With the summer kicking off, it is a good opportunity for employers to review and refresh their employment practices to ensure compliance with developments on the federal, state and legal landscape. This Bubbler Post will review our earlier guidance and (hopefully!) prompt you to review your employment practices:

  • Employment Applications: Equal pay laws have continued to gain traction on the state and local level, and there are a number of jurisdictions banning inquiries into the salary history information of prospective applicants. If you have employees working in the states, counties and/or cities listed below, you should review your application forms and employment documents to ensure that they do not request salary information.
  • Vendor Relationships: Given the pay inquiry laws discussed above, employers should communicate with recruiters and background check companies to ensure that these entities similarly comply with their obligations under applicable law. You can write a letter to your vendors detailing your expectations, you can enter into an amendment to your existing agreement outlining the legal framework, or you can reach out to your vendor contact to discuss the importance of compliance – from both a business and legal perspective – and request that they remove salary history inquiries from their screening process. Whatever you do, be conscious of the potential for joint liability to attach to these claims. Particular provisions to consider are ones regarding compliance with applicable laws and indemnification.

 

  • Employment Agreements: In light of the Supreme Court’s landmark decision holding that employers can enforce class action waivers in arbitration agreements, employers should review and revise their employment agreements to include this language. You can include a class or collective action waiver either by (1) explicitly prohibiting class/collective claims or (2) explicitly requiring that all claims be brought by employees individually and not jointly. Here, we’ve laid out more guidance on this decision’s impact on employers, including factors employers should consider when deciding whether to adopt an arbitration provision with a class waiver and the impact on state law prohibitions on arbitration.

 

  • Employee Trainings: In the wake of the #MeToo movement, workplace professionalism trainings are more relevant than ever. And, in some jurisdictions, they are required. Read more here about the steps New York State and New York City have taken to implement stronger protections against workplace harassment. Employers in other jurisdictions should take note, and perhaps jump on board. While not a complete defense, evidence of thorough and detailed trainings around appropriate workplace conduct can limit liability for an employer defending against a sexual harassment claim. We almost always suggest more training.

 

  • Settlement Agreements: On the federal level, employers should be thoughtful of their obligations under the Tax Cuts and Jobs Act of 2017. Pursuant to a new provision in the tax code overhaul bill – Section 13307 – employers can no longer deduct the taxable income of any sexual harassment settlement amount subject to a non-disclosure agreement. We’ve discussed this here and will continue to track employers’ obligations as additional guidance is issued. In the meantime, employers should tread carefully and make an informed decision about whether to take a tax deduction or include a non-disparagement provision.

Welcome back for this month’s edition of the Bubbler!  There’s plenty to talk about, so let’s jump right in.

The California Supreme Court issued an important decision this week addressing the test for whether a worker is an independent contractor or an employee.  The U.S. Supreme Court declined to review a Seventh Circuit decision upholding an employer’s rule that a months-long leave of absence was not a reasonable accommodation. The Ninth Circuit held that employers are prohibited from using an employee’s past salary as a legitimate “factor other than sex” for purposes of defeating a Fair Pay Act claim, emphasizing that allowing the inclusion of prior salaries would only perpetuate gender pay disparity. The Fifth Circuit downsized ERISA fiduciary standards in a ruling that invalidated a set of seven expansive fiduciary rules. The Northern District of Illinois issued an unusual ruling, holding that two plaintiffs’ claims were subject to an enforceable arbitration agreement, yet refused to compel arbitration. The DOJ challenged a set of competitors’ no-poaching agreements as per se violations of the Sherman Act, which regulates concerted anti-competitive action. Finally, in the wake of the #MeToo movement, New York (state and city) have passed new laws concerning workplace sexual harassment.

As always, stay tuned for more employment matters updates!

This week, the California Supreme Court rejected the old “totality of circumstances” test to determine if a worker was properly classified as an independent contractor in favor of a new “ABC test” under which employers will be required to classify most workers as employees.

Continue Reading California Rewrites the Independent Contractor Test – What Your Business Needs To Do Now to Pass It

Lots to talk about in the Labor & Employment world!  The Massachusetts Pregnant Workers Fairness Act went into effect on April 1, 2018, imposing stricter non-discrimination rules on employers of pregnant workers. The U.S. Department of Labor launched the Payroll Audit Independent Determination program, which encourages employers to self-report wage and hour violations. The Sixth Circuit issued a decision in EEOC v. R.G. & R.G. Harris Funeral Homes, holding that transgendered employees are protected under Title VII, even mounted against an employer’s religious objections under the Religious Freedom Restoration Act.  The Commonwealth of Massachusetts lost a step in the legal challenge to the contraceptive mandate exemptions in the Affordable Care Act, on the grounds that it did not have standing to assert the relief it sought. Still on the federal landscape, Congress added an amendment to the FLSA in the recent omnibus budget bill, providing that an employer may not keep tips received by its employees for any purpose. The Supreme Court issued an important ruling holding that service advisors are exempt from the FLSA’s overtime requirements and rejecting the principle that FLSA exemptions should be narrowly construed.   The State of Washington followed suit with many other states, including California, New York, and Massachusetts, becoming the most recent state to add an updated Equal Pay Act, and a “Ban the Box” law.  In the wake of the #MeToo movement, Washington also barred nondisclosure agreements in sexual harassment suits.  As always, stay tuned for further updates and more details on these developments which we will be covering more extensively here in the coming weeks, including a post on the Massachusetts Pay Equity Act coming up later this week.

