With South Dakota COVID-19 cases still on the rise, employers and businesses around the state are making plans to get back to work or to determine what the new work environment will be and what it will look like. South Dakota businesses were never mandatorily forced to shut down, although many did and are now planning on reopening.

Governor Kristi Noem has unveiled South Dakota’s “Back to Normal Plan” which covers guidance for individuals, employers, enclosed retail businesses that promote public gatherings, schools, health care providers and local governments. See:

As to employers and the physical workspace, it is essential that good hygiene and sanitation practices are continued to be followed, especially in high traffic areas.

The federal Centers for Disease Control (CDC) has tips on cleaning and disinfecting facilities, as well as guidance for individual employees, including the following:

  • maintaining social distance of 6 feet between coworkers;
  • washing hands frequently with soap and water for 20 seconds;
  • avoiding touching one’s eyes, nose or mouth;
  • cleaning shared surfaces often; and
  • staying home when sick.

Employers can develop policies surrounding its rules for employees, such as requiring them to stay home when they are sick, prohibiting employees from coming to work if they have symptoms of COVID-19, and sending employees home if they are sick. As mentioned in my previous article, employers can screen employees and can even test them for COVID-19 if it makes sense for that business and the screens and tests are conducted in a fair and reliable manner. While the South Dakota government has never prohibited travel to or from other states, or within the state, employers can consider what travel restrictions it wishes to impose on employees, so long as it does so in a reasonable and equitable manner.

If employees were operating via telework or remote arrangement, employers can consider continuing the telework setup, or can require employees to return to the workplace.

While fear of COVID-19 is not covered under the Families First Coronavirus Response Act, employers may want to reassure employees by articulating the reasonable steps the employer takes to protect the safety of employees returning to and working in the workplace.

Other ideas that employers can implement are:

  • educating employees on the proper hygiene protocols, and consider posting guidance around the workplace on stopping the spread of germs at work;
  • limiting non-essential business operations to the extent possible;
  • limiting areas where employees typically gather, such as the coffee or break room;
  • ensuring handwashing and disinfecting stations are available and the supplies are maintained;
  • consider supplying masks to employees, depending on the nature of the business;
  • continuing remote meetings, such as ZOOM or teleconference;
  • minimizing non-essential business travel as necessary;
  • adhering to state and federal/CDC guidelines.

Employers are well-advised to balance both the health and safety of its employees with the business and economic needs of the organization. While the pandemic has certainly presented challenges for employers and employees alike, a well-thought out plan is essential in this stage of America’s reopening.

Please contact attorney Jennifer S. Frank at (605) 791-6450 for further information or questions.

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As the Coronavirus pandemic rages on, many employers are left wondering what questions they may lawfully ask their employees about their health and any symptoms, in order to protect their workers and customers/clients. In addition, employers may wonder what kind of tests or other screenings they are lawfully permitted to do, if any.

The United States Equal Employment Opportunity Commission (“EEOC”), which is the federal agency in charge of enforcing anti-discrimination laws (including the Americans with Disabilities Act (“ADA”)), revised its guidance on April 23rd, explaining that employers may now screen their employees for COVID-19.

Employers do need to be aware that the ADA requires any mandatory medical test of employees to be “job-related and consistent with business necessity.” The EEOC stated that when applying this standard to the current situation involving the COVID-19 pandemic, employers are permitted to take steps to determine if employees entering the actual workplace have COVID-19, on the basis that an individual with the virus will pose a direct threat to the health of other workers or individuals in the workplace. Therefore, employers are allowed to choose to administer testing for COVID-19 to any employees before they enter the workplace, in order to determine whether they have the COVID-19 virus.

In prior guidance, the EEOC also stated that employers may ask employees if they are experiencing symptoms of COVID-19 (such as fever, chills, shortness of breath, cough, or sore throat) and may measure employees’ body temperatures before allowing the employees to work or enter the workplace, even though it constitutes a “medical examination.”

Employers need to be aware of the following when administering a medical test such as measuring employees’ body temperature or testing them for COVID-19:

  • Some people with COVID-19 do not have a fever – so an employee without a fever does not mean they do not currently have the virus;
  • Accurate testing for COVID-19 will only reveal whether the employee has the virus now – a negative test does not mean that the employee will not acquire the virus later;
  • Employers need to ensure that any test they utilize will be safe, accurate and reliable;
  • Employers should consider the incidence of false-positives or false-negatives associated with a particular test;
  • Conducting screening or testing must be done on a non-discriminatory basis;
  • Testing that is broader than necessary to address the potential threat is prohibited;
  • How to deal with an employee who refuses to be screened or tested.

