In This Issue

• Pregnancy Rule Changes Placed On Short-Term Leave
• BWC Reduces Maximum Group Rating Discount
• It’s that time of year again: Minimum Wage Increase.
• Preparation Every Employer Should Take Before Discharging an Employee

This is the only 2008 seminar date for
the Managing Labor and Employee Relations Seminar.

Pregnancy Rule Changes Placed On Short-Term Leave

By Loriann E. Fuhrer

Recent changes proposed by the Ohio Civil Rights Commission (OCRC) to Ohio’s administrative rule on pregnancy leave have been shelved for at least 90 days. The changes would have expressly required employers to provide 12 weeks of unpaid leave for pregnancy and childbirth, where medically recommended, regardless of the pregnant employee’s length of service. These changes would have brought the express language of the administrative rule in line with the interpretation the OCRC has been giving it all along. The current rule requires employers to provide “reasonable leave” for pregnancy and childbirth, and the practice of the OCRC has been to consider a leave policy to be reasonable if it makes 12 weeks available when medically recommended, regardless of tenure.

Last week, the Joint Committee on Agency Rule Review (JCARR) rejected the proposed rule change in a 9-1 vote. However, the reason given for the rejection was that the OCRC had not complied with a requirement to provide information on the economic consequences of the proposed rule change on public employers. It is likely that the OCRC will cure this deficiency in its application and re-file it after the minimum 90-day waiting period. Recent comments by OCRC Chief Legal Counsel Matt Miko give no indication that the OCRC intends to alter the substance of the proposed changes when it re-files.

Employers should understand that the OCRC does not view the proposed changes as setting out anything new. The OCRC has always interpreted Ohio’s pregnancy discrimination law as requiring employers to provide up to 12 weeks of unpaid leave when medically recommended, regardless of the employee’s length of service. While the business community had hoped the OCRC would change the rule to reflect a consistent interpretation with federal pregnancy discrimination law, it does not appear the OCRC has any intention of doing that. Federal law requires that pregnant women be treated the same as other workers with similar ability or inability to work, and permits the application of length of service requirements to pregnant employees so long as those requirements are applied to all employees.

The rule changes proposed by the OCRC would also have clarified the OCRC’s position with regard to light duty by requiring that, if an employer has a light duty program, it must be available to pregnant women. Although this change is also on hold for at least 90 days, the OCRC will likely take the position in the interim that the anti-discrimination statute already requires employers to include pregnant women in their light duty program, if they have one, and this inclusion is likely to be required without regard to length of service.

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BWC Reduces Maximum Group Rating Discount

By David M. McCarty

On November 21, the Bureau of Workers' Compensation voted to reduce the maximum group-rating discount from 90% to 85%, effective July 1, 2008. The Bureau's press release claims the reduction "will create greater equity between the premiums paid by group-sponsored employers and non-group employers, and reduce Ohio's overall workers' compensation base rates." The Board's 5% discount reduction exceeded the 3% reduction recommended by its own Actuarial Committee. Consequently, group-rated employers on the whole will see their premiums rise while employers not fortunate enough to be in a group will probably see their premiums go down. Employers would be well-advised to bear the Bureau's action in mind when formulating their 2008 budgets. We anticipate that the Bureau will institute further group-rating discount reductions in 2009 and beyond.

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It’s that time of year again: Minimum Wage Increase.

By Brendan P. Feheley

This is your friendly reminder that the minimum wage increase is upon us again. As we told you in October, the minimum wage in Ohio will change each year based on the Consumer Price Index, as is required by the 2006 Constitutional amendment. On January 1, 2008, the minimum wage for most Ohio employees becomes $7.00/hour. Make sure your payroll adjusts according to the new requirements. Remember that the increase in minimum wage also will affect overtime rates for minimum wage employees. In 2008, the overtime rate for employees making minimum wage will be $10.50/hour. The minimum wage for employees who meet the requirements to be classified as “tipped employees” also increases on January 1, 2008 to $3.50/hour.

The minimum wage increase affects all Ohio employees aged 16 or older who work for employers with gross revenues above $255,000.00 in 2007. For employees aged 14 or 15 and those employers with gross revenues below the $255,000.00 threshold, the federal minimum wage of $5.85/hour applies. Also, keep in mind that the federal minimum wage will increase in July to $6.55/hour.

