Nevada: State Supreme Court Clarifies Wage and Hour Rules

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All Employers with NV Employees

EFFECTIVE

August 11, 2022

  

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In Martel v. HG Staffing, LLC, the Nevada Supreme Court upheld a grant of summary judgment in favor of the employer in a class action alleging violations of minimum wage and overtime laws. In this case, the employees alleged they were not paid wages for completing tasks like attending meetings or classes, getting into uniform, or reconciling cash amounts without pay. The ruling in favor of the employers addressed four issues: 1) statute of limitations for wage claims; 2) validity of collective bargaining agreements; 3) overtime exemptions under state law; and 4) extension of statute of limitations for underlying wage claims. Employers should take note of this ruling as it addresses several Nevada wage and hour statutes. 

 

Statute of limitations for wage claims. The former employees alleged violations under the statutes for pay for each hour worked, overtime, and final paychecks and requested their claims should fall under a three-year statute of limitations period. The Nevada Supreme Court disagreed and stated minimum wage claims under the Nevada Minimum Wage Amendment are subject to a two-year statute of limitations period which begins to accrue after the employee’s final shift. Therefore, the employees’ claims are barred under this statute of limitations. This parallels the requirement that employers retain employee wage records for two years. 

 

Validity of collective bargaining agreements. A collective bargaining agreement does not have to have a signature, date, or the names of both parties to be valid. The Nevada Supreme Court said that so long as the union and the employer manifested assent to the agreement it is valid. Evidence that grievances were filed and arbitrations were conducted under the collective bargaining agreement shows both parties agreed to the collective bargaining agreement as valid. 

 

Overtime exemptions under state law. NRS § 608.018(3)(e) provides an exemption from overtime for employees covered by collective bargaining agreements that otherwise provide for overtime. The employees in this case argued the collective bargaining agreement must have a premium overtime rate in order for the exemption to apply. The Nevada Supreme Court disagreed and found the collective bargaining agreement provided for overtime in a sufficiently different manner to qualify for the overtime exemption within the statute. 

 

Extension of statute of limitations for underlying wage claims. The Nevada Supreme Court also stated that the employees’ unpaid wage claims were also barred by the two-year statute of limitations. The employees argued that even though the complaint was filed two years and one day after their final shifts, they should still be able to recover penalties for wages which could be recovered. The Nevada Supreme Court disagreed.  

 

Action Items 

  1. Review procedures for retention of employee wage records. 
  2. Review procedures for payment of overtime and final paychecks. 
  3. Consult with legal counsel for any terminations involving a potential wage claim. 
  4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance. 

 


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

New Jersey: Independent Contractor Test Clarified

APPLIES TO

All Employers with NJ Independent Contractors

EFFECTIVE

August 2, 2022

  

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In East Bay Drywall, LLC. v. Department of Labor and Workforce Development, the Supreme Court of New Jersey stated that formation of a corporation or LLC did not automatically mean that an individual qualifies as an independent contractor for purposes of the New Jersey Unemployment Compensation Act. New Jersey uses the “ABC” test to determine employment status. Specifically, prong “C” requires that an individual must be customarily engaged in an independently established trade, occupation, profession or business. However, the court stated that mere corporation status, even with business registration and insurance information, was not necessarily enough to satisfy this requirement. 

 

There, a contractor would use subcontracted workers to perform work on its jobs, which could be individuals, LLC’s, or corporations. The Court said that prong “C” requires the independent contractor’s business to be able to go on despite termination of the contractor relationship. This may include presentation of evidence that the contractor was free to accept or decline assignments and that they performed work for other companies, that the contractor engaged in advertising, maintained independent locations, or had employees. 

 

Notwithstanding, the Court stated that a business registration and certificate of insurance could be a significant indication of independent contractor status if they demonstrate a complex ownership structure and continued in force beyond the contractor relationship. 

 Action Items 

  1. Review independent contractor status with legal counsel for compliance. 
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance. 

 


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

Pennsylvania: New Overtime Calculations and Wage Rules for Tipped and Salaried Nonexempt Employees

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All Employers with PA Employees

EFFECTIVE

August 5, 2022

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Under the Pennsylvania Minimum Wage Act (PMWA), employers must now use different calculations in order to determine the overtime pay due for salaried nonexempt employees. The new rules do not impact overtime calculations for hourly nonexempt employees. Additionally, employers have new restrictions on treatment of tipped employees. 

