APPLIES TO All FLSA-Covered Employers with Employees in TX, LA, and MS

EFFECTIVE April 28, 2023

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Fifth Circuit said that the DOL’s 80/20 Rule has a burdensome recordkeeping requirements that may cause irreparable harm to employers. The issue has been sent back to the district court for reconsideration and remains a developing issue.

Discussion

On April 28, 2023, the Fifth Circuit Court of Appeals directed a Texas district court to further examine a lawsuit challenging the U.S. Department of Labor’s (DOL) 80/20 Rule, which impacts employers utilizing a tip credit to fulfill their minimum wage obligations under the Fair Labor Standards Act (FLSA). This decision is part of an ongoing process to determine the legitimacy of the 80/20 Rule.

In October 2021, the DOL announced a final rule reinstating the 80/20 Rule, which divides employee work into three categories: (1) tip-producing work; (2) directly supporting work; and (3) work that is not part of a tipped occupation. Under the Rule, a tip credit cannot be claimed if tipped employees spend over 20% of their time on non-tip generating tasks or if such non-tip generating tasks are done continually for more than 30 minutes.

In December 2021, the Restaurant Law Center (RLC) and the Texas Restaurant Association (TRA) brought suit in the Texas federal district court, challenging the validity of the 80/20 Rule and filing a preliminary injunction to preclude the DOL from enforcing the Rule. The preliminary injunction was initially denied by a Texas district court judge in February of 2022, based on the judge’s finding that RLC and TRA had not shown that there would be irreparable harm flowing from enforcement of the 80/20 Rule. RLC and TRA appealed this decision to the Fifth Circuit Court of Appeals.

The Fifth Circuit determined that the district court judge had incorrectly disregarded evidence of irreparable harm, specifically finding that the 30 continuous-minute limitation under the 80/20 Rule creates a minute-by-minute record keeping obligation and imposes significant costs on employers. Following the Fifth Circuit’s April 28^th decision, the case has been sent back to the district court for reconsideration. Employers in the Fifth Circuit should continue to monitor developments of this area, however, for the time being, the 80/20 Rule remains in effect.

 

Action Items

1. Review compliance with the 80/20 Rule.
2. Continue to monitor legal developments regarding legitimacy of the 80/20 Rule for tipped employees.
3. Consult with legal counsel regarding applicability of the 80/20 Rule to current tipped employees.
4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

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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. © 2023 ManagEase

APPLIES TO All Employers with Employees in Washington, D.C.

EFFECTIVE As Indicated

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Washington, D.C. employers may not take any adverse actions against an employee or applicant because of their recreational cannabis use or participation in D.C.’s or another state’s medical cannabis program. Testing for cannabis is prohibited as a condition of employment except for certain safety-sensitive positions or unless otherwise required by law.

Discussion

Washington, D.C.’s Cannabis Employment Protections Amendment Act of 2022 provides broad protections for employees who use marijuana. Employers may not take any adverse actions against an employee or applicant because of their recreational cannabis use or participation in D.C.’s or another state’s medical cannabis program. The Act is scheduled to become effective on or after July 13, 2023 but is currently unfunded. Once an approved budget includes the law’s provisions, it will become effective. Employers should not wait for an approved budget to begin implementing some of the requirements and limitations.

Adverse actions include failure to hire, failure to promote, demotions, suspensions, and terminations due to use of cannabis, status as a medical cannabis patient, or testing positive on a drug test absent on-the-job impairment. Testing for cannabis is prohibited as a condition of employment except for certain positions or unless otherwise required by law. Testing is allowed for safety-sensitive positions; positions that require regular or frequent operation of a motor vehicle, heavy or dangerous equipment or machinery; regular or frequent work on a construction site or near power or gas utility lines; positions that require the administration of medications; and employees of the federal government. Post-accident and reasonable suspicion drug testing is allowed, although the law is silent on random or return-to-work testing. Employees who exhibit impairment during the hours of work that 1) substantially decreases or lessens the employee’s performance of the duties or tasks of the employee’s job position, or 2) interfere with an employer’s obligation to provide a safe and healthy workplace are also not protected from adverse action if their impairment is due to lawful cannabis use.

