervisory employees only if the employer becomes aware of the conduct and fails to take reasonable corrective measures.”

According to the Court, the statute is unambiguous” and only excludes “nonemployees” and “nonmanagerial or nonsupervisory employees” from its strict liability standard.  As such, the Court found “[t]here is no language in the Act that limits the employer’s liability based on the harasser’s relationship to the victim.”  The Court rejected the employer’s argument that federal case law should apply to the case.

II.        The Importance of Conducting EEO Training

Of course, in Hawaii the HCRC has merely interpreted HRS Chapter 378’s statutory language to impose strict liability for supervisory harassment.  Unlike the Illinois statute interpreted by the Illinois Supreme Court it is reasonable to argue that Hawaii statutory law is ambiguous and not straightforward. 

Nevertheless, the HCRC is charged with the interpretation and enforcement of HRS Chapter 378 and it does not bode well for Hawaii employers that another state’s high court is willing to impose what some would consider harsh penalties on the employer defendant.  Accordingly, employers in Hawaii should redouble its efforts to train supervisors AND employees regularly on preventing discrimination and harassment in the workplace.  Training should include the consequences of violating company policy.

Training employees reduces the likelihood that inappropriate conduct will be engaged in or tolerated at a level that can create a hostile environment.  See Arquero v. Hilton Hawaiian Village, 104 Hawai’i 423, 91 P.3d 505 (2004) (coworker pinched buttocks of the plaintiff on two occasions); Nelson v. University of Hawai’i, 97 Hawai’i 376, 38 P.3d 95 (2001) (verbal harassment).

Second, in the event that inappropriate conduct takes place, employees who are offended will be substantially more likely to use the employer’s complaint procedure, thereby permitting the employer to remedy the situation and avoid having a lawsuit filed against it.

Lastly, training is a tool for prevention and reducing the potential of supervisory harassment.

A.        Training as a Tool for Prevention

The EEOC’s Policy Guidance on Sexual Harassment states:

An employer should ensure that its supervisors and managers understand their responsibilities under the organization’s anti-harassment policy and complaint procedure. Periodic training of those individuals can help achieve that result.  Such training should explain the types of conduct that violate the employer’s anti-harassment policy; the seriousness of the policy; the responsibilities of supervisors and managers when they learn of alleged harassment; and the prohibition against retaliation.

The HCRC regulations state that “prevention is the best tool for the elimination of sexual harassment.  Employers should affirmatively raise the subject, express strong disapproval, develop appropriate sanctions, inform employees of their right to raise and how to raise the issue of sexual harassment, and take any other steps necessary to prevent sexual harassment from occurring.”  §12-46-109(g).

As part of its settlements against employers, the EEOC and HCRC have chosen mandatory training as one of its primary responses through the use of consent decrees requiring organizations to conduct training and ensure policy compliance.

In 2004, the California Legislature passed Assembly Bill 1825, requiring all employers with fifty or more employees to conduct compulsory sexual harassment training for all of its supervisory employees by January of 2006, thus supporting the EEOC and HCRC’s position that training and education is the best tool for prevention.  Under the California law, the training must re-occur every two years, and all new supervisors brought in after the original round of training must go through the program within six months of their arrival. 

Managers who are aware of the implications of sexual harassment may be less likely to take official action they realize will create vicarious liability for the organization – this may preserve the employer’s right to the Faragher/Ellerth affirmative defense in a case of constructive discharge.  Further, managers who are aware of how to proceed with complaints from employees about harassment are more likely to intervene with an appropriate employer response thus making a stronger showing under the first prong of the Faragher/Ellerth affirmative defense.

Finally, as noted throughout this article training can be an effective tool to combat inappropriate behavior by supervisors and to reduce risks under state law—especially to the extent it is interpreted similar to the Illinois Supreme Court’s decision.

B.                 Training and the Faragher/Ellerth Defense

Conducting training will greatly increase the chance of avoiding liability under the Faragher/Ellerth affirmative defense.  The importance of this defense was significantly increased by the Suders decision, which held that the defense is available in constructive discharge cases unless the plaintiff quits in a reasonable response to an employer-sanctioned adverse action of an official nature, such as a demotion or a cut in pay.

The training of rank and file employees should be documented and if it is to be conducted on a regular basis, can include a certification by the employee that he or she has not been subject to any policy violations since the last training.

C.        Training and Damages Issues Under Hawaii Law

Generally, individuals cannot be found liable for violations under federal law.  Under Hawaii law, however, courts may award unlimited punitive and compensatory damages. 