 

Salaried Nonexempt. This calculation method precludes employers from using the fluctuating work week method under the Fair Labor Standards Act (FLSA). Instead of the FLSA’s method, employers must now add up all remuneration (including weekly salary, nondiscretionary bonuses, and commissions) and divide this amount by 40 hours. That regular rate is then multiplied by 1.5 and then multiplied by the number of hours worked in excess of 40 hours in that workweek. The FLSA’s fluctuating work week method cannot lawfully be used for Pennsylvania salaried nonexempt workers under Pennsylvania case law, and the PMWA codifies that case law. 

 

Tipped Employees. Under current Pennsylvania law, employers can pay tipped employees as little as $2.83 an hour as long as the employees make at least $30 per month in tips. The minimum tip threshold is now increased to $135. In addition, employees must work at least 80% of the time in a role that directly generates tips. Further, tip pooling is limited to only include employees paid below the regular base minimum wage level. Managers, supervisors, and employers can only keep the tips they directly receive for work they themselves performed. Employers who include fees for administrative or service fees must indicate in writing that these fees are separate from gratuities or tips kept by employees. Additionally, employers cannot deduct credit card processing fees or other transactional fees from employee tips. 

 

Action Items 

  1. Review the additional guidance from the Pennsylvania Department of Labor & Industry here. 
  2. Have payroll administration procedures updated for calculating overtime.
  3. Have policies and procedures updated for distribution of tips and tip pools. 
  4. Update contracts and receipts to indicate service fees are separate from gratuities and tips paid to employees.  
  5. Have appropriate personnel trained on the new overtime calculations. 
  6. 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

October Updates

APPLIES TO

Varies

EFFECTIVE

Varies

QUESTIONS?

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IMPORTANT! Continue Using Expired Form I-9, For Now 

On October 11, 2022, U.S. Citizenship and Immigration Services posted a notice saying that employers should continue using the currentForm I-9, Employment Eligibility Verification, after its expiration date of October 31, 2022 until further notice. The Department of Homeland Security will publish a Federal Register notice to announce the new version of the Form I-9 once it becomes available. 

 

USCIS Extends Green Card Validity Extension 

On September 28, 2022, U.S. Citizenship and Immigration Services (USCIS) automatically extended the validity of Permanent Resident Cards (i.e., Green Cards) to 24 months for lawful permanent residents who file Form I-90 (Application to Replace Permanent Resident Card). Form I-90 receipt notices may be presented with an expired Green Card as evidence of continued status. 

 

Department of Homeland Security Considering Form I-9 Remote Document Review 

On August 18, 2022, the Department of Homeland Security (DHS) published a proposed rule which could provide alternative options for Form I-9 document examination, including a remote option. While the rules were relaxed to allow review by video chat, fax, or other electronic means during the COVID-19 pandemic, they eventually still required in-person review of the documents. The proposed rule would allow DHS to create pilot programs to test potential alternative remote examination procedures. If adopted, HR professionals could handle Form I-9 document review compliance remotely. DHS could also require sign-up to E-Verify and impose other IT requirements in order to take advantage of this potential rules change. While this proposed rule is not yet in effect and needs to go through the standard notice-and-comment period, employers should continue to watch for updates through the DHS website. 

 

OFCCP Plans to Disclose Employer EEO-1 Data 

The Office of Federal Contract Compliance Programs (OFCCP) is planning to produce confidential data, including EEO-1 data, in response to a Freedom of Information Act (FOIA) request. Federal law prohibits the EEOC from disclosing an employer’s EEO-1 data and this extends to requests made under FOIA. The OFCCP however is relying on a decision from the D.C. Circuit Court stating that EEO-1 reports are not subject to that prohibition. The FOIA request at issue seeks Type 2 Consolidated Employer Information Reports filed by federal contractors from 2016 through 2020. Employers who selected “Yes” to question 3 in Section C of their EEO-1 Reports are at risk for having these reports made public. Employers who are concerned that their data will be made public should contact the OFCCP to ask whether its data is being included in the FOIA production and to request a copy of what is going to be produced. Employers may request an extension to file an objection after receipt of a copy of the production. 

 

Second Circuit: Retaliatory Intent Required in Whistleblower Retaliation Claim 

On August 5, 2022, in Murray v. UBS Securities, LLC, the Second Circuit Court of Appeals clarified the elements required for an employee to prove retaliation based on whistleblowing activity under the Sarbanes-Oxley Act of 2022 (SOX). To make a SOX claim, a plaintiff must show that they engaged in protected activity, the employer knew that the plaintiff engaged in a protected activity, the plaintiff suffered an unfavorable personnel action, and the protected activity was a contributing factor in the unfavorable action. The Second Circuit stated that because adverse action is prohibited “because of whistleblowing,” the “contributing factor” element includes a requirement to show that the employer acted with an intent to discriminate because of the lawful whistleblowing activity. 

