July 18, 2008

For many of us, summer will always seem like the time to relax, be more casual, and, of course, take vacations. But transferring the spirit of summer to the workplace always raises a number of issues for employers.  To find out more about these issues, including dress codes, use of mobile devices while on vacation, the impact of the economy on employee vacations, the use of summer interns and how to be more “green” this summer, read on.

Dress Codes
Traditional business attire (suit and tie, etc.) has been making a bit of a comeback in some offices, but has largely given way to business casual or just casual in most workplaces, and even more casual summer clothing is an increasing sight in many workplaces. Employers may want to consider whether to continue to enforce their regular dress codes or to relax those rules during the summer months. “Aloha Fridays” are a common example. A regular summer issue, although it often transcends the summer season now, is the issue of flip-flops (“slippahs” for our Hawaiian cousins) in the workplace. There is certainly no law against wearing flip-flops at work, except, of course, for OSHA requirements for foot protection for certain types of work.

Despite the broad appeal of a relaxed summer dress code, it may not be appropriate for all workplaces. And there is always the risk that some employee might make inappropriate comments about another employee’s more revealing attire. The reverse can also be true — some employees might find other employees’ choice of summer wear offensive or even harassing. If an employee abuses the summer dress code and sports inappropriate attire, it is in the employer’s interest to intervene and head off possible offense and liability.

The Impact of Mobile Technology on Summer Vacations
Many employees stay connected to their workplaces through PDA, laptops and cell phones on evenings and weekends — and summer vacations. Although this can increase productivity, having employees working during their time off raises many issues for employers. First, if nonexempt employees are checking their email or conducting business while on vacation, they may be entitled to compensation for the time worked, and, if they are working remotely long enough, they may be entitled to rest breaks, meal periods and overtime. The law is less clear with respect to exempt employees. If the employer has an expectation that the employee will check in on voicemail and email, the employee should be compensated. If there is no such expectation, the employer generally doesn’t need to compensate the employee. Federal law allows for partial-day deductions from vacation without jeopardizing an employee’s exempt status, but state laws differ, and employers need to understand the parameters in which such deductions may be made. Some employers are establishing specific rules, and some are reaching specific agreements with unions, that specify how and when employees will be paid for after-hours work done on Blackberries. A recent example is an agreement just reached between the television broadcasting company ABC and news employees that provides that some work done using Blackberries may be compensable, but that routine checking of email does not merit overtime pay. Employers should be aware, however, that such rules and agreements will still need to meet the requirements of applicable law.

Moreover, responding to emails or phone messages on vacation may well reduce the benefits of time away from work and affect employee morale. An employee who feels pressured into working during a vacation may claim that such time should not be counted against accrued vacation.

2008: The Summer of “Staycations”
Higher gas prices and airfares, and the downturn in the economy, are also affecting employee vacation plans this summer. The AAA reports that high gasoline prices are dampening Americans’ intent to travel, which may mean vacationing closer to home or taking a shorter vacation, each of which may translate into employees conducting yet more work while on vacation. It may also translate into employees postponing or canceling vacations, which can disrupt employer vacation schedules. While it might, at first glance, seem beneficial to an employer for employees to skip taking vacations, this can have unwanted consequences in the long run, including leaving employees with more vacation to carry over into the next year, if the employer’s vacation policy permits this practice. This leaves more accrued vacation liability on the company books, and may encourage employees to take extended vacations in the future, which may be harder for an employer to handle. Allowing employees to amass large amounts of accrued vacation can also negatively affect employers when an employee leaves employment, at which time an employee generally has to be paid for accrued but unused vacation, depending upon state law and the employer’s policy.

Summer Shutdowns
The economy is also causing some businesses to impose summer shutdowns or increase the length of traditional seasonal shutdowns. For example, Ford Motor Company is increasing its usual two-week summer shutdown to a five-week closure. This practice is clearly lawful, although there are limits on how exempt employees can be treated in this context (any exempt employee who works part of a week must be paid for the entire week, so shutdowns are generally conducted in one-week increments). It is best to provide employees with as much advance notice as possible of such a shutdown, to avoid an unintended impact on employees who may have already made plans to vacation during other parts of the summer.

