Key Employment Considerations When Resuming or Increasing Business Operations

shutterstock_532208329Many states are beginning to re-open their economies, and employers are resuming or increasing business operations in some fashion.  As employers make this transition, there are several key employment considerations that employers should pay close attention to.  Below is an overview of some of the topics employers should carefully analyze when reopening or increasing business operations.

  1. Exempt and Non-Exempt Employee Classification Issues

As employers begin to ramp up business or begin plans to do so, employers should carefully evaluate whether exempt employees performing a majority of work on non-exempt tasks still meet the administrative exemption Continue reading

Employers Face a Myriad of Wage & Hour Issues with COVID-19

There are significant developments happening every day (and virtually every hour) relating to the Coronavirus (COVID-19).  While we cannot predict all the effects of this virus, we can say that first and foremost, employers across all industries need to focus on the safety of their employees, customers, and guests.  Thus, whether your employees are working at your company’s office or from home, employers must monitor guidance from federal, state, and local public health experts and implement recommendations or orders designed to maintain a safe work environment.  To that end, please see our blog post from last week providing advice and FAQ’s regarding how employers can respond to COVID-19. COVID-19

In addition to so many other issues, COVID-19 poses unique wage and hour and human resource challenges. Indeed, Since our last post, we have received dozens of wage and hour related questions from clients resulting from this virus. Although no employer could have full been prepared for the scope of this pandemic, it is important to be aware of both federal and state laws that apply to situations such as this. The best protection is to have a policies and procedures in place in advance (or if that ship has already sailed, to quickly create some policies and procedures) to ensure your employees are paid and well taken care of during this unprecedented time. Our guidance can be used by employers in navigating through the legal and business implications created by this pandemic.  In addition, the information may be applicable to other future crises or disasters.

Therefore, please filed below answers to the most frequently asked questions we have received:

Continue reading

DOL Releases Final Rule for Determining Joint Employer Status

Department of LaborEarlier this week, on January 12, 2020, the U.S. Department of Labor (DOL) announced the release of its final rule revising and updating its regulations interpreting joint employer status under the Fair Labor Standards Act (FLSA).  According to DOL, “The final rule provides updated guidance for determining joint employer status when an employee performs work for his or her employer that simultaneously benefits another individual or entity, including guidance on the identification of certain factors that are not relevant when determining joint employer status.”  The DOL published its Notice of Proposed Rulemaking (NPRM) on April 9, 2019, and received over 12,000 comments within the 30-day comment period.  The final rule becomes effective on March 16, 2020, 60 days after publication in the Federal Register today, January 16, 2020.

As a threshold matter, under the FLSA, an employee working for one company may be found to be the joint employee of a second, independent company, depending on the nature and extent of control over the employee’s work.  Joint employer status is important for numerous reasons, including the fact that a joint employer can be held joint and severally liable for FLSA wage and hour obligations.  In 1958, DOL published an interpretive regulation, 29 C.F.R. § 791, explaining that joint employer status depends on whether multiple persons are “not completely disassociated” or “acting entirely independently of each other” with respect to the employee’s employment. 

Specifically, the regulation provided three situations where two or more employers are generally considered joint employers: (1) where there is an arrangement between the employers to share the employee’s services (e.g., to interchange employees); (2) where one employer is acting directly or indirectly in the interest of the other employer (or employers) in relation to the employee; or (3) where the employers are not completely disassociated with respect to the employment of a particular employee and may be deemed to share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer.  The DOL issued its NPRM out of concern that Continue reading

2019 Year in Review and 2020 Forecast: Employment Law Updates in D.C., Maryland, and Virginia

Over the past year, there were a number of changes in the employment law landscape throughout the District of Columbia, Maryland, and Virginia.  To keep employers apprised of the latest developments in these jurisdictions, below is a recap some of the key laws that took effect or were enacted in 2019 and a forecast of potential changes on the horizon in 2020.

