Workplace Wise - Iowa Employment Law Attorneys

Thursday, December 17, 2015

OSHA Penalties are Going Up, Up, Up

By Brent Soderstrum

On November 2, 2015, President Obama signed the bipartisan budget bill which permits OSHA to institute a “catch-up adjustment” effective August 1, 2016.  The increase that starts on August 1, 2016, and the subsequent annual adjustments for which the bill provides are to be based upon the Consumer Price Index (“CPI”).
The big question is what the exact amount of the “catch-up adjustments” will be.  Apparently, the CPI is approximately 80% higher than it was back in 1990, which is when OSHA penalties were last increased.  However, this first increase in OSHA penalties could be much higher than 80% because the Act sets the “maximum adjustment” at 150% of the current penalty structure.  Thus, the potential penalty structure for maximum fines could be as follows: 
                 Other than serious:  $12,600-$17,500.  The maximum is currently set at $7,000.
                 Serious:  $12,600-$17,500.  The maximum is currently set at $7,000.
                 Repeat:  $126,000- $175,000.  The maximum is currently set at $70,000.
                 Willful :  $126,000-$175,000.  The maximum is currently set at $70,000.
This first increase is not the end of it.  The budget bill also requires OSHA to annually increase the monetary penalties based upon the percentage increase in the CPI from the previous year.  As a result, every January 15 OSHA will set new penalty amounts; and thus, employers need to pay attention.
OSHA’s increased penalties are intended to increase employers’ attention to the safety regulations by putting some teeth into the monetary penalties.  Regardless of the penalty increases, employers need to be prepared for OSHA to show up at their door and be prepared to handle an OSHA inspection.  It has been easy in the past for employers to accept OSHA citations when the dollar amounts are reduced.  However, with the increase in the penalty structure, a repeat violation can be quite devastating to a company.
Look over your safety manuals and be prepared for a work accident and/or an OSHA inspection.  Also, don’t be too quick to settle an OSHA case even now before the new penalty structure goes into place, since a possible repeat violation will have much more punch to it after August 1, 2016.
If you  have any questions about the OSHA penalty adjustments, how to handle an OSHA inspection or how to comply with OSHA’s regulations, please do not hesitate to contact BrownWinick attorney Brent Soderstrum.

