Although claims and lawsuits during the employment relationship are much less likely than after termination of the relationship, they do occur. Obviously, it’s difficult to engage in effective risk management of the employment and managerial process if the employer is not familiar with the law. The questions below inform employers about the compliance aspect of employment law during the employee employer relationship
- What is an adverse employment action and why does it matter?
- An adverse employment action is one that is materially adverse to the conditions of employment. In order to be materially adverse, a change in employment conditions must be more disruptive than a mere inconvenience or an alteration of job responsibilities. The employee must have an objective basis for demonstrating the action is adverse rather than a mere subjective feeling that it is. This is important because an adverse employment action is usually the basis for employment law claims of discrimination or retaliation whether state or federal. Note: an adverse employment action is not necessary for claims of harassment.
- What actions are considered adverse employment actions?
- From most obvious to least obvious:
- Salary reduction
- Negative evaluation
- Hostile behavior to an employee who complains
- Negative job references
- Refusing to provide a reference
- Informing an individual’s prospective employer about the individual’s protected activity
- Failure to hire
Here are examples of employment actions that courts have determined were not adverse employment actions:
- A rejection of reimbursement of expenses.
- Satisfactory ratings in an evaluation that are lower than a previous evaluation are not adverse when the employee receives a merit raise.
- What is Title VII and when can it be used as the basis for a lawsuit?
- Title VII of the Civil Rights Act of 1964 makes it illegal for an employer “to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual employment opportunities… because of such individual’s race, color, religion, sex, or national origin”. Generally, Title VII protects all aspects of an employment relationship from the hiring process, discipline, promotion and termination or any other adverse action taken by an employer against a prospective, current or former employee. A claimant must file an EEOC charge to exhaust his/her administrative remedies prior to filing a federal lawsuit alleging a violation of Title VII. While there are many possible outcomes to an EEOC investigation, the most likely is the issuance of a “right to sue” letter which allows the claimant to file suit against the employer within 90 days of the mailing of the letter.
Only employers with fifteen or more employees in a 150 mile radius are subject to claims under Title VII. The definition of “employees” includes anyone with whom the employer has an “employment relationship”. Full time, part time and employees on leave are counted in determining the number of employees for purposes of whether Title VII applies to an employer.
- Who does Title VII protect?
- Anyone discriminated against, harassed, or retaliated against by an employer because of their race, color, religion, sex, or national origin. Following are specific explanations of protected classes:
Race: Title VII even protects non majority racial groups. Typically companies think of only minority groups as protected classes, but as the Supreme Court held in McDonald v. Santa Fe Transportation Company, white employees may sue for discrimination, harassment or retaliation under Title VII.
Color: Admittedly, there is not a great deal of litigation in this area as a person’s color is fairly obvious.
Religion: Religious protection applies even to individuals who are not affiliated with a “recognized” church or religion. More importantly, employers are required to provide a reasonable accommodation for religious beliefs of employees as long as the accommodations do not require “undue hardship” on the part of the employer or involve more than what is considered a day minimus (minimal) cost to the employer.
It is important for employers to inquire into an applicant’s availability for work without specifically asking about religious practices. If an employee indicates that they are not available on a particular day for work as a result of their religious practice, then an individual inquiry into whether this individual may reasonably be accommodated with a minimal cost to the employer must be undertaken. If the employer is able to make a reasonable accommodation for the employee, then they should do so. If an employer determines that they are not able to make such an accommodation, then the employer should document the specific reasons why such accommodation would be an undue hardship on the employer and document the costs related to the accommodation. Specific guidelines issued by the EEOC regarding religious discrimination are found here:
Sex: Violations of Title VII related to sex are the most widely litigated and expansive areas of Title VII litigation. Generally speaking, “sex” in this context refers to several types of violations of Title VII. First, a person may be discriminated against, harassed, or retaliated against because they are a male or female. Sexual harassment is specifically prohibited under Title VII and the EEOC has issued guidelines related to unwelcomed advances, sexual favors or other verbal or physical conduct. These guidelines discuss specific prohibitions and can be reviewed here.
The EEOC and federal courts have also considered discrimination, harassment or retaliation based upon pregnancy to be a type of claim that is protected by Title VII under the “sex” protected class. Title VII specifically prohibits adverse employment actions against pregnant women under the “sex” protected class. Generally speaking, Title VII requires that pregnant employees be treated the same as other employees related to disability benefits, sick leave, health insurance, and general leave rules. The specific amendments regarding pregnancy may be reviewed here.
Recently, the EEOC has expanded the prohibition against adverse employment actions related to sex to include gay, lesbian, bisexual, and transgender persons. Although there has been no specific federal case law dealing with the issue, the EEOC has issued a determination on this subject, and appears to be aggressively pursuing investigations and claims to make this case law as soon as possible. Employers should be aware of this and treat individuals identified as gay, lesbian, bisexual or transgendered as any other employee without regard to this information.
National origin: The EEOC has also issued guidelines regarding national origin discrimination, harassment and retaliation. Specifically, the EEOC sees the following as potential bases for national origin discrimination: (1) facts which lead to the reasonable conclusion that a person is in some way associated with individuals or groups of a particular national origin; (2) involvement in associations which promote the interest of specific national origin groups: participation in churches, mosques, temples or schools. Typically associated with persons of a specific national origin; (3) and a specific name or family name that is associated with national origin.
- Does Title VII allow prospective employees or former employees to file claims against their employers?
- Yes. Prospective employees may sue an employer without an employment relationship being created if the employee believes that he or she was not hired due to their membership in one of the protected classes. A company’s entire application and hiring process should be created with this possibility in mind. See the pre-hiring questions for more information on this issue.
Former employees may also sue their former employer for retaliation when an employer provides a negative job reference to a perspective employer and the former employee believes this is due to his or her membership in a protected class. For this reason, you may decide to give minimum information as a policy and, if so, make sure that you provide only this information with regard to all employees. Following are some examples of information you may wish to give in order to attempt to avoid a claim by a former employee: (1) the dates of employment; (2) the responsibilities of the former employee; (3) eligibility for rehire.
Should you decide to use the last criteria, be careful, as stating that they are not eligible for rehire could obviously be considered a negative reference and could result in a claim by the former employee.
In addition N.C.G.S. § 1-539.12 provides immunity from civil liability for employers disclosing information related to the job performance of a former employee. However, this state statute would not likely provide any immunity or act as a defense to federal claims under discrimination statute such as Title VII, the ADEA, the ADA, etc.
- Are persons who are gay, lesbian, bisexual, or transgender protected by Title VII?
- Probably. While there is no federal case law which has recognized that persons who are considered gay, lesbian, bisexual or transgender are a part of the “protected class” of sex, the EEOC has issued findings that these persons are protected by Title VII’s prohibition against discrimination on the basis of sex. See an article about a finding by the EEOC against an employer in this regard here.
Employers should be sensitive to this finding as failure to heed this interpretation will likely bring an extensive EEOC investigation into an employers employment practices. In many instances, this investigation can be as costly and time consuming as litigation. Furthermore, as you can see here, the EEOC has the power to prosecute a lawsuit on behalf of an employee or former employee and it is only a matter of time before they do so on behalf of a person considered gay, lesbian, bisexual or transgender under Title VII.
- What are the three types of claims that employees can make against employers under Title VII?
- Discrimination.This type of action refers to an employer treating an employee differently because an employee is in a protected class. Discrimination may be intentional or unintentional and so employers must be careful not to implement policies and procedures which may intentionally or unintentionally discriminate against those in protected classes. An example of this type of potential discrimination is the inclusion of a question on an application related to conviction of a crime. The EEOC has indicated that this question may be a discriminatory method used by employers to exclude members of certain races as members of certain races have a much higher rate of conviction of crime.
