January 23, 2006
COMMENTARY: Turn the page | A look at the new laws, regulatory changes and recent court decisions that affect employers and employees in 2006
By Douglas P. Currier
Labor and Employment Law Group, Verrill Dana, Portland
If you are an employer in Maine, you should know about several changes to state and federal employment rules that occurred in 2005. There are new laws, regulations and court decisions that will impact how you hire, compensate and manage your employees. The following are a few highlights to keep in mind for the year.
Last September, Maine added a new family care leave law to the books that requires employers to allow employees to use available paid vacation and sick time to care for family members who are injured or ill (see "Taking a sick day," Sept. 5, 2005). In another change to employee leave rights in Maine, the remedies for employees who believe they have a claim based on the Maine Family Medical Leave Act have been strengthened to encourage them to assert their rights. As a result, an employer's liability will now be significantly greater if the employer did not have a reasonable basis to believe that its actions complied with the Family Medical Leave Act. That means employers considering any employee requests that might be covered under Maine's Family Care Leave Act should make a good faith effort to determine whether their decision is consistent with those rules, either through researching the law themselves or by calling their attorney or the Department of Labor.
As most employers know by now, sexual orientation also was added to the list of classes protected under the Maine Human Rights Act (see "Domestic policy," Sept. 5, 2005). It is now illegal in Maine to refuse to hire, to fire, to harass or to otherwise discriminate against an employee because of his or her actual or perceived heterosexuality, bisexuality, homosexuality or gender identity or expression. With that change, employers should make certain their Equal Opportunity Employment and anti-harassment policies are expanded to include sexual orientation. Also, employees and managers alike should be trained on what their rights and responsibilities are with respect to preventing and responding to issues of harassment, including harassment based on sexual orientation, in the workplace.
The Maine Department of Labor adopted regulations in July intended to make sure that any employee who was entitled to receive overtime compensation under previous federal law would still be eligible for those benefits even after federal changes altered the definition of which employees are "exempt." This means employers have two different set of regulations with which they must comply. Check your job classifications and job descriptionsˆ… again.
The Maine Department of Labor also adopted this past year new regulations clarifying an employer's obligation to pay employees severance in the event of a plant closing or relocation. Maine's severance pay law, 26 M.R.S.A. ß625-B, provides that employees with a minimum of three years of employment who work at a facility with 100 or more employees and lose their job because of a plant closing or relocation are entitled to one week of severance pay for every year of service at that facility. The new regulations ˆ— which arose out of a desire to answer legal questions that surfaced in some real-life cases such as the 2002 lawsuit filed by laid-off workers against Vishay Sprague in Sanford ˆ— provide more concrete guidance as to when severance must be paid to employees and which employees will be eligible to receive severance.
For example, the statute defines a plant closing or termination as the "substantial cessation" of industrial or commercial operations in a covered establishment. The new regulations clarify that a substantial cessation may be deemed to have occurred when, among other possibilities, the number of employees at the facility, the number of hours worked and/or the amount of production is reduced by 50% over the same time period one year earlier.
The Maine Human Rights Commission made official this past year its reaction to a 1999 U.S. Supreme Court decision that narrowed the definition of who is disabled under the law. Based on a new regulation adopted pursuant to the Maine Human Rights Act, whether someone is disabled is determined without taking into account any mitigating measures. For example, while under federal law someone with very poor eyesight who can see 20/20 by using corrective lenses would not be considered disabled, that same person will likely be considered disabled under Maine law, because the determination is made without considering the fact that the individual's vision problems can be corrected. So employers in Maine need to be more sensitive to working with employees with a broader range of health issues and providing reasonable accommodations compared to other employers throughout the country. (See, "Behind the ruling," this page.)
Judges weigh in
Along with lawmakers and regulatory agencies, the courts have been active as well, especially with respect to interpreting laws against discrimination in 2005. Some examples:
ˆ• The U.S. Supreme Court ruled this past year that the federal Age Discrimination in Employment Act permits a "disparate impact" cause of action for employee lawsuits against their employers. That decision means any employer's policy that, when implemented, tends to adversely impact older workers more so than younger workers may constitute age discrimination ˆ— even though the policy does not expressly state a preference for younger workers over older workers.
ˆ• A 2005 Sixth Circuit decision tells us that a woman does not need to be pregnant in order to sue under the federal Pregnancy Discrimination Act. For example, it may be a violation of the PDA for an employer to refuse to hire a female applicant because the employer is aware she was previously out-of-work for an extended period during a difficult pregnancy and the employer fears the applicant may want to have more children in the future.
ˆ• A 2005 Seventh Circuit case asserts that the decision by a company CEO to replace a male employee with his female paramour is not gender discrimination because the disadvantaged competitor for the position could have been male or female. The decision, while offensive and certainly unfair, is not illegal, says the court.
ˆ• A 2005 Ninth Circuit decision suggests that an employer may be entitled to an inference that there is no discrimination when the same person who took an adverse action against an employee previously took positive actions that benefited the employee. For example, in a sex discrimination case, an employer can argue that there should be a presumption that a supervisor who hired an applicant knowing the applicant was a woman did not later discharge this same individual because of her gender.
Decisions like these ˆ— along with the host of new laws and clarifications or changes to existing regulations ˆ— are a good reminder for us all that the law is constantly evolving. Employers are well advised to review their processes and procedures for managing employees each year to make sure they continue to make sense and comply with the changes in the law.
