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U.S. Department of Labor Proposes Changes to Minimum Salary for Overtime Exemptions

March 11, 2019

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On March 7, 2019, the United States Department of Labor issued a notice of proposed rulemaking that would change the minimum salary levels necessary for an employee to be properly classified as exempt from the overtime compensation requirements of the Fair Labor Standards Act.  Under the proposed rule, the minimum salary for most exemptions would rise from $455 per week ($23,660 annualized) to $679 per week ($35,308 annualized).  The minimum annual compensation for the “highly compensated employee” exemption would rise from $100,000 to $147,414.

For employees in the executive, administrative and professional exemptions, the proposed rule would permit nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to ten percent (10%) of the required minimum salary.  In addition, provided that the employee has received at least ninety percent (90%) of the required minimum compensation in each payroll week for 52 weeks, the employer would be permitted to make a single “catch-up” payment within one pay period after the end of the 52-week period, in order to bring the employee’s compensation to the required level.

For “highly compensated employees,” the proposed rule would require that ten percent (10%) of the minimum annual compensation be paid in the form of a weekly salary, but the remainder could be paid in the form of nondiscretionary bonuses and incentive payments.  In addition, the rule would also permit a “catch-up” payment as described above.

The proposed rule would formally rescind the Obama-era rule proposed in 2016, which was blocked by permanent injunction before it

Top bankers without termination protection?

January 31, 2019

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The Brexit Transition Act (“Brexit-StBG/Steuerbegleitgesetz” – The Act) will allow banks in Germany to terminate the employment of their high paid employees without following the usual strict requirements of German labor law. The Act is still under discussion within the German parliament. This blog provides an overview of the proposed simplification of termination protection.

A potential consequence of Brexit is that financial institutions currently based in London may look to relocate to other European financial centres. In Germany, this has led to a discussion around concerns that the German financial metropolis Frankfurt was facing a major disadvantage against competing cities such as Paris, Zürich and Barcelona.  German Employment protection laws were at the top of the list of concerns. In particular, the key issue was how employers would be able to terminate the employment of high paid (investment) bankers under strict German labor laws?

The solution proposed is not surprising: the Act shall provide banks with the right to file a motion to end employment without providing reasons (Sec. 9 para I 2 of the German Termination Protection Act/KSchG) thereby deviating from standard German termination protection proceedings. Under the new Act – if enacted – banks may benefit from the simplified termination proceedings provided the following prerequisites are met in order to trigger the respective motion to end employment by the banks:

– the employee is a so-called risk taker (”Risikoträger“) pursuant to Sec. 25a of the German Banking Act (Sec. 25a para 5a KWG);

– the annual fixed remuneration

Ninth Circuit Issues Important Decision in Domino’s Website Accessibility Action

January 23, 2019

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As businesses continue to face lawsuits and demand letters alleging that their websites are inaccessible to blind and deaf patrons in violation of the Americans with Disabilities Act (“ADA”), courts across the country continue to weigh in on the issue.

Click here to read the recent article posted on our Retail Law blog.

Recharacterization of the Relationship Between a Delivery Driver and a Digital Platform as an Employment Agreement

In a judgment dated 28 November 2018, the French Supreme Court (Cour de Cassation) ruled for the first time on the characterization of the agreement between a delivery driver and a digital platform. The French Supreme Court granted the status of employee to a former delivery driver of Take Eat Easy.

The French Court of Appeal had rejected the employee status because, among other things, the driver remained free each week to determine the time slots during which he wished to work. The French Supreme Court considered, basing itself on objective elements, that the “geo-tracking system which enabled the company to monitor in real time the position of the driver and the number of kilometers covered by him” allowed the company to sanction the driver (via a bonus and malus system). It therefore ruled that the existence of a power of direction and control over how the driver provided his services created a relationship of subordination, and annulled the judgment of the French Court of Appeal.

For several years now, litigation related to digital platforms such as Uber has emerged both in France and abroad; the decisions rendered by the courts however differ.

