LABOR AND EMPLOYMENT RELATIONS

Transcription

1 Chapter 23 LABOR AND EMPLOYMENT RELATIONS Sheryl J. Willert 1 and KoKo Ye Huang INTRODUCTION In Washington state, unless an employer decides to manage its employment relationships through contracts, employees are generally considered to be at will. At will employment means that either an employer or an employee can terminate the employment relationship at any time, with or without notice, and with or without a reason. An employer s ability to manage the employment relationship is limited if the employer makes specific promises of specific treatment such as promises that the employment relationship will last for a specific period of time. Employers can make such promises either in written contracts or in other documents such as employment handbooks. In addition to restrictions on terminating the employment relationship which may be found in employment contracts or handbooks, state and federal labor and employment laws and policies place some limits on an employer s ability to modify or change the employment relationship. As is true in every state in the United States, Washington employers are prohibited from making discriminatory employment decisions. They are also required to adhere to other laws related to employees general qualifications to be employed in the United States, methods and timing of payments to employees, hours that employees may work, and workplace safety regulations. Multiple state and federal agencies oversee administration of these requirements. Those agencies include, among others, the Equal Employment Opportunity Commission (EEOC) and its state counterpart the Washington State Human Rights Commission, and the Department of Labor (DOL) and its state counterpart, which are responsible for the respective state and federal health and safety regulations for employees in Washington BASIC PRINCIPLES The Washington Law Against Discrimination Washington State law generally requires that employers make employment decisions including hiring, promotion, discipline, discharge, compensation, privileges, and other terms and conditions of employment without regard to an employee s race; sex; religion; national origin; 1 Sheryl J. Willert is managing director of Williams Kastner. Her practice focuses on labor and employment-related matters and alternative dispute resolution. 2 KoKo Ye Huang is an attorney with the Seattle office of Williams Kastner. Her practice focuses on employmentrelated matters, with a concentration on immigration law. 199

2 DOING BUSINESS IN WASHINGTON age; creed; color; marital or parental status; physical, sensory or mental handicap; sexual orientation; honorably discharged veteran or military status; or use of a guide service animal. These categories are often referred to as protected classes or categories. In addition to employment-related decisions, differential treatment, including acts of harassment, could also be considered a form of unlawful discrimination. Employers covered by these mandates are generally those with eight or more employees. The Washington State courts have, however, held that using these factors in employment decisions related to independent contractors could also be considered employment discrimination. Independent contractors are individuals retained by a company or an employer to perform work but not considered employees because the employer does not have the right to control the manner and means by which the work is accomplished. Among the factors relevant to determining whether someone is an employee are: the skill required to perform the task or job; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the method of payment; the hired party s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party. Discrimination on the basis of harassment is prohibited under Washington law if the harassment is based on an individual s protected class or category. For conduct to rise to the level of harassment, it must be objectively and subjectively unwelcome, make the working environment uncomfortable, and tangibly change the terms and conditions of employment. Because Washington law prohibits discrimination on the basis of the factors mentioned above, employers should be careful about the types of things they ask during interviews or on applications or place in advertisements when they seek to hire employees. Asking the wrong questions or making the wrong comments about a person s protected classification could subject employers to liability. Discriminatory Employment Practices and Policies. In addition to determining whether an employer has engaged in discriminatory conduct directed toward an employee, state and federal agencies examine whether an employer has adopted policies or procedures that appear to be neutral but in fact have the impact of discriminating against a specific group of individuals who are protected under the law. This concept is known as disparate impact discrimination and can occur regardless of whether an employer intends for its policies to have an adverse impact on the employment of a particular group. If an employer is faced with allegations that such a policy exists, the employer has the responsibility to demonstrate that it has a legitimate business necessity for the use of the policy and that there is no less restrictive method of achieving its objective than through the use of the adopted policy. While the general rule is that an employer may not treat employees differently if they fall into protected classes or categories, there are some limited exceptions to this rule involving age, gender, and religion. These exceptions are known as bona fide occupational qualifications (BFOQ) and are qualities which an employer believes are necessary in order for an employee to perform the job. If an employer seeks to establish a specific characteristic as a BFOQ, such efforts will be closely examined should they be challenged and are rarely determined to be 200

