NJ PHCC Summer 2019 by Graphtech

Official Magazine for the New Jersey Association of Plumbing-Heating-Cooling Contractors Summer 2019 â&#x20AC;¢ Volume 15 Number 3

NJ PHCC 189 East Bergen Pl Red Bank, NJ 07701

PRSRT STD U.S. POSTAGE PAID HARRISBURG PA PERMIT NO. 533

NJ CONTRACTOR

how to solve the

summer slowdown

DONE

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Contents Summer 2019 • Volume 15 Number 3 New Jersey PHCC 189 East Bergen Place Red Bank, NJ 07701 P: (800) 652-7422 F: (609) 987-0511 director@nj-phcc.org Local Area Meetings Essex CountyPHCC 1st Wednesday Monthly Located at Tierney’s Copperhouse 4 Little Falls Road, Fairfield, NJ Mercer County PHCC 1st Tuesday Monthly Located at Tessara’s 812 Route 33, Hamilton, NJ

President’s Message....................................... 2 Workplace Employee Disputes........................ 3 How to Solve the Summer Slowdown.............. 5 Contesting Unemployment Benefits Claims .....10 HR Question of the Month..............................15 Wage Theft– Upping the Ante........................ 18

2019 Executive Committee PRESIDENT John Heine Heine Plumbing & Heating 270 Sparta Ave., Suite 104 Sparta, NJ 07871 (973) 383-0392 PRESIDENT ELECT Stephen Dzieminski Stephen Dzieminski Plumbing 702 President Ave. Lawrence Township, NJ 08648-4429 VICE PRESIDENT Kevin Tindall Tindall & Ranson 880 Alexander Rd. Princeton, NJ 08540 (609) 897-9770

SECRETARY Susan Perlstein-Tavares Frank Perlstein & Son, Inc. 815 S Broad St. Trenton, NJ 08611-1903 (609) 393-4877 (609) 394-5106 (fax) TREASURER Ken Alexander Alexander Plumbing, Heating & Cooling 743 Alexander Rd., Unit 10 Princeton, NJ 08540 (609) 987-2424 (609) 987-9797 (fax) EXECUTIVE DIRECTOR Nicole Urizzo 189 East Bergen Place Red Bank, NJ 07701 (609) 987-0500 (609) 987-0511 (fax) director@nj-phcc.org

DESIGNED & PUBLISHED BY:

Alexis Kierce, Publications Manager 717-238-5751 x119 alexis@thinkgraphtech.com For Advertising Information: Jen Smith, Account Manager 717-238-5751 x124 jen@thinkgraphtech.com

An exclusive publication of the NJ PHCC. The NJ Contractor is published four times a year by Graphtech. Editorial Offices: 189 East Bergen Place, Red Bank, NJ 07701. With the exception of official association announcements, the statements of fact and opinion that are made herein are the responsibility of the authors alone and do not reflect the opinion or philosophy of the officers or the membership of the NJ PHCC. Materials may not be reproduced without written permission from the NJ PHCC headquarters.

Summer 2019

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---------President’s Message Greetings! As many of you know the 2018 Code NSPC was adopted on 9/3/19. That date starts the 6 month grace period before full enforcement of the 2018 code begins. This cycle there will be a NJ Eition of the 2018 NSPC. This book should be available to ship by the 2nd week of October and will have the adopted NJ amedments written into it. It will also be back in binder form only. If you need a book please contact the State office to put in your request at director@nj-phcc.org. With the recent change that was made to the New Jersey law which requires all contractors who perform public works jobs to be participate in a US DOL Apprenticeship program, we want to remind you we can help with our PHCC Online Academy. We are a DOL approved and registered Apprenticeship program for both Plumbing & HVACR. Both programs are offered as online courses. Contact us to see if we can help you and your apprentices. We continue to strive to help educate the future of our Industries. The 2020 NJ/PA PHCC Trade Show will be held at Wind Creek in Bethlehem, PA. More information will come to follow soon. We hope to see you there! Sincerely, John Heine President New Jersey PHCC

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NJ Contractor • NJ PHCC

DONE Workplace Employee Disputes

here is little question that the workplace is where most people spend the majority of their time. Equally true is the fact that today’s workplace is often filled with stressful situations and sometimes complex relationships. It is only natural that periodically disagreements will arise between employees. Fortunately, most employee workplace disputes are generally little more than verbal exchanges, sometimes heated, between employees. They are most commonly precipitated by a comment or conduct that one or the other finds offensive. Such conflicts rarely lead to anything more than hurt feelings and estrangement of the parties. Many times employers simply ignore such situations expecting that the employees will work it out. However, given today’s increasingly diverse workplace it is possible that an employee conflict could create potential legal liability for the employer. For example, a hostile comment or conduct that relates to an employee’s race, gender, national origin or other status protected under law could create employer obligations beyond simply smoothing out the conflict. Title VII, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA) and related state human rights laws all make comments or conduct that are derogatory of an employee’s unique protected status a form of “unlawful harassment”. In such a case the employer’s response must go beyond merely resolving the employees’ disagreement and avoiding escalation of the situation. The unlawful harassment must be addressed and adequate steps taken to assure that there is no reoccurrence of the discriminatory conduct. While in theory, unlawful harassment must be “severe” or “pervasive” to be legally actionable, the reality is that in some circumstances a single offensive comment could be the basis of legal liability. Moreover, a hostile remark or act that implicates an employee’s protected status can have repercussions in the workplace for beyond the individuals involved.

