New York: New Requirements for Independent Contractor Arrangements

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All Employers with Freelance Workers in NY

EFFECTIVE

May 20, 2024

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  • New York’s new Freelance Isn’t Free Act imposes contract, payment, recordkeeping, and anti-discrimination requirements on companies that hire freelance workers.
  • New employer obligations apply to contracts with freelancers entered into on or after May 20, 2024.

Discussion

A new law in New York extends workplace protections to freelance workers. Titled the Freelance Isn’t Free Act, the law goes into effect on May 20, 2024 and imposes several requirements on employers who hire freelance workers in the state of New York (which is broader than New York City’s existing Freelance Isn’t Free Act). With a relatively broad scope, the law applies to almost all employers, defining a “hiring party” as any person who retains a freelance worker to provide any service. Notably, the law does not apply to federal, state, or local governments.

Under the law, a freelance worker is (1) any person or organization (of no more than one person), (2) that is hired or retained as an independent contractor, (3) to provide services valued at $800 or more (which can be met either through a single contract for service or the aggregate of all contracts between the parties). The law only provides for four narrow exemptions to the definition of freelance worker: (1) attorneys, (2) licensed medical professionals, (3) sales representatives, and (4) construction contractors (as defined under the law).

The four key employer requirements under the law include: (1) written contract requirements, (2) freelance workers compensation requirements, (3) recordkeeping requirements, and (4) anti-discrimination requirements.

Regarding the written contract requirement, any contract for service between a hiring party and a freelance worker must be reduced to writing and contain the following (at a minimum):

  • The parties’ name and mailing address;
  • An itemization of all services the freelance worker will provide to the hiring party;
  • The value of those services;
  • The rate and method of compensation for the services;
  • The date on which the hiring party will issue payment to the freelance worker or the mechanism by which such date will be determined; and
  • The date by which the freelance worker must submit to the hiring party a list of services rendered under the contract (for purposes of timely compensation).

All written contracts entered into with freelance workers must be maintained for a minimum of six years. A hiring party’s failure to maintain these documents creates a presumption that the terms the freelance worker presents as true and accurate are in fact the agreed-upon terms between the parties.

With respect to compensation of freelance workers, the law contains a specific provision requiring that the hiring party must pay freelance workers on or before the date specified in the contract (as discussed above) or—if the contract does not specify the timing of payment or the mechanism by which such date will be determined—no later than 30 days after the completion of the freelance worker’s services. The law prohibits the hiring party from requiring, as a condition of timely payment, that the freelance worker accept less compensation than the amount in the contract.

Lastly, the law prohibits any hiring party from harassing, discriminating, threatening, intimidating, disciplining, or denying work opportunities to a freelance worker for exercising, or attempting to exercise, any rights under the law.

Importantly, the law only applies prospectively to contracts for service entered into on or after May 20, 2024.

Action Items

  1. Consult with legal counsel on freelance worker contractual agreements.
  2. Have appropriate personnel trained on freelance workers 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. © 2024 ManagEase

Washington: Update to Paid Sick Leave Law

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All Employers with Employees in WA

EFFECTIVE

January 1, 2024

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  • Paid sick leave is used at the employee’s option.
  • PTO policies that combine with paid sick leave have updated notice and tracking requirements.
  • Construction workers’ paid sick leave must be paid out upon termination.

Discussion

SB 5111 amended the state paid sick leave law and regulations for all employees, as well as specifically for construction workers.

All Covered Employers

Paid sick leave is used at the employee’s option; employers cannot require employees to use paid sick leave for qualified purposes.

Employers who use paid time off (PTO) policies to combine mandated paid sick leave must meet the requirements of mandated paid sick leave, including payment at the greater of the applicable minimum wage or the normal hourly compensation. Employers must also provide employees notice that the PTO policy is meant to satisfy the paid sick leave requirements.

Additionally, if PTO policies provide a more generous benefit than what is statutorily required for paid sick leave, the paid sick leave balance must be tracked separately, and there can be no requirement to use the paid sick leave portion for more generous purposes (e.g., vacation leave) before accessing the more generous PTO leave for more generous purposes.

