The Equal Employment Opportunity Commission’s (EEOC) 2021 guidance regarding the treatment of LGBTQ applicants and employees in the workplace has been blocked from enforcement in 20 states: Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, and West Virginia. In Bostock v. Clayton County, the Supreme Court ruled the prohibition against sex discrimination in Title VII of the Civil Rights Act of 1964 includes employment discrimination on the basis of someone’s sexual orientation or transgender status. On the heels of this ruling, the EEOC issued guidance to provide clarity on how Title VII applies to LGBTQ related matters involving employment discrimination. In addition to Title VII’s other protections, the guidance primarily required employers to: 1) not prohibit a transgender person from dressing or presenting in a manner consistent with the person’s gender identity; 2) allow employees to use sex-segregated bathroom and locker room facilities that correspond to their gender identity; and 3) treat repeated and intentional use of the wrong name or pronoun for a transgender employee as harassment in violation of Title VII. 

A lawsuit filed by the Attorney General of Tennessee was joined by 19 other states’ attorneys general arguing that the guidance infringes on states’ powers to regulate their public workplaces and did not follow proper federal procedure when implementing the guidance. In July, a judge for the Federal District Court for the Eastern District of Tennessee agreed to issue a preliminary injunction against the enforcement of the EEOC guidance until the substance of the lawsuit is decided. Employers in these states should note this preliminary injunction only temporarily limits the EEOC’s actions. However, the injunction does not change the Bostock opinion protecting sexual orientation and transgender status under Title VII. Employers should continue to adhere to Bostock since individual employees can still bring lawsuits challenging employment practices under Title VII as it applies to LGBTQ status. 

Action Items 

1. Read the EEOC guidance here. 
2. Continue to comply with protections for sexual orientation and transgender status. 
3. Consult with legal counsel prior to taking adverse actions that could violate Title VII. 
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

In United Mine Workers of America 1974 Pension Plan v. Energy West Mining Company, the D.C. Circuit Court of Appeals said exiting employers from a multiemployer defined benefit pension plan must use the actual and projected experience of the plan when calculating the withdrawal liability owed to the plan. In this case, the pension plan used a lower risk-free discount rate instead of a higher interest rate assumption based on the plan’s historical investment performance to calculate the withdrawal liability. This resulted in a liability that was $75 million more than what the employer would have paid if the plan had used the higher interest rate. For the purpose of withdrawal liability calculations, the higher the rate, the lower the total liability for the exiting employer.  

The Employee Retirement Income Security Act of 1974 (ERISA), as amended by the Multiemployer Pension Plan Amendments Act of 1980 (MPPA), requires exiting employers in a multiemployer defined benefit pension plan to pay a withdrawal liability. According to the ruling, the plan actuary must use methods that take into account the historical experience of the plan and reasonable expectations. Interest rate assumptions must also meet the minimum funding standards required by ERISA.  

The statute requires the withdrawal liability calculation to “offer the actuary’s best estimate of anticipated experience under the plan.” A risk-free rate calculation is not appropriate if the plan’s actual and projected investment policy is to continue to be invested in riskier assets. Employers exiting from multiemployer defined benefit pension plans should now be able to rely on a withdrawal liability being calculated similar to the minimum funding rate and based on the plan’s current and projected investment policy. 

Action Items 

1. Consult with legal counsel to ensure compliance with ERISA when exiting a pension plan. 
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

In Meza v. Pacific Bell, the California Court of Appeal stated that overtime true-up payments relating to a past pay period is not subject to Labor Code § 226(a)(9)’s requirement to list “hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate.” Specifically, Section 226(a)(9) only applies to hourly rates occurring during the pay period for which a paycheck is issued.  

There, an employee’s class action claimed various wage and hour violations, including failing to list the pay rate and hours for overtime true-up based on performance bonuses earned in earlier pay periods. California requires that the bonus be included in the regular rate calculation for overtime pay. Because the bonus was earned over the course of an entire month and the bonus amount was not known until the close of that month, there was no way to determine the overtime owed in relation to that bonus on a pay-period by pay-period basis. The payment was typically listed on the first wage statement of the month after the employee earned it, but did not include information in the “rate” and “hour” columns of the wage statement.  

