Tag Archives: compensation

How to Determine Whether a Worker is an On-Call Employee

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Far too often, employers find themselves in the position of unknowingly violating the law as it relates to compensating their employees. Similarly, it is critical for employees to understand what their rights under federal and state law and how much they should be earning. Unfortunately, the complicated and often dynamic nature of federal and state law can render understanding labor law exceedingly challenging for both employers and employees. One such complex issue is determining whether a worker should be compensated as an on-call employee.

On-call time is where an employee is not technically working but is still compensated because he or she is considered to be “on-call.” Determining whether an one should be classified as an on-call employee can be challenging insofar as it is a query that is dependent on a number of very specific variables. Indeed, making this issue even more difficult is the fact that there is no bright line rule for determining whether an on-call employee must be paid for on-call time.

Both federal (FLSA) and state (NYCRR) law call for employees to be compensated while they are on-call at their place of employment or at a place required by the employer. What happens however, when an employee is not required to be in a certain place while on-call. The answer in part, is dependent on for whom the employees use of time benefits. In other words, who benefits more from the time the employee spends on-call, the employee or the employer. This is not a straight forward inquiry, however. Moreover, this is not the only inquiry that is necessary to determine whether an employee should be compensated for time spent on-call. This determination turns on several other significant variables.

If you have questions regarding on-call time, or other labor and/or employment law related questions, call Gilbert Law Group today at (631)630-0100, and speak to one of our qualified and knowledgeable attorneys.

Federal Court Affirms NLRB’s Change In Calculation For Job Search Expenses In Wrongful Termination Cases

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The U.S. Court of Appeals for the District of Colombia Circuit just recently upheld the National Labor Relations Board’s (NLRB) decision for a change in its method of calculation for how unlawfully discharged employees should be compensated by their former employers. The NLRB will now allow employees who were wrongfully discharged to seek out compensation for the costs they incurred while searching for a new job. This change can have a significant impact on wrongful termination cases.

The decision leading to this change involved grocery store chain King Soopers, a division of Kroger Co. The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the Service Employees International Union, and an International Brotherhood of Electrical Workers local in Kansas all filed amicus briefs in favor of the proposed changes. The majority opinion was written by NLRB chairman Mark Gaston Peirce, NLRB member Kent Y. Hirozawa and NLRB member Lauren McFerran.

Previously, the NLRB had not awarded these job search costs to employees who claimed that they were unlawfully terminated as these expenses were only used to offset the interim earnings which limited the back pay to which an employee would be entitled to. As a result of this previously used policy, the compensation that a worker could be awarded was limited.

To illustrate the method historically used by the NLRB, say the plaintiff bringing suit has incurred $250 in expenses searching for a new job and has also lost $5,000 in gross earnings from his employer while failing to secure another job in the interim meaning that he has $0 in interim earnings. Under the traditional approach, the Board would award the plaintiff $5,000 in back pay which in reality would only result in the plaintiff recovering $4,750 once you subtract the $250 the plaintiff spent job searching. In this situation using the traditional approach, the plaintiff would not receive the $250 incurred in job search expenses because traditionally this amount was only awarded as an offset against interim earnings. Therefore, under the traditional approach, the only circumstance under which one could recover the expenses they incurred in job searching was if they were able to secure interim employment. Now, under this change in direction by the NLRB, the plaintiff will be able to be compensated for their job search expenses even if they are unable to secure interim employment.

Despite a strong showing of support for this change, NLRB member Phillip A. Miscimarra, who concurred in part and dissented in part, made some intriguing points in support of the traditional approach in his dissent. He felt that the traditional method of calculation was an effective method in most cases stating it “makes claimants whole in most cases, and the change adopted by my colleagues will result in greater than make-whole relief in other cases.” He continued to explain his worries regarding the change in approach stating “I do not discount the fact that parties and claimants experience substantial, often oppressive non-monetary consequences as the result of unfair labor practices, nonetheless, the [National Labor Relations Act] only permits the Board to award the relief that is remedial” not relief that compensates the plaintiff for everything they have lost. Additionally, he explained that the change in approach would open the door for “protracted board litigation” over job search expenses and that this newly adopted approach does not correlate with the method of calculation used by other statutes when calculating back pay.

Due to the impact of this decision, workers who are discharged and later ordered to be compensated with back pay will likely be awarded with greater amounts of money. However, it is still up in the air as to how much of an impact this change by the NLRB will truly have as David Rosenfeld, of Weinberg, Roger & Rosenfeld who also filed an amicus brief stated that job search expenses is a scarcely addressed topic in unfair labor practice cases. In an interview with Bloomberg BNA, Rosenfeld explained “people do find jobs, often they do find jobs that are the equivalent of what they lost, so there isn’t a lot of back pay.” In the majority opinion, the board wrote “Board proceedings have rarely involved litigation over search-for-work and interim employment expenses.”

If you have questions regarding a labor or employment issues, call Gilbert Law Group today at (631) 630-0100.

Contributed by: Richard (R.J.) Cherpak

Under ERISA, Retiree Healthcare Coverage No Longer Guaranteed Unless Contract Is Clear

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Contributed by Jonathan Sobel

On January 26, 2015, the Supreme Court released a decision altering the distribution of union retiree healthcare benefits. In M & G Polymers USA, LLC v. Tackett, the Court, citing ERISA as the controlling law, ruled that ordinary contract principles will be used by courts in determining whether retiree healthcare coverage under a plan for retired workers was meant to be vested for life. This rule invalidated an earlier judicial presumption, known as the Yard-Man presumption, stating that union health benefits would be presumed to be perpetual unless there was specific language stating the contrary in either a plan document or a collective bargaining agreement.

In this case, the employer M & G Polymers had entered into a pension and insurance agreement with the union representing its employees at a plant in West Virginia. In the agreement was a provision stating that the employer would contribute to the healthcare benefits of employees who retired after a certain date and had pension eligibility, with no cost to the employees, for a three-year term. After the agreement had expired, the employer announced that retirees would be required to contribute to the cost of their healthcare. The retirees then filed a lawsuit, alleging that the employer had breached the agreement and violated the Labor Management Relations Act (“LMRA”).

The Court noted that the Employee Retirement Income Security Act (“ERISA”) governs the rules for interpreting pension plans and welfare benefits plans, as applicable in this case. Under ERISA, a welfare benefits plan must be “established and maintained pursuant to a written instrument,” but “[e]mployers or other plan sponsors are generally free under ERISA, for any reason at any time, to adopt, modify, or terminate welfare plans.” In doing so, the Court essentially has given employers carte blanche discretion to change healthcare coverage for its retired employees as it sees fit.