Covered Construction Workers

Following separation, employers must pay the balance of accrued and unused paid sick leave to construction workers classified under NAICS code 23 who have not reached the 90th calendar day of employment, except for those performing work only under NAICS code 236100. Paid sick leave is paid out at the greater of the applicable minimum wage or their normal hourly compensation. Previously paid out paid sick leave does not need to be reinstated upon rehire of construction workers. However, when a construction worker is rehired within 12 months of separation, the previous period of employment must be counted for purposes of determining the date upon which the employee is entitled to use paid sick leave. There are also additional recordkeeping requirements related to advanced paid sick leave, payment of paid sick leave following termination, and date of hire and termination.

Action Items

  1. Update paid sick leave and PTO policies, as appropriate.
  2. Update separation procedures regarding final pay.
  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. © 2024 ManagEase

February Updates

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Varies

EFFECTIVE

Varies

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Federal Civil Penalties Increased for 2024 The U.S. Department of Labor (DOL) published its final rule to adjust for inflation the civil monetary penalties assessed or enforced by the DOL in 2024. The civil penalties apply to violations under OSHA, Family and Medical Leave Act, Fair Labor Standards Act, and ERISA. The list also includes new immigration-related fines/penalties that went into effect on January 15, 2024. Typically, these violations involve H-1B, H-2A and H-2B visas, and cover a range of employer activity including, but not limited to, employer discrimination, retaliation, misrepresentation of fact, or non-compliance with established terms and conditions of employment. The increased monetary penalties apply to violations occurring after November 2, 2015, for which penalties were assessed after January 15, 2024. The full schedule of the increased penalties can be found here.

 

Arkansas: Updates to Uniform Attendance and Leave Policy Act Effective July 31, 2023, HB 1775 amends Arkansas’s Uniform Attendance and Leave Policy Act to allow sick leave to care for a child who is in the employee’s home through the foster care system. The amendments provide that eligible employees are entitled to up to 40 hours of foster care leave, with pay, for the following purposes: (1) bonding with the child and for adjustment purposes; (2) attending school placement meetings related to changes due to foster care placement; (3) attending individualized educations program meetings related to changes due to foster care placement; (4) attending required court hearings; and (5) attending required case-planning activities.

 

California: Trial Courts Cannot Dismiss PAGA Claims for Unmanageability

On January 18, 2024, in Estrada v. Royalty Carpet Mills, Inc., the California Supreme Court said that trial courts do not have authority to strike/dismiss claims under the Private Attorneys General Act (PAGA) on the grounds that the claims are unmanageable. PAGA claims operate differently from class actions, which can be denied on manageability grounds, and they have a different purpose. Rather, courts can limit the types of evidence and use other tools to manage large PAGA cases. It remains to be seen whether an employer may strike/dismiss an unmanageable PAGA claim as a violation of the employer’s due process rights, but that would only have limited applicability to protect constitutional rights.

 

California: New Emergency Silica Safety Standard Effective December 29, 2023, Cal-OSHA approved an emergency temporary standard (ETS) to provide greater protections to workers exposed to respirable crystalline silica (RCS), primarily targeted to the engineered stone industry, but the ETS is applicable to all employers. It requires exposure protections, respiratory protections, training, reporting, and a written exposure control plan. The ETS will be in effect for one year.

 

REMINDER! Connecticut: Unemployment Benefits Reforms Passed in 2021, and effective January 1, 2024, HB 6633 states that receipt of severance pay results in disqualification for receipt of unemployment benefits for the period of time covered by the severance payment. It is not clear how lump sum severance payments affect this restriction. Employers should consult with legal counsel to review their severance agreements and its impact on unemployment eligibility.

 

Illinois: Amendments to Personnel Records Review Act The Illinois Personnel Records Review Act (IPRRA) was recently amended to make it easier for employees to obtain copies of their personnel records. As of January 1, 2024, employers must email or mail a copy

of the employee’s records to the employee upon their written request, regardless of whether the employee can show that they are unable to inspect the records in person prior to receiving a copy. However, employers can still charge for any actual cost of copying the requested materials.

 

Portland, ME: State of Emergency Triggers Hazard Pay On January 11, 2024, Maine Governor Janet Mills declared a state of civil emergency for coastal counties in Maine impacted by flooding caused by a storm earlier that week. The declaration triggers a hazard pay measure for nearly every employer in the city of Portland, pursuant to the city’s broad minimum wage ordinance. Therefore, effective 12:15 p.m. EST on January 11, 2024, to 12:15 p.m. EST on January 18, 2024 when Maine’s governor lifted the state of emergency, employees in Portland were entitled to the increased minimum wage of $22.50 per hour.