Employers are reminded to maintain all information about employees’ illness or medical information as a confidential medical record in accordance with the ADA.

It is still best practice for all employers to require –to the greatest extent possible – that all employees continue to observe infection control measures, in accordance with the Centers for Disease Control and other medical and public health authorities. This includes social distancing, regular handwashing, avoiding touching the eyes, nose or mouth, and staying home when sick.

For more information on COVID-19 and the ADA, visit:

Please contact attorney Jennifer S. Frank at (605) 791-6450 for further information or questions.

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As most employers know, unemployment compensation (called reemployment assistance (RA) in South Dakota) is a program providing temporary financial assistance for people who lose their job through no fault of their own. It is not available in the case where someone quits or is terminated due to employee misconduct.

With regard to the current Coronavirus pandemic, South Dakota workers who become unemployed because their employer needs to temporarily reduce workers’ hours, shut down the place of employment, or isolate workers due to COVID-19 may be eligible to receive RA benefits. The South Dakota Department of Labor and Regulation (SD DLR) indicates that there are many variables that can affect a worker’s eligibility for (and an employer’s liability for) RA benefits and the SD DLR will examine each case on an individual basis in accordance with the law.

In addition, on March 27, 2020, President Trump signed into law the federal Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act provides, among other benefits and programs, unemployment benefits for a limited amount of time for certain categories of workers who ordinarily would be ineligible for unemployment benefits (e.g., the self-employed, independent contractors, gig economy workers, those workers who may have exhausted other unemployment insurance benefits, and those workers who may not have a sufficient work history to qualify for a regular state claim).

In addition, the CARES Act includes eligibility for those workers already receiving unemployment benefits in any amount to be paid an additional $600 per week benefit. This amount is fully covered by the federal government.

The SD DLR has several COVID-19 resources available on its website, including a listing of various proposed COVID-19 scenarios and what the eligibility for RA benefits might be.

The following are some of the examples provided:

• A worker has tested positive for COVID-19, and, as a result, is temporarily unable to work = ELIGIBLE for RA benefits
• A worker has his or her hours reduced by the employer because of a reduction in force related to COVID-19 = LIKELY ELIGIBLE for partial RA benefits
• A worker is out of work because their employer closed due to COVID-19 = ELIGIBLE for RA benefits
• A worker is sent home from work because their employer thinks they are a risk or they are a risk = LIKELY ELIGIBLE for RA benefits
• A worker chooses to self-quarantine and is unable to work = INELIGIBLE for RA benefits
• A worker is unable to work because they need to care for a dependent (such as a child) = INELIGIBLE for RA benefits
• A school worker is unable to work because their place of employment is closed = LIKELY ELIGIBLE for RA benefits
• An employer decides to temporarily close or do a reduction in force because of COVID-19 = LIABLE for RA benefits.

If a South Dakota employer is planning to lay off employees temporarily in conjunction with COVID-19, a recommended best practice is to issue a letter to the employees – as the SD DLR will ask individuals for a copy of the letter as documentation to show that the employer clearly expressed to them the duration of the temporary layoff. Employers should include the date the layoff will begin, the fact that the layoff is temporary, and a tentative call back date. The SD DLR recommends that the tentative call back date should be ten weeks from the date the layoff begins. It is also imperative that the employer does not guarantee a specific date for resuming normal operations, and do not guarantee employment, as this could be considered a contractual obligation.

It is recommended that South Dakota employers let their employees know how to file for RA benefits, and that workers should do so online if possible. Employees can visit As a general rule, South Dakota unemployment benefits generally equal approximately 50% of an employee’s average weekly earnings. South Dakota state law provides that the maximum amount a person may receive is $414 per week in benefits. In addition, individuals receiving unemployment benefits in conjunction with COVID-19 may be eligible for the additional $600 per week in their benefits under the CARES Act.

For further information on COVID-19 Pandemic Scenarios & Benefits available, click here.