Finally, there’s still time! Don’t forget to register to attend our Fourth Annual Employment Law Summit on April 19.

2017 is in the books and 2018 is now upon us.  A dramatic close to 2017 on Capitol Hill ushered in sweeping changes to the tax code that will begin to impact both employers and employees in a number of ways – some more immediately – from employers losing deductions for sexual harassment settlement payouts, to penalties for high nonprofit executive compensation, to tax deferral on exercise of stock options for public company executives, to employee benefit plans.  Wage and leave-related issues are also likely to dominate in 2018, as more states (and employers on their own initiative) increase wage thresholds and broaden employee paid and unpaid leave entitlements (even for some smaller employers).  Salary history bans, such as those already enacted in New York City, Massachusetts, and California, will continue to get traction in 2018 as more states and municipalities jump on that bandwagon.  We also expect to continue to witness a significant shift in the NLRB’s enforcement policy and decision-making; the NLRB’s new General Counsel has already announced a number of changes that are sure to make employers sigh with relief.  Also in 2018, employers could continue to face rising uncertainty with respect to health plans in the wake of the tax bill’s repeal of the individual mandate that was central to keeping health plans affordable under the Affordable Care Act.  Finally, so that we can help keep you accountable to the five New Year’s resolutions we made for you over the holidays (that we know you were eager to adopt as your own), we have collected them for you here:  (1) review and refresh your non-harassment policies and training; (2) update your leave policies; (3) make sure your job applications comply with new state ban-the-box laws and salary history inquiry bans; (4) assess the strength and enforceability of your post-employment covenants under changing state law; and (5) make sure your employee benefit plans are compliant.

Many state legislatures spent 2017 tinkering with post-employment covenants.  Given the growing trend to legislate locally and the employee mobility issues that seem to nag every employer, we thought the New Year would be a perfect time to review and revisit your post-employment covenants. So for our multi-jurisdictional employers (which seems to be everyone these days), how do your post-employment covenants legally measure up?

Continue Reading New Year’s Resolution #4: Ringing Your Post-Employment Covenants into the New Year

This past year, a growing number of states and municipalities banished the Ghost of Christmas Past from haunting job applicants. As a result, employers in those jurisdictions must resolve now to bid auld lang syne to asking applicants about their salary and criminal histories. Employers should take a fresh look at their job applications, and hiring practices, policies and procedures and update them now to remain in compliance in the New Year.

Continue Reading New Year’s Resolution #3: New Year, New Hiring Practices – Resolve to Bid Auld Lang Syne to Outdated Job Applications

As we count down to the fast-approaching New Year, one of the most significant changes taking place for employers in New York is the implementation of the New York Paid Family Leave law, which takes effect on January 1, 2018. We previously posted a comprehensive guide for employers on the steps they need to take in advance of January 1st to prepare for the implementation of Paid Family Leave, and for those who have not yet tackled this item, it is not too late!

Continue Reading New Year’s Resolution #2: New Year, New Leave Policies – Don’t Get Left Behind on Compliance!

As we enter the holiday season, we gather around the bubbler to sing about a few of our favorite (and not so favorite) things in the world of employment and labor law.  Unfortunately, they’re not as sanguine as raindrops on roses or whiskers on kittens…

Some retail employers will be on Santa’s naughty list after the Sixth Circuit found that sales employees paid on a 100% commission or draw basis cannot be required to repay outstanding draws after termination of employment.  The Senate decked the halls of the NLRB by confirming a new General Counsel, who will serve a critical policy role and is expected to move away from enforcement of the NLRB’s broadened joint-employer standard.   This could be the last Christmas employees have to visit EEOC offices in person to file discrimination charges after the EEOC launched a new online portal, putting employers on alert of the possibility of increased charge filings in 2018.  It’s a wonderful Christmas time for minimum wage workers in Montgomery County, Maryland, in DC’s metro area, who joined the small but growing ranks of jurisdictions increasing its minimum wage to $15.00 per hour beginning in 2021. Retail employees in New York might get a silent night away from work thanks to new employee scheduling regulations proposed by the New York State Labor Department that will limit “just in time” or “on call” scheduling and require additional pay for employees scheduled on short notice.  While California employers may have longer than 8 nights, they don’t have quite a month to prepare for new regulations that will take effect January 1, 2018, which expressly prohibit employers from inquiring about an applicant’s criminal history prior to a conditional offer of employment.