Significantly, unlike under Title VII individuals can be held liable for violations of Hawaii’s Employment Practices Act.  See HRS §378-1 (defining “employer” to include “any person”) and §378-2 (3) (making it unlawful for any “person” to “aid, abet, incite, compel, or coerce the doing of any of the discriminatory practices forbidden by this part, or to attempt to do so.”); Schefke v. Reliable Collection Agency, 96 Hawai’i 408; 32 P.3d 52, 93-94 (2001) (holding individuals may be found liable under Hawai’i Employment Practices law).

Thus, training employees may alert them to the financial risks they take when they engage in behaviors prohibited by Hawaii law.

D.        Training to Reduce Exposure to Punitive Damages

In Kolstad v. American Dental Association, the Court held that “in the punitive damages context, an employer may not be vicariously liable for the discriminatory employment decisions of managerial agents where these decisions are contrary to the employer’s ‘good-faith efforts to comply with Title VII.’”  Accordingly, compliance efforts are both necessary and sufficient to avoid liability for punitive damages.

Roman Amaguin, Esq.; http://www.virtualhawaiiemploymentlawyer.com; http://www.amaguinlaw.com

According to the Strategic Plan, the third goal, Safe and Secure Workplaces “focuses on ensuring that workplaces are safe, healthful, and fair; providing workers with the wages due to them; providing equal opportunity; and protecting veterans’ employee and reemployment rights.” It is this area that prompts the majority of DOL audits of employers.

The newly appointed Secretary of Labor, Hilda Solis, issued a statement on March 24, 2009 that the DOL is renewing its efforts to enforce labor laws across the country. With the addition of 250 field investigators provided to the DOL under the American Recovery and Reinvestment Act, businesses can be assured of increased audits.

In is important to understand that the DOL is quite a large organization with far reaching regulatory authority. The DOL has 27 divisions that each has their own function. A few of the divisions that are most familiar to private employees are:

In 2008 the WHD recovered more than $185 million in back wages for 228,000 employees. In addition, the agency assessed $9.9 million in civil monetary penalties and concluded 28,242 compliance actions. Including the 2008 figures, the 8 year cumulative total of back wages collected by the agency was $1.4 billion dollars. (Please click here for US Department of Labor 2008 Fiscal Year Report)

Audits are generally triggered either when a current or former employee files a complaint with the DOL or when the DOL targets a specific industry for investigation. It is a common practice of the DOL to target a variety of low-wage industries including day care, agriculture, janitorial services, the garment industry, healthcare, the hotel and motel industries, restaurants, and temporary help. These industries generally have vulnerable and often immigrant workforces, and a history of chronic violations.

Keeping in mind the many arms of the DOL and its numerous divisions, there are many areas that may be audited and some of the main areas of employee complaints (that result in an audit) are listed below:

In addition, many states have a state agency equivalent to the DOL. For example, in California there is the Division of Labor Standards Enforcement, which can also audit CA employers for the same items as the DOL. It is imperative to know your specific state’s requirements in addition to federal regulations. In California, employers should also ensure they are complying with meal and rest break requirements, properly recording meal breaks and the employees’ time worked, properly paying overtime, and reimbursing employees for all business related expenses.

Liability for violation of the wage and hour laws does not require evidence of bad intent or unlawful motive by an employer. The performance of the employee is also rarely an issue, making the employer’s exposure fairly straightforward in most cases. 

If the DOL audits your company, a representative will visit your facility to conduct interviews, make sure the required posters are hung, and possibly examine the time clocks to determine whether your company is in compliance with the Fair Labor Standards Act. DOL will then review up to 3 years’ worth of your wage-and-hour records and investigate your wage-and-hour practices to determine whether you have paid your employees the proper amount of overtime. This will include a review of your pay records, so you must make sure the records are accurate and organized.

Employers need to be proactive about complying with these complex wage and hour laws. If cost is a concern, complete an in-house audit and then have an attorney double check the policies and practices. It will cost a lot more to contact an attorney after the DOL or state agency is in your workplace or the lawsuit has already been filed.

If you want to learn more Human Resources Tips, please click here for more information.

 INTRODUCTION:

Along with other types of claims, there has been a significant increase in pregnancy discrimination complaints nationwide.  The increase in the number of complaints has outpaced the increase in percentage of women in the workforce during the same period.  

Accordingly, it is clear that employers need to become more aware of their obligations towards pregnant employees, especially under Hawaii state law, which covers all employers, and permits not only individual liability for violations of the law, but also unlimited punitive and compensatory damages to be awarded a plaintiff.

