In the latest Weekly Wright Report:
Retirement Anyone? Be Mindful of Landmines
If you are a business owner concerned about the aging of key personnel and how to plan for locating and training qualified replacements, you have a justifiable reason to understand the retirement plans of elderly employees. Do you come right out and ask an employee? This can be a trap for the unwary. Under the Age Discrimination in Employment Act (ADEA), an employer with 20 or more employees cannot discriminate against employees 40 years or older. You can inquire about plans for retirement, but going beyond a simple inquiry might lead to a claim that you violated the ADEA. You are caught in a dilemma. How hard can you press the employee? On the one hand, you need to know his or her plans in order to plan for the company’s future, to safeguard continuity, and to manage a transition. Yet – you must avoid a claim.
Here is what not to do. If you are narrowing down qualified successors for a particular function, do not exclude older employees from the pool. When inquiring about an employee’s retirement plans, you should not limit the inquiry to older employees. Once an employee has told you that he or she has no plans to retire, leave it alone. Do not repeat the question. If the employee declines to divulge retirement plans, do not behave in any way that signals as a negative reaction. The employee could see this as pressure to retire. Do not make age a factor in employee decisions. When discussing retirement with an employee, do not mention age either directly or by implication such as referring to baby boomers, “your generation”, or even something glib and friendly such as “you look great for your age…” or “your performance is as good as the younger guys.”
There is another trap for the unwary. Employers frequently use severance agreements as a way to have a terminating employee waive claims under the ADEA, ADA, and other laws that prohibit discrimination against members of a protected class. To be effective, severance agreements must follow certain rules. For instance, the agreement must state clearly that the terminating employee has 21 days to consider the agreement before signing and an additional 7 days to revoke it. It must be clear and understandable, recite the rights or claims being waived, be supported by consideration, and advise the employee to consult an attorney.
Yet if more than one employee is terminated because of a reduction-in-force, the Older Workers Benefit Protection Act may apply. It has additional requirements. For example, “[I]f a waiver [of a potential claim under one of the anti-employee discrimination laws] is requested in connection with an exit incentive or other employment termination program offered to a group or class of employees, the individual is given a period of at least 45 days within which to consider the agreement.” In addition, the employer must inform the individual in writing in a manner calculated to be understood by the average individual eligible to participate, as to- (i) any class, unit or group of individuals covered by such program, any eligibility factors for such program , and any time limits applicable to such program; and (ii) the job titles and ages of all employees eligible or selected for the program, and the ages of all individuals in the same job classification or organizational unit who are not eligible or selected for the program.” The waiver agreement must also include a description, with some specificity, of other parts or units of the employer’s business that were under consideration for reduction-in-workforce, even if they were not chosen. The employer asserting the validity of a waiver has the burden of proofing that the employee did so knowingly and voluntarily.
In Ray v. AT&T, Inc., 2019 BL 10475, E. D. Pa., No. 18-3303, AT&T failed to meet these requirements. As a result, the waiver and release documents were invalid. The terminated AT&T employees were free to bring an age discrimination action. And they likely kept their severance. Be careful.
Good Deeds Rewarded as Good Deeds
On March 14 the DOL issued a new opinion providing guidance as to whether volunteer hours worked by employees would be considered compensable time for which the employer must pay the employee. The factual scenario involved an employer who monetarily rewarded employee efforts which had the most community impact. The DOL made clear that as long as the volunteerism was not coerced explicitly or implicitly, the hours volunteering were not considered hours worked for which the employer needed to compensate the employees.
It was never the intent of Congress “to discourage or impede volunteer activities.” All the FLSA was intended to do was “prevent manipulation or abuse of minimum wage or overtime requirements through coercion or undue pressure upon individuals to ‘volunteer’ their services.” 29 C.F.R. § 553.101. Volunteers are ordinarily not deemed employees provided they volunteer without contemplation or receipt of compensation and “freely without coercion or undue pressure,” direct or implied, from an employer. Similarly, an employer may notify employees of volunteer activities and ask for assistance as long as there are “no ramifications if an employee chooses not to participate.” Compensating employees when they participate in volunteer activities during normal working hours does not jeopardize their status as volunteers when they participate in volunteer activities outside of normal work hours. In addition, an employee’s time spent volunteering may be considered a factor in calculating whether to pay the employee a bonus as long as: (1) volunteering is optional, (2) not volunteering will have no adverse effect on the employee’s working conditions or employment prospects, and (3) the employee is not guaranteed a bonus for volunteering.
Since the company seeking the opinion did not pressure employees to volunteer and only rewarded the group of employees with the most community impact providing them a bonus, if any, participation did not count as hours worked under the FLSA.
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