Labor Landscape: How Evolving Federal Labor Agency Priorities Can Impact Your Business

A G&A Series: Claims & Investigations

This 3-part employment law series from G&A will cover:

• Part 1: Labor Landscape: How Evolving Federal Labor Agency Priorities Can Impact Your Business
• Part 2: Proactive Compliance: Safeguard Your Company with Current Policies and Insurance
• Part 3: Employee Claims: How to Effectively Manage a Labor-Related Investigation

Part 1 —

In search of equal pay and opportunities—and improved work-life balance—more employees who believe they are not being heard or treated fairly in the workplace are exploring their legal rights. As a result, worker-driven claims of unfair, unsafe, or discriminatory employment practices are on the rise in the U.S. In 2021 alone, the Equal Employment Opportunity Commission (EEOC) reported receiving more than 385,000 calls and 52,000 emails regarding potential discrimination claims.

If left unresolved, these claims can lead to costly employment-related lawsuits for business owners. In fact, according to the EEOC, the average cost of an out-of-court settlement for an employment claim is $75,000, and the average jury award for an employment-related case is $217,000.

“With increased protections of employee rights under both state and federal laws—not to mention state and federal legislation to limit the enforceability of arbitration agreements—employers across the country should be prepared for more lawsuits over the next few years,” says Kristen Nesbit, a Fisher Phillips partner.

Evolving Expectations Prompt Employees to Lobby for Change

The COVID-19 pandemic and critical social justice movements triggered underlying labor concerns that have been years in the making. As a result, employees' expectations of their employers have evolved, prompting them to lobby for changes, including:

• Workplace equality
• Flexible work schedules
• Wage and benefits improvements
• Improved work-life balance

Workers are increasingly turning to U.S. labor agencies, such as the Equal Opportunity Commission (EEOC), Occupational Safety and Health Administration (OSHA), and Wage and Hour Division (WHD), to make claims and allegations of unfair employment practices against their employers. Employees can seek advice or submit claims to these federal agencies, which have been granted authority to set and enforce established standards.

Health and safety concerns related to the COVID-19 virus during the early days of the pandemic hindered agency employees' ability to carry out daily responsibilities. More recently, however, they have been tasked with resuming business as usual and increasing their caseloads and investigations.

"The public's rising awareness of race, ethnicity and gender and their greater willingness to call organizations to account for alleged misdeeds are fueling a rise in both the number and cost of EPLI (Employment Practices Liability Insurance) claims," according to Insider Engage's "What Are the Big EPLI Trends for 2022?" by Simon Challis.

In this first installment in our Claims and Investigations series, we examine three prominent labor agencies' current priorities and initiatives (and the employment issues they are targeting) to help your business stay on top of potential compliance concerns in your workplace.

EEOC Sharpens Focus on Discrimination and Harassment Claims

The Equal Employment Opportunity Commission (EEOC) has renewed its focus on preventing harassment and systemic discrimination in the workplace, promoting racial justice and equity, remedying discrimination in pay, and addressing the civil rights impact of the COVID-19 pandemic on the public and private sectors, according to the agency's Fiscal Year 2021 Agency Financial Report (AFR).

The EEOC receives between 60,000 to 80,000 workplace discrimination and harassment claims every year, and as of the end of its fiscal year 2021, had a charge backlog of almost 43,000 cases, according to JD Supra's "EEOC’s First Year Performance Under Biden Nosedived in a Big Surprise and Amid Reduced Transparency" by John Fox.

According to Littler Mendelson's "Annual Report on EEOC Developments: Fiscal Year 2021,"

the steps the EEOC has taken to further its mission include:

• Hiring more than 450 new employees, including many investigators, investigative support assistants, mediators, and attorneys.
• Filing 53 lawsuits alleging workplace harassment, which raised claims of a hostile work environment based on sex, race, national origin, disability, religion, and age.
• Resolving 51 harassment suits and recovering more than $19 million for 895 individuals subjected to harassment.
• Resolving 21 racial or national origin discrimination lawsuits and recovering approximately $15 million in monetary relief for individuals subjected to discrimination.
• Conducting 261 outreach sessions that focused specifically on issues relating to race and educating the public about the rise in violence, harassment, and bias against members of the Asian American and Pacific Islander communities.
  