Tuesday, December 8, 2015

Comment on Recent Iowa Public Employment Relations Board Negotiability Decisions

By BrownWinick Employment Law Practice Group

In a series of recent negotiability dispute decisions, the Iowa Public Employment Relations Board ("PERB") has left public employers wondering whether the Board’s 2010 legislative grant of authority to interpret Iowa Code chapter 20 and demonstrated tendency to discard long-standing case precedent will continue to erode the common and ordinary meaning of a mandatory subject of bargaining within the context of Iowa Code section 20.9.
In 2010, Iowa Code Chapter 20 was amended to provide PERB with the power to “interpret, apply, and administer the provisions of [the] chapter.” Iowa Code § 20.6.
Iowa Code section 20.9 contains a limited list of subjects over which an employer and the duly certified employee organization are required to negotiate; including, wages, insurance, supplemental pay, and procedures for staff reduction. Bargaining proposals that fit within one of these enumerated categories are considered mandatory subjects of bargaining. Waterloo Educ. Ass’n v. Iowa Pub. Employment Relations Bd., 740 N.W.2d 418, 422 (2007) (citing City of Fort Dodge v. Iowa Pub. Employment Relations Bd., 275 N.W.2d 393, 395 (Iowa 1979). All other proposals, for which the employer and the employee organization may agree to negotiate, are considered permissive. Id.
The classification of a proposal as either mandatory or permissive is significant. If a proposal is considered mandatory, then the parties may utilize statutory impasse procedures when agreement is not reached. Id. (citing Decatur County v. Pub. Employment Relations Bd., 564 N.W.2d 394, 396 (Iowa 1997)). If a proposal is permissive, the employer may refuse to bargain over the matter and unilaterally implement its desired change. Id.
In Waterloo Educational Association v. Pub. Employment Relations Bd.740 N.W.2d 418 (Iowa 2007) (Waterloo II) the Iowa Supreme Court rejected the management rights balancing test and reaffirmed the two-prong definitional test. 740 N.W.2d at 429. First, PERB must determine whether a proposal fits within the scope of a specific term listed within section 20.9. Id. In making this threshold determination, PERB must consider the “common and ordinary meaning [of section 20.9 topics] within the structural parameters imposed by section 20.9.” Id. at 430. Once a proposal has been properly classified as a mandatory subject of bargaining, PERB must then consider whether the proposal is otherwise preempted by or inconsistent with a provision of law.Id.
The Court in Waterloo II did not abandon decades of case law establishing the narrow parameters of section 20.9, nor did it expand the scope of mandatory subjects of bargaining. The Court simply reaffirmed a long-standing legal test requiring PERB to first determine whether a proposal fits within one of the enumerated categories.
In Fort Dodge Community School DistrictNo. 8512, slip op. (PERB July 2, 2012), PERB elected to exercise its statutory authority to interpret chapter 20 and reevaluated long-standing legal precedent defining the term “supplemental pay. ” PERB held that the common and ordinary meaning of supplemental pay is “a payment of money or other thing of value that is in addition to compensation received under another section 20.9 topic and is related to the employment relationship.” Id. at 24. PERB emphasized that while supplemental pay is not limited to cash payments, “[t]here can be no question that chapter 20 deals strictly with collective bargaining in the public sector in Iowa; thus, in the context of section 20.9, any ‘supplemental pay’ proposal must be related to the employment relationship between bargaining unit members and the public employer.” Id. at 23.
Prior to Waterloo II, the Iowa Supreme Court held that “supplemental pay refers to pay for services rendered. . . it is pay based upon extra services and directly related to the time, skill, and nature of the additional services.” Fort Dodge Community School District vs. Pub. Employment Relations Bd., 319 N.W.2d 181, 184 (Iowa 1982); See. e.g., W. Hills Educ. Agency 12 & Prof’l Staff Ass’n of Area Educ. Agency 12, No. 2337, slip 15 (PERB Feb. 4, 1983) (severance pay held permissive).
Notwithstanding the long-standing precedent that defined supplemental pay, PERB ruled that the Education Association’s proposals for severance pay fell within the common and ordinary meaning of supplemental pay as redefined by PERB. PERB reasoned the Education Association’s proposals, which provided for cash payments, were “related to the employment relationship in that the payment is made upon termination, is conditioned upon length of service, and is calculated based on unused, accumulated sick leave. Moreover, the proposals incentivize employees to remain in the [employer’s] employ while refraining from using their contractually agreed-to sick leave.” Fort Dodge Community School District at 24.
The Court of Appeals affirmed the District Court’s affirmation of PERB’s ruling on the grounds PERB was vested with the authority to interpret chapter 20; and that the interpretation of supplemental pay was not irrational, illogical, or wholly unjustifiable. Fort Dodge Community School District v. Pub. Employment Relations Bd., 855 N.W.2d 733 (Iowa App. 2014).
Similarly, in State of Iowa (Board of Regents) & UE Local 896/COGS, No. 100058 slip op.(PERB February 25, 2015), the Board elected to exercise its statutory authority to interpret chapter 20 and ruled that a Union proposal for reimbursement of mandatory student fees (paid by all undergraduate and graduate students enrolled at the University of Iowa) was a mandatory subject of bargaining (supplemental pay) for enrolled graduate students who also had part-time appointments to teach classes and assist with research at the University.
In reaching its decision, the Board appropriately analyzed the question of negotiability pursuant to the two prong approach inWaterloo II. The Board engaged in a definitional exercise to determine whether the proposal fit within the scope of either the mandatory topic of wages or supplemental pay.  It correctly determined that the proposal to reimburse mandatory student fees was not a wage because the employer’s obligation to make the required payment was not triggered by an employee providing a service. Instead, the Board stretched precedent and ruled the payments contemplated by the proposal fit the definition of supplemental pay as redefined by the Board in Fort Dodge Community School District v. Iowa Pub. Employment Relations Bd., 855 N.W.2d 733 (Iowa App. 2014) Specifically, the Board found the Union’s proposal for student fee reimbursement was a payment related to the employment relationship and was therefore supplemental pay and mandatory.  As reasoned by the Board, “They [student fee reimbursement payments] are, under a literal reading, triggered by the relationship’s very creation ? the receipt of an appointment to a bargaining unit position – and are akin to a hiring bonus.” Id. at 7.
On appeal to District Court, the employer argued PERB Board’s application of “related to employment relationship,” in the context of mandatory student fees, overextended prior precedent [supplemental pay definition], rendered other section 20.9 topics superfluous and created open scope bargaining in direct contravention of legislative intent. The employer further argued that student fees did not relate to the employment relationship whatsoever, but were related solely to their enrollment as students at the University. The District Court rejected the employer’s arguments, deferred to PERB’s statutory authority to interpret chapter 20 and affirmed PERB’s ruling as not irrational, illogical, or wholly unjustifiable.  State of Iowa (Board of Regents) v. Iowa Public Employment Relations Board, No. CVCV049496 (Polk County District Court July 31, 2015).
PERB willingness to exercise its interpretative authority and reexamine decades old precedent should give public employers pause to question whether PERB’s recent decisions indicate a trend by PERB, which if unbridled, will have the effect of abolishing limited scope bargaining in Iowa.
However, all hope should not be lost. In City of Camanche and City of Camanche Police and FireCase No. 100058, slip op. (PERB August 5, 2015), the Board declined the Union’s invitation to exercise its statutory authority to interpret Iowa Code chapter 20 and rule that prescription and health insurance for retirees was not an illegal subject of bargaining, but mandatory under the category of insurance. Instead the Board correctly and appropriately followed long-standing case precedent and ruled the proposal was illegal. See City of Mason City v. PERB, 316 N.W. 2d 851 (Iowa 1982) (retiree health insurance proposal directly augments or supplements the benefits a public employee would receive under a retirement system under other provisions of the Code and is therefore an illegal subject of bargaining).