 

Seventh Circuit: FMLA Allows Plaintiffs to Recover Attorneys’ Fees 

On August 16, 2022, in Simon v. Cooperative Educational Service Agency #5, the Seventh Circuit Court of Appeals stated that the remedy of “equitable relief” under the Family and Medical Leave Act (FMLA) includes obtaining a declaratory judgment, which is a legal determination by a court. The definition of equitable relief is significant because plaintiffs are eligible to receive attorneys’ fees when succeeding on a declaratory judgment. This was a matter of first impression to the court, but the court found it was supported by federal law’s general interpretation of “equitable relief.”  

 

Ninth Circuit: NLRB May Order Union Attorneys’ Fees for Employer’s Bad Faith Negotiating 

On August 11, 2022, in NLRB v. Ampersand Publishing, LLC, the Ninth Circuit stated that the NLRB has the power to issue a remedial order requiring an employer to reimburse a union for legal fees incurred during the collective bargaining process. The award is part of reimbursable bargaining expenses primarily aimed at restoring the economic status quo that would have existed but for the employer’s bad faith bargaining and other unfair labor practices. 

 

11th Circuit: Federal Contractor Vaccine Mandate Extended 

On August 26, 2022, the 11th Circuit Court of Appeals revised a previously existing injunction against the federal contractor COVID-19 vaccine mandate to only apply to the plaintiffs in that case, which includes Alabama, Georgia, Idaho, Kansas, South Carolina, and West Virginia. Other states not involved in the litigation also have injunctions in place. For those states not subject to an injunction order, the federal government appears to be maintaining its non-enforcement policy for the time being. Federal contractors should continue to monitor the status of the mandate for compliance. 

 

California: AB 51 Prohibiting Mandatory Arbitration Agreements on Hold Again! 

On August 22, 2022, the Ninth Circuit Court of Appeals vacated its ruling in Chamber of Commerce v. Bonta in favor of rehearing the case. Previously, the Ninth Circuit’s opinion interpreted AB 51’s prohibition on employer mandatory arbitration agreements to only apply before such an agreement is signed. While the rehearing is pending, AB 51 continues to be unenforceable. Employers should review the current and expected arbitration agreement landscape with legal counsel before making any changes to arbitration agreements. 

 

Colorado: State Workers’ Compensation Act Clarified for Mental Health Records 

As of June 9, 2022, HB 22-1354 requires mental health providers to give mental health records to self-insured employers for workers’ compensation purposes. Employers must keep mental health records separate from personnel files, and may not disclose the records to any person “who is not reasonably necessary for the medical evaluation, adjustment, or adjudication of claims involving psychological or psychiatric issues.” The bill also permits release of a claimant’s mental health information to their employer related to work restrictions and their claim, but prohibits disclosure of actual mental health records to third parties that don’t need the information. 

 

Louisiana: Protections from Workplace Violence in the Healthcare Industry 

Effective August 1, 2022, Louisiana adopted two bills that protect the healthcare industry from workplace violence. Act No. 461 requires healthcare facilities to: 1) post signage explaining that violence against healthcare staff will not be tolerated and can result in a felony conviction; 2) develop and maintain a comprehensive workplace violence prevention plan; and 3) report all instances of workplace violence that occur at the healthcare facility to appropriate authorities. Employers should also check the Louisiana Department of Health’s website for additional information regarding the above requirements including copies of signage and a checklist for the violence prevention plan. Act No. 129 adds enhanced penalties for those who commit assault or battery towards emergency room personnel, emergency services personnel, or a healthcare professional. Such an assault or battery is now a felony. A new criminal offense of unlawful disruption of the operation of a healthcare facility has also been created. Employers should review both acts, as well as the Louisiana Department of Health’s website 

 

Massachusetts: Still No Paid Leave Top-Off with PFML 

On August 9, 2022, the Department of Family and Medical Leave confirmed on its website that employees are not permitted to use their accrued sick or vacation leave to “top off” their weekly Paid Family and Medical Leave (PFML) benefit in weeks that they are receiving benefits from the FML. Despite recent attempts by the legislature, there has been no change to the DFML law.  

