Author: Daniel C. Deacon

DOL Finalizes Overtime Rule – Significantly Increasing Salary Level Basis Threshold for FLSA Overtime Exemptions

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By Daniel C. Deacon

On April 23, 2024, the U.S. Department of Labor (“DOL”) finally released its final rule raising the salary threshold for overtime exemptions titled Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees.  The rule will phase in the new salary threshold in two steps over the next eight months, and automatically update it every three years thereafter based on Census data. The increase in the salary level basis threshold is a dramatic shift from the current threshold.  As such, employers should audit their current wage practices promptly to ensure they are compliant with the new rule, as the first increase is set to take effect in just over two months on July 1, 2024.

Overview of the Executive, Administrative, and Professional Employees Overtime Exemption

Unless specifically exempted under the FLSA, U.S. hourly workers are entitled to be paid no less than time-and-half their regular rate of pay for all hours worked in excess of 40 hours a week.  The additional income is called “overtime pay.”

However, up until now, a certain subset of employees – i.e. executive, administrative, and professional workers, are exempt from the FLSA’s overtime pay requirements provided they satisfy all three of the following tests: Continue reading →

Mid-Year Employment Updates in DC, Maryland, and Virginia

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We are mid-way through 2023, and there have been several changes to the employment laws in the District of Columbia, Maryland, and Virginia that employers need to take note of.  All of these laws, which were passed in 2022 or the more recent 2023 legislative sessions, went into effect on July 1, 2023, including amendments to minimum wage laws, leave laws, marijuana laws, and laws related to nondisclosure, confidentiality, and non-disparagement agreements.  Below is an overview of some of the key changes that employers need to carefully analyze to ensure existing employment policies and practices are up to date.

District of Columbia

Minimum Wage Hike. Beginning on July 1, 2023, DC minimum wage increased from $16.50 per hour to $17 per hour.  Tipped workers will see their base wage increase from $6 per hour to $8 per hour, and if their tips don’t bring their total hourly earnings up to $17 per hour overall, their employer needs to make up the difference.

Recreational Cannabis Use Protection in Effect.  Under the DC Cannabis Employment Protections Amendment Act of 2022, which went into effect on July 1, 2023, employers cannot take any adverse action against an employee because of the employee’s recreational cannabis use, participation in D.C. or another state’s medical cannabis program, or failure to pass an employer-required or requested cannabis drug test.  In simple terms, employers are prohibited from terminating, suspending, demoting, refusing to hire, failing to promote, or otherwise penalizing an employee for cannabis use, but there are two notable exceptions: Continue reading →

Illinois Set to Become the Third State with a Mandatory Paid Leave Law

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The Illinois Paid Leave for All Workers Act (Senate Bill 208), which will provide paid leave to virtually all Illinois employees, was passed by the Illinois legislature on January 10, 2023 and was sent to the Governor J.B. Pritzker for signature on January 30, 2023.  Governor Pritzker has publicly supported this bill and it is expected he will sign the bill into law soon.   Illinois is set to join Nevada and Maine as the only three states in the country with a mandatory paid leave law- requiring nearly all Illinois employers to provide employees up to 40 hours of paid leave per year for “any purpose.”  This will have significant impact on Illinois employers, and it is imperative for employers to take proactive steps to review existing leave policies and prepare to implement the Act’s requirements when it goes into effect on January 1, 2024.

Scope of the Act

The Act will apply to all Illinois employers except school districts organized under the School Code and park districts organized under the Park District Code.  Furthermore, all Illinois employees will be covered with a few limited exceptions:

  • employees under the federal Railroad Unemployment Insurance Act or the Railway Labor Act;
  • students employed by a college or university for less than 2 consecutive calendar quarters during a calendar year with no reasonable expectation of being rehired by the same employer of the same service in a subsequent calendar year;
  • employees working in the construction industry who are covered by a collective bargaining agreement (“CBA”); and
  • employees covered by a collective CBA with an employer that provides services nationally and internationally of delivery, pickup, and transportation of parcels, documents, and freight.

The Act will not impact the validity or otherwise modify the terms of a CBA in effect on January 1, 2024. The Act’s requirements can be waived in a bona fide CBA as long as the waiver is set forth explicitly in the agreement in clear and unambiguous terms.