In France, several Uber drivers filed proceedings to recharacterize their Uber agreement as an employment agreement. On 29 January 2018, the French Labor Court dismissed a former Uber driver’s request on the grounds that the driver was “entirely free to work according to the hours and days that suited him”, and that “this total freedom in the

New French Measures Affecting Employees and Employers Following Yellow Vest Demonstrations: Exemptions for 2018 Exceptional Bonus and 2019 Overtime

January 7, 2019

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French Parliament passed a bill last December 21, 2018 introducing urgent economic and social measures to improve employees’ purchasing power.

One measure concerns the payment of an exceptional bonus of up to 1,000 euros net, exempted from social contributions and income tax, to employees earning up to 3 times the yearly minimum wage. Another is an exemption from certain social contributions and from income tax for any overtime worked as from January 1, 2019.

The exceptional bonus measure concerns those employees that earn up to three times the minimum wage and is capped at 1,000 euros. The bonus must be paid between December 11 and March 31, 2019. Existing bonuses or those provided by employment agreements, company practices, collective or company labor agreements, and planned salary increases cannot benefit from the exemptions.

The amount of this bonus may only vary according to the level of remuneration, employee classification, effective presence during 2018 and working time. If an employer decides to grant a bonus to all of its employees, only those having earned up to € 53,945 in 2018 will benefit from the exemptions. As a reminder, social contributions amount to up to 25% for employees and 42% for employers. An employee without a spouse or children who earns up to three times the minimum wage, would pay up to 14% of income tax.

This bonus needs to be provided for by a company collective agreement or an agreement entered into with the personnel representatives. It may alternatively be unilaterally determined

Alambret publishes article on the decrease of litigation cases before the labor court in France.

Recent figures issued by the French ministry of Justice point out a decrease of litigation cases before the labor court. What are the reasons of such a trend? The French government outlines the positive impact of the Macron’s reforms. On the other hand, Unions replied that now the employees renounce to claim before the labour court. What are the reasons of this decrease? Could you link it or not to political measures?

Francois Alambret recently published an article regarding this subject on Focus RH, a website dedicated to labor and employment topics and specifically to HR directors or managers. Click this link to read it.

https://www.focusrh.com/strategie-rh/organisation-et-conseil/saisir-les-prud-hommes-est-devenu-plus-complique-31482.html

 

Aufsichtsräte be aware!

November 27, 2018

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Aufsichtsräte be aware!

November 27, 2018

Authored by: Michael Magotsch

In a decision of 18 September 2018 the German Federal Supreme Court (Bundesgerichtshof/ BGH, Az: II ZR 152/17) confirmed a legacy decision (ARAG/Garmenbeck) of 1997 and tightened the liability of supervisory board members. Clients need to be aware of the increased liability for Supervisory Board members („Aufsichtsräte“).

Unlike in other jurisdictions (in the UK for example) Germany has a Two-Tier corporate management structure. Thus, in addition to the management board (i.e. Vorstand at AG or Geschäftsführung at GmbH) corporations may have a so-called Aufsichtsrat, a supervisory board. The supervisory board monitors the managing directors and has – as one of its key authorities – the right to appoint and withdraw members of the management board. The supervisory board is strictly separate from the management board of a company. Depending on the total headcount of the company, the supervisory board consists of representatives elected by the shareholders AND employee representatives elected by the staff (in most cases Works Council and Trade Union members), provided the company is subject to German co-determination laws.

In this remarkable decision the Supreme Court stressed the responsibility of the supervisory board, highlighting the increased risk for supervisory board members to be made liable by the company for damages caused by the management board if they have failed to bring damage claims before the Courts to ensure potential remedies on behalf of the company.

In the case at hand, the management board had violated its fiduciary duties vis-a-vis the company. Potential damages claims by the company against

Practical Tips to Address Implicit Bias in the Workplace

Over the past half century, employers have made great strides in protecting employees and applicants from conscious bias on the basis of race, gender, age and other protected characteristics.  But what about unconscious – or “implicit” – bias?

What is “Implicit Bias”?