3 LABOR AND EMPLOYMENT RELATIONS necessary. Examples of BFOQ s which have been considered to be appropriate include hiring only men to model men s clothing and accessories. Discrimination on the basis of national origin creates its own unique set of issues. All employers must generally follow the rule of nondiscrimination on the basis of national origin. However, like other types of discrimination, there may be exceptions. One such exception may be a determination by an employer to impose an English-only rule in the workplace. Circumstances which may permit the imposition of such rule would include situations where it is necessary to insure the safety of the workplace, to facilitate evaluation of an employee s performance if the supervisor is not fluent in the employee s native language, and where such a rule would promote efficiency. Each circumstance must be examined before such a rule is adopted. If an employer believes that there should be other exceptions to the prohibition on national origin playing a role in its decision-making process, such concerns should be carefully reviewed and evaluated prior to implementing the policy. Pre-Employment Medical Testing/HIV Positive Employees. As a general rule, Washington employers may require pre-employment medical testing for employees if all employees in a specific occupation are tested and if the testing is related to their ability to perform the job. Pre-employment or post-employment testing for HIV is not job related unless an employer can establish that because of the nature of the job, there is a substantial risk of transmitting the HIV virus and no way to eliminate the risk Minimum Qualifications to Work Any individual who seeks to be employed in Washington or anywhere in the United States must provide work authorization. This process requires that a potential employee present an employer, within certain time limits, documents that establish the individual s identity and eligibility to work. Employers can suggest the specific documents required for this process. This process applies regardless of citizenship or immigration status. Chapter 16 of this volume should be reviewed for additional details on immigration in the United States. Washington State also has standards and laws regarding how old an individual must be before they can work in certain occupations. Individuals under the age of eighteen are not permitted to work in jobs considered by the government to be dangerous to health and safety. Likewise, there are restrictions on the number of hours and amount of time that individuals under the age of eighteen can work. Information regarding these restrictions can be found at Wage and Hour Laws Minimum Wage and Overtime Pay Requirements. Depending on whether employees are considered to be exempt or nonexempt, an employer will be required to pay minimum wage and/or overtime compensation. Nonexempt employees in Washington state are subject to wage and hour laws, which provide that they must be paid a minimum wage a minimum amount of money for each hour worked. The minimum wage is subject to change on an annual basis and is based on a requirement that certain calculations must be done on an annual basis. These 201

4 DOING BUSINESS IN WASHINGTON calculations are based upon the federal Consumer Price Index. The minimum wage in 2010 is $8.55 per hour. Employees not subject to minimum wage and overtime payments are known as exempt employees. There are many categories of employees who are exempt from the minimum wage requirements such as individuals employed as casual labor at a private home, individuals providing forest service protection, newspaper vendors or carriers, and individuals employed on vessels other than American flagged ship vessels to name a few. However, in most circumstances, for questions arising as to whether employees are exempt, those employees fall into the categories of executive, administrative, professional, and outside sales employees. Whether an employee falls into these categories requires a detailed and specific examination of job responsibilities to include (depending on the category) whether the employee is paid on a salaried basis and makes at least $455 per week; whether the employee supervises other employees; the amount and level of education that the employee has received; the employee s role in the administration of the business operations of the company; and whether their primary responsibility is to make sales through efforts that occur outside of the premises of the company as opposed to on the premises of the company. Because there are many details which must be considered before an employer can determine whether an employee falls within one of these categories, it is important to consult with a professional about the details of the job in question and how the law applies to that job. Non-exempt employees are generally entitled to overtime compensation for hours worked in excess of 40 per week. Normally, employees must be compensated at an overtime rate of at least at one and one-half times their regular rate of pay for all hours worked in excess of 40 hours in a seven-day workweek. Employers in Washington should be wary not to fall into the trap of not counting hours worked outside of Washington in the hours worked calculation in any given work week. Overtime pay is required regardless of whether employees are paid hourly or in some other manner, such as commission, piecework, or salary; or whether payment is made on a weekly, monthly or other basis. Generally, overtime is also required regardless of whether those hours are worked in Washington or outside of Washington. Contrary to popularly held beliefs, there is no requirement under Washington law that employees be provided with paid vacations, holidays, or extra pay if they work on holidays unless an employer has entered into an employment agreement to provide such benefits. Similarly, there is no requirement that employers provide paid leaves of absence. There are, however, certain circumstances under which an employer is required to provide a leave of absence to an employee. Both federal and state Family and Medical Leave Acts (FMLA) mandate leaves of absences for employers with 50 or more employees under certain circumstances. The FMLA require employers to provide a leave of absence if an employee and/or their child, spouse, or parent has a serious health condition or for the birth or adoption of a child or to care for a newborn. The FMLA has a number of important requirements which should be explored before granting or denying leave pursuant to this policy. Other leave requirements under Washington law include providing leave for the actual period of pregnancy disability, victims of domestic violence, families of military service men and women and, where appropriate, to accommodate disabilities. 202