Th Act also exempts those employers that are covered by a municipal or county law in effect on Jan. 1, 2024, such as the Chicago Minimum Wage and Paid Sick Leave Ordinance and the Cook County Earned Sick Leave Ordinance.  For any municipal or county ordinances enacted or amended on or after January 1, 2024, employers are only required to comply with the provisions of the local ordinance to the extent that it provides greater benefits, rights, and remedies to employees than those provided under the Act.

Accrual and Use of 40 hours of Leave in 12-Month Period

Beginning on January 1, 2024, covered employees will accrue one hour of paid leave for every 40 hours worked.  However, employees cannot use their paid leave until they have completed 90 calendar days of employment, or until March 31, 2024, whichever is later.

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New York City Pay Transparency Law Goes into Effect – Tips for Employers

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After a series of amendments passed by the New York City Council in the Spring of 2022 postponed the effective date of the New York City Pay Transparency Law, the law finally went into effect on November 1, 2022.  Employers need to take swift action to ensure that their job advertisements comply with the law, if they haven’t already done so.  The law amended the New York City Human Rights Law (NYCHRL) to make it an unlawful employment practice for a covered employer to advertise a job, promotion, or job transfer without disclosing the minimum and maximum salary or hourly wage range of compensation for the position that the employer in good faith believes it would pay for the position.

A covered employers is any employer with four or more employees, including independent contractor and owners, or one or more domestic workers, that has at least one employee who works, at least in part, in New York City.  The law also covers employment agencies of any size. Temporary help firms that recruit, hire, and assign their own employees to perform work or services for other organizations to support or supplement the other organization’s workforce are exempt from the disclosure requirements.  However, employers that work with temporary help firms must follow the disclosure requirements.

Prior guidance issued by the New York City Commission on Human Rights (the “Commission”) provides that the “salary” employers must disclose is the “base annual or hourly wage or rate of pay,” and it does not need to include other forms of compensation or benefits offered in connection with the advertised job, such as health insurance, 401K contributions or employer-funded pension plans, severance pay, overtime pay, commissions, tips, bonuses, and stock. The guidance also provides further instruction about how the law applies, which include the following highlights:

  • Coverage and Application
    • The four employees do not need to work in the same location, and they do not need to all work in New York City.
    • As long as one of the four employees works in New York City, the workplace is covered.
    • The disclosure requirements apply to any position that can or will be performed, in whole or in part, in New York City, whether from an office, in the field, or remotely from the employee’s home.  In other words, employers outside of New York City need to be aware of the law’s potential reach, especially with respect to remote jobs that could be filled by persons living (and working from) New York City.  Employers that post for remote jobs and have more than four employees should include compliant salary/wage ranges in postings for those jobs.
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D.C. Circuit Lessens Burden of Proof for Title VII Job Transfer Claims

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On June 3, 2022, the full court of the U.S. Court of Appeals for the District of Columbia overturned long-standing precedent regarding the burden of proof a plaintiff must carry in pursuing a Title VII Claim.  In Chambers v. District of Columbia (D.C. Cir. 2022), the D. C. Circuit held in a 9-3 en banc decision that when an employer transfers an employee or denies an employee’s request for a transfer because of the employee’s race, color, religion, sex, or national origin, the employer violates Title VII by discriminating against the employee in his or her “terms, conditions, or privileges” of employment. The court’s opinion overruled a nearly 24-year old precedent that held the denial or forced acceptance of a job transfer is actionable only if an employee suffers “objectively tangible harm.”  See Brown v. Brody (D.C. Cir. 1999).  The court’s decision could have sweeping effects on Title VII litigation throughout the country, as the diminished burden of proof is significantly more plaintiff-friendly and causes concern for employers when evaluating job transfers and potentially other employment actions.

Background

The plaintiff worked in the Attorney General’s office in the District of Columbia for more than two decades as a clerk, Support Enforcement Specialist, and investigator.  She requested several transfers to other units in the Attorney General’s office after complaining that she had a much larger caseload than her comparators.  All of her transfer requests were denied, and she ultimately filed an EEOC charge and a lawsuit in 2014 alleging sex discrimination and retaliation. 

The district court relied on Brown in granting the District of Columbia’s motion for summary judgement.  On appeal, a three-judge panel of the D.C. Circuit upheld the district court’ ruling.  However, two of the three judges highlighted that Title VII does not make any reference to “objectively tangible harm” and requested the full court to further review the matter. 