Contact Jennifer Frank with questions:

(605) 342-2592
[email protected]
909 Saint Joseph Street, Suite 800
Rapid City, SD 57701

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LJSL LEGAL ALERT: Families First Coronavirus Response Act – What Employers Need to Know Now

With the emergence and spread of the Coronavirus (COVID-19) throughout the world, our country’s full attention is on this pandemic on a daily, if not more frequent, basis. Employers attempt to quickly manage and deal with issues such as remote workforce, sick employees, and school closures. In the meantime, the Federal government signed into law on March 18th a new law called the “Families First Coronavirus Response Act” (FFCRA) in order to assist employees during this crisis, as well as provide certain tax relief to employers.

The FFCRA goes into effect on April 1, 2020, and creates obligations for many employers to provide temporary paid leave. The FFCRA contains two separate laws that provide for paid leave for qualifying employees: a new paid sick leave benefit – the Emergency Paid Sick Leave Act; and an expansion of Family and Medical Leave Act leave – the Emergency Family and Medical Leave Expansion Act.

Below are the main aspects of this new legislation:

Emergency Sick Leave

• Employers who have fewer than 500 workers and governmental entities are subject to the new law.

• Employees who are either full-time or part-time, qualify for paid sick time if the employee is unable to work (or unable to telework) due to one of the following reasons for leave because the employee:

1. is subject to a Federal, State or local quarantine or isolation order related to COVID–19;
2. has been advised by a health care provider to self-quarantine due to concerns related to COVID– 19;
3. is experiencing symptoms of COVID–19 and seeking a medical diagnosis;
4. is caring for an individual who is subject an order described in (1) or self-quarantine as described in (2);
5. is caring for his or her child if the school or place of care of the child has been closed, or the childcare provider of such child is unavailable, for reasons related to COVID–19; or
6. is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

• Full-time employees who are eligible are entitled to receive 80 hours of sick leave, and part-time employees are granted leave based on their average hours worked in a two-week period.

• Sick leave is available for immediate use regardless of how long the employee has been employed with the employer.

• Employees taking sick leave for themselves (i.e., 1-3 above) will be paid at their normal rate or the applicable state or federal minimum wage, whichever is greater.

• Workers taking time off to care for family members (i.e., 4-6 above) must be paid at 2/3 of the foregoing rate.

• Sick leave is capped at $511 per day and $5,110 in the aggregate for leave under 1 through 3 above, and capped at $200 per day and $2,000 in the aggregate for leave taken in 4 through 6 above.

• Wages paid by employers under the emergency sick leave provisions are not subject to the 6.2 percent social security payroll tax that employers typically pay on workers’ wages.

• Employers cannot require employees to utilize other paid leave before being able to utilize the new paid sick leave under this emergency program.

• Paid sick leave will not carry over to another year and will not be paid out to employees upon separation of employment.

• Employers may not discharge, discipline, or otherwise discriminate against any employee who takes paid sick leave under the FFCRA or files a complaint related to the FFCRA.

• There are certain exclusions, such as (i) employers may exclude an employee who is a health care provider or an emergency responder from paid sick leave benefits; and (ii) certain small businesses may be exempt if they employ fewer than 50 employees and “when the imposition of the requirements would jeopardize the viability of the business as a going concern.”

Emergency Family Leave

• Employers who have fewer than 500 workers and governmental entities are subject to the new law.

• Covered employers will have to provide up to 12 weeks of FMLA leave for employees who have been on the job for at least 30 days, and who are unable to work or telework because they have a bona fide need to care for a minor child when the school or child care provider is closed or unavailable, for reasons related to COVID-19.

• Leave under this section is included in (and not in addition to) the total FMLA leave entitlement of 12 weeks in a 12-month period. For example, if an employee has already taken 6 weeks of FMLA leave, that employee would be eligible for only another 6 weeks of expanded Family and Medical Leave.

• The first 10 days of this leave can be unpaid. However, employees can opt to use any other form of paid leave to be paid for this 10-day period, including the emergency paid sick leave above if not yet utilized.

• For the subsequent days of this leave, the employee will receive a benefit of 2/3 of their normal pay from their employer.

• The paid leave is capped at $200 per day and $10,000 in the aggregate.

• Generally, employees must be restored to their position that they held prior to the leave commencing.

• Wages paid under the emergency family leave provision will not be subject to the 6.2 percent social security payroll tax that employers typically pay on workers’ wages.

• There are certain exclusions, such as (i) employers may exclude an employee who is a health care provider or an emergency responder from paid leave benefits; and (ii) certain small businesses may be exempt if they employ fewer than 50 employees and “when the imposition of the requirements would jeopardize the viability of the business as a going concern.”