 

Massachusetts: Updated PFML Guidance

Effective November 1, 2023, employees with additional paid leave benefits provided by company policy could use those benefits to “top off” Massachusetts Paid Family and Medical Leave benefits up to 100% of their wages. This was solely the employee’s choice. To resolve conflict which arose between paid leave policies that prohibited “top off,” the Department of Family and Medical Leave (DFML) released guidance that employees could top off PFML benefits subject to the accrual and use restrictions of their employer’s policies. Employers should review and update their policies to determine how employees can use existing paid leave policies to top off PFML.

 

Missouri: New Voluntary Retirement Plan Coming! SB 75 created the Missouri Show-Me MyRetirement Plan, a voluntary, state-run retirement plan for private employers with 50 or fewer employees. If an employer later employs more than 50 employees is allowed to remain in the program for five years. Employees who are 18 or older with taxable wages in Missouri are eligible to participate through payroll deductions to the plan. Employees may terminate their participation in the plan at any time. Employers may voluntarily provide contributions. Contributions may begin by September 1, 2025. Employers should continue to look for forthcoming regulations to implement the plan.

 

New Jersey: Unions to File Prevailing Wage Claims Effective January 8, 2024, S1438/A5794 amends New Jersey’s State Prevailing Wage Act to permit unions to file prevailing wage claim suits on behalf of workers on covered projects regardless of whether the workers belong to the union. The Prevailing Wage Act requires employers to pay certain minimum rates, as determined by the New Jersey Department of Labor and Workforce Development (NJDOLWD), to workers working on public works projects. While the law previously permitted a union to represent unionized workers on a project in an action brought on their behalf, the amended law goes one step further, allowing the union to also represent non-union worker(s) employed on the project in a claim for any unpaid wages owed to such individuals. The only caveat is that a worker who is not a member of the union organization must consent in writing to such representation.

 

New York: Governor Vetoes Noncompete Ban On December 22, 2023, Governor Kathy Hochul vetoed a bill which proposed to ban nearly all types of noncompete agreements. The Governor explained the veto was due to the fact the ban was overly broad. Employers should note this is not the end of the road for this type of legislation in New York. The Governor requested modified legislation which would prohibit noncompetes for middle-class and low-wage workers but would allow employers to continue using noncompete agreement with highly compensated employees.

 

New York: Relief for “Frequency of Pay” Claims

Under New York Labor Law Section 191, manual workers must be paid on a weekly basis. Manual workers are those who spend 25% or more of their time engaged in physical labor. Section 191 claims could only be brought by the NY Department of Labor. In 2019, the New York Appellate Division, First Department ruled in Vega v. CM & Associates Construction Management, LLC that there was a private cause of action for employees. This led to class action litigation for late paid wages. This included for wages that were paid in full but were paid on a bi-weekly or semi-monthly basis. On January 17, 2024, the New York Appellate Division, Second Department broke with this decision and ruled in Grant v. Global Aircraft Dispatch Inc. that payment of full wages on the regular biweekly payday does not constitute nonpayment or underpayment. This comes on the heels of Governor Kathy Hochul’s 2025 Executive Budget Proposal which includes language to provide relief to employers faced with such “frequency of pay” litigation. The proposed budget includes language that Section 198 of the Labor Law would be amended to state “… liquidated damages shall not be applicable to violations of . . . section 191 of this article where the employee was paid in accordance with the agreed terms of employment, but not less frequently than semi-monthly.” It remains to be seen whether the legislature will agree and approve the State Budget language.

 

New York: Updated Model Lactation Policy

Since June 7, 2023, the Nursing Mothers in the Workplace Act requires employer accommodations for nursing employees. Employers must also provide a lactation policy upon hire, annually thereafter, and to employees returning to work following the birth of a child. The Act required the New York State Department of Labor (NYSDOL) to develop a model policy regarding workplace lactation rights. The NYSDOL recently updated the model policy for use. Review the NYSDOL’s website for more information.

 

New York: Increased Statute of Limitations

Effective February 15, 2024, the statute of limitations for unlawful discriminatory practice claims filed with the New York State Division of Human Rights expands from one year to three years. Previously, only sexual harassment claims had a three-year statute of limitations.

 

New York, NY: Private Right of Action for Earned Safe and Sick Time Act Claims Effective March 20, 2024, Proposed Int. No. 563-A creates a private right of action for damages and other relief for violations of the Earned Safe and Sick Time Act (ESSTA). Employees who allege a violation of their rights under the ESSTA can take their employer to court under a civil action for compensatory damages, injunctive and declaratory relief, attorneys’ fees and costs, and other relief the court finds appropriate. The amendment also allows the Department of Consumer and Worker Protection (DCWP) to impose penalties per instance of violation and not just per violation. The DCWP also retains the right to conduct an investigation on its own initiative. Employers should update their leave policies and train appropriate personnel on the requirements of the law.