Reductions In Force
High gas prices and airfares are also expected particularly to impact employers whose business is dependent upon tourism. These elements have already led some businesses in the tourist industry to lay off employees or reduce the schedules of hourly workers. The downturn in the economy in general will also likely lead to more layoffs in other industries this summer.

The U.S. Supreme Court in Meacham v. Knolls Atomic Power Laboratory has recently held that, where an employer’s layoff has a disparate impact on older workers, the employer has the burden of demonstrating that it used reasonable factors other than age in selecting employees for layoff. This increased burden makes it even more important for employers to conduct layoffs with care and attention to possible legal pitfalls; employers are urged to contact counsel for more information should layoffs become necessary. Employers should also be aware of the requirements of the federal Worker Adjustment and Retraining Notification Act, which requires at least 60 days’ notice to certain employees in the event of a plant closing or mass layoff (as defined in the WARN Act).

Seasonal Hiring
Regardless of the state of the economy, many employers will still hire temporary labor or seasonal interns, or use volunteers, during the summer. The use of summer workers raises a variety of issues. In general, employers should follow the same practices in hiring summer workers as they do for regular employees, including having the prospective employee fill out a complete application, doing a reference and background check, and training the employee on all employer policies and safety procedures. The laws prohibiting employment discrimination apply with the same force to summer workers as to full-time employees, so employers should conduct themselves in all respects (with regard to hiring, terms and conditions of employment, and discharge) with that in mind.

Whether and how summer workers must be paid is always an issue of interest to employers. Overall, the Fair Labor Standards Act and its requirements for the payment of minimum wage and overtime apply whenever an employer “suffers or permit[s]” an individual to work. As a result, in almost all cases, summer workers must be paid — an employer cannot simply label a worker an “intern” and avoid paying wages. In certain circumstances, an intern may fall under the “learner/trainee” exemption to the payment of minimum wages and overtime under the FLSA, but this exemption only applies in limited situations; employers are urged to check with counsel to determine whether their workers fit into this category.

Similarly, the “volunteer” exemption to the FLSA applies only to individuals who volunteer or donate their services to nonprofit organizations for civic, charitable or humanitarian objectives. Further, employers should understand that the rules governing whether a worker is an independent contractor or an employee do not change due to the seasonal nature of employment; unless the particular factors determining whether an individual is an independent contractor are met (the complexities of which could be the subject of an entire Employment Law Alert), employers must treat summer workers as employees for the purposes of federal and state taxes and unemployment benefits (with certain exemptions for “seasonal employers” under some state unemployment laws). Employers should also be clear with summer employees about whether they are eligible for benefits such as health insurance, and make sure that eligibility and exclusion provisions in plan documents are drafted to exclude temporary workers, if the employer does not intend to cover them.

For some businesses, the use of summer workers also raises the issue of compliance with child labor laws. The FLSA and similar state laws set wage, hour and safety requirements for individuals under age 18 working in particular jobs. The rules vary, depending upon the age of the minor and the type of job involved. Younger workers may also find that there is more competition for jobs this summer as a result of the slowing economy — not just from other students, but from more senior workers who are themselves having trouble finding work. This competition should be favorable for employers, assuming they handle the increase in job applications with care.

Heat Stress
Additionally, as the temperature rises during the summer, so do heat-related workplace safety concerns. Heat stress claims the lives of a number of employees each year. OSHA has issued guidelines for minimizing exposure to heat stress in both outdoor and indoor work events. See http://www.osha.gov/Publications/osha3154.pdf, as an example. Cal/OSHA has adopted a regulation on this subject for outdoor workplaces (8 CCR 3395).

Summer “Green”
Finally, summertime may also bring with it the opportunity to work a little more green in to the work day. Employees may be more interested in green commuting during the summer — depending upon where you live, it may be more attractive to walk or bike to work during the warmer months than in the dead of winter. In some areas of the country, summer also brings “Spare the Air” days, when people are encouraged to take public transportation in order to improve air quality. Employers may want to support employees’ efforts to try out forms of commuting which are more environmentally friendly, perhaps giving employees alternatives on arrival and departure times or subsidizing the use of public transportation, in the interest of improving their carbon footprint.

For more information on this issue or any other labor or employment law matter, please contact your regular Nixon Peabody attorney or:

Sandra E. Kahn at 617-345-1045 or [email protected].