 

Michigan: Paid Medical Leave and Minimum Wage Laws in Effect Through February 19, 2023 

The Michigan Court of Claims issued a stay of the Mothering Justice v. Nessel decision through February 19, 2023. In that case, the court had originally reinstated ballot initiatives that made significant changes to the state’s paid medical leave and minimum wage laws. Those laws were subsequently amended by the state legislature and those amendments were legally challenged. However, the amended versions of those laws will remain in place until the stay ends. It remains to be seen what may happen with the ballot initiatives on appeal. 

 

Minnesota: Approval of Recreational Marijuana Use Creates New Issues for Employers 

As of July 1, 2022, anyone over 21 years old can legally purchase and consume edible and drinkable products containing hemp-derived THC. While this new law does not explicitly protect applicants or employees who choose to consume now-legal THC products, employers should be aware of Minnesota’s “lawful consumable products” law in the event of a THC-positive test result. Minnesota protects employees from discipline based on participating in lawful activities outside of work. Whether the lawful consumable products law includes THC food products has not yet been determined. However, employers may restrict the use of lawful consumable products during nonworking hours if the restriction relates to a bona fide occupational requirement and is reasonably related to employment activities or responsibilities of a particular employee or group of employees or is necessary to avoid a conflict of interest or the appearance of a conflict of interest with any responsibilities owed by the employee to the employer. Employers can still enforce policies prohibiting employees from possessing, using, and being under the influence of THC during work hours and on work property. With uncertainty on how exactly this law will be applied, employers should consult with legal counsel before disciplining or terminating an employee with a THC-positive test result. 

 

New Jersey: New Posting Requirements Under the NJLAD and NFLA 

As of August 1, 2022, regulations went into effect regarding poster and notice requirements under the New Jersey Law Against Discrimination (NJLAD) and Family Leave Act (NJFLA). Specifically, employers may electronically post NJLAD and NJFLA required posters to their internet or intranet site used by employees. If employers choose to electronically post, they must also annually provide copies of those posters to every employee, either through email, printed material, or an internet or intranet website. 

 

New Jersey: Non-Disparagement Provisions Soon to be Barred by NJLAD? 

As a result of the #MeToo movement, New Jersey amended the Law Against Discrimination (NJLAD) to prohibit nondisclosure or confidentiality clauses in employment or settlement agreements which have the purpose or effect of concealing details related to a claim of discrimination or harassment. In Savage v. Township of Neptune, the Appellate Division stated the NJLAD does not prohibit nondisparagement clauses. This ruling may not stand for long. On June 27, 2022, the New Jersey State Senate introduced S2930 to expressly include non-disparagement in the NJLAD in response to the Savage ruling. Continue to look for updates on this developing issue. 

 


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

EEOC Guidance on Treatment of LGBTQ Employees Blocked in 20 States

APPLIES TO

All Employers with AL, AK, AZ, AR, GA, ID, IN, KS, KY, LA, MS, MO, MT, NE, OH, OK, SC, SD, TN, and WV Employees

EFFECTIVE

July 15, 2022

  

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The Equal Employment Opportunity Commission’s (EEOC) 2021 guidance regarding the treatment of LGBTQ applicants and employees in the workplace has been blocked from enforcement in 20 states: Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, and West Virginia. In Bostock v. Clayton County, the Supreme Court ruled the prohibition against sex discrimination in Title VII of the Civil Rights Act of 1964 includes employment discrimination on the basis of someone’s sexual orientation or transgender status. On the heels of this ruling, the EEOC issued guidance to provide clarity on how Title VII applies to LGBTQ related matters involving employment discrimination. In addition to Title VII’s other protections, the guidance primarily required employers to: 1) not prohibit a transgender person from dressing or presenting in a manner consistent with the person’s gender identity; 2) allow employees to use sex-segregated bathroom and locker room facilities that correspond to their gender identity; and 3) treat repeated and intentional use of the wrong name or pronoun for a transgender employee as harassment in violation of Title VII. 

 

A lawsuit filed by the Attorney General of Tennessee was joined by 19 other states’ attorneys general arguing that the guidance infringes on states’ powers to regulate their public workplaces and did not follow proper federal procedure when implementing the guidance. In July, a judge for the Federal District Court for the Eastern District of Tennessee agreed to issue a preliminary injunction against the enforcement of the EEOC guidance until the substance of the lawsuit is decided. Employers in these states should note this preliminary injunction only temporarily limits the EEOC’s actions. However, the injunction does not change the Bostock opinion protecting sexual orientation and transgender status under Title VII. Employers should continue to adhere to Bostock since individual employees can still bring lawsuits challenging employment practices under Title VII as it applies to LGBTQ status. 

