Discussion

On October 16, 2025, in Galarza v. One Call Claims, LLC, the Eleventh Circuit Court of Appeals ruled a business classifying workers as independent contractors does not matter where the economic reality clearly demonstrates an employment relationship. Here, three insurance adjusters worked for the defendant company after Hurricane Harvey. While there was an independent contractor agreement with each of the adjusters, they worked full-time for nearly two years with tight schedules and oversight from the defendant. The adjusters sued the defendant alleging that they were really misclassified employees who were owed overtime wages. The court agreed.

In reaching its ruling, the court applied the Fair Labor Standards Act’s (FLSA) economic reality test. The court applied the factors to the adjusters’ arguments as shown below:

1. The nature and degree of the alleged employer’s control over the manner in which work is performed. The defendant controlled the adjusters’ schedules and hours by setting work schedules and reviewing timesheets. They were threatened with discharge if they worked outside set hours. They were not free to perform other work.
2. The worker’s opportunity for profit or loss depending on managerial skill. They were paid non-negotiable, fixed day wages. The adjusters paid their own expense, but this was a cost-cutting measure that benefitted the defendant.
3. The worker’s investment in materials or hiring additional workers as necessary to complete their task. The adjusters had no authority to hire others. The defendant supplied computers, telephones, email accounts, and ID badges that they were required to use while working in-person.
4. Whether the worker’s job requires a special skill. This factor weighed in favor of the defendant since the adjusters acquired their skills and licenses prior to their assignment with the defendant.
5. The permanency and duration of the relationship between the worker and alleged employer. The defendant retained the adjusters for an indefinite and extendable period of time during which the workers did not service any other companies, similar to at-will employment, supporting employee status.
6. The extent to which the worker’s services are an integral part of the alleged employer’s business. Without the adjusters’ services, the defendant had no service or product to sell.

Five of the six factors in the economic realities test favored the adjusters. The court reversed the grant of summary judgment favoring the defendant and found that a jury should decide whether the adjusters were employees. This case reiterated the interpretation under the FLSA that it is the relationship between the parties that controls the classification of employees and independent contractors and not a business’ label of that relationship.

Action Items

1. Review independent contractor status with legal counsel.

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. © 2025 ManagEase

Discussion

On October 22, 2025, in Nunez v. Syncsort Incorporated, the Massachusetts Supreme Judicial Court held that retention bonuses are not considered “wages” under the Massachusetts Wage Act. The case involved a senior employee who received a retention bonus agreement contingent on remaining employed through specific dates and maintaining good standing. Although the employee ultimately received the full bonus, he sued under the Wage Act, claiming the second installment was paid late (eight days after his termination) and sought mandatory treble damages.

The Court unanimously affirmed the lower courts’ dismissal of the Wage Act claim, emphasizing that not all forms of compensation qualify as wages under the statute. While the Wage Act covers compensation paid solely in exchange for labor or services (e.g., salaries, hourly wages, and earned commissions), it does not extend to contingent payments like retention bonuses. The Court clarified that retention bonuses are additional compensation tied to an employee’s agreement to remain employed through a future date, and therefore fall outside the scope of the Wage Act’s protections.

While this decision provides some relief for employers, it emphasizes the importance of clearly documenting the terms of such bonuses, including the conditions for earning and payment. Employers are encouraged to consult with legal counsel when designing compensation agreements or evaluating potential liability exposure under the Wage Act.

Action Items

1. Review compensation agreements, including retention bonuses, with legal counsel.

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. © 2025 ManagEase

Discussion

Columbus Ordinance No. 2898-2025 will implement new pay transparency requirements for employers as of December 5, 2025, but enforcement will be delayed until January 1, 2027. Specifically, employers must include a reasonable salary range or scale in job postings.

“Employment posting” includes any written or electronic posting intended to recruit applications for a specific available position that includes a description of the position and/or qualifications of desired applications. Importantly, this does not include job postings that are duplicated and published without an employer’s consent. It also does not apply to job postings for internal transfer or promotion within an organization.

The salary range means “financial compensation in exchange for labor,” which includes things like wages, commissions, hourly earnings, and other monetary earnings. The reasonableness of the salary range must be based on factors specific to the position, such as: the flexibility of the employer’s budget; the anticipated range of experience job applicants may have; the potential variation in the responsibilities of the position; the opportunities for growth in and beyond the position; the cost of living for the various locations in which an applicant may work; and market research on comparable positions and salaries.