Workplace Violence While most employee workplace disagreements amount to little more than shouting or verbal exchanges, there is always the possibility that the dispute could escalate into a physical confrontation. Fighting between employees is generally a terminable offense for the aggressor, and sometimes both employees. There is rarely any acceptable excuse for employees to physically assault each other. It must be dealt with firmly and swiftly to assure a safe and orderly workplace. The impact on morale and productivity can be long lasting. It also constitutes an incident of “workplace violence”. That is an issue that has unfortunately been in the news with increasing frequency lately. In recent months, there have been several terrifying incidents where a workplace shooting has left fellow employees dead or wounded. These of course are the most reprehensible and extreme forms of workplace violence. The mere possibility of such an event occurring has become such a concern that many

employers have implemented “active shooter” training into their safety regimen. Much like fire drills, employees are trained in how to respond if the workplace comes under attack by someone with a firearm. It is training that everyone prays never has to be put to use. One form of workplace violence that is fairly common, and apparently also occurring more frequently is “verbal aggression”. A recent health and safety workplace survey found that nearly 70% of responding employees had experienced it in their workplace. Preventing such unacceptable conduct from occurring is not as easy as one might think. A workplace rule prohibiting “bullying” is a good idea, but it may not be sufficient. Trying to predict whether a particular employee might engage in violent or threatening behavior is difficult at best. There is no standard profile of what type of employee might engage in workplace violence. However, there are some indicators that could be warning signs to consider. These potential signs include: * demonstrated instances of poor impulse or anger control; * inability to get along with fellow employees; * instances of suspiciousness, paranoia or perception of being a victim; * reduced socialization and interaction with fellow employees; * experiencing serious personal problems such as divorce, child custody or similar issues.

Employer Response The presence of one or more of these telltale signs could indicate someone more likely than others to engage in some type of potentially threatening, aggressive or violent behavior. It raises the obvious question of what response, if any, can or should be made before such conduct actually occurs. Certainly, employees displaying one or more such traits may never engage in problematic behavior. Nonetheless, to the extent that there is a legitimate concern based upon demonstrable evidence, an employer may want to consider being proactive. Employee Assistance Programs (EAPs) are particularly suited for addressing these types of employee issues. They have access to professionals versed in the treatment of a variety of employee problems, Continued on page 4 Summer 2019

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DONE including anger management. In some cases, it is a matter of providing the necessary counselling or course of treatment before the employee is permitted back into the workplace. Taking steps to defuse the potential conduct or behavior before it impacts the workplace is always preferable to dealing with the fallout of an incident that might have been prevented.

If an Employee has a Mental Illness or Disability When the underlying problem that is causing the troubling or hostile behavior is a suspected mental illness or disability, the matter becomes even more difficult for employers to address. The Equal Employment Opportunity Commission (EEOC) has stringent standards regarding what and when an employer can inquire about information regarding the employee’s medical (mental) health. Of the four circumstances under which an employer may ask questions of an employee regarding a medical condition, the only one relevant to these situations is when the employer has objective evidence that an employee is unable to perform their job or poses a safety risk because of the condition. If the employee’s condition creates the potential for workplace violence, it would seem to satisfy the permissible enquiry standard. Additionally, it is quite possible that the mental condition could constitute a disability under the ADA. The EEOC takes the position that a mental health condition does not have to be significant or permanent to qualify as a “disability”. If the condition is limiting to the employee, it likely

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qualifies. The potential safety risks involved with violent or aggressive behavior would certainly be limiting. In these types of cases it is always best to have the medical professionals involved – both that of the company as well as the employee’s medical provider. An individualized assessment would have to be made before any definitive action, including any potential reasonable accommodation could be considered.

Conclusion Workplace disputes can be something as simple as a brief exchange of cross words between employees, up to an all-out physical confrontation. Maintaining order in the workplace and assuring all employees a safe and hopefully pleasant work environment should be among every employer’s highest priorities. Being aware of the warning signs of aggressive behavior and how to respond should be a critical part of all manager and supervisor training. Richard D. Alaniz is a partner at Alaniz Law & Associates, a labor and employment firm based in Houston. He has been at the forefront of labor and employment law for over forty years, including stints with the U.S. Department of Labor and the National Labor Relations Board. Rick is a prolific writer on labor and employment law and conducts frequent seminars to client companies and trade associations across the country. Questions about this article, or requests to subscribe to receive Rick’s monthly articles, can be addressed to Rick at (281) 833-2200 or ralaniz@alaniz-law.com.