DISTRICT OF COLUMBIA

shutterstock_DCTipped Wage Workers Fairness Amendment Act of 2018 Not Fully Funded: The D.C. City Council enacted the Tipped Wage Workers Fairness Amendment Act in October 2018, which had the immediate impact of repealing Ballot Initiative 77 – a voter-approved ballot that eliminated the use of the tip credit in D.C.  Thus, employers with tipped employees are still permitted to take a tip credit toward meeting minimum hourly wage requirements.  But the Act also imposes certain training, reporting, and notice requirements for all employers of tipped employees – many of which have yet to take effect due to the lack of funding.

As explained in our previous blog article, the Act imposes certain training and notice requirements on all employers of tipped employees.  The date on which employers must implement sexual harassment prevention training and provide the requisite notice to tipped employees, however, has not yet been determined, as a majority of the Act’s requirements have not been approved through budget funding.  To date, the only provisions of the Act that are in effect, besides the repeal of Ballot Initiative 77, are related to employee and manager training on D.C.’s Minimum Wage Act Revision Act, certain notices to employees regarding their tips, and third-party payroll and wage reporting requirements (beginning Jan. 1, 2020).  Employers should monitor this law throughout 2020, as it will likely be funded sometime next year.

Employees Can Claim D.C. Paid Leave Act Benefits Beginning July 1, 2020: D.C.’s Universal Paid Leave Amendment Act of 2016 (“Paid Leave Act”) provides up to eight weeks of parental leave to bond with a new child, six weeks of family leave to care for an ill family member with a serious health condition, and two weeks of medical leave to care for one’s own serious health condition.  D.C. employees who take paid leave will be eligible to receive up to $1,000 per week, depending on their wage level.  The leave program is funded by a quarterly 0.62% payroll tax on businesses that  expected to generate a total of $250 million each year.

July 1, 2019 marked the date on which the District began collecting taxes from employers in preparation to administer paid leave benefits beginning on July 1, 2020.  Employers should ensure that they have the Paid Family Leave Notice posted in their workplace, along with other labor law posters, by February 1, 2020, and ensure that all new employees hired after February 1, 2020 are provided with an electronic or hard copy of the notice.  The proposed benefits regulations that contain instructions on how employees file for benefits are being finalized by the D.C. Department of Employment Services (“DOES”) and are expected to be rolled out in the next few months.  Employers should familiarize themselves with this rule and the anticipated regulations, especially if they have not paid the quarterly taxes that DOES began collecting six months ago.

For further details on the D.C. Paid Leave Act and employer obligations, please check out our prior blog post.

Minimum Wage Increase in 2020: Under D.C.’s Fair Shot Minimum Wage Amendment Act of 2016, the minimum wage in the District of Columbia increased from $13.25 per hour to $14.00 per hour on July 1, 2019, and the base minimum wage for tipped employees increased from $3.89 per hour to $4.45 per hour.  The law also provides for a progressive increase to $15.00 per hour on July 1, 2020, and a base increase of $5.00 per hour for tipped employees.

Drug Testing/Marijuana Updates Expected in 2020: The D.C. City Council is considering two bills that would eliminate drug testing employees for marijuana.  Possession of marijuana and its recreational use is legal in D.C., and many employees have a valid prescription for medicinal marijuana.  However, under current law, employees can still be disciplined at work if they test positive for marijuana.

The Prohibition of Marijuana Testing Act of 2019 proposes to eliminate marijuana testing as a condition of employment unless required by law.  The second bill, the Medical Marijuana Program Patient Protection Amendment Act of 2019, would prohibit discriminating against D.C. government employees who are enrolled in the medical marijuana program, and would do away with marijuana testing on such employees who have a valid prescription under the program.  This rule was already rolled out as emergency legislation in June 2019 but only went into effect for 90 days.  Although neither of these laws are final, and private sector employers have not been impacted by these proposals yet, it is certainly something to keep a close eye on.  Many states across the country have already, or are beginning to, incorporate employee protections in marijuana legislation, which significantly alters traditional employer policies, procedures, and practices related to drugs and drug testing policies.

