Freelancers are taking over the workplace!

According to one recent 2016 study, 55 million Americans are working as freelancers (which is 35% of the US Workforce). The use of freelancers by businesses raises all sorts of legal questions, but most significantly is the issue of worker misclassification.  Businesses routinely classify freelancers as independent contractors, not employees.  Is this correct?  It depends on a variety of factors.  In general, if the freelancer is truly independent (meaning that the business does not control how the freelance does his/her work) and the freelancer operates as an independent business, then classifying the freelancer as independent contractor would most likely be correct.  However, the line between who is an employee and who in an independent contractor can sometimes be difficult to determine. Unfortunately, different laws use different tests to determine if the worker is an employee or independent contractor.  Most of the tests focus on (a) whether the business controls how the freelancer performs the work, (b) whether the business controls the “economic realities” of the relationship; and (3) whether the worker has an independent business.  Great care must be taken to ensure workers are properly classified.  A business cannot summarily decide that a particular worker is an independent contractor, rather the relationship and interaction between the business and the freelancer needs to be examined.  The consequences for misclassifying a worker can be significant, as various statues requires violators to pay fines, taxes, unpaid wages, and other damages.

For more information on worker misclassification issues, please contact Scott A. Mirsky at (301) 656-7603 or samirsky@paleyrothman.com.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Minimum Wage in Montgomery County Set to Increase Again

While is seems like the minimum wage in Montgomery County, Maryland was just increased to $10.75, employers are now less than 90 days away from the next increase. On July 1, 2017, the minimum wage will rise to $11.50 per hour.   While this increase is not a surprise, as the legislation approving this lift in the minimum wage rate was passed several years ago, the fact remains that Montgomery County will have the highest minimum wage in the State of Maryland.  However, Prince George’s County, Maryland will shortly follow and increase its minimum wage to $11.50 on October 1, 2017.   Employers in the District of Columbia are already required to comply with the $11.50 minimum wage.

As a reminder, for all hours worked over 40 in a given work week the employee must be paid time-and-one-half. In other words, all overtime hours must be paid at a rate of $17.25/per hour.

For more information on minimum wage and overtime issues, please contact Scott A. Mirsky at (301) 656-7603 or samirsky@paleyrothman.com.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Employers Need To Be Aware Of Potential Retaliation Claims

Most employers are well aware that they cannot make employment decisions based upon a person’s race, disability, sex, age, national origin, religion and other classes protected under federal, state or local law. However, many employers seem to run afoul of the employment discrimination laws not because they engage in discriminatory conduct based upon a person’s membership in a protected class, but rather by retaliating against the individual for raising a possible discrimination issue.  In fact, the U.S. Equal Employment Opportunity Commission recently announced that in over 45% of the workplace discrimination charges it received in 2016 involved, at least in part, a claim of retaliation was raised by the complaining party.  https://www.eeoc.gov/eeoc/newsroom/release/1-18-17a.cfm

Therefore, it is extremely important that in addition to immediately commencing an investigation into any discrimination allegation, the employer must take appropriate steps to safeguard the complaining party from retaliation. The employer’s personnel policies should make clear that retaliation will not be tolerated and this should be reiterated to all individuals involved in the alleged discrimination. Generally, taking any adverse action against a complaining individual is not a good idea.  However, for reasons totally unrelated to the fact that the employee raised a complaint of discrimination, it is sometimes necessary to terminate an employee who has complained about discrimination.  This decision should only be made after consultation with competent legal guidance, as the employer will need to demonstrate that the adverse employment decision was not motivated by retaliation or discrimination.   The closer the “temporal proximity” is between the complaint of discrimination and the adverse employment action, the harder it will be for the employer to satisfy its burden.

Again, terminating an employee after he/she has raised a complaint of discrimination is generally ill-advised. It is important to remember that even if the underlying complaint of discrimination turns out to unsubstantiated, the retaliation claim will not disappear and will have to be addressed.

For more information on retaliation claims, please contact Scott A. Mirsky at (301) 656-7603 or samirsky@paleyrothman.com.
Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Non-Compete Agreements

Is a non-compete agreement enforceable?

In Maryland, if the terms of the non-compete agreement are reasonable then the Court will generally enforce the agreement.  To determine what is reasonable, many factors need to be analyzed.  Such as, what is the duration of the restriction?  What is the geographic scope of the restriction?  What is the scope of work that is being restricted?  If the non-compete is narrowly tailored to protect the legitimate business needs of a company, and its terms are reasonable, then the Maryland courts will most likely enforce a non-compete agreement.  If on the other hand, the non-compete is overbroad, seeks to restrict activities that are outside of the company’s business or geographic region, or is for too long of a time period, then the Court will not enforce the non-compete agreement.

