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$4.5 million for an employer's failure to grant additional leave under state law was recently granted by a Californian court – in the case of Hill v. Asian American Drug Abuse Program Inc.  

Although several previous court rulings have come down on the side of the employers who denied extended leave under the Americans with Disabilities Act (ADA), it would now seem that this issue has not been established.

Della Hill worked as a counselor for a nonprofit drug abuse program in Los Angeles County - and in 2014, she was honored by that county for her work.  However, in 2015 she injured her arm and subsequently took time off to recover from the injury and also from a diagnosis of severe depression. She was scheduled to return to work on March 23, 2015 but she then asked for an extension of her leave, under state law, until April 11, 2015 - an additional 18 days.

Della Hill’s employers ignored her request and she did not return to work. Instead, she was fired from her job on March 31, 2015 without further discussion about any alternatives or possible re-employment.

As a result, Della Hill filed a suit under Californian law - which is analyzed similarly to federal anti-discrimination law - and last month the jury found in her favor, awarding her $550,000 in past and future wage loss, $1.35 million in compensatory damages, and $2.6 million in punitive damages, the latter due to the fact that the employer failed to engage her in any interactive discussion.  The jury decided that this was evidence of "malice, oppression or fraud". 

Ms Hill was represented by the Los Angeles-based employment discrimination firm Shegerian & Associates.  Carney Shegerian, trial lawyer and founder of the firm, said:

"Ms. Hill was a hard-working employee who was dedicated to her work with AADAP prior to her termination. After breaking her arm, Ms. Hill took a protected leave of absence, which was when she was diagnosed with major depression.” 

He went on to say:

“Employers have a legal obligation to make reasonable accommodations for disabled employees and to engage in a dialogue to gauge their needs. But instead of accommodating Ms. Hill after learning of her diagnosis, AADAP chose to wrongfully terminate her employment because of her disability."

Carney Shegerian added:

“Ms. Hill was not only a victim of discrimination in the workplace, but her firing was covered up under the excuse that it was a financial hardship to keep her out on a leave of absence despite such leave being unpaid.  The termination, without warning or legal justification, forever changed Ms. Hill's life.  This sizable verdict should serve as a warning to other employers that there are serious consequences for not only violating an employee's rights in the workplace but for covering up such violations based on unfounded reasons.”

 

The population in America is ageing – and so is its workforce.  There are now more Americans aged 65 years and older than in almost two decades. Early retirement seems to be a thing of the past, as the seniors are predicted to be the fastest growing section through 2024 and reasons for this are suggested as long life, lack of retirement savings, high housing and health care costs. 

Jen Schramm, SHRM-SCP - who is senior strategic policy advisor for labor market issues at the AARP Public Policy Institute – said:

“Several factors influence how long people stay in the labor force. Increasing longevity means that people need to finance a longer period of retirement. Many people have not saved enough money for retirement and are facing increased costs of living—particularly burdensome are housing costs and medical expenses.”

Data from the U.S. Bureau of Labor Statistics was analyzed to understand which jobs older Americans were taking and how the workforce had changed since 2006.  According to a December 2017 study by SeniorLiving.org, it was found that the number of employed senior Americans had risen by 35 percent between 2011 and 2016.

The study also found that management, sales and office support were the top three occupations for the over 65s - having remained relatively the same since 2011, but with the numbers of employees having increased.  The top field for older Americans is management - employing 1.4 million seniors in 2016.

Jen Schramm said:

"Workers with higher levels of education often have more opportunities to remain in the workforce at older ages. Workers in occupations and with skills that are in high demand may have the opportunity to work longer if employers provide incentives to remain in the workforce."

The second highest number of older Americans was employed in the Sales industry - about 1.2 million.  Sales consists of cashiers; counter and rental clerks; advertising positions; insurances and financial services; travel and real estate – among others.