Tuesday, November 3, 2015

Supreme Court to Hear Arguments in 8th Circuit FLSA Case

By Megan Erickson Moritz

The U.S. Supreme Court will hear oral arguments in Tyson Foods, Inc. v. Bouaphakeo on November 10, 2015. The outcome of the case could significantly change the way wage and hour collective actions and class actions are litigated.

In this case, Tyson Foods challenges a $5.8 million judgment awarded to employees of its meat processing facility in Storm Lake, Iowa. The employees brought claims under the Fair Labor Standards Act (FLSA) and the Iowa Wage Payment Collection Law (IWPCL) seeking unpaid wages for time worked off the clock. A jury returned a verdict for the class, and the Eighth Circuit affirmed.

On appeal to the Supreme Court, Tyson argues the case never should have been certified as an FLSA collective action or a Rule 23 class action because the plaintiffs relied on statistical evidence and average times employees spent putting on and taking off personal protective equipment. The two issues presented to the Court are:

          I.    Whether differences among individual class members may be ignored and a class action certified under Federal Rule of Civil Procedure 23(b)(3), or a collective action certified under the Fair Labor Standards Act, where liability and damages will be determined with statistical techniques that presume all class members are identical to the average observed in a sample.

II.   Whether a class action may be certified or maintained under Rule 23(b)(3), or a collective action certified or maintained under the Fair Labor Standards Act, when the class contains hundreds of members who were not injured and have no legal right to any damages.

Tyson argues the standards governing collective actions should be on par with those announced in the 2011 Wal-Mart Stores v. Dukes case, which emphasized the importance of establishing commonality to justify class certification. That is, plaintiffs must demonstrate their claims turn on a “common contention… capable of class-wide resolution.” The Dukes Court disapproved of “Trial by Formula,” and suggested claims for individualized relief (such as back pay) are not appropriate for class treatment. Tyson, and many other businesses, hope the Court’s decision in this case will reaffirm the exacting standards for obtaining class or collective action certification.

If you have any questions about wage and hour issues, please do not hesitate to contact Megan EricksonMoritz for more information.

Tuesday, October 13, 2015

Supplemental Poster to be Used by Government Contractors and Subcontractors

By Elizabeth A. Coonan

On September 10, 2015, the United States Department of Labor Office of Federal Contract Compliance Programs (OFCCP) issued a supplemental poster to be used by government contractors and subcontractors. The OFCCP is working with the EEOC to update the existing poster and advises that the prior poster should be used along with the supplemental poster until further notice. A copy of the supplemental poster can be found here.  

If you have any questions about postings, please do not hesitate to contact BrownWinick’s Employment and Labor Practice Group Co-Chair, Beth Coonan for more information.

Friday, October 2, 2015

Tricks and Treats for the HR Department

A true Halloween scare for any HR department involves the kinds of missteps that result in government audits or legal action against the employer. Although employees are a company's most valuable resource, failure to manage the employment relationship properly can result in frightening consequences. By conducting a regular HR audit, employers can eliminate common problems, protect valuable assets and improve employee morale. Some of the common problems an HR audit can resolve include: 

  • Poor communication with employees. Creating, circulating and updating employee handbooks can improve employee communication. Quality handbooks also encourage legal compliance and answer employee questions.
  • Gaps in protections for trade secrets and confidential information. Shoring up policies and practices designed to protect confidential or trade secret information makes it harder for employees to misuse or steal it.
  • Failure to adhere to wage and hour laws. Ensuring proper classification of exempt employees and independent contractors reduces the risk of government audits and lawsuits.
  • Inappropriate I-9 practices and procedures. Promoting I-9 compliance helps employers avoid hefty fines and penalties.
  • Flawed hiring practices. Keeping hiring practices free of practices that could be construed as discriminatory reduces the risk of lawsuits, for example asking about protected class status.
  • Inattention to discrimination, harassment and retaliation. Sound training, policies and investigations helps eliminate these significant risks.
  • Poorly administered discipline and investigations. Avoiding errors in this area helps strengthen a legal defense if the issue results in litigation.
  • Inappropriate handling of accommodation requests. Good use of the interactive process yields happier employees and fewer legal risks.
  • Social media gaffes. Providing structure and guidance for social media practices keeps employers from facing embarrassing public problems.
  • Health and safety shortcomings. Keeping employees safe is key to any company's success.
  • Unlawful leave policies and practices. Complying with leave law keeps a significant area of legal exposure from becoming a costly lawsuit.

BrownWinick’s Employment and Labor Practice Group can conduct an HR audit for your company to address these and other issues.  Contact Co-Chairs, Beth Coonan or Ann Kendell, for more information.

(Reprinted with permission from Practical Law)

Wednesday, July 1, 2015

DOL Issues Update on Overtime Regulations

By Megan Erickson Moritz

More than a year ago, President Obama asked the Department of Labor to update its overtime regulations. Yesterday, the DOL finally announced its proposed rule. The proposed rule would extend overtime pay and minimum wage protections to almost 5 million US workers within a year of its implementation. The proposal also includes raising the salary threshold applicable to many of the exemptions from $455 a week to $970 a week. 

The Office of Management and Budget has reviewed and approved the Notice of Proposed Rulemaking, but the Notice has not yet been published in the Federal Register.  When it is officially published in the Federal Register, the Notice will specify the dates for the public comment period. The OMB-approved version of the Notice is available for review online at the DOL's website as a courtesy, but does not trigger the official comment period.

More information about the DOL's announcement is available here.