Department of Labor Issues Guidance on Cryptocurrency and ERISA retirement plans

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All ERISA retirement plans

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March 10, 2022

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The Department of Labor recently released long awaited guidance on the use of cryptocurrency in retirement plans governed by ERISA. The guidance used an expansive definition of cryptocurrency, including crypto-tokens, coins, and assets, along with any derivatives.

 

The guidance spelled out the concerns the DOL has about a plan fiduciary’s allowance of cryptocurrency in a retirement plan. Specifically, the DOL is worried about the high risk of fraud, theft, and loss that currently accompanies cryptocurrency. Additional concerns from the guidance include:

 

  • The SEC’s determination that cryptocurrency investments are highly speculative and volatile.
  • That cryptocurrency is not held in a trust or custodial account like most plan assets.
  • The difficulty in accurately accessing cryptocurrency value.
  • The lack of rules and regulations surrounding cryptocurrency markets.
  • The hurdles plan participants must overcome to make informed decisions.

 

Fiduciaries have the responsibility to evaluate the investments offered to participants and that duty extends to evaluation of cryptocurrency as an investment option in the plan. According to the DOL, including cryptocurrency in the plan could be considered a signal to plan participants that investment experts consider cryptocurrency a prudent investment option. A plan sponsor’s failure to remove irresponsible investments is considered a breach of fiduciary duty.

 

The DOL essentially ended the guidance with a warning to plan sponsors that they plan to “conduct an investigative program aimed at plans that offer participant investments in cryptocurrencies.” Plan sponsors are now on notice that including cryptocurrency in their retirement plans could increase the chances of being audited.

 

Action Items

  1. If considering including cryptocurrency options in retirement benefits, review fiduciary obligations 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.

© 2022 ManagEase

2nd Circuit: Common Law Joint Employer Standard Applies to Title VII

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All Employers with CT, NY, and VT Employees

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March 7, 2022

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For the first time, in Felder v. United States Tennis Association, the Second Circuit Court of Appeals identified a specific test for determining who is considered a “joint employer” under Title VII of the Civil Rights Act of 1964. The court aligned with other Circuit Courts stating that a joint employer relationship exists when two or more entities, according to common law principles, share significant control of the same employee, such as control over an employee’s hiring, firing, training, promotion, discipline, supervision, including handling of records, insurance, and payroll. Because exercise of control is the guiding indicator, factors indicating a joint-employment relationship may vary depending on the case. However, all aspects of the relationship must be assessed and weighed with no one factor being decisive.

 

There, an African-American security guard was assigned to work at a tennis tournament who refused to issue him security credentials; he alleged discrimination against the tournament association. The court stated that an entity can only be liable under Title VII as a joint employer for rejecting the temporary assignment of a contractor’s employee if the entity would have been the employee’s joint employer had it accepted his assignment. More specifically, an employee must allege that the entity would have exercised significant control over the terms and conditions of his employment.

 

Action Items

  1. Review vendor contracts and joint employer relationships 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.

© 2022 ManagEase

11th Circuit: Mandatory Service Charges Are Not Tips

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All Employers with AL, FL, and GA Employees

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March 18, 2022

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In Compere v. Nusret Miami, LLC, the Eleventh Circuit Court of Appeals stated that mandatory service charges included on a customer’s bill do not constitute a “gratuity” or tip under the Fair Labor Standards Act (FLSA) and therefore can be used toward the employer’s minimum wage obligations. Generally, federal law prohibits restaurants from using tips to pay minimum and overtime wages to employees, but establishments may apply non-tip charges toward employee wages.

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San Francisco, CA: New Guidance on San Francisco Paid Sick Leave for COVID-19

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All Employers with San Francisco, CA Employees

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February 22, 2022

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San Francisco recently provided updated guidance on its Paid Sick Leave Ordinance (PSL). The PSL applies to any employer that has employees who perform work in San Francisco, including part-time and temporary employees. The guidance clarified that PSL is only available to current employees, not individuals who were laid off.

Employees can use time under the PSL for the following reasons:

  • Public health officials or healthcare providers require or recommend an employee isolate or quarantine to prevent the spread of disease.
  • Attending a COVID-19 vaccination appointment or recovering from vaccination side effects.
  • An employee’s business or work location temporarily ceases operations because of a public health or other public official’s recommendation.
  • Providing care for a family member who is attending a COVID-19 vaccination appointment, experiencing side effects from a vaccination, or is under quarantine because of a public health official or healthcare provider’s recommendation.
  • Providing care for a family member whose school, childcare provider, senior care provider, or work temporarily ceases operation in response to a public health or other public official’s recommendation.