Production occupations employed the smallest number of older Americans and this could be due to the fact that over time, certain skills become harder to maintain due to normal ageing effects.  This limits the number of jobs an older person can perform.  However, production occupations still showed a 36 percent increase in the employment of seniors from 2011 – 2015.

Americans still see retirement as their goal but are not all in a hurry to do take it up. 

The study points to the fact that the percentage of older American women who stay at work is lower than the percentage of older American men – but the women plan to work longer than the men, according to Melody Kasulis, project manager for SeniorLiving.org.  She remarks:

“I'd speculate and say that it could be for multiple reasons like better health, length of life, desire to stay busy after their children have left the household.  The cost of living has a lot to do with the extra years people in the retirement age group are trying to put in."

Jen Schramm said:

 "AARP research has found that among people ages 65 to 74 who are currently working or looking for work, 35 percent cite the need for money as the most important factor in their decision to work. Finances are therefore likely a key factor for many women working later in life. Approximately 19 percent of people ages 65 to 74 say that the most important factor in their decision to work is that they enjoy working."

During 2018 there will be a number of important law developments – including the response to the Taylor report. 

Employers will be continuing with the General Data Protection Regulation (GDPR) compliance and gender pay gap reporting, along with preparations for Brexit. 

The General Data Protection Regulation (GDPR), which updates data protection law across the EU, will come into effect on 25 May 2018 for all EU member states - including the UK.  Data audits and policy reviews will be carried out by employers to make certain that their data protection meets the terms of the regulations.

Organisations in the private or voluntary sector with 250 or more employees will be required to publish their first gender pay gap report by 4 April 2018 and certain public-sector employers with 250 or more employees have until 30 March 2018 to publish. Employers are required to post their reports on their own website and also on a Government website.

Reports of incorrect gender pay gap submissions have shown up the difficulties that organisations have in completing the calculations correctly.  At present, more than 350 employers have published gender pay gap reports on the Government website.

Minimum wages rise each April, and this year will increase to £7.83 for employees aged 25 and over; £7.38 for those aged 21 to 24; 18 to 20-year-olds are due to be paid £5.90; under 18’s will receive £4.20 and apprentices £3.70 with the accommodation offset increasing to £7 per day.

Workers must be at least school leaving age (last Friday in June of the school year they turn 16) to get the National Minimum Wage. They must be 25 or over to get the National Living Wage.

Contracts for payments below the minimum wage are not legally binding. The worker is still entitled to the National Minimum Wage or National Living Wage.

Workers are also entitled to the correct minimum wage if they are:

  • part-time
  • casual labourers - for example, someone hired for one day
  • agency workers
  • workers and home workers paid by the number of items they make
  • apprentices
  • trainees, workers on probation
  • disabled workers
  • agricultural workers
  • foreign workers
  • seafarers
  • offshore workers

The weekly amount for statutory family pay rates will also increase to £145.18 on 1 April 2018 and this rate will apply to maternity pay, adoption pay,  paternity pay, shared parental pay and maternity allowance.

With regard to the Brexit preparations, the terms of the initial agreement with the EU protect the rights of EU citizens currently residing in the UK – providing employers with more confidence.  However, the agreement does not include the ability of new EU workers to work in the UK after Brexit and employers in sectors that rely on considerable inflows of European workers are still waiting for confirmation of immigration arrangements following withdrawal from the EU.

According to the Ministry of Justice, more than £1.8 million has been processed since the charging of employment tribunal fees was declared illegal.  Over 4,600 applications for refunds had been received between 20 October and 18 December 2017 and this had resulted in £1,808,310 being refunded to claimants.

In July of last year, the Supreme Court ruled that the Tribunal fees regime, where a claimant was required to pay a fee to bring their claim against an employer to Court, was unlawful as it infringed the rights of employees - in some circumstances making access to justice impossible. This followed a legal challenge by Unison.