MARYLAND

shutterstock_MarylandLaw Regarding Noncompete and Conflict of Interest Clauses Imposed Restrictions on Employment Agreements: A new Maryland law that went into effect on October 1, 2019 prohibits employers from including noncompete or conflict of interest clauses in any employment contract with an employee earning $15 or less per hour or $31,200 or less annually.  Such provisions are considered void as against public policy.  However, the bill specifically provides that employers may still prohibit such employees from taking client lists or other proprietary client-related information.  Employers should carefully review their employment agreements with employees who are considered lower wage earners and revise them, as necessary, to ensure that company interests are protected while still complying with the law.

Workplace Harassment Amendment Expanded Scope of Liability for Employers: On October 1, 2019, under HB 679/SB 872, several changes to Maryland’s anti-discrimination law went into effect, which vastly expanded the scope of liability for employers under State law.  For instance, the definition of “employee” was expanded to include independent contractors; the definition of “employer” was revised to increase the scope of liability for cases of harassment from any employer with 15 or more employee to any employer with a single employee; and a definition of harassment was specifically provided in the statute.  Additionally, the time period for filing a complaint of harassment with the local human rights commission was expanded from six months to two (2) years, and the time period for filing a lawsuit alleging harassment in violation of the state anti-discrimination law was expanded from two (2) years to three (3) years.  Employers should be wary of these changes to Maryland’s discrimination laws, as it certainly expands the risk of employer liability in Maryland and makes Maryland courts a more attractive forum to pursue such claims.

Equal Pay Law Penalties Increased: Penalties for Maryland’s Equal Pay for Equal Work law increased on October 1, 2019.  Employers found to have violated the law two (2) or more than three (3) times within a three-year period may be assessed a penalty equal to 10% of the damages owed by the employers, which are paid into the General Fund of the State of Maryland.

Organ Donation Leave: Under the HB 1284, which took effect on Oct. 1, 2019, employers with 15 or more employees are required to provide eligible employees (employed for at least 12 months and at least 1,250 hours during the previous 12 months) up to 60 business days of unpaid leave in any 12-month period to serve as an organ donor, and up to 30 business days of unpaid leave in any 12-month period to serve as a bone marrow donor.  Employers should consider adding a new provision to their leave policies in their Employee Handbooks and pay particularly close attention to any requests from employees for time off to donate an organ or bone marrow.  Notably, such organ donor leave does not run concurrently with leave taken pursuant to the Family and Medical Leave Act.

Ban the Box Legislation Vetoed by Governor Hogan: Legislation passed by the Maryland General Assembly prohibiting employers with 15 or more employees from asking about an applicant’s criminal record prior to the first in-person interview was vetoed by Governor Larry Hogan in May 2019.  Note, however, that there are several local ban-the-box laws throughout Maryland, including those enacted by Baltimore City, Prince George’s County, and Montgomery County – all of which provide greater restrictions on employers than what was proposed under the proposed bill.

Minimum Wage Increase in 2020: Beginning on Jan. 1, 2020, the minimum wage in Maryland will increase from $10.10 per hour to $11.00 per hour.  Please note, however, that employers in Montgomery County, MD and Prince George’s County, MD are subject to separate, higher minimum wage rates, which may also vary depending on the size of the employer.

Maryland OSHA Still Has Not Adopted the E-Recordkeeping Rule: Maryland OSHA (“MOSH”) is the only state-plan safety and health agency in the country that has not adopted federal OSHA’s e-Recordkeeping Rule, which was promulgated back in May 2016.  Under the revised federal rule issued in January 2019, which MOSH is required to adopt, establishments with 250 or more employees and establishments with 20 or more employees in high hazard industries are required to submit their 300A data by March 2nd of every year through federal OSHA’s Injury Tracking Application.  Covered establishments should closely monitor this rule and be prepared to submit their 300A data, as it is will likely be finalized prior to the upcoming March 2, 2020 data submission deadline.

VIRGINIA

shutterstock_Virginia (1)Repeal of Jim Crow-era Minimum Wage Exemptions: HB 2473 was enacted in March 2019 in an effort to modernize Virginia’s minimum wage law and to repeal certain Jim Crow-era provisions that endorsed wage discrimination against African Americans.  The legislation rescinded exemptions that allowed employers to pay less than the minimum wage to newsboys, shoeshine boys, ushers, doormen, concession stand attendants, cashiers in theaters, and babysitters who work 10 hours or more per week.

