Last month, California Governor Gavin Newsom signed Assembly Bill 5 into law. This lengthy bill generally codifies and expands the applicability of the three-part ABC test from the Dynamex decision in determining whether a worker is an employee or independent contractor for purposes of California Labor Code, Unemployment Insurance Code, and the Wage Orders.
The California legislature is considering a bill that would codify in the Labor Code and Unemployment Insurance Code the California Supreme Court’s decision in Dynamex – which adopted a standard that made it significantly more difficult for employers to classify workers as independent contractors, ignoring the realities of the modern workplace and gig economy. Assembly Bill 5 was introduced back in December 2018, and has passed the Assembly and is making its way through the Senate.
As this blog previously noted, last year the Supreme Court in Dynamex interpreted the definition of “employee” under the California Wage Orders as placing the burden on the hiring entity seeking to characterize a worker as an independent contractor to establish each of these three factors: (A) that the worker is free from the control and direction of the hiring entity in performing the work; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed. This is known as the “ABC test.”
For years prior to the Dynamex decision, the California courts Continue reading
In December 2014, Congress passed and President Obama signed the Multiemployer Pension Reform Act of 2014 (“MPRA”). The objective of the MPRA was to shore up struggling multiemployer pension plans, many of which are severely underfunded and getting worse. Among other things, the MPRA provided employers an incentive to continue participation in “endangered” or “critical” status plans by mandating that any increases to the employer’s contribution rate after 2014 will not count against the employer for purposes of determining withdrawal liability.
Because the funded status of many of these plans is so low, this provision can mean significant savings for employers who withdraw from plans in critical or endangered status. The rehabilitation plans of typical critical status multiemployer plans have called for contribution rate increases anywhere from 4-8% or more annually so, in the five years since 2014, many employers have seen cumulative rate increases of from 20-25%, or more. But because Continue reading
D.C. is moving forward with proposed final regulations to implement its Paid Family Leave law, the Universal Paid Leave Amendment Act of 2016, effective April 7, 2017 (D.C. Official Code 32-541.02(b)(2)). The Rules are intended to create a regulatory framework for employers to register, opt-in, and opt-out for D.C.’s Paid Family Leave program.
As discussed in a prior blog post, all D.C. employers need to begin to prepare for the implementation of the program because starting July 1, 2019, the District will begin to collect quarterly taxes to fund the Paid Family Leave benefit, in the amount of .62 percent of the wages of its covered employees, based on wages beginning April 1, 2019. The payroll tax will apply even if employers already provide paid leave benefits to its workers.
Our firm has received several questions about the new rules, and below are some frequently asked questions about the Paid Family Leave law:
- Does the law apply to all employers in D.C.?
Yes. Any sized employer doing business in D.C. is covered by this law, including small businesses, non-profit organizations, and self-employed individuals who opt into the program.
- I have employees who work in D.C. and other states outside of D.C., which employees are covered by this law?
Any employee who spends more than 50% of their work time in D.C. will be covered, and the employer must count their wages as subject to the payroll tax.
- Do wages include tips, commissions and other types of pay?
Wages will have the same meaning as provided for in D.C.’s unemployment compensation act, so all income will be counted as wages.
- Is there a minimum number of hours an employee must work before they are eligible for paid leave?
An employee is eligible for paid leave benefits as soon as they are hired, regardless of the number of hours worked for the employer, subject to a one week waiting period before benefits are paid.
- How much of paid leave is an employee entitled?
Starting on July 1, 2020, employees are entitled to paid leave benefits in the amount of eight (8) weeks for parental leave, six (6) weeks for those taking care of sick family members; and two (2) weeks for medical leave. An employee can receive benefits under any one or a combination of paid leave provided under the Act. However, employees are only entitled to receive payment for a maximum of 8 workweeks in a 52-workweek period, regardless of the number of qualifying leave events that occurred during that period.
For example, if an employee receives parental leave following the birth of twins, the employee is only entitled to 8 weeks of paid leave, not 16. Also, if an employee receives 4 weeks of paid medical leave to care for a sick family member, and then takes parental leave a few months later, the employee is only entitled to an additional 4 weeks of paid leave within the 52-workweek period.
- Are there notice and record-keeping requirements?
Yes, employers are required to provide employees a notice (1) at the time of hiring; (2) annually; and (3) at the time the employer is aware that the leave is needed. The notice must explain the employees’ right to paid leave benefits under the Act and the terms under which such leave may be used; that retaliation for requesting, applying for, or using paid leave benefits is prohibited; that an employee who works for an employer with under 20 employees shall not be entitled to job protection if he or she decides to take paid leave pursuant to the Act; and that the covered employee has a right to file a complaint and the complaint procedures established by the Mayor for filing a complaint.