 

New York, NY: Expanded Domestic Violence Victim Protections

As of July 4, 2023, the New York City Human Rights Law definition of “victim of domestic violence” was expanded to include a victim subject to acts or threats of economic abuse.

 

Pennsylvania: Changes to Employer Criminal Background Screening Effective February 12, 2024, Pennsylvania’s HB 689 amends Pennsylvania law relating to the expungement of certain criminal record information and employer immunity when hiring individuals with expunged records. The amended law immunizes employers from liability for claims related to the effects of

expunged records or the lawful use of criminal record history information when an applicant voluntarily discloses an expunged conviction. The law also extends the availability of automatic expungements to pardons and expands eligibility for Pennsylvania’s pre-existing limited access statute for criminal records. Now, certain individuals who are free from conviction for seven years and otherwise meet requirements can petition for limited access; previously, the minimum threshold was 10 years. The law also clarifies categories of offenses that are and are not eligible for limited access petitions.

 

Philadelphia, PA: Amendments to Local Fair Criminal Records Screening Standards Ordinance Philadelphia amended its Fair Criminal Record Screening Standards Ordinance to specifically address an employer’s use of convictions subject to “exoneration.” Effective January 19, 2024, the Ordinance defines “exoneration” as reversing or vacating a conviction by pardon, acquittal, dismissal or other post-conviction re-examination of the case by the court or other government official, and generally prohibits employers from denying employment based on convictions subject to “exoneration” as so defined.

 

Pittsburgh, PA: Strict Enforcement of Paid Sick Days Act in Food Service Industry

On January 3, 2024, Pittsburgh’s Office of Equal Protection announced strict enforcement and compliance checks for local businesses, particularly the food services industry, for the Pittsburgh Paid Sick Days Act. Compliance investigations will begin early in 2024 starting with the 15201 and 15203 zip codes. The Act requires employers with at least 15 employees to provide employees up to 40 hours of paid sick leave per year. Employees accrue paid sick time at a rate of one hour of leave for every 35 hours worked in Pittsburgh. Employers with fewer than 15 employees must also provide paid sick leave at the same accrual rate, up to 24 hours per year. The Act applies to employees who work in the City even if the employer is not physically present there. Thirty-five hours of work performed in the City for the employer in a calendar year provides eligibility. Employers should review their policies and procedures to make sure they are ready for a compliance check.


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. © 2024 ManagEase

New NLRB Joint Employer Rule Finalized!

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All Employers

EFFECTIVE

December 26, 2023

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  • Joint employer relationships occur if there is direct, indirect, or mere authority (even if not exercised) to control employees’ essential terms and conditions of employment.

Discussion

On October 26, 2023, the National Labor Relations Board (NLRB) issued its final rule on definition joint employer relationships. The final rule will be effective on December 26, 2023.

The new joint employer rule repeals and replaces the 2020 NLRB joint employer rule. The 2020 rule said that joint-employer status exists where a company exercises “substantial direct and immediate control” over the essential terms and conditions of another company’s employees. The 2020 rule was a rejection of the previous line of Browning-Ferris cases that indicated a joint employer relationship could be possible where a company had the authority to control another company’s employees, even where they did not exercise that authority.

The current 2023 joint employer final rule returns to the Browning-Ferris standard with some expansion. Specifically, joint employer status occurs:

  • Where one company directly exercises control over the second company’s employees’ essential terms and conditions of employment, OR
  • Where the first company’s control is indirect (even through an intermediary), OR
  • Where the first company’s control is reserved (i.e., authorized) but not ever actually exercised.

“Essential terms and conditions” of employment are defined to include wages, benefits, and other compensation; hours of work and scheduling; assignment of duties to be performed; supervision of the performance of duties; rules for performance and discipline; hiring and termination; and health and safety work conditions. The final rule notes that an entity’s control over matters that are not material to an employment relationship and that do not apply to the employees’ essential terms and conditions of employment is not relevant to the determination of whether the entity is a joint employer.