Employer Tax Credits

Employers will be able to obtain a dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA. In addition, applicable tax credits extend to amounts paid or incurred to maintain health insurance coverage.

The federal Department of the Treasury will be authorized to issue guidance related to the credits. Also, the Department of the Treasury will have further information on its website related to tax credits.

Model Notice

The Department of Labor issued on March 25th its model notice that covered employers must post in their workplace regarding the FFCRA. You may access the notice at:

The poster must be posted at a conspicuous place at the employer’s premises where notices to employees are customarily posted.

An FAQ is also available at:

Additional U.S. Department of Labor Guidance

The U.S. Department of Labor Wage and Hour Division published its first round of guidance this week to provide information to employers and employees about how they will be able to take advantage of the protections and the relief offered by FFCRA.

There is a Fact Sheet for Employers and a Fact Sheet for Employees, along with a Questions and Answers document – to address important questions such as how to count the number of employees to determine coverage, small employer exceptions and how to calculate employee wages under the new law.

See the Department of Labor’s website:;;

Further guidance is expected from the DOL/WHD in the coming days and weeks.

Contact Jennifer Frank with questions:

(605) 342-2592
[email protected]
909 Saint Joseph Street, Suite 800
Rapid City, SD 57701

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South Dakota’s Annual Increase Of Minimum Wage Has Been Announced

Just announced: the new South Dakota Minimum Wage for 2020 is increasing by 20 cents per hour. The new rate of $9.30 per hour is up from $9.10 in 2019. The new rate becomes effective on January 1, 2020.

South Dakota’s minimum wage is adjusted on an annual basis, increasing at the same rate as the cost of living as measured in the Consumer Price Index published by the U.S. Department of Labor. The amount of the increase will be rounded up to the nearest five cents. The South Dakota state minimum wage cannot decrease.

There is no state statute that requires a poster to be displayed regarding minimum wage. However, South Dakota’s State Department of Labor provides one as a courtesy to employers, and many employers do post this in their workplace at a location where employees can see it or other postings are made. See the link below.

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United States Department of Labor Issues Long-Awaited Final Overtime Rule

This week the Federal Department of Labor announced its long-awaited final overtime rule, which will go into effect on January 1, 2020. The final rule raises the standard salary threshold from the currently enforced level of $455 per week up to the new level of $684 per week (which is the equivalent of $35,568 per year for a full-time worker) in order to be considered exempt from minimum wage and overtime under the Fair Labor Standards Act (“FLSA”). The new thresholds account for the growth in employee earnings since the rule was last updated in 2004.

The final overtime rule does not change any of the “duties tests” that must be met (in addition to the salary threshold and being paid on a salary basis) to claim Executive, Administrative, or Professional exemptions under the FLSA. Moreover, the final rule does not include any automatic updates, which had been proposed under prior versions of the rule during the Obama administration.

The final rule:
• Raises the “standard salary level” from $455 per week to $684 per week ($35,568 per year for a full-time employee);

• Raises the total annual compensation requirement for highly compensated employees (HCE) from the current level of $100,000 to a new level of $107,432 per year;

• Now allows employers to use non-discretionary bonuses and incentive payments (including commissions) paid at least on an annual basis to satisfy up to 10% of the standard salary level; and

• Also revises the special salary levels for workers in U.S. territories and the motion picture industry.

The Department of Labor estimates than an additional 1.3 million American workers will now be made eligible for overtime pay. The Department also estimates that an additional 101,800 workers will be entitled to overtime pay as a result of the increase to the HCE compensation level.

In the past, there have been court challenges that blocked a prior version of the overtime rule from going into effect. In 2016, a federal district court judge in Texas ruled that the Department of Labor had exceeded its authority in issuing the overtime regulation because the actual text of the FLSA does not mention a salary threshold. The court then granted summary judgment against the Department. The Department of Labor appealed to the Fifth Circuit, which granted a stay until the new regulation was issued. Now that the new final rule has been announced, there may be further court action to resolve whether the DOL has authority to set a salary threshold in the first place.

Employer Takeaway:
With the potential for further court challenges, the final rule may face a delay in its implementation. However, in light of the final rule’s impending effective day, employers are well-advised to consider potential increases to exempt employees’ salaries if necessary (up to a minimum of $684 per week), in order to preserve those employees’ status as truly exempt.

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Retaliation Cases on the Rise – But Timing Alone Not Always Enough to Prove It

Retaliation claims against employers are on the rise, as the statistics from the Federal Equal Employment Opportunity Commission (EEOC) show. In fiscal year 2018, for example, total retaliation claims appeared in 51.6% of charges filed with the EEOC, totaling a whopping 30,556 charges alleging retaliation in employment nationwide. As a result, employers across the nation, including in South Dakota, are concerned about retaliation claims, and eager to learn how to avoid them.

Generally speaking, the claim of employment retaliation is comprised of three elements the plaintiff would have to prove: (1) the employee engaged in protected activity; (2) there was an adverse employment action against the employee; and (3) the two are causally related. If an adverse action occurs close in time to the employee’s protected activity, it can suggest or imply that a causal connection is present. However, timing alone is not always enough to establish a causal connection, as a recent case shows us.

In May 2019, the U.S. 8th Circuit Court of Appeals (whose rulings apply to all South Dakota employers), held that an employee’s claim for FMLA retaliation was not established just because the employee took a leave of absence under the FMLA (which is protected activity) and subsequently faced disciplinary actions and ultimately, termination of employment within a short period of time thereafter.

In this case, the Plaintiff Karen Beckley (“Beckley”) worked for St. Luke’s Hospital, most recently as a surgical technician in the operating room. Her main duty was to pass instruments in the surgical suite. She had been employed by the employer for many years, having taken intermittent FMLA leave prior to her promotion to the operating room in 2012. Beckley frequently took FMLA leave, and had no negative consequences from August 2012 until March 10, 2014, when she received a Level 1 disciplinary warning for failing to respond to messages left on her cell phone and pager. She admitted that this reprimand was unrelated to her FMLA usage.

Then, on August 12, 2014, she received a Level 2 disciplinary warning for not responding appropriately to a call-in request. On August 25, 2014, Beckley received a Final Warning for failing to respond to an emergency call-in request. During each reprimand, Beckley was counseled that any additional occurrences could lead to further disciplinary action, including discharge of employment. Also, each disciplinary action involved a different charge nurse, none of whom played a role in Beckley’s ultimate termination of employment.

In addition to the formal disciplinary actions, the hospital counseled her about several other issues related to her work performance. In March 2014, she was talked to about her inattention to details. She admitted that this criticism of her work performance was unrelated to her use of FMLA leave. In July 2014, Beckley mislabeled a syringe, which was handed to a surgeon containing a medication instead of the required saline solution that the surgeon needed for a flush. Beckley admitted the mistake was serious, was her responsibility, and that it was a “big deal.”

Finally, in March 2015, less than seven months after being given the final warning, Beckley became contaminated in the operating room, when she touched a non-sterile object. While she immediately realized she “broke sterility,” she did not immediately change her gown or gloves. She then left the operating room, but was gone for at least 15 minutes without letting the surgeon know, which she admitted. The employer fired Beckley the same day.

Beckley alleged that the complaints from co-workers and her supervisor against her were related to her increased use of FMLA leave. She asserted that a co-worker told her she “needed to watch herself” with regard to her FMLA usage. She also viewed her supervisor’s inquiry about whether or not she could schedule doctor’s appointments during off-duty hours as a complaint or concern about her FMLA usage. Beckley thought she was being treated more severely than other employees for what she believed were relatively minor offenses.

Beckley then sued St. Luke’s, alleging FMLA retaliation as a result of adverse employment actions following the exercise of FMLA leave. While she did not have direct evidence of retaliation, she relied on the length of time between her FMLA leave and the subsequent disciplinary actions and then termination of employment, and also asserted that the hospital treated other employees who did not take FMLA leaves more leniently.

Ultimately, the court decided that Beckley’s temporal proximity claim was insufficient to establish a causal connection to the disciplinary actions or termination, and therefore, she could not establish a prima facie case of retaliation. The court then went on to find that St. Luke’s showed that it had a legitimate, non-discriminatory reason for her termination, and that Beckley had failed to establish that the employer’s reason was pretexual (i.e., a “cover-up” for actual retaliation).

In reaching its conclusion, the court relied upon the fact that Beckley had taken FMLA leave without any negative repercussions from October 2012 through March of 2014. In addition, the performance issues were well-documented by the written disciplinary actions, and Beckley was informed each time that any additional performance concerns could give rise to further disciplinary actions, including termination of employment. Further, it found that Beckley’s allegations that she was mistreated by supervisors, she was held to a different standard than others, her work was scrutinized more carefully than others, her co-workers’ comments about her FMLA leave usage, and her supervisor’s inquiry about scheduling doctor’s appointments during non-work hours, without evidence of tangible injury or harm, were not actionable under the FMLA. The court viewed the above as falling into the bucket of “petty slights or minor annoyances” that, while frustrating to employees, do not give rise to an actionable FMLA claim.

In the end, the court found that Beckley’s case only consisted of an unpersuasive argument of temporal proximity combined with her subjective belief that she was being treated differently than other employees. As a result, the court found that she did not present a case that she was retaliated against for exercising a protected FMLA leave.

Employer Takeaway: Employers should be reassured by this recent case that they can take legitimate disciplinary action against employees without fear of a retaliation claim against them being successful. So long as the adverse employment reasons are justified by the employee’s performance/behavioral concern or violation of company policy, and the discipline or termination is well-documented, the fact of timing alone will not always be enough for the employee to establish a successful retaliation claim.

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“Because of Sex” – U.S. Supreme Court to Hear LGBT Employee Discrimination Cases

On April 22, 2019, the United States Supreme Court announced it would hear arguments on three high-profile employment-related cases next term, all involving the issue of whether sexual orientation and transgender status are considered protected under federal anti-discrimination laws.

Under the federal law, Title VII of the Civil Rights Act of 1964, it is an unlawful employment practice to discriminate against applicants or employees “because of” someone’s sex, among other protected classifications. The statute does not specifically mention sexual orientation, transgender status or gender identity in the actual text. Lower federal courts across the country have been split on the issue of whether Title VII actually bars discrimination based on sexual orientation or gender identity.

This question about the interpretation of Title VII and its applicability to sexual orientation and gender identity has been a large, looming question for the past several years, and the time is ripe for this issue to be settled. The petitions received from three different cases were presented to the U.S. Supreme Court justices, who will hear the arguments in October 2019. The cases are not expected to be decided until sometime in 2020. Currently, the U.S. Supreme Court has a conservative majority, with the relatively recent additions of associate justices Brett Kavanaugh and Neil Gorsuch, who were nominated by President Donald Trump.

Of note, the Equal Employment Opportunity Commission (“EEOC”), the federal agency responsible for enforcing federal anti-discrimination laws, takes the position that it is a violation of Title VII to discriminate against workers on the basis of their sexual orientation or on the basis of gender identity, including transgender status. The EEOC supports its position as consistent with applicable Supreme Court cases, such as Price Waterhouse v. Hopkins from 1989, which hold that employment actions motivated by gender stereotyping constitute unlawful sex discrimination. However, the federal Department of Justice opposes the EEOC’s stance. It states that the EEOC’s position about the scope and applicability of Title VII to categories not mentioned in the statute does not have the force and effect of law and is entitled to no deference beyond that agency’s power to persuade.

Two of the three cases up for review deal with the question of whether sexual orientation discrimination constitutes a form of discrimination “because of . . . sex,” in violation of Title VII of the Civil Rights Act. One of those two cases is Altitude Express, Inc. v. Zarda, out of the 2nd Circuit Court of Appeals, involving a claim by a former employee, Zarda, against his former employer, Altitude Express, alleging that he was terminated from his position as a skydiving instructor based on his sexual orientation. In that in that case the court adopted the EEOC’s view and held that Title VII prohibits sexual orientation discrimination. The second of the three cases up for review is Bostock v. Clayton County, Ga., out of the 11th Circuit Court of Appeals, which dealt with Bostock, a gay man and county employee, who became involved with a local gay recreational softball league, and was fired several months later on the basis of “conduct unbecoming of a county employee.” In that case, the court held that Title VII does not ban sexual orientation discrimination. As one can see, these two lower courts reached opposite conclusions on the issue.

The third case, R.G. & G.R. Harris Funeral Homes v. EEOC, out of the 6th Circuit Court of Appeals, involves the question of whether Title VII prohibits discrimination against transgender people based on either (1) their status as transgender; or (2) sex stereotyping under Price Waterhouse v. Hopkins. The Harris case dealt with a funeral director (formerly known as Anthony Stephens) who worked for the funeral home employer for six years before making the announcement about transitioning from male to female. She was fired several weeks after she informed her boss of her transition. The 6th Circuit Court of Appeals ruled that the word “sex” in Title VII includes “gender identity” and held that discrimination of the basis of transgender violates Title VII. Of note, the EEOC considers the term “transgender” to refer generally to gender nonconforming individuals, especially those whose gender identity (i.e., inner sense of being male or female) or gender expression (i.e., outward appearance, behavior, and other such characteristics that are culturally associated with masculinity and femininity) is different from the sex assigned to the person at birth.