Employers are also required to provide a notice to employees of their rights under the law, whether their positions have been designated as safety-sensitive, and the protocols for drug and alcohol testing. The notice must be provided no later than 60 days after the law’s effective date, upon hire, and annually thereafter. The D.C. Office of Human Rights is expected to issue a notice template. Violations of the law can result in a fine of up to $5,000 per violation in addition to a civil penalty, lost wages, reasonable attorneys’ fees, training, reinstatement, and other relief necessary to undo the harm of the adverse action. This is in addition to a plaintiff’s private right of action.

 

Action Items

1. Review the law here.
2. Revise alcohol and substance abuse policies including drug testing.
3. Train appropriate personnel on the requirements.
4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

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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. © 2023 ManagEase

APPLIES TO Private Employers with more than 25 Employees in FL

EFFECTIVE July 1, 2023

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Private employers in Florida with 25 or more employees are required to use the E-Verify system to verify a new employee’s work authorization. Documentation of employee work authorization should be maintained by the employer for a period of three (3) years.

Discussion

Governor Ron DeSantis recently signed an immigration bill that will significantly affect private employers as of July 1, 2023. Most notably, all private employers with 25 or more employees will be required to use the E-Verify system to verify a new employee’s work authorization status. Verification must be completed within three (3) business days after the first day that the new employee begins working for pay.

Each employer required to use the E-Verify system under this new law must certify on its first return each calendar year to the tax service provider that it is in compliance with the new law, and employers voluntarily choosing to use the E-Verify system must make a similar statement of compliance. Employers subject to this requirement must retain a copy of the documentation provided by the new employee and any official verification granted for at least three (3) years. In the event an employer obtains knowledge that a new employee is unauthorized to work, the employer is prohibited under the new law from continuing to employ the individual.

The new law requires the Florida Department of Economic Opportunity (DEO) to enforce penalties requiring repayment of any economic development incentives or revocation of all applicable licenses, if the DEO finds or is notified that an employer has knowingly employed an individual who is not authorized to work. The new law further prohibits counties and municipalities from providing funds to any person, entity, or organization that issues identification documents to individuals who do not provide proof of lawful presence in the United States.

 

Action Items

1. Implement E-Verify procedures for verifying work authorization.
2. Update tax procedures for verifying compliance with the new law.
3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

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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. © 2023 ManagEase

APPLIES TO Employers with Employees in Chicago, IL

EFFECTIVE April 24, 2023

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Chicago’s “Ban-the-Box” ordinance now requires employers to conduct an individualized assessment when determining whether to base an employment-related decision on an individual’s criminal history. Chicago’s “Ban-the-Box” ordinance requires that specific language be included in both a written pre-adverse and adverse notice sent to individuals when an employment decision is based on the individual’s criminal history.

Discussion

The City of Chicago, Illinois, recently amended its “Ban-the-Box” ordinance in several significant ways, including to (1) create an individualized assessment requirement; (2) require a pre-adverse and final adverse action notice when employers are assessing criminal records; and (3) require additional language in an adverse action notice.

The new amendments largely follow suit with the State of Illinois, which supplemented the Illinois Job Opportunities for Qualified Applicants Act (JOQAA) requirements in mid-2021. Under Chicago’s ordinance, an employer may not use a conviction record as a basis to refuse to hire, renew employment, select for training, or otherwise discharge, discipline or alter the privileges or conditions of an employee’s employment unless (1) there is a “substantial relationship” between the individual’s criminal offense(s) and the job sought; or (2) the employer believes that the individual poses an unreasonable risk to property or the safety or welfare of specific individuals or the general public.

The recent amendment to the ordinance requires an individualized assessment when evaluating whether an employment decision can be based on a conviction record. In doing so, the amended ordinance lists six factors for the employer to consider: (1) the length of time since conviction; (2) the number of convictions that appear on the individual’s conviction record; (3) the nature and severity of the conviction and its relationship to the safety and security of others; (4) the facts or circumstances surrounding the conviction; (5) the age of the employee at the time of the conviction; and (6) evidence of rehabilitation efforts.

If the employer makes a preliminary determination that an individual’s conviction history may result in adverse employment action, under the amended ordinance, the employer must provide a written pre-adverse action notice to the individual that outlines the following information: (1) notice of the disqualifying conviction(s) or anything else in the conviction record that serves as the basis for the preliminary determination and the employer’s reasoning for the disqualification; (2) a copy of the conviction record, if any; and (3) an explanation of the individual’s right to respond to the determination before it becomes final. Following issuance of the pre-adverse notice, the employer must provide the individual with at least five (5) business days to respond before finalizing the decision.

Following the five business days, if the employer makes a final determination to disqualify or take other adverse action because of the individual’s conviction history, the employer must provide the individual with notice of the decision in writing. This final adverse action notice must include: (1) notice of the disqualifying conviction(s) or anything else in the conviction record that serves as the basis for the final determination and the employer’s reasoning for the disqualification; (2) any procedure the employer maintains where the individual may challenge the decision; and (3) information regarding the individual’s right to file a charge with the Chicago Commission on Human Relations (CCHR).

 

Action Items

1. Update background screening procedures for compliance, including conducting an individualized assessment.
2. Implement written pre-adverse and adverse notices for use the background screen process.
3. Have appropriate personnel trained on background screening requirements.
4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

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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. © 2023 ManagEase

APPLIES TO All Employers with MN Employees

EFFECTIVE As Indicated

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look The Minnesota Omnibus Jobs Bill creates Earned Sick and Safe Leave and Parental Leave, creates additional accommodations for lactating and pregnant employees, prohibits non-competes and captive audience meetings, and creates a reasonable accommodation fund. A state-funded Paid Family and Medical Leave insurance program effective January 1, 2026 entitles employees to up to 12 weeks of family leave benefits and up to 12 weeks of medical leave benefits. Employees have certain protections from drug testing and adverse actions related to lawful off-duty consumption of marijuana.

Discussion

The Minnesota Omnibus Jobs Bill was recently signed into law and includes a number of employee leave entitlements and protections. Many of the provisions go into effect as early as July 1, 2023, so employers should work to revise their policies and practices immediately.

• Earned Sick and Safe Leave. The Earned Sick and Safe Leave (ESSL) law allows employees to accrue one hour of leave for every 30 hours worked, up to a total of 48 hours per year. Carryover is permitted but may be capped at 80 hours. Employers may also frontload 80 hours of leave as an alternative. Employees are eligible if they have performed work for at least 80 hours in a year in Minnesota. Accruals will begin January 1, 2024 when the law becomes effective. The many qualifying reasons for leave include time off due to the employee’s own medical condition, care for a family member, absences related to domestic violence for the employee or a family member, absences related to communicable diseases, or the closure of a workplace, school, or care facility due to weather or a public emergency. Retaliation for the exercise of rights under the ESSL is prohibited. Employers must also provide notice regarding the ESSL to employees. Employers in Minneapolis, St. Paul, and Bloomington should note the ESSL does not preempt local ordinances although it is very similar to what is required by ordinances in these jurisdictions.
• Non-Competes Prohibited. Non-competes signed after July 1, 2023 are prohibited. The ban does not prohibit agreements that are agreed to (1) during the sale of a business where the agreement prohibits the seller from carrying on a similar business within a reasonable geographic area for a reasonable period of time; or (2) in anticipation of the dissolution of a business in which the dissolving partnership or entity agrees that the partners, members, or shareholders will not carry on a similar business in a reasonable geographical area for a reasonable period of time. Trade secret protection, confidentiality agreements, non-solicit agreements, and nondisclosures are still valid. The ban does not apply retroactively.
• Captive Audience Meetings. Employers are prohibited from holding mandatory meetings on unionization, political, or religious topics. Employers are also prohibited from taking adverse action against employees for failing to attend such meetings. It is likely this provision will face legal challenges since other similar pieces of legislation across the country have been challenged and struck down as violating the Supremacy Clause and the First Amendment of the U.S. Constitution.
• Lactation and Pregnancy Accommodations. Lactating employees are no longer limited to the first 12 months after the birth of a child to receive breaks to express milk. Employers also no longer have the right to deny breaks if doing so would disrupt business operations. Lactation spaces are also clarified to be clean, private, and secure with access to an electrical outlet. Reasonable modifications for pregnant workers now include more frequent or longer restroom, food, or water breaks; temporary leaves of absence; modifications to work schedule or job assignments; and more frequent or longer rest break periods. There is also now a notice requirement at the time of hire and when an employee makes an inquiry about or requests parental leave.
• Parental Leave. The unpaid parental leave law now applies to all employers. All Minnesota employers are required to provide 12 weeks of parental leave to all employees immediately upon the start of employment.
• Reasonable Accommodation Fund. Employers domiciled in and with their principal place of business in Minnesota with 500+ employees will now have access to a grant program to reimburse eligible employers for the cost of expenses incurred in providing reasonable accommodations for individuals with disabilities. Reimbursement is capped at $30,000. The fund will expire in 2025 or whenever the funding providing for its purpose expires.

In addition to the Omnibus Jobs Bill, the Governor signed into law two additional important pieces of legislation.

State-Funded PFML. HF 2 creates a state-funded Paid Family and Medical Leave insurance program effective January 1, 2026. Employees will be entitled to up to 12 weeks of family leave benefits and up to 12 weeks of medical leave benefits (20-week annual limit of combined medical and family leave for more than one qualifying event in a claim year). Qualifying reasons for leave include: 1) to address their own serious health condition, including pregnancy; 2) to care for a covered family member with a serious health condition; 3) to bond with a new child; 4) to address certain needs related to the domestic abuse, sexual assault, or stalking of the worker or the worker’s family member; and 5) to address certain needs arising from a family member’s military deployment.

Employers can offer a private plan, with approval from the state, if it includes equal or greater benefits than the state plan. The PFML runs concurrently with the FMLA. An employee may use vacation pay, sick pay, paid time off, or disability insurance in lieu of PFML benefits if the employee is concurrently eligible.  Such time off would be protected but the employee could not receive PFML benefits from the state.  Employees are also ineligible to receive PFML benefits for any week they are receiving payments related to the separation from employment or Social Security disability benefits. Receipt of workers’ compensation will result in a reduction of the amount of PFML benefits paid by the amount of the employee’s workers’ compensation payment.

An employer may choose to designate certain benefits such as salary continuation, vacation leave, sick leave, or other paid time off as a supplemental benefit payment, which can be used to “top off” the amount of PFML benefits received so that the employee receives their regular wage or salary. Employees may choose – but cannot be required – to use supplemental benefits concurrently with their PFML.

Recreational Marijuana. HF100 legalizes recreational marijuana and provides employee protections for lawful off-duty use. Possession and adult use of marijuana is permitted beginning August 1, 2023. Cannabis would no longer be a “drug” under Drug and Alcohol Testing in the Workplace Act (DATWA) but would allow testing through a new category of “cannabis testing.” This change requires employers to decide whether to test individuals for cannabis, reevaluate the circumstances in which they require cannabis testing, and amend their written policies to address new cannabis testing requirements.

There are two classes of positions for testing. Safety sensitive positions would still be subject to DATWA requirements. All other positions would be prohibited from requiring cannabis testing for the sole purpose of determining the presence or absence of cannabis. That means employers could no longer require pre-employment testing or random testing for cannabis. Employers could conduct reasonable suspicion cannabis testing as defined in the statute. Specifically, the employer could continue to require cannabis testing if it reasonably suspects that the employee: (1) is under the influence of drugs or alcohol; (2) violated the employer’s written rules prohibiting the use, possession, sale or transfer of drugs, alcohol, or cannabis during work; (3) has sustained a personal injury or caused another employee to sustain a personal injury; or (4) has caused a work-related accident or was operating or helping to operate machinery, equipment, or vehicles involved in a work-related accident.

The law clarifies the circumstances under which discipline may be imposed in the workplace for cannabis use. Specifically, the law states that employers may discipline, discharge, or take other adverse personnel action against an employee for cannabis use, impairment, sale or transfer while the employee is working, while the employee is on the employer’s premises, or while the employee is operating the employer’s vehicle, machinery, or equipment if the employer has enacted work rules regarding cannabis and cannabis testing in a DATWA-compliant policy. Employers may also impose discipline if, as the result of consuming cannabis, the employee “does not possess the clearness of intellect and control of self that the employee otherwise would have” or the employee has a confirmed positive result on a cannabis test. Employers are also allowed to take action if authorized under state or federal law or regulations, or if failing to do so would cause the employer to lose a federal monetary or licensing-related benefit.

 

Action Items

1. Implement policies and procedures for state-required paid sick leave.
2. Have non-compete agreements reviewed by legal counsel or otherwise eliminate use.
3. Have appropriate personnel trained on prohibited captive audience meetings.
4. Review and updated policies and practices as required.
5. Implement required parental leave notice.
6. Updated payroll processes to reflect deductions and accruals for leave.
7. Prepare to implement paid family and medical leave insurance.
8. Have substance abuse policies updated for marijuana use.
9. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

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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. © 2023 ManagEase