The court said that Section 226 only required listing hourly rates “during the pay period,” and it was not “an artificial, after-the-fact rate calculated based on overtime hours and rates from preceding pay periods that did not even exist during the time of the pay period covered by the wage statement.” Specifically, the court said it “cannot read into the statute a requirement that an employer include hours and rates from prior pay periods when the legislature omitted such a requirement.” While this helps clarify the rules around wage statements, the ruling still may be appealed to the state supreme court. Employers should continue to look for updates on this case.  

Action Items 

1. Evaluate paystub setup for adjustments, if appropriate. 
2. Have appropriate personnel trained on wage statement 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

In California, an employer must provide an employee with a reasonable seat while working if the nature of the work reasonably permits the use of a seat. In Meda v. AutoZoners, Inc., a California Court of Appeal looked at what an employer must do to be considered to have “provided” seating to employees. 

There, a sales associate claimed that she was not provided suitable seating while working behind a bar-height counter where she was able to perform a majority of her work while seated. The employer claimed that two chairs located next to a manager’s office around the corner were available for employee use. However, the court said that where an employer has not expressly advised its employees that they may use a seat during their work and has not provided a seat at a workstation, a factual analysis was necessary to determine whether an employer “provided” reasonable seating, including the proximity of the available seating to the workspace and the employee’s knowledge of the availability of seating. The factual analysis may vary depending on the circumstances. 

The court did not say that employers are required to place a seat at every workstation involving work that could be performed while seated, acknowledging that doing so may not always be feasible given the particular characteristics of a workspace. The court also gave examples of how an employer may inform its employees of the availability of seating, such as by directly informing employees that seats are available for use or including a seating policy in its employee handbook. Going forward, employers should evaluate their seating availability and need within the workplace to ensure compliance with seating requirements. 

Action Items 

1. Evaluate seating availability for workers. 
2. Provide notice to workers of available seating. 
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

Colorado Senate Bill 22-161 amends the state’s wage theft laws by increasing penalties and adding additional enforcement methods for violations. The amendment addresses not only wage theft but also employee misclassification and deductions from final pay for unreturned company equipment. It also creates a new Worker and Employee Protection Unit under the control of the office of the Attorney General which can investigate and enforce wage theft, unemployment insurance, and misclassification claims.  

Penalties. Most notably, SB 22-161 increases the penalties employers must pay to employees if they do not pay wages owed within 14 days after an employee makes a written demand or files a civil action or administrative claim. As of January 1, 2023, employers who do not pay wages owed within 14 days of a demand will automatically pay the greater of two times the amount of the unpaid wages or $1,000. This is quite an increase from the original 1.25 times penalty. If the failure to pay was willful, the employer must pay the greater of three times the amount of unpaid wages or $3,000. All second or subsequent failures to pay within the 5 years preceding a claim are per se willful. Successful payments occurring within 14 days after the written demand will result in the employee being required to dismiss the claim. If the Division makes an adverse decision for failure to pay and the employer still has not paid within 60 days of that adverse decision, the employer will need to pay attorneys’ fees incurred to enforce the Division’s adverse action, a fine equal to 50% of the amount owed, and an additional penalty owed to the employee which is the greater of 50% of the amount owed or $3,000.  

The amendment also greatly reduces the ability for successful employers to recover attorney’s fees incurred in a civil action. Employers can only recover attorney’s fees if it has paid all the amounts demanded in good faith by all employees within 14 days of receiving the demand and if the employees ultimately recover less in the action than the amount the employer paid. Conversely the Division is now allowed to award attorney’s fees to employees who recover more than $5,000 in unpaid wages in an administrative claim.  

Unreturned company property. Additionally, Colorado employers will no longer be able to freely deduct the value of unreturned company property from final pay. Rather, in order to deduct from final pay, the employer must provide a notice to the employee within 10 days after separation which includes the specific property or amount of money the employee failed to return or pay, the replacement value of the property, when the property or money was provided to the employee, and when the employer believes the employee should have returned the property or paid the money. If the employee repays or returns the property within 14 days of the notice, the employer must return the amount of the deduction within 14 days of the receipt of money or property. 

Action Items 

1. Read the bill here. 
2. Review procedures for the timely payment of wages. 
3. Review classification of employees and independent contractors. 
4. Revise procedures for final pay deductions and prepare template notice of deductions. 
5. Have appropriate personnel trained on the requirements. 
6. 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