Written Wage Statements Now Required in Virginia: Beginning on January 1, 2020, Virginia employers (with the exception of agricultural employers) must provide paystubs to employees on each regularly scheduled payday.  Virginia Code § 40.1-20 was amended in April 2019 to require employers to provide a written statement by pay stub or online, which must include the following:

  1. The name and address of the employer;
  2. The number of hours the employee worked during the pay period;
  3. The employee’s rate of pay;
  4. The gross wages earned by the employee during the pay period; and
  5. The amount and purpose of any deductions.

Given that the current law only requires employers to provide a written statement of employees’ gross wages and any deductions upon request, this may be a significant change for many employers.  It is prudent to take steps to ensure that accurate pay stubs are provided beginning on January 1, 2020.  Employers that already issue pay stubs should review their current payroll systems to verify that all of the code’s requirements, as listed above, are included in employee pay stubs.

Bi-Partisan Bill Limiting Non-Compete Agreements Not Put Up for Vote: A proposed bill that prohibits employers from entering into, enforcing, or threatening to enforce non-compete agreements with low-wage workers passed the Senate and House Commerce and Labor Committee.  But the General Assembly did not put this bill up for a vote in the House during the last legislative session.  Virginia employers should pay close attention to this bill moving forward, as it has bi-partisan support and other states have have continued to enact similar provisions, including Maryland.

Efforts to Increase Minimum Wage Fall Short: At least four bills were introduced in the General Assembly in 2019 to raise Virginia’s minimum wage, which is currently set at the federal floor of $7.25 an hour.  Most of these bills were left in committee.  One bill that did pass the Senate Commerce and Labor Committee would have mandated annual increases to the hourly minimum wage, raising it to $8 this year and reaching a final rate of $11.25 in 2022.  Another bill that would have increased the minimum wage to $10 this year, $13 next year, and $15 by 2021 made it through committee but was then struck down by a Senate vote of 21-19.  While none of these bills managed to increase the state minimum wage, efforts to increase the state minimum wage will certainly be an agenda item during the next legislative session.  Given the narrow split on the issue, it is only a matter of time before Virginia’s minimum wage increases.

Marijuana Legislation at the Forefront of Issues for 2020: Currently, marijuana is strictly prohibited in Virginia and previous marijuana legislation efforts in the General Assembly have failed.  However, with the advent of the November 2019 elections and democrats now controlling both the House of Delegates and the Senate, it appears that marijuana legislation is on the horizon.

Delegate Lee Carter pre-filed a bill (HB 87) for the 2020 legislative session that would decriminalize marijuana and allow adults 21 and older to possess and purchase cannabis from licensed retailers.  Additionally, the bill would impose a 10 percent tax to fund veteran initiatives, transportation, and local municipalities.  The bill also contains specific prohibited employment practices, which appear to limit an employer’s ability to discipline employees for use of marijuana outside of the workplace.  Finally, Democratic Attorney General Mark Herring recently held a “Cannabis Summit” in Richmond to discuss decriminalizing marijuana and comprehensive marijuana reform, which includes recreational legalization.  This topic is gaining significant attention heading into 2020, so employers should pay close attention to the bill pre-filed with Virginia General Assembly.

New Year’s Resolutions Aplenty for Illinois Employers

By Aaron R. Gelb

shutterstock_checklistWhile many employers view California as a particularly challenging state in which to do business due to the variety of “unique” workplace laws and regulations, Illinois is not very far behind after a rather busy legislative session during the first year of Governor JB Pritzker’s term.  Whether or not you plan to hit the gym in 2020 or eat more vegetables next year, here is a list of New Year’s resolutions every organization should adopt if it has employees in Illinois:

□          Make sure you are not asking applicants about their salary history.

