District of Columbia: Ban on Non-Compete Provisions Scaled Back

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All Employers with District of Columbia Employees

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October 1, 2022

 

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Washington, D.C. employers preparing for the implementation of the Ban on Non-Compete Agreements Amendment Act of 2020 now need to reevaluate their positions. While the original act banned nearly all non-compete agreements, the D.C. Council recently passed the new Non-Compete Clarification Amendment Act of 2022 allowing for certain exceptions.  

 

The Amendment now allows employers to enter into non-competes with almost any employee whose total compensation is or is reasonably expected to be more than $150,000 per year in addition to medical specialists making more than $250,000 per year. Bonuses, commissions, overtime premiums, vested stock, and other payments provided on a regular or irregular basis may be included in the total compensation calculation. The threshold will increase based on the consumer price index in the Washington Metropolitan Statistical Area beginning on January 1, 2024.  

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Maine: New Restrictions on Employee Nondisclosure Agreements

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All Employers with ME Employees

EFFECTIVE

August 8, 2022 

 

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“An Act Concerning Nondisclosure Agreements in Employment” (LD 965) recently went into effect in Maine. Specifically, employers are prohibited from requiring employees, interns, or applicants to enter into an agreement that waives or limits their right to report to discuss unlawful discrimination in the workplace.  

 

Employers are also prohibited from requiring applicants, interns, or employees to enter into settlement, separation, or severance agreements that (1) limit their right to communicate with a federal or state agency that enforces employment or discrimination laws; (2) prevent an individual from testifying or providing evidence in a federal or state court proceeding in response to legal process; or (3) prohibit an individual from reporting conduct to a law enforcement agency. However, such agreements may prevent disclosure of factual information relating to a claim of unlawful employment discrimination if:  

 

(A) the agreement expressly provides for separate monetary consideration in addition to anything that the individual is already entitled;  

(B) the restriction mutually applies to all parties to the agreement;  

(C) the agreement states that the individual maintains the right to report, testify, or provide evidence to federal or state agencies and testify and provide evidence in federal and state court proceedings; and  

(D) the employer keeps a copy of the agreement for six years following execution of the agreement or the end of the individual’s employment, whichever is later. 

 

Notably, the bill does not limit the use of nondisclosure agreements to protect trade secret or confidential or proprietary information. Violations are subject to fines or injunction; willful violations are subject to fine up to $1,000. 

 

Action Items 

  1. Review the bill here. 
  2. Have nondisclosure, settlement, separation, and severance agreements reviewed by 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

Michigan: Uncertainty Looms for Wage and Hour and Paid Sick Leave Laws

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All Employers with MI Employees

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Pending

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For now, employers can continue to rely on Michigan’s adopted and amended paid medical leave and minimum wage laws instead of the voter-initiated versions of the laws. In 2018, the Michigan legislature approved two ballot proposals with revisions. One proposal was the Improved Workforce Opportunity Wage Act (IWOWA) which provided an increase in minimum wage, and the other was the Earned Sick Time Act (ESTA) which became the Paid Medical Leave Act (PMLA) and mandated paid sick leave for a variety of absences.  

 

In the IWOWA, the legislature amended the original ballot proposals to: 1) allow a gradual minimum wage increase of $12 per hour effective in 2030 instead of 2022; 2) remove an additional inflation-based annual minimum wage increase beyond $12 per hour; and 3) eliminate wage increases specific to tipped employees. The changes to the ESTA included: 1) changing the name to the PMLA; 2) exempting employers with less than 50 employees from compliance; 2) lowering the annual leave entitlement to 40 hours from 72 hours; and 3) eliminating employees’ right to claim retaliation for violations of their rights under the law. These two laws as amended went into effect March 29, 2019.  

 

Subsequently, a court case filed challenging the Michigan legislature’s constitutional authority to “adopt” and “amend” these ballot proposals. On July 19, 2022, in Mothering Justice v. Nessel, the Court of Claims agreed that the method used by the Michigan legislature was unconstitutional and immediately nullified the IWOWA and PMLA, making the original ballot initiatives into law. This would have meant Michigan employers would have had to make significant changes to their minimum wage and paid sick leave policies effective August 9, 2022. Following this ruling, the State of Michigan appealed to the Court of Appeals and sought a stay of the decision through all of its potential appeals. A stay was granted on July 29, 2022. This means Michigan employers can continue to rely on the existing laws through February 19, 2023. 

 

In the event the State of Michigan is not successful in its appeal of the decision and the stay is lifted, Michigan employers should be aware of the following most notable potential changes to current minimum wage and paid sick time laws if the lower court’s ruling is upheld. 

