Obama Orders Paid Sick Leave for Federal Contractors

On Labor Day, appropriately enough, President Obama issued an executive order establishing up to seven days of paid sick leave for employees of federal contractors and subcontractors. The order was drafted and proposed in early August and issued on September 7th, capping off the White House’s push of its “Lead on Leave” initiative.

The order requires paid leave to employees for their own health care; to care for a family member such as a child, parent, spouse, domestic partner or other family member or close companion; or to seek medical attention, counseling, other assistance from a victim services organization or to take legal action in the case of domestic violence or sexual assault. Under this order, paid leave that accrued to an employee that separated from the employer would be reinstated to that employee if the employee is rehired within 12 months.

Sick Woman Sleeping In BedroomThe order has a bit of breathing room until it takes effect, as it applies only to government contracts for services, construction or concessions entered into after January 1, 2017. The Department of Labor has a deadline of September 30, 2016 to craft regulations to implement the order, delineate its scope and provide guidance to federal contractors and subcontractors for compliance.

Executive orders with regard to federal contractors or employees have been the implementation testing ground for initiatives such as the recognition of same-sex partner benefits and minimum wage increases, policy changes the administration would like to see take place on broader scales. The effective date of the order gives some consideration to the idea that the order may be of short effect pending the outcome of the 2016 presidential election, but employers under government contracts should be begin the process of compliance now regardless by revising budgets and reevaluating bids for contracts that would be effective after the effective date in the order. The attorneys of McBrayer can assist government contractors with the preparation and implementation of paid sick leave regulations to be ready when they become effective.

Luke WingfieldLuke A. Wingfield is an associate with McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Wingfield concentrates his practice in employment law, insurance defense, litigation and administrative law. He is located in the firm’s Lexington office and can be reached at lwingfield@mmlk.com or at (859) 231-8780. 

This article is intended as a summary of federal and state law and does not constitute legal advice.

Second Circuit: An Internship is an Internship

Recipients of the benefits of unpaid intern labor everywhere recoiled in horror in June of 2013 when a Federal District Court Judge in Manhattan held that unpaid interns on the set of the film “Black Swan” were protected by minimum wage and other employment laws. Since then, employers have been looking at that college kid earning “valuable work experience” by bringing them their coffee with a wary eye. Fret not, employers, for the Second Circuit has overturned the results in the “Black Swan” case (better known as Glatt, et al. v. Fox Searchlight Pictures, Inc.) while simultaneously rejecting a Department of Labor test for unpaid internships in a deft display of legal agility and coordination that can only be described as “balletic”.

Human resource concept Young businessman holding white billboard with a question mark on it and waiting for job interview asian people

In Glatt, the District Court relied on a six factor test issued by the Department of Labor in 2010 that defined how unpaid interns are classified for purposes of federal wage and hour law. These six factors were not created out of whole cloth by the DOL, but rather culled from a 1947 Supreme Court decision involving unpaid railroad brake trainees, Walling v. Portland Terminal Co. Under the DOL test, the relationship between employer and intern must meet all six criteria to be exempt from wage and hour laws.

The Second Circuit in Glatt found the DOL test too restrictive, instead laying out its own non-exhaustive list of considerations for unpaid internships:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee — and vice versa
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands‐on training provided by educational institutions
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

For those concerned that the District Court’s ruling in Glatt signaled the end of unpaid internships, the Second Circuit’s reversal of that decision should spell relief. Rather than enforce a set of six inerrant rules as to interns, the court opted for a middle ground that provides a flexible framework for crafting legal internship programs with an education bent.

Employers should still be wary – this decision only applies in the Second Circuit for now, so other circuits may choose to follow the Department of Labor guidelines. The Sixth Circuit, for instance, has taken a somewhat softer stance than other circuits on whether unpaid volunteers qualify for the antidiscrimination protections of Title VII of the Civil Rights Act of 1964, which could signal a more sympathetic ear in general to the plight of unpaid workers.

For more information on unpaid internships in relation to federal, state and local employment laws, contact the attorneys of McBrayer.

D. TrimbleAndrew H. Trimble is an associate in the Lexington, Kentucky office. Mr. Trimble focuses practice on general litigation, employment law and criminal defense. Mr. Trimble can be reached at (859) 231-8780, ext. 136 or atrimble@mmlk.com.

How Much Time Can New Parents Take Off?

Paid leave for new parents, both mothers and fathers, has been in the headlines as of late as the U.S. Department of Labor promotes its “Lead on Leave” initiative. The question for employers, however, is just how much time may an employee take off for the birth or adoption of a child. Luckily, the Family and Medical Leave Act (“FMLA”) answers the question almost entirely by itself.