Staying Compliant with Anti-Discrimination Laws

To keep in compliance with anti-discrimination laws enforced by the EEOC, business owners should consider these best practices:

• Become familiar with EEO laws and regulations.
• Post required notices and report workforce data: Employers must post information about federal laws prohibiting job discrimination. The "EEO is the Law" poster summarizes these laws and explains how an employee or applicant can file a complaint. (Learn more about the poster and download it here.)
• Audit workplace procedures: Review your hiring, onboarding, and workplace practices to make sure you comply with EEO regulations and to make sure you are ADA-compliant.
• Create an anti-discrimination policy: Develop a robust anti-discrimination policy that details employees' rights and responsibilities at work, and outline the steps your company takes to prevent harassment or discrimination.
• Instill diversity in your recruiting and retention programs: Encourage your organization's recruiters to seek candidates with diverse backgrounds and skills and monitor the hiring process to ensure there is not even the appearance of discrimination. In addition, develop a robust retention program that offers all employees equal opportunities for advancement throughout your company's talent pipeline.

OSHA Shifts From COVID-19 Focus to Workplace Safety Inspections

Restrictions on onsite inspections and business travel in 2020 and 2021 significantly reduced OHSA employees' ability to enforce workplace safety standards, implement safety education and training programs, and investigate workplace safety claims and accidents.

According to Safety + Health's "OSHA standard on preventing violence in health care ‘a priority,’ Marty Walsh tells lawmakers," OSHA's work on temporary standards related to the COVID-19 pandemic took up much of the agency's bandwidth during that time, and the agency was significantly understaffed. As a result, during the first nine months of the pandemic, OSHA performed 50% fewer inspections than the year prior, while receiving 15% more complaints.

The Department of Labor was committed to reversing that trend, and in 2022, OSHA inspections started to increase.

Recommendations that can help keep your employees safe and your company in compliance with the Occupational Safety and Health (OSH) Act include:

• Review current regulations to ensure you are implementing OSHA's required safety and reporting measures to provide a safe workplace that is free of known hazards.
• Prominently display OSHA's "Job Safety and Health: It's the Law" poster in the workplace.
• Maintain an annual log of recordable workplace injuries and illnesses on OSHA Form 300 and retain the record for five years. This requirement applies to most employers with more than 10 employees not on the excepted industry list.
• Report all work-related fatalities within eight hours and severe injuries within 24 hours.
• Post OSHA citations at or near the site of alleged violations.
• Provide required training to all workers in a language and vocabulary they can understand.

The Wage and Hour Division’s Anti-Retaliation Initiative

Moving forward, one of the top enforcement priorities for the Department of Labor’s Wage and Hour Division (WHD) is to protect workers from retaliation for exercising their rights in the workplace. The department will also continue to combat wage theft, worker misclassification, and failure to provide leave under the Family Medical Leave Act (FMLA).

According to the WHD’s Protecting Workers from Retaliation Field Assistance Bulletin, retaliation (reduced or denied pay, demotion, etc.) occurs when an employer (manager, supervisor, administrator, etc.) takes adverse action against an employee because they engaged in a protected activity, such as making a complaint to a manager or cooperating with a WHD investigation.

In addition to avoiding retaliatory actions, experts recommend that business owners shore up compliance under the Fair Labor Standards Act (FLSA), which sets minimum wage and overtime pay standards, outlines employee record-keeping requirements, and establishes child labor regulations.

An increasing number of district attorneys and state attorneys general have been prosecuting employers for wage theft, and many have created dedicated units to proactively investigate wage theft and handle individual cases as they arise. Also, several states have increased the penalties on employers found guilty of wage theft. For example, in Washington, D.C., employers who commit wage theft can be found guilty of a misdemeanor and sentenced to up to 90 days in prison, in addition to a $10,000 fine for each affected employee.

Examples of wage theft include:

• Paying workers less than the legal minimum wage.
• Failing to pay non-exempt employees time-and-a-half for hours worked more than 40 hours per week.
• Asking employees to work “off the clock” before or after their shifts.
• Denying workers their legal meal breaks.
• Taking illegal deductions from wages.
• Confiscating tips or failing to pay tipped workers the difference between their tips and the legal minimum wage.
• Misclassifying employees as independent contractors to pay a wage lower than the legal minimum or to avoid paying overtime.