President Obama Unveils Plan to Expand Overtime Pay; U.S. Supreme Court Holds Failure to Provide Religious Accommodation Could be Intentional Discrimination Even Where the Employer Had No Actual Knowledge of the Need for Accommodation

June 2015

President Obama Unveils Plan to Expand Overtime Pay
President Obama is expected to propose a plan later this week which would significantly change the nation's overtime pay law, dramatically expanding the number of people who will qualify for overtime pay after working more than 40 hours in a week. The proposed rule could extend overtime wages to 5 million more American workers than are currently qualified.

The President will recommend updating the Department of Labor's overtime rules so that salaried workers who earn less than roughly $50,400 per year would be guaranteed to receive 1 and 1/2 times their regular pay when they work more than 40 hours in a week. Under the current rules, salaried workers must earn less than $23,600 per year in order to be eligible for guaranteed overtime pay. Workers whose salaries fall beneath the salary threshold are guaranteed overtime pay regardless of their position.

The White Houses' proposed changes must still undergo a public-comment period before it can be finalized sometime next year. The proposed changes can be enacted through regulation, without congressional approval.

The President is expected to release more details concerning the proposed rule later this week and we will keep you updated on these developments.

U.S. Supreme Court Holds Failure to Provide Religious Accommodation Could be Intentional Discrimination Even Where the Employer Had No Actual Knowledge of the Need for Accommodation
On June 1, 2015, the United States Supreme Court found in favor of the Equal Employment and Opportunity Commission ("EEOC") in EEOC v. Abercrombie & Fitch Stores, Inc., a closely watched religious discrimination case. The EEOC had argued that Abercrombie & Fitch ("Abercrombie"), violated Title VII of the Civil Rights Act of 1964 ("Title VII") when it failed to hire a prospective employee, Samantha Elauf, because of her religious practice without offering her a reasonable accommodation. The Court held that an applicant raising a disparate-treatment claim under Title VII does not need to show that the employer had actual knowledge of the applicant's need for accommodation of a religious practice, but need only show that the need for a religious accommodation was a motivating factor in the employer's decision.

Title VII
Title VII makes it an unlawful employment practice for an employer to discharge or refuse to hire an individual because of the individual's religious observance or practice unless the employer demonstrates that it is unable to accommodate the practice without undue hardship in the conduct of its business.

The Facts
The plaintiff, Samantha Elauf, a practicing Muslim, wore her hijab, a headscarf worn by Muslim women as a symbol of modesty, when she interviewed for a position at Abercrombie. During her interview, Elauf did not mention that she was Muslim or that she wore her hijab for religious reasons, and she did not affirmatively request an accommodation that would permit her to wear the headscarf at work. Although Elauf was qualified for the position, she was not hired because her hijab violated the company's "Look Policy," which prohibited head coverings.

Abercombie's Position
Abercrombie argued that it did not have actual knowledge of the Elauf's need for an accommodation and therefore could not have intentionally discriminated or failed to accommodate the plaintiff.

The EEOC's Position
The EEOC argued that an employer need not have actual notice of the need for an accommodation, reasoning that employers have a better knowledge of work rules, and may be able to identify religious conflicts not known to applicants.

The Decision
The Court held that applicants need show only that their need for an accommodation was a motivating factor in the employer's decision and that Title VII does not impose a burden on a plaintiff to demonstrate that a company had actual knowledge of the applicant's religious practice or need for an accommodation to show intentional discrimination on the basis of religion. The Court noted that Title VII does not "impose a knowledge requirement," in contrast to other antidiscrimination statues, like the Americans with Disabilities Act of 1990. Rather, Title VII focuses on whether religion is a motivating factor in an employment decision -- and held that motive and knowledge are separate concepts.

The Court stated that "the rule for disparate-treatment claims based on a failure to accommodate a religious practice is straightforward: An employer may not make an applicant's religious practice, confirmed or otherwise, a factor in employment decisions." The Court acknowledged that if the applicant requested an accommodation, or the employer was certain that the applicant followed a practice that would require accommodation, it may be easier to infer motive, but held that neither is required for liability.

The Court also noted that a neutral policy is not necessarily a defense to a disparate treatment claim since Title VII demands more than "mere neutrality with regard to religious practices" and gives them "favored treatment." Accordingly, employers are required to provide reasonable accommodation of religion, including modification of neutral policies, so long as the modification does not impose an undue hardship to the employer.

The Court reversed the decision of the Court of Appeals for the Tenth Circuit that granted summary judgment to Abercombie and remanded the case for further consideration in light of its decision.

What This Means to You
In light of the Court's recent decision, employers must ensure that the religious practice of an applicant or employee -- whether suspected or confirmed -- is not a factor when making employment decisions. Employers should not assume that neutral polices absolve them for providing a reasonable accommodation due to religion. In this regard, employers should consider taking the following proactive steps:

  • Train managers and human resources staff to ensure that an applicant's or employee's known or suspected religious practice is not considered when making hiring decisions or any other employment decisions.
  • Review your current policies, including "Look Policies" and be prepared to modify such policies to accommodate religious practices
  • Articulate a commitment to providing reasonable accommodations, and carefully evaluate when a religious accommodation would or would not be an undue hardship;
  • Have a process in place for addressing religious accommodation requests;
  • Take note of any applicable state or local laws addressing religious discrimination and harassment, which may be broader than required by federal law.

For more information on this issue or other employment matters, please contact:

Carol M. Goodman at [email protected] or +1 212 592 1465

© 2015 Herrick, Feinstein LLP. This alert is published by Herrick, Feinstein LLP for information purposes only. Nothing contained herein is intended to serve as legal advice or counsel or as an opinion of the firm.