Implicit bias refers to “the attitudes or stereotypes that affect our understanding, actions, and decisions in an unconscious manner.”  See http://kirwaninstitute.osu.edu/research/understanding-implicit-bias/ .

Each of us has implicit biases, formed based on our experiences and exposures from a variety of sources over time.

What are the Implications of Implicit Bias for the Workplace?

By their nature, implicit biases may cause decision-makers to unconsciously form opinions – and make employment decisions – about applicants and employees in a manner that has a negative effect based on protected characteristics such as race, gender, and age.

Some studies have shown, for example, that when reviewers were given copies of a memorandum with identical errors, but some reviewers were told the writer was African-American and others were told the writer was Caucasian, the average score on a scale from 1 to 5 was nearly a point higher for the Caucasian writer, and the Caucasian writer was described as having “potential” while the African American writer was called “sloppy.”  See http://nextions.com/wp-content/uploads/2017/05/written-in-black-and-white-yellow-paper-series.pdf.

What can Employers do about Implicit Bias?

Unfortunately, implicit biases operate at a subconscious level.  As a result, our implicit biases may run counter to what we consciously believe.  This can make it difficult for decision-makers to realize that their decisions

Does An Employer Have FMLA Obligations Even Before An Employee Satisfies the Eligibility Requirements For Taking FMLA Leave?

November 26, 2018

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In a word: Yes.  In fact, there are many.

The most notable obligation under the Family and Medical Leave Act – the obligation to provide protected leave for a qualifying reason – does not apply until the employee has become eligible for leave under the Act.  However, many other obligations apply even before an employee becomes FMLA-eligible:

  • Employers may not manipulate the size of a worksite or the number of work hours available to an employee in order to avoid employee eligibility for FMLA leave.
  • Employers may not induce an employee to waive prospective rights under the FMLA, such as inducing a pre-eligible employee to waive the right to take leave once the employee becomes eligible in exchange for some other employer-provided benefit.
  • Employers must not retaliate against an employee who, before becoming eligible for FMLA leave, requests leave that will begin after eligibility is achieved. See Pereda v. Brookdale Senior Living Communities, Inc., 666 F.3d 1269 (11th Jan. 10, 2012) (holding that the FMLA prohibits an employer from harassing, criticizing the performance of, and terminating an employee in response to a pre-eligibility request for post-eligibility leave, because to hold otherwise would create “a loophole . . . whereby an employer has total freedom to terminate an employee before she can ever become eligible.  Such a situation is contrary to the basic concept of the FMLA”).
  • Employers must give accurate information to an employee about whether the employee is eligible for leave. When an employee is given inaccurate information

Tips for Handbook Review

November 5, 2018

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Tips for Handbook Review

November 5, 2018

Authored by: Christy Phanthavong

It’s that time of year when human resources departments turn their attention to reviewing and updating their employee handbooks for the upcoming year.  Below are some things to consider when updating your handbook:

  • Updates to federal laws – Have any applicable federal laws or regulations been changed, or any court or agency opinions issued that impact your policies?
  • Updates to state or local laws – Similarly, have any applicable state laws or regulations been changed?
  • State law addenda – Does a “one-size fits all” handbook work for your company, or does your company footprint require state law addenda? Has your company recently expanded into new locations?
  • Keeping up with the times – Unfortunately, policies relating to safety, security, emergency plans, emergency contact information, etc. are becoming increasingly necessary and important.
  • Introduction – Does your statement describing your company, its history and philosophy, etc. need refreshing or updating?
  • Policies v. Practices – Is your handbook keeping up with your actual practices?
  • Cross-references – Are there new and separate company policies (e.g., Code of Conduct; global policies) that should be cross-referenced in the handbook?
  • Consistency with separate policies – Do you have separate policies (such as a stand-alone reaffirmation of a policy against harassment, or local facility policies that are separate from a corporate handbook) that are similar or related to policies in the handbook, and if so, is the language consistent?
  • Phone numbers, names, titles, third party administrators – If specific information regarding these and similar subjects is provided in
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