Hopefully, this is not on your list of New Year’s resolutions because the bill went into effect on September 29, 2019 after being signed into law by Governor Pritzker over the summer.  Under this new law, the Illinois Equal Pay Act has been amended to bar employers from asking a job applicant about their salary history.  Illinois employers may no longer screen or disqualify applicants because of their current or prior salary, nor can they insist that an applicant disclose his or her salary history in order to be interviewed, considered for or offered employment.  Forget about going straight to the source as the law also prohibits seeking such information from the applicant’s former employer.  Perhaps most significantly, the amendment also prohibits employers from factoring salary history information into compensation or hiring decisions even if an applicant provides the information voluntarily without prompting

□          Allow your employees to discuss their wages or other compensation issues with each other.

While Illinois employers can still prohibit select employees—human resources, for example—from disclosing confidential wage and salary information, they cannot otherwise place such restrictions on other employees.  The ability to discuss compensation has long been protected by federal law, so this new Illinois law should not pose any particularly unique challenges for Illinois employers.  That said, employers should take steps to ensure their managers understand the extent of the rights afforded their employees to openly discuss such issues, even if it has the potential to cause waves with their coworkers.

□          Schedule sexual harassment training in the latter part of the year.

Beginning July 1, 2020, Illinois employers will be expected to provide annual workplace sexual harassment training to employees and managers.  While the IDHR will be required to develop and make available a model sexual harassment prevention training to the public at no charge, it is not clear at this time when that will take place.  In the meantime, employers may develop their own program or wait for the free model program to be released.  Those employers that opt to create their own program must ensure that it includes an explanation of sexual harassment, examples of unlawful sexual harassment, a summary of relevant federal and state statutory provisions, and a summary of the employer’s responsibilities under the law.

□          Update your EEO policies.

There have been several amendments to the Human Rights Act, which will become effective July 1, 2020. Importantly, with a few limited exceptions, the amendments make the Illinois Human Rights Act (“HRA”) applicable to all Illinois employers, not just employers with 15 or more employees.  The HRA will now also apply to working environments beyond the physical location at which employees perform their assigned duties, which means that remote workers who claim to have been harassed online may presumably bring a claim against their employer; whether that will apply to individuals employed outside of Illinois but work for an Illinois company or report to an office in Illinois, remains to be seen.  This also means that employers would be well-advised to pay closer attention to off-site events such as holiday parties and ensure that any off-site incidents that are brought to the company’s attention are addressed as if they had occurred in the workplace.  EEO policies should also be revised to reflect the fact that the HRA now protects against discrimination or harassment on the basis of an individual’s “perceived” status; meaning that an employee may now bring a claim that they were discriminated against or harassed because they were perceived to be from a certain country or of a certain sexual orientation, for example, even if that is not the case.

Employers that operate a restaurant, bar or casino will face additional requirements intended to protect their employees from sexual harassment, including the need to (1) provide certain employees with personal safety and notification devices that may be used to summon help if they are the victim of or are witnessing sexual harassment or a crime; (2) expressly inform each of their employees about the protections against sexual harassment and discrimination as provided by state and federal law (by giving them a copy of a harassment-free workplace policy); and (3) to take measures to separate employees from offending guests and accommodate employees who seek legal protection against offending guests.

□          Reevaluate your drug testing policy and procedures.

The Cannabis Regulation and Tax Act (“CRTA”), which goes into effect January 1, 2020, allows individuals 21 years of age and over to consume, possess and purchase cannabis. Unlike most of the other states that now allow recreational cannabis use, Illinois took the additional step of amending the Illinois Right to Privacy Act to include cannabis within the definition of lawful products.  The Right to Privacy Act, often referred to as a smokers’ rights law, prohibits employers from taking adverse actions (refusing to hire, terminating, demoting) against employees because they use a lawful product while not at work.  While the CRTA does not prohibit employers from adopting policies concerning drug testing, use, or storage while at work or on call, an employer must—in order to discipline or discharge an employee—have a good faith belief that the employee manifests specific, articulable symptoms while working that decrease or lessen the employee’s performance of the duties or tasks of employee’s job.  The statute sets forth a number of factors that may be considered, such as disregard for the safety of the employee or others, carelessness, physical dexterity, agility, speech and irrational or unusual behavior, among others.  If an employer elects to discipline any employee on the basis that the employee was under the influence or impaired by cannabis, the employer must afford the employee a reasonable opportunity to contest the basis of the determination.  The State has yet to issue regulations that provide guidance regarding what constitutes a “reasonable opportunity” to challenge such a finding; for now, employers would be wise to adopt a specific process that can be used to document the explanation offered by the employee and the company’s ultimate conclusion.  Given these requirements, employers will likely be unable to justify taking an adverse action against an employee because of a positive random test result or against an applicant due to a pre-employment test.