5 LABOR AND EMPLOYMENT RELATIONS Break and Meal Periods. Under Washington law, employees are entitled to breaks and meal periods. Breaks are generally ten minutes in duration and provided at the midpoint of the morning and afternoon of an eight hour day. Employees are also entitled to a meal break of at least 30 minutes for every five hours that they work. Withholding Wages. Washington law requires that an employer pay all wages due and owing to an employee at regularly scheduled pay periods unless there is a specific basis for withholding those wages. Employers may withhold a portion of wages if it is required by state or federal law, it is required by rule or regulation and related to the provision of health care services, or if an employee specifically grants permission for withholding such monies in advance and in writing. If an employer withholds wages under any other circumstances, the employer may be liable for double damages and attorney s fees as well as the potential imposition of criminal sanctions Industrial Insurance: Discharge Only for Good Cause Washington employers are required to provide industrial insurance, commonly known as workers compensation, for all employees in the event employees sustain illness, injury, or death as a result of performing work on behalf of an employer. Unless an individual is exempt by law from the requirements of the workers compensation laws, anyone working for an employer in Washington state is eligible for such coverage. Exemptions include but are not limited to sole proprietorships, independent contractors who meet specific criteria set forth in RCW and casual workers unconnected to specific trade. Employers are required to provide notice to the state of the type of work to be performed by an employee so that the state can determine what premiums the employer will be charged for the appropriate amount of insurance in the event employees are required to avail themselves of this insurance. Chapter 22 of this volume includes further information on Industrial Insurance and Workplace Safety Termination Laws As an at will employment state, Washington provides an opportunity for employers to terminate employees with or without cause and with or without notice. However, this general rule is tempered by a number of considerations and exceptions. Exceptions to Employment-At-Will. Exceptions to the concept of at will termination include a prohibition for terminating an employee in violation of public policy. A public policy is an explicit policy which has been established by the government through either the adoption of a law or a determination by the court system. Therefore, an employer may not terminate an employee if that termination is based upon the employee s protected class or category; because that employee was called to jury duty, suffered an injury in the workplace, or reported a violation of the law; or other similar reasons. Additionally, an employee who has a contract that requires for cause termination cannot be terminated in the absence of cause. The concept of cause is generally defined in a written agreement and may cover, by way of example, activities such as excessive absenteeism, theft, 203

6 DOING BUSINESS IN WASHINGTON failure to perform up to expectations, damaging the reputation of the company, and workplace violence. WARN Notice. Under certain conditions, employers who have or who have had 100 or more employees within the preceding 12 months must determine whether they are required to provide specified notice prior to terminating employment under the Worker Adjustment and Retraining Notification Act (WARN). This requirement is triggered if there is a plant closing or a mass layoff. A plant closing is the loss of employment for a minimum of 30 days by 50 or more employees. A mass layoff is termination of 500 or more employees or one-third of the employees where there are fifty or more full-time employees for a 30 day period. An employer s failure to comply with these procedures can result in civil litigation against the employer. Pay on Termination. Employers must provide employees with their pay at the end of the next regularly scheduled pay period after termination unless otherwise provided by a collective bargaining agreement or by contract. Employers are not required to provide severance pay to an employee who is being terminated unless the employer is required to provide such payment as a result of plant closing laws, has a policy, or has contractually agreed to do so. Unemployment Compensation. Individuals are eligible to receive unemployment compensation if they have been terminated and employed for at least 680 hours during the qualifying period prior to termination. In order to receive such benefits, they must file an application; show that they are ready, willing and able to work; have been unemployed for at least one week; and report to the Employment Security Department about their job search activities on an established schedule. Additionally, they must not have been terminated because of a labor dispute such as a strike, because they are attending school more than 12 hours a week, or because they have engaged in gross misconduct. Gross misconduct includes admission or conviction of a work-related crime or a flagrant or wanton disregard for the employer and/or a co-worker. Mandatory Arbitration or Dispute Resolution Agreements. As an alternative to litigation, many employers request that employees sign mandatory arbitration agreements. Enforcement of such agreements depends entirely on the content of the agreement and the nature of the right that the employee is seeking to vindicate. Additionally, courts will examine whether the arbitration agreement is one-sided (favoring the employer) or takes away any reasonable or meaningful choice from the employee. Washington courts have made it clear that the language of the agreements must be relatively simple and easy to understand and that the employee must have a reasonable period of time in which to consider whether they are willing to be employed with a company that requires such agreements. Employers should ensure that any dispute resolution provision that removes an employee s opportunity to pursue legal remedies in court is carefully drafted and reviewed by legal counsel. If an employee is already working for an employer when the employer decides to implement a mandatory arbitration agreement, an employer will have to provide something of value to the employee in order to require that the employee agree to mandatory arbitration. Record Keeping and Posting Requirements. Like other states, Washington requires that employers maintain certain records with respect to current and former employees. The length of time that these records must be maintained varies depending on the type of information 204