Attractive Pregnant EngineerEligible employees (more on this in a minute) may take up to 12 weeks of leave to care for a newborn child or a newly placed adopted or foster child. This leave is unpaid, and an employer may require that an employee use all accrued paid leave while FMLA leave is taking place. During this leave, however, the employee’s job is protected by the FMLA. The provisions of this law apply both to mothers and fathers, allowing both parents the opportunity to bond with the new child while protecting their employment status.

There is one catch to FMLA leave, and that’s that an employee must be eligible to take the leave. This means that he or she must have worked at least 12 months for that particular employer, accumulating at least 1,250 hours of employment during that time period before the start of the leave. The employer must also have more than 50 employees employed within 75 miles of the worksite where the employee is requesting FMLA leave.

Kentucky does not have any laws that require private employers to provide leave for new parents. Kentucky’s Adoption Leave Law at KRS §337.015 does provide an employer must grant an employee up to six weeks of leave for the adoption of any child under the age of seven. This law applies to any size of employer, unlike the FMLA.

Leave provided by law to new parents is limited almost entirely to the FMLA, which contains multiple limitations. Employers may offer more generous leave, but nothing in federal law or Kentucky state law (with the Adoption Leave Law exception) requires employers to offer more than 12 weeks of unpaid leave for eligible employees. For more information on employer leave policies concerning leave for new parents, contact the attorneys of McBrayer.

B. JohnsonBrandon K. Johnson is an Associate in the Louisville, KY office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Johnson practices primarily in the areas of insurance defense, employment law, and general litigation. He can be reached at bjohnson@mmlk.com or at (502) 327-5400.

This article is intended as a summary of state and federal law and does not constitute legal advice.

EEOC: Title VII Prohibits Employment Discrimination Based On Sexual Orientation

The recent U.S. Supreme Court decision in Obergefell v. Hodges struck down restrictions on marriage by same-sex couples, but it did not address other forms of discrimination based on sexual orientation, such as in employment. The Equal Employment Opportunity Commission, however, did not wait for a ruling from the high court, instead ruling on its own that Title VII of the Civil Rights Act of 1964 prevents discrimination in an employment context on the basis of sexual orientation. This decision, Baldwin v. Foxx,[1] broadens Title VII protections considerably, although it remains to be seen if the high court agrees with the EEOC interpretation.

ExpelThis is the first true decision from the EEOC on the application of Title VII to sexual orientation, and the agency found that prohibitions on sex discrimination under the law inherently apply to sexual orientation as well. The agency extended Title VII protection based on sex discrimination on the grounds that sex and sexual orientation are inherently inseparable, sexual orientation discrimination is a form of impermissible associational discrimination, and sexual orientation discrimination often occurs on the basis of sex stereotypes, a prohibited form of discrimination under U.S. Supreme Court Title VII interpretation.

This is not, however, the first time the EEOC has spoken to the topic of providing Title VII protection to sexual orientation. In October of 2014, the EEOC submitted a friend-of-the-court brief with the 7th Circuit Court of Appeals in the case of Muhammad v. Caterpillar,[2] putting forth the interpretation of Title VII that it adopted in Baldwin. This, too, came after the agency ruled in 2012 in the case of Macy v. Holder,[3] that Title VII prohibitions on sex discrimination applied towards transgender individuals as well. With this in mind, the official EEOC interpretation in Baldwin is new, but not surprising.

Though Title VII does not explicitly prohibit discrimination based on sexual orientation in its text, the EEOC interpretation will likely control for the time being, and employers should be wary about taking sexual orientation into account during the hiring process or in adverse employment decisions. Kentucky does not explicitly prohibit such discrimination directly, but Lexington, Louisville and Morehead have such ordinances, and many smaller municipalities are adopting similar prohibitions on an ongoing basis. The attorneys of McBrayer can assist employers with implementing nondiscrimination policies to prevent liability under new EEOC interpretations of Title VII. Contact us today!

B. KochBrittany Blackburn Koch is an associate attorney practicing in the Lexington office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She is a native of Pikeville, Kentucky, and a graduate of Centre College and the University of Kentucky College of Law. Ms. Koch’s practice focuses primarily on family law, employment law, criminal law and civil litigation. She may be reached at bkoch@mmlk.com or at (859) 231-8780, ext. 300.

This article is intended as a summary of  federal and state law and does not constitute legal advice.

[1] Baldwin v. Foxx, FAA-2012-24738 (EEOC June 15, 2015).

[2] Muhammad v. Caterpillar, 767 F.3d 694 (7th Cir. 2014).

[3] Macy v. Holder, No. 0120120821, 2012 WL 1435995 (E.E.O.C. Apr. 20, 2012).

Surprise! That Independent Contractor is an Employee!

The Department of Labor (“DOL”) has given employers some bitter pills to swallow lately, especially in light of the proposed rule concerning new restrictions on the white collar overtime exemption. With a new set of guidance on the classification of independent contractors, the streak of DOL heartburn for employers continues unabated.