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DONE

how to solve the

summer

slowdown BY MIKE AGUGLIARO

our summer was probably busy: the phone rang off the hook, your team worked 24/7, and you probably made good money serving customers. But now, as August wraps up and September starts up, you’re probably finding the opposite is happening: the calls have dried up, your guys are hanging around the shop, and you’re starting to wonder how you’ll cover your summer bills. This is a classic problem that service companies face at this time of year. The busy summer falls off a cliff, leaving silence and tumbleweeds and bored team members… and a lot of worry and doubt. The good news is: it doesn’t have to be this way. While the most successful service business owners will start planning for the fall slowdown in June, you can still pick up some work at this point even if you’re starting late. Here are some of my best tips to get more work right now and get your team out to more jobs right away:

#1. Offer a Membership and Incentives Do you have a membership program in your service company? You should, and this is a great time of year to create one and get your members buying from you. • If you don’t have a membership program, put one together and then get your outbounders to start calling. A membership plan doesn’t have to be complicated; you just need to offer your customers a reason to pay a regular fee for a higher level of service from you. Action Step: put together a simple, attractive membership plan and work the phones to put customers into it. • If you do have a membership program, this is the perfect time of year to get your outbounders calling members with a special offer for a fall tune-up. That’s the power of memberships: you can serve your customers while also smoothing out the dips in call volume. Action Step: put together a nice offer for your members and work the phones to get your members buying.

#2. Leftovers Promotion Take a quick walk through your warehouse or storage area. What do you see? Maybe some leftover A/C units from the summer? Maybe a water filtration unit from last year? Maybe a water heater that a small scratch in it? These are all items that you can blow out for big savings to customers who don’t mind less-than-pristine products if it means big savings. Find out what you have leftover (heck, your local supply house or even your competitor may even have some extra scratch and dent items to sell you at a discount too) and get those out to customers who want them. A leftovers promotion is a huge win for everyone: it cleans out your storage area to make room for winter, it gets your team working, and it serves customers who are looking for great deals. ACTION STEP: Start by taking a walk around your warehouse to see what’s in stock that you could blow out to customers for big savings.

#3. Old Jobs One of the biggest opportunities for new work are the people who didn’t call you back or who said no to your estimate or consultation. Sure, they said no to you at the time, and maybe you think they even called another company, but they may not have. People are busy. Their priorities change; they have a bit of money to invest in their home one day but have to spend it elsewhere the next; they think about furnaces during the chilly months but delay the decision during the war months; they go on vacation and choose to deal with it later… there are many reasons. Continued on page 6

Summer 2019

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DONE Bottom line is: the people who said no to you before, or who never called you back on the offer you made previously, may not have received service elsewhere. Some of them may have simply put off the decision. You can swoop back in and remind them that you’re still there and happy to serve them. (And, even if they did hire the competition to do the job you quoted on, they’ll appreciate that you followed up with them… and perhaps there’s another service you can offer them.) ACTION STEP: Dig up that old list of people who never got back to you, or who said they were hiring someone else, and start calling. Go back even 3-5 years of old estimates! There’s gold in that list; go get it!

Summary Do your phones have a layer of dust on them? Is your team twiddling their thumbs? Great news: the opportunities are out there to serve your customers—with memberships and membership discounts, with leftovers and scratch-and-dent promotions, and even with breathing new life into a list of people who said no to you in the past. The work is out there, now it’s time to get to work and get it!

BONUS TIP There’s one more thing you should do if the fall is really quiet: write a reminder to yourself in May to start proactively planning the fall. Don’t wait for the fall to arrive before you start dealing with the slowdown. Build your fall plan in May and June so you can deploy it in July and be ready for August and September. Sure, it won’t solve this fall’s slowdown but it will give you peace of mind for every future fall slowdown.

RISK MANAGEMENT CORNER

Fire Prevention

Not a Once-a-Year Responsibility

How often do you think about fire prevention? Weekly? Monthly? Yearly? On the off chance you come across an article on the subject? Unless your answer to that question is “daily,” you have some work to do. That might sound dramatic, but the U.S. Fire Administration received more than 100,000 reports of nonresidential building fires each year from 2014–20161. In those incidents, about 90 deaths, 1,350 injuries, and $2.4 billion in property damage costs were reported. That last figure is about 20 percent of the total dollar loss from all fires. Some fires have common causes — cooking, faulty electrical wiring, or smoking, for example. But others come from less obvious sources. Here are just a few: • Dust and debris piles near heat sources or electrical outlets • Oily rags stored in the open or in a container that isn’t sealed • Overheated electrical equipment or appliances While you should review your overall fire safety plan a couple times a year, you should constantly be on the lookout for fire risks. This sounds like a big task, but if you integrate it into your business’s everyday procedures, the time commitment will be minimal. Update your cleaning checklists to include inspection of any new potential hazards you’ve identified. You and your employees will barely notice a change in routine, but your fire risk management strategy will be much more effective. Also, remind your employees and managers to constantly be on the lookout for anything unusual. Are there any strange noises coming from machines? Any flickering lights? Do vehicles appear to be operating properly? While it’s true that no matter how diligent you are, a fire is still possible. But if you take proper steps and keep fire prevention at the top of your priority list, you have a better chance of avoiding a catastrophe. Fire Prevention Week runs from October 6–12. It’s a great opportunity to remind yourself and your employees of the importance of fire prevention, but it shouldn’t be the only time of year you think about it. 1FEMA Topical Fire Report Series: Nonresidential Building Fires (2014-2016), July 2018, https://www.usfa.fema.gov/downloads/pdf/statistics/nonres_bldg_fire_estimates.pdf. Accessed August 2019. Articles provided by Federated Insurance. These articles are intended to provide general information and recommendations regarding risk prevention only. There is no guarantee that following these guidelines will result in reduced losses or eliminate any risks. This information may be subject to regulations and restrictions in your state and should not be considered legal advice. Qualified counsel should be sought regarding questions specific to your circumstances and applicable state laws. © 2018 Federated Mutual Insurance Company. All rights reserved.

