Law Offices of Stanley E. Niew, P.C.
attorneys at law
LABOR & CONSTRUCTION LAW UPDATES
These Newsletters are not intended as legal advice since each situation depends specifically on the facts presented. Persons reading these Newsletters should seek competent legal advice with regard to the subjects contained herein before making any employment or other decisions.
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JULY 2016
Inside This Issue
1. OSHA’S New Regulations Dramatically Affect All Employers’ Safety Policies and Require Some Policies to be Terminated
While Some Must be Re-Written ***HIGHLY IMPORTANT – READ IMMEDIATELY***
2. So You Think You Can Replace Strikers Permanently Under Any Conditions: THINK AGAIN
3. Consider if Your Company is a Joint Employer
4. Single-Employer Doctrine Reaffirmed as Defense by 7th Circuit
OSHA’S New Regulations Dramatically Affect All Employers’ Safety Policies and Require Some Policies to be Terminated While Some Must be Re-Written***
****HIGHLY IMPORTANT****
OSHA DELAYS ENFORCEMENT OF NEW REGULATIONS
*** Following Up on our July Newsletter***
OSHA announced that it is delaying the enforcement of the Regulations which were to become effective August 10, 2016 until November 1, 2016. This was in response to a lawsuit filed in Texas.
The increase in fines, however, remain in effect.
- Stan Niew
OSHA issued new safety regulations which become effective August 10, 2016. The regulations are 72 pages long, single space, three columns to a page with seemingly hundreds of exhibits. The regulations are intended to stop under-reporting of injuries by employees. A summary of the key provisions are outlined below:
1. Post-Accident Drug Testing Now Permissible In Limited Circumstances
Virtually every employer drug tests immediately after an injury. OSHA believes that blanket post-accident testing policies deter proper reporting of injuries.
Post-accident testing is now limited. Under OSHA’s new standard employers need not specifically suspect drug use before testing “but there should be a REASONABLE POSSIBILITY that the drug use by the reporting employee was a CONTRIBUTING FACTOR to the reported injury.” OSHA also believes that drug testing that is designed in a way that it may be perceived as punitive or embarrassing to the employee is likely to deter injury reporting.
A policy that requires immediate reporting of an accident or injury violates the new regulations. Each employer must amend their drug testing policies to provide an employee a reasonable time to report an injury once an employee actually knows of the injury. Drug policies must take into consideration slow growing illnesses.
Every employer must revise their policies to comply with this standard before August 10, 2016. The only exception to the rule is post-accident testing required to comply with State or Federal law.
2. New standards require notification to Employees of their Rights
Effective August 10, 2016 all employers must adopt a policy which informs all employees of their right to report work-related injuries and illness; modify existing policies for reporting work-related injuries to be reasonable and not to deter or discourage employees from reporting injuries; and incorporate in the policy anti-retaliation provision for employees who report work-related injuries and illnesses.
3. Most Safety Related Incentive Plans Unlawful
OSHA takes the position in the new regulations that incentive programs for safety cause employees not to report injuries. OSHA specifically mentions incentive programs that are now unlawful such as:
- entering employees who have not been injured in the previous year in a drawing to win a prize;
- employee team bonuses for team member, uninjured for a period of time;
- bonuses for foremen and supervisors for no lost days in a period;
- company program giving an incentive of $1500 only if zero recordable injuries.
Safety programs that are permissible:
- giving t-shirts for participating in safety committee;
- incentive programs that promote worker participation in safety-related activity such as identifying hazards;
- modest rewards for suggesting ways to strengthen safety;
- supervisor incentive plan that covers multiple jobsites and is coupled with other non-safety related incentive plans. Employers must do an analysis to determine that the program will not cause underreporting.
4. New Reporting Requirements
The new rule requires an electronic reporting of employer records. Companies with 250 or more employees must submit Forms 300, 300A and 301 to OSHA on an annual basis. Companies with 20 or more employees, but less than 250, must electronically file Form 300A annually.
5. Recommended Action
- Prior to August 10, prepare and adopt a policy that informs employees of their rights as stated in paragraph 2 above.
- Revise all drug testing policies prior to August 10. If that deadline is impossible to meet, suspend your current policy until a new policy is adopted.
- Evaluate all safety incentive plans and immediately suspend all incentive plans that violate the new regulations.
Compliance will not be easy and it will take you and your staff valuable time to comply.
We can assist you in developing such a policy. Just call or email Stan Niew since certain company information is needed.
So You Think You Can Replace Strikers Permanently Under Any Conditions: THINK AGAIN
The law has been clear since the passage of the National Labor Relations Act that employers may permanently replace economic strikers at any time, for any reason.
