pace - law presentation: employment law 101

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  1. 1. Employment Law 101: Recognizing The Top Mistakes Made by Mid-Sized Employers Presented at PACE Conference Chandler, Arizona October 8, 2013 Jennifer PhillipsManuel H. Cairo602-382-6565 jphillips@swlaw.com602-382-6534 mcairo@swlaw.com
  2. 2. Overview and Scope of Presentation Worksite Enforcement Federal law focus Because each state has their own employment laws FLSA Fair Labor Standards Act NLRA National Labor Relations Act Title VII Civil Rights Act of 1964 ADAAA Americans with Disabilities Act as amended FMLA Family and Medical Leave Act2013 Snell & Wilmer L.L.P.2
  3. 3. Background The Immigration Reform and Control Act of 1986 (IRCA) requires employers to satisfy three separate and distinct legal obligations: 1.2.3.A person or other entity must not knowingly hire, recruit or refer for a fee, for employment an alien who is unauthorized to work in the United States and must not continue to knowingly employ an alien that is unauthorized or has become unauthorized to work in the United States. See 8 U.S.C. 1324a. The employer must verify whether or not the new hire is authorized to work in the United States, and whether or not the person hired is a citizen or alien. See 8 U.S.C. 1324a(b). Refrain from discriminating against individuals on the basis of actual or perceived national origin, citizenship, or immigration status. 2010 2013 Snell & Wilmer L.L.P Snell & Wilmer L.L.P.3
  4. 4. Common Mistake: I can handle the inspection process myself.Notice of Inspection Purpose To identify any violations that might lead to criminal prosecution of an employer or civil liabilityThree Day Rule 8 C.F.R. 274a.2(b)(2(ii) 2013 Snell & Wilmer L.L.P 2010 Snell & Wilmer L.L.P.4
  5. 5. Common Mistake: I can handle the inspection process myself.2010 2013 Snell & Wilmer L.L.P Snell & Wilmer L.L.P.5
  6. 6. Common Mistake: I can handle the inspection process myself. The issuance of the Notice of Inspection on any employer is the first step in the process that may lead to the issuance of a Notice of Intent to Fine, a Warning Notice, or finding employer is in compliance.2010 2013 Snell & Wilmer L.L.P Snell & Wilmer L.L.P.6
  7. 7. Common Mistake: I can handle the inspection process myself. Content Forms I-9 for current and past employees Roster of all current and terminated employees with hire and termination dates Quarterly wage and hour reports/payroll data Quarterly tax statements Business Information: - Employer Identification Number - Taxpayer Identification Number - Owners Information - Articles of Incorporation, if any - Business Licenses Correspondence from Social Security Administration E-Verify Information Electronic System Information2 2013 Snell & Wilmer L.L.P 010 Snell & Wilmer7
  8. 8. Common Mistake: Not understanding the potential role of notices. Notice of Suspect Documents: Advises employer that based on a review of the Forms I-9 and documentation submitted by the employee, ICE has determined that the employee is unauthorized with respect to employment and advises the employer of the possible criminal and civil penalties for continuing to employ the individual. Confirmation of Notice of Inspection Results Change to Notice of Inspection Results2013 Snell & Wilmer L.L.P8
  9. 9. Common Mistake: Not understanding the potential role of notices. Notice of Discrepancies: Advises the employer that based on a review of the Forms I-9 and documentation submitted by the employee, ICE has been unable to determine their work eligibility in the U.S. A notice explaining the employees rights and responsibilities is forwarded with this letter, which the employer is requested to serve on each affected employee.2013 Snell & Wilmer L.L.P9
  10. 10. Common Mistake: Not understanding violations.Verification Violations Substantive Defined as knowing hire, continuing to employ, failure to prepare and present, and those serious paperwork violations that could have led to the hiring of an unauthorized alien. --Warning Notice Notice of Intent to Fine20 2013 Snell & Wilmer L.L.P 10 Snell & Wilmer10
  11. 11. Common Mistake: Not understanding violations.Verification Violations Technical/Procedural Notice of Technical or Procedural Failures Ten Business Days To Correct -Notice of Inspection Results Notice of Intent to Fine 2013 Snell & Wilmer L.L.P 2010 Snell & Wilmer11
  12. 12. Consequences: Warning Notice May be issued in circumstances where substantive violations were identified but there is the expectation of future compliance by the employer. 2013 Snell & Wilmer L.L.P 2010 Snell & Wilmer12
  13. 13. Consequences: Warning Notice Inappropriate when: knowing hire and/or continuing to employer violations Failure to prepare and present Unauthorized aliens hired as a result of substantive paperwork violations Fraud Prior ICE history Failure to correct technical violations 2010 2013 Snell & Wilmer L.L.P Snell & Wilmer13