7 LABOR AND EMPLOYMENT RELATIONS contained in the record. The purpose of maintaining these records is to ensure that they are available for inspection if the governmental agencies that have responsibility for administering the law associated with these records request them. Additionally, maintaining these records can assist in protecting an employer from claims that the business failed to comply with the provisions of the law. An important example of the type of records which should be maintained are pay records so that a business can prove that appropriate wages, including overtime, have been paid or personnel files for those who are or were employed at the business. Because the length of time for maintaining such records varies, every employer should seek specific advice with respect to each specific record in question. In addition to maintaining records, Washington also has requirements that some records be made available to current employees for inspection. Foremost among those records are personnel files. Under Washington law, an employee has a right, at a time mutually agreed upon between the employer and the employee, to review the file. There are also requirements to post certain information in prominent places at the workplace so that employees are made aware of their rights under Washington State and federal law. Among the types of information that must be posted are information about Unemployment Compensation Benefits, Equal Employment Opportunity, the Fair Labor Standards Act, the Employment Polygraph Protection Act and the Family and Medical Leave Act. Information about all of the postings that are necessary can be obtained from the Washington State Department of Labor Industries Collective Bargaining Laws Unions When a majority of employees at any Washington employer decide to designate a labor union as their representative for purposes of negotiating certain terms and conditions of employment, employers are required to enter into negotiations with the unions on these subjects and are no longer free to conduct discussions on those subjects with individual employees who are union members. Therefore, when employers seek to establish things like pay, benefits, hours of work, and scope of work, they must necessarily negotiate these matters and either come to agreement with the union or come to impasse. There are, however, certain workplace issues which are generally left to the discretion of management, regardless of the presence of a union in the workplace. These issues are normally referred to as management rights. If a workplace becomes unionized, a question often arises about whether all of the employees are appropriate members of the union and are, therefore, appropriately subject to the terms of the collective bargaining agreement. This determination is often made by the National Labor Relations Board (NLRB) which has responsibility for enforcement of the right of employees to unionize. Absent a specific written agreement to the contrary, unions and their supporters have the right to strike. If employees go on strike, employers generally have the right to permanently replace those workers with individuals who are not striking. Despite the right of an employer to permanently replace striking employees, as a general rule, those employees may not be discharged. In addition to striking, union members have a right to engage in other types of concerted activities such as picketing (gathering outside the workplace or another location) in an effort to educate members of the public (and, in particular, customers of the employer) about 205

8 DOING BUSINESS IN WASHINGTON issues of concern to the union and its members in an effort to force an employer to come to their position or to compromise. Unions normally cannot require employees to join the union as a condition of employment, although they can require each employee to pay the portion of monthly union dues which are related to activities for the members of the bargaining unit. Regardless of whether an employer approves of the decision of employees to unionize, an employer cannot discriminate against or otherwise retaliate against union members or supporters. Washington courts and regulatory agencies would consider refusing to hire, threatening, interrogating, treating employees less favorably at work, or engaging in other adverse employment actions against union members or supporters discrimination and/or retaliation APPLICATION OF U.S. NONDISCRIMINATION AND OTHER LAWS TO UNITED STATES SUBSIDIARIES OF FOREIGN CORPORATIONS The question of whether the laws of the United States and the State of Washington apply to a US subsidiary of a foreign corporation was heavily debated starting in the early 1990s and in response to court decisions that prevented application of the federal antidiscrimination laws to US employees of foreign subsidiaries, Congress made it clear that the federal antidiscrimination laws would apply to those employees. Additionally, Washington federal courts have ruled that the federal nondiscrimination laws also apply to U.S. employees of foreign subsidiaries where the employees work outside of the United States if that foreign subsidiary is controlled by a U.S. entity. As a result of these interpretations of federal law, foreign corporations doing business in Washington should expect a similar interpretation of employment laws by Washington State courts. Despite these general propositions, should a question arise about the applicability of U.S. or Washington State law, subsidiaries of foreign corporations doing business in Washington should conduct an analysis in conjunction with experts to determine whether Washington law applies. Among the questions to be analyzed include: where is the work located, whether the employee is a U.S. citizen or a citizen of a different country, whether the employee is authorized to work in the United States, how many employees does the employer employ within the United States or the state of Washington, and what is the home country of the employer. 206