On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) of 2022. The IRA includes a 30% federal tax credit for those in private construction, alteration or repair of certain clan energy projects like solar, wind, geothermal, carbon sequestration, and electric vehicle charging stations. The tax credit can be taken by an owner/developer and their contractors and subcontractors. In order to take advantage of the tax credit, employers must comply with the federal prevailing wage provisions of the Davis-Bacon Act (Act).

The Act applies to contractors and subcontractors performing work on federally funded or assisted contracts and requires payment of wages set by the U.S. Department of Labor (DOL), depending on the worker’s classification. In addition to the prevailing wage, the IRA also requires employment of pre-set work hour percentages of apprentices participating in the DOL’s Registered Apprenticeship program or a state equivalent. Prior to the IRA, private sector construction had not been subject to the Act.

The U.S. Department of Treasury is in the process of issuing guidance, 60 days after which the IRA’s prevailing wage and apprenticeship requirements go into effect. Claiming tax credits without full compliance may lead to significant penalties. There is the ability to cure unintentional violations but only for a 60-day window of time after the Department of Treasury and IRS issue additional guidance. Employers unfamiliar with the Act’s requirements should review them carefully now before relying on qualifying for the tax credit.

Action Items

1. Review the IRA and the Davis-Bacon Act
2. Monitor U.S. Department of Treasury website for additional guidance.
3. Train appropriate personnel on prevailing wage and apprenticeship requirements.
4. Subscribers can call our HR Hotline at (833) 268-5531 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2022 ManagEase

In Cadena v. Customer Connexx LLC, the Ninth Circuit Court of Appeals stated that the time an employee spends booting up a computer is compensable work time for call center employees because the activity is integral and indispensable to their work. The call center employees’ primary responsibilities are to provide customer service and scheduling tasks using the employer-provided computers. Before they can perform these services, they must turn on the computer and log in; they are unable to perform their jobs without the computers.

Under the Fair Labor Standards Act (FLSA), activities performed before or after an employee’s regular work shift are compensable if they are an integral and indispensable part of the principal activities for which the employee is employed. The Ninth Circuit stated that employees’ duties could not be performed without turning on and booting up their work computers, and having a functioning computer was necessary before they could perform their job duties. Conversely, logging out of all programs at the end of their shift and shutting down the computer may not be integral to the employees performing their duties; this issue was sent back down to the lower court for further review.

Notably, the court distinguished the need to access the company’s timekeeping system as having no impact on the “integral and indispensable” analysis, rather focusing on the employees’ principal activities. That being said, the Ninth Circuit remanded the case back to the district court to determine whether the time spent booting up and shutting down computers was de minimis under the FLSA and not required to be compensated. The court also specifically limited its analysis to the facts of this case.

While this case continues to expand employers’ need to evaluate employee compensable time, keep in mind that that not all states, like California, acknowledge use of de minimis time as a valid reason to fail to pay employees for all hours worked.

Action Items

1. Evaluate employee job duties for integral and indispensable time spent consistent with this ruling.
2. Implement pay processes to account for payment of compensable time.
3. Have appropriate personnel trained on pay requirements.
4. Subscribers can call our HR Hotline at (833) 268-5531 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2022 ManagEase

In Camp v. Home Depot U.S.A. Inc., the California Court of Appeal recently stated that where an employer can and does track employees’ time worked in minutes, neutral time rounding is not a defense for failing to pay employees for all time worked. There, Home Depot had an electronic timekeeping system that employees used to clock in and out, recording their time to the minute. However, the employer also had a rounding policy that rounded employees’ shift time to the quarter hour.

Following the California Supreme Court rulings in Troester v. Starbucks Corp. and Donohue v. AMN Services, LLC, the court essentially eliminated employers’ ability to rely on neutral rounding policies to avoid paying for all time worked. However, this case creates a conflict with standing precedent permitting neutral rounding, but gives courts the ability to determine which rule they may follow. The appellate court invited the state Supreme Court to weigh in on this topic, which is likely to happen.

The court noted that rounding may still be valid where a neutral rounding policy is used due to an employer’s inability to capture the actual minutes worked by an employee. The court also did not address whether an employer who has the actual ability to capture an employee’s minutes worked is required to do so. We are likely to see further discussion on this topic, and employers with rounding policies should consider consulting with legal counsel to determine whether to continue their use.

Action Items

1. Remove rounding policies used with electronic time tracking methods.
2. Have appropriate personnel trained on timekeeping requirements.
3. Subscribers can call our HR Hotline at (833) 268-5531 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2022 ManagEase

In 2023, all Colorado businesses with five or more employees (who have worked for at least 180 days), and who have been in business for two or more years, must register for SecureSavings.  If employers already offer a tax-qualified retirement savings plan to any employees, they can file an exemption once they are registered.

The program uses automatic enrollment and savings through payroll deductions to allow employees to contribute to a Roth Individual Retirement Account (IRA) directly from their paychecks. The program defaults to a 5% contribution rate, but employees may change their contributions upon enrollment. If they change jobs, their account goes with them. However, employees can choose to opt-out within 30 days of being added to the program.

There are no employer fees to participate in the program. Also, employers do not match employee contributions to the program. Colorado SecureSavings will be fully available across the state in early 2023. Employers should expect to receive instructions on how to register.

Action Items

1. Review the SecureSavings program here.
2. Prepare to register and review the FAQs here.
3. Subscribers can call our HR Hotline at (833) 268-5531 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2022 ManagEase

The New Jersey Cannabis Regulatory Commission released guidance for employers trying to comply with the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA). CREAMMA requires employers to conduct a “physical evaluation” of an employee and to use a Workplace Impairment Recognition Expert (WIRE) prior to conducting a marijuana drug test. Under CREAMMA, such WIRE individuals must be certified. The new interim guidance is in place until standards for WIRE certifications are created and finalized. Until then, employers may use the following steps to show evidence of impairment that can support an adverse employment decision for suspected cannabis use or impairment.

Designate an individual to make impairment decisions. An interim staff member or third-party contractor can assist with making determinations of suspected cannabis use so long as they are sufficiently trained; however, the guidance is silent on what that training should be.

Reasonable Suspicion Observation Report. An employer is recommended to use documentation to describe the behavior, physical signs, and evidence which lead to the determination of reasonable suspicion. The state released a template Reasonable Suspicion Observed Behavior Report which the individual making the determination should complete. Employers are free to create their own documentation or reports.

Cognitive impairment tests. Employers may use cognitive impairment tests that are scientifically valid, objective, consistently repeatable, standardized automated tests of an employee’s impairment, and/or an ocular scan, as physical signs of evidence to establish reasonable suspicion.

Evidence of Impairment. The guidance makes clear that a drug test showing the presence of cannabinoid metabolites in the employee’s bodily fluid alone is not enough to support an adverse action. Documentation including evidence of physical signs or other evidence of impairment during work hours must be available to support an adverse employment action.

Action Items

1. Review the guidance here.
2. Review and revise drug testing and drug use policies.
3. Review template or create report to document reasonable suspicion and physical signs of impairment.
4. Have appropriate personnel trained on identifying signs and behaviors of cannabis impairment.
5. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2022 ManagEase