 FEDERAL LAW AND HAWAII LAW ARE SIGNIFICANTLY DIFFERENT WITH RESPECT TO PREGNANCY DISCRIMINATION:

Title VII of the Civil Rights Act of 1964 (“Title VII”) makes it unlawful for an employer to limit, segregate or classify employees or applicants for employment in any manner which deprives or tends to deprive an individual of employment opportunities because of the individual’s race, color religion, sex or national origin.  Generally, the law covers all employers engaged in an industry affecting commerce with 15 or more employees.

Title VII was amended by the Pregnancy Discrimination Act (“PDA”) to prohibit all forms of discrimination in employment based on pregnancy, childbirth, or related medical conditions.  Under PDA, pregnant employees must not be treated less favorably than a non-pregnant employee under similar circumstances.

Under the PDA, pregnant employees must not be treated less favorably than a non-pregnant employee under similar circumstances.  Thus, an employer that refuses to hire or promote a female because of pregnancy has violated PDA.  Also, an employer that forces a pregnant employee to take a leave of absence despite being able to perform her job has violated PDA.  Conversely, it is unlawful to force a pregnant employee to continue performing work she is incapable of doing due to her pregnant condition from which other similarly situated disabled employees are excused.

If the employee litigates her federal PDA claim the available remedies include the Court: Issuing an injunction prohibiting the employer from committing future violations of the law; granting equitable relief such as reinstatement or promotion; awarding back pay limited for a period beginning two years before the date the charge of discrimination was filed, less any interim earnings; awarding front pay, and; reasonable attorneys’ fees.

In addition, the total amount of compensatory and punitive damages are limited depending on the size of the employer.  Specifically, the caps are set by statute as follows:

Number of Employees            Cap

015-100 employees                $ 050,000

101-200 employees                $ 100,000

201-500 employees                $ 200,000

500 plus employees                $ 300,000

Under the Hawaii Employment Practices Act, HRS Chapter 378, covered employers are prohibited from discriminating in public and private employment on the basis of “sex.”  Like PDA, Hawaii law prohibits discriminating against women in employment because of “pregnancy.” 

There are significant differences between PDA and Hawaii law.  First, the Hawaii statute covers any employer with “one or more” employees, thus affecting many small business owners that perhaps lack resources to fully educate themselves on the law or implement risk reduction policies and procedures. 

Second, while it is clear under federal law that individual employees cannot be held individually liable for adverse decisions deemed unlawful under the law, there is virtually uniform authority amongst state court judges that no such protection is afforded under state law.  Thus, supervisors along with the employer are commonly named as individuals in lawsuits filed by plaintiffs in Hawaii state court pursuant to HRS Chapter 378.

Third, while federal law simply requires the employer to treat a pregnant employee as it would similarly situated non-pregnant employees under Hawaii law employers are required to do much more.  Specifically, Hawaii law requires by regulatory mandate that employers “make every reasonable accommodation to the needs of the female affected by disability due to and resulting from pregnancy, childbirth, or related medical conditions.”

Regardless of the policies applicable to non-pregnant disabled employees, female employees who are disabled due to pregnancy, childbirth, or related medical conditions must be permitted to take a leave of absence, paid or unpaid, for a “reasonable period of time.”  A “reasonable period of time” is that time determined by the employee’s health care provider.

Hawaii law requires the reinstatement of an employee returning from pregnancy leave to her original job or to a position of comparable pay, without loss of accumulated service credits and privileges.  Prior to the employee’s return to work the employer may request a physician’s certificate approving her return to work.

Finally, and in many cases most significantly, under Hawaii law a court may award unlimited punitive and compensatory damages in cases brought under HRS Chapter 378.   

 CONCLUSION:

            PDA and the Hawaii Employment Practices Act are significantly different in scope and breadth.   Under federal law employers must remember to treat pregnant employees the same as similarly situated employees.  However, under Hawaii law employers are required to afford pregnant special protections regardless of how similarly situated employees are treated. Employers should seek counsel if they have questions regarding the law.

Roman Amaguin, Esq.; romanamaguin@yahoo.com; www.amaguinlaw.com

Roman Amaguin, Esq. is a Hawaii lawyer specializing in employment law, labor law, and civil litigation.

QUESTION: Dear Mr. Cheng: I used to work in a restaurant and the owner worked us 10 Hours a day straight. I am tired. Recently, I requested a break and was fired. I am still waiting for my paycheck and it has been two months. I was paid $30/Day and owed $390.00 for 13 days of work because I worked six days a week. I worked there for 6 months. Is this legal? Jessica – Rosemead ANSWER: Jessica, not only was this illegal but the violations of the law allow you to receive much more money than what you think is owed to you. Our business law department represents numerous businesses in the San Gabriel Valley, including restaurants. The actions by the owner are classic labor law violations. Minimum Wage: First, no person can contract for less than minimum wage. Currently, minimum wage is $8/Hour in 2008.