 

Action Items 

  1. Read the EEOC guidance here. 
  2. Continue to comply with protections for sexual orientation and transgender status. 
  3. Consult with legal counsel prior to taking adverse actions that could violate Title VII. 
  4. 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

NLRB and FTC Join Forces on Antitrust by Scrutinizing Independent Contractor Arrangements

APPLIES TO

All Employers

EFFECTIVE

July 19, 2022

  

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Employers in the gig economy or who otherwise have a primarily contractor-based workforce need to prepare for additional scrutiny from both the National Labor Relations Board (NLRB) and the Federal Trade Commission (FTC). The NLRB’s major area of focus is to protect workers’ rights to organize and bargain collectively. The FTC promotes fair competition by targeting anti-competitive conduct and deceptive practices. In a July 19, 2022 Memorandum of Understanding (MOU), both agencies claimed a shared interest in protecting workers against unfair methods of competition, unfair or deceptive acts or practices, and unfair labor practices. Specifically mentioned, among other points, were one-sided and restrictive contract provisions like noncompete and nondisclosure provisions as well as the classification and treatment of workers. 

 

Employers with a large contractor workforce should prepare for additional risk surrounding misclassification. Having independent contractors enter into one-sided or restrictive noncompete and nondisclosure agreements may now not only result in a misclassification violation but possibly an anti-competitive trade practice. One-sided independent contractor agreements could also be considered an unfair labor practice. While there is not much additional information included in the MOU, it allows the agencies to share information and consult for official law enforcement purposes, provide training, and coordinate outreach and education. Employers will need to stay tuned on what will come about as a result of this partnership. 

 

Action Items 

  1. Read the Memorandum of Understanding here. 
  2. Review and revise contractual requirements for independent contractors. 
  3. Audit independent contractors for misclassification issues. 
  4. 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

D.C. Circuit: Multiemployer Defined Benefit Pension Plans’ Withdrawal Liability Calculations Reviewed

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All Employers with Employees in the District of Columbia

EFFECTIVE

July 8, 2022

  

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In United Mine Workers of America 1974 Pension Plan v. Energy West Mining Company, the D.C. Circuit Court of Appeals said exiting employers from a multiemployer defined benefit pension plan must use the actual and projected experience of the plan when calculating the withdrawal liability owed to the plan. In this case, the pension plan used a lower risk-free discount rate instead of a higher interest rate assumption based on the plan’s historical investment performance to calculate the withdrawal liability. This resulted in a liability that was $75 million more than what the employer would have paid if the plan had used the higher interest rate. For the purpose of withdrawal liability calculations, the higher the rate, the lower the total liability for the exiting employer.  

 

The Employee Retirement Income Security Act of 1974 (ERISA), as amended by the Multiemployer Pension Plan Amendments Act of 1980 (MPPA), requires exiting employers in a multiemployer defined benefit pension plan to pay a withdrawal liability. According to the ruling, the plan actuary must use methods that take into account the historical experience of the plan and reasonable expectations. Interest rate assumptions must also meet the minimum funding standards required by ERISA.  

 

The statute requires the withdrawal liability calculation to “offer the actuary’s best estimate of anticipated experience under the plan.” A risk-free rate calculation is not appropriate if the plan’s actual and projected investment policy is to continue to be invested in riskier assets. Employers exiting from multiemployer defined benefit pension plans should now be able to rely on a withdrawal liability being calculated similar to the minimum funding rate and based on the plan’s current and projected investment policy. 

 

Action Items 

  1. Consult with legal counsel to ensure compliance with ERISA when exiting a pension plan. 
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance. 

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

California: Supplemental Paid Sick Leave Expected to Extend to the End of 2022

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All Employers with CA Employees

EFFECTIVE

Pending

 

 

QUESTIONS?

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Expected to be signed by the Governor this month, AB 152 will extend California’s supplemental paid sick leave through December 31, 2022, with some notable changes. Currently, the state’s supplemental paid sick leave is set to end September 30, 2022. The extension and new rules will go into effect immediately as soon as the Governor signs the bill. Key provisions are discussed as follows. 