On May 31, 2016 in a 2 to 1 decision, the National Labor Relations Board (“NLRB”) ruled that economic strikers may not be replaced if there is an “independent, unlawful purpose” for doing so. In the American Baptist Homes case, the NLRB found that the employer was replacing workers “to punish the strikers” and show the union that it should “avoid future strikes.” The NLRB said that these are two independent, unlawful purposes, are now impermissible. The NLRB reasoned that the independent, unlawful purposes were to break union solidarity and punish a majority of the striking workers. Thus, the employer’s motive has become a material factor in determining whether replacing economic strikers amounts to an unfair labor practice.
Hopefully this decision will be appealed and overturned by a federal appellate court.
Now, employers must analyze if there is a business justification for permanently replacing economic strikers. Reasons may include termination from the project, delay damages or loss of future work with the particular client.
Consider if Your Company is a Joint Employer
The National Labor Relations Board (“NLRB”) and the U.S. Department of Labor (“USDOL”) are actively looking to Joint Employer complaints.
Joint Employment – General Principles
A single individual may be simultaneously considered an employee of more than one employer under the Fair Labor Standards Act (“FLSA”). In such cases, the employee’s work for the joint employers is considered as one employment for purposes of the Act. Joint employers are individually and jointly responsible for FLSA compliance, including paying not less than the minimum wage for all hours worked during the workweek and, if applicable, overtime compensation for all hours worked over 40 in the workweek. 29 C.F.R. 791.2(a). A determination of whether joint employment exists must be based upon all the facts of the particular case. For instance, two employers may both supervise the same employee or one may hire and set the pay rates while another has authority to supervise or fire the worker; both scenarios may represent a joint employment relationship.
As a general example, workers sent by a cleaning company to a client-hotel to clean hotel rooms may be jointly employed by both the cleaning company and the hotel. Similarly, a private agency, non-profit organization, or public entity that hires a home care worker to provide services in an individual’s home may be a joint employer with the individual (or family or household member of the individual).
Determining Joint Employment
Joint employment is determined by applying the “economic realities” test, which examines a number of factors to determine whether a worker is economically dependent on a purported employer, thus creating an employment relationship. Factors to consider may include whether a possible employer has the power to direct, control, or supervise the worker(s) or the work performed; whether a possible employer has the power to hire or fire, modify the employment conditions or determine the pay rates or the methods of wage payment for the worker(s); the degree of permanency and duration of the relationship; where the work is performed and whether the tasks performed require special skills; whether the work performed is an integral part of the overall business operation; whether a possible employer undertakes responsibilities in relation to the worker(s) which are commonly performed by employers; whose equipment is used; and who performs payroll and similar functions. Other factors also may be considered and no one factor is controlling. The ultimate question is one of economic dependence.
The NLRB has slightly different standards that will be discussed in our next newsletter.
Single-Employer Doctrine Reaffirmed as Defense by 7th Circuit
The U.S. Court of Appeals for the 7th Circuit recently ruled that a District Court erred in granting summary judgment to a union pension fund seeking fringe benefit contributions under Labor Management Relations Act and ERISA. Plaintiff-union, Chicago Regional Council of Carpenters fringe benefit funds (the “Funds”), alleged the Funds were owed by Schal Bovis, Inc., (defendant-employer) for failure to make fringe benefit payments for construction work performed by non-union labor and by sheet metal workers.
Ultimately, the appeal boiled down to 2 issues regarding 2 separate claims under the collective bargaining agreement (“CBA”). The CBA required the defendant-employer to track hours and pay fringe benefits for “jurisdictional work” performed by non-union subs.
The first claim involved the installation of cabinetry, undisputedly within the Union’s jurisdiction. Defendant contracted a non-union sub, Canac, who in-turn used its union labor-sister company, Qualifit Kitchens, to perform the work. The Court of Appeals held that Canac and Qualifit Kitchens were a single employer under the single-employer doctrine, and thus, the general contractor did not violate the CBA by assigning work to Canac.
However, under the CBA the Union also agreed “not to interfere with the existing practices of other unions affiliated with the building trades.” The second claim involved the jurisdictional work of installing stainless steel kitchen equipment. Defendant subcontracted the work to Edward Don who subcontracted RB Hoods, which was a union signatory with the Sheet Metal Workers. RB Hoods used union labor from the Sheet Metal Workers and paid fringe benefits to the Sheet Metal Workers. The Court of Appeals held that the general contractor’s retention of sheet metal workers to install stainless steel kitchen equipment did not violate the CBA’s provision governing the union’s jurisdiction.
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