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NJ Contractor • NJ PHCC

DONE

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DONE Contesting Unemployment Benefits Claims BY RICHARD D. ALANIZ The goal of almost every employer is to maximize profits by reducing operating costs whenever and wherever possible. The costs generated by excessive unemployment claims is an issue of particular concern for most employers. Challenging every unemployment claim would therefore seem to be a good business decision. It can have a significant impact on the tax rate the employer must pay to help fund unemployment insurance. The fewer the successful claims the employer has, the lower the tax rate. However, contesting every claim may not necessarily be the best strategy. There may be good reasons for not contesting some claims. Employers frequently complain that they have little control over the decision to award unemployment benefits to former employees. While it may at times appear that way, a company has significant power over whether or not a former worker will receive unemployment benefits. The state unemployment office will ultimately decide whether benefits are to be awarded or not. However, the employer decides whether to contest the former employee’s application for benefits. In many states, failure to challenge an application for benefits can result in a presumption that no disqualifying conduct occurred. The granting of benefits becomes almost automatic. As with any other business decision, careful consideration must be given to the decision.

When Contesting Benefits is Not Advised There are a variety of situations where an employer may not have adequate grounds to contest an application for benefits and the effort made would very likely be in vain. Employees who are laid off for business reasons, such as a reduction in force (RIF) or downsizing provide no legitimate basis for challenging an application for benefits. A company may also voluntarily give up its right to contest unemployment benefits as part of a severance agreement entered into with the departing employee. It would be part of the “consideration” given in exchange for the employee giving up the right to contest the termination under any of the various state and federal laws that provide protection against discrimination or improper termination. Some human resource professionals as well as some employment attorneys advise that employers carefully consider

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challenging the benefit applications of terminated employees. They argue that fired employees are very likely to be angry exemployees. No matter the actual reason for their termination, the company will be viewed by them as acting unfairly. That angry former employee will have his/her anger stoked by the attempt to deny them unemployment benefits. They may seek out a lawyer for help. With the ever-growing number of lawyers and the litigious mentality that is so pervasive today, that former employee could easily find a lawyer willing to challenge the termination. Claims of an unlawful discriminatory motive such as race, gender, age, disability or some other legally protected status are easy to file. All that is required is the filing of a charge with the Equal Employment Opportunity Commission (EEOC) or the equivalent state human rights agency. Many plaintiff lawyers promptly submit a request that the agency immediately issue a “right to sue” letter. Such a letter permits the filing of a lawsuit against the employer within 90 days. Today it is not uncommon for a manager and/ or a supervisor to also be named as a defendant. Defending a lawsuit, even when successful, can be an expensive and timeconsuming proposition. It should also be noted that some employment professionals believe that even when an employer chooses not to contest an unemployment benefit claim, the former employee is just as likely to file a discrimination claim. Some in fact suggest that it is even more likely since the employee may conclude that no challenge was filed because the employer knew that it could not defend the stated reason for firing. They also argue that by successfully challenging the application for benefits, the employer demonstrates that they are confident in their case against the employee, which may serve to discourage lawsuits. Continued on page 10

NJ Contractor • NJ PHCC

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Disqualification from Unemployment Benefits Contrary to what some employers believe, even fired employees can successfully claim unemployment benefits in many circumstances. Where the termination was the result of the employee simply being unable to satisfactorily perform the job duties or had poor work habits, the likelihood is that benefits would be awarded. Also, termination for minor rule infractions such as attendance requirements would similarly not be grounds for the denial of benefits in most cases. Poor attendance is one of the most common issues that causes employee termination. Generally, unless there are other serious acts of misconduct or there are egregious circumstances, termination for poor attendance rarely disqualifies someone from receiving benefits. In most states, it is only when an employee is fired for misconduct that he/she is disqualified to receive unemployment benefits. Unfortunately, what constitutes “misconduct” sufficient for disqualification has been substantially limited in most states. It requires willful conduct that harms the company. Such things as theft, fighting, engaging in workplace violence, and sexual harassment would almost always be grounds for denial of benefits. Obviously, employees who voluntarily quit their employment are generally ineligible for benefits. If there is an issue with regard to a voluntary quit, it usually revolves around whether the employee had just cause to quit. Deciding to leave a workplace with abusive supervisors would probably not be considered a “voluntary quit”. It is much more likely to be seen as a constructive discharge.

Contesting a Claim As noted above, there may be circumstances where the company will decide not to contest a claim even though it may have adequate grounds to do so. Ultimately, an employer should contest a claim for benefits only if they have sufficient grounds that will likely result in disqualification. Termination for poor work performance, inability to learn new procedures or operate new equipment, and similar common reasons for employee termination provide no basis for contesting the award of benefits. Only those cases were serious misconduct has occurred are good candidates for a successful challenge. As in any other legal matters, they require substantial time and attention to detail. The rationale for the denial of benefits must be clear and convincing. In addition to a clear narrative that describes in detail the basis for termination, all applicable rules violated, documented oral warnings and all written warnings should be attached to the contest. The natural tendency of most state unemployment offices is to err on the side of granting benefits. Often their view is that the state-managed fund

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NJ Contractor • NJ PHCC

is there precisely to care for unemployed individuals. It is seen as part of the social safety net intended to protect people in need. They tend to ignore the fact that the former employee only became unemployed as the result of their own serious misconduct.