 

The combined total 80-hour allotment will now be available to employees through December 31, 2022. The extension does not call for any new time allotment beyond what was already available through September 30th 

 

Previously, if an employee reportedly tests positive for COVID-19, an employer may require the employee to submit to a diagnostic test on or after the fifth day after the initial test and provide documentation of those results. Now, if the diagnostic test is positive, the employer may also require the employee to submit to a second diagnostic test within no less than 24 hours.  The employer must make these tests available at no cost to the employee. An employer has no obligation to provide additional COVID-19 supplemental paid sick leave if the employee refuses to submit to these tests.  

 

Additionally, supplemental paid sick leave for in-home supportive services providers are also extended to December 31, 2022, but without any changes. 

 

Finally, the bill implements the California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program for those employers with 26-49 employees, in existence in California since before June 1, 2021, who provide supplemental paid sick leave to employees, subject to exception. The program allows these employers to recover costs, up to $50,000, associated with providing supplemental paid sick leave between January 1, 2022 and December 31, 2022.  

 

Action Items 

  1. Review the bill here. 
  2. Prepare to update paid sick leave policies, if applicable. 
  3. Have appropriate personnel trained on the new requirements. 
  4. Consult with legal counsel regarding the Relief Grant Program, if applicable. 
  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

California: Wage Statement Rate and Hours Requirement Only Applies to Current Pay Period

APPLIES TO

All Employers with CA Employees

EFFECTIVE

June 17, 2022

 

 

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In Meza v. Pacific Bell, the California Court of Appeal stated that overtime true-up payments relating to a past pay period is not subject to Labor Code § 226(a)(9)’s requirement to list “hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate.” Specifically, Section 226(a)(9) only applies to hourly rates occurring during the pay period for which a paycheck is issued.  

 

There, an employee’s class action claimed various wage and hour violations, including failing to list the pay rate and hours for overtime true-up based on performance bonuses earned in earlier pay periods. California requires that the bonus be included in the regular rate calculation for overtime pay. Because the bonus was earned over the course of an entire month and the bonus amount was not known until the close of that month, there was no way to determine the overtime owed in relation to that bonus on a pay-period by pay-period basis. The payment was typically listed on the first wage statement of the month after the employee earned it, but did not include information in the “rate” and “hour” columns of the wage statement.  

 

The court said that Section 226 only required listing hourly rates “during the pay period,” and it was not “an artificial, after-the-fact rate calculated based on overtime hours and rates from preceding pay periods that did not even exist during the time of the pay period covered by the wage statement.” Specifically, the court said it “cannot read into the statute a requirement that an employer include hours and rates from prior pay periods when the legislature omitted such a requirement.” While this helps clarify the rules around wage statements, the ruling still may be appealed to the state supreme court. Employers should continue to look for updates on this case.  

 

Action Items 

  1. Evaluate paystub setup for adjustments, if appropriate. 
  2. Have appropriate personnel trained on wage statement requirements. 
  3. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance. 

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

California: Application of FAA to Intrastate Employers Clarified for Employee Arbitration Agreements

APPLIES TO

All Employers with CA Employees Subject to FAA

EFFECTIVE

July 15, 2022

 

 

QUESTIONS?

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(888) 378-2456

In Evanskaas v. California Transit Inc., a California Court of Appeal stated that the Federal Arbitration Act (FAA) applies to businesses engaging in activities that have a substantial relation to interstate commerce. The question arose as to whether the employer’s business activities made them subject to the FAA. Specifically, the activities must substantially affect interstate commerce in the aggregate, even if their individual impact on interstate commerce is minimal.  

 

There, an employer’s business involved providing intrastate transportation for individuals protected by the Americans with Disabilities Act (ADA). The employer sought to enforce an employee’s arbitration agreement, which included a class action waiver. Class action waivers in arbitration agreements are prohibited in California. However, if an arbitration agreement is subject to the FAA, California’s rule does not apply because it is preempted by federal law. 

 

The court stated that the employer was engaging in activities that substantially impact interstate commerce because it provides paratransit services that public entities are required to provide under the ADA and are subject to federal control, is engaged in “inherently commercial activity” that makes use of highways and vehicles, and its services facilitated economic activity by the passengers. This case appears to have limited application as the court distinguished it as applying to “an arbitration agreement between an employer and an employee hired to provide commercial services required by federal law enacted by Congress under its commerce power.” However, employers with class action waivers are encouraged to review their arbitration agreements with legal counsel to confirm coverage by the FAA. 

 

Action Items 

  1. Review arbitration agreements with class action waivers with legal counsel for compliance. 
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance. 

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