On July 15, DOL Administrator David Weil issued an Administrator’s Interpretation that said “most workers [who are classified as independent contractors] are employees under the FLSA’s broad definitions.” The guidance turns on language in Fair Labor Standards Act (“FLSA”) that the word “employ” is defined to include “to suffer or permit to work.” This definition, along with the “economic realities” test espoused by the Supreme Court and the Circuit Courts of Appeals, broadens the scope of workers covered by FLSA, preempting the common law “control” test which looked only to the employer’s control over the worker.

Hand With Pen And Eyeglasses Over AgreementUnder the “economic realities” test, several factors affect the analysis of the employee-worker relationship, such as the extent to which the work is an integral part of the employer’s business, the worker’s opportunity for profit or loss, the extent of the investments of the employer and the worker, whether the work requires special skills, the permanency of the relationship and the degree of control exercised by the employer. Under this set of factors, courts generally regard independent contractors as those who operate a separate business and are economically independent from the employer. Those who are economically dependent on the employer are employees where the FLSA is concerned, according to the DOL guidance.

The guidance concludes that the FLSA’s language of “to suffer or permit to work,” interpreted through the “economic realities” test, is significantly broad, and as a result, the DOL concludes that most workers are employees under the FLSA. The defining question in this calculus is whether the worker is truly in a separate business that is independent economically from the employer. If the worker is economically dependent on the employer, the worker is an employee in the DOL’s eyes.

The dangers of misclassification of employees are numerous (and the subject of another McBrayer blog post), and this new guidance gives insight into how the DOL will view employee and independent contractor classification going forward. Employers that rely heavily on independent contractors or hire workers as individual independent contractors in particular should review those work arrangements with the factors of the “economic realities” test in mind, as well as consider the consequences of not adding those workers to the employee roster. For assistance with classification of employees, or for more information on the importance of employee classification, contact the attorneys of McBrayer.

C. Effinger

Cynthia L. Effinger, attorney with McBrayer, McGinnis, Leslie & Kirkland, PLLC is located in the firm’s Louisville office. Ms. Effinger’s practice is concentrated in the areas of employment law and commercial litigation. Her employment law practice is focused on drafting employment manuals and policies, social media, wage and hour, non-compete agreements and workplace discrimination. Ms. Effinger can be reached at ceffinger@mmlk.com or (502) 327-5400.

This article is intended as a summary of  federal and state law and does not constitute legal advice.

How Should Employers Provide Bathrooms for Transgender Employees? OSHA Has the Answer.

One of the great equalizing principles in life is that everyone, regardless of gender, has to use a bathroom. This leads to one of the touchier issues involving employers and transgender employees, however, as bathroom use is generally divided by gender. Should employers allow transgender employees to use the bathroom of her or his gender identity? Should employers require transgender employees to use the bathroom of his or her gender assigned at birth? Luckily, OSHA recently released guidance to help employers understand the needs of transgender persons.

OSHA does not play coy with its advice. The OSHA publication of the guidance states at the top, “Core principle: All employees, including transgender employees, should have access to restrooms that correspond to their gender identity.”[1] OSHA’s advice, however, extends well beyond this statement. The crux of OSHA’s concern is that its sanitation standards require employers to provide employees with access to toilet facilities, but transgender persons may have health or safety issues beyond those of cisgender[2] individuals. Employer best practices allow a transgender employee to determine the most appropriate and safest option for her- or himself. OSHA also suggests that additional bathroom options for all are appropriate, such as single-occupancy unisex bathrooms, or even multiple-occupant, gender-neutral bathrooms with lockable single-occupant stalls.

Transgender icon on white background. Vector illustration.

Employers should not ask employees to provide any documentation of their gender identity to have access to bathroom facilities, and employers should not, under any circumstances, require transgender employees to use segregated bathroom facilities that keep them from other employees. The EEOC ruled in April that transgender employees cannot be denied access to common restrooms used by others of the same gender identity. It does not matter whether the employee had any procedures to change the employee’s physical sex or if other employees have negative reactions to such use of the restrooms. The EEOC, in the case of Lusardi v. McHugh, took the position that such denials or segregation of transgender persons constitutes impermissible sex discrimination under Title VII of the Civil Rights Act of 1964 (for more on this case and the EEOC interpretation, read McBrayer attorney Amanda Stubblefield’s blog post here).

Federal agencies such as OSHA and the EEOC are recognizing the difficulties transgender employees face in the workplace and are making moves to combat discrimination. Employers should review bathroom policies in the workplace, as well as any other policies that may have a disparate impact on transgender, gay, lesbian or bisexual employees. For help in reviewing and revising such policies, contact the attorneys of McBrayer.