 

Potential Changes to Current Paid Sick Leave. Almost all public (except federal) and private employees would be eligible for paid sick leave. The law would cover all employers with at least 1 employee. While small businesses only need to provide up to 40 hours of paid sick leave a year, large employers or those with more than 10 employees must offer up to 72 hours per year. Employees can use paid sick leave to also care for someone who is related by affinity – which has no additional definition. Employers can only request supporting documentation if an employee is absent for more than three days, and the documentation need not be detailed. Employers cannot frontload paid sick leave but must allow for accrual. Employees would have a private right of action with a 3-year statute of limitations for violations of their exercise of rights under the paid sick leave law.  

 

Potential Changes to Minimum Wage. Minimum wage would immediately increase to $12 per hour. The minimum wage rate would be adjusted by the rate of inflation beginning October 2022 and effective January 1 of each succeeding year. Employers with tipped employees would have to increase the minimum wage rate to 80% in 2022, 90% in 2023, and 100% in 2024. This means eventually tipped employees would receive minimum wage in addition to gratuities.  

 

Action Items 

  1. Monitor the Michigan Department of Labor & Economic Opportunity’s website for updates. 
  2. Evaluate potential administrative and financial impacts if the original ballot proposals are implemented. 
  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

New York, NY: New Fast Food Fair Workweek Laws

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Certain Fast Food Employers with NYC Employees

EFFECTIVE

June 23, 2022

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(888) 378-2456

Final regulations were recently adopted implementing New York City’s Fair Workweek and just cause laws for fast food workers. The final rules differed somewhat from the previously proposed rules. Employers should note key changes. 

 

De Minimis Schedule Changes. De minimis schedule changes are measured using a 15-minute grace period at both the start and end of each shift, rather than aggregating schedule changes for the whole shift. De minimis changes do not trigger consent or premium pay requirements for schedule changes. 

 

Premium Pay Exception. Premium pay is owed to employees for employer-mandated schedule changes with less than 14 days’ notice, except when an employer (1) shortens or cancels a shift, (2) still pays the employee for the originally scheduled work hours, and (3) keeps a record of the date and time the scheduled hours were paid and not worked. Employers should note that the added recordkeeping provision may invite errors that still incur owed premium pay. 

 

Written Consent for Schedule Changes. Employers have a 15-minute grace period to get written consent from an employee for working additional hours in a shift if they cannot get the employee’s written consent before the additional time begins. 

 

Work Schedule Notification Penalties. Employers must provide premium pay for schedule changes made within 14 days, seven days, and 24 hours of the new schedule. The rules clarify that days are measured in hours, which means that 14 days is 336 hours and seven days is 168 hours. 

 

Action Items 

  1. Review the rules here. 
  2. Review the city’s website for additional resources. 
  3. Have scheduling and payroll procedures updated for compliance. 
  4. Have appropriate personnel trained on the requirements. 
  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

Oregon: Savings Clauses Increase Enforceability of Arbitration Agreements

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All Employers with OR Employees

EFFECTIVE

July 8, 2022

QUESTIONS?

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(888) 378-2456

In Gist v. ZoAn Management, Inc., the Oregon Supreme Court stated that an arbitration agreement was enforceable due to a savings clause which allowed arbitrators to disregard invalid or unenforceable provisions of the original agreement. In this case, an employee entered into a Driver Services Agreement (DSA) where he and other drivers were considered independent contractors as they provided the defendant with delivery services. The employee filed a class action lawsuit against the employer claiming that he and other drivers were actually employees and the employer had violated Oregon’s wage and hour statutes.  

 

The Court ultimately concluded the savings clause in the DSA allowed the arbitrators to disregard invalid or unenforceable provisions, including statements that the drivers were independent contractors. Because of the savings clause, the arbitration provision did not violate ORS § 652.360 which prohibits employers from using a contract to exempt themselves from the requirement to pay wages. Employers are encouraged to include a savings clause in their arbitration agreements to increase enforceability of the entire agreement. 

 

Action Items 

  1. Have arbitration agreements reviewed by legal counsel for updates. 
  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

Pennsylvania: Comments Made About Employees’ Health Have Basis for Discrimination Claims

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APPLIES TO

All Employers with 15+ Employees

EFFECTIVE

June 21, 2022

QUESTIONS?

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(888) 378-2456

In Rice-Smith v. Misericordia Convalescent Home, a federal court in Pennsylvania stated that a nurse’s disability discrimination claim under the Americans with Disabilities Act (ADA) could proceed in litigation even though the employer had no actual evidence of her alleged medical condition. Verbal notice from the employee was enough to be possibly regarded as having a disability, which is a protected status even if the individual does not in fact have a disability. 