Appealing an Award of Benefits It is quite possible that benefits will be awarded even in circumstances where the “misconduct” appears evident. Overturning an award of benefits is difficult. If the decision is made to appeal the granting of benefits in a particular case, most states have a limited period for the filing of an appeal. It will be stated on the notice to the employer of the award of benefits and is usually 10 days. Proving that there was sufficient “misconduct” to overturn a prior award requires substantial evidence. The employer must show that the employee’s conduct was intentional or in willful disregard of the employer’s interests. The employer may also be required to show that the employee intentionally disregarded his/her duties or obligations. Documentation is critical and should include all the documentation submitted at the content stage including any, last chance agreements or performance improvement plans provided to the employee. In addition, witnesses that can testify as to the critical events and why the termination decision was made are critical. In cases when the appeal involves the granting of benefits to an employee who voluntarily quit, the burden is generally on the employee to prove they were eligible to receive benefits. Here the employee’s written resignation or some written confirmation of the voluntary quit would support the appeal. Even a saved voice message from the employee resigning or quitting should be sufficient. Having available a witness who spoke directly with the employee about quitting would be important evidence. Despite the appearance of a system that is stacked against the employer, with careful consideration and proper presentation of what is needed to prove your case against the granting of benefits or to overturn a prior award, an employer can exert at least some control over whether unemployment benefits should be awarded or not. AUTHOR BIO: Richard D. Alaniz is a partner at Alaniz Law & Associates, a labor and employment firm based in Houston. He has been at the forefront of labor and employment law for over forty years, including stints with the U.S. Department of Labor and the National Labor Relations Board. Rick is a prolific writer on labor and employment law and conducts frequent seminars to client companies and trade associations across the country. Questions about this article, or requests to subscribe to receive Rick’s monthly articles, can be addressed to Rick at (281) 8332200 or ralaniz@alaniz-law.com.

DONE

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DONE HR Question of the Month – Interview Questions - What Can Employers Ask? QUESTION

We want to make sure we’re not asking any interview questions we shouldn’t or aren’t allowed to be asking of candidates. Specifically, can we ask how much a candidate was earning at his/her last job(s)? What if we’ve heard that someone has a history of harassment (or making claims of harassment) at a prior place of employment – can we inquire about that? ANSWER

Generally employers should refrain from asking any questions -- whether on an application, during an interview, or otherwise during the hiring process -- that require candidates to disclose, or could elicit unintentional disclosure of, information about their membership in a protected class (i.e., a class that is protected under federal, state or local anti-discrimination laws). This means that at a minimum employers should not directly or even indirectly ask about race, color, sex, religion, national origin, birthplace, age (except when necessary to confirm a minimum age required, and in a yes or no manner only), disability, pregnancy, or marital/family status (and, in some jurisdictions, gender identity or sexual orientation), nor should they ask questions about veteran status or workers' compensation history. To not hire a candidate on the basis of any one of these or similar categories is unlawfully discriminatory and potentially retaliatory. Indeed questions that elicit information about such characteristics can indicate that the employer is intentionally seeking to discriminate or retaliate, and can create significant exposure to the employer if a candidate is not hired after responding to such inquiries. Employers generally cannot take such information into consideration when making employment decisions, and therefore should not be asking such questions of applicants, whether directly or indirectly. As for questions specifically about prior compensation history, some states (California, for example) now prohibit such inquiries outright. That said, even where these questions are not outlawed, employers should consider whether they want to proceed with making prior salary history or expected income a relevant or necessary part of its hiring process, particularly given the current climate where several states have such laws and a number of others are considering them. Seeking salary history from job applicants and/or relying on prior salary to set employee pay rates can create issues for employers because the data can potentially contribute to gender wage gaps by perpetuating wage inequalities. For reference, CA's statutory language provides that "[w]hen employers make salary decisions during the hiring process based on prospective employees’ prior salaries or require women to disclose their prior salaries during salary negotiations, women often end up at a sharp disadvantage and historical patterns of gender bias and discrimination repeat themselves, causing women to continue earning less than their male counterparts." This law is not binding on employers outside of CA, of course, but gender discrimination is unlawful under federal law, which applies in all states, and the federal Equal Pay Act (EPA) specifically and expressly prohibits gender-based wage discrimination. See https://www.eeoc.gov/laws/statutes/epa.cfm for more information on the EPA. Accordingly, employers in other states may want to consider the underlying reasoning of the CA

