Employment Law Update - Fall 2004 < Articles < News

Employment Law Update – Fall 2004

General Assembly Corrects Day of Rest Snafu

For decades, Virginia has had a state law allowing certain employees to choose Saturday or Sunday as their day of rest. However, this little-known law had numerous exemptions for various types of employers. As of July 1, 2004, an apparent inadvertent legislative change removed those much-relied upon exceptions to Virginia’s day of rest law. When the newspapers brought this to the public’s attention, Virginia employers who employ workers on Saturday and Sunday were besieged by inquiries and requests from employees for weekend days off. Fortunately for Virginia employers, the Richmond Circuit Court entered an order on July 2, 2004 prohibiting enforcement of any changes to the state’s day of rest law for 90 days. Also, Governor Mark Warner quickly called a Special Session of the General Assembly to address the situation. The General Assembly then met on July 13, 2004 and reinstated the various exceptions to Virginia’s day of rest laws.

During this tense period, our K&C Employment Team worked to keep employers informed of the above developments and supported the eventual legislative remedy. We remained in constant contact with the Virginia Department of Labor and Industry (DOLI), which is charged with enforcing this law, in an effort to keep abreast of that agency’s enforcement stance. Throughout this uneasy period, the DOLI refrained from any enforcement efforts and has recognized constitutionality concerns regarding even the pre-July 1, 2004 law. When contacted for this article, the DOLI Director, Ellen Marie Hess, indicated that her agency was taking a common sense approach to the enforcement of the statute. The DOLI continues to monitor potential legislative changes that may result when the General Assembly meets again in January which could provide further latitude for employers whose operations need employees on weekends.

Practical Pointer

Even though Virginia employers are generally relieved that the exceptions to Virginia’s day of rest law have been restored, care should be taken to address any written requests to have either Saturday or Sunday off for religious reasons. Not only should employers make sure that they are covered by an applicable exception under Virginia law, but federal law prohibiting discrimination due to religion may require an employer to reasonably accommodate an employee’s need for either Saturday or Sunday off in connection with their religion. On the state level, watch for future legislative changes that may facilitate Virginia employers’ needs to employ individuals on Saturday or Sunday.

Federal FaiPay Rules to Allow Employers Greater Flexibility in Docking Pay of Exempt Employees

The Department of Labor (DOL) published final FairPay regulations referred this past Spring modifying rules governing the payment of overtime for the white-collar exemptions (executive, administrative and professional employees). The DOL claims the FairPay rules, which became effective on August 23, 2004, were implemented to provide clear, straight-forward (and stronger) overtime rules. Perhaps the most substantial change was a higher salary requirement of $455.00 per week for most exempt employees.

One area in which employers will now have greater flexibility is in taking disciplinary actions involving suspension without pay of certain exempt employees. Prior to the new FairPay rules, employers who wanted to suspend exempt employees for inappropriate conduct like sexual harassment, violence or drug/alcohol use, were forced to either suspend the employee for an entire week or not at all. As of August 23, 2004, employers will have the latitude to suspend exempt employees without pay for one full day or more. The new regulations contemplate employers putting their disciplinary-deduction policies in writing before taking advantage of this expanded salary-deduction option.

Most employers already have disciplinary policies or conduct rules in place for their employees. The FairPay regs do not require an exhaustive list of specific violations when a suspension without pay will be imposed, but the FairPay rules require a written policy sufficient to put employees on notice that they could be subject to an unpaid disciplinary suspension.

Practical Pointer

Required written policies regarding suspending exempt employees without pay is not the only area that the new FairPay rules suggest employer changes to written policies. For example, the DOL created a new Safe Harbor rule to protect employers against inadvertent violations of the salary basis requirement for various overtime exemptions. However, this Safe Harbor protection is only available if the employer has a clearly communicated policy prohibiting improper deductions, has a complaint mechanism in place and has a practice of reimbursing exempt employees for any wrongful deductions. Employers are well-advised to conduct a wage-hour self-audit which should not only include pay practices, but required changes to written policies. For help in this regard, call any member of the K&C Employment Team.

