202.795.9999

Overview of the Fair Credit Reporting Act

The Fair Credit Reporting Act (“FCRA”), promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies.  The law’s intent is to protect consumers from the willful or negligent inclusion of inaccurate information in their credit report.  FCRA regulates the collection, dissemination and use of consumer information. Download this slideshow to learn more about employers’ and employees’ rights and responsibilities under the FCRA.

This material is for informational purposes only and should not be relied on for legal advice.  For legal assistance with an employment matter, contact our Firm through the “Contact Us” page on our website, or call us at 202-795-9999. 

Final Rules Issued on Universal Paid Leave Employer Contributions

On June 21, 2019, the D.C. Department of Employment Services’ (“DOES”) rules on employer contributions  under the Universal Paid Leave Amendment Act (the “Act”) went into effect. DOES began collecting the .62% tax on wages of covered employees from covered employers on July 1. Claimants will be able to begin receiving benefits on July 1, 2020. It is expected that DOES will issue proposed rules on claims administration this year.

Employer Registration. Each covered employer with 5 or more covered employees must register through the DOES online portal, and covered employers with fewer than 5 employees may notify DOES that they do not have computer access and request a paper form. Each employer can use the portal to update its information, submit wage reports, and make payments.

Opt-In for Self-Employed Individuals. A self-employed individual may opt into the program during an open enrollment period: the first 90 days of program commencement in 2019, November and December of 2020 and each year thereafter, or within 60 days of beginning self-employment in the District. To opt in, an individual must provide a business license, occupational license, or other documentation that demonstrates self-employment in the District.

Opt-Out of Self-Employed Individuals. A self-employed individual may only opt out during an open enrollment period, and may request removal from the program in certain circumstances. An individual may opt into the program after opting out in an open enrollment period, but is not eligible for benefits after the first year, and is barred from opting in for 5 years if the individual opts out two more times. If an individual opts in after the first open enrollment period for which the individual was eligible, the individual may not opt out for three years.

Wages. For purposes of the Act, “wages” has the same definition as it does under the District’s unemployment compensation law, except that it also includes self-employment income by an individual who has opted in. In general, “wages” means all remuneration for personal services, including gratuities.

Contributions by Covered Employers to the Universal Paid Leave Implementation Fund. Each covered employer must pay an amount equal to 0.62% of wages of each of its covered employees to the Universal Paid Leave Implementation Fund. Payments are due not later than the last day of the month following the close of each calendar quarter. When a covered employee performs services in employment for 2 or more covered employers during the same period, each covered employer must make contributions on the basis of each covered employer’s payments to the covered employee. Late payments are subject to interest and penalties.

Collection Procedures. Collection procedures for failure to timely report wages or pay owed contributions are similar to those applicable to unemployment insurance contributions. If an employer or and self-employed individual disagrees with DOES’s determination of the failure to file a report or pay contributions, an administrative appeal may be filed within 30 days of receiving notice of the failure to file or pay. One administrative appeal is permitted for each report due or contribution owed.

Online Portal. All DOES communications with covered employers and self-employed individuals must be through the online portal, or another format approved by DOES.

Employer Responsibilities. Each covered employer must maintain a DOES-provided paid leave program notice at each worksite in a conspicuous place. A worksite is a single physical location where business is conducted, or if employees are physical dispersed, the location where covered employees report each day. Each covered employer also must provide the notice to employees within 30 days of hiring, annually, and when the employer receives direct notice from the employee that leave for a qualifying event is needed. An employer may establish compliance with this requirement by sending a digital notice to employees, so long as the employer retains email receipts or signed statements acknowledging delivery.

Recordkeeping. Covered employers must keep records required for the program for at least 3 years and make them available to DOES upon request. Records include:

  • Name and Social Security or tax identification number of each covered employee
  • Beginning and ending dates of each pay period
  • Wages paid each pay period
  • Method of payment
  • Employee earnings
  • Dates wages were paid
  • Dates of parental, medical, and family leave taken
  • Copies of employee notices of leave furnished to employer
  • Copies of all written notices given to employees as required by the program
  • Documents describing employee benefits
  • Records of disputes between the employer and employee regarding the program.

This material is for informational purposes only and should not be relied on for legal advice.  For legal assistance with an employment matter, contact our Firm through the “Contact Us” page on our website, or calling us at 202-795-9999. 

D.C. Circuit Broadens Joint Employment Test Under NLRA

Whether a business is an “employer” of a particular employee may have significant consequences for its obligations under federal and D.C. law.  However, when a business is one of several that have a relationship with an employee, it is not always clear whether that business is an employer. In these cases, it is necessary to determine whether the business is a “joint employer” for purposes of applicable law. In a recent decision, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) attempted to clarify the joint employment analysis under the National Labor Relations Act (“NLRA”).

 

What is joint employment?

Joint employment issues often arise under the NLRA, which governs collective bargaining. The NLRA specifies only that an employer “includes any person acting as an agent of an employer, directly or indirectly” 29 U.S.C. § 152(2). The Supreme Court has interpreted this to require an entity to “possess[] sufficient control over the work of the employees to qualify as a joint employer” Boire v. Greyhound Corp., 376 U.S. 473, 481 (1964).

The courts and the National Labor Relations Board (“NLRB”) have narrowed the test, making it easier for a putative employer to show that it is not a joint employer. However, the D.C. Circuit’s December 28, 2018, decision in Browning-Ferris Industries of California, Inc. v. NLRB may steer the test in favor of employees.

