You may have heard about new overtime rules from the Department of Labor. It’s not all about bathroom laws. Michael Kelsheimer, author of the Employer Handbook, broke down the new rules in Federal Changes to Overtime Exemptions Alert.

In a gross over-simplification, employees that oversee others, i.e, manager, were exempt from overtime if they earned more than $23,660 year. Come December 1, that amount is increased to $47,476 per year.

So that means anyone earning less than that can no longer be exempt no matter how many employees they oversee and will be entitled to overtime pay if they work more than 40 hours per week.

Does your account lead that oversees a team make less than that? Do they work more than 40 hours per week? What about the lead developer?  Or customer service team leader?

We know many of you use independent contractors as opposed to employees and these rules would not apply if the person is truly an independent contractor.  But, classifying someone as an independent contractor is harder than you think.  Luckily, Michael has written about that, too in Are you an Employee or an Independent Contractor?

 

 

 

 

As the summer arrives in full force, I am watching a lot of my start-up friends take advantage of the unpaid internship to help with some needed coding, design or marketing projects they haven’t gotten to.   These kids are smart, hungry, can use the experience and wouldn’t it be nice to have someone pick up coffee and donuts for you once in awhile?

As my Looper Reed colleague Michael Kelsheimer explains in a prior post on his Texas Employer Handbook blog, you have to be careful when using unpaid labor.

UNPAID INTERNS, VOLUNTEERS AND TRAINEES

Who, What, Why . . .
Who does it apply to: Every employer who has or intends to hire unpaid interns.
When must an intern be paid: All “employees” of a business must be paid at least minimum wage unless they are a “trainee” under the law, regardless of whether they are called an “intern.”  So, what makes a trainee? The United States Department of Labor (DOL) has established a six-factor test couched in terms of – you guessed it – training – to determine whether an unpaid intern should be considered an employee or trainee under the Fair Labor Standards Act (FLSA):
  • the training is similar to that which would be given in a vocational school (even though it includes actual operation of the facilities of the employer);
  • the training is for the benefit of the trainees;
  • the trainees do not displace regular employees, but work under their close observation;
  • the employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion operations may actually be impeded;
  • the trainees are not necessarily entitled to a job at the conclusion of the training period; and
  • the employer and the trainees understand that the trainees are not entitled to wages for the time spent training.
When can I hire an unpaid intern or volunteer: The six-factor test is primarily used in the, “for profit,” private sector. State and local government agencies and non-profit organizations can generally utilize interns or volunteers without an obligation to pay them under the FLSA. It is important, though, that the volunteers understand they are not to be paid for their time. Volunteer work at non-profit, religious, charitable, and civic organizations have specifically been cleared by the Texas Workforce Commission.
What about true student interns: Student interns are not evaluated differently by the DOL. They should easily meet the trainee test. That said, there are special rules for individuals who have completed a professional degree like physicians, attorneys, and therapists, generally allowing them to volunteer their time as they choose.
What do these factors really mean: The more an internship program can be structured around a classroom or academic type experience the better. It is better if the employer can provide the individuals with skills applicable to various employment settings, not just skills particular to the employer’s business. Essentially, the employer needs to provide the intern or volunteer with valuable training. Ideally, the training would make them more marketable in the open job market. The employer must pay any intern or volunteer that is used as a replacement for a regular employee or to reduce their workload. The intern or volunteer should receive more supervision than a regular employee.  If the employer would have to hire additional employees if the intern or volunteer were not performing certain work, the intern or volunteer would be considered an employee. Don’t rely on unpaid interns to do work of any real significance to your business. The work done by an unpaid intern should be secondary to their training. An intern that is hired by an employer on a trial basis with the expectation that they will eventually be hired full time will likely be considered an employee under the FLSA. Employers should indicate prior to the start of the internship that there is no guarantee or expectation of hiring the interns upon completing the internship. A written agreement indicating this is advisable. Employers should indicate prior to the start of the internship that there is no intention to pay the intern. A written agreement indicating that the intern will not be paid and does not expect to be paid is advisable.
What happens if I don’t follow the test: An employer violating the rule is subject to the same damages available to an employee who is not paid all of the wages they are owed. This may include minimum wage and overtime for all hours worked, plus an equal amount in liquidated damages for all interns over the past two or three years.
What about discrimination laws: It depends on whether the person in question receives “significant remuneration” for their efforts. The EEOC has stated that things like a pension, group life insurance, workers’ compensation, or access to professional certifications constitute significant remuneration. However, Courts have determined that things like academic credit, practical experience, and scholarly research do not constitute significant remuneration. Because this point is subject to interpretation, however it is best to treat all interns and volunteers as though they are employees with respect to discrimination laws.
Common Situations:
Required training: Safety First is ready to hire a new class of security guards.  The company requires that security guard trainees receive 40 hours of training prior to performing any regular work under their service contract.  According to their contract, the training is focused on “company practices, policies, and rules.” Does Safety First have to pay the trainee security guards even though they are not yet performing regular work?  Yes. These trainees would be considered employees because: (1) the employer is directly benefiting from their training, (2) the training is given to security guards who will work on contract, and (3) Safety First can only employ specifically trained guards.
Homegrown hiring: Maverick Finance hires interns each summer.  Maverick’s intern program is structured much like an academic program.  The interns do not do the work of regular employees and are heavily supervised.  The interns are not paid and are aware there is no guaranty of employment.  However, Maverick hires its first year analysts almost exclusively from the unpaid interns it has each summer. Does the FLSA require Maverick to pay these interns at least minimum wage? Probably.  Although Maverick substantially satisfies the six factor test, its practice of hiring analysts from the intern pool is likely enough to tip the balance against the company in the face of a DOL audit.
What should I do:
Good: Paying minimum wage to all interns probably is the safest bet. You avoid the risk of an audit of all your employment practices because of one dissatisfied intern that calls the DOL.  If you go the trainee route, be sure to meet all the factors.
Better: If you have true “trainees” taking into consideration all the factors, it makes sense to put that understanding in writing in a short half-page agreement outlining the factors. If you use volunteers, it makes sense to have them sign a one-paragraph agreement acknowledging their status as a volunteer without expectation of pay or other “significant remuneration” to avoid the possibility of an EEOC complaint.
Best: In addition to the items above, require that the trainees keep track of their hours so you have a record of how much they might be entitled to if the DOL audits and rules them employees. Be sure they do not work more than 40 hours to avoid increasing the risk to include overtime. Have the trainees and their supervisors keep a log of their activities so that there is no confusion regarding the type of work they did.