What are the possible remedies for breaching a non-compete agreement?

If a company wants to take action against a former employee who is violating a non-compete agreement, then the company can hire an attorney to write a cease-and-desist letter asking the former employee to stop breaking the terms of the non-compete agreement.  In addition, the company can take immediate legal against the former employee and ask the Court to enter an emergency order for injunctive relief against the former employee ordering him/her to stop violating the non-compete agreement.   At a subsequent trial, the company may be awarded monetary damages caused by the former employee’s actions and the company may also be awarded their attorney’s fees if the non-compete agreement specifically allows the company to recover its attorney’s fees.

As knowledgeable employment law attorneys, we can help you navigate and figure out the best way to protect your business, trade secrets, and client base.

For more information on employment policies, please contact Scott A. Mirsky at (301) 656-7603 or samirsky@paleyrothman.com.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Impending FLSA Regulations are On-Hold

In a blog I posted on June 25, 2016, “Time to Start Preparing for The New Overtime Regulations”, I discussed what was slated to become a major change to the Fair Labor Standards Act (FLSA) on December 1, 2016.  Well, not so fast.  Last month, a federal judge in Texas issued a Court Order blocking the implementation of the new regulations which would have increased the minimum salary to $47,476 annually for an employee to qualify for the executive, administrative or professional exemptions (the so called “white collar exemptions”).   While employee-rights groups celebrated the new regulations, many business groups felt that the new regulations put extra financial pressures on businesses that were already having difficulty surviving in the current economy and that the Department of Labor had overstepped its authority with the new regulations.  Thus, lawsuits were filed which culminated in the federal judge’s decision, which applies nationwide, and basically keeps everything status quo for the time being and employers do not have to make changes by December 1, 2016.

However, while I was presenting seminars on this topic during the past few months, I discovered that many employers are still misclassifying their employees and, as a result, may be failing to pay required overtime.  Many employers simply believe that they can pay their employees a non-fluctuating salary, and somehow they are magically in compliance with the FLSA.  This is not the case.  An employee’s job duties dictate if he/she is entitled to overtime.  The fact that the federal judge has stayed the impending regulations, does alter the basic rule that employees whose job duties do not qualify for an exception under the FLSA must be paid overtime.

For more information on the classification of employees under the Fair Labor Standards Act, please contact Scott A. Mirsky at (301) 656-7603 or samirsky@paleyrothman.com.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Employment Policies Cannot Prohibit Employees from Discussing their Wages with their Co-Workers

A new Maryland law went into effect on October 1, 2016 that prohibits employers from making pay decisions based upon an employee’s sex or gender indemnity.  In furtherance of the purpose of the newly enacted Maryland Equal Pay for Equal Work Act of 2016 (“Act”), an employer cannot restrict their employees from talking about their salaries.   In particular, an employer is not allowed to prohibit its employees from inquiring about, discussing, or disclosing their wages or the wages of any other employee.  Pursuant to the new law, any efforts by the employer to take an adverse action against an employee because he/she has exercised his/her rights to discuss wages and/or to inquire about his/her wages, is a violation of the Act.

However, the Act does allow the employer to take steps to protect the integrity of the work environment.  Specifically, an employer can institute a written policy that establishes reasonable workday limitations on the time, place, and manner for inquires about or the discussion of disclosure of employee wages but these limitations need to be consistent with standards adopted by the Commissioner of Labor and Industry and all other state and federal laws.

Now is the time to review employment policies to ensure compliance with the new Act.

For more information on Maryland’s new Equal Pay for Equal Work Act of 2016, please contact Scott A. Mirsky at (301) 656-7603 or samirsky@paleyrothman.com.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Alert! Montgomery County Employers: Required Paid Time-Off Starts on October 1, 2016

The Montgomery County Earned Sick and Safe Leave Law goes into effect on October 1, 2016.  Under this new law, all employers in Montgomery County will be required to implement policies that allow employees to accrue paid time-off to be used under certain circumstances, including but not limited to, (1) when the employee (or his/her family member) is sick, (2) when there is a public health emergency closing the employer’s place of business or schools, (3) when the employee (or his/her family member) is the victim of domestic violence, sexual assault, or stalking.