Hired Gun Gives Local Employers Tips on Avoiding Lawsuits

Harris Butler, a lawyer with Butler, Williams & Skilling in Richmond, provided attendees with a valuable perspective at the July 22, 2004 showing of the 20th Annual Employment Law Update. Mr. Butler, who specializes in suing employers, described what he looks for when choosing an employer to sue. He indicated that insensitive supervisors who are unwilling to communicate and do not adequately document employment decisions have led to employer liability in a number of cases he has handled. Among his successes was a record-setting workplace harassment/retaliation verdict that exceeded $1,000,000. Mr. Butler’s comments highlighted a need for employers to use common sense to avoid bad facts to keep lawyers like him from having a sympathetic story to tell a jury.

Of course, the K&C Employment Team, which only represents employers, provided guidance throughout the day to attendees on how to avoid being sued successfully by hired guns like Mr. Butler. Because supervisors may unwittingly provide employees with a basis for legal action, attendees were urged to utilize the new K&C Supervisory Training Clinic to help front-line supervisors avoid legal risks. This Clinic provides focused instruction for supervisors during sessions that last approximately 2 hours. The next Supervisory Clinic will highlight workplace harassment training and will be offered in Richmond on September 22, 2004 and in Norfolk on September 29, 2004. For registration information, contact Kristen Bown at (804) 771-5722.

COBRA Changes on the Horizon

On May 26, 2004, the Department of Labor issued final rules with respect to notification of continuing health coverage under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). These final rules set out comprehensive guidance concerning the timing and content of applicable notices under COBRA for private health plans. Two new notices are required under the final rules. Plan administrators must now give covered employees and COBRA qualified beneficiaries a notice of COBRA unavailability and a notice of the early termination of COBRA coverage.

The provisions of the final regulations apply to notice obligations arising on or after the first day of the first plan year beginning on or after November 26, 2004; so for calendar year plans, the regulations are applicable to notice obligations beginning January 1, 2005. However, plan administrators may choose to implement the changes required by the final rules immediately.

Click here to view model notice forms for the COBRA General Notice and the COBRA Election Notice on the DOL website. This topic will be also be addressed at Kaufman & Canoles 21st Annual Employment Law Update in Benefits Update: COBRA Changes & Beyond on November 4th at the Chesapeake Conference Center.

Fired Employee’s Workers’ Comp Kneads Granted

The Virginia Court of Appeals recently reversed the Workers’ Compensation Commission when it found that a Northern Virginia bakery route salesman who faked a robbery and planned to kill his supervisor was entitled to workers’ compensation benefits. In Artis v. Ottenberg’s Bakers, Inc., the claimant had been employed as a bakery route salesman who began collecting workers’ comp benefits for post-traumatic stress syndrome. Mr. Artis claimed he began suffering from this disorder following an incident when he struck and killed a pedestrian who darted in front of his truck. Although the driver said he was too distraught to finish his shift, he completed his route that day because his employer had no one available to replace him. He subsequently was unable to drive for a number of weeks due to the emotional distress he suffered as a result of the accident.

When Mr. Artis returned to work, he began to harbor resentment and anger toward his employer. Mr. Artis’ resentment toward his employer allegedly led to his filing a false police report indicating he had been robbed of approximately $250. He later admitted that he had hoped his supervisor would respond to the scene of the reported robbery, at which time Mr. Artis intended to kill the supervisor.

Not surprisingly, Mr. Artis’ employer discharged him for his misconduct and the Workers’ Compensation Commission initially ruled that the termination under these circumstances barred receipt of further benefits. However, the Virginia Court of Appeals ruled that Mr. Artis’ discharge could have been related to the earlier fatal accident which created the work-related disability. Accordingly, the Court reversed and awarded benefits to Mr. Artis. This bizarre case may end up as a candidate for the K&C Employment Team’s Most Outrageous Cases for 2004.

21st Annual Employment Law Update Dealing With Risk in the Workplace

On November 4th, the K&C Employment Law Team will host the premiere showing of the 21st Annual Employment Law Update at the Chesapeake Conference Center. This year’s program will feature new information and materials designed to help employers deal with risk in the workplace. Topics on deck include Severance & Settlement Strategies, Interviewing & Hiring, and Reducing Worker’s Compensation Liability. Also, you won’t want to miss The K&C Discipline & Discharge Clinic with all new video vignettes. Reserve your seat now! We are expecting a full house. For more information or to register, contact Kristen Bown at (757) 624-3232.

This program has been approved for 5 credit hours toward PHR and SPHR recertification through the Human Resource Certification Institute (HRCI). For more information about certification or recertification, please visit the HRCI homepage at www.hrci.org.