Covered employers are also required to develop and maintain records pertaining to their obligations under the Act for no less then three years.
An employer that violates the notice requirement may be subject to a $100 civil penalty for each covered employee to whom individual notice is not delivered and $100 for each day that the covered employer fails to post notice in a conspicuous place.
- How does the Paid Family Leave law interact with the DCFMLA and existing employer paid leave policies?
The DC Family Medical Leave Act (DCFMLA), which provides for 16 weeks of unpaid leave, remains unchanged under the Act. Therefore, employees are still eligible to take unpaid leave under DCFMLA. When paid leave taken pursuant to the Act also qualifies for leave under the DCFMLA, the paid leave taken under the Act will run concurrently with, not in addition to, leave taken under other acts such as DCFMLA. Nothing in the act provides job protection to any eligible individual beyond that to which an individual is entitled to under DCFMLA.
Eligible employers are not prohibited from providing individuals with leave benefits in addition to those provided under the Act but employers are still required to provide the paid leave benefits under the Act. The provision of supplemental or greater paid leave benefits does not exempt the covered employer from providing or prevent an eligible employee from receiving benefits under the Act.
If your company employs workers in the District of Columbia, you should begin preparing for the tax collection now. If you have any questions about this new law, contact one of our labor & employment attorneys in D.C.
Pay inequity, particularly compensation disparity based on sex, has become a very prominent political issue in the last decade and it looks like some additional changes could be on the horizon at the federal level. Democrats expressed that pay equity would be a priority in their labor agenda during the 2018 Congressional election cycle and, in February 2019, a proposal intended to further promote fair pay practices was reintroduced in Congress. In addition, just last week, a federal judge lifted the stay on the changes to the Equal Employment Opportunity Commission’s (“EEOC”) EEO-1 Report. The revised EEO-1 report would require certain employers to provide pay data by sex, race, and ethnicity to the EEOC, allowing it to more easily detect and track impermissible pay differentials. Though at very different stages in their respective lawmaking processes, the proposed law and final regulation are very clearly intended to address pay inequality and provide additional enforcement tools.
Stay Lifted on EEO-1 Report
In August 2017, ahead of the 2018 submission deadline, the Office of Management and Budget (“OMB”) stayed collection of pay data based on race, ethnicity, and sex to allow it to review the regulation related to the lack of public opportunity to comment on the format of submission of the additional data and burden estimates related to the specific data file format provided. However, on March 4, 2019, a Washington, D.C. federal judge ordered the stay be lifted because she determined that OMB’s decision was arbitrary and capricious – citing unexplained inconsistencies based on its prior approval of the rule and failure to adequately support its decision. Continue reading
Cybersecurity and digital threats were a hot topic at ALIS Law, a conference for hotel owners and operators, in Los Angeles last month. I had a pleasure of moderating a session on “threats in a digital world” with senior executives from national hotel management and ownership groups. In our session, we discussed what were some of the pressing and most concerning digital threats that kept the hospitality industry up at night. Here are some highlights and take-aways from the session:
- Cybersecurity and hacks from foreign and domestic threats remain a top concern. Many hotels have been engaging in surveillance as one method of cyber protection. It was noted how much the investment in technology to prevent, address, and respond to cybersecurity issues has increased for both owners and operators. While owners may bear the cost on their profit & loss statement, and management companies are putting in policies, owners are adding property specific monitoring. It was discussed that one global hotel company, Hyatt Hotels, recently announced a bug bounty program whereby they will be paying ethical hackers to monitor their systems, including mobile applications, for potential risks and where credible risks or threats are found – the hackers will be compensated – which is a novel approach in the hospitality industry.
- While cybersecurity threats have been a focus, one repeated concern is the threat of harm to a hotel’s reputation due to guests and third parties spreading false information on social media sites, such as LinkedIn, Yelp, and Trip Advisor. To address these concerns, hotel operators talk with their teams daily about the consequences of false information or a bad review and take steps to remove false reviews if possible. Others noted that removing a false review from a site like Trip Advisor can be challenging unless the company is able to prove that the review was posted for criminal reasons or demonstratively false.
- One consequence of a cybersecurity hack beyond the disclosure of guest information is if a hacker was able to secure personal identifiable information of a hotel company’s investors and borrowers. If investors are concerned that a hotel company is not protecting their highly confidential and personal financial information, that would have a significant impact on the reputational harm to the company.