- Harassment (hostile work environment and quid pro quo). Title VII prohibits actions of employees and supervisors against other employees based upon their membership in a protected class to the extent that such actions create an “intimidating, hostile or offensive” working environment. Essentially, this means that the actions must be so severe and pervasive that a reasonable person would consider these actions to substantially interfere with a person’s ability to work. Under federal law, an employee is not required to resign before filing a claim of harassment. Also, federal law recognizes what is referred to as “constructive discharge”. “Constructive discharge” refers to the termination of an employment relationship by an employee because they were harassed or discriminated against with such severity that they believe they had no alternative but to resign and decided to end the employment relationship. While federal law recognizes constructive discharge, North Carolina does not. Generally speaking, if an employee quits, any liability related to the termination as an adverse employment action is eliminated. Again, this does not apply to federal claims and would not apply to Title VII claimsHostile work environment is a type of harassment. Generally speaking, to be legally liable for the creation of a hostile work environment the actions against the employee must be severe and pervasive. Until recently this meant that courts would not consider one or two comments to be enough to create a hostile work environment but read how that is changing here. Depending on the title and role of the harasser in the employer’s organization, there may or may not be defenses as to the liability of the organization as a whole. A supervisor engaging in harassing conduct would necessarily make the employer liable, but that is not the case in most instances where an employee is the harasser. To read more on this issue, please see “Is my company liable for violations of Title VII by its employees?”.Quid pro quo is another type of harassment typically seen only in a sexual content. This means that a specific sex act is requested for advancement or for an employee simply to keep their job. Obviously, this is an egregious form of sexual harassment.
- Retaliation Title VII prohibits an employer from taking any adverse employment action against any employee who has complained of discrimination or harassment he or she believes is based upon one of the protected classes. This applies if the employee in any way participated in an investigation or other proceeding related to such a complaint by the employee himself or herself or other employee or former employee. Examples of the type of behavior that is protected is: giving a statement regarding the alleged discrimination or harassment; speaking to investigators with the EEOC or other administrative agency regarding the discrimination or harassment; discussing the issue with employees or other employers.
- Is an employee liable under Title VII for actions of employees or supervisors?
- It depends. Here are the likely scenarios: (1) if a supervisor takes an adverse employment action against an employee based upon their race, color, religion, sex, or national origin, then the company is generally going to be liable for that supervisor’s actions as the company has given these persons authority to manage other employees. The theory is that the employer should only put persons in these positions who are making nondiscriminatory employment decisions and the employer has a duty to ensure that these supervisors comply with employment laws; (2) if a supervisor or employee engages in harassing behavior that does not result in an adverse employment action then an employer may avoid any real liability if the employee “exercises reasonable care to prevent and promptly correct the harassing behavior”. In other words, as long as no adverse employment action has been taken and the employer promptly takes action to eliminate the harassing behavior upon notice of occurrence, the employer will likely avoid liability; (3) if an employee or supervisor engages in harassing behavior and the individual quits or an adverse employment action is taken against them, then the employer may avoid liability with the so called Faragher-Ellerth affirmative defense. See Faragher v. City of Boca Raton, 524 U.S. 775, 118 S.Ct. 2275, 141 L.Ed.2d 662 (1998); Burlington Industries, Inc. v. Ellereth, 524 U.S. 742, 118 S.Ct. 2257, 141 L.Ed.2d 633 (1998). Under this defense, the employer may avoid liability if it exercised reasonable care to prevent and properly correct the harassing behavior and provided a mechanism for complaining about and resolving this type of behavior, but the employee failed to take advantage of the preventative or corrective opportunities.
- What is the EEOC’s role in investigating and determining employment claims of employees and former employees?
- The Equal Employment Opportunity Commission is a federal agency which investigates and issues determinations regarding charges by employees or former employees under Title VII, that ADA, the ADEA, the FMLA and GINA against employers with more than 15 employees.
The EEOC, upon receiving a charge under the above-referenced statutes investigates the claim. Specifically, they request a response from the employer and then they may conduct interviews, request additional information, and even issue subpoenas if necessary to investigate and determine how to deal with the complaint.
Upon completion of the investigation, the EEOC may take one of the following actions: (1) dismiss the complaint (this almost never happens); (2) issue a Right to Sue letter which give the complainant the right to hire their own lawyer or file a lawsuit in federal court on their own (this happens in almost all cases); (3) they find cause and seek to have a “conciliation” with the employer to resolve the matter; (4) the EEOC itself files a lawsuit on behalf of the employee and sues the employer in federal court.
The EEOC also has a mediation program but the parties must both voluntarily enter into the program. This allows the scheduling of a mediation with an employee of the EEOC meeting with the parties in an attempt to resolve the matter. Typically, the EEOC pushes the employer to pay money or in some other way resolve the matter and if an employee is not interested in resolving the matter monetarily, the employer should not agree to this course of action.
- What are the timing requirements for filing an EEOC charge and lawsuit?
- A complainant must file an EEOC Charge related to the ADA, ADEA or Title VII within 180 days of the actions taken by the employer that comprise the basis of Plaintiff’s claims. If the complaints are of an ongoing nature, then the last of the actions taken by the employer which the Plaintiff believes is illegal must have occurred within 180 days of the complainant’s filing of an EEOC Charge.
If the EEOC, after investigating and issuing a Right to Sue letter, an applicant may file a lawsuit within ninety days of the receipt of a Right to Sue letter. If the complainant fails to do so, then the federal court will dismiss the claim. Once an employer receives notice of the Right to Sue letter and ninety days passes, the employer can be assured that the complainant may not file a lawsuit based upon the information contained in the EEOC Charge. It is important to note that the Plaintiff may only file a lawsuit related to the issues that the employer would be on reasonable notice of based upon their inclusion in the EEOC Charge. In other words, if certain issues are alleged under Title VII, but were not included in the EEOC Charge, an employer may challenge those particular claims in federal court as failing to have exhausted the administrative remedies required by Title VII.
- What defense, if valid, defeats every Title VII, ADA and ADEA claim?
- The strongest defense to a Title VII claim, or any federal discrimination claim for that matter, is the legitimate non-discriminatory business reason defense. Employers are already aware that documentation is essential in a good HR practice and this is one of the reasons why documentation is so important. If an employer takes an adverse employment action against an employee and such action is based upon a documented legitimate non-discriminatory business reason, then federal courts are likely to dismiss the claim prior to trial as long as there is no other evidence that the reason is false or pretext. Those employers who have made good decisions based upon strong nondiscriminatory business reasons are likely to prevail on summary judgment or at least settle the claim for a minimal amount.
- What remedies/damages are available in a Title VII lawsuit?
- Plaintiffs have a right to jury trials and punitive/compensatory damages under Title VII. The amount of potential punitive/compensatory damages is limited. The limits are determined based on the size of the employer. The current limits are (1) 15-100 employees $50,000 cap; 101-200 employees $100,000 cap; 201-500 employees $200,000 cap, and over 500 employees $300,000 cap.
Plaintiffs may also obtain an injunction prohibiting an employer from committing violations of Title VII; Plaintiff may obtain reinstatement or the promotion being sought. Finally, the court may award reasonable attorney’s fees and expert witness fees to the prevailing party.
Although the caps do limit liability for compensatory damages, an award of attorney’s fees in that a hotly contested Title VII claim could result in payment of well over $100,000.
- May an employer be sued for racial discrimination based on statutes or claims other than Title VII?
- Yes. § 1981 of the 1866 Civil Rights Act had been interpreted by the federal courts to allow a claim for discrimination against an employee or a prospective employee in any employment related decision as a result of any adverse employment decision. It is important to note that intentional discrimination on the basis of race must be proven to sustain a § 1981 claim. Essentially, this means that a claim would not likely proceed where there is no direct evidence of intentional discrimination. The Act itself states that all persons are entitled “to make and enforce contracts…and to full and equal benefits of all laws and proceedings for the security of persons and property as it enjoyed by white citizens”.
