Adding to the growing number of states limiting employers’ use of credit reports, including Hawaii, Washington, Oregon, Illinois, and Maryland), Connecticut recently passed Public Act No. 11-223 restricting employer use of credit reports and credit history for employees or job applicants. The Connecticut law goes into effect October 1, 2011, and prohibits employers from requiring an employee or job applicant to consent to a request for a credit report “as a condition of employment.” This includes reports that contain information about credit score, credit account balances, payment history, savings or checking account balances or savings or checking account numbers.
The law has four exceptions. Paraphrasing from the law, employers may request credit data if:
Regarding the last exception, the law broadly defines “substantially related to the job” to mean that the information contained in the credit report is related to the following: a managerial position that involves setting direction and control of the business; a position that involves access to customers, employees or the employer’s personal or financial information (other than retail transaction information); involves a fiduciary responsibility to the employer; provides an expense account or corporate debit or credit card; provides access to confidential or proprietary business information; or involves access to the employer’s nonfinancial assets valued at $2,005 or more, including but not limited to, museum and library collections and to prescription drugs and other pharmaceuticals.
Job applicants and employees may lodge complaints alleging violations of the law with the Connecticut Labor Department. Employers will be liable to the Labor Department for a civil penalty of $300 for each improper request for a credit check. The Connecticut Attorney General can bring civil actions to recover penalties brought by the Labor Department.
As a result of these new restrictions, Connecticut employers should review hiring policies, and other policies that require employee credit information, and prepare to comply with the law by October 1, 2011.
The Equal Employment Opportunity Commission (EEOC) released their employment charges for 2010.
Charges in the private sector workplace hit an unprecedented level of 99,922 total complaints. At the same time, the Commission dramatically slowed growth of charge inventory to less than one percent compared to last year’s pending end-of-year inventory which was 15.9 percent.
Every category of charges increased in 2010 including charges under Title VII; the Equal Pay Act; the Age Discrimination in Employment Act (ADEA); The Americans with Disabilities Act (ADA); and the Genetic Information Nondiscrimination Act (GINA).
Full of firsts for the EEOC, the most dramatic surprise is that retaliation charges surpassed race charges as the most frequently filed charge to the EEOC.
In the words of EEOC Chair, Jacqueline A. Berrien, “We are pleased to see that our rebuilding efforts are having an impact on how efficiently and effectively the Commission enforced the civil rights laws protecting the nation’s workers…Discrimination continues to be a substantial problem for too many job seekers and workers, and we must continue to build our capacity to enforce the laws that ensure that workplaces are free of unlawful biases.”
According to the report, the EEOC resolved 104,999 private sector charges, including filing 250 lawsuits and resolving 285 lawsuits in fiscal year 2010. The EEOC also reported that it secured more than $404 million in monetary benefits from employers, which are the highest level ever obtained by the Commission through the administrative process. “EEOC Reports Job Bias Charges Hit Record High of Nearly 100,000 in Fiscal year 2010,” www.eeoc.gov (Jan. 11, 2011).
The simple truth is that employees who are gainfully employed are less likely to sue their former employer than an employee who is unemployed or underemployed. With unemployment at 9.4 percent and underemployment estimated between 16 and 19 percent, record number employment practice charges are to be expected.
What is surprising is that 2010 charges almost hit the 100,000 mark, an all-time high in the history of the EEOC and an increase of approximately seven percent from last year.
Another surprise, disability charges made the largest jump in 2010 - from 21,451 to 25,165, representing 25 percent of all the EEOC charges filed. The increase in disability charges was the highest of any category with more than a 17 percent increase from last year.
Several reasons exist for the jump in disability claims. First, the economy and, second, the expansion of what constitutes a “disability” under the Americans with Disabilities Act Amendments Act, which went into effect in January 2009. Everyone expected disability claims to rise upon the Act’s enactment, but the magnitude of the increase is alarming to everyone, especially employers.
Another disturbing trend is that retaliation became the single most-filed EEOC charge with 36,258 filings in 2010, making up 36.3 percent of all charges. This is an increase of almost 8 percent from last year.
This is another ominous sign for employers. Retaliation charges are easier to prove and are more likely to make it to trial…hence the reason more trial attorneys are couching their charges as retaliation versus traditional forms of discrimination.
Recent Supreme Court decisions have made it clear that witnesses and complainants to discrimination are protected from retaliation. The result is an increase of the pool of potential complainants and circumstances whereby retaliation charges are permitted.
Chairwoman Berrien gives no reason to believe that charges will slow in 2011, even if the economy is recovering. In fact, she specifically mentions a desire to build the Commission’s capacity for enforcement and the need to protect job seekers.
So employers can expect no relief from the EEOC in their struggle to stay above the water during the recession and hire more employees.
With that in mind, one thing employers can do is train their workforces on sexual harassment, discrimination, wrongful termination and retaliation.
Here are some considerations as we head into 2011:
Our readers responded when asked how well they understand the Family and Medical Leave Act (FMLA). While 53 percent have a fair understanding of the FMLA, 45 percent do not know the Act’s requirements. Here is the breakdown:
Commentary
The FMLA provides employees with up to 12 weeks of unpaid, job-protected leave per year and requires that group health benefits be maintained during the leave. In summary, employers must provide eligible employees with up to 12 weeks of unpaid leave each year for the following reasons:
The Act was intended to help employees balance work and family responsibilities by allowing them to take reasonable unpaid leave for certain reasons while accommodating the legitimate interests of employers.