- Some of the best practices that owner and operators have put into place is an incident response plan to respond to a threat. In doing so, a key question is who you need at the table to decide how to move forward (IT / GC / PR / Owner) and what elements do you need to put into place. In addition, implementing policies and procedures on the front end is critical. For example, from an accounting perspective, having controls in place that can protect where the money is going and where it is coming from and ensuring that there are multiple approvals before money is sent out electronically. Finally, training staff on the policies and procedures so that the right people are getting the right information. Managers need to judge and reward staff for compliance with the policies because while a company continue to monitor and audit, training is only effective if compliance is monitored. For example, one company reported conducting more secret shoppers to determine whether someone can drop a flash drive into a front desk computer to tap into the network.
Unfortunately, cybersecurity risks and threats are not going away anytime soon, but with planning and focus on this important issue, hotel owners and operators can get ahead of some of the threats and take control and strong action if a risk materializes.
By: Andrew J. Sommer
In the final days of California’s 2018 legislative session, and the end of his term, Governor Jerry Brown has signed into law a variety of employment bills, including a flurry of new legislation seeking to bolster the state’s workplace harassment laws in the aftermath of the #MeToo movement. Conn Maciel Carey LLP provides this summary of key new employment laws impacting California private sector employers. Unless otherwise indicated, these new laws just took effect on January 1, 2019.
Expanded Anti-Harassment Training Requirements
Existing law requires that employers with 50 or more employees provide at least two hours of sexual harassment training to all supervisory employees within six months of the individuals becoming supervisors, and at least once every two years thereafter. Covered employers must provide classroom or other effective interactive training that incorporates the topics of sexual harassment and abusive conduct as well as harassment based on gender identity and expression and sexual orientation.
Senate Bill (SB) 1343 broadly expands the harassment training requirements to small employers and for the first time requires training of non-supervisory employees.
Join Conn Maciel Carey Labor & Employment Practice Group partner, Mark Trapp, on November 14, 2018 when he presents an interactive workshop to help unionized employers understand and analyze what is often the most critical challenge facing their business – multiemployer pension withdrawal liability. Attendees will learn innovative and aggressive techniques and strategies to address this issue and proactively secure the future of their company.
This workshop will also discuss the current legislative environment for multiemployer pension plans and issues, particularly the work of the Joint Select Committee on Solvency of Multiemployer Pension Plans, charged with preparing a report and recommended legislative language by November 30 to “significantly improve the solvency” of multiemployer pension plans and the Pension Benefit Guaranty Corporation.
Workshop attendees will:
Gain a broad understanding of the challenges facing employers who participate in a multiemployer pension plan
Discover strategies for assessing and minimizing their withdrawal liability risks through collective bargaining and business planning
Examine the status and possibility of legislative relief from the Joint Select Committee on Solvency of Multiemployer Pension Plans
Click here to register.
On Thursday, October 25, 2018, at 1 pm EDT, join Kara M. Maciel and Andrew J. Sommer of Conn Maciel Carey’s national Labor & Employment Practice Group for a complimentary webinar: “A Business Primer on Disability Access Laws: Preventive Tools and Defense Strategies“
Businesses continue to be plagued by litigation under the Americans with Disabilities, Title III (ADA) over alleged access barriers. Lawsuits against hotels and retailers, among other public accommodations, appear to be on the rise with a disproportionate share in California.
This webinar will provide an overview of ADA, Title III standards as they apply to construction existing before the enactment of the ADA in 1992 as well as to subsequent new construction and alterations. The webinar will also address Continue reading
It has been about a year since the #MeToo movement went viral, spreading greater awareness about sexual misconduct and harassment, and, more generally, the role of women, in the workplace. So, where are we now, and has anything changed? Was it just an awareness movement? Or, have things actually started to shift in the legal landscape with respect to the way employers are required to handle sexual misconduct and harassment? And what about with the way women are represented at work? Even if #MeToo may have started out as an awareness movement, states like New York and California are implementing changes in the law that are now imposing, or will soon impose, new requirements on employers, in hopes of giving #MeToo a significant, lasting effect. So, what should employers in New York and California do now? And, given that these states are often at the forefront of labor and employment issues, how should employers outside New York and California prepare in case new laws are passed in their states?
New York’s New Anti-Sexual Harassment Laws
On April 12, 2018, New York Governor Andrew Cuomo signed into law the 2019 New York State Budget, updating the state’s sexual harassment laws. Among other changes, there are two key components under these laws. First, every employer in New York must establish a sexual harassment prevention policy. These policies should have already been adopted and provided to all employees by October 9, 2018. The New York Department of Labor and New York Division of Human Rights have established a model sexual harassment prevention policy for employers to adopt. But employers are not required to use this model, so long as their policy meets or exceeds the minimum standards of the model and set forth in the laws. Employers must distribute the policy to all employees in writing or electronically, and must ensure that all future employees receive the policy before they start work. Additionally, employers are encouraged to post a copy where employees can easily access it.