Unlike Title VII and other federal statutes, a plaintiff raising a racial discrimination claim under § 1981 of the 1866 Civil Rights Act is not required to exhaust the administrative remedy of filing a charge with the EEOC. Instead, a person may file a claim based on § 1981 against an employer in federal court.
Also, unlike Title VII, the statute of limitations for filing a § 1981 claim is the statute of limitations that is the “most analogous state statute of limitations”. In this case, the most analogous state statute of limitations is three years and therefore, a lawsuit must be initialed within three years from the date of the act of discrimination that is the basis of plaintiff’s claim.
If a plaintiff is successful under § 1981 of the 1866 Civil Rights Act, then they may obtain compensatory and punitive damages as well as legal fees as a result of their claims. No damages caps apply.
- What is the North Carolina Equal Employment Practices Act (NCEEPA) and can an employer be sued for a breach of it?
- The NCEEPA does not provide a statutory right to sue based solely on a claim that the NCEEPA was violated. However, it can be used as the basis for a state law claim for wrongful termination. Generally the Act is similar to Title VII in that it prohibits discrimination against employees based upon race, religion, color, national origin, age, sex, or handicap. The Act only applies to employers which regularly employ fifteen or more employees and protects employees in their rights and opportunities to seek, obtain and hold employment without discrimination or abridgement”.
- What is the purpose of the NCEEPA?
- The purpose of the North Carolina Equal Employment Practices Act is to state that it is the public policy of the state of North Carolina to provide equal employment to all persons. In furtherance of this policy, the NCEEPA does direct the Human Relations Commission Department of Administration to have authority to receive charges of discrimination from the EEOC and on the EEOC’s behalf investigation and conciliate charges of discrimination. The statute directs the Human Relations Commission to “affect an amicable resolution of the charges of discrimination”.
In reality the law does not allow the Human Relations Commission Department of Administration to levy any fines or make any specific findings related to an investigation of the alleged discrimination against employee. However, as stated above, the NCEEPA may act as the basis for a state or wrongful termination claim. An at will employee in the state of North Carolina may only bring a case for wrongful termination if they were terminated due to a violation of North Carolina Public Policy. Please click here for a thorough discussion of at will employment and the state law claim of wrongful termination. In other words, employers should not discriminate against individuals based upon these protected classes, and if an employer does, and the employee wishes to forego filing an EEOC charge and filing a federal claim based to Title VII, the NCEEPA would allow them a basis to file a claim in state court. A state law claim for wrongful termination based on the NCEEPA is not a plaintiff (or a plaintiff’s attorney’s) first choice because there are no awarding of attorney’s fees for prevailing party. With Title VII, the same claim which is investigated by the EEOC and then filed in federal court would allow plaintiff’s counsel to obtain reasonable attorney’s fees. Therefore, as you might expect, a wrongful termination claim based upon the NCEEPA is a rare occurrence. Usually, the only reason such a claim would be filed is if a plaintiff failed to file an EEOC Charge within 180 days of the alleged discrimination and therefore could not pursue a Title VII claim in federal court. A wrongful termination claim based on the NCEEPA could allow, under the same facts, a plaintiff to file a lawsuit for discrimination based upon a protected class up to three years after the termination.
- What is the Age Discrimination and Employment Act (ADEA)?
- Under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634 (“ADEA”), it is unlawful for an employer to, among other things, discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age. Any person over the age of 40 is eligible to bring a claim for age discrimination under this statute. A claimant must file an EEOC charge to exhaust his/her administrative remedies prior to filing a federal lawsuit alleging a violation of the ADEA.
- What must a plaintiff prove in order to prevail in a claim under the ADEA?
- In order to establish a case of age discrimination under the ADEA, a complainant, , must produce evidence sufficient to persuade a reasonable fact-finder that it is more likely true than not that:
- He/she is a member of a protected class (in this case, the protected class of persons over the age of 40);
- His/her employer took an adverse employment action against him/her;
- At the time of the adverse action, he/she was performing his job at a level that met his/her employer’s legitimate job expectation; and
- He/she was replaced by a substantially younger worker who was similarly qualified.
For more information, see e.g., Dugan v. Albemarle County School Board, 293 F.3d 716, 720-21 (4th Cir. 2002); Hill v. Lockheed Martin Logistics Management, Inc., 354 F.3d 277, 285 (4th Cir. 2004); EEOC v. Clay Printing Company, 955 F.2d 936, 941 (4th Cir. 1992).
- What is the Americans with Disabilities Act (ADA)?
- The Americans with Disabilities Act of 1990 (ADA) prohibits discrimination and ensures equal opportunity for persons with disabilities in employment. The ADA protects all adverse action taken by an employer against a prospective, current or former employee. A claimant must file an EEOC charge to exhaust his/her administrative remedies prior to filing a federal lawsuit alleging a violation of the ADA.
Only employers with fifteen or more employees in a 150 mile radius are subject to claims under the ADA. The definition of “employees” includes anyone with whom the employer has an “employment relationship”. Full time, part time and employees on leave are counted in determining the number of employees a company has for purposes of whether ADA applies to an employer. Here is an article that describes several factual scenarios that may signal an employee is likely to make an ADA claim.
- What must a plaintiff prove to win a claim under the ADA?
- To establish a case of discrimination under the ADA, a Plaintiff must show that (1) he was a “qualified individual with a disability”; (2) that he could perform the essential functions of the job, with or without reasonable accommodation; and (3) that she suffered an adverse employment action because of his disability. Halperin v. Abacus Tech. Corp., 128 F. 3d 191, 196 (4th Cir. 1997).
- What is the definition of a qualified individual with a disability under the ADA?
- There are three definitions of a “qualified individual with a disability”:
- actual disability-a physical or mental impairment that substantially limits one or more major life activities. The following have been determined by courts to be a “major life activity”: caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, operation of major bodily functions (immune system, special sense organs and skin, normal cell grown, digestive, genitourinary, bowel, bladder, neurological, brain, respiratory, circulatory, cardiovascular, endocrine, hemic, lymphatic, musculoskeletal, and reproductive), and working;
- record of a disability, a person who has a record of an actual disability as identified above;
- “regarded as” having a disability-employer believes the individual has an impairment (law no longer requires that the perceived impairment substantially limits a major life activity).
Once you have determined whether the individual in question has a disability, then you must determine whether they are a qualified individual with a disability which means that they are a person who can perform the “essential functions” of a job in question with or without a reasonable accommodation.
The “essential functions” of a job is identified under federal law as “the fundamental job duties of the employment position the individual with the disability holds or desires”. 29 CFR § 1630.2(h)(1). Typically an employer identifies the essential functions of a job and can prove this through written job descriptions, proof of the amount of time spent on the particular function and consequences to other employees in not requiring that the employee perform the function.
- What is a reasonable accommodation under the ADA?
- If an employee claims a disability and requests an accommodation that would allow them to perform the essential functions of the job, the employer has a duty to make such an accommodation and should work with the employee to determine the best possible solution. If a mutually agreeable solution is available and acceptable, then such accommodation should definitely be made to avoid a claim under the ADA. The definition of a “reasonable accommodation” is determined on a case by case basis. However, if there is disagreement and difficulty in identifying an appropriate accommodation acceptable to both parties, the next article provides considerations for determining if a reasonable accommodation exists.
- If an employer and employee cannot agree on a reasonable accommodation, how can an employer identify a reasonable accommodation under the specific circumstances?