If you are an employer in Maine, you should know about several changes to state and federal employment rules that occurred in 2005. There are new laws, regulations and court decisions that will impact how you hire, compensate and manage your employees. The following are a few highlights to keep in mind for the year.
Last September, Maine added a new family care leave law to the books that requires employers to allow employees to use available paid vacation and sick time to care for family members who are injured or ill (see "Taking a sick day," Sept. 5, 2005). In another change to employee leave rights in Maine, the remedies for employees who believe they have a claim based on the Maine Family Medical Leave Act have been strengthened to encourage them to assert their rights. As a result, an employer's liability will now be significantly greater if the employer did not have a reasonable basis to believe that its actions complied with the Family Medical Leave Act. That means employers considering any employee requests that might be covered under Maine's Family Care Leave Act should make a good faith effort to determine whether their decision is consistent with those rules, either through researching the law themselves or by calling their attorney or the Department of Labor.
As most employers know by now, sexual orientation also was added to the list of classes protected under the Maine Human Rights Act (see "Domestic policy," Sept. 5, 2005). It is now illegal in Maine to refuse to hire, to fire, to harass or to otherwise discriminate against an employee because of his or her actual or perceived heterosexuality, bisexuality, homosexuality or gender identity or expression. With that change, employers should make certain their Equal Opportunity Employment and anti-harassment policies are expanded to include sexual orientation. Also, employees and managers alike should be trained on what their rights and responsibilities are with respect to preventing and responding to issues of harassment, including harassment based on sexual orientation, in the workplace.
The Maine Department of Labor adopted regulations in July intended to make sure that any employee who was entitled to receive overtime compensation under previous federal law would still be eligible for those benefits even after federal changes altered the definition of which employees are "exempt." This means employers have two different set of regulations with which they must comply. Check your job classifications and job descriptionsˆ… again.
The Maine Department of Labor also adopted this past year new regulations clarifying an employer's obligation to pay employees severance in the event of a plant closing or relocation. Maine's severance pay law, 26 M.R.S.A. ß625-B, provides that employees with a minimum of three years of employment who work at a facility with 100 or more employees and lose their job because of a plant closing or relocation are entitled to one week of severance pay for every year of service at that facility. The new regulations ˆ— which arose out of a desire to answer legal questions that surfaced in some real-life cases such as the 2002 lawsuit filed by laid-off workers against Vishay Sprague in Sanford ˆ— provide more concrete guidance as to when severance must be paid to employees and which employees will be eligible to receive severance.
For example, the statute defines a plant closing or termination as the "substantial cessation" of industrial or commercial operations in a covered establishment. The new regulations clarify that a substantial cessation may be deemed to have occurred when, among other possibilities, the number of employees at the facility, the number of hours worked and/or the amount of production is reduced by 50% over the same time period one year earlier.
The Maine Human Rights Commission made official this past year its reaction to a 1999 U.S. Supreme Court decision that narrowed the definition of who is disabled under the law. Based on a new regulation adopted pursuant to the Maine Human Rights Act, whether someone is disabled is determined without taking into account any mitigating measures. For example, while under federal law someone with very poor eyesight who can see 20/20 by using corrective lenses would not be considered disabled, that same person will likely be considered disabled under Maine law, because the determination is made without considering the fact that the individual's vision problems can be corrected. So employers in Maine need to be more sensitive to working with employees with a broader range of health issues and providing reasonable accommodations compared to other employers throughout the country. (See, "Behind the ruling," this page.)
Judges weigh in
Along with lawmakers and regulatory agencies, the courts have been active as well, especially with respect to interpreting laws against discrimination in 2005. Some examples:
ˆ• The U.S. Supreme Court ruled this past year that the federal Age Discrimination in Employment Act permits a "disparate impact" cause of action for employee lawsuits against their employers. That decision means any employer's policy that, when implemented, tends to adversely impact older workers more so than younger workers may constitute age discrimination ˆ— even though the policy does not expressly state a preference for younger workers over older workers.
ˆ• A 2005 Sixth Circuit decision tells us that a woman does not need to be pregnant in order to sue under the federal Pregnancy Discrimination Act. For example, it may be a violation of the PDA for an employer to refuse to hire a female applicant because the employer is aware she was previously out-of-work for an extended period during a difficult pregnancy and the employer fears the applicant may want to have more children in the future.
ˆ• A 2005 Seventh Circuit case asserts that the decision by a company CEO to replace a male employee with his female paramour is not gender discrimination because the disadvantaged competitor for the position could have been male or female. The decision, while offensive and certainly unfair, is not illegal, says the court.
ˆ• A 2005 Ninth Circuit decision suggests that an employer may be entitled to an inference that there is no discrimination when the same person who took an adverse action against an employee previously took positive actions that benefited the employee. For example, in a sex discrimination case, an employer can argue that there should be a presumption that a supervisor who hired an applicant knowing the applicant was a woman did not later discharge this same individual because of her gender.
Decisions like these ˆ— along with the host of new laws and clarifications or changes to existing regulations ˆ— are a good reminder for us all that the law is constantly evolving. Employers are well advised to review their processes and procedures for managing employees each year to make sure they continue to make sense and comply with the changes in the law.
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