Is liking something expressive activity protected by the First Amendment?  Does being a Facebook “friend” create the appearance of impropriety requiring the judge to recuse himself from the case?  Leave it to Facebook to make us answer these questions.

You don’t like me, you just want my coupon . . .

The Fourth Circuit Court of Appeals is wrestling with the question of whether liking something on Facebook is protected First Amendment activity in the case of Bland v. Roberts.  A jailer in Virginia liked his boss’s opposition during a campaign for sheriff.  The incumbent won and the plaintiff was fired.  The sheriff said it was for competency issues, but the plaintiff said retaliation was the motivating factor for the termination.

Public employers, and some private employers in some states, cannot retaliate against an employee for taking part in Constitutionally protected activity that does not interfere with work.  In other words, you can’t fire a public employee just because they spoke out on a issue or supported a candidate.

So, it seems like a slam dunk case for our fired jailer.  The district court dismissed his case because the court ruled “liking” something on Facebook did not amount to a “substantive statement” worthy of protection.  The court determined that without more, the simple act of making one-click on Facebook does not reveal that someone is engaging in protected speech.  While it is true half of the people on Facebook would like Osama bin Laden to get a 15% discount at Target, “liking” a candidate or a cause is political speech.

It’s dangerous to predict the outcome of an appeal based on oral argument, but according to this report from Bloomberg, I would put my money on a reversal.

“Carter clicked the Like because he liked something,” U.S. Circuit Judge Stephanie Thacker said to a lawyer for Hampton Sheriff B.J. Roberts during the 40 minute hearing. “How is that any different than perhaps putting a sign in the yard saying ‘I Like Ike’?” she asked.

Facebook, which got a few minutes at the hearing to argue for a reversal, made similar arguments.