- Identify the “essential functions” of the job and determine whether the limitation about which the Plaintiff complains actually interferes with an essential function. If so, then consider the second factor, but if not, then no accommodation is necessary;
- Determine what accommodations would allow the individual to perform the essential functions of the job;
- Determine whether the accommodation is reasonable under the circumstances. An employer should consider the cost, changes to work schedules, obtaining or making changes to equipment, etc. Identifying the reasonableness of the accommodation is a difficult process. In general terms, the employer should attempt to make every accommodation to keep the employee in the position unless doing so would impose an “undue hardship” on the employer. This means that if the accommodation would incur unreasonable expense in relation to the job and pay of the employee, courts may find that the employer does not have to offer an accommodation. Obviously this analysis needs to be done on a case by case basis and is much like the Title VII standard of nondiscriminatory business reason. Should an employer decide to terminate a person who would be covered by the ADA, instead of giving them an accommodation, the employer should make sure it has substantial evidence justifying that all accommodations identified were unreasonable and created an “undue hardship” given the circumstances. An employer must consider fairness and reasonableness in making this decision with the understanding that it is likely it will have to defend its position in litigation and justify to a court the reason for the adverse employment action and evidence that the accommodation would cause an undue hardship.The City of Sacramento has prepared an explanation of “reasonable accommodation” and created a specific written procedure for the identification of a “reasonable accommodation” in its City Policies which is worth the read.
- How is the North Carolina Persons with Disabilities Protection Act (NCPDPA) similar to the ADA?
- The North Carolina Persons with Disabilities Protection Act (NCPDPA) found in N.C.G.S. § 168A-1 is generally similar to the Americans with Disabilities Act in that the purpose of the NCPDPA is to “ensure equality of opportunity to promote independent living, self-determination, economic, self-sufficiency, and to encourage and enable all persons with disabilities to participate fully to the maximum extent of their abilities in the social and economic activities of the state, to engage in remunerative employment to use available public accommodations and public services and to otherwise pursue their rights and privileges as inhabitants of this state”. The following are some specific similarities:
- Both only apply to employers who employ fifteen or more full time employees. The NCPDPA excludes persons from the definition of employee who are hired to “work as domestic or farm workers at a person’s home or farm”.
- Both apply to a “qualified person with a disability”, but there are specific differences in the definitions under the statutes which are discussed below.
- An employer must attempt to make a “reasonable accommodation”, but again the NCPDPA has a specific definition of reasonable accommodation as described below.
- Lawsuits brought under either of these Acts shall be tried by a judge without a jury.
- A court may grant attorney’s fees to a substantially prevailing party.
- Both have the same statute of limitations in that a claim under the NCPDPA shall be brought within 180 days after the plaintiff became aware of or should have become aware of an alleged discriminatory practice or conduct. However, in a claim under the ADA, the 180 days refers to the deadline for filing an EEOC Charge.
- There is no requirement that an EEOC Charge be filed or any other administrative remedy be exhausted prior to filing a suit under the NCPDPA.
- Both NCPDPA and the ADA prohibit retaliation based on rights set forth in each of the statutes.
- How is the North Carolina Persons with Disabilities Protection Act (NCPDPA) different from the ADA?
- To bring a claim under the NCPDPA a plaintiff may file suit in civil superior court in the jurisdiction where the alleged discriminatory action took place while the ADA requires an EEOC Charge be filed an a Right to Sue letter be issued prior to filing a suit against an employer.
- The NCPDPA specifically states that you may not bring a claim under its provisions if you have brought a claim under the ADA.
- The NCPDPA requires reasonable accommodations be made when an employee requests them, but specifically states those things that are not required by the statute in attempting to satisfy to create a reasonable accommodation:
- hire one or more employees, other than the person with the disability, for the purpose, in whole or in part, of enabling the person with the disability to be employed; or
- reassign duties of the job in question to other employees without assigning the employee with disability duties that would compensate for those reassigned; or
- reassign duties of the job in question to one or more other employees where such reassignment would increase the skill, effort, or responsibility required of such other employee or employees from that required prior to the change in duties; or
- alter, modify, change or deviate from bona fide seniority policies or practices; or
- provide accommodation of a personal nature including, but not limited to, eyeglasses, hearing aids or prosthesis except under the same terms and conditions as such items are provided to the employer’s employees generally; or
- make any changes that would impose on the employer an undue hardship.
- Both the NCPDPA and ADA do not require a reasonable accommodation to cause a “undue hardship” on the employer, but in the case of the NCPDPA undue hardship specifically defines the factors that should be considered in determining undue hardship:
- The nature and cost of the accommodations needed under this chapter.
- The overall financial resources of the particular facility or facilities involved in the provision of the accommodations, the number of persons employed at the facility, the effect on expenses and resources of the facility, and any other impact on the operation of the facility.
- The overall effect on the financial resources of the covered entity, the number of persons employed by the covered entity, and the number, type, and location of the covered entities facilities.
- The type of operations of the covered entity, including the composition, structure and functions of the workplace of the entity, the geographic separateness of the particular facility through the covered entity and the administrative or fiscal relationship of the particular facility of the covered entity.
- The NCPDPA prohibits discrimination employment, but specifically identifies the discriminatory practices covered by the Act while the ADA prohibits any discriminatory practices in any area of employment. The NCPDPA identifies the following as a discriminatory practice:
- An employer who failed to hire or consider for employment or promotion to discharge or otherwise to discrimination against a qualified person with a disability on the basis of a disabling condition with respect to compensation and the terms conditions of employment;
- An employment agency to fail or refuse to refer for employment or otherwise discriminate against a qualified person with a disability on the basis of a disabling condition;
- A person controlling an apprenticeship on the job or other training or retraining program to discriminate against a qualified person with a disability on the basis of a disabling condition and admission to or employment in a program established to provide apprenticeship or on his behalf; or
- An employer or labor organization or employment agency to fail to meet the duties imposed on them by N.C.G.S. §168A-4(b).
- Additionally, there are codified exemptions to these discriminatory practices, they are as follows:
- To make an employment decision on the basis of State and federal laws or regulations imposing physical, health, mental or psychological job requirements;
- To fail to hire, transfer or promote, or to discharge a person with a disability who has a history of drug abuse or who is unlawfully using drugs where the job in question is in an establishment that manufactures, distributes, dispenses, conducts research, stores, sells or otherwise handles controlled substances regulated by the North Carolina Controlled Substances Act, G.S. 90-86 et seq.;
- To fail to hire, transfer, or promote, or to discharge a person with a disability because the person has a communicable disease which would disqualify a person without a disability from similar employment;
- To fail to make reasonable accommodations where the person with a disability has not fulfilled the duties imposed by G.S. 168A-4;
- To inquire whether a person has the ability to perform the duties of the job in question;
- To require or request a person to undergo a medical examination, which may include a medical history, for the purpose of determining the person’s ability or capacity to safely and satisfactorily perform the duties of available jobs for which the person is otherwise qualified, or to aid in determining possible accommodations for a disabling condition, provided (i) that an offer of employment has been made on the condition that the person meets the physical and mental requirements of the job with or without reasonable accommodation; and (ii) that the examination, unless limited to determining the extent to which a person’s disabling condition would interfere with his or her ability or capacity to safely and satisfactorily perform the duties of the job in question or the possible accommodations for a disabling condition, is required of all persons conditionally offered employment for the same position regardless of disabling condition;
- To obtain medical information or to require or request a medical examination where such information or examination is for the purpose of establishing an employee health record;
- To administer pre-employment tests, provided that the tests (i) measure only job-related abilities, (ii) are required of all applicants for the same position unless such tests are limited to determining the extent to which the person’s disabling condition would interfere with his or her ability to safely and satisfactorily perform the duties of the job in question or the possible accommodations for the job in question, and (iii) accurately measure the applicant’s aptitude, achievement level, or whatever factors they purport to measure rather than reflecting the impaired sensory, manual or speaking skills of a person with a disability except when those skills are requirements of the job in question, provided that an employer shall not be liable for improper testing which was administered by a State agency acting as an employment agency. (1985, c. 571, s. 1; 1999-160, s. 1.)
- The NCPDPA also specifically sets forth a “nonexclusive list of affirmative defenses” they are as follows:
- The failure of the qualified person with a disability to comply with or meet the employer’s work rules and policies or performance standards, absent a reasonable accommodation excusing noncompliance, provided that the person is not held to rules or standards different from other employees without a disability similarly employed;
- The excessive, willful or habitual tardiness or absence of a qualified person with a disability, absent a reasonable accommodation that allows for flexible working hours, provided that the standard used by the employer in determining whether such tardiness or absence is excessive is the same as that applied by the employer to employees without a disability similarly employed; or
- A bona fide seniority or merit system, or a system which measures earnings by quantity or quality of work or production, or differences in location of employment. (1985, c. 571, s. 1; 1999-160, s. 1; 2011-94, s. 4.)
- What is the Family Medical Leave Act (FMLA)?
- The Family and Medical Leave Act of 1993 (FMLA) allows eligible employees to be absent from work between twelve and twenty-six weeks of unpaid leave in a twelve month period for certain medical and/or family reasons.
- What claims are available to an employee for violations of the FMLA?
- The Family and Medical Leave Act of 1993 protects employees from interference with their entitlements to take leave under the Act and from discrimination and retaliation for exercising those rights.
Interference claim – an employee may sue its employer for violation of FMLA for the employer’s failure to return an employee to the position he or she held before taking leave. See § 2614. The employee is only entitled to the rights, benefits or position of employment he or she would have been entitled to had the employee not taken the leave. In claims of interference, the employer’s intent is not considered.
Discrimination and retaliation – an employee may sue an employer’s discrimination/retaliation for employee exercising a right under the FMLA leave. Without direct evidence of discrimination/retaliation, the courts apply the McDonald Douglas burden shifting framework that is applied to both Title VII and ADA claims. A plaintiff must set out a case for discrimination or retaliation and then the burden shifts to the employer to articulare a legitimate non-discriminatory, non-retaliatory reason for the adverse employment action. If a Defendant satisfies this burden, then the burden shifts back to the plaintiff who must prove by a preponderance of the evidence that the reason presented by the employer is pretexted. The prima facia case of discrimination/retaliation of a FMLA is established by showing (1) the employee was protected under FMLA; (2) the employee suffered an adverse employment action; and either (3a) the employee was treated less favorable than a similarly situated employee who had not requested FMLA leave; or (3b) that the adverse employment action was made because the employee took FMLA leave.
- What notice must an employee give the employer before taking FMLA leave?
- An employee is not required to give notice of FMLA leave. The Act requires only 12 weeks of leave, and notice requirements cannot extend the amount of leave required under the Act. See Ragdale v. Wolverine World Wide, Inc. 535 U.S. 81 (2002). The Supreme Court stated that the only notice provisions in the Act only require that the employee provide notice of leave if foreseeable, and that the employers provide notice in conspicuous places on the premises setting forth summaries of the FMLA and information pertaining to filing a charge. See 29 U.S.C.A. § 2619. Penalties for the employer’s violation of the notice provisions is limited to $100.00 for each separate offense. Id; see also Ragdale v. Wolverine World Wide, Inc. 535 U.S. 81 (2002) (providing that “[a]s long as these policies meet the Act’s minimum requirements, leave taken may be counted toward the 12 weeks guaranteed by the FMLA.”).
Also, an employer has the authority to require an employee to substitute paid leave for unpaid leave under FMLA, 29 U.S.C.A. § 2619 (d)(2)(B). The statute provides:
An eligible employee may elect, or an employer may require the employee, to substitute any of the accrued paid vacation leave, personal leave, or medical or sick leave of the employee for leave provided [for leave due to a serious health condition that makes the employee unable to perform the functions of the position] for any part of the 12-week period or such leave under such subsection, expect that nothing in this subchapter shall require an employer to provide paid sick leave or paid medical leave in any situation in which such employer would not normally provide any such paid leave…
29 U.S.C.A. § 2619 (d)(2)(B).
Additionally, the Act encourages employers to adopt more generous policies. § 2653.
- Does the FMLA apply to all employers?
- No. FMLA only applies to companies with fifty or more employees within seventy-five miles of the employee’s worksite during at least twenty work weeks in the current or prior calendar year. Employees include part time, full time and those on leave.
- What employees are eligible for FMLA leave?
- An employee is eligible for FMLA leave if they have been employed for at least a total of twelve months and have worked at least 1,250 hours during the twelve months prior to the date they intend to take leave. In order to determine whether the employee has worked for a least twelve months, an employer must consider any time the employee worked for the employer in the previous seven years. Interestingly enough, this applies to rehires.
- For which reasons may an employee take FMLA leave?
- The law requires one of the following: (1) in order to provide care for the employee’s spouse (Read about treatment of LBGT persons eligibility for FMLA here), child or parent with a serious health condition; (2) the birth of a son or daughter; (3) the placement of a child with the employee for adoption or foster care; and (4) as a result of the employee’s own serious health condition that prevents the employee from performing the essential functions of his or her job.
- What is a serious health condition as defined by the FMLA?
- A serious health condition is a physical or mental impairment requiring: (1) inpatient care, including any period of incapacity or subsequent treatment in connection with inpatient care; or (2) continued treatment by a health care provider which requires absence for three full consecutive calendar days in a regiment of continuing treatment; or (3) a period of inability to work which is permanent or long term due to a condition.
Miscellaneous Employment Laws
- What is the Genetic Information Nondiscrimination Act of 2008 (GINA) and what does it protect?
- GINA protects former, current and prospective employees from discrimination based on genetic information obtained by the employer in all phases of an employment relationship. Specifically, the Act seeks to restrict the acquisition of genetic information. The idea behind this law is to prevent employers from discriminating against employees in the employment relationship based upon potential diseases or disorders in their family history. As with other federal statutes, GINA also protects employees from retaliation, discrimination or harassment related to their own or other persons’ genetic information.
GINA applies to private employers who have fifteen or more employees for twenty or more work weeks in the current core preceding year. The EEOC enforces GINA and as with the ADEA, the ADA, the FMLA and Title VII it investigates claims against employers and either takes action or issues a right to sue letter.
There are six specific exceptions to the prohibition of an employer acquiring genetic information. These are (1) learning about genetic information of an employer or his or her family members in an informal situation; (2) information which was obtained in providing health or other wellness benefits to an employee; (3) information obtained to certify FMLA leave for an employee; (4) information publicly available; (5) information obtained through the monitoring of workplace substance exposure for the benefit of the employee and use by law enforcement labs for quality control purposes.
North Carolina also prohibits discrimination on the basis of genetic information. There is no private state law cause of action under the North Carolina Law.
- Must employers continue to employ service members who are absent from their job due to being called into military service?
- The Uniformed Services Employment & Reemployment Rights Act (USERRA) applies to persons who serve in the “uniformed services” which includes Army, Navy, Marine Corp., Coast Guard and Public Health Commission Corp. as well as their reserve components. Such employees are allowed reemployment after active duty, inactive duty, training, and funeral honors duties.
Generally, persons covered by the Act must be reemployed by their employer. However, the “cumulative length of service” that causes a person absent from their position may not exceed five years except in certain circumstances. See text of Act here. U.S.C. Title 38 §§ 4301-4333. Additionally, North Carolina provides employment protection for North Carolina National Guard members. N.C.G.S. § 127A-202.1 prevents any type of discrimination or retaliatory action from an employer, perspective employer on the basis of their membership, application for membership, performance of service, application for service, or obligation related to the North Carolina National Guard. It does not appear there is a specific right to file suit against your employer based on this statute, but as previously discussed, such a statute may serve as the “public policy” for a state law claim of wrongful termination. The statute itself empowers the Commissioner or Labor to enforce the provisions of this section.