Job applicants may file complaints alleging violations of the ordinance with the Columbus Community Relations Commission, which may issue civil penalties and order other remedies. Although the Ordinance will not be enforced for a year, employers are encouraged to begin preparing for compliance.

Action Items

1. Update job descriptions.
2. Conduct an equal pay audit.
3. Implement wage ranges for appropriate positions.
4. Update job posting procedures.
5. Have appropriate personnel trained on the 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. © 2025 ManagEase

Discussion

Philadelphia Bill No. 250373-A will amend the Fair Criminal Record Screening Standards Ordinance to expand employee protections and employer requirements as of January 6, 2026. Generally, an employer cannot inquire into an applicant’s criminal history until after a conditional offer of employment. The following summarizes the recent updates.

Definitions

The definitions of conviction and inquiry have been expanded; and the definitions of felony, misdemeanor, summary offense, incarceration, job advertisement, adverse action, and excessive and unreasonable levels of supervision have been added.

Notably, any criminal record inquiry through public or government records or internet searches, either by or on behalf of an employer, is specifically subject to the Ordinance. Job advertisement is defined to mean any verbal or written communication of potential employment. Adverse action means any action that negatively affects an applicant or employee’s compensation, terms, or condition of current or future work or is intended to harass an applicant or employee in connection with work, including excessive and unreasonable levels of supervision, refusal to hire or promote, blacklisting, interferences with current employment or employment prospects, contacting law enforcement or a government agency to file a report, including reporting suspected or actual immigration status.

Advance Notice

An employer may provide applicants and employees notice of its intent to conduct a criminal background screen, including in job advertisements, which is required to have certain information in it. The bill expands the notice requirements to include a statement that any consideration of the background check will be an individualized assessment based on the applicant or employee’s specific record and the duties and requirements of the specific job.

Individualized Assessment

An employer may take adverse action following an individualized assessment of the criminal history results. The bill expands the individualized assessment process to prohibit taking adverse action unless it is determined that a reasonable person would conclude that employing the applicant or employee would pose a specific unacceptable risk to the operation of the business or to co-workers or customers, as independently determined by the factfinder. Among the previously stated factors for consideration in the individualized assessment process, the bill expands the definition of evidence of rehabilitation that may be considered.

Criminal Record

The bill also expands what may and may not be considered in an individual’s criminal record for purposes of employment evaluation. The seven-year lookback period will now be determined by the timing of the underlying arrest or the release from incarceration for such conviction, whichever is later. Misdemeanor convictions may be considered if occurring within less than four years of the underlying arrest or release from incarceration for the conviction, whichever is later.

An employer cannot consider a conviction record that has been expunged, sealed, or otherwise cannot be used, whether the record appears on a criminal background check, a Driver Record issued by the Pennsylvania Department of Transportation, or any other source. The individual must be given the opportunity to provide evidence of expungement or sealing.

Adverse Action

The adverse action process will be expanded. The employer must provide a preliminary notice of intent to deny a job application along with a notice of rights; a statement that the employer will consider evidence of any error in the criminal history records and evidence of rehabilitation and mitigation, including a list of the types of evidence that may be offered; and instruction on how to submit evidence or explanation to the employer. The applicant will still have 10 business days to provide evidence of an error or rehabilitation, but that timing must be observed before the employer may issue a final determination.

Retaliation

A new section on prohibited retaliation has been added to the Ordinance. Specifically, employers are prohibited from retaliating against an applicant or employee for exercising their rights, and retaliation is presumed if adverse action is taken within 90 days of when that person engaged in the exercise of rights, unless the employer acts in good faith to comply with the law and moves forward with adverse action after considering additional information submitted by the individual, if the adverse action is based on legitimate business concerns that are not related to the criminal history, or when addressing an employee’s pending criminal charge as permitted in the Ordinance.

Enforcement

The enforcement process has been further detailed on information required to be provided to the Commission when a claim has been made. Employers may also be subject to liquidated damages to make the individual “whole” as a result of a violation.

Action Items

1. Review the Ordinance here.
2. Update background check policies and procedures for compliance.
3. Have appropriate personnel trained on the 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. © 2025 ManagEase