Justice Minister, Dominic Raab told the Justice Committee that employment tribunal fee refunds were expected to be in the region of £33m, based on the fees paid since they were introduced in 2013.  It is likely the number of people entitled to a refund could reach 100,000.

It is thought that the refunds consist of the actual amount a claimant paid for the Tribunal - plus interest of 0.5% calculated from the date of the original payment to the refund date. 

Catherine Greig, a senior associate at MacRoberts, commented on the refunds already made, saying,

“The numbers are so small at the moment because of the small timeframe. However, bigger legal firms could be doing a lot of admin for claims behind the scenes and it could be a case of the floodgates opening soon because they’ll be sitting on claims.”

Nicholas Robertson, head of employment at Mayer Brown’s London office, said,

“There may have been some late claims lodged immediately after the Unison case, where claimants were prevented from suing by the potential fees and are bringing older claims now, as quickly as possible, and relying on the tribunal to permit such out of date claims to go ahead. This feature by its very nature will be short-lived.”

“I said after the outcome of the Unison case that my instinct was that there would be more tribunal claims, but it remains to be seen if tribunal claims will return to the levels before the introduction of the fees regime. My view is that they will not return to those levels.”

He added that fewer claims were being lodged by multiple claimants - which may suggest people were being advised that it was safer to bring a claim individually.

“The tribunal system’s resources were reduced to handle a reduced level of anticipated claims. So increased hearing times are not surprising even if there is only a relatively modest increase in the number of claims.”

The removal of the Tribunal fees leaves a gap in Government funding increased by the refunds that will be paid.  However, there is no indication as yet that a new fee regime will be introduced.   

However, it has been advised that employers should be vigilant in their treatment of staff to ensure fair practice is maintained across the workforce and that policies and procedures are in not only in place, but followed.      

The Recruitment & Employment Confederation (REC) survey and HIS Markit’s Report on Jobs have released figures suggesting that the number of permanent staff placements - and starting salaries - increased at the fastest pace in four months, at the end of 2017. 

They also reported that the growth of temporary placements was high with a marked decline in staff availability - the sharpest decrease reported in the last two years - contributing to steep increases in pay. Overall demand for staff remained sharp, firmly above the average seen over the 20-year survey history.

The REC/HIS Markit’s Report on Jobs provides the most comprehensive guide to the UK labour market, using original survey data provided by a panel of 400 UK recruitment consultancies.  

Figures released by Totaljobs on their website also reflected the recruitment boom, suggesting that there had been an increase of 20% in the number of jobs advertised in the first week of 2018 compared to the same period in 2016.

On a regional basis, the Midlands continued to show the fastest increase in permanent placements at the end of the year and the least rate of growth was seen in London - but London registered the fastest increase in temp billings of all five monitored UK regions in December. Expansion was also sharp elsewhere.

December data pointed to rising demand for staff, both in the private and public sector, although growth remained sharper for the private sector.

This information, however, contrasts with the official statistics from the Office for National Statistics (ONS) which revealed that there had been a 2% overall fall in employment, together with 0.2% fall in real weekly earnings, including bonuses.

Charles Cotton – reward adviser at the CIPD – stated:

“The REC survey is focusing specifically on recruitment and individuals being placed in organisations but is not necessarily looking at those who are leaving or being made redundant. The broader picture, including labour market issues, must be taken into consideration to reach a balanced view of what is really happening in the recruitment market.”

REC chief executive Kevin Green said:

“Employers, as a response to these candidate shortages, are offering increased starting salaries to attract staff – but while this has been the case for some time, it isn’t translating into significant wage growth across the economy yet,”

Charles Cotton warned that increases in starting salary may not be good for employees in the longer term:

“Organisations are increasing starting salaries to get people through the door but, once they are in there, then this does not improve particularly fast, and if they have been appointed to the top of their pay range they may not see much of a pay rise at all.”  