The opinion should be issued in a few months and will tell us whether the over 3 billion “likes” a day on Facebook are entitled to First Amendment protection.

It is not likely your “like” will make its way to the Supreme Court.  The lesson is to be careful of making employment decisions based on what you see on Facebook.  The issue is more problematic for public employers, but as we have discussed before even non-union private employers need to make sure their social media policies and employment decisions do not upset the NLRB.  “Liking” a complaint from a co-worker about working conditions cannot be the basis of a termination.  “Liking” Coke when you work at Pepsi in an at will state probably can be.

MAKING “FRIENDS” WITH THE JUDGE

Meanwhile, the court of appeals here in Texas held that being “friends” with a judge on Facebook should not be the basis of a criminal conviction reversal.

In Youkers v . Texas, the criminal defendant was accused of violating the terms of his parole supervision which sent him to jail for eight years.  On appeal, Youkers argued the father of the victim in the underlying crime was Facebook friends with the judge and sent the judge a Facebook message.  Therefore, the defendant argued, there was an improper bias and the conviction should be overturned.

The Facebook message

When you only hear part of the story, things look bad.  Yes, there was an ex parte Facebook message from the victim’s father to the judge.  The message, however, sought leniency for the defendant.  The judge also disclosed the message to everyone without any objection and warned the father not to do it again.

The Facebook “friendship”

The more interesting question is whether merely being friends with a judge on Facebook provides even an appearance of impropriety.  I’ve had interesting discussions about this topic at various ethics CLE’s with judges and private practitioners.  And, yes, I am Facebook friends with several judges.

The court of appeals ruled judges are not prohibited from using social media.  In Texas, unfortunately, we elect our judges.  The court realized the judges need to be on social media.

As pointed out in Professor Goldman’s Technology and Marketing Law Blog:

Merely designating someone as a “friend” on Facebook “does not show the degree or intensity of a judge’s relationship with a person.” ABA Op. 462. One cannot say, based on this designation alone, whether the judge and the “friend” have met; are acquaintances that have met only once; are former business acquaintances; or have some deeper, more meaningful relationship. Thus, the designation, standing alone, provides no insight into the nature of the relationship.

Without more, the defendant could not prove there was an improper evidence.

The ABA cautions judges to use social media within the existing ethical rules (endorsing political candidates is a tough one) and this case should give lawyers here in Texas a little more comfort about friending judges.  The practicing bar has a little more freedom.  Yet, the existing ethical rules still apply to our social media use.  For instance, we cannot imply we hold any sway with a particular jurist and a simple Facebook friendship does not do that – particularly when the elected judge is friends with hundreds of lawyers.

A lot of the judges are our friends.  Before they got on the bench, they were our colleagues.  Once on the bench, they are still our neighbors, our kids’ coaches and friends.  We socialize with them outside the courthouse.  With Facebook, there is just a record.

As part of our continuing coverage of the Texas Legislature Watch (they only meet every other year in Texas), we look at the bill that would prohibit employers from demanding passwords or other access to the social media accounts of employees and prospective employees.  It goes to the House floor tomorrow.

As we originally reported, on December 21, 2012, HB 318 was prefiled and the senate considered the similar SB 118.  You can read my original post for the original version of the bill and my original comments. 

Now that it is through committee, the bill specifically excludes those in the “financial industry.”  It also includes an exception for employers to investigate wrongdoing.  Specifically, it now states:

(c) An employer may access a personal account of an employee if the employer holds a reasonable belief that the employee has violated:

(1) state or federal law, including a federal regulation or any regulatory policy or guidance issued by a federal agency; or

(2) an employment policy of the employer, including a policy governing:

(A) employee usage of an electronic communication device for work-related communications;

(B) the storage of potentially sensitive, nonpublic consumer information or of employer proprietary information;

(C) employee cooperation in a workplace investigation; or

(D) the safety and security of employees and customers of the employer.

While addressing two of the issues we spotted with the original bill, it still does not apply to college or other students.  It also does not provide any immunity for employers for failing to investigate social media profiles.

As explained in this article by Jessica Mendelson of Seyfarth Shaw, Texas looks to join the states of Utah, New Mexico and Arkansas that recently passed similar laws.