If an employer has at least one employee working in Montgomery County, then the employer must comply with the law.  Employers with five or more employees must allow their employees to earn 1 hour of paid leave for every 30 hours worked up to a minimum of 56 hours of paid leave each year.  Employers with less than five employees must allow their employees to earn at least 32 hours of paid leave and 24 hours of unpaid leave.

If an employer already provides at least 56 hours of paid leave (which can be used for the same situations, and in the same manner, as enumerated in the Montgomery County Earned Sick and Safe Leave Law), then the employer is most likely in compliance with the leave requirements of the new law and does not need to provide additional hours of paid leave.

However, it important to note, that under the new law all employers in Montgomery County are required to provide its employees with a written statement (or an online portal) which shows the employee how many hours of paid time off they have available to use.

Finally, all employers in Montgomery County must notify their employees that they are entitled to sick and safe leave.  The notice must comport with certain requirements or include the model notice prepared by Montgomery County.

All employers who have employees located in Montgomery County should immediately review their leave polices to ensure compliance with the new law and consult with an employment attorney who is familiar with the Montgomery County Earned Sick and Safe Leave Law.  If an employer in Montgomery County does not offer paid time-off or does not have a written policy describing paid time-off, now is the time to address this issue.

For more information on employment policies, please contact Scott A. Mirsky at (301) 656-7603 or samirsky@paleyrothman.com.

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Time for Employers to Amend their Confidentiality and Non-Compete Agreements

With the recent passage of the Defense of Trade Secrets Act (DTSA), all employers need to take another look at their confidentiality and non-compete agreements.  On the one hand, the DTSA now provides a federal cause of action for misappropriation of trade secret claims with more equitable relief along with compensatory damages, punitive damages, and attorney’s fees.  On the other hand, it grants immunity to employees (and contractors) who make a disclosure of a trade secret/confidential information to a government official or an attorney solely for the purpose of reporting or investigating suspected unlawful conduct.  In other words, and stated generally, an employee can take your company’s trade secrets/confidential information if their purpose in doing so is to report your company’s alleged misconduct.

In addition, the employer must provide notice of this immunity to its employees (and contractors) in their confidentiality and non-compete agreements or the agreement can cross-reference another policy document provided to the employee or contractor that addresses the notice requirements of the DTSA.  This notification requirement applies to agreements entered into or amended after the enactment of the DTSA.  The failure of the employer to include the required notice provision, will limit the legal remedies available to the employer if an employer determines that, in fact, an employee has misappropriated the employer’s trade secrets/ confidential information.

All businesses who use confidentiality and/or non-compete agreements should immediately consult with an employment attorney to discuss amending their current agreements.

-Scott Mirsky

For more information on employment policies, please contact Scott A. Mirsky at (301) 656-7603 or samirsky@paleyrothman.com.

 Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.

Time to Start Preparing for The New Overtime Regulations

**SEE UPDATED BLOG POSTED DECEMBER 2016**

Starting on December 1, 2016, the minimum salary level to qualify for the executive, administrative or professional exemptions (the so called “white collar exemptions”) under the Fair Labor Standards Act (“FLSA”) will increase to $47,476 annually.  This is a big jump from the previous minimum salary level of $23,000 annually.  Put in simple terms, white-collar employees making less than $47,476 will not meet the test for the “white collar exemption” and the employee will be eligible for overtime pay if they work over 40 hours in a given week.

What should employers do to prepare?

Make a list of all employees (and their salaries) who are currently exempt under the “white collar exemptions.”  If they are paid $47,476 or more then no change is warranted (assuming they meet the duties test of the “white collar exemptions” which are not changing under the new regulations).  On the other hand, if the employee makes less than $47,476 they will be entitled to overtime under the new regulations.  Employers have a few options to handle this situation.

  • Raise the employee’s salary to $47,476 or higher;
  • Do not increase the employee’s salary but make sure the employee does not work more than 40 hours in a given week; or
  • Do not increase the employee’s salary and pay the 1.5 overtime premium for all hours worked over 40 hours in a given week.

This decision should not be made until after considering the financial impact of each option and after thorough discussion with a competent employment law attorney.

The author of this blog post, Scott A, Mirsky, Esquire, assists businesses deal with complicated employment issues and employment litigation.   He can be reached at (301) 656-7603 or samirsky@paleyrothman.com.

 

Disclaimer: The content of this blog is intended for informational purposes only. It is not intended to solicit business or to provide legal advice. Laws differ by state and jurisdiction. The information on this blog may not apply to every reader. You should not take any legal action based upon the information contained on this blog without first seeking professional counsel. Your use of the blog does not create an attorney-client relationship between you and Mirsky Law Group, LLC.