law, and contemplate taking a similar approach by omitting compensation history or expectation inquiries. Still, we appreciate that employers in states without express salary history bans may still find value in using responses to questions about pay history or expectations as a starting point for compensation negotiations. So long as such employers are compliant with applicable anti-discrimination and pay equity laws, and inquiries are asked of all candidates (or at least all candidates for the same position), and not just some of them, they arguably have discretion to make such determinations as to these types of inquiries, but again should consider the potential consequences outlined above before proceeding As for inquiries related to whether a candidate brought forth a harassment claim with one or more prior employers, we advise against such inquiries. Individuals who have exercised their right to file a harassment complaint or claim, whether with a prior or current employer, are protected against retaliation for having done so -- and not hiring someone due to their complaint history would arguably be construed as a retaliatory action. As such, it is a best practice to avoid even an inquiry about such complaints or claims during (or even after) the hiring process. Indeed, if the employer makes such an inquiry and then the individual is not hired (or faces other adverse action after employment commences), the employer risks exposure to a retaliation claim, and the fact that the employer sought to ask such questions can substantially impair its ability to defend such a charge. On the other hand, if the employer never asks about, and thus is never in possession of, such information (which arguably is not relative to making a hiring or employment decision, regardless), it makes mounting a discrimination or retaliation claim very difficult for the individual in question to do. Asking candidates whether they were ever accused of workplace harassment (versus having complained of alleged harassment) is not, per se, an unlawful question, but employers should also be cautious before making such inquiries. As an initial matter, any such question must be asked of all candidates, not just some of them, to avoid potential discrimination concerns. As well, the employer must consider that it may not secure accurate or complete information from an applicant, and oftentimes their prior employers will provide only a neutral reference, without verification either way. Finally, individuals who are alleged to have engaged in harassment in the workplace are not necessarily “guilty” of the conduct of which they were accused in all cases, so employers that make such inquiry part of their hiring process would do well to engage in a discourse with any candidates who disclose a prior accusation to determine the facts and circumstances. After discussion, the employer can assess whether it does or does not warrant disqualification from employment opportunity.

Want to know more? Listen to our podcast on interview questions.

Summer 2019

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DONE

DONE A Million Miles Later, Some Things Never Change BY MARK BRESLIN

ast month I was flying along, minding my own business, when the flight attendant came up to me. In the crowded cabin she announced to me and the other passengers that on this flight I would pass one million miles flying on United. Everyone clapped. I sat there stunned. A thousand presentations and four hundred thousand people later -and now, a million miles. My thoughts were interrupted by the woman next to me. She asked, “So what do you get for a million miles?” And before I could think, it just popped out of my mouth. “You get an ex-wife.” Everyone howled with laughter. So, after that many miles and years, I want to take an inventory on what has changed or improved in our industry and what has remained the same. With pretty much unlimited access to the owner community; construction CEOs and International Presidents; learning specialists, training directors, Business Managers, field leaders, rankand-file union members and even apprentices, here are my findings for your consideration.

The Good 1. U nions are much more businesslike and ROI-focused. The old school, status-quo dinosaurs have finally died off. The younger leaders are more professional and often getting it done. 2. O ur safety culture is outstanding and remarkable in its depth and execution. 3. Accountability and performance matter. Finally. 4. N egotiated work becoming dominant has changed a lot of the low-bid mentality and bad business practices. 5. The amount of resources dedicated to training now being provided is unprecedented and noteworthy. 6. The new generation of leadership has way more emotional and social intelligence and uses it well. 7. C ontractors are finally focusing on people as their most valuable assets and investing in them at a level not seen before. Recruitment and retention are part of any successful contractor’s strategy for the first time. 8. The Millennial apprentices that I meet today are better educated, more open to change, highly optimistic and will change the game for our industry (despite their “issues”).

The Bad 1. The stigma about working in our industry still exists. Parents, teachers and counselors still don’t get the amazing opportunity. But at least the value of a college education (and debt) is up for debate. 2. The intake system for apprentices in union construction still sucks. It is often disjointed and lacks proper testing, interview and other protocols, leading to 10-30% drop outs and the entry of marginal candidates. We can do much better. 3. The structure of most major unions has not changed much, nor have there been the mergers or consolidation that were expected to increase resources, leverage economies of scale and reduce union politics as an obstacle to change.

4. The state of training and development by most contractors for their field leaders is pathetic. Field leaders who manage tens to hundreds of millions of dollars in a career still rarely get any form of leadership and management training – and that falls squarely on contractors for their apathy. 5. M any owners still treat contractors like shit. Transfer of risk has become a high art: brutal specifications, insane schedules, poor designs, lack of communication, untimely responses, overreach by retained CMs, and a lot more – despite a full two decades of “partnering,” it still looks to me like the owner community has a long way to go.

The Ugly 1. The other day, at a program for 200 field leaders made up of many companies, I asked how many of them had received praise and recognition for their work in the last month. Not one of them raised their hand. That is a broken “tough guy” culture that has yet to change. 2. L ast month, I asked 500 apprentices how many of them had already heard on the jobsite the phrases “You’re not paid to think” or “You get paid from the neck down.” Every hand went up. That too is a broken culture that needs to change. 3. O ur industry is still often not a safe and supportive place for women and minorities to grow and succeed. Hard to believe in 2019, but there it is. In summary, I am actually very optimistic about change and our industry. Yes, it is taking a while. Yes, we probably could have moved faster on a lot of this. But every day now, I see and feel the hunger for more change and a culture of “better, faster, smarter and safer.” And its pace can be shocking. What I thought might be a little experiment in 2018 with microlearning leadership video training resulted in contractors and unions putting 15,000 field leaders on the system in one year – blowing my mind and confirming that there is more momentum, belief, investment and care for our workforce than meets the eye. As well, what makes me really happy is seeing a holistic change where employers and unions are focusing on our workforce as people – not looking at them as a commodity, a vote to be reelected or a set of skills to be used for a jobsite function. I feel the care out there, and so do those working for you. I can say for certain that was absent when I got on that first flight way back when. Finally, I’d like to correct the record. The woman who asked about the million miles? I gave her the wrong answer. The real answer is for all those miles, I was gifted an opportunity, and that was to make a difference -- for an industry and for individuals. It’s the same opportunity every reader of this article has every day in our industry. Let us all use it well to create positive change. Many are counting on us to do so. Mark Breslin is an author, speaker, CEO and influencer inspiring change for workplace success across all levels of business. Mark has improved leadership, accountability, innovation and engagement for organizations and individuals. He has spoken to more than 400,000 people and published hundreds of thousands of books on leadership and workplace culture. See his work at www.breslin.biz