- May employers discipline or terminate employees for engaging in lawful activities?
- N.C.G.S. § 95-28.2 prevents discrimination against persons for the lawful use of lawful products during nonworking hours. Specifically, the law prohibits employers from discriminating against an employee or perspective employee in all phases of employment as long as the activity “does not adversely affect the employee’s job performance or the person’s ability to properly fulfill the responsibilities of the position in question or the safety of other employees”. There are specific allowance and prohibitions in the Act and if you are dealing with such an issue, you should review the short statute here for the specifics.
An employee or perspective employee who is discriminated against due to a violation of this statute may bring a civil action within one year of the date of the alleged violation and may recover wages or benefits as a result of the violation; an order of reinstatement without loss of position, seniority or benefits, or an order directing employer to offer employment to the perspective employee. Finally, a court may award reasonable costs including court costs and attorney’s fees to the prevailing party.
- May an employer discipline or fire an employee for missing work due to participating in their children’s school activities?
- No. N.C.G.S. § 95-28.3 provides for paid leave it the leave is for parental school participation. The parent is allowed up to four hours per year for such participation. However, such leave must be at a mutually agreed upon time and date; the employer may require the employee to provide employer with a written request at least 48 hours before the time for leave; and the employer may require employee to furnish verification from a child’s school regarding the leave. This statute prevents discrimination in all phases of employment and an employee may file a civil action within one year of the date of the alleged violation. Employee may recover wages and benefits lost as a result of the violation or an order of reinstatement without loss of position, seniority, wage or benefits.
- What precautions should an employer take related to protecting confidential employee information?
- The North Carolina General Assembly enacted the Identity Theft Protection Act in 2005 requiring employers to implement reasonable measures to safeguard confidential information of employees that could be used to steal the employee’s identity. This Act affects not only employers, but other businesses who may come into possession of personal confidential information. However, the Act specifically applies to employers in the following situations: requires social security number protection; allows for a consumer to place a “security freeze on a consumer’s credit report”; provides requirements for the destruction of personal information records; and prohibits publication of certain personal information.
Employers should implement procedures to comply and avoid liability under the Act as the act allows for the filing of a civil action against any company who violates the Act and allows civil damages. For each unlawful act or violation, damages may be awarded in an amount of up to $5,000, but no less than $500 or three times the amount of actual damages, whichever is greater. The statute also allows the court to enjoin or restrain future acts that will constitute a violation of the section. Finally, the court may award reasonable attorney’s fees to the prevailing party. Actions under this Act must be brought within three years from the date on which the identity of the wrongdoer was discovered or reasonably should have been discovered.
FAIR LABOR STANDARDS ACT
- What is the Fair Labor Standards Act (FLSA)?
- The FLSA is a federal statute which regulates employers payments of wages and other minimum standards of employment for the protection of employees. Failure to follow its guidelines can result in a lawsuit, payment of compensatory damages, liquidated damages and the employee’s attorney’s fees. An excellent overview and requirements of the FLSA is provided here.
- Which employers must comply with the FLSA?
- An employer must follow the rules set forth in the Fair Labor Standards Act if it is engaged in interstate commerce or producing goods for interstate commerce or handling, selling or otherwise working on goods or materials for interstate commerce and meet the following requirements:
The company must have an annual gross volume and sales made or business done of not less than $500,000 or is engaged in the operation of a hospital or any institute primarily engaged in caring for the sick, the aged, or mentally ill who reside on the premises owned by the company; a school for mentally or physically disabled or gifted children; a preschool, an elementary or secondary school or an institution of higher education (whether or not operated for profit), or is engaged in the activity of a public agency. An argument can be made that almost all companies are engaged in interstate commerce; however, if the business does not gross annual sales of $500,000, the FLSA would not apply.
- What are the general requirements of the FLSA?
- Minimum wage – the FLSA has set the current minimum wage at $7.25 per hour. As you likely know, there have been certain municipal and state laws passed with regard to minimum wage and the FLSA states that the employee is entitled to the higher of the two wages.
- Overtime – covered nonexempt employees receive overtime pay for hours they have worked in excess of forty hours per week to be set at a rate no less than 1 ½ times the regular rate of pay. Overtime is not required by the FLSA for work on weekends and holidays unless such time is in excess of the forty hours for the given work week.
- Recordkeeping – employers are required by the FLSA to display an official poster setting forth the requirements of the FLSA. Obviously, employers must keep records of employee time and pay.
- Child labor – the FLSA sets standards with the goal of protecting minors from employment conditions that could be considered detrimental to their health and well-being due to their age. See the specific rules here.
- What jobs are exempt from minimum wage and overtime pay?
- The FLSA provides exemptions from both the hourly minimum wage and overtime pay requirements. Here are the general tests to be applied in determining whether an employee is exempt from minimum wage and overtime requirements of the FLSA.
- Executive exemption – all of the following must be satisfied in order for the executive exemption to exist:
- employee must be compensated on a salaried basis at a rate no less than $455 per week;
- the employee’s primary duty must be the management of the enterprise or managing a department or subdivision of the enterprise;
- employee must customarily and regularly direct the work of at least two or more other full time employees; and
- the employee must have the authority to hire and fire other employees and generally to make decisions regarding the employment condition of other employees.
- Administrative exemption – all of the following must be satisfied in order for the administrative exemption to exist:
- employee must be compensated on a salaried basis at a rate no less than $455 per week;
- the employee’s primary duty must be the performance of office or non-manual work related to the management or general business operation of the employer’s customers; and
- the employee’s primary duty must include the exercise of discretion and independent judgment with respect to matters of significance.
- Learned professional exemption – all of the following must be satisfied in order for the learned professional exemption to exist:
- employee must be compensated on a salaried basis at a rate no less than $455 per week;
- the employee’s primary duty must be the performance of work requiring advanced knowledge defined as work predominantly intellectual in character and requiring consistent exercise of discretion in judgment;
- the advanced knowledge referred to in requirement No. 2 must be in a field of science of learning; and
- the advanced knowledge referred to in requirement No. 2 must be customarily acquired for a prolonged course of specialized intellectual instruction.
- Creative professional – all of the following must be satisfied in order for the creative professional exemption to exist:
- employee must be compensated on a salaried basis at a rate no less than $455 per week;
- the employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.
- Computer employee exemption – all of the following must be satisfied in order for the computer employee exemption to exist:
- the employee must be compensated either as a on a salaried basis at a rate no less than $455 per week; or
- if compensated hourly, the rate must be no less than $27.63 per hour;
- the employee must be employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field performing the duties described below;
- the employee’s primary duties must consist of:
- the application of systems analysis techniques and procedures including consulting with users to determine hardware/software system functional specifications;
- design, development, documentation, analysis, creation, testing or modification of computer systems or programs including prototypes based on and related to user or system design specifications;
- the design, documentation, testing, creation, or modification of computer programs related to machine operating systems; or
- a combination of all these duties, the performance of which requires the same level of skill.
- Outside salesperson exemption – all of the following must be satisfied in order for the outside salesperson exemption to exist:
- employee’s primary duty must be selling (as defined by the FLSA) or obtaining orders for contracts or services or for the use of facilities for which a consideration will be paid by the client or customer and the employee must be customary and regularly engaged away from the employer’s place or place of business.
- Employees of certain seasonal amusement or recreation activities and employees engaged in newspaper delivery are exempt from FLSA.
- Certain farm workers employed by anyone who used no more than 500 man days of farm labor in any calendar quarter of the proceeding calendar year and casual babysitters and persons employed as companions to the elderly in firm are exempt from the FLSA.