The D.C. Circuit, in common with many other federal courts, has long imposed this tangible harm requirement articulated in Brown because of the view that Title VII is not a general “civility code” and that employees challenging discriminatory decisions should show more than de minimis harm lest courts be involved in supervising myriad routine business decisions. However, the en banc panel overruled Brown – holding that the refusal of a transfer request for one employee while granting similar requests to a similarly situated co-worker on the basis of a protected trait is discriminatory because it “deprives the employee of a job opportunity.”

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Maryland Joins a Number of States by Enacting a Paid Family and Medical Leave Law

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Maryland recently became the tenth state to enact a paid family leave law – joining California, Colorado, Connecticut, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Washington, as well as the District of Columbia and San Francisco.  Although the legislature passed the Maryland Time to Care Act of 2022 by a supermajority vote on March 31, 2022, Governor Hogan opposed the bill and vetoed it on April 8, 2022.  Just one day later, however, the legislature voted to override Governor Hogan’s veto by an overwhelming majority.  

Although the bill will be phased in over the course of the next two-and-a-half years, Maryland employers should pay close attention to the law and the regulations that the Maryland Department of Labor will be implementing within the next year.  To get ahead, employers should proactively make plans to revise their current leave policies and reach out to their HR and payroll providers to ensure that they are prepared to handle the necessary payroll tax contributions.

Effective Dates and Roll-Out of the Act

Similar to how the District of Columbia and other jurisdictions implemented their paid family leave laws, the law will be phased in over the course of several years.  Specifically, the Act establishes a Family and Medical Leave Insurance Fund that will require all employers with 15 or more employees, all employees, and all self-employed individuals that elect to participate in the program to make contributions a fund beginning October 1, 2023.  Notably, employers with less than 15 employees are not required to contribute to the fund, but employees of those small employers will still be required to contribute to the insurance fund.

The contribution rates will be set by the Maryland Secretary of Labor by June 1, 2023.  Covered employees will be eligible to claim and receive benefits approximately a year-and-a-half later on January 1, 2025.   The funding requirements and employer/employee contribution rates will also be periodically reviewed and subject to change based on bi-annual studies and recommendations by the Maryland Secretary of Labor.

Coverage and Qualifying Events under the Act

The Act defines “covered employer” broadly to any person or governmental authority that employs at least one individual in the state of Maryland.  However, there are certain limitations on who is eligible to claim benefits.  Covered individuals – i.e. employees eligible to claim benefits under the Act – are defined as employees who have worked at least 680 hours over the 12-month period immediately before the date that leave is to begin.

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Congress Bans Private Arbitration for Sexual Assault and Harassment Cases

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On February 10, 2022, the Senate passed legislation ending the use of forced arbitration in lawsuits involving sexual assault and harassment claims.  The bill – the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act – passed the Senate by a voice vote just days after it passed the House by a vote of 335 to 97.  The legislation is now before President Biden, and it is expected that he will sign the bill soon. 

This law has been in dispute along partisan lines for nearly a decade, as Republican lawmakers had traditionally opposed the legislation.  However, the #MeToo movement, which included claims against some members of Congress in the past, paved the way for lawmakers to find common ground and resolve the partisan gridlock. 

The law will take effect immediately upon President Biden’s signature, and it will apply to any and all claims of sexual assault or harassment, as defined under federal, state, or tribal law, that arise or accrue after its enactment. Employers that currently use arbitration clauses to manage sexual assault and harassment claims should take steps to review and amend their practices accordingly and prepare for the potential that current and past allegations of sexual misconduct will become public.

Employers will be prohibited from implementing policies or contracts that funnel assault and harassment cases into private arbitration – meaning claimants have the right to file lawsuits in federal, state, or tribal court, which is open to the public.  The law also prohibits employers from using joint-action waivers prohibiting class actions. Therefore, parties are now able to collectively file class action lawsuits alleging widespread sexual assault and/or harassment.

The law raises several new considerations for employers about how to manage claims of sexual assault or harassment. The public nature of filing claims in court elevates the risk of reputational harm for employers, as well as increases liability risk due to the potential for a proceeding before a jury.  Due to the elimination of private arbitration for these claims and the increased risks, plaintiffs now have more leverage in settlement negotiations.

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New York City Issues Private Employer Vaccine Mandate

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By Dan C. Deacon

For those of you with establishments in New York City, note that this week, Mayor Bill de Blasio and the New York City Commissioner of Health and Mental Hygiene issued a private employer vaccine mandate, and yesterday published this implementation guidance for employers.

