Welcome to Legal Brief for HR!  This update on issues that matter to employers is provided as a service of the SHRM Texas State Council, which I serve as Co-Director of Legislative Action. Feel free to forward this email to anyone who would benefit . . . all are welcome to join this FREE service with over 3000 subscribers.

I’m looking forward to speaking at the North Texas SHRM Annual Conference (June 8), chapter meetings of Permian Basin SHRM (June 13), North Texas Compensation Association (June 15), and Corsicana HRMA (June 20) and at the SHRM National Conference in D.C. (June 28).  Hope to see you there!

Here’s what’s up:

1.     Border Blues – The U.S. Senate has passed a comprehensive immigration reform bill (62-36) but House reps are saying they won’t accept anything that amounts to amnesty for illegal workers who are in the country now.  A key part of the Senate bill is a proposed electronic verification system that would replace the I-9 process.  Employers would contact the Dep’t of Home Security (DHS) within three days of hiring, to confirm a worker’s eligibility to work, and DHS would respond within ten days.  If DHS can’t verify the worker, it would provide the worker a chance to provide additional proof.  Stay tuned!

2.     Living It Up – An employer will pay $1.43 million, to cover $805K in unpaid wages and vacations for 219 workers, plus civil penalties and 10% prejudgment interest, for violation of a living wage ordinance.  Amaral v. Cintas Corp. ( Cal. Super. Ct. 5-11-06).  Even though the facility providing services was outside of the city limits of Hayward, CA, the “living wage” ordinance applied because the company was doing business with the city.  The ordinance was enacted in 1999 and set a minimum wage of $8/hour with health benefits or $9.25 without (the wage is now $10.86 without benefits).  Other living wage ordinances are applied to a geographic area and are not dependent upon being a city contractor.  A good website to research these local minimum wage laws is www.livingwagecampaign.org.

3.     Overtime Ouch – A brokerage unit has agreed to pay $98 million to settle the overtime pay claims of thousands of former and current brokers.  Bahramipour v. Citigroup Global Markets Inc. fka Salomon Smith Barney (N.D. Cal. 5-24-06).  Plaintiffs allege that they were mistakenly classified as exempt (using the administrative exemption), did not receive earned overtime and were not reimbursed for registration fees, costs of support staff and costs of trading errors. 

4.     A Bigger Stick – The State of Illinois is on the verge of amending its minimum wage statute,  allowing punitive damages to be awarded against employers who underpay their workers (in addition to backpay, costs and attorneys fees). The bill, S.B. 2339, would entitle workers to an additional 2% of the backpay award, as punitive damages, and would be available in civil actions filed individually or by a group of workers.

5.     Visa?  Priceless – US CIS announced that as of May 12, 2006, 34,808 cases have been counted against the FY2007 H-1B visa cap. There are only 58,200 H-1B’s available (after the set aside of 6800 visas under trade agreements with Chile and Singapore), so it’s expected that the 65,000 cap will be hit very soon . . . if you want one, shake a leg!  Thanks to Cindy Kang of Haynes and Boone, LLP, for providing this helpful reminder.

6.     ICE, ICE Baby – In yet another raid on an employer, the Immigration and Customs Enforcement (ICE) division of the Dep’t of Homeland Security arrested four supervisors for a home building company, three subcontractors (who hired, housed and provided the workers) and 76 suspected illegal workers.  United States v. Witt (E.D. Ky. 5-8-06).  In the charges, ICE alleges that the company knew the contractors’ “business structure” and that this “layer” between the undocumented workers and the company does not relieve the company of the responsibility to ensure that their contractors employ a legal workforce.  Each of the company supervisors, if convicted, faces up to ten years in prison and a $250K fine.

7.     Busted! – An employee who faked knee injuries two summers in a row, in order to get time off to take vacations with his fiancée, has no claim for failure to reinstate under FMLA.  He tried to argue that the company should’ve required a second medical opinion before firing him, but the Court agreed that the employer had an “honest belief” that disability leave had been fraudulently obtained, which violated the prohibition against falsification of company documents.  And it didn’t hurt that they had hired a P.I. who videotaped the employee doing yard work while supposedly on the mend from his injury.  Crouch v. Whirlpool Corp. (7^th Cir. 4-20-06).

8.     Chicken Nuggets – Now that the U.S. Supreme Court has unanimously vindicated the DOL’s long-held position that workers’ time spent donning and doffing protective gear, plus the walk to/from the changing area and the production line are all compensable, the settlements are pouring in.  Next up?  A $1.2 million settlement involving 5482 workers in a MO poultry processing plant.  Several folks have requested copies of an article I wrote for Texas Lawyer, on the “continuous workday” decision by the U.S. Supreme Court in IBP, Inc. v. Alvarez.  You will find a copy posted on our firm’s website at www.munckcarter.com (click on E-Newsletter) along with previous editions of Legal Briefs for HR.

9.     Drive Time – County construction inspectors must be paid from the time they pick up a county vehicle at a remote parking lot until they return the car to the lot at the end of the day.  Obtaining the vehicles was described as an “integral and indispensable” part of the employees’ workday and was, therefore, compensable under the FLSA.  The county argued that the employees benefited, by saving wear and tear on their personal cars, but the Court found that parking the idle cars on the lot was primarily for the County’s benefit and was an “inconvenient detour at the end of the workday.”  Burton v. Hillsborough County (11^th Cir. 5-18-06).

10.     Free Employment Law Guide – The DOL has posted a revised edition of its Employment Law Guide, in English and Spanish, on their website at www.dol.gov/compliance/guide/index.htm.

11.     Kudos! – Park Place Lexus is the first car dealership to win the Malcolm Baldridge National Quality Award, and one of only six businesses to be recognized this year.  The winners were deemed to be the best in seven areas – leadership; strategic planning; customer and market focus; measurement, analysis and knowledge; human resource focus; process management; and results. For more information on what it takes to win a MBNQA, go to www.quality.nist.gov.

Until next time,

Audrey E. Mross

Labor & Employment Attorney

Munck Carter, P.C.

600 Banner Place Tower

12770 Coit Road

Dallas, TX  75251

972.628.3661 (direct)

972.628.3616 (fax)

214.868.3033 (cell)

amross@munckcarter.com

www.munckcarter.com

Legal Briefs for HR is provided to alert recipients to new developments in the law and with the understanding that it is guidance and not a legal or professional opinion on specific facts or matters.  For answers to your specific questions, please consult with counsel.