 

In this case, an employee told her employer’s director of nursing during the interview process that she had multiple sclerosis and needed to use a cane while working. After her hire, the employee had a number of behavioral issues including using her phone while working, insubordination, and instigating confrontations. Ultimately, the employee was discharged for her ongoing disciplinary issues following a confrontation with a co-worker, which she blamed on medication she was taking for her multiple sclerosis. The employee also claimed the director of nursing made comments about her multiple sclerosis during the termination meeting, which he denied.  

 

The court stated that the ADA disability discrimination claim could proceed because simply disclosing her medical condition in her interview and requesting the use of a cane was enough information to establish that the employer may have regarded her as having a disability, despite the fact that the employee did not provide any evidence that she actually had multiple sclerosis. Also, the director of nursing’s text message coupled with his alleged statements at the termination meeting were enough to cast doubt that the disciplinary issues were the true reason for the discharge. This case should serve as a further warning that merely regarding someone as having a medical condition or disability is enough to advance claims of ADA discrimination.  

 

Action Items 

  1. Have appropriate personnel trained on managing discipline for employees in protected categories. 
  2. Consult with legal counsel before making adverse employment decisions against an employee who is perceived to be or regarded as having a disability or medical condition. 
  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

Rhode Island: New Protections for Tipped Workers

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APPLIES TO

All Employers with RI Tipped Employees

EFFECTIVE

June 28, 2022

QUESTIONS?

Contact HR On-Call

(888) 378-2456

SB 2246A implements new protections for tipped workers, including prohibiting employers from keeping employee tips, implementing new tip pool requirements, and restricting deductions from tips for credit card processing. “Tipped employees” are “engaged in an occupation in which the employee customarily and regularly” receives more than $30 per month in tips. Key requirements are noted as follows. 

  • The bill specifically states that employers cannot take “any part” of a tip from an employee. 
  • Deductions for credit card processing fees are permitted if the employer gives notice to the employee and the amount does not bring the employee below minimum wage. 
  • Tips must be paid no later than the regular payday, even if the employer is still waiting for reimbursement from a credit card company. 
  • Tip pools are permitted for employees “who customarily and regularly receive tips,” provided that (1) the employer gives notice to employees of the pool contribution amounts; (2) the employer limits any tip credit to the amount actually received by the employee; and (3) the employer does not keep any portion of the tips (excepting credit card processing fees). 
  • Non-tipped employees may participate in tip pooling if the employer does not take a tip credit and does not include exempt employees in the tip pool. 
  • Service charges belong to the employer rather than the employee. 
  • Service charges shared by the employer may be counted toward minimum wage requirements. 

 

Action Items 

  1. Review the bill here. 
  2. Review payroll procedures for managing tips and tip pooling. 
  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

August Updates

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APPLIES TO

Varies

EFFECTIVE

Varies

QUESTIONS?

Contact HR On-Call

(888) 378-2456

Arizona: Unemployment Benefits Eligibility Without a COVID-19 Vaccine or Booster 

Effective July 6, 2022, SB 1494 makes Arizona employees eligible to receive unemployment benefits even if the reason for their separation was due to not receiving a COVID-19 vaccine or booster in accordance with the employer’s policy. If the employer’s vaccine mandate was due to a lawful requirement, then the unemployment benefits paid will not be charged against that employer’s account. Employers requiring COVID-19 vaccinations and boosters due to specific laws should review and revise their policies to make sure the legal requirements are clear. 

 

Glendale, CA: New Hotel Worker Protections 

As of July 27, 2022, the Glendale Hotel Workers Protection Ordinance implements a required minimum wage, limits mandatory overtime, creates maximum square footage requirements for housekeepers, and requires “panic buttons” for workers assigned to clean rooms alone. There are also notice requirements for guest rooms. Training on the Ordinance is required for new hires and annually for all employees. 

 

Los Angeles, CA: New Hotel Worker Protections 

Effective July 7, 2022, the Regarding Workplace Security, Workload, Wage, and Retention Measure for Hotel Workers Ordinance provides a number of safety, workload, and wage and hour protections for hotel workers. Mostly notably, hotels must provide personal security devices or personal alarms to hotel workers, post notices in hotel rooms, and provide training on the Ordinance to all employees and new hires. Hotel workers who report violent or threatening conduct are protected from adverse action and paid time off to report incidents to law enforcement and to consult with a counselor. The Ordinance also contains new workload limitations which limit the number of rooms and maximum square footage cleaned in a specific time frame as well as some changes in the calculation for overtime. Overtime is now voluntary, and hotel workers must consent in writing to work more than 10 hours in a workday.  

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