The guidance also extended the amount of time an employee may be out on PSL before an employer can request documentation that substantiates the need for time off. Previously, employers had to wait until the employee missed three or more consecutive days of work. The guidance now requires that employers wait until the employee has missed at least five consecutive days and is not under a doctor’s care. The five consecutive days can be full or partial workdays.

Action Items

  1. Have applicable paid sick leave policies updated for compliance.
  2. Have appropriate personnel trained on leave requirements.
  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.

© 2022 ManagEase

Indiana: New Restrictions on Employer Vaccination Mandates

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All Employers with IN Employees

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March 3, 2022

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Indiana now prohibits all Indiana employers from imposing COVID-19 vaccination mandates unless those mandates include exemptions for medical or religious reasons and natural immunity from prior infection. The law applies to nearly all Indiana based employees, including independent contractors, subcontractors, and interns. However, the law does not apply to employees working in another state. Employers with federal contracts that have vaccination requirements as a condition to receive funds and healthcare facilities required to comply with the federal CMS mandate are also exempt. Finally, professional sports and entertainment venues do not have to comply so long as they provide accommodations that comply with federal law.

 

Employers that grant exemptions can still require employees to submit to COVID-19 testing, but not more than twice per week. The law is silent on whether the employer or employee would have to pay for these tests. Employers should consult applicable state and local laws, as well as collective bargaining agreements, to determine who is legally responsible for payment.

 

Employees may seek a medical exemption by submitting a statement in writing from a licensed physician, physician’s assistant, or advanced practiced medical nurse. The statement must say that the COVID-19 vaccine would be detrimental to the employee’s health or is medically contraindicated. Employees seeking a religious exemption simply need to submit a statement saying they will not be vaccinated because of a sincerely held religious belief. Natural immunity exemptions must be granted if the employee submits the results of an FDA approved lab test taken within the last three months. Employers can require that employees submit new test results every three months thereafter. If desired, employers can waive these requirements and just grant exemptions without employee submissions.

 

Action Items

  1. Review HB 1001 here.
  2. Have vaccination polices updated for compliance where applicable.
  3. Have appropriate employees trained on the new requirements.
  4. 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.

© 2022 ManagEase

Massachusetts: State Independent Contractor Test Applies to Franchises

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All MA Franchisor-Franchisee Relationships

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March 24, 2022

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In Patel v. 7-Eleven, Inc., the Massachusetts Supreme Judicial Court stated that the state test for determining independent contractor status applies to the relationship between a franchisor and its franchises. Specifically, unless an individual satisfies the statutory ABC test for determining independent contractor status, an individual performing any service for an employer is an employee for purposes of wage laws. Thus, regardless of the FTC Franchise Rule, a franchisee providing services to a franchisor under the terms of a franchise agreement may still be classified as an “employee” of the franchisor under state wage-and-hour law.

 

There, the question was whether owner/operators of 7-11 franchises were employees of the national franchisor under state wage-and-hour law. The court stated, “[t]he FTC Franchise Rule ‘is a pre-sale disclosure rule[,]’” and “[c]ompliance with [its] disclosure requirements does not mandate that a franchisor exercise any particular degree of control over a franchisee.” Moreover, as indicated by the FTC itself, the FTC Franchise Rule does not conflict with state independent contractor rules. The court further acknowledged that this ruling does not “render every franchisee an employee” under state law. Nonetheless, franchises should immediately review their relationship status with legal counsel for compliance.

 

Action Items

  1. Have franchise agreements reviewed by legal counsel.
  2. Evaluate 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.

© 2022 ManagEase

IMPORTANT! New Jersey: New Geotracking Notice Requirement for Employers

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All Employers with NJ Employees

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April 18, 2022

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AB 3950 prohibits employers from knowingly making use of a tracking device in a vehicle used by an employee without providing written notice. “Tracking device” means an electronic or mechanical device which is designed or intended to be used for the sole purpose of tracking the movement of a vehicle, person, or device, but does not include devices used for the purpose of documenting employee expense reimbursement.

 

First, employers should note the distinction that the requirement is for employers to provide written notice rather than obtain written consent, as may be the case in some other jurisdictions. Second, the rule applies regardless of who owns the vehicle being used by the employee. Third, the definition of “tracking device” appears to be narrowly scripted. Presumably, it does not apply to smartphones, which have a multitude of functions other than GPS tracking, or other similar multipurpose devices. However, it may apply to movement tracking devices used for tracking routes or monitoring safe driving.