The key provisions of the mandate include:

1.  Beginning December 27, 2021, workers must provide proof of vaccination against COVID-19 to a covered entity before entering the workplace, and a covered entity must exclude from the workplace any worker who has not provided such proof, unless they are provided an accommodation for a disability or religious reason.

    • “Covered entity” means:
      • a non-governmental entity that employs more than one worker in New York City or maintains a workplace in New York City; or
      • a self-employed individual or a sole practitioner who works at a workplace or interacts with workers or the public in the course of their business.
    • “Worker” means an individual who works in-person in New York City at a workplace. Worker includes a full- or part-time staff member, employer, employee, intern, volunteer or contractor of a covered entity, as well as a self-employed individual or a sole practitioner.
      • Worker does not include:
        • an individual who works from their own home and whose employment does not involve interacting in-person with co-workers or members of the public;
        • an individual who enters the workplace for a quick and limited purpose (such as to use the bathroom, make a delivery, or clocking in and receiving an assignment before leaving to begin a solitary assignment); or
        • non-City residents who are performing artists, college or professional athletes, or individuals accompanying such performing artists or college or professional athletes who do not have to display proof of vaccination pursuant to the Key to NYC program, Emergency Executive Order No. 316 and successor Orders.
    • “Workplace” means any location, including a vehicle, where work is performed in the presence of another worker or member of the public.
    • “Proof of vaccination” means one of the following documents demonstrating that an individual has (1) been fully vaccinated against COVID-19; (2) received one dose of a single-dose COVID-19 vaccine; or (3) received the first dose of a two dose COVID-19 vaccine, provided that a worker providing proof of only such first dose provides proof of receiving the second dose of that vaccine within 45 days after receiving the first dose:
      • A CDC COVID-19 Vaccination Record Card or other official immunization record from the jurisdiction, city, state, or country where the vaccine was administered, or from a healthcare provider or other approved immunizer who administered the vaccine, that provides the person’s name, vaccine brand, and date of administration. A digital photo or photocopy of such record is also acceptable.
      • New York City COVID Safe App showing a vaccination record;
      • A valid New York State Excelsior Pass/Excelsior Pass Plus;
      • CLEAR Health Pass; or
      • Any other method specified by the Commissioner as sufficient to demonstrate proof of vaccination.

2.  Workers in New York City who perform in-person work or interact with the public in the course of business must show proof they have received at least one dose of a COVID-19 vaccine by December 27th.

        • Workers will then have 45 days to show proof of their second dose (for Pfizer or Moderna vaccines).

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NY State Health Commissioner Designates COVID-19 as a Highly Contagious Disease That Presents Serious Risk, Prompting Employers’ HERO Act Plans to be Activated

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By Conn Maciel Carey’s COVID-19 Task Force

On Labor Day, the New York State Commissioner of Health designated COVID-19 as a highly contagious communicable disease that presents a serious risk of harm to public health.  Under the New York HERO Act, employers must either adopt the New York State Department of Labor’s (“NYDOL”) model prevention plan or develop and establish an alternative prevention plan that equals or exceeds the requirements in the NYDOL’s model plan.

The NYDOL issued the HERO Act Standards and model plan, which set forth the minimum requirements employers must provide to address exposure to airborne infectious diseases in the workplace, on July 7, 2021.  As explained in our prior blog post, those requirements include:

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Pfizer Vaccine’s Full FDA Approval – What Does This Mean for Employers?

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Earlier this week, on August 23, 2021, the U.S. Food and Drug Administration fully approved the Pfizer-BioNTech COVID-19 vaccine.   Earlier this year, many employers were hesitant to issue vaccine mandates and expressed concerns about potential legal risks associated with such a mandate since the COVID-19 vaccines were only approved for emergency use.  While the full approval designation may not change the legal landscape as it relates to vaccine mandates, many employers may feel more comfortable imposing such mandates. 

As explained in our prior blog, employers can mandate employee vaccinations under federal law.  The U.S. Equal Employment Opportunity Commission (EEOC) issued guidance several months ago stating that employers generally can mandate COVID-19 vaccinations for employees who physically enter the workplace without running afoul of the federal anti-discrimination laws it enforces.  The U.S. Department of Justice (DOJ) also issued a slip opinion on July 6, 2021, regarding vaccination mandates and the emergency use authorization status of the vaccines:

We conclude that section 564(e)(1)(A)(ii)(III) concerns only the provision of information to potential vaccine recipients and does not prohibit public or private entities from imposing vaccination requirements for vaccines that are subject to EUAs.

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