He added:

“That is an issue we called out last month in the CIPD’s latest reward management survey, which could throw up a number of employee relations issues in the longer term. Employers should always seek to confirm how long and enduring the recruitment surge will be before taking people on to permanent contracts.”

“Whether taking on new staff permanently or shifting existing employees from temporary to permanent contracts, it’s important to be creative and consider your working culture, what people are being paid, and non-financial benefits that could put you ahead in terms of recruitment, as well as ensuring you don’t undersell or oversell for the job you advertise.”

Kevin Green, REC Chief Executive says:

“Early in the New Year, people often think about changing jobs, so employers are going to have to think carefully about how they can both retain existing capabilities and find the new hires they need as competition for people intensifies. Bosses should consider going to wider talent pools and to be inventive about how to improve their employer brand and make themselves an even more attractive place to work.”

The Department of Health and Human Services and other executive departments and agencies have been given the authority and discretion to roll back certain aspects of the Affordable Care Act (ACA) after President Trump signed an executive order.

As Congress had tasked the Internal Revenue Service (IRS) with the enforcement of several key components of ACA - including the individual mandate, it was unclear as to what that actually meant.  

However, it appears that the IRS - despite warnings to employers that it would not be giving extensions or penalty relief - will not be enforcing the mandate and the IRS has said that they will be extending the deadline for distributing Forms 1095-B and 1095-C to individuals by 30 days to March 2, 2018.  The date for filing Forms 1094-B and 1094-C (and Forms 1095) with IRS has not been extended and remains at February 28, 2018 for paper forms and April 2, 2018 for electronic filing.

In addition to extending the deadline, the IRS will once again offer penalty relief if a company can show that it has made good-faith efforts at complying with the demands of ACA reporting, such as gathering necessary data and transmitting it to a third-party to prepare required reports; testing the ability to transmit data to the IRS and taking steps to ensure compliance for the 2018 tax year.

At the end of 2017, the IRS announced it would begin assessing employer mandates penalties on companies for their 2015 reporting but now the IRS has revealed the specific letter it will issue, when the letter will be issued; the time frame for which the letters apply and an official sample of the letter it will be using.

If it is determined that an applicable large employer company did not fulfill the ACA’s offer of coverage rules or had one or more of its full-time employees receive a premium tax credit for at least one month in 2015 - the IRS will issue a letter. 

A response to the letter will be required by the date shown on the letter - which is usually 30 days from the date of issue.

Employers with at least one employee or more are required to conspicuously show Labor Law posters in an area frequented by all employees – for example, locations could include designated bulletin boards in the break room, above time clocks, in the employee lounge or in a cafeteria or a lunch room.

Failure to fulfil the posting requirements can result in a steep fine. Most federal, state and local penalties range from $500 to $10,000 per offense; however, agencies retain discretion about whether to assess or reduce such statutory penalties but penalties may also be escalated after the first offense.

The new year of 2018 brings in new compliance standards – meaning that employers will have to update their posters.  The new information required concerns federal and state minimum wages, safety at work and health regulations.  However, only some employers are required to display some of the posters – for example the Family and Medical Leave Act needs to be shown by employers of over 50 workers and small businesses would not be subject to the Act's posting requirements.

To assist employers, the Department Of Labor can provide electronic copies of the required posters and some of the posters are available in languages other than English.

Franklin Wolf, an attorney with Fisher Phillips in Chicago, stated: “Employers should not be shy about conferring with counsel about any updates in the law.”  He added: “Laws applicable to employers may change at a rapid pace and without much mainstream news coverage. This is particularly true for state and local laws."

Aaron Warshaw, an attorney with Ogletree Deakins in New York City, said: “Consulting with counsel may lead to a more detailed compliance discussion. For example, you may start a call asking about the poster requirements under New York state law, but the attorney may say, 'Hey, by the way …,' and you end up talking about the recently enacted New York City Fair Workweek Law."