No one likes to be sued.  It may make you mad enough that you want to scream and holler on the Internet.  There is a reason, however, a lot of lawyers recommend not commenting on personnel issues and pending litigation.

Take a lesson from Coyote Ugly that does not involve dancing on the bar.  The lesson is — don’t go to the Internet to rail on your former employees when they file a Fair Labor Standards Act minimum wage case against you.

About a month after a group of employees filed suit against the Coyote Ugly Saloons, the president of the chain of Coyote Ugly Saloons went to her “Lil Spill” blog and wrote:

This particular case will end up pissing me off[,] cause it is coming from someone we terminated for theft. I have to believe in my heart that[,] somewhere down the road, bad people end up facing bad circumstances!

I have been reading the basics of Buddhism[,] and am going to a class on Monday. The Buddhist way would be to find beauty in the situation and release anger knowing that peace will come. Obviously, I am still a very new Buddhist[,] cause my thoughts are “[f***k] that [b**ch.]” Let me do my breathing exercises and see if any of my thoughts change. Lol .

A slightly different take then, say, Warren Buffet may have taken.  The subject of the post had already been reinstated by the time the blog post was published.

To add to the fire, a supervisor allegedly posted on Facebook when drunk about another plaintiff who was still employed but had joined the suit:  “Dear God, please don’t let me kill the girl that is suing me . . . . that is all . . . .”

The result of these diatribes was a retaliation claim in addition the underlying minimum wage claims.  The federal district court in Tennessee recently allowed both claims to continue.  You can read the opinion here.

I am not an employment lawyer, but I know enough to warn clients you can almost get into more trouble for retaliating against an employee for making an overtime, workers’ compensation, minimum wage, harassment or discrimination complaint than you can for the underlying complaint.  My colleague Michael Kelsheimer has written on retaliation on his Employer’s Handbook blog.

The emedia law lessons seem almost too obvious.  I’ve never thought to add “don’t let your supervisors post to about your employees while drunk” to my social media policies.  The real lesson is to train your employees and have policies.  Considering the founder was the first to take to the Internet, I’m not sure there was much respect for policies or compliance.  Your business, I am guessing, is probably different.  You should have policies and plans in place regarding who can say what about pending claims and what is and is not appropriate to do on the Internet.

Your employees want to be able to use their own iPhones or Android devices at work.  Angry Birds on the Blackberry is just not the same.  This trend is being referred to as Bring Your Own Device or BYOD.

While it will make your employees happy, it creates some issues that involve three key stakeholders: legal, IT and HR.  They need to get together to make sure the company does not willy-nilly take on unneeded risk just so the recent college grad can access Instagram photos on his phone while working.

So, where do I start?

While there are IT and HR issues to consider, the primary legal risk centers on the company’s need to access the employee’s personal phone and possibility to wipe it clean if the phone is lost or the employee is terminated. 

If you want to address the issues cheaply (the Yugo), then adjust your existing Computer Use or Technology Resources (whatever you have already called it) policy.  Make sure the restrictions and rules also apply to the employee-owned devices (don’t forget the tablets) that access the company’s computer networks and resources.   You also probably need to add a line that although the company will try not to erase or access personal items on personal devices, the company reserves the right to access the phone, its data and possibly wipe it clean if it needs to protect company assets or conduct necessary investigations.  Employees should also be warned that they run the risk of losing personal data on their devices if they use them for work.

If you don’t already have some type of Computer Use policy, then you can create a brief agreement with employees before you allow them to use their personal devices to access the company’s networks to cover these basics.

This is a minimal approach to covering BYOD that covers the privacy and right to search/erase issues. In one of the few applicable cases involving the company inspection of a personal laptop, the court in Sitton v. Print Direction, Inc., 718 S.E.2d 532 (Ga. Ct. App. 2011) noted the employee gave the company permission to look at the contents on the laptop when it expressed the necessity for the company “to be able to respond to proper requests resulting from legal proceedings that call for electronically-stored evidence” and provided that for this reason, its employees should not regard “electronic mail left on or transmitted over these systems” as “private or confidential.” The company’s policy also stated the company “will . . . inspect the contents of computers, voice mail or electronic mail in the course of an investigation triggered by indications of unacceptable behavior.” The policy was expressly included personal devices used at work and not just company-issued computers.