Joint employers of particular employees subject to a collective bargaining agreement must bargain collectively for the terms of employment that it controls or has authority to control, even where not “essential” to its joint-employer status. Those joint employers are not required to bargain with respect to any term and condition of employment that they do not possess the authority to control or exercise the power to control.

Joint employer status typically means joint and several liability for labor violations of those areas that the joint employer controls or has authority to control. Employers should have workforce and vendor agreements reviewed by legal counsel to assess and minimize potential exposure.

Action Items

  1. Review the final rule here.
  2. Have joint employer relationships reviewed by 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. © 2023 ManagEase

Executive Order on Artificial Intelligence

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All Employers

EFFECTIVE

October 30, 2023

  

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  • President Biden issued an “Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence” to address growing concerns surrounding the use of artificial intelligence in various areas, including labor and employment.
  • Federal agencies are called to create new guidance and training and to develop best practices to combat AI-related concerns.

Discussion

On October 30, 2023, President Biden issued  an “Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence” to address growing concerns surrounding the use of artificial intelligence in various areas, including labor and employment. The Executive Order calls to action many federal agencies, and tasks them with developing guidance, trainings, and best practices that can be implemented to minimize potential harms from the use of AI technology.

Key components of the Executive Order applicable to employers include:

  • The Secretary of Labor is ordered to develop principles and best practices to mitigate the harms and maximize the benefits of AI for workers by addressing job displacement, labor standards, workplace equity, health, and safety, and data collection. Once these best practices are identified, the agencies are expected to adopt these guidelines as part of their programs.
  • The Secretary of Labor is also responsible for issuing guidance emphasizing that employers must ensure that employees are appropriately compensated for all hours worked under the Fair Labor Standards Act when using AI tools to monitor or augment employees’ work.
  • The Chairman of the Council of Economic Advisors is required to prepare a report outlining AI’s potential impacts on the labor market, and the Secretary of Labor must produce a report identifying options for strengthening federal support for workers facing labor disruptions caused by AI.
  • The U.S. Department of Justice is directed to increase coordination efforts with federal civil rights offices on AI and algorithmic discrimination issues.
  • The Federal Trade Commission is encouraged to use the agency’s rulemaking authority to “ensure fair competition in the AI marketplace and to ensure that consumers and workers are protected from harms that may be enabled by the use of AI.”

Most agencies have between 30 to 365 days to fulfill their respective requirements under the Executive Order. Even though the text of the document largely focuses on federal workers, private employers may be impacted by any developing guidance. Employers should continue to monitor developments related to AI in the workplace, and ensure that their policies and procedures for using such technologies are compliant with applicable federal, state and local laws.

Action Items

  1. Review workplace policies and procedures regarding the use of AI technology for compliance.

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

DOL Guidance on “Hot Goods” and Child Labor Violations

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All Employers

EFFECTIVE

August 31, 2023

  

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  • The Department of Labor’s Wage and Hour Division issued Field Assistance Bulletin No. 2023-3 (Guidance) to instruct its field agents on the prohibition of “hot goods” as defined by the Fair Labor Standards Act (FLSA).
  • The FLSA prohibits the shipment or delivery for shipment of hot goods in interstate commerce if the goods were removed from a producing establishment within 30 days following a child labor violation.

Discussion

The Department of Labor’s Wage and Hour Division issued Field Assistance Bulletin No. 2023-3 (Guidance) to instruct its field agents on the prohibition of “hot goods” as defined by the Fair Labor Standards Act (FLSA). “Hot goods” are those that are produced in a business that uses oppressive child labor. These goods can include “wares, products, commodities, merchandise, or articles or subjects of commerce of any character, or any part or ingredient thereof” and intangibles like ideas, intelligence, and news. If a portion of a good is the product of child labor and the rest of the good is not, the entire product is still considered a “hot good.” The FLSA prohibits the shipment or delivery of hot goods in interstate commerce if the goods were removed from a producing establishment within 30 days following a child labor violation.

The Guidance provides several clarifications to the language included in the FLSA prohibition. “Oppressive child labor” is any violation of the Department of Labor’s Child Labor Regulations and Orders. The act of being “produced” covers a broad range of activities: production, manufacturing, mining, handling of goods, sorting, storing, packing, and labeling. “In or about an establishment” includes performing occupational duties on the premises regardless of whether workers are employed by the owner, or performing work in close proximity if the work duties are directly related to the activities of the producing establishment.

The Guidance also clarifies the good-faith defense provided by the FLSA. Alleged violators can defend themselves by showing they acquired the goods in good faith and relied on written assