Federal Government Shutdown Averted … For Now

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Federal Government Employees & Federal Contractors

EFFECTIVE

September 30, 2023

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  • On September 30, 2023, the U.S. Senate passed a last-minute continuing resolution that will keep federal agencies open until November 17, 2023.
  • If, by November 17, 2023, Congress has not achieved a longer-term government funding solution, the government may face the threat of a shutdown, with various employment-related impacts on federal employees and government contractors.

Discussion

On September 30, 2023, the U.S. Senate passed a last-minute continuing resolution that will keep federal agencies open until November 17, 2023. President Biden signed the short-term spending bill just before midnight on September 30, 2023, temporarily averting a government shutdown that would have impacted millions of federal government employees and contractors.

The temporary funding bill allows the government to stay open for 45 days, giving the House and Senate more time to finish their funding legislation negotiations. However, if at the end of that 45-day period Congress has not reached an agreement that would grant the government a longer-term funding solution, the nation will face the threat of another potential government shutdown.

Who is impacted by a government shutdown?

All federal agencies are required to maintain contingency plans in the event of a government shutdown. Many of these contingency plans require reduced or no pay for federal workers, and in some cases, a forced furlough of thousands of government employees. Federal law says that employees who are in “non-essential” roles are prohibited from working during a lapse in government funding. With more than 800,000 government employees designated as “non-essential,” many federal operations may come to a standstill as a result of a potential shutdown.

Alternatively, those federal employees whose absence would endanger life or property, or whose responsibilities derive from the Constitution, are required to continue working, albeit with delayed paychecks or no paychecks during the shutdown period. This would include the almost 2-million United States military personnel who would be required to continue to perform their duties throughout the shutdown.

In past government shutdowns, federal employees have eventually received backpay. However, backpay was not fully guaranteed until 2019. A shutdown this year would be the first time all federal employees are guaranteed backpay ahead of a shutdown period.

Also impacted by a looming shutdown is the expansive group of government contractors who work for outside firms that are hired and funded by government agencies. A shutdown may present similar issues for federal contractors, who may also experience wage payment delays or potential furloughs. Unlike federal employees, government contractors are not guaranteed back pay once the shutdown is over.

What is a furlough?

A furlough is a temporary leave of absence initiated by an employer, typically due to economic hardship or a lack of available work. Employees affected by furloughs are required to take temporary time off, usually without pay. Furloughed employees technically remain employed; however, they may have the opportunity to seek temporary employment elsewhere, subject to any applicable state regulations or corporate policies.

A furlough is distinct from a layoff, which entails the permanent termination of an employee, usually related to economic or business reasons. Notably, furloughs are not used to address employee misconduct, which is a subject addressed by employee discipline or termination.

Are there EEO considerations associated with a furlough?

As always, when making any decisions impacting the terms, conditions, or privileges of an individual’s employment, employers must refrain from any unlawful, discriminatory, or retaliatory action. This requires that, when selecting employees for furlough or a reduction in working hours, employers use consistent and articulable metrics that are evenly applied across their workforce, and which are consistent with the company’s legitimate business interests (e.g., newest hired, department shutdown, etc.). Otherwise, employers may risk exposure for claims of discrimination or retaliation.

What are the wage and hour considerations associated with a furlough?

Under the federal Fair Labor Standards Act (FLSA), exempt employees must be paid the same minimum salary for each pay period in which they perform any amount of work (with limited exceptions). Notably, the FLSA cautions that employers may not make deductions to an exempt employee’s predetermined salary for absences “occasioned by the employer” or caused by “the operating requirements of the business.” Therefore, while an employer may withhold payment for a full week in which the exempt employee does not work at all, the employer cannot reduce an exempt employee’s salary based on a partial week in which the employee did not perform work. Doing so may jeopardize the employee’s exempt status by violating the “salary-basis” requirements.

Additionally, under the FLSA, employers must compensate non-exempt workers for any work actually performed. Because of this, employers should carefully instruct both exempt and non-exempt furloughed employees not to perform any work while on furlough status. This may include a restriction on email access or revocation of company-issued phones to ensure that employees are not performing any type of work-related duties while on furlough.

Before taking any action with respect to wage and hour reductions for exempt or non-exempt employees during a furlough, employers are encouraged to speak with legal counsel about proper compliance with applicable federal, state and local wage and hour laws.

Does a furlough require notice under the WARN Act?

The federal Worker Adjustment and Retraining Notification (WARN) Act took effect in 1989 to protect workers, their families, and communities by ensuring workers receive advance notice about qualified plant closings and mass layoffs. Notably, the WARN Act requires an “employment loss,” which is defined as: (1) an employment termination; (2) a layoff exceeding six months; or (3) a reduction in an employee’s hours of work of more than 50 percent in each month of a six-month period.

That said, federal, state, and local government entities that provide public services are not covered by the WARN Act, and therefore, federal employees furloughed due to an impending government shutdown would not be entitled to the advance notice requirements. On the other hand, government contractors may be subject to the WARN Act’s requirements, depending on the circumstances of the furlough.

Traditionally, the WARN Act’s notice requirements do not apply to furloughs if the employer communicates that the furlough is temporary and that employees can expect to return to work within six months. Because an anticipated government shut down is unlikely to exceed six months, the WARN Act is unlikely to be triggered for most government contractors. However, if circumstances change and a temporary furlough extends beyond six months or becomes a permanent layoff, then the WARN Act’s notice obligations may be triggered.

Despite the WARN Act’s seemingly straightforward application, the U.S. Department of Labor (DOL) issued a guidance letter in 2012 urging government contractors not to issue WARN notices when facing the increased possibility of sequestration. The DOL’s rationale that government contractors were not entitled to the WARN Act’s notice requirements was premised on the fact that contractors did not know specifically who was going to be laid off, and further, whether they would even be affected by the sequestration. Because of this, the DOL opined that government contractors did not have the appropriate information to provide proper WARN notices, until such time that specific closings or mass layoffs became “reasonably foreseeable.” The DOL could interpret the circumstances surrounding a government shutdown similarly, however, they have not specifically addressed the situation in recent guidance. More significantly, there is no guarantee that a court reviewing the matter would give deference to the DOL’s opinion.

While the DOL is not the entity that enforces the WARN Act, they do provide compliance assistance materials that employers may consult to determine at what time certain notice obligations may be triggered. There may also be state-specific laws that apply (i.e., “mini-WARN laws”) regarding long-term furloughs or permanent reductions in force that impose notice requirements distinct from the WARN Act. Because of these complexities, employers are encouraged to speak with legal counsel to determine their compliance obligations for providing any advance notice to employees ahead of a shutdown period.

Are furloughed workers eligible for unemployment compensation?

Furloughed employees may become eligible for unemployment compensation; however, unemployment compensation requirements will differ by state. Some states may require a one-week waiting period before an individual qualifies for payments, whereas some do not. Additionally, certain states typically require proof that an individual is seeking work to qualify for unemployment compensation, but this requirement may be suspended for furloughed workers impacted by the government shutdown.

Federal employees who qualify for unemployment compensation during furloughs often must return the money after the government reopens and they receive retroactive back pay. Government contractors who receive unemployment compensation, and who do not receive retroactive backpay, may not be required to return the money once they have been restored to their prior positions.

Government employees who are required to continue to work without pay during the furlough are not eligible for unemployment compensation, per the U.S. State Department’s Furloughed Employees Handbook.

Do furloughed workers remain eligible to participate in an employer’s benefits plan?

Health insurance coverage generally continues for federal employees during a shutdown. Agencies continue to process transactions for the Federal Employee Health Benefits (FEHB) program (among others); however, employee premium payments are typically paused during a shutdown. Once the shutdown ends, furloughed employees will begin repaying accumulated FEHB premiums through a payroll withholding.

For furloughed government contractors, the question of benefits eligibility is not as straightforward. Most employer benefits plans set forth certain eligibility requirements, such as a minimum number of working hours required for eligibility in the plan. As a result of a furlough, impacted government contractors will experience a reduction in their working hours, which may cause them to drop below the minimum number of hours required to remain eligible for their employer’s benefits plan. If an impacted employee drops below the required number of hours, employers may need to terminate the employee’s benefits, pursuant to their plan’s documents.

Employers of government contractors should review their plan documents to determine eligibility requirements and speak with their plan administrators about preparations needed to potentially terminate coverage.

Is a furlough a COBRA-qualifying event?

If a reduction in an employee’s hours causes them to lose coverage under the terms of the employer’s COBRA-covered health plan, the employer is required to send out qualifying event notices to impacted employees. Impacted employees and their qualified beneficiaries must be offered the opportunity to continue coverage during the furlough period at their own expense, up to the maximum COBRA continuation period.

Takeaways

While this list is not exhaustive, it illustrates that a government shutdown requires careful consideration of various employment-related issues, including those related to wage and hour, employee benefits, the WARN Act, and anti-discrimination concerns. In the event that a longer-term funding solution is not achieved by the November deadline, employers who expect to be impacted by a potential government shutdown should consult with legal counsel regarding their specific compliance obligations and begin necessary preparations now.

Action Items

  1. Continue to monitor updates to Congress’ funding legislation negotiations.
  2. Consult with legal counsel regarding specific compliance obligations in the event of a government shutdown.

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

OSHA: Employee Shooting was Work-Related and Recordable

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All Employers

EFFECTIVE

May 17, 2023

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  • An employee’s injury resulting from an act of violence is considered work-related and recordable through a broad approach to determining “work relatedness” at the time of the injury.

Discussion

In a previous interpretation letter, the Occupational Safety and Health Administration (OSHA) clarified that an employee’s injury resulting from an act of violence is considered work-related and recordable through a broad approach to determining “work-relatedness” at the time of the injury. Here, the driver of a company vehicle, during working hours and traveling on a public roadway between service calls, neared an intersection where a four-car collision occurred due to a wrong-way driver. The wrong-way driver then shot the company driver and stole their company vehicle, fleeing the scene. There was no evidence the company driver provoked the act of violence in any way.

For purposes of determining whether an event is recordable, an injury is deemed work-related if an event in the work environment either caused or contributed to the injury, subject to limited exception. More specifically, work only needs to be a causal factor to the injury. “Work environment” is defined as “the establishment and other locations where one or more employees are working or are present as a condition of their employment.” A rebuttable “geographic presumption” applies to injuries caused by events that occur in the work environment, and are thus considered work-related. This can include injuries from an event at work that is outside the employer’s control.

In this case, the employee was in a work environment because he was driving a company vehicle and was traveling for work between service calls. Work relatedness requires the employee to be engaged in the interest of the employer as a condition of their employment. OSHA also stated that employers cannot be allowed to exclude random acts of violence from their logs of injuries and illnesses. “The issue is not whether the conditions could have, or should have, been prevented or whether they were controllable, but simply whether they are occupational, i.e., are related to work.” Importantly, recording or reporting a work-related injury, illness, or fatality does not mean that the employer or employee was at fault, that an OSHA rule has been violated, or that the employee is eligible for workers’ compensation or other benefits. Recording a case on the employer’s log only indicates that 1) an injury or illness has occurred; 2) the case is work-related; and 3) the case is non-minor. Applying these factors, OSHA determined the shooting injury was work-related and recordable.

Action Items

  1. Review the OSHA interpretation letter.
  2. Review and audit injury and illness logs for accuracy and compliance.
  3. Have appropriate personnel trained on recording requirements.

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

DACA Final Rule is Unlawful

APPLIES TO

All Employers

EFFECTIVE

September 13, 2023

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  • The U.S. District Court for the Southern District of Texas ruled the Deferred Action for Childhood Arrivals (DACA) final rule to be unlawful.
  • Employment authorization documents (EADs) for current DACA recipients will remain valid until they expire.

Discussion

The U.S. District Court for the Southern District of Texas determined the Deferred Action for Childhood Arrivals (DACA) final rule was unlawful. However, the court maintained a partial stay of the previous July 16, 2021 order for “all DACA recipients who received their initial DACA status prior to July 16, 2021. DACA protects certain undocumented immigrants from deportation if they were brought to the United States as children. DACA also provides such undocumented immigrants with employment authorization. The DACA final rule issued by the Biden Administration largely mirrored the program as it was created in 2012. Of note for employers, it clarified that expunged convictions, juvenile delinquency adjudications, and immigration-related offenses characterized as felonies or misdemeanors did not automatically make someone ineligible for DACA. Also, work authorization received through DACA ends only when someone’s DACA status is terminated, not if deportation proceedings are started.

The ruling means: 1) U.S. Citizenship and Immigration Services (USCIS) will continue to accept DACA applications but will not process any initial requests; 2) employment authorization documents (EADs) for current DACA recipients will remain valid until they expire; and 3) USCIS will continue to accept and process DACA renewal requests and EAD applications in connection with active DACA grants. This decision is highly likely to be appealed to the Fifth Circuit Court of Appeals. Employers should continue to accept unexpired, valid EADs for any current DACA recipients they may employ.

Action Items

  1. Review EAD expiration dates for further action.
  2. Have appropriate personnel trained on work authorization requirements.

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

EEOC Releases Strategic Enforcement Plan for Fiscal Years 2024-2028

APPLIES TO

Employers with 15+ Employees

EFFECTIVE

October 1, 2023

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  • The EEOC released its Strategic Enforcement Plan for fiscal years 2024-2028, which outlines the EEOC’s subject matter priorities to achieve its mission of preventing and remedying unlawful employment discrimination.

Discussion

On September 21, 2023, the Equal Employment Opportunity Commission (EEOC) released its Strategic Enforcement Plan (SEP) for fiscal years 2024-2028. The SEP establishes the EEOC’s subject matter priorities to achieve its mission of preventing and remedying unlawful employment discrimination.

Earlier this year, the EEOC published its Strategic Plan for Fiscal Years 2022-2026, which serves as an overarching framework for achieving the EEOC’s mission. The SEP will work together with the Strategic Plan by establishing substantive law enforcement priorities. Notable aspects of the SEP include:

  • Targeting discrimination, bias, and hate directed against religious minorities (including antisemitism and Islamophobia), racial or ethnic groups, and LGBTQI+ individuals;
  • Expanding the vulnerable and underserved worker priority to include additional categories of workers who may be unaware of their rights under equal employment opportunity (EEO) laws, may be reluctant or unable to exercise their legally protected rights, or have historically been underserved by federal employment discrimination protections;
  • Updating the emerging and developing issues priority to include protecting workers affected by pregnancy, childbirth, or related medical conditions, including under the new Pregnant Workers Fairness Act (PWFA) and other EEO laws; employment discrimination associated with the long-term effects of COVID-19 symptoms; and technology-related employment discrimination;
  • Highlighting the continued underrepresentation of women and workers of color in certain industries and sectors, such as construction and manufacturing, finance, tech and other science, technology, engineering, and mathematics fields;
  • Recognizing employers’ increasing use of technology, including artificial intelligence and machine learning, to target job advertisements, recruit applicants, and make or assist in hiring and other employment decisions; and
  • Preserving access to the legal system by addressing overly broad waivers, releases, non-disclosure agreements, or non-disparagement agreements when they restrict workers’ ability to obtain remedies for civil rights violations.

The new SEP also commits the EEOC to supporting employer efforts to proactively identify and address barriers to equal employment opportunity, cultivate a diverse pool of qualified workers and foster inclusive workplaces.

The 2024-2028 SEP was developed in conjunction with input from the public through a series of three public listening sessions, in which the EEOC heard from a total of 35 witnesses, including representatives from civil rights and workers’ rights organizations, unions, employer and human resources representatives, scholars, and attorneys representing plaintiffs and defendants in employment discrimination matters.

Action Items

  1. Review the EEOC’s full 2024-2028 SEP here.
  2. Ensure workplace policies comply with applicable EEO requirements.

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

Seventh Circuit: Employers May Be Obligated to Provide Accommodations for Work Commute

APPLIES TO

All Employers with 15+ Employees in IL, IN, and WI

EFFECTIVE

July 28, 2023

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  • Employers may be required to provide reasonable accommodations under the Americans with Disabilities Act (ADA) for employees to safely commute to work.

Discussion

In EEOC v. Charter Communications, LLC, the Seventh Circuit Court of Appeals said that employers may be required to provide reasonable accommodations under the ADA for employees to safely commute to work. Here, a Character Communications employee had a vision disability making nighttime driving unsafe. Public transportation was not an option, so the employee requested a change to their work schedule to reduce the possibility of nighttime driving during the commute home. Charter Communications granted the request for thirty days but refused to extend it any further. The Equal Employment Opportunity Commission (EEOC) sued on the employee’s behalf for failing to accommodate a disability under the ADA.

The court said an employee with a disability may be entitled to a work schedule accommodation for commuting where the commute is a prerequisite to an essential job function. In this case, physical attendance was an essential function of the job which was limited by the disability. The court, however, stopped from adopting a bright-line rule requiring accommodations for commuting. Employers, generally, have no duty to accommodate an employee with a disability for their commute to and from work. The determination of whether it is required is a “highly fact-specific inquiry that considers the needs of both employer and employee.” Before providing such an accommodation, employers are instructed to consider factors like the efficacy of the proposed accommodation, its effects on the employer’s business operations, effects on other employees’ workloads and schedules, and effects on seniority systems and collective bargaining systems.

Action Items

  1. Review procedures for granting and denying reasonable accommodations.
  2. Have appropriate personnel trained on the requirements.
  3. Consult with legal counsel prior to denying a request for reasonable accommodations.

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

Ninth Circuit: Affirms Employer’s Obligation Under the Labor Condition Application

APPLIES TO

All Employers with Employees in AK, AZ, CA, HI, ID, MT, NV, OR, WA, Guam, and the Northern Mariana Islands

EFFECTIVE

August 1, 2023

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  • The Ninth Circuit affirmed an employer’s duty to comply with the attestations made under the Labor Condition Application (LCA) to pay its foreign national employees during the LCA’s period of authorized employment.

Discussion

The Ninth Circuit Court of Appeals recently affirmed an employer’s duty to comply with the attestations made under the Labor Condition Application (LCA) to pay its foreign national employees during the period of authorized employment that is outlined within the LCA. An LCA is an application filed with the U.S. Department of Labor (DOL) by a U.S. employer on behalf of a foreign national worker who will apply for non-immigrant work visas in the H-1B, H-1B1, and E-3 statuses.

In Persian Broadcast Service Global, Inc. v. Walsh, a former employee filed an administrative complaint with the DOL’s Wage and Hour Division, arguing that his employer failed to pay him the full amount of his wages as specified in the two LCA’s that the employer had filed in connection with his employment. An LCA binds an employer to pay the required wages for the period of authorized employment, as stated within the LCA. Only two exemptions exist which can eliminate an employer’s legal obligation to do so: (1) when an employee is non-productive for personal reasons; or (2) when there has been a bona fide termination of the employment relationship.

In this case, the employer filed the first LCA requesting one full-time “TV producer and reporter” position with an annual salary of $45,000 per year, for a period of two years. The second LCA sought to extend the employee’s work authorization period by an additional two years, at an annual salary of $60,000 per year. Over the course of the employee’s engagement with the company, the employer paid him irregularly and sporadically in amounts between $300 and $2,300. At various points of his engagement, the company indicated to the employee that they could not afford to pay him. However, the employee argued that at no point did he interpret the employer’s comments to be a notice of termination. In all, the employer paid the employee a total of $20,581 for the entire period of his employment spanning four years. Ultimately, the Ninth Circuit said that the employer was responsible for payment of wages outlined under the LCA attestations.

Action Items

  1. Pay employees according to the terms of their applicable LCAs.

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

Ninth Circuit: Furlough Requires Payment of Final Wages

APPLIES TO

All Employers with Employees in CA

EFFECTIVE

September 22, 2023

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  • The Ninth Circuit Court of Appeals determined that furloughed employees are entitled to immediate payment of their accrued vacation time when furloughed without a specific return date.

Discussion

The Ninth Circuit Court of Appeals determined that furloughed employees are entitled to payment of their accrued vacation time immediately upon furlough, even if the employees are not permanently terminated until a later date.

In Harstein v. Hyatt Corporation, a former employee filed a class and Private Attorneys’ General Act (PAGA) claim, alleging that her former employer failed to timely pay the accrued vacation time to employees who were furloughed in March of 2020, even though the employees were not officially terminated from their employment until June of 2020. Under California law, a failure to pay all unused accrued vacation time, along with all other wages earned immediately at the time of termination, triggers penalties of a day’s wages until all final wages are paid (i.e., waiting time penalties), which are generally capped at 30 days.

California’s Labor Code requires that, when an employment relationship comes to an end, employers must promptly pay any unpaid wages to the departing employee. More specifically, when an employer discharges an employee, the wages earned and unpaid at the time of the discharge become due and payable immediately. In deciding this case, the Ninth Circuit relied primarily on a non-binding Department of Labor Standards Enforcement (DLSE) opinion letter and the DLSE’s Policies Interpretations Manual, which state that when an employee is temporarily laid off without a specific return date within the normal pay period, employment should be treated as “terminated,” and therefore, final wages become due to be paid immediately.

The Court found that, because the employees were temporarily laid off in March 2020 for longer than a normal pay period and without notice of a specific return date, the employer should have paid the accrued vacation pay in March 2020 when it issued the furlough, rather than in June 2020 when the furlough became a permanent layoff.

The case has been sent back to the district court for further consideration on whether the employer’s actions were willful, so employers should continue to monitor the progression and interpretations in this case.

Action Items

  1. Review final pay practices and revise for compliance with this updated standard.
  2. Consult with legal counsel regarding specific application of this standard to individual furlough circumstances.

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

California: It’s “Shocktober” Once Again! What is Changing in 2024?

APPLIES TO

As Indicated

EFFECTIVE

As Indicated

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  • Construction worksites must implement appropriate toilet facilities for female and non-binary employees.
  • Public prosecutors will have the ability to prosecute civil and criminal actions for violations of certain provisions of the Labor Code.
  • The mandatory Wage Theft Notice will be updated for emergency and disaster declarations, and for agricultural worker rights.
  • Grocery worker rights are expanded during change of store ownership.
  • Employment complaints of sexual assault, harassment, discrimination, and retaliation are protected against claims of defamation.
  • “Sensitive personal information” under the CCPA includes personal information that reveals a consumer’s citizenship or immigration status.
  • Noncompete provisions in employment contracts are void.
  • CPRA protects data privacy rights regarding contraception, pregnancy care, and perinatal care, including abortion services.
  • Covered fast food workers must earn $20/hr. as of April 1, 2024.
  • Mandated reporting at long-term care facilities is changed when abuse is caused by another resident of the facility with dementia.
  • People with concealed carry firearms licenses may only enter commercial establishments open to the public with their concealed carry firearms if there is a sign posted notifying them that they may do so.
  • There is a rebuttable presumption of retaliation if an employer takes adverse action against an employee within 90 days following certain protected activities.
  • Minimum wage will increase for covered healthcare workers as of June 1, 2024.
  • Employers must implement a workplace violence prevention plan as part of their Injury and Illness Prevention Plans by July 1, 2024.
  • State mandatory paid sick leave increases to 5 days/40 hours per 12-month period.
  • Employers are prohibited from inquiring about job applicants’ prior marijuana use, subject to limited exception.
  • Employees in the hospitality and business service provider industries who were laid off during the COVID-19 pandemic have rehire rights through December 31, 2025.

Discussion

It’s that time of year again! California’s governor had until October 14th to sign or veto the bills that the state legislature sent to his desk. The employment laws passed this year do not disappoint the tradition of “Shocktober.” The following is a summary of the key bills employers should be aware of. All bills go into effect on January 1, 2024 unless otherwise noted.

ENACTED BILLS

AB 521 | Toilet Facilities at Construction Worksites. In an effort to protect women and nonbinary individuals at construction sites, this bill exempts construction jobsites from the single-user toilet rule, which requires single-user restrooms to be available to all genders. By the end of 2025, the standards board is required to consider adopting regulations that require at least one single-user toilet facility on all construction jobsites, designed for employees who self-identify as female or nonbinary.

AB 594 | Public Prosecution. In addition to the authority already held by the Labor Commissioner to prosecute violations of the Labor Code, this bill gives public prosecutors the ability to prosecute civil and criminal actions for violations of certain provisions of the Labor Code. Prosecution under this bill would be separate from potential recovery under a Private Attorneys General Act (PAGA) lawsuit.

AB 636 | Wage Theft Notice Update; Agricultural Workers Notice. Employers are currently required to provide employees with a wage theft notice pursuant to Labor Code § 2810.5. As of March 1, 2024, this bill amends the required notice to include information about the existence of a federal or state emergency or disaster declaration applicable to the county or counties where the employee is to be employed, and that was issued within 30 days before the employee’s first day of employment, that may affect their health and safety during their employment.

As of March 15, 2024, the bill also requires employers with employees who are authorized to work under an H-2A agricultural visa to include in the Section 2810.5 notice, in Spanish, a separate section describing an agricultural employee’s rights under state law, such as the H-2A visa wage rate, overtime rates, frequency of pay, pay for piece rate workers, rest periods, travel time compensation, employee housing rights, itemized wage statements, sexual harassment prohibitions, workplace safety requirements, improper wage deductions, employee-paid health insurance, rick to sick leave, workers’ compensation coverage, and the right to complain to government agencies and seek advice from collective bargaining representatives. This entire Section 2810.5 notice must be provided to the H-2A visa employee on their first day of work in Spanish and in English upon request.

The Labor Commissioner will provide an updated notice before the deadlines. The revised Section 2810.5 notice can also meet the notice requirements for non-H-2A visa employees.

AB 647 | Grocery Ownership Transfer and Worker Protections. This bill expands existing protections for grocery workers when there is a change in ownership. The protections are expanded to include the purchase or acquisition of a grocery establishment. A grocery establishment is also expanded to include its distribution centers that are used primarily to distribute goods to or from its owned stores. A grocery establishment does not include a retail store that ceased operations for 12 months or more, up from six months. “A successor grocery employer may be the same entity as an incumbent employer when a change in control occurs but the covered employer remains the same.” Importantly, when the sum of both the incumbent and successor grocery employers, immediately prior to the change in control, is less than 300 nationwide, those employers are exempt from the retention rules.

An incumbent grocery employer and any collective bargaining representative must provide the successor grocery employer with information about their employees, which will now include their cell phone number and email address. The bill also adds anti-retaliation protections as well as the ability to bring a lawsuit against an employer for violations of the retention requirements.

AB 933 | Protected Complaints. This bill expands protections for individuals from being subject to defamation lawsuits if they have engaged in privileged “communications”. “Communication” includes factual information related to the individual experiencing sexual assault; an act of workplace harassment or discrimination; failure to prevent an act of workplace harassment or discrimination; aiding, abetting, inciting, compelling, or coercing an act of workplace harassment or discrimination; or an act of retaliation against a person for reporting or opposing workplace harassment or discrimination. If the individual successfully defends a defamation lawsuit involving their protected communication, that individual is entitled to their reasonable attorney’s fees and costs, plus treble damages, punitive damages, or any other relief otherwise permitted by law.

AB 947 | California Consumer Privacy Act (CCPA) Amended. This bill expands the definition of “sensitive personal information” under the CCPA to include personal information that reveals a consumer’s citizenship or immigration status.

AB 1076 | Noncompete Agreements Void. This bill seeks to codify the 2008 ruling in Edwards v. Arthur Andersen LLP, consistent with existing law, which voids noncompete provisions in employment contracts. For previously signed noncompete agreements by employees hired on or after January 1, 2022, employers must notify employees that those agreements are void by February 14, 2024.

AB 1194 | California Privacy Rights Act (CPRA). Under the CPRA, if the consumer’s personal information contains information related to accessing, procuring, or searching for services regarding contraception, pregnancy care, and perinatal care, including abortion services, this bill requires a business to comply with the CPRA’s requirements unless the personal information is used for specified business purposes, is only retained in aggregated and deidentified form, and is not sold or shared. The CPRA requirements restrict businesses from cooperating with a government agency request for emergency access to a consumer’s personal information regarding contraception, pregnancy care, and perinatal care, including abortion services, except that businesses will still have a duty to preserve or retain evidence under California or federal law in an ongoing civil proceeding.

AB 1228 | Fast Food Worker Rights Revised. In 2022, AB 257 enacted significant employer rules for the fast food industry, including a Fast Food Council that would have broad authority. AB 1228 is viewed as a compromise to settle a pending referendum on that law. Going forward, fast food employers of national chains with more than 60 establishments will have a $20/hour minimum wage rate for covered employees as of April 1, 2024. There would still be a Fast Food Council but with less authority than previously envisioned. AB 1228 also does not create joint liability for franchisors and franchisees as the previous law would have. The law will only be in effect through 2029, unless extended by the legislature.

AB 1417 | Mandated Reporting at Long-Term Care Facilities. Existing law requires specified people, known as mandated reporters, to report cases of elder or dependent adult abuse. This bill changes the time a mandated reporter would be required to submit a written report if abuse occurring in a long-term care facility is caused by another resident of the facility with dementia, and there is no serious bodily injury, to be within 24 hours, rather than two hours. The written report must be submitted to the long-term care ombudsman and the local law enforcement agency. In all other instances at a long-term care facility, immediately or as soon as practically possible, but no longer than two hours, the mandated reporter would be required to submit a verbal report to the local law enforcement agency, and to submit a written report within 24 hours to the long-term care ombudsman, the local law enforcement agency, and the corresponding state licensing agency.

SB 2 | Concealed Carry Authorization from Commercial Businesses. In addition to other locations, this bill prohibits people with concealed carry firearms licenses from doing so on any privately owned commercial establishment that is open to the public, unless the operator of the establishment clearly and conspicuously posts a sign at the entrance of the building or on the premises indicating that licenseholders are permitted to carry firearms on the property.

SB 497 | Presumption of Retaliation. This bill creates a rebuttable presumption of retaliation if an employer takes adverse action against an employee within 90 days following certain protected activities, such as making a claim for unpaid wages; bringing a claim or testifying in a proceeding subject to PAGA; or seeking to enforce their rights under the state’s equal pay law.

SB 525 | Minimum Wage Increase for Healthcare Workers. This bill sets a state standard for minimum wage rates for healthcare workers, including those who provide patient care, health care services, or services supporting the provision of health care (e.g., janitors, housekeeping staff, groundskeepers, guards, clerical workers, administrative employees, food service workers, medical billing personnel, and laundry workers). Minimum wage rates are set to go into effect, starting June 1, 2024, as follows:

  • Healthcare facility employers with more than 10,000 workers, and dialysis clinics – $23/hr. in 2024, $24/hr. in 2025, and $25/hr. in 2026.
  • Hospitals with a “high governmental payor mix” (Medi-Cal and Medicare patients), and rural independent hospitals – $18/hr. in 2024, with 3.5% increases annually, up to $25/hr. by 2033.
  • Community clinics – $21/hr. in 2024, $22/hr. in 2026, and $25/hr. in 2027.
  • Other covered health care employers – $21/hr. in 2024, $23/hr. in 2026, and $25/hr. in 2028.

County owned, affiliated, or operated healthcare facilities have delayed compliance to January 1, 2025.

SB 553/SB 428 | Workplace Violence Prevention Standard. This bill requires covered employers to implement a workplace violence prevention plan (as part of their Injury and Illness Prevention Plans) by July 1, 2024, subject to limited exception. There are also recordkeeping and training requirements. The Cal/OSHA Standards Board must adopt applicable standards by the end of 2026. Starting on January 1, 2025, this bill also permits employers to seek temporary restraining orders on behalf of their workers in response to harassment, or a threat of or actual workplace violence.

SB 616 | Paid Sick Leave Increased. This bill increases the state’s minimum paid sick leave entitlement from 3 days/24 hours to 5 days/40 hours per year. Usage may be limited to 5 days/40 hours and accrual may be capped at a minimum of 10 days/80 hours. The bill also preempts local paid sick leave laws on the topics of no payout on termination, reinstatement of accrued paid sick leave on rehire, lending advanced paid sick leave accruals to employees, calculation of paid sick leave, employee notice of paid sick leave, and timing of payment of paid sick leave.

SB 700 | Marijuana Protections. Except when permitted during a background screen, this bill prohibits employers from inquiring about job applicants’ prior marijuana use. The bill does not preempt federal or state law requiring drug testing for controlled substances, and does not apply to the building and construction industries. Employers may still maintain drug-free workplace policies.

SB 723 | Rehiring Displaced Workers. Existing Labor Code § 2810.8 includes rehiring requirements for those in the hospitality and business service provider industries who were laid off during the COVID-19 pandemic. This bill expands application of the rehiring requirements to include a presumption that covered employees who were separated from employment after March 4, 2020 due to a lack of business, reduction in force, or other economic, nondisciplinary reason were due to a reason related to the COVID-19 pandemic, unless the employer establishes otherwise by a preponderance of the evidence. This means that former employees who meet this criteria must be offered re-employment when positions are available for which they qualify, in addition to other notice and recordkeeping requirements. This law will remain effective through December 31, 2025.

SB 848 | Leave for Reproductive Loss. This bill requires private employers with five or more employees, and public employers, to provide 5 days’ unpaid leave for reproductive loss (i.e., failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction) within three months of the loss event or following the conclusion of other leave then being taken. Leave need not be taken consecutively. For multiple reproductive loss events, total leave is not required to exceed 20 days in a 12-month period. Employees who have worked for at least 30 days prior to the need for leave are eligible.

VETOED BILLS

While that may seem like a daunting list, you may be wondering what got vetoed. Here are a few of those vetoed bills worth noting.

  • AB 575 | Paid Family Leave (PFL) Expansion. This bill would have expanded PFL benefits to an employee taking leave to bond with a minor child within one year of an individual’s assumption of responsibilities for the child in loco parentis.
  • AB 1356 | WARN Act Expansion. This bill would have extended the advance layoff notice required under the WARN Act from 60 days to 75 days. “Covered establishment” would have also covered a group of locations including any facilities located in the state.
  • SB 799 | Unemployment Benefits for Striking Workers. This bill would have extended unemployment benefits to employees who leave work because of a trade dispute.
  • SB 403 | Caste Protections. The bill would have included “caste” as a classification protected against discrimination under FEHA. The Governor vetoed the bill stating that caste discrimination is already prohibited through the current list of FEHA protected categories.
  • SB 731 | Return-to-Work Notice. This bill would have required employers to provide remote employees with at least 30 days’ advance notice that they will be required to return to work in person.
  • SB 725 | Extended Grocery Worker Protections. This bill would have required a successor grocery employer to provide a dislocated grocery worker allowance equal to one week of pay for each full year of employment if the successor grocery employer did not hire an eligible grocery worker following a change in control or did not retain them for at least 90 days following the change in control.
  • AB 524 | Family Caregiver Status Classification. This bill would have added “family caregiver status” to the list of categories protected against discrimination under FEHA.

Action Items

  1. Review applicable bills.
  2. Have employer policies updated for compliance.
  3. Update required notices.
  4. Prepare for minimum wage increases.
  5. Update pre-employment processes regarding marijuana inquiries, if applicable.
  6. Review noncompete agreements with legal counsel and provide required void notice.
  7. Update paid sick leave policies and accruals for compliance.
  8. Have appropriate personnel trained on updated requirements.

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

Georgia: Restrictive Covenant Must be Enforceable Under Georgia Law for Foreign Choice-of-Law Provisions

APPLIES TO

All Employers with Employees in GA

EFFECTIVE

September 6, 2023

  

QUESTIONS?

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Quick Look

  • The Georgia Supreme Court ruled a restrictive covenant must be enforceable under Georgia law before applying a foreign choice-of-law provision.

Discussion

In Motorsports of Conyers, LLC v. Burbach, the Georgia Supreme Court ruled a restrictive covenant must be enforceable under Georgia law before applying a foreign choice-of-law provision. Here, two motorcycle dealerships sought to enforce a restrictive covenant against a former employee under Florida law. A Florida choice-of-law provision governed the employment contracts containing the restrictive covenants. In its ruling, the Georgia Supreme Court found that applying the Georgia Restrictive Covenant Act (GRCA) is the first step in deciding whether a public policy exception overrides a foreign choice-of-law provision.

The GRCA codified case law distinguishing between restrictive covenants that are reasonable and unreasonable. Reasonable restrictive covenants are those that have limitations on scope, duration, and geographic reach. Contracts that do not have such restrictions are a restraint of trade and contrary to public policy. The GRCA allows courts to blue-pencil such unreasonable restrictive covenants to allow them to be enforced in part under Georgia law. As such, the Court returned the case to the trial court to first apply the GRCA framework prior to determining whether the foreign choice-of-law provision applies. Employers hoping to enforce a foreign choice-of-law provision in Georgia courts should consult with legal counsel first.

Action Items

  1. Consult with legal counsel to determine enforceability of restrictive covenants.

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

Illinois: Recent Legislative Updates

APPLIES TO

As Indicated

EFFECTIVE

January 1, 2024

  

QUESTIONS?

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Quick Look

  • New hire reporting requirements will require employer reporting of newly hired independent contractors.
  • The Illinois Transportation Benefits Program (TBP) Act will require covered employers to provide covered employees with a commuter benefit.
  • The Smoke Free Illinois Act will prohibit the use of electronic cigarettes in the workplace.

Discussion

The conclusion of Illinois’ most recent legislative session has resulted in several additional laws that affect employee rights or employer obligations. Employers should begin to review these new and amended laws to prepare for their upcoming impacts. All bills go into effect January 1, 2024.

HB 1363 | Amended Gender Violence Act. The Illinois Gender Violence Act is amended to impose potential liability on a covered employer for gender-related violence that is committed in the workplace by an employee or agent of the employer, when the violence arises out of and in the course of employment. The amendment further indicates that an employer is only liable if it: (1) failed to supervise, train, or monitor the employee who engaged in the gender-related violence; or (2) failed to investigate complaints or reports provided directly to management and the employer failed to take remedial action in response to the complaints or reports. The amended law does indicate that an employer who provides training pursuant to Section 2-109 of the Illinois Human Rights Act (i.e., meets the sexual harassment prevention training requirement), then the employer will have an affirmative defense that adequate training was provided to the employee.

HB 1540 | E-Cigarettes Prohibited in the Workplace. The Smoke Free Illinois Act will prohibit the use of electronic cigarettes in the workplace, by amending the definitions of “smoke” or “smoking” to include the use of E-cigarettes.

HB 2068 | Employee Transportation Benefits. The Illinois Transportation Benefits Program (TBP) Act will require covered employers to provide covered employees with a commuter benefit that allows them to use pre-tax dollars to purchase a transit pass or qualified parking via a payroll deduction. The TBP Act covers employees who work an average of at least 35 hours per week on a full-time basis. Covered employers include employers with at least 50 covered employees in specific geographic areas, at an address located within one (1) mile of a fixed route transit service. “Public Transit” is defined under the law as any transportation system within the authority and jurisdiction of the Regional Transportation Authority.

HB 3301 | Independent Contractor Reporting. The new hire reporting requirements under Illinois’ Unemployment Insurance Act are amended to require employer reporting of newly hired independent contractors.

Action Items

  1. Revise new hire reporting procedures to account for new reporting requirement of independent contractors.
  2. Review and revise workplace polices to account for employee transportation benefit requirement and e-cigarette prohibitions.
  3. Update payroll procedures to account for employee transportation benefit.
  4. Review workplace training procedures and employee complaint handling procedures for compliance with requirements under amended Gender Violence Act.

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