 

Employers who fail to comply may be subject to a $1,000 civil penalty for the first violation, and up to $2,500 for each subsequent violation. Notably, the bill does not apply to state or local government entities or public transportation systems. It also does not interfere with interstate commerce regulations, such as using electronic communication devices mandated by the Federal Motor Carrier Safety Administration.

 

Action Items

  1. Immediately provide written notice to employees of the use of geotracking devices.
  2. Restrict geotracking to legitimate business needs and avoid privacy violations, as may be required by federal and state law.
  3. Keep geotracking data confidential on a need-to-know basis.
  4. Have appropriate personnel trained on the new rule.
  5. 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.

© 2022 ManagEase

New York: Sexual Harassment and Retaliation Protections Expanded

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All Employers with NY Employees

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As Indicated

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New York recently passed several bills expanding protections against sexual harassment and retaliation. Employers should take note of the following new rules:

  • MAR 16, 2022 | Retaliation Expanded. S5780 prohibits employers from retaliating against employees by disclosing their personnel files because they opposed illegal practices or filed a complaint, testified, or assisted in a proceeding under the New York State Human Rights Law (NYSHRL).
  • MAR 16, 2022 | NYSHRL Applies to State and Local Governments. S3395a expands the definition of “employer” under the NYSHRL to include state and local governments.
  • JUL 14, 2022 | Sexual Harassment Hotline. S812A establishes a toll-free confidential hotline administered by the New York State Division of Human Rights (NYSDHR) to provide individuals with complaints of workplace sexual harassment counsel and assistance.

 

These bills are part of a current trend in the New York legislature to provide greater protections to sexual harassment victims. There are several other bills pending, such as prohibiting no-rehire agreements, prohibiting certain damages in connection with non-disclosure or non-disparagement agreements when connected to discrimination, harassment, or retaliation claims, and extending the statutes of limitations for filing administrative charges and lawsuits.

 

Action Items

  1. Have retaliation policies updated for compliance.
  2. Have appropriate personnel trained on the new requirements.
  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.

© 2022 ManagEase

Washington: Employment Nondisclosure and Nondisparagement Agreements Restricted

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All Employers with WA Employees

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June 9, 2022

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(888) 378-2456

Washington’s “Silenced No More Act” is creating significant changes for employers with nondisclosure and nondisparagement agreements. Following similar prohibitions in California, SB 1795 prohibits employers from entering into agreements that prevent current, former, or prospective employees or independent contractors, who are Washington residents, from disclosing or discussing conduct that occurs at the workplace, work-related events, between employees, or between an employer and an employee, whether on or off the employment premises, that the individual reasonably believes to be illegal discrimination, harassment, retaliation, wage and hour violations, sexual assault, or against public policy. Such agreements are void and unenforceable.

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Wisconsin: State Supreme Court Clarifies Employers’ Burden Under Wisconsin Fair Employment Act

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All Employers with WI Employees

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March 10, 2022

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(888) 378-2456

In Cree, Inc. v. Palmer, the Wisconsin Supreme Court stated that employers may potentially discriminate against individuals with a domestic violence criminal history for purposes of the Wisconsin Fair Employment Act. A provision of the Act bars employers from discriminating against applicants and employees because of an arrest or conviction record, except where the records “substantially relate” to the job circumstances. Historically, Wisconsin’s Department of Workforce Development (DWD) has stated that domestic violence does not substantially relate to any job. In Cree, the Wisconsin Supreme Court disagreed.

 

There, a job applicant was initially hired, then had the offer revoked after the employer discovered eight crimes of domestic violence on the applicant’s criminal record during a background check. The applicant filed a complaint with DWD. If hired, the applicant would have worked with over 1,000 employees and regularly interacted with customers, both on and off the employer’s premises.

 

In its ruling, the Court gave a more simplified substantial relationship test for employers to follow. Employers must show that the facts, events, and conditions of the arrest or conviction must materially relate to the facts, events, and conditions of the job. In this case, the seriousness of the offense and the short amount of time that had passed between conviction and the denial of employment, combined with an employer’s general obligation to protect its employees and customers, were in the employer’s favor.

 

The Court’s decision clarifies how employers should make decisions when determining if an employee or applicant’s arrest or conviction is substantially related to the job they are performing. Employers will still need to analyze each situation on its own facts and circumstances. Before making any detrimental employment decision, employers are always encouraged to seek the advice of competent legal counsel.

 

Action Items

  1. Update background check processes based on the new test.
  2. Have appropriate personnel trained on background check requirements.
  3. Consult with legal counsel before taking adverse action against an employee or applicant.
  4. 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.

© 2022 ManagEase