Another recent development is that the EEOC has a new chair, Janet Dhillon, who was appointed by President Trump and approved by the U.S. Senate on May 8, 2019, after a several year impasse over her nomination due to concerns that she would seek to change the EEOC’s position on LGBT issues and rights. Many business groups backed Dhillon, who has worked as an in-house lawyer for JCPenney, Burlington Stores, and US Airways.

Employer Takeaway
It is clear that the current state of the law regarding LGBT rights is disjointed, and eyes are on the U.S. Supreme Court this fall to resolve the outstanding issue of whether sexual orientation and transgender status are protected by Title VII’s prohibition of employment discrimination on the basis of sex. While the EEOC’s current view that Title VII does prohibit discrimination on the basis of sexual orientation and transgender status/gender identity is considered guidance, it is not followed by all courts in the nation hearing these types of issues in employment cases. Therefore, it is still a best practice for employers to include a prohibition of sexual orientation and/or transgender discrimination and harassment against applicants or employees in its policies, procedures and employment-related practices. In addition, anti-harassment and anti-discrimination training for all managers and supervisors can help to raise awareness of sexual harassment and sex discrimination generally, and ultimately, this can help to prevent employment-based claims of discrimination and harassment overall. Within the next year, employers will certainly have more clarity and direction, but until then, employers should continue to follow best practices.

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U.S. Department of Labor States Employees May Not Decline or Defer FMLA Leave of a Covered Absence

On March 14, 2019, the United States Department of Labor (“DOL”) issued an opinion letter (FMLA2019-1-A) after being asked “whether an employer may delay designating paid leave as Family and Medical Leave Act (FMLA) leave or permit employees to expand their FMLA leave beyond the statutory 12-week entitlement.” On the first question, whether an employer may delay designation of FMLA leave, the DOL was of the opinion that an employer may not do so. As to the second question, whether an employer may expand FMLA leave beyond the statutory 12-week entitlement, the DOL was similarly of the opinion that an employer may not do so.

The Question to the DOL

In being asked to issue the opinion, the inquiring party represented to the DOL that some employers “voluntarily permit employees to exhaust some or all of the available paid sick (or other) leave prior to designating leave as FMLA-qualifying, even when the leave is clearly FMLA-qualifying.” The inquiring party represented that employers may be relying on 29 C.F.R. § 825.700, which states in relevant part that “an employer must observe any employee benefit or program that provides greater family and medical leave rights to employees than the rights provided by the FMLA.”

For obvious reasons, it makes sense that an employer would occasionally be approached by an employee who knows that they will need more than 12 weeks of total leave to attend to his or her serious health condition or that of their family member. Other employees may even have offered to donate leave time to this employee in order to allow him or her to take additional time off of work. And, some employers have policies or practices that go above and beyond the FMLA in order to assist employees dealing with difficult medical situations.

The Legal Issues

Under the FMLA, employees of covered employers (those employers employing 50 or more employees within 75 miles of an employee’s workplace) are eligible to take up to 12 weeks of unpaid leave per year for specified medical reasons for themselves or their qualified family members. An employer may require the employee (or the employee may elect) to “substitute” accrued paid leave to cover part of the unpaid FMLA entitlement period, in order to be compensated for that portion of the unpaid FMLA leave. In any event, the employer must properly designate FMLA time as such.

In order to designate FMLA time as FMLA time, an employer must give notice of the FMLA designation to the employee under 29 C.F.R. § 825.300(d)(1). This Designation Notice is required within five business days after the employer “has enough information to determine whether the leave is being taken for a FMLA-qualifying reason.” Importantly, under the regulations, failure to provide the required notice may constitute an interference with, restraint of, or denial of the employee’s FMLA rights.

Under 29 C.F.R. § 825.700, nothing prevents employers from adopting leave policies more generous than the floor of the FMLA. Further, for those small businesses that are not covered by the FMLA, there is nothing preventing employers from being more generous than the FMLA. That being said, an employer may not designate more than 12 weeks of leave as FMLA-protected.

The Opinion

As an initial matter, the DOL noted that an employer is prohibited from delaying designation of FMLA-qualifying leave as such. This is because once an employee communicates a need to take leave for an FMLA-qualifying reason, neither the employee nor the employer may decline FMLA protection for that leave. Even if the employee never specifically states that the leave is under the FMLA, if the employer is qualified—again, generally more than 50 employees in that geographic area—and the employer has knowledge of facts that indicates the leave is FMLA-qualifying, the employer must provide notice of FMLA designation to the employee within five business days.

Thus, even if the employee asks the employer to wait to start the clock under the FMLA, the employer is not allowed to do so. Once the employer knows that the leave will be FMLA-qualifying, the employer must designate the leave as FMLA leave.

As to the question of whether an employer may provide more than 12 weeks of FMLA leave, the DOL noted that aside from the military caregiver leave exception (which provides 26 weeks of FMLA leave), the FMLA provides for 12 weeks of unpaid leave. Employers are not prohibited from being more generous with their employees than required by the FMLA. However, being more generous does not make the additional leave covered by the FMLA or subject to the protections provided for therein. While the employer may continue to provide unpaid leave after the 12 weeks of FMLA leave have been exhausted, that leave is not deemed “FMLA leave” in the strict sense of FMLA entitlement.

Practical Application

For many South Dakota small businesses, the FMLA does not apply because there are simply not enough employees for the FMLA to be applicable. For those employers that are covered by the FMLA, according to the DOL, once an employee’s leave is FMLA-qualifying, it must be so designated. The opinion letter clearly leaves no wiggle room for an employer to avoid application of the FMLA, even if the employee prefers to delay or decline FMLA-leave designation. It is still acceptable for employers to be generous and to offer any additional leave beyond what the FMLA provides (such as non-FMLA medical leave), although such additional leave will not be considered actual FMLA leave. In addition, paid leave can be used to provide compensation during an otherwise unpaid FMLA leave (such as short-term disability), but such paid leave will run concurrently with the FMLA leave.

Keep in mind that DOL Opinion Letters do not have the same force and effect of law the way that a statute, regulation or court decision does. However, courts do turn to administrative agencies for help and guidance in interpreting the law. Therefore, South Dakota employers who are subject to compliance with the FMLA are well-advised to follow the guidance in this DOL opinion letter. Practical tips include training managers and supervisors on the FMLA rules, particularly since individual liability for violations exists. Also, employers need to ensure that their policies and procedures are up-to-date, consistent and regularly followed. In this way, South Dakota employers will be ensuring legal compliance, as well as fair treatment of all their employees.

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Lynn Jackson Alert: U.S. Department of Labor Proposes Raise to Exempt Employee Minimum Salary

On March 7, 2019, the U.S. Department of Labor (DOL) announced a Notice of Proposed Rulemaking to raise the minimum salary threshold for exempt employees to $35,308 annually ($679 per week), which is up from the 2004 standard currently in place of $23,660 annually ($455 per week). Exempt categories such as administrative, executive, professional, and outside sales and computer employees are often referred to as “white collar” exemptions. Employees in exempt categories must meet not only the minimum salary requirement, but must also be paid on a salary basis and meet the standard duties test of the applicable exemption. There have been no changes under the proposed rule to the “standard duties” test under the exemptions.

The DOL’s proposed rule will be subject to a 60-day public comment period before it eventually could make its way into a final form. It is expected that the final rule would become effective some time in early 2020.

The proposed rule raises the highly-compensated employee (HCE) exemption from $100,000 under the current rule to $147,414 per year, of which $679 must be paid weekly on a salary or fee basis. Under the proposed rule, employers would not be able to count non-discretionary bonuses in order to meet the required weekly salary requirement for HCEs.

In addition, the proposed rule would allow employers to count certain bonuses, incentive payments, and commissions paid on an annual or more frequent basis to be used to satisfy up to 10 percent (10%) of the employee’s overall salary to meet the new salary threshold of $35,308.

Employer Takeaway: While this proposed rule is not yet final, employers should begin taking steps in anticipation of the rule becoming effective at some point in the next year. For example, employers should review the salary ranges for exempt employees currently in place at their businesses, and consider adjusting salaries upwards if necessary to meet the new standard, or re-classify the worker as non-exempt and paid on an hourly basis if that becomes necessary. With careful planning, employers will be well-prepared for compliance should the change in the overtime rule become effective.

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