□          Prepare the necessary disclosures regarding adverse judgments.

The amendments to the Human Rights Act also require employers to make certain disclosures to the Illinois Department of Human Rights.  Beginning July 1, 2020, employers must make annual disclosures to the IDHR with information about adverse judgments or administrative rulings against them in the prior year.  The required disclosures cover the number of adverse judgments or administrative rulings, whether an employee obtained equitable relief, and a breakdown of the judgments and rulings by unlawful employment practice including sexual harassment and discrimination on the basis of sex, race, color, national origin, age, religion, disability, military status or unfavorable discharge from military status; sexual orientation or gender identity; and any other characteristic protected under the Human Rights Act. It is not yet clear—as no regulations have issued to date—the means by which these disclosures must be made.  The IDHR will compile the reported information about adverse judgments and administrative rulings for publication in an annual report, but it will aggregate individual data to avoid exposing personal information.  Note, also, that the IDHR while investigating a charge filed under the Illinois Human Rights Act, may request similar information about an employer’s settlements in the preceding five years that involved allegations of sexual harassment or unlawful discrimination occurring in the workplace or involving an employee or corporate executive.

□          Reassess your arbitration agreements.

Beginning in January 2020, the Workplace Transparency Act (“WTA”) bars employers from unilaterally requiring that a current or prospective employee waive, arbitrate, “or otherwise diminish” existing or future claims, rights, or benefits related to unlawful discrimination, harassment, or retaliation.  Unilateral arbitration provisions or “agreements” are quite common and often presented as a condition of employment, so there are many employers that will be impacted by this new law.  However, provisions that would be void in a unilateral agreement under the WTA may be allowed if an employer and the current or prospective employee mutually agree to it in writing, and the agreement reflects “actual, knowing, and bargained-for consideration” from both parties. To comply with the WTA, the agreement must acknowledge the employee’s right to: (1) report a good-faith belief of an unlawful employment practice or criminal conduct to the appropriate governmental authorities; (2) participate in governmental proceedings; (3) make truthful statements or disclosures as required by law, regulation, or legal process; and (4) seek or receive legal advice.  If an employer does not comply with these requirements, the WTA establishes a rebuttable presumption that the condition is unilateral and void as against public policy.

Potential and Pending Requirements for D.C. Employers of Tipped Employees

shutterstock_waiterIn October 2018, the District of Columbia (“D.C.”) Council passed a law called the “Tipped Wage Workers Fairness Amendment Act of 2018” (the “Act”), which had the immediate impact of repealing legislation (“Ballot Initiative 77”) that eliminated the use of a tip credit in D.C.  Because the D.C. Council repealed Ballot Initiative 77 through passage of the Act, employers with tipped employees are still permitted to take a tip credit toward meeting minimum hourly wage requirements.  However, the Act also imposes certain training, reporting, and notice requirements for all employers of tipped employees.  Some of these requirements have already gone into effect, while others require budgetary approval before they will kick in. We review some of the more significant requirements below.