 

Joint employment has previously required only actual, direct, and immediate control.

For many years, courts held that two businesses are joint employers if they “exert significant control of the same employees” by “shar[ing] or co-determin[ing] those matters governing essential terms and conditions of employment NLRB v. Browning-Ferris Indus. of Pa., Inc., 691 F.2d 1117, 1124 (3d Cir. 1982).  Later NLRB decisions narrowed the analysis to require “(i) actual control, as opposed to the right to control, and (ii) direct and immediate control, not indirect control.”  And in September 2018, the NLRB proposed a rule that would require a putative joint employer to “possess and actually exercise substantial direct and immediate control over the employees’ essential terms and conditions of employment in a manner that is not limited and routine.”

 

The D.C. Circuit now permits consideration of unexercised and indirect control.

In the latest Browning-Ferris decision, however, D.C. Circuit upheld a broader joint employment analysis considering “both (i) an employer’s authorized but unexercised forms of control, and (ii) an employer’s indirect control over employees’ terms and conditions of employment.”  It reasoned that this test is grounded in common-law rules of agency, which underpin the NLRA. The Court declined to require actual or direct control to be the only or “most important” part of the analysis.

 

The joint employment test will likely remain uncertain.

The D.C. Circuit’s decision is significant not only because it establishes a broader test for joint employment, but because it strongly suggests that the NLRB’s proposed rulemaking is impermissibly narrow. “The Board’s rulemaking,” the Court noted, “must color within the common-law lines identified by the judiciary.” Against this backdrop, the definition of joint employment may remain in flux.

 

This material is for informational purposes only and should not be relied on for legal advice.  For legal assistance with an employment matter, contact our Firm through the “Contact Us” page on our website, or calling us at 202-795-9999. 

Discovering Past Failure to Pay Overtime Wages

D.C. law requires an employer to pay a “non-exempt” employee overtime for any hour worked in excess of 40 hours in a workweek. Further, an employer must make, keep, and preserve records for three years regarding, among other things, each employee’s regular hourly rate of pay, total hours worked each workday and each work week, and time of day and day of week on which employee’s workweek begins.  .  As explained below, if an employer does not timely pay overtime wages and does not keep required wage records, the employer cannot avoid liability by belatedly paying those wages.

If an Employer Fails to Pay Overtime, the Employee is Entitled to Damages Based on Unpaid Wages.

Under District law, if an employer pays an employee less than the wage to which the employee is entitled, the employer is liable to the employee in the amount of unpaid wages, statutory penalties, and, with certain exceptions, liquidated damages equal to three times the amount of unpaid wages.  A court may reduce liquidated damages to no less than unpaid wages only if the employer demonstrates that the act or omission was in good faith, that the employer had reasonable grounds to believe that the act or omission was not in violation of the law, and the employer promptly paid the full amount of wages claimed to be owed to the employee.

An Employer Cannot Avoid Liability by Paying Overtime After Wages are Due.

Neither D.C. law nor the similar federal Fair Labor Standards Act (FLSA) gives an employer the opportunity to correct the failure to pay an employee wages due so as to avoid liability.  An FLSA violation occurs when an employer fails to pay employees “their minimum and overtime wages on their regularly scheduled paydays.”  Martin v. United States, 117 Fed. Cl. 611, 621 (2014).  Further, D.C. law requires an employer to pay an employee “all wages earned . . . on regular paydays designated in advance by the employer and at least twice during each calendar month.”  Thus, once an employer fails to timely pay an employee wages, a violation has occurred.

In the Absence of Employer Records, Damages May Be a Just and Reasonable Approximation Based on Evidence.

As explained above, damages for a violation of D.C. wage law are a function of unpaid wages.  In the absence of wage records, however, under the FLSA, an employee must show that they “performed work for which [they were] improperly compensated . . . and produc[e] sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.”  Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1046, 1047 (2016) (quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946)).  The employer may then rebut the employee with “evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inferences to be drawn from employee’s evidence.  If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate.”  Anderson, 328 U.S. at 687–88.

Although an Employer Cannot Correct a Violation, It Does Have Options.

Even if an employer belatedly provides estimated back pay in an amount that equals or exceeds the amount of back pay actually owed, supported by evidence, the employee may still bring a claim under D.C. wage law. Such a claim could result in damages equal to twice unpaid wages, at a minimum.

Nonetheless, there are steps an employer may take to manage its liability in cases where it has discovered that it has failed to pay overtime wages or keep records.  An employer in this situation should consult with an attorney to understand the options.

This material is for informational purposes only and should not be relied on for legal advice.  For legal assistance with an employment matter, contact our Firm through the “Contact Us” page on our website, or calling us at 202-795-9999. 

Podcast: Legal Issues for Business Owners

On May 28, 2019, GMP Partner Tom Martin and Associate Attorney Kevin Hilgers appeared as guests on the Rhode Island Avenue Radio Podcast. Listen to the conversation with Kyle Todd, Executive Director of Rhode Island Avenue NE Main Street, as they discuss educating employers about the District’s new Universal Paid Leave tax, as well as D.C.’s next Minimum Wage increase on July 1, the legal status of marijuana in D.C., and overtime for tipped workers.

Please note that this podcast is created by, and remains the intellectual property of, Rhode Island Avenue Main Street.

This material is for informational purposes only and should not be relied on for legal advice.  For legal assistance, contact our Firm through the “Contact Us” page on our website, or calling us at 202-795-9999.