Summer 2019

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DONE

Wage Theft– Upping the Ante

ON AUGUST 6, 2019, New Jersey became the fourth state to adopt a “wage theft” statute for wage and hour violations. The new law provides for jail time in addition to increasing the fines for criminal convictions for underpaying workers. First-time offenders could face a fine of $500 to $4,000, imprisonment of 10-90 days, or both. It also allows workers to collect liquidated (double) damages in civil or criminal wage cases who now have up to six years to file a claim. This is all part of a growing response, especially in Blue states, to the problem of employers’ continuing failure to comply with wage and hour laws, whether it is the federal Fair Labor Standards Act (FLSA), or similar laws at the state level. Wage payment violations can and do occur in workplaces of all sizes and in all industries. They generally involve a number of employees since most violations are the result of an improper pay procedure or employee misclassification, which can apply to several individuals. All non-exempt employees are entitled to time-and-one-half (1 1/2) for all hours worked over forty (40) in a workweek. Some states, such as Alaska, California, and Colorado for example, have a daily overtime rule in addition to the weekly overtime requirement. Failure to Pay Overtime Under both the federal and state laws, the most common claims involve the failure to pay overtime. In most cases the failure is caused by an employer treating an employee as exempt from overtime when they are not properly qualified for the exemption. Under both the FLSA and most state wage and hour laws, paying an employee a salary does not automatically make them exempt from overtime. In order to be exempt the employee must satisfy the criteria under what is known as the “white collar” exemptions. The main categories are “executive”, “administrative”, “professional”,

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NJ Contractor • NJ PHCC

and “outside sales”. In all but the “outside sales” category the person must satisfy two separate tests – the salary test and the duties test. Under the FLSA currently the required salary is $23,660 per year, or $455 dollars per week. The state salary requirements vary, with some similar to the federal level and others substantially higher. There is a pending Department of Labor rule to increase the federal required salary for exempt status to $35,308 per year, or $679 per week. It is expected that the new salary rule will be issued soon and will entitle over one-million additional people to receive time-and-a-half for all hours over forty in a workweek. Employer advocates have already indicated that they will challenge the new rule in court once it becomes effective. The “duties” test that must also be satisfied varies with each of the exemptions. In the case of the “executive” exemption, in order to satisfy the test the person must have as their primary duty the management of a company, department or other subdivision of the enterprise. They must also direct at least 2 employees and have the authority to hire, fire, promote or to effectively recommend such actions. The exemption includes such people as managers, supervisors and others with similar authority. To meet the duties test for the “administrative” exemption the person must work in a non-manual job that includes as its primary duty the exercise of discretion and independent judgement with regard to business matters of significance. Positions that have historically been covered by this exemption are insurance claim adjusters, executive assistants, human resources personnel, purchasing agents, buyers and other jobs with similar responsibilities. The “professional” exemption generally applies to positions requiring advanced knowledge in a specialized field of science or learning acquired by a prolonged course of intellectual instruction.

DONE This exemption generally applies to lawyers, doctors, pharmacists, architects, engineers and similar occupations. The “outside sales” exemption requires that the person’s primary duties consist of making sales while customarily away from the employer’s place of business. Unlike the other exemptions, there is no minimum salary requirement. The exemption does not apply to inside sales employees. There is no longer any requirement that exempt employees spend a certain percentage of their time in exempt duties. This means that they can engage in non-exempt duties as long as their primary responsibility is to perform exempt functions. Not Paying Employees for All Time Worked When employees are not paid for all hours worked, the employer is considered to be in violation of both the FLSA and any applicable state wage and hour laws. It is not always misclassification that causes the violation. In some cases, overtime liability is generated by an employer failing to pay non-exempt employees for their off-the-clock work. There is likely even if the employer was unaware that such work was being performed and never asked that it be done. It frequently involves work-related activity done before or after the official workday. A non-exempt employee responding to work e-mails after hours is one example that has drawn increasing attention. The rule is that if the employer “suffers the employee to work”, the employee is entitled to payment. If the additional unpaid time takes the weekly total over 40 hours, then overtime is due the employee. All employers should consider providing employees clear notice that all off-the-clock work must be reported and that no overtime work may be performed without proper authorization. State Specific Issues Wage and hour claims are the most frequently filed claims against employers. In states with complex and strict wage laws like California, the majority of cases pending in the courts relate to such claims. Aside from the fact that many, if not most, employers inadvertently violate wage and hour laws, there are several other equally fundamental reasons so many cases are filed. Wage and hour claims generally have a three (3) year statute of limitations. In addition, the liability almost always results in liquidated damages – double damages. And to make such cases even more attractive for Plaintiff lawyers, the employer is liable for all the employee’s attorney’s fees. These cases are easy to file and almost as easy to win. Proper payment either was or was not made. If there is more than one employee affected, which is almost always the case with claims of failure to properly pay, they can become collective (class) actions which can cover, dozens, hundreds and even thousands of employees. Employees who have left, but may have worked during the three-year liability period and not paid properly can be members of the class. There is no requirement that the employees who claims a violation first complain to the Department of Labor or similar state agency. A lawsuit can