Amy CubbageAmy D. Cubbage is Of Counsel in the Louisville office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She concentrates her practice in litigation in the areas of employment, complex tort and commercial litigation, including class actions, toxic torts and mass torts. Ms. Cubbage may be reached at (502) 327-5400, ext. 308 or acubbage@mmlk.com.

This article is intended as a summary of state and federal law and does not constitute legal advice.

[1] https://www.osha.gov/Publications/OSHA3795.pdf

[2] Cisgender individuals identify with the gender that corresponds to the gender assigned to the individual at birth

Recap of the Webinar, “The New Overtime Rules Are Coming – Are You Ready?”

On  Thursday, July 30th, McBrayer hosted a webinar entitled, “The New Overtime Rules Are Coming – Are You Ready?” The webinar was hosted by attorney Cynthia L. Effinger of McBrayer’s Louisville office. This well-attended drew participants eager to understand how the recently-released Department of Labor Notice of Proposed Rulemaking will affect employers throughout the state and nation. This webinar focused on the following core concepts:

  • The current state of the overtime exemption
  • The proposed rules, their effect, and a timeline for implementation
  • How businesses should start preparing to comply with the new regulations
  • The consequences of misclassification of employees

Ms. Effinger gave up-to-the-minute information on how employers should contemplate and prepare for the new rules and answered questions from those anxious to know how these sweeping changes will affect their day-to-day operations. If you missed this webinar, don’t worry! The visual presentation slides and a recording of the webinar are available. In addition, the following is a recap of important points from the webinar:

How are the new rules going to change the overtime exemption for “white collar” employees?

Currently, there is an exemption under the Fair Labor Standards Act for employees in certain categories of employment (administrative, professional, executive, etc.) from regulations  regarding overtime pay. If those employees perform certain defined duties and meet a minimum salary standard, employers do not have to pay a time and a half hourly rate when those employees exceed 40 hours in a workweek. That minimum salary is currently $455 a week, or $23,600 per year. That minimum is very low, considering that it is meant to exempt higher-level employees in “white collar” jobs who are ostensibly compensated for their overtime hours through higher pay. The president directed the Department of Labor to revise those standards, and the DOL recently released a Notice of Proposed Rulemaking that raised the minimum salary to the 40th percentile of wages, which will likely be $970 per week ($50,440 per year) when the regulation takes effect.

When will this regulation take effect?

The open comment period closes in early September, and a final rule could be issued before the end of the year. However, the DOL itself has stated that the final rule will likely be released sometime in 2016.

Will this exemption salary level stay the same as in years past?

The DOL is looking to create a mechanism to adjust the minimum salary level to keep up with inflation, wage growth or cost of living, so the minimum salary will likely fluctuate upwards with time. There are currently two mechanisms the DOL is evaluating for doing this: 1. Keeping the minimum salary set at all times to the current 40th percentile of all wages, and 2. Adjusting the minimum salary with measurements set by the Consumer Price Index for All Urban Areas, which is a measure of inflation.

How should employers prepare?

It is imperative that employers begin to prepare for these changes now. First, employers should conduct an internal audit to determine which employees will be affected by an increase in the minimum salary for overtime exemptions. Employers should use a higher figure than the $50, 440 minimum salary in the first year, as this number will likely rise over time. Estimating with a higher number will provide employers a few years of breathing room for compliance with the regulations. ODaily Time Record With Blank Payroll Time Sheetnce employers have determined which employees will now be non-exempt under the rules, employers should decide to either raise the salaries of those employees to a level where they are still exempt from overtime pay or determine how to track the hours of those employees to provide them with the overtime pay they’ll require when applicable. Employers should also reevaluate their overtime policies (including other work time not generally accounted for, such as answering emails or taking calls after work hours) and mechanisms for tracking employee hours. Finally, employers need to budget for the changes.

What are the dangers of misclassification?

The Department of Labor looks heavily at employee classification, and it can conduct an audit either based on a tip or under its own auspices. Employers that misclassify employees are subject to penalties and liability to those employees, including back wages, liquated damages, attorney’s fees and court costs. There is a two year statute of limitations for failure to pay overtime, and a three year period if the violation was intentional. Recent penalties against employers have been in the millions of dollars, so these violations can add up.

We hope that all attendees found the webinar helpful and insightful. If you are an employer with questions and concerns about the new overtime regulations, please don’t hesitate to contact us!



C. Effinger

Cynthia L. Effinger, attorney with McBrayer, McGinnis, Leslie & Kirkland, PLLC is located in the firm’s Louisville office. Ms. Effinger’s practice is concentrated in the areas of employment law and commercial litigation. Her employment law practice is focused on drafting employment manuals and policies, social media, wage and hour, non-compete agreements and workplace discrimination. Ms. Effinger can be reached at ceffinger@mmlk.com or (502) 327-5400.

This article is intended as a summary of  federal and state law and does not constitute legal advice.