He added, “Whenever a client asks me to handle an onsite inspection by a government agency, one of the first steps I take is examine the site's workplace posters". He continued "If a government investigator sees that the employer has not updated its EEO and wage and hour posters since the Bush administration, then he or she may reasonably conclude that the employer's general employment practices have not been updated either."

In a survey of 2,187 CEOs and business leaders, the leadership consulting firm of Zenger Folkman identified "establishing stretch goals" as the No.1 competency gap among HR leaders.  These leaders are spread across hundreds of different organizations with 68% located in the US, 11% in Asia, 8% in Europe, 7% in Latin America, 4% in Canada, and 1% in Africa.

Steve Rice, CHRO of the Bill and Melinda Gates Foundation in Seattle, said:

“HR leaders can be overly risk averse to their own detriment. Fear drives mediocrity. It's necessary to take risks to move forward.”

After comparing an appraisal of leaders in the HR function with those of leaders in other functions, the data suggests that the typical HR leader is seen as six percentile points below average. HR seems to have become every manager and employee’s favorite corporate punch bag, competing with IT for the title of the most-irritating function.  

The data was analyzed in two different ways. The results for the 2,187 HR leaders in the dataset was compared with those of 29,026 leaders in other functions. A few key skills that were common strengths of those in HR and also some that appeared as weaknesses were identified.

Generally speaking, one of the most positive areas for HR leaders was that they were very concerned about developing other staff. This separated them from leaders in other functions, who did not score highly on this skill. They also rated positively on providing coaching, acting as a mentor and giving feedback in a helpful way.  The persons taking the survey were also asked to indicate the importance of each competency measured - they rated this skill eleventh of 16 for HR leaders. Therefore it could be that developing others is not taken as seriously as other competencies that are highly valued by the other functional leaders.

Areas where HR leaders scored higher than leaders in other functions were in building positive relationships, role modelling and having functional knowledge and expertise.

When comparing HR leaders to all other leaders they were not rated positively on their ability to understand the needs and concerns of customers. The function of HR appears to focus on internal problems - and the apparent lack of understanding of the external environment causes others to view some HR leaders as not in touch with the issues facing the organization.

Other weaknesses pinpointed were their inability to view the larger picture, focusing instead on the day-to-day issues and a general lack of speed and urgency to respond and react quickly to problems.

The survey did show, however, that HR leaders were among some of the best leaders in the world.

The Employment Appeal Tribunal (EAT) has ruled that employers must consult unions when changing employees’ terms and conditions when they are signed up to collective bargaining.

The EAT upheld a decision made by the Sheffield Employment Tribunal to compensate employees of Kostal UK – an electronics manufacturer – for the breaching of collective bargaining rules. The employees were members of the trade union Unite.  It was found that the company had made unlawful inducements to the employees to sign a new contract without consulting with the union and ruled that it must pay its employees compensation of £3,800 for each unlawful inducement made.

Eat judge Mrs Justice Simler stated that section 145b of the Trade Union and Labour Relations Act 1992 seeks to prevent employers “going over the heads of the union with direct offers in order to achieve the result that one or more terms will not be determined by collective agreement with the union if the offers are accepted”.

The claims resulted from a failed agreement between Kostal and Unite, following a proposal for a 2% increase in basic pay, plus an additional 2% for those earning less than £20,000 – together with a Christmas bonus payable during the 2015 festive season.  In addition, Kostal sought a sick pay and Sunday overtime reduction for new employees and consolidation of the two 15-minute breaks currently in operation, into one 30-minute break.

In December 2015, Kostal wrote to employees asking that they sign a new contract containing the new terms and conditions or risk losing their Christmas bonus.  Those who did not accept the offer were again urged to do so in January 2016.  The union was not aware of this contact and subsequently – on behalf of the employees – sued Kostal for compensation, which they won.

