Employment law

Molly’s Law

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A new law entitled “Molly’s Law” aims to strengthen Illinois’ Freedom of Information Act and also amends the timeframe in which wrongful death lawsuits can be filed. The law is named after Molly Young, a southern Illinois woman who died of a fatal gunshot wound to the head in the apartment of her boyfriend, a Carbondale police dispatcher at the time, in 2012. Since her death, the question of whether the shooting was a suicide or homicide has remained.

The law provides harsher punishments for municipalities and organizations that willfully and intentionally fail to comply with Court orders to release information through the FOIA. The violation fine is increased to $10,000, plus $1,000 for each day the information is withheld.

Proposed in February 2016 and unanimously passed through the House in April, Molly’s Law was signed by Governor Bruce Rauner this month and goes into effect on January 1, 2017.

Workplace Wellness Programs & HIPAA

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The U.S. Department of Health & Human Services has recently published an article explaining how HIPAA applies to certain workplace wellness programs. In this article, Jocelyn Samuels, the Director of the Office for Civil Rights, explains that workplace wellness programs give employees the opportunity to improve their health while simultaneously controlling health care spending. The following is a summarization of the article:

Employers are collecting employee health information as a part of these wellness programs. Questions are then raised about what employers are allowed to do with the collected information, as well as what their responsibilities are to protect the confidentiality of the information. The Health Insurance Portability and Accountability Act (HIPAA) does not apply to all workplace wellness programs, but it does apply to programs offered as part of an employer-sponsored group health plan.

If you are unsure whether your employer’s workplace wellness program is offered as part of a group health plan, or if you have questions about the protection of the collected health data, you should ask your employer. There are a few important facts helpful in understanding how your health information should be protected:

  1. If an employer’s wellness program is part of a group health plan, they are prohibited from using or disclosing your health information for employment-related actions or other purposes not permitted by HIPAA, such as marketing without your express authorization.
  1. If an employer administers a wellness program as part of a group health plan, HIPAA requires they establish firewalls or other security measures to make sure collected information is not allowed to be accessed and used for employment functions, such as your supervisor using the health information to make decisions about your job.
  1. HIPAA also requires that if there is a breach in your wellness program health information, your employer must notify you, the Department of Health and Human Services (HHS), and in some cases, the media. They must do so in accordance with the HIPAA Breach Notification Rule.
  1. The Office for Civil Rights at HHS oversees compliance with HIPAA, and there are serious implications for entities that fail to comply. Violating entities may be required to take corrective action, or can face civil penalties of up to $50,000 or more for each violation. If repeated violations of the same provision occur, an entity could face up to $1.5 million in penalties in a calendar year.

For additional information, view the OCR’s guidance on HIPAA and workplace wellness programs at http://www.hhs.gov/hipaa/for-professionals/privacy/workplace-wellness/

United States Bankruptcy Court, Northern District of Illinois

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COURT ANNOUNCEMENTS

Important Announcement About Telephone Scam

We’ve recently been given information about a new type of scam directed at both lawyers and their clients. We’re sending this update because the scam is directly linking attorneys and their clients.

Here’s how the scam works:

*    The client receives a phone call.

*    The caller ID shows the number belongs to the attorney.

*    The client is told that they need to pay additional money.

*    The client is then given a toll-free number to call.

*    When the client calls, they are directed as to how to pay the money.

The scam works through a process called “Caller ID Spoofing.” “Spoofing” allows a caller to create a new caller ID for their phone. Previous “spoofing” scams, for example, have involved callers using a number that belongs to the IRS.

What makes this especially troubling is that the scammers have linked the attorney with the client. While this information may be publicly available through court documents, we have not seen it used in this way.   A  recent case involved  a bankruptcy court and the client was told they needed to pay more money to a creditor. Fortunately, the scam was caught in time and no money was lost.

Attorneys should consider advising clients about the potential for this type of scam and to make sure they double check before any additional money is sent. If this happens to you and your client, please file a report with the FBI’s Internet Crime Complaint Center athttp://www.ic3.gov.

To view this information from our website select the following link: Court Announcement

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Comments or questions? Contact Us

Eastern Division Office:
219 S. Dearborn
Chicago, IL 60604
(312) 408-5000

Western Division Office:
327 South Church Street
Rockford, IL 61101
(815) 987-4350

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Changes in U.S. Overtime Rules

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The U.S. Department of Labor will be issuing new regulations in July 2016 that will bring an additional 13.5 million workers under the overtime requirements of the Fair Labor Standards Act. Labor Secretary Thomas Perez claims the new rules could add as much as $1.3 billion nationwide to workers’ pockets.

The proposed changes will more than double the salary threshold for overtime eligibility to $970 a week. This means that employees earning a yearly salary of $50,440 or less will automatically be eligible for overtime pay. Currently, the threshold for a salaried worker is $23,660 a year.

As of now, all hourly employees are automatically eligible for overtime pay. Salaried white collar workers, labeled by the U.S. Department of Labor as Executive, Administrative, and Professional Employees (EAP), are generally exempt from the requirement to pay overtime as long as they are paid at least $455 a week.

The DOL finds two major problems with the current rules. One, the salary level has not kept pace with the general increase in salaries since 2004. Additionally, employers have taken liberty with the definitions of EAP, and many workers who should not be exempt from overtime are classified as exempt. For example, under the DOL’s current rules, an administrative employee is one who exercises individual judgment or discretion in matters of significance to the company. However, administrative assistants, who do not exercise this judgment, if making more than $23,660 a year, are often classified as an exempt employee.

The DOL has decided on one solution: raise the minimum exempt salary for EAP workers. This means that when implemented, employers will have to begin paying overtime to all employees making less than $970 a week. The DOL believes salary is the only true objective measure of exempt vs. non-exempt staff, because job duties can vary so much from employer to employer. Thus, no matter what the employee’s job duties are, if the salary falls under the threshold, the employee is eligible for overtime.

Interestingly, the new overtime rules will not fix the minimum EAP exempt salary at a stated dollar amount. Rather, the minimum EAP exempt salary will be indexed at the 40th percentile of all salaries in America. The DOL will use the Bureau of Labor’s annual statistical data on salaries to reset the minimum FLSA exempt salary each year. This means that employees may be eligible for overtime one year and not the next (or vice versa) without any change in their salary.

Before the new rules take effect, employers should take advantage of the time to collect data related to each employee’s work week. By determining the work habits of employees, employers can consider the best classification for each. For example, if during the data collection period an employer sees that an employee is working an average of 47 hours a week at $42,500 a year, it may become more cost effective to raise the individual’s salary to $50,440. By increasing the salary rather than paying overtime, the employer may save money. With the DOL not issuing the rule until July 2016, employers have enough time to collect data on employee work habits and come up with a strategic, cost-effective plan to manage their employee’s salaries and overtime.

Eligibility For Unemployment Benefits

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In a recent case regarding unemployment benefit eligibility, the plaintiff, Petrovic, was fired from defendant American Airlines after she gave a gift and a first class upgrade to a passenger without authorization.

Petrovic filed a claim for unemployment benefits with the Illinois Department of Employment Security. The Board of Review denied her claim on the ground that she was discharged for misconduct, so she filed a complaint for administrative review, where the trial court reversed the Board’s decision. The Board then appealed.

On appeal, the Board argued that Petrovic was employed as a tower planner for the airline. On the date in question, she left her work area without her manager’s approval to secure an undocumented upgrade for a “friend of a friend.” She had been issued a performance discussion less than a year earlier regarding being out of her work area.

The Board claimed that Petrovic received PC based training where she was made aware of the policies that only authorized employees may issue upgrades, and that employees are expected to remain in their work areas during their shifts unless given permission by their managers. Petrovic did not receive permission for any of her actions and admitted to receiving the PC based training.

Petrovic’s supervisor testified that along with the approximately $7,100 loss to the airline, the procedure for moving a passenger also affects the load audit necessary for an accurate weight and balance number, causing safety concerns.

The Illinois Unemployment Insurance Act denies benefits to employees discharged for misconduct. Under the Act, three elements must be proven to establish misconduct: “(1) there was a deliberate and willful violation of a rule or policy of the employing unit, (2) the rule or policy was reasonable, and (3) the violation either harmed the employer or was repeated by the employee despite a previous warning or other explicit instruction from the employing unit.” 820 ILCS 405/602(A).

There is plenty of Illinois case law stating that a rule or policy does not need to be written or otherwise formalized in order to be applied. The court may find the existence of a reasonable rule “by a commonsense realization that certain conduct intentionally and substantially disregards an employer’s interests.” Willful conduct stems from an employee’s awareness of, and conscious disregard for, a company rule.

Here, Petrovic admitted that she left her work area to procure an unauthorized upgrade. Though she claimed she was unaware of any rule or policy, the record indicated otherwise. Further, Petrovic admitted to being aware that she did not have authority to perform the actions she took.

The appellate court ultimately ruled that Petrovic’s actions resulted in financial loss to the employer, making her termination rightfully based on misconduct. They reversed the decision of the trial court that reversed the denial by the Board of Review, leaving Petrovic ineligible for unemployment benefits.