Required Employer Notices May Be Electronically Delivered

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All Employers

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December 23, 2020

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The U.S. Department of Labor (DOL) issued a Field Assistance Bulletin that provides guidance for when employers may electronically post or deliver certain required notices to employees under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), Section 14(c) of the FLSA (Section 14(c)), the Employee Polygraph Protection Act (EPPA), and the Service Contract Act (SCA).

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New Independent Contractor Rule – Almost!

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All Employers

EFFECTIVE

Delayed

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On January 7, 2021, the U.S. Department of Labor (DOL) published a final rule clarifying independent contractor relationships. Specifically, the rule reaffirms using the “economic reality” test to determine whether an individual is in business for themselves (independent contractor) or is economically dependent on a potential employer for work.

The DOL identifies two “core factors” in making this determination: (1) the nature and degree of control over the work; and (2) the worker’s opportunity for profit or loss based on initiative and/or investment. There are three other factors that may serve as additional guideposts in the analysis, particularly when the two core factors do not point to the same classification, including (1) the amount of skill required for the work; (2) the degree of permanence of the working relationship between the worker and the potential employer; and (3) whether the work is part of an integrated unit of production. The actual practice of the worker and the potential employer is more relevant than what may be contractually or theoretically possible. The final rule also provides six fact-specific examples applying the factors.

The rule was set to go into effect on March 8, 2021. However, because of the pending regulatory review ordered by the current presidential administration, it is now proposed to take effect May 7, 2021, assuming it passes review. At this point, that would be a big assumption. The longer the rule is delayed the more likely there will be legal challenges to the rule. Continue to look for updates on this developing topic.

Action Items

  1. Review the final rule here.
  2. Review independent contractor status with legal counsel for compliance.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2021 ManagEase

New DOL Tip Rule Delayed

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All Employers

EFFECTIVE

Delayed

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In the Consolidated Appropriations Act of 2018, Congress amended section 3(m) of the Fair Labor Standards Act (FLSA) to prohibit employers from keeping tips received by their employees, regardless of whether the employers take a tip credit under section 3(m). The U.S. Department of Labor (DOL) recently issued a final rule amending its tip regulations to address these amendments. Key changes include:

  • Tip pools where no tip credit is taken may include employees who do not customarily and regularly receive tips;
  • Employers, managers, and supervisors are expressly prohibited from keeping employee tips;
  • If using a mandatory tip pool, employers must distribute the tips no less often than when they pay wages;
  • There is a new recordkeeping requirement for employers who do not take a tip credit but collect employees’ tips to operate a mandatory tip pool; and
  • Employers may take a tip credit for employee time performing non-tipped duties contemporaneously with their tipped duties, or for a reasonable time immediately before or after performing the tipped duties, thereby eliminating the former 80/20 rule.

This rule was set to take effect March 1, 2021. However, because of the pending regulatory review ordered by the current presidential administration, it is now proposed to take effect May 7, 2021, assuming it passes review. Keep in mind some states have more strict requirements than what is permitted at the federal level. Additionally, there are expected to be legal challenges to the new rule. Continue to look for updates on this developing topic.

Action Items

  1. Review the final rule here.
  2. Review tip pool procedures for compliance.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2021 ManagEase

A Flurry of New DOL Opinions – Here Today, Gone Tomorrow?

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All Employers

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As Indicated

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The U.S. Department of Labor (DOL) issued a flurry of opinion letters at the end of the last administration. Some still stand and some were withdrawn. Here is a summary of some of the key opinions.

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EEOC Updates Guidance on Discrimination, Severance Agreements, and More

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All Employers

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As Indicated

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The U.S. Equal Employment Opportunity Commission (EEOC) has already been making changes in 2021 to ICHRA contributions, its conciliation process, severance agreement rules, and religious anti-discrimination compliance. The following highlights key points.

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H1-B Visa Updates: Lottery System Revised to Wage-Based Allocation

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All Employers with H1-B Visa Employees

EFFECTIVE

December 31, 2021

QUESTIONS?

Contact HR On-Call

(888) 378-2456

For employers hoping to hire foreign nationals for specialty occupations, the process for a worker to obtain an H1-B visa can be quite a journey. This year, the USCIS published a new regulation changing the former “lottery” system awarding H1-B visas to a wage-based allocation system, instituting new challenges for employers.

Each year, there is a cap maximum of H1-B visas available for specialty occupations that require a bachelor’s degree, and a separate cap for positions requiring a graduate degree from a United States university. Previously, a lottery system distributed additional visas to employers picked at random. On January 7, 2021, a final rule was issued revising the lottery system into a four-tiered list based on wages, with employers offering the highest wages preferred over those offering lower wages.

Specifically, employers must offer H1-B Visa employees a prevailing wage as set by certain salary surveys, most frequently used are those issued by the U.S. Department of Labor (DOL). Employers offering the highest wages (level 4) will have first priority, descending down the wage levels until all 85,000 visas are exhausted.  Employers who do not utilize the DOL surveys will be classified in the lowest tier (level 1) regardless of the wage actually offered.

