1. envision, strategize and actualize HOT TOPICS: New Rulings & Guidance from DOL, EEOC, NLRB, OSHA and More Anna Elento-Sneed June 2016 Webinar Wednesdays

2. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary DISCLAIMER This presentation is provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please consult an attorney if you have specific legal issues.

3. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary DISCUSSION TOPICS U.S. Department of Labor (USDOL) Equal Employment Opportunity Commission (EEOC) National Labor Relations Board (NLRB) Occupational Safety & Health Administration (OSHA) Hawaii Supreme Court

4. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary USDOL FLSA Regulations on Salaried Exempt Employees –What was changed? Raises minimum salary requirements for bona fide executive, administrative, and professional employees (the “white collar exemptions”) –From $455 per week ($23,660 per year) to $913 per week ($47,476 per year) for full-time salaried workers –Effective date is December 1, 2016 Raises overtime exemption for highly compensated employees (HCE employees) –From $100,000 to $134,004 per year –Effective date is December 1, 2016 Nondiscretionary bonuses, incentive payments and commissions may be considered as part of salary for purposes of meeting threshold, provided they are paid at least quarterly –Only applies to non-HCE employees –Maximum amount of bonuses, incentive payments and commissions that may be counted toward the threshold is 10% of the salary requirement (i.e. $91.30 per week or $1,186.90 per quarter) Establishes automatic updates in salary threshold every three years –Minimum salary requirement is pegged to 40 th percentile of FT salaried works in lowest-wage Census region –HCE threshold is pegged to 90 th percentile of FT salaried workers nationally –Automatic updates begin January 1, 2020 –USDOL will post new salary levels 150 days in advance of their effective date, beginning on August 1, 2019

5. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary USDOL FLSA Regulations on Salaried Exempt Employees –Why was the change made? Update salary threshold that had not been revised since the 1970s Address inequities between exempt and nonexempt employees Clarify the differences between exempt and nonexempt employees Encourage employers to hire more workers Increase wages for an estimated 4.2 – 8.9 million salaried workers –What does this mean for employers? Increase in labor costs unless … Revisit staffing strategies, work schedules, automation and compensation levels

6. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary USDOL What’s Next? –Proposals to increase the minimum wage –Review of other exemptions: Computer and outside sales exemptions Industry exemptions –Litigation rules (particularly on class actions) How you “estimate” damages –Continuation of aggressive enforcement actions

7. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary EEOC New ADA Guidelines on Leaves of Absence –What was changed? Clarification of “equal access” to leaves of absence –Must provide leave to disabled on the same basis as provided to the non-disabled (i.e. if there are no pre-requisites to use of the leave, you cannot establish pre-requisites for disabled employees who wish to use the leave) –You can establish pre-requisites for leave policies, but the pre-requisites must apply to all employees – disabled and nondisabled Unpaid leaves are a form of “reasonable accommodation” above and beyond any statutory or paid leaves –There is no requirement to provide paid leave as a reasonable accommodation –Must provide unpaid leave even if: (1) the employer doesn’t offer leave as a benefit; (2) the employee is not eligible for leave under company policies; and (3) the employee has exhausted leave provided by federal or state law, workers compensation programs or company policies –Can refuse if granting the unpaid leave creates an “undue hardship” operationally or financially

8. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary EEOC New ADA Guidelines on Leaves of Absence –What was changed? Communication with employees requesting leave –Individual with a disability must inform employer of the need for leave as a “reasonable accommodation” »If leave can be addressed under existing program, then employer must grant leave request »If leave cannot be addressed by existing program, then go through interactive process –With employee’s permission, employer may request the following information from employee’s health care provider: »Specific reason(s) for the leave; »Whether the leave will be a block of time or intermittent; and »When the need for leave will end Communication during leave and prior to return to work –If employee provided fixed return date, may not ask employee for periodic updates (but may reach out to check on employee’s progress) –If employee did not specify return date, or if employee requires additional leave beyond original date, then employer may continue the interactive process

9. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary EEOC New ADA Guidelines on Leaves of Absence –What was changed? Maximum leave policies adopted by employer –Employers may adopt such policies (i.e. FMLA policies, no fault policies, etc.) –BUT. if an employee requires more leave as a “reasonable accommodation,” then the employer must make an exception –Letters to employees who are about to exceed the “maximum” must be modified: »Must inform employees that if they need additional unpaid leave, they may request it as a “reasonable accommodation” »If employer uses third party provider to handle leave programs, must ensure that third party’s form letters comply with employer’s obligations under ADA »Third party contractor must be instructed to forward “reasonable accommodation” requests to employer’s HR department in a timely manner and to refrain from terminating the employee until HR has had opportunity to engage in interactive accommodation process »HR must contact the employee ASAP to explain interactive process »All communications on interactive process should be handled by HR »HR may request employee’s health care provider provide information (see above)

10. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary EEOC New ADA Guidelines on Leaves of Absence –What was changed? Return to Work and Reasonable Accommodations Upon Return –Employers may not require employee to be 100% healed –Employer may not refuse reinstatement based on safety risk absent medical proof that employee poses “direct threat” –If employee has restrictions, employer may: »Ask the employee and doctor to specify the accommodation(s) required; »Ask why the restrictions are required; »Ask how long the reasonable accommodation may be needed; »Explore with employee and doctor possible accommodations that will enable employee to perform essential job functions consistent with doctor’s recommended limitation; and »Explore whether any of the accommodations will impose an “undue hardship.” Reassignments –If reassignment is required, employer must place employee in vacant position for which he/she is qualified, without competing for position –Reassignment does not include promotion –Do not have to place employee into position for which another employee is entitled under uniformly-applied seniority system

11. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary EEOC New ADA Guidelines on Leaves of Absence –What was changed? Considerations for “undue hardship” defense –Specific factors considered in applying the defense: »Amount or length of leave required »Frequency of the leave »Whether there is any flexibility with respect to the days on which leave is taken »Whether the need for intermittent leave is predictable or unpredictable »The impact of the employee’s absence on coworkers and on whether the specific job duties are being performed in an appropriate and timely manner »The impact on the employer’s operation and its ability to serve customers/clients appropriately and in a timely matter (taking into account the size of the employer) –Undue hardship is evaluated case-by-case –Indefinite leave (i.e. employee cannot say whether or when he/she will return to work) constitutes “undue hardship” –In assessing undue hardship, may take into account the leave already taken –Leave includes right to return to the employee’s original position, but if employer determines holding the job open will cause undue hardship, then you look at alternatives to allow the employee to: (1) complete the leave; and (2) return to work (i.e. assignment to vacant positions)

12. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary EEOC New ADA Guidelines on Leaves of Absence –Why was the change made? Increased litigation over leaves of absence Further clarify guidelines issued in 2002 –What does this mean for employers? Revision of policies Reorganizing leave administration practices –What’s next? Transgender issues relating to bathrooms, locker rooms, etc. Possible changes in EEOC conciliation process

13. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary NLRB Changes Made Since 2015 –“Quick election” rules Cuts election process to as little as two weeks –Purple Communications decision Entitles employees to use company email for personal use –New “persuader” regulations Restricts ability of consultants (including lawyers) to advise employers about union organizing Changes Under Consideration –Employee handbooks E.g., Policies prohibiting disclosure of compensation, prohibiting mandatory arbitration requirements, extension of Purple Communications to use of company computers –Possible revision of decertification rules –Authority of NLRB to order payment of attorneys’ fees

14. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary NLRB What Do These Changes Mean for Employers? –Easier to unionize Process is quicker and easier for labor organizations More difficult for employers to mount an anti-organizing campaign Labor organizations and pro-union employees have greater access to workers (through email and social media) –May be harder to get rid of union support –Employers will need to re-think their approach to employees and the work environment in order to “stay ahead”

15. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary OSHA Recordkeeping & Reporting –What was changed? Rule on recordkeeping and reporting of workplace injuries requires –Employers to inform employees of their right to report work-related injuries and illnesses free from retaliation »Can fulfill requirement by putting up OSHA poster “Job Safety and Health – It’s the Law” –Reporting procedure to be “reasonable” – cannot discourage employees from reporting –Employers to submit some of the information electronically to OSHA for posting on a publicly accessible website (OSHA will remove Personally Identifiable Information before posting) »Form 300, Log of Work-Related Injuries and Illnesses »Form 300A, Summary of Work-Related Injuries and Illnesses »Form 301, Injury and Illness Incident Report Rule applies to: –All companies with 250 or more employees, regardless of the industry –Companies with 20 or more employees, in industries designated as hazardous Non-retaliation provisions are effective August 10, 2016 Posting provisions are effective date is January 1, 2017

16. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary OSHA Recordkeeping & Reporting –Why was the change made? Transparency to encourage safe work practices Publicly available data to encourage research –What does this mean for employers? Public scrutiny Possible impact on whistleblowing claims –What’s next? Who knows …

17. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary HAWAII SUPREME COURT Gao v. State of Hawaii, SCWC-14-0694 (Haw. 2016) –Facts of the Case: Employer issued Gao a “Notice to Improve Performance” (NTIP) which set out performance requirements; Notice said if performance remained unsatisfactory, more action could be taken Day after receiving NTIP, Gao sought medical treatment for “depression” Gao applied for workers compensation benefits based on NTIP, contested LIRAB issued decision saying NTIP was “reprimand” which precluded him from receiving workers compensation Case appealed to Hawaii Supreme Court –Court’s Decision: Reversed LIRAB decision, said claim was compensation under workers compensation because NTIP did not punish Gao Reviewed history of Workers Compensation Law and noted – In 1989, Legislature amended statute to preclude claims for mental stress arising out of disciplinary actions taken in good faith by employer –Statute defines “disciplinary action” to mean reprimand, suspension or discharge, HRS Section 386-1 –Attempts were made in 1998 and 2005 to further define “disciplinary action,” but were not successful

18. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary USDOL What does this mean for employers? –Rethink performance improvement plans If intended to be disciplinary, should specify that it is disciplinary If not intended to be disciplinary, and the employee claims stress, expect the workers compensation claim to be held “compensable”

19. Copyright © 2015 ES&A, Inc. All Rights Reserved Confidential and Proprietary WHAT ELSE CAN WE EXPECT Congress’ new laws –Trade secrets Hawaii State Legislature’s new laws –E.g., disclosure of employee user identification and passwords U.S. Supreme Court –Cases to undo NLRB changes and restrict EEOC & USDOL Hawaii Supreme Court Stay tuned!