In an August 19, 2009 opinion letter, the DLSE approved of an employer’s proposal to temporarily reduce exempt worker’s workweek from five to four days, with a commensurate 20% reduction in salary.
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GOVERNMENT AGENCY UPDATE
NEW REGULATIONS AND OPINIONS IN 2009
By Christopher W. Olmsted
California DLSE Approves Salary Reduction For Furloughed Exempt Workers
With the economy in flux, businesses are looking for ways to reduce payroll without losing talent. Some companies have put their hourly workers on a “work furlough” by reducing the number of hours or days in a weekly schedule. But can the same be done for salaried exempt workers? Normally, salaries cannot be adjusted based on the number of hours worked in a workweek.
The answer is yes, according the California’s Division of Labor Standards Enforcement (“DLSE”). Although the rules for salaried exempt workers are strict in California, in a recent opinion letter, the DLSE endorsed a salary reduction commensurate with a workweek reduction.
In an August 19, 2009 opinion letter, the DLSE approved of an employer’s proposal to temporarily reduce exempt worker’s workweek from five to four days, with a commensurate 20% reduction in salary.
Click here to read the opinion.
California AWS Summer Schedules
In an opinion letter dated March 23, 2009, the DLSE approved of an alternative workweek schedule for summer months only.
The inquiring employer proposed a schedule of four 9-hour days and one 4-hour day during summer months, and regular eight hour days for the rest of the year. The question was whether this schedule counted as a “regularly scheduled alternative workweek schedule,” or, alternatively, whether the employer had to hold a new election every year for the summer schedule.
The DLSE approved the proposed summer AWS because it proposed a fixed schedule that will occur each year, and it is regularly occurring because it will be in effect for each full week between June and September.
Click here to read the opinion.
Federal Department of Labor Opinion Regarding Training Classes
The Department of Labor issued an opinion letter on the topic of pay for employee training. Technicians employed by a telecommunications company took online training courses at home in preparation for a voluntary training course (which would be on paid time) on a new technology system.
The DOL opined that the employees should be paid for their time at home online. Although the training was voluntary and after regular working hours, and the employees performed no productive work during the training, the course was directly related to the skills needed for the employees’ jobs. Because of this last factor, the DOL opined that under federal regulations, the workers must be paid.
Click here for more information.
E-Verify Rule for Federal
Contractors
In 2008, President Bush signed an Executive Order requiring federal contractors to use the E-Verify System, to verify the employment eligibility of their workers as defined in the Executive Order. On September 8, 2009, new E-Verify regulations went into effect.
Generally, federal contractors must enroll in and use E-Verify for all employees hired during the contract period as well as for all existing employees assigned to perform work under the contract. Subcontractors with contracts valued at over $3,000 for services or construction must also use E-Verify. There are some exemptions to the requirement, including contracts of fewer than 120 days in duration, certain off-the-shelf products, and contracts valued at less than $100,000.
Employers not mandated to use E-Verify may still voluntarily enroll in the system.
Click here for more information on E-Verify.
Federal No Match Rules Rescinded
After much controversy and litigation, the Department of Homeland Security threw in the towel and rescinded its proposed No Match rules.
For years, the Social Security Administration (“SSA”) has been sending “No-Match Letters” to employers who employed individuals whose social security numbers (“SSN”) did not match their personal information. The SSA, however, provided unclear guidance to employers responding to the letters. Seeking to fill the void, DHS the agency responsible for enforcement of our immigration laws, issued a new rule describing the steps an employer must take when it receives a “no match” letter from DHS or the Social Security Administration (SSA).
In October 2007, the AFL-CIO labor union obtained a court injunction prohibiting enforcement of the new rule. The DHS subsequently issued amended regulations, seeking to address some of the flaws raised by the union. But the effort lost steam, particularly after the new administration took over in 2009.
“After further review,” wrote the agency in its rescission notice, “DHS has determined to focus its enforcement efforts relating to the employment of aliens not authorized to work in the United States on increased compliance through improved verification, including participation in E-Verify, ICE Mutual Agreement Between Government and Employers (IMAGE), and other programs.” The rescission becomes effective November 6, 2009.
Concurrent with the rescission, ICE has dramatically stepped up its inspection of employer I-9 audits. ICE has issued nearly 1,700 notices of inspection nationwide since July 2009.
DHS notes that employers should still react when receiving a no match letter. An employer who receives such a letter may be seen to be on notice that the worker could be illegal. “Receipt of a No-Match letter, when considered with other probative evidence, is a factor that may be considered in the totality of the circumstances and may in certain situations support a finding of ‘‘constructive knowledge.’’ A reasonable employer would be prudent, upon receipt of a No-Match letter, to check their own records for errors, inform the employee of the no-match letter, and ask the employee to review the information.”
Given that the receipt of a No-Match letter could be deemed notice of an immigration problem, employers who receive No Match letters should take action to protect themselves from possible immigration enforcement actions.
First, upon receipt of a No Match letter, the company should research its own records to check for typographical errors. If no errors are found, the employer should notify the employee that the SSN is incorrect. Ideally the notice should be in writing.
The company should advise the employee to resolve the issue with the SSA within a reasonable period of time. Thirty to ninety days ought to be sufficient.
If the employee is unable to resolve the discrepancy then the employer should probably terminate the employee.
Employers should be aware that improper terminations may be a violation of federal law. The DHS wrote in its commentary that it “acknowledges that an employer who terminates an employee without attempting to resolve the issues raised in a No-Match letter, or who treats employees differently based upon national origin, perceived citizenship status, or other prohibited characteristics may be found to have engaged in unlawful discrimination under the anti-discrimination provision of the Immigration and Nationality Act of 1952 (“INA”).
As a reminder, employers should be using the most recent Form I-9, with a revision date of August 2009.
The form can be found at this link.
Download entire December 2009 Legal Update in PDF format.
This article is intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney. Copyright © 2009 by Barker Olmsted & Barnier, APLC. San Diego, California. All rights reserved.
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