We want more . . .

If you like, or want more rules, the pundits suggest there you should have a whole policy separate and apart from your computer use policy to cover things not necessarily addressed above such as:

– Required security measures the company will take (such as requiring passcodes to unlock the iPhone or company-provided apps with more complex, rotating passwords or automatic locks after a set number of failed attempts)

– The ability to clean a device remotely if stolen or lost including employee notification protocols with warning that personal items may be lost in the process

– Notice that using your own device is a privilege and not a right

– Only employees can access company resources with devices

– Reserving the right to disconnect from the company resources without notice

– Departing employee procedures

– Coordination with the data retention policies

– Identify which devices and operating systems the company will support

– Eligibility and Reimbursement procedures and restrictions

– Any required applications that the company will require to be installed

– Require IT approval before use

– Require IT approval before transfer or disposal of the device to clean

– Reserve the right to wipe clean in case of an emergency

– Disclaim any liability for increased charges

– Add that the company does not condone typing or reading while driving

– Disclaim any liability for data loss to the device as a result of the company data or applications

– What support is available for BYOD

– Restrictions against jailbreaking or otherwise modifying the operating system of the phone

The gold-plated plan would require the employee to sign off on this policy separate and apart from the rest of the employee manual. 

For more . . .

Here is a website with a sample policy.  It needs to be tailored to fit your specific needs and requirements.  If you are just getting started, this may be a helpful place to start.  SAP BYOD Policy Guidebook

Democratic Texas State Representative Helen Giddings filed a bill prohibiting employers in Texas from asking for social media passwords from applicants and current employees.  Texas joins a long list of states that have either passed or proposed similar legislation. 

On December 21, 2012, HB 318 was pre-filed.  Democratic State Senator Chuy Hinojosa filed the exact bill with the Senate as SB 118.  The bills read: 

(b) An employer commits an unlawful employment practice if the employer requires or requests that an employee or applicant for employment disclose a user name, password, or other means for accessing a personal account of the employee or applicant, including a personal e-mail account or a social networking website account or profile, through an electronic communication device.

(c) This section does not prohibit an employer from:

(1) maintaining lawful workplace policies governing:

(A) employee usage of employer-provided electronic communication devices, including employee access to personal accounts on those devices; or

(B) employee usage of personal electronic communication devices during working hours;

(2) monitoring employee usage of employer-provided electronic communication devices or employer-provided e-mail accounts; or

(3) obtaining information about an employee or applicant for employment that is in the public domain or that is otherwise lawfully obtained.

Six states already have similar laws and many others are considering similar legislation.  The National Conference of State Legislatures has a good resource that tracks what all of the states are doing in this area. 

Here are a couple of issues I see with the Texas version.

1.  There is no exemption for employers to investigate wrongdoing.

For example, Michigan lays out some exceptions that exclude “Disciplining or discharging an employee for transferring the employer’s proprietary or confidential information or financial data to an employee’s personal internet account without the employer’s authorization”; and “conducting an investigation or requiring an employee to cooperate in an investigation . . .”   

2.  There is no exemption for highly-regulated industries like securities.

The Michigan law exempts employers “if there is specific information about activity on the employee’s personal internet account, for the purpose of ensuring compliance with applicable laws, regulatory requirements, or prohibitions against work-related employee misconduct.”

3.   What about shoulder-surfing?

The statute forbids employers from using “other means for accessing a personal account” but there is a qualifier at the end that seems to limit the employer’s access to the account “through an electronic communication device.”  So, can an employer tell an applicant or employee to log-in to Facebook while I look over your shoulder?  It is certainly not clear.  Other states take a more direct approach.    The California law expressly forbids requiring an employee to “access personal social media in the presence of the employer” which would prevent shoulder surfing.

4.  Immunity for employers who can no longer access social media accounts.

 I normally advise companies not to use social media to screen applicants unless you have and follow a specific plan.  I could foresee, however, that a mishap could happen at work and a creative plaintiff’s lawyer could argue negligent hiring because a social media search would have revealed the employee was racist, sexist, violent, etc.  It would make sense then that if employers are prohibited from doing thorough social media research, they should not be held liable for failing to do so if something went wrong.  Michigan has addressed this in its version by stating:

Sec. 7. (1) This act does not create a duty for an employer or educational institution to search or monitor the activity of a personal internet account.

(2) An employer or educational institution is not liable under this act for failure to request or require that an employee, a student, an applicant for employment, or a prospective student grant access to, allow observation of, or disclose information that allows access to or observation of the employee’s, student’s, applicant for employment’s, or prospective student’s personal internet account.

5.  What about students?

Many of the bills apply the same rules to secondary school, colleges and universities.  If we care about privacy, shouldn’t we apply it to them as well.

These are just a few issues and I still question whether this a fix in search of a problem.  Yes, there have been one or two publicized incidents of employers demanding access to social media accounts.  But, I’m not the only one that questions whether laws forbidding requests for social media accounts are necessary.  As the economy recovers, I would think this is something the market will handle.  Besides, I see certain positions where such requests would be encouraged such as youth camp counselors or mental health providers, security personnel and employees for religious institutions. 

This is the second part of our Texas Leg Watch 2013.  The Texas Legislature meets every odd year, so we will monitor any bills of interest to the online media, marketing and start-up community.  Our first post looked at a proposal that would allow civil lawsuits to be brought against internet online advertisements that resulted in human trafficking perhaps usurping the federal Communications Decency Act protections.

Federal agencies are not shy about enforcing alleged violations of their policies after the fact.  From these enforcement actions, lawyers are supposed interpret the results to advise their clients on how to avoid the same fate. 

In the past, the NLRB even summarized some of the cases for us in its second report on social media in the workplace.  This week, the NLRB went a step further and actually told us what we should and should not include in social media policies.  You can read the NLRB’s third report issued on May 30, 2012, here.

According to the report, companies need to consider whether their social media policies “would reasonably be construed to chill” the employees’ rights to discuss with each other their working conditions.  

What not to include

The NLRB believes this broad right, applicable to union and non-union employees alike, makes certain run of the mill social media provisions overly broad such as a policy that forbids employs from sharing “confidential guest, team member or company information.”

The NLRB also frowns upon policies that require the employees to only include information that is “completely accurate and not misleading and that they do not reveal non-public information on any public site.”

You also should not include language in your policy that prohibits employees from posting “offensive, demeaning, abusive or inappropriate remarks.”

Warnings to “think carefully” before connecting with colleagues is overly broad.  

To my chagrin, the NLRB even frowned upon policies that restricted employees from discussing the company’s legal matters. 

All of these no-no’s could be construed to prevent employees from discussing the terms and conditions of their employment with each other which is unlawful.  

So, what can I have in a policy?

Here are some of the acceptable examples:

“You are solely responsible for what you post online.”

“Before creating online content, consider some of the risks and rewards that are involved. Keep in mind that any of your conduct that adversely affects your job performance,…may result in disciplinary action up to and including termination.”

What we use

For informational purposes only and not specific legal advice that you can rely upon or that establishes a lawyer-client relationship because each situation is unique (aren’t lawyers fun people to hang out with?), here is the language we usually start with:

You are responsible for any information you post online.  Any online behavior, including that done during non-work hours, that unnecessarily casts the Company in a negative light or that adversely impacts the Company environment of teamwork will ultimately be your responsibility and may be the basis for discipline by the Company.  Some examples include, but are not limited to, any vulgar, obscene or disparaging comments about the Company, its employees or customers that do not address the terms and conditions of your employment. 

Hopefully, this starting point passes muster and success means it will never be tested.

[Updated 6-4-2012] Is the NLRB going too far?

Not everyone agrees with the NLRB’s position suggesting the NLRB is addressing conduct outside of its purview.  Looper Reed employment law attorney and The Employer Handbook creator Michael Kelsheimer says, “after chastising and punishing businesses for their social media policies over the last several years, the NLRB has finally provided some guidance to businesses on what is acceptable for a social media policy. Unfortunately, the NLRB’s guidance severely cuts into an employer’s ability to stop conduct that really is not protected by the NLRA and could violate other laws such as Title VII.”