The final rule was set to go into effect March 9, 2021. However, with the advent of the new White House administration, the rule’s effective date has been extended to December 31, 2021 to give adequate time for implementation and further evaluation of the rule. Continue to look for updates on this topic.

Action Items

  1. Review the updated H1-B regulation here.
  2. Consult with legal counsel on the requirements for H1-B applications.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2021 ManagEase

Federal Anti-Retaliation Protections Extended to Criminal Antitrust Whistleblowers

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All Employers

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December 23, 2020

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(888) 378-2456

The Criminal Anti-Retaliation Act of 2019 (the “Act”) prohibits employers from taking adverse actions in retaliation against individuals who report criminal antitrust violations to their employers or the federal government, and also protects individuals who participate in a federal investigation or proceeding related to criminal antitrust violations. Adverse actions include things like discharging, demoting, firing, harassing, or otherwise discriminating against individuals covered by the Act.

The Act applies to employees, contractors, subcontractors, or agents of an employer. Criminal antitrust violations include violations of Section 1 or 3 of the Sherman Antitrust Act. Notably, an actual criminal prosecution is not required to trigger the anti-retaliation protections so long as the information contained in the whistleblower’s report would be a crime if the report were accurate, and the whistleblower reasonably believes the report involves a covered violation.

Individuals who successfully claim a violation of the Act may receive job reinstatement, back pay with interest, and special damages including reasonable attorney fees.

Action Items

  1. Have anti-retaliation policies updated as needed.
  2. Have appropriate personnel trained on anti-retaliation rules.
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2021 ManagEase

Ninth Circuit: Per Diem Benefits Included in Regular Rate

APPLIES TO

All Employers with AK, AZ, CA, HI, ID, MT, NV, OR, WA,

Guam, and Mariana Islands Employees

EFFECTIVE

February 8, 2021

QUESTIONS?

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(888) 378-2456

In Clark v. AMN Services, the Ninth Circuit Court of Appeal stated that certain per diem benefits were not true business expenses and should be included in the calculation of employees’ regular rate of pay for overtime purposes. There, per diem employees who traveled for work purposes were paid both an hourly wage and a weekly per diem benefit, allegedly to cover the cost of meals, incidentals, and housing while working away from home; however, the benefit payments varied related to the work performed.

The court said that determining whether a per diem must be included in the regular rate of pay is a case-specific inquiry that turns on whether the payments function to reimburse employees for expenses or instead operate to compensate employees for hours worked. To this end, it looked at several factors, including whether payments increase, decrease, or both based on time worked, whether the payments are made regardless of whether any costs are actually incurred, whether the employer requires any attestation that costs were incurred by the employee, and whether the payments are tethered specifically to days or periods spent away from home or instead are paid without regard to whether the employer is away from home.

Ultimately, the tie of the per diem deductions to shifts not worked regardless of the reason for not working; the “banking hours” system; the default payment of per diem on a weekly basis, including for days not worked away from home, without regard to whether any expenses were actually incurred on a given day; and the payment of per diem in the same amount, but as acknowledged wages, to local employees who did not travel indicated to the court that the payments functioned as compensation for hours worked rather than as reimbursement for expenses incurred.

Action Items

  1. Review pay structure for nonexempt employees with legal counsel.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2021 ManagEase

California: Dynamex is Retroactive!

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All Employers with CA Employees

EFFECTIVE

January 14, 2021

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In Vazquez v. Jan-Pro Franchising International Inc., the California Supreme Court said that the ABC independent contractor test originally set forth in Dynamex is retroactive. Specifically, the Court stated that the decision did not change any “settled rule” about what independent contractor test applied to California’s Wage Orders. Prior to Dynamex, employers used the multi-factor test set forth in Borello to determine independent contractor status. However, the Court in Vazquez explained that employers had no reasonable grounds to rely on Borello for purposes of Wage Order claims. Employers may now be liable for failing to use the ABC test before the Dynamex decision was issued.

Interestingly, AB 5, which codified and expanded upon Dynamex, expressly states that certain exceptions under AB 5 shall apply retroactively to existing claims and actions to the “maximum extent permitted by law.” It is unclear at this time how broadly this language will be interpreted to cover those industries or jobs that are now legally subject to the Borello test. Continue to look for developments on this topic.

Action Items

  1. Review independent contractor status with legal counsel.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2021 ManagEase

California: ETS Rules Clarified

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All Employers with CA Employees

EFFECTIVE

January 26, 2021

QUESTIONS?

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(888) 378-2456

The California Department of Industrial Relations (DIR) recently issued an FAQ with updates clarifying the Cal/OSHA Emergency Temporary Standard (ETS). The following is a summary of some of the key points.

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