Therefore, at a minimum you are owed $80/Day and not $30/Day as stated. Meal Breaks: Each day you work more five hours you are required to get a meal break not less than 30 minutes. Failure to do so allow you to receive a penalty of $8/Day for every meal missed. Furthermore, depending on your specific circumstances you may also need to receive another $8/Day in a second meal break missed. Rest Breaks: You were also required, based on your circumstances, to receive a rest break no less than 10 minutes, twice a day. A violation of this allows you to receive one additional hour of pay. Overtime: Any time you work over 8 hours a day and less than 12 hours you are required to receive 1.5 x your hourly wage. Therefore, each day you worked you were entitled to receive another $48/Day ($12 x 4). Termination: Anytime you are terminated you are required to receive your pay immediately. If you do not you receive your average daily wage as a penalty for up to 30 days. Therefore, being that your average daily wage (including penalties) should have been $128 you are entitled to receive $3840.00 in penalties. Conclusion: The approximate amount you are entitled to receive based upon your facts is $17952.00. This is calculated on the wages and penalties that you are entitled to receive minus the actual amount received. In conclusion to your question, the answer is no, this was absolutely illegal. QUESTION: Dear Attorney Cheng: I am a business owner in a large company in the San Gabriel area. I am worried about Labor Code violations because the employee recently requested time records and I no longer have them. Are there any legal consequences of not keeping employment records? Sam – Rowland Heights ANSWER: Dear Sam, under the Labor Code you are required to keep documentation available for your employees to copy. Failure to do so within 21 days of a written request for them entitles employees to damages that can range up to $4000.00. Furthermore, when there is a labor dispute, there is a presumption that if the employer fails to keep proper documentation, the employees’ statements can be used to support hours worked. This is a very severe consequence because an employee can claim many extreme figures for their employment. However, if the employer cannot substantiate the hours worked, the employee is not penalized for a disorganized employer.

If you run a business and have employees, there are a slew of federal and state labor law notices you’re required to post where employees can see them each day. These are often called labor law posters, or compliance posters. They include things like minimum wage laws, the federal USERRA, non-discrimination notices, and more.

Keeping up with everything that ought to be posted and making sure that the most current notices are posted in the workplace can be a real chore for big and small businesses alike. What’s more, posting a collection of paper notices can make your office look messy.

To solve the problem, a number of companies sell labor law posters that combine all the state and federal regulations on one or two posters. The posters, in general, are a good thing. They tidy up offices and help businesses stay in compliance with labor laws.But unfortunately, some of the companies that market labor law posters by mail use hard-sell marketing tactics to get you to replace your labor law posters before you really need to. In fact, some of the marketing materials that get sent in mail seem somewhat misleading and deceptive.

One ploy that’s been used in various parts of the country is a mailing that has the word FINAL NOTICE in all capital letters on the top of the page of an official-looking document. Below the “Final Notice” headline was text stating that the employer must comply with the new labor posting requirements and that failure to do so could lead to government fines of up to $17,000 and other possible dire consequences.

Other tactics include mail-merging the name of the recipient company into the letter and using text in the letter such as a Notice Number, Reference Number, and a Reply By date designed to make recipients think the mail is somehow an official warning.

If your business gets a notice like that, take the time to look at who it really comes from. If you see the words poster service, or compliance service, or if you see an out-of-state address, you can be sure the official-looking “Notice” is just a sales letter. Another dead giveaway: the letter will tell you how to order labor law posters from a private company.

If you’re unsure when labor law notices you need to post were last changed, check with the US Department of Labor and your state labor department to find out if there have been any changes in required postings. Remember, too, that no matter what the labor law poster companies tell you, you don’t need to buy a new poster just because it’s a new year. You only need to replace your posters when the state or federal laws listed on them change. For a list of the latest changes in state and federal labor law posters see http://www.businessknowhow.net/posters/updates.asp.

© 2008 Attard Communications, Inc. Janet Attard is the founder and CEO of Business Know-How, a popular small business website that has been providing information and resources to businesses for 20 years. BusinessKnowHow.com is a source for labor law posters and safety posters. The website also provides a wealth of ideas, tips and hints for marketing and managing small businesses. Subscribe to the Business Know-How newsletter at http://www.businessknowhow.com/newsletter/subscribe.htm

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