The FMLA governs all public agencies, public and private elementary and secondary schools, and employers with 50 or more employees. According to the Department of Labor (DOL), employees are eligible for leave if they have worked for their employer at least 12 months, at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles.
The DOL provides more information and numerous websites and other resources to help employers understand the FMLA.
International Data Corporation estimates there are nearly 1 billion virtual workers worldwide. A new survey by Runzheimer International reports that executives who manage mobile workforces believe that effective management of remote employees is their biggest issue. More than half, 54 percent, cited effective management as their greatest concern. At the same time, employee satisfaction, competitive advantage and cost savings were ranked as the top benefits of a mobile workforce.
Sixty percent of the surveyed executives believe that their organizations effectively manage mobile workforce programs but don’t necessarily have measurements in place to make that determination. “Effective Management of Employees Ranked by Executives as Top Concern With a Mobile Workforce, According to Runzheimer International Study,” www.prnewswire.com (Dec. 22, 2010).
Commentary and Checklist
As mobile work devices like laptops, cell phones, smart phones and PDAs continue to improve, mobile work programs will continue to thrive. Allowing employees to work from home or other virtual offices is one type of program designed for a mobile workforce. A virtual office is any place where an employee can work and stay connected to her employer via a mobile work device.
The virtual office has many advantages. Employees consider working remotely a benefit, and virtual offices are easily cost effective. Virtual offices permit employees to stay in the field longer, which allows them to better interact with coworkers, contractors and customers associated with off-site projects.
However, as the survey demonstrates, remote workforces present unique managerial issues. A difficult challenge for employers is making certain that virtual employees are actually working and productive during work hours. This means relying on something other than witnessing the employee working in the work environment, and setting goals that can only be met if the employee is working when required. It also means requiring that the employee be available during work hours in a setting suitable for work…versus attending a meeting on a cell phone while grocery shopping, for example.
This may involve monitoring computer usage and requiring that virtual employees be available via employer-provided phones versus cell phones, laptops or tablets.
Employees that work from a virtual office must know and adhere to your organization’s rules. That means acknowledging the employee handbook and your employer’s special rules for telecommunication, including preserving confidentiality. Virtual employees must also adhere to rules regarding tardiness, moonlighting and other rules meant to protect productivity.
The following checklist will help managers and supervisors prepare for and deal with the issues presented by virtual office employees and other remote workers:
Buried deep in the Patient Protection and Affordable Care Act, the 2,000-plus page health care reform legislation passed earlier this year, is a new reporting requirement that will increase the paperwork of almost every employer in the United States. The provision, section 9006 of the Act, greatly expands when employers must file information returns (the so-called Form 1099) to report certain business transactions to the Internal Revenue Service (IRS). Under current tax law, employers are required to issue 1099s in limited circumstances when they pay over $600 to an individual or a business for services rendered, such as when paying outside consultants and other independent contractors. Payments made to corporations or in exchange for goods and merchandise do not require the form. The 1099s are sent both to the IRS and the person or business receiving the payments. The intent behind the reporting requirement is to allow the IRS to track the payments and to insure that proper taxes are being paid on them.
Under the new Act, every transaction over $600 would be covered and payments to corporations or for merchandize are no longer exempted. The provision takes effect January 1, 2012, and is supposed to raise over $17 billion to help pay for the Act’s overhaul of the health care system with the extra taxes that will be collected. However, the IRS’ National Taxpayer Advocate, in a June 2010 report to Congress, expressed concern that the potential administrative burden of the new requirement on businesses, their vendors, and the IRS outweighed any resulting improvement in tax collections. Since the requirement would apply to businesses of all sizes, charities and other tax exempt organizations, and government entities, the Taxpayer Advocate estimates that it will cover 26 million non-farm sole proprietorships, four million S corporations, two million C corporations, three million partnerships, two million farming businesses, one million charities and other tax-exempt organizations, and probably more than 100,000 federal, state, and local government entities.
Public outcry over the new requirements was muted at first, likely because most employers missed the provision tucked into the health care bill. But, as the mid-term elections loom, more business groups and farm advocates have questioned the wisdom of imposing this new burden on organizations already struggling in the current economic climate. Recognizing the potential negative impact on employers, Senate Republicans and Democrats have proposed bills to limit the new 1099 reporting requirements. However, the lost $17 billion in projected revenues has proven a sticking point. A Republican proposal would have repealed the provision entirely, paying for it by changing certain public health coverage initiatives, such as delaying funding of wellness and prevention programs. A Democratic proposal would have changed the reporting requirements’ threshold so that it applied only to employers with 25 or more employees and to transactions of $5,000 or more and would have included taxes on energy companies to pay for the changes. Both proposals were defeated primarily because of the funding provisions. At this point, it seems unlikely that the current Congress will be able to eliminate or even modify the provision, but if there is a significant shift in the Congressional seats from Democrat to Republican, the chances for a complete repeal of the provision are much more likely.