  14. 14. Consequences: Notice of Intent to Fine Recommendation of fine based on statutory requirements and internal guidance memoranda Structure: I-763 Notice of Intent to Fine I-761 Application for Notice of Intent to Fine Memorandum to Case File for Determination of Civil Money Penalty Charging Documents Evidence Summary List Exhibits20 2013 Snell & Wilmer L.L.P 10 Snell & Wilmer14
  15. 15. Consequences: Substantive/Uncorrected Technical Violations Standard Fine Amount Substantive Verification Violations0%-9%1st Offense $110 - $11002nd Offense $110-$11003rd Offense+ $110-$1100$110$550$1,10010% - 19%$275$650$1,10020% - 29%$440$750$1,10030%-39%$605$850$1,10040%-49%$770$950$1,10050% or more$935$1,100$1,1002010 Sn 2013 Snell & Wilmer L.L.P ell & Wilmer L.L.P.15
  16. 16. Consequences: Knowing Hire/Continue to Employ Standard Fine Amount Knowing Hire and Continuing to Employ ViolationsFirst Tier $375 - $3,200Second Tier $3,200 - $6,500$375$3,20010% - 19%$845$3,750$6,25020% - 29%$1315$4,300$8,20030% - 39%$1785$4,850$10,15040%-49%$2255$5,400$12,10050% or more$2,725$5,950$14,0500%-9%Third Tier $4,300-$16,000$4,300 2013 Snell & Wilmer L.L.P 2010 Snell & Wilmer L.L.P.16
  17. 17. Consequences: Factors and Enhancement 2013 Snell & Wilmer L.L.P 2010 Snell & Wilmer L.L.P.17
  18. 18. Consequences: Settlement and Appeals Final Order Settlement Agreements Office of the Chief Administrative Hearing Officer Federal Circuit Court of Appeals2013 Snell & Wilmer L.L.P18
  19. 19. Common Mistake: Misclassifying Employees as Independent Contractors Fair Labor Standards Act (FLSA) Federal law governing wage and hour issues minimum wage, overtime, equal pay, and record-keeping requirementsEnterprise Coverage vs. Individual Coverage -Enterprise Coverage: Employees who work for certain businesses or organizations ("enterprises") are covered by the FLSA. These enterprises, which must have at least two employees, are: -Individual Coverage: Even when there is no enterprise coverage, employees are protected by the FLSA if their work regularly involves them in commerce between States ("interstate commerce"). The FLSA covers individual workers who are "engaged in commerce or in the production of goods for commerce." (1) those that have an annual dollar volume of sales or business done of at least $500k (2) hospitals, businesses providing medical or nursing care for residents, schools, and government agenciesI.e.: Workers who produce goods (worker assembling components in a factory or a secretary typing letters in an office) that will be sent out of state, regularly make telephone calls to persons located in other States, handle records of interstate transactions, travel to other States on their jobs, and do janitorial work in buildings where goods are produced for shipment outside the State.Wage and Hour Division of the U.S. Department of Labor (DOL) is the federal agency which investigates and prosecutes alleged FLSA violations 2012 Snell & Wilmer L.L.P.19
  20. 20. Common Mistake: Misclassifying Employees as Exempt FLSA - Exempt vs. Nonexempt Workers Commissioned sales employees of retail or service establishments are exempt from overtime if more than half of the employee's earnings come from commissions and the employee averages at least one and one-half times the minimum wage for each hour worked. Computer professionals: Section 13(a)(17) of the FLSA provides that certain computer professionals paid at least $27.63 per hour are exempt from the overtime provisions of the FLSA. Drivers, driver's helpers, loaders and mechanics are exempt from the overtime pay provisions of the FLSA if employed by a motor carrier, and if the employee's duties affect the safety of operation of the vehicles in transportation of passengers or property in interstate or foreign commerce. Farmworkers employed on small farms are exempt from both the minimum wage and overtime pay provisions of the FLSA. Salesmen, partsmen and mechanics employed by automobile dealerships are exempt from the overtime pay provisions of the FLSA. Seasonal and recreational establishments: Employees employed by certain seasonal and recreational establishments are exempt from both the minimum wage and overtime pay provisions of the FLSA. Executive, administrative, professional and outside sales employees: (as defined in DOL regulations) who are paid on a salary basis are exempt from both the minimum wage and overtime provisions of the FLSA.2013 Snell & Wilmer L.L.P.20
  21. 21. Common Mistake: Misclassifying Employees as Independent Contractors Employee vs. Independent Contractor FLSA applies to any individual employed by an employer but not to independent contractors because they are not considered employees under the FLSAEmployers cannot simply claim workers are exempt from the FLSA requirements (such as

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