- Highly compensated employees – If an employee performing office or non-manual work is paid an annual compensation of $100,000 or more, this employee would be exempt from the FLSA if they customarily perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard test for exemptions as set forth above. The above-exemptions do not apply to blue collar workers which the FLSA defines as individuals who perform work with their hands using physical skill and energy. Regardless of the amount they are paid, employees in production, maintenance, construction, or similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsman, operating engineers, longshoremen, construction workers and laborers are all entitled to minimum wage and overtime premium pay under the FLSA. Additionally, police, firefighters, paramedics, and other first responders are also not exempt employees.
- Executive exemption – all of the following must be satisfied in order for the executive exemption to exist:
- May employers pay tipped employees less than minimum wage under the FLSA?
- An employer may wish to pay tipped employees less than the minimum wage as long as they pay these employees $2.13 per hour and their tips are customarily and regularly more than $30 a month. If an employer elects to pay an employee under this exception, the employee must make at least minimum wage including all tips and failure to do so will require the employer to make up the difference between the amount per hour paid and the minimum wage if the amount is less than the minimum wage. Employers also must inform the employee of this payment plan prior to the engagement.
- Are there any other jobs exempt from overtime pay aside from FLSA exemptions?
- Certain employees are exempt from overtime pay only by the NC Department of Labor:
- Certain commissioned employees of retail or service establishments; auto, truck, trailer, farm implement, boat, or aircraft sales-workers; or parts-clerks and mechanics servicing autos, trucks, or farm implements, who are employed by non-manufacturing establishments primarily engaged in selling these items to ultimate purchasers;
- Employees of railroads and air carriers, taxi drivers, certain employees of motor carriers, seamen on American vessels, and local delivery employees paid on approved trip rate plans;
- Announcers, news editors, and chief engineers of certain non-metropolitan broadcasting stations;
- Domestic service workers living in the employer’s residence;
- Employees of motion picture theaters; and
- What issues are not regulated by the FLSA?
- As stated on the US Department of Labor’s website:
- vacation, holiday, severance, or sick pay;
- meal or rest periods, holidays off, or vacations;
- premium pay for weekend or holiday work;
- pay raises or fringe benefits; or
- a discharge notice, reason for discharge, or immediate payment of final wages to terminated employees.
- a mechanism for the payment or collection of employees “usual or promised wages” in excess of those required by the FLSA;
- a limitation on the number of hours in a day or week an employee is required or scheduled, including overtime hours as long as the employee is at least 16 years old.
NORTH CAROLINA WAGE AND HOUR ACT
- How may the North Carolina Wage and Hour Act (NCWHA) apply to employers?
- The interplay between the Federal Labor Standards Act and the North Carolina Wage & Hour Act is relatively complicated. If you are facing a lawsuit related to allegations of errors in payments of wages, overtime or other issues as to the amount and procedure of payment to employees, you should consult your general counsel and/or an outside attorney. Having a general understanding of these laws is somewhat helpful, and I have endeavored to present that information to you here.
If the FLSA is applicable to your company, it will preempt the state Wage & Hour Act in the areas of minimum wage, overtime, youth employment and recordkeeping provisions. However, there are additional requirements set forth in the NCWHA that could apply in addition to the requirements of the FLSA. Here are a few issues raised by the NCWHA that apply to all North Carolina employers, but are not found in the FLSA:
- Payment to separated employees. The NCWHA requires that employers pay employees whose employment has been discontinued for any reason on or before the “regular pay day.
- Wages in dispute. The fair amount of wage allegedly owed to an employee is in dispute. The employer should pay the portion of the wages that it conceives are due.
- Withholding of wages. An employer may withhold a portion of employee’s wages when (a) allowed to do so by state or federal law; (b) when an amount or rate of deduction is known and agreed to in advancement of wages. The agreement must be in writing and signed before the pay day for the pay period which the deduction is made, state the reason for the deduction, and identifies the dollar amount or percentage of wages to be deducted. However, if the deduction is for the convenience of the employee, the employee shall be given a reasonable opportunity to withdraw the authorization; (c) if the amount of the deduction is not known or agreed upon, the employer must have written authorization signed before the payday for the pay period on which the deduction is made, indicates the reason for deduction, and the employee must receive advanced written notice of actual amount to be deducted, receive written notice of their right to withdraw the authorization, and be given reasonable opportunity to withdraw the authorization in writing.The withholding of wages owed for employer’s benefit must comply with the following: (a) if no overtime was recorded for the week, employer may reduce wages only to the minimum wage level; (b) in overtime weeks employer may reduce wages to minimum wage level for a non-overtime hours worked, and a reduction may be made to overtime wages owed.Employer may hold or divert a portion of employee’s wages for “cash shortages, inventory shortages or loss or damage to an employee’s property after giving employee written notice of the amount to be deducted seven days prior to the payday on which the deduction is to be made except that when a separation occurs the seven day notice is not required”.An overpayment of wages as a result error, an advance of wages to an employee or the principal amount of a loan made to an employee shall be considered prepayment of wages and maybe withheld or deducted from an employee’s wages. Deductions in excess of the specific amounts for interest or other charges shall require written authorization.If criminal process has issued against an employee or an employee has been indicted or employee has been arrested as a result of a cash shortage, inventory shortage, or damage to employer’s property, employer may withhold a portion of employee’s wages in order to recoup the amount of the cash shortage, inventory shortage, or damage to employer’s property without written authorization otherwise required in this section. If the employee is found not guilty, the amount deducted shall be reimbursed to the employee by the employer.
- What other responsibilities does an employer have under the North Carolina Wage and Hour Act (NCWHA)?
- Pay a minimum wage as set forth by the FLSA.
- Pay employees overtime of which consists of not less than time and a half the regular rate of pay for hours worked in excess of forty hours per work week.
- Employers must establish a regular payday of all wages which may be daily, weekly, biweekly, semimonthly, or monthly.
- Notification – Employer must notify employees of the following regarding their pay: (a) the amount of promised wages and the day employee’s for payment; (b) make available to employees in writing through a posted notice maintained in an accessible place the employment practices and policies regarding promised wages; (c) notify in writing a posted notice maintained in an accessible place for employees twenty-four hours prior to any changes in promised wages; (d) furnish employee with itemized statement of deductions made from employee’s wages for each pay period deductions are made.
- Youth employment – No person under the age of eighteen may be employed in any occupation without a youth employment certificate unless they are specifically otherwise exempted. The Commissioner of Labor provides such certificates. The NCWHA also provides for civil penalties for violations of the youth employment restrictions.During regular school terms, no one under the age of eighteen enrolled in grade 12 or lower may be employed between 11 p.m. and 5 a.m. when there is school for the person the next day. Such a restriction does not apply to persons sixteen and seventeen years of age if an employer receives written approval for the person to work beyond the stated hours from the parent or guardian and from the person’s principal or principal’s designee.A person under the age if eighteen may not be employed in an occupation identified by the FLSA as being detrimental to the health. No person fourteen or fifteen years of age may be employed in an occupation except those determined by the United States Department of Labor under the FLSA and if these persons are so employed in a permissible occupation, they may not (1) work more than three hours per day when school is in session; (2) work more than eight hours a day on a day when school is not in session; (3) work before 7 a.m. or after 7 p.m. except they may work until 9 p.m. when school is not in session; (4) work more than forty hours in any week when school is not in session; (5) work more than eighteen hours in one week when school is in session, and (6) they may only work outside of school hours. There are additional specific requirements for individuals under the age of fourteen which may be found here.
- What are the remedies available to an employee under the North Carolina Wage and Hour Act (NCWHA)?
- As previously indicated, it is most likely the violations in minimum wage and overtime would be handled by the FLSA. However, the specific wage payment itself along with minimum wage and overtime violations against employers not subject to the FLSA may be recovered under the NCWHA.