Under the Act, all employers of tipped employees will have to provide sexual harassment prevention training to employees, as well as managers, owners, and operators of the business.  Specifically, the D.C. Office of Human Rights (“OHR”) will make available a sexual harassment training course, or will certify a list of providers to give the training, that covers how to respond to and prevent sexual harassment by co-workers, management, or patrons/guests.  The Act mandates that employers provide the training to new hires within 90 days of hire unless they received the training within the last two years.  All other workers already employed must receive training within two years.  Managers, owners, and operators must then receive training every 2 years and all training should be given in-person or online.  If the training is given by a certified provider, the employer must submit a certification to the OHR that the training has been completed.  Certification is required within 30 business days after completion. Continue reading

The Final Overtime Rule Explained:  What Every Employer Must Do Next

By: Kara M. Maciel and Lindsay A. DiSalvo

shutterstock_losing moneyAfter receiving over 116,000 comments on its Proposed Rule to revise the version of the Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees Rule (“Overtime Rule”) promulgated in 2016, the U.S. Department of Labor (“DOL”) has issued a final, revised version of the Overtime Rule.  On September 24, 2019, the DOL announced the final Overtime Rule (“revised Overtime Rule”) through a press release touting the impact of the Rule and highlighting its major changes.  Notably, the press release reflects the significant impact the change in the threshold salary level for the white-collar exemptions is projected to have on employees – lowering the number of employees likely to become eligible for overtime pay from 4.2 million under the 2016 version of the Overtime Rule to 1.3 million.  This is due to the DOL decreasing the salary threshold level from $913.00 per week to $684.00 per week under the revised Overtime Rule.    

Significantly, the Rule takes effect on January 1, 2020 – in just under 100 days.  This timeline does not provide for a phase-in period as advocated for by many commenters and trade associations, and is a much shorter time period than 192 days employers were given in 2016 when the Overtime Rule was promulgated, and the 120 days given in 2004.  As justification for this timeline, the DOL stated that Continue reading

Hurricane Headaches: HR Tips for Employers

Hurricane.jpgHurricane Dorian is approaching the Southeastern United States, and first and foremost, employers need to make sure their employees, customers, and guests are safe from the storm.

Natural disasters such as hurricanes, earthquakes and tornadoes have posed unique human resource (HR) challenges from wage-hour to FMLA leave and the WARN Act. The best protection is to have a plan in place in advance to ensure your employees are paid and well taken care of during a difficult time.

Although no one can ever be fully prepared for such natural disasters, it is important to be aware of the federal and state laws that address these situations. Our guidance can be used by employers in navigating through the legal and business implications created by events such as hurricanes.  In addition, the information may be applicable to other crises and disasters, such as fires, flu epidemics and workplace violence.

Frequently Asked Questions 

If a work site is closed because of the weather or cannot reopen because of damage and/or loss of utilities, am I required to pay affected employees?

The Fair Labor Standards Act requires employers to pay their non-exempt employees only for hours that the employees have actually worked. Therefore, an employer is not required to pay nonexempt employees if it is unable to provide work to those employees due to a natural disaster.

An exception to this general rule exists when there are employees who receive fixed salaries for fluctuating workweeks. These are nonexempt employees who have agreed to work a specified number of hours for a specified salary. An employer must pay these employees their full weekly salary for any week in which any work was performed.

For exempt employees, an employer will be required to pay the employee’s full salary if the work site is closed or unable to reopen due to inclement weather or other disasters for less than a full workweek. However, an employer may require exempt employees to use available leave for this time. Continue reading

California Legislature Embraces the Dynamex Standard for Evaluating Independent Contractor Arrangements

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 Dynamexshutterstock_litigationwhich 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

U.S. Department of Labor Receives Close to 60,000 Comments to its Proposed Overtime Rule Raising the Minimum Salary Threshold for Exempt Workers

Increasing Money GraphOn March 22, 2019, the U.S. Department of Labor (DOL) released its proposed rule to raise the annual salary threshold for a worker to qualify as exempt under its “white collar” regulations from $23,660.00 to $35,308.00.  The public comment period closed yesterday, May 21, 2019, with almost 60,000 comments from the business and worker communities.

History of the Proposed Rule

The road to a final rule over the salary threshold has been long and bumpy for the DOL.  In 2014, President Obama directed the DOL to “update and modernize” the existing Fair Labor Standards Act’s (“FLSA”) white collar exemptions.  Two years later, the DOL released its final rule revising the regulations by doubling the salary threshold to $47,476.00.

The final rule dramatically increased the number of workers who would qualify for overtime pay, forcing every employer in the country to carefully assess how to handle the additional financial burden. Continue reading