be filed in either federal or state court, depending upon which law is at issue. Since liability is usually fairly clear, most of these types of cases settle long before trial. What it Means to Be a Wage Thief It is because of the prevalence of wage and hour violations that some states have begun to treat these cases as “wage theft” as previously noted. It is a significant escalation of what have historically been considered relatively minor although sometimes expensive violations. In addition to the increased penalties, including criminal sanctions in some cases, being portrayed as a “wage thief ” carries a much heavier stigma for the employer. No employer wants to be known for stealing wages from their hard-working employees who are merely trying to feed their families. Such an accusation can cause lasting damage to the employer’s reputation and brand. People may not want to do business with or work for a “wage thief ”. With today’s 24/7 news cycle it is apparent how this could occur. Thus far, only Colorado, the District of Columbia, Minnesota and New Jersey have adopted wage theft laws. Colorado’s law becomes effective on January 1, 2020. However, it is only a matter of time before more states move in this direction. For example, it has recently been reported that prosecutors in California and New York are beginning to view wage violations as crimes although neither state has formally adopted a wage theft law. Bloomberg Law recently reported that prosecutors in those states are focusing on specific industries such as construction, restaurants, janitorial services, and home care providers. All are seen as industries with low wages, temporary jobs, a significant number of immigrant employees, and are the types of businesses that can easily close down in one location and open up elsewhere at will, leaving employees unpaid. Thus far, there have been only isolated prosecutions and have almost exclusively involved business owners who engaged in egregious violations of the wage and hour laws. Conclusion All employers should pay close attention to the developing “wage theft” approach to wage and hour violations at the state level. Overtime liability and failure to pay for all hours worked are almost always generated without the employer even being aware of it until a claim or lawsuit is filed. No employer wants criminal penalties and being branded a “wage thief ” on top of the double damages and attorney’s fees that they already are likely to be paying. Richard D. Alaniz is a partner at Alaniz Law & Associates, a labor and employment firm based in Houston. He has been at the forefront of labor and employment law for over forty years, including stints with the U.S. Department of Labor and the National Labor Relations Board. Rick is a prolific writer on labor and employment law and conducts frequent seminars to client companies and trade associations across the country. Questions about this article, or requests to subscribe to receive Rick’s monthly articles, can be addressed to Rick at (281) 833-2200 or ralaniz@alaniz-law.com.

Summer 2019

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DONE

It's Your Life

Can You Afford the Loss of a Key Employee?

f you’re like most business owners, you have go-to employees when it comes to the day-to-day operation of your company. They have the management skills, technical know-how, experience, or customer relationships upon which you rely — you trust them to make the right decisions when you’re not available. They can be at any level or in any position, but they are people your business can’t do without. Now that you have them on your team, what would happen if you were to lose one of them due to a premature death, longterm illness or disability, or another employment opportunity?

with the skills and work experience you need. In addition to the monetary costs associated with hiring and training a replacement, the process will also require your time. It’s estimated that the cost to replace mid- to high-level employees can range from one-and-a-half to four times their annual salary. Can your business absorb those costs, especially with little notice?

Fortunately, you can offset the financial burdens your business may face as the result of the loss of a key employee. The first step is to identify them. In general, key employees are individuals whose departure could create genuine setbacks for the company, both logistically and financially. They may have years of experience with your company or the industry. Perhaps they have specialized skills that require extensive training and knowledge that would be difficult to replace. Is there someone for whom you don’t have a back-up? Don’t forget to include yourself — you are a key person too!

After you have determined the people and the cost, consider your options for mitigating the risks you could face. Life insurance is a cost-effective solution to help provide financial support toward your company’s need to replace a key employee. Life insurance can help to keep the business running and growing, provide funds to attract, recruit, and train a replacement, and replace lost profits. It can also provide time and flexibility for survivors to make necessary business continuation decisions if the key person is you or another owner. While the policy death benefit will provide a lump sum in the event of the insured employee’s death, the cash value of a permanent policy can also be accessed through policy loans and withdrawal during the employee’s lifetime.

Once you have identified the people, consider the cost of replacing them. You will need to advertise to recruit potential replacements. In the current job market, you may need to adjust pay or offer a signing bonus to attract candidates

Don’t risk the short- and long-term success of your business by not planning for the loss of a key employee. Consider permanent life insurance on your most important team members as part of your overall risk management strategy.

Articles provided by Federated Insurance. These articles are intended to provide general information and recommendations regarding risk prevention only. There is no guarantee that following these guidelines will result in reduced losses or eliminate any risks. This information may be subject to regulations and restrictions in your state and should not be considered legal advice. Qualified counsel should be sought regarding questions specific to your circumstances and applicable state laws. © 2018 Federated Mutual Insurance Company. All rights reserved.

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NJ Contractor • NJ PHCC

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