Prior to initiating any action in state court for violation of NCWHA, the commissioners shall exhaust all administrative remedies meaning that the commissioner shall investigate any complaints and issue a ruling which must be appealed by the employer prior to plaintiff filing suit. In many cases, there is a mistake involving payment of an employee it will be resolved by the commission. However, in instances where the employer appeals the ruling, the plaintiff must file a lawsuit within two years as provided by N.C.G.S. §1-53.
If a lawsuit is commenced in addition to overtime, minimum wage or wage payment, interest at a legal rate from the date each amount first came due may be obtained by the employee. The court shall award liquidated damages, but is not required to do so if the court determines that the employee was acting in good faith and had reasonable grounds to believe that the act or omission was not a violation of the NCWHA. Finally, a court may award costs and fees including reasonable attorney’s fees to the Plaintiff as a result of the violation of the Act. Similarly, the court may award costs and fees of action and reasonable attorney’s fees to be paid by the plaintiff if the court determines the action was frivolous.
- When may an employer garnish the wages of employees?
- A creditor must obtain a court ordered judgment garnishing wages in North Carolina. Employers may be presented with orders to garnish wages from an employee for (1) taxes owed; (2) alimony; (3) child support; (4) student loans; and (5) payment of ambulance services in certain North Carolina counties.
Under North Carolina law, courts are not permitted to enter and Order for an employer to garnish wages of personal debt. However, creditors from other states may be able to get an order of garnishment under their own state’s laws. It is not a violation of the North Carolina Wage and Hour Act for an employer to garnish an employee’s wages if required to do so by law. Regardless, it is unlikely that another state’s order would be enforceable against an employee or an employer in North Carolina unless a court with jurisdiction over the employer adopted the order as its own. Again, it is unlikely that a North Carolina court would issue an order to an employer to garnish an employee’s wages in North Carolina unless it is one of the allowed debts listed above.
If you receive an order to garnish wages, you should seek advice to determine whether that order is enforceable against your company in order to avoid litigation related to the unlawful garnishment of wages.
EQUAL PAY ACT
- What is the Equal Pay Act of 1963?
- The Equal Pay Act of 1963 is a portion of the Fair Labor Standards Act and is applicable to the same companies as the FLSA. The purpose is to “prohibit discrimination on account of sex and the payment of wages by employers engaged in commerce in the production of goods for commerce”.
More specifically, the Act prohibits employers from paying different wages to persons of the opposite sex for “equal work on jobs, the performance of which requires equal skill effort and responsibility and which are performed under similar working conditions except where such payment is made pursuant to (1) a seniority system; (2) a merit system; (3) a system which measure the earnings by quantity or quality of production; or (4) a differential based on any other factor other than sex: provided that an employer who is paying a wage differential in violation of this section shall not in order to comply with its provisions of this subject shall reduce the wage of any employee.
- Are there exemptions to the Equal Pay Act?
- Yes. The Equal Pay Act has specific exemptions as follows:
- An employee who is an executive, administrative or professional capacity including academic administrative personnel or teachers and elementary or secondary schools or an outside salesman.
- An employee of an amusement or recreational establishment, organized camp, or religious nonprofit educational conference center as long as said establishment does not operate for more than seven months in a calendar year.
- What are an employee’s remedies under the Equal Pay Act?
- An employee is not required to file an EEOC Charge prior to filing suit violation of the Equal Pay Act. An employee, in order to recover for violations of the Equal Pay Act must file a lawsuit within two years of the claimed violation and within three years if the allegation is that the employer willfully violated the Equal Pay Act. Any successful employee may recover the amount of wages that would have been earned if no discrimination had existed. Liquidated damages are available in an amount equal to the amount of back wages owed if a court determines that an employer acted in bad faith of intentionally. The courts may enter injunctions to prevent employers from future breaches of the Equal Pay Act. In it discretion, the court may also grant attorney’s fees for the prevailing party.
- What is the Lily Ledbetter Act and why does it matter?
- The Lilly Ledbetter Fair Pay Act was a direct response to the Supreme Court’s decision in Ledbetter v. Good Year Tire Rubber Company. In that case, the Supreme Court vacated a lower court’s award of damages for Ms. Ledbetter against Good Year Tire Rubber Company for her failure to file within an applicable statute of limitations. Essentially, the Court held that the decision to pay Ms. Ledbetter a rate that was discriminatory was the date on which the statute of limitations began to run. The Lilly Ledbetter Fair Pay Act was enacted to reverse that decision and states that a claim under the Equal Pay Act or any other discriminatory pay practice accrues each time an employee is paid as well as the time of the decision.
This essentially means that because the payment of discriminatory wages is considered a discriminatory violation of Title VII, therefore, the 180 day statute of limitations under Title VII for reporting claims of discrimination applies. Now, due to the passage of the Lilly Ledbetter Act, the statute of limitations for acts of discrimination involving the amount of payments is restarted every time an aggrieved employee is paid.
- What is a retaliation claim in the context of employment law?
- Generally speaking, retaliation refers to an employers an adverse employment action against an employee as a result of the employee engaging in or supporting a legally protected activity. These legally protected activities relate to laws that prohibit employers from discriminating against employees for reasons other than their performance.
Employees may make a claim in federal court for retaliation under Title VII, the ADEA, the EPA, or the ADA among others. Under North Carolina law, a retaliation claim may be made as allowed by the Retaliatory Employment Discrimination Act (REDA).
- What types of retaliation claims are available to an employee in federal court, and what must an employee prove?
- Anti-retaliation provisions in Title VII, the ADEA, the EPA, and the ADA make it unlawful to discriminate against an employee because he or she has made a charge, testified, assisted, or participated in any manner in the investigation, proceeding, hearing, or litigation under these statutes. Violation of these statutes and the anti-retaliatory provisions is investigated by the Equal Employment Opportunity Commission. Therefore, an employee must file a charge with the EEOC in order to pursue a retaliation claim based on these statutes.
- What state law claims for retaliation are available in North Carolina?
- The Retaliatory Employment Discrimination Act (REDA) prohibits discrimination or any type of retaliatory action against an employee when the employee in good faith “does or threatens to do any of the following:
- File a claim or complaint initiating any inquiry, investigation, inspection, proceeding, or other action or testify or provide information to any person with respect to any of the following:
- Workers Compensation
- Wage and Hour Act
- Statute prohibiting discrimination related to Hemoglobin B and Sickle Cell Trait
- National Guard Reemployment Rights
- Statute prohibiting discrimination related to Genetic Testing
- Domestic Violence Act
- Drug Paraphenalia Control Act
- Cause any of the activities listed in subsection 1 to be initiated on the employee’s behalf.
- Exercise any right on behalf of the employee or any other employee.
- Comply with the provisions of Article 27 of Chapter 7B of the general statutes.
- Exercise rights under Chapter 50B.
It is important to note that under REDA it is not a violation of REDA if the unfavorable action against the employee who engaged in a protected activity proves that it would have taken the same unfavorable action in the absence of the protected activity of employee.
- File a claim or complaint initiating any inquiry, investigation, inspection, proceeding, or other action or testify or provide information to any person with respect to any of the following:
- What remedies are available under REDA?
- First, a claimant must file a charge with the North Carolina Commissioner of Labor within 180 days of the alleged violations. The Commission has the power to investigate the matter, and if conciliation efforts fail, the Commission may file a civil action on behalf of the employee or issue a Right to Sue letter which allows the employee to bring a civil action on its own.
As with EEOC charges, the employee must file a lawsuit within 90 days of receipt of a Right to Sue letter and may recover the following remedy:
- Injunction with joined continued violation.
- Reinstatement of the employee to the same position held before the retaliatory action or discrimination.
- Reinstatement of full fringe benefits and seniority rights.
- Compensation for lost wages, benefits, and other economic losses proximately caused by the retaliatory action.
- In rare instances triple damages may be awarded if the violation of REDA is deemed intentional.
Further, the Court may award the employee reasonable costs and expenses, including attorney’s fees.