Kostal appealed and argued that it had not intended to encourage employees out of collective bargaining but to inform them that there was a time limit on the offer of the Christmas bonus.  Agreement was eventually reached on pay and amended terms and conditions, but by then the offer of the Christmas bonus was no longer applicable.

In her judgement, Mrs Justice Simler said that the law prohibited offers made to workers who are members of a recognised trade union – or one seeking recognition by their employer – if acceptance of the offer would have a prohibited result and the sole or main purpose in making the offers is to achieve that result. The prohibited result is that the workers’ terms of employment, or any of those terms, “will not, or will no longer, be determined by collective agreement negotiated by or on behalf of the union”.  She also quoted a government review of the law that confirmed the law should explicitly prohibit inducements or bribes being made to trade union members to forego union rights.

Ranjit Dhindsa, Partner and head of the employment, pensions and immigration team at Fieldfisher stated:

“That means employers or unions cannot go behind the veil of collective terms by going directly to employees when it suits them. A lot of employers get frustrated with collective bargaining, as seen here when Kostal couldn’t come to a pay agreement with its union.”

She added:

“….a lot of employers may have tried this tactic and got away with it, but they can’t now assume that they will”.  

Howard Beckett, assistant general secretary for legal services at Unite, said:

“The decision confirmed employers cannot dip in and out of collective bargaining when it suits their purposes and this is key to protecting workers and trade unions from underhand employer tactics.”

 

A forecast issued during December 2017 by the Hay Group division of Korn Ferry shows that salaries are to rise by only 1.5% globally, when adjusted for inflation. This is considerably down on 2017’s prediction of 2.3% and 2016’s prediction of 2.5%.

The figures were calculated using Korn Ferry’s pay database and according to their website, contains data from more than 20 million job holders in 25,000 organizations, across more than 110 countries. Using predicted salary increases for 2018 as forecasted by global HR departments and comparing them to predictions made at this time last year regarding 2017, it also takes into account 2018 inflation data from the Economist Intelligence Unit.

In the US, an average increase of 2.8% is predicted – this is about the same as last year. However, when adjusted for inflation (expected to be 2% in 2018) the real wage increase is only around 0.9% - which is down from 1.9% last year.

Western Europe, which incorporates the UK, fairs less well with an average increase of 2.3% predicted and the inflation-adjusted real wage giving an increase of only 0.9%.

Bob Wesselkamper, who is Global Head of Rewards and Benefits Solutions at Korn Ferry stated:

"With inflation rising in most parts of the world, we're seeing a cut in real wage increases across the globe."

He added:

"On average, employees are not seeing the same real pay growth they did even one year ago."

According to Government data, in the 3 months since Tribunal fees were abolished in July, the number of claims have risen by 66 percent – one of the strongest indicators that introducing fees for Employment Tribunals was discouraging employees from making claims.

Following a Supreme Court ruling that said the Government was acting unlawfully to introduce them, the Ministry of Justice “took immediate steps” to stop charging fees for tribunals and also rolled out a fee refund scheme for claimants who had paid fees between 2013 and 2017. Individuals who paid tribunal fees between these dates can apply to be reimbursed and it is estimated that 100,000 claims are eligible for a refund, which could cost up to £27m.

The newly released statistics show that the number of single claims for individual grievances such as unfair or wrongful dismissal increased dramatically, with claims for unlawful deductions from wages, for example, now re-emerging from a low of 549 in July 2017 to a high of 2926 claims in August 2017. It is thought that many workers found the cost of bringing a claim for something such as underpaid holiday often exceeded the amount being disputed and therefore did not proceed.

However, whilst single claims appear to be on the increase, multiple tribunal claims fell to 23,297 which is a decrease of 15 per cent over the same period as last year. Experts have reasoned that this could be because during the period when fees were charged, it was cheaper to work as a group, rather than bring a single claim, which would seem to be borne out by the recent rise in single claims.

Obviously these figures only reflect the very recent trend and experts have said that more figures would be needed before they could tell whether this is the new norm.