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Preparation Every Employer Should Take Before Discharging an Employee
This will help you defend against a wrongful discharge suit

By Natalie M. McLaughlin

Whether you are an employer for a business, government entity, or non-profit, you will likely, at some point, confront the need to discharge an employee. In Ohio, an employer can discharge an at-will employee for any reason, or no reason at all, so long as it is not contrary to law. Taylor v. Volunteers of Am., 153 Ohio App.3d 698, 701 (1st Dist. 2003). If you have made an explicit or implicit agreement with your employee concerning discharge, then you are bound by the terms of that agreement. Mers v. Dispatch Printing Co., 19 Ohio St.3d 100, 103 (1985).

However, even if you have a completely legitimate reason for your actions, there is always a risk that an employee who is angry, hurt, or desperate will sue you for wrongful discharge. That employee will not hesitate to charge you with acting unlawfully, and no matter how unwarranted the charge is, this can tie you up in time-consuming and expensive litigation.
There are six steps that you, as an employer, can take to help prepare you to defend against a wrongful discharge suit. These steps will aid you in resolving the suit quickly and favorably.

First, give your employees a handbook or other written document that lays out your policies and expectations for them. Though you cannot prepare for every conceivable scenario, you can at least lay out some basic standards of productivity and behavior. This puts all employees on notice of expectations. It also serves as a documented source existing before the terminating incident to support your decision to terminate. To ensure that your handbook does not create contractual terms that will bind you, include a disclaimer and have each employee sign it. Such a disclaimer will negate any inference that the handbook creates any contractual obligations upon you as employer. Gaumont v. Emery Air Freight Corp., 61 Ohio App.3d 277, 286 (2d Dist. 1989).

Second, follow the written policies that you gave to your employees, and do not make representations that are inconsistent with those policies. For example, if you have a procedure for warning and disciplining an employee prior to termination, then you need to follow that procedure.

Third, when called for, perform an investigation. For example, if the termination is due to complaints from other employees, a supervisor or customers, investigate to ascertain the truth. Henceforth, even if your decision ultimately proves unsupportable, it appears legitimate. Even with at-will employment, exhibiting good faith in your decision to terminate will help you defend against a charged unlawful motive. And outside of employment at-will, there is a standard of good faith required of every contract. Ziegler v. Findlay Industries, Inc., 464 F.Supp.2d 733, 740 (N.D. Ohio 2006).

Fourth, apply your policy to the employee you are discharging consistently with how you have applied your policy to employees in the past. For example, if your written policy is that an employee is allowed three late arrivals before termination, but you have allowed other employees in the past to be tardy five times before terminating them, then you need to likewise apply your unwritten procedure to this employee (allowing her five late arrivals before termination). As long as you consistently apply your policy, then that shows that you treat all your employees the same and supports applying the policy in the current discharge. If you have repeatedly not followed your policy, then you may want to consider revising it to conform with your actual practice.

Fifth, clearly and succinctly communicate to your employee your legitimate reason for terminating her. Employers, wanting to avoid awkwardness, may be tempted to give an inaccurate or incomplete reason. For example, you may tell the employee that the reason for termination is because business is slow, though the real reason is because the employee has proven incompetent at performing the required tasks. The risk is, if you tell an employee the termination is for one reason, but then try to assert down the road that the real reason is something else, this detracts from your credibility. Rehearse what you will tell the employee ahead of time, then give the employee a brief but clear explanation for the termination. Do not argue with the employee, and do not allow her to put you on the defensive or make you feel you have to justify your decision.

Sixth, keep detailed documentation that is timely recorded. You should be able to open the employee's personnel file and have listed the reason the employee was discharged and the incidents that support that reason. For instance, if an employee is terminated for tardiness, you need to have a record of that tardiness, documented warnings, etc. You should also prepare a summary of the termination meeting right after it occurs, with as many details as possible regarding what you told the employee and the employee's response.

This article is meant for informational purposes only, and should not be relied on as legal advice. If you have any further questions about your current employment policies, would like help in revising your policies, seek advice on terminating an employee, or need help defending against a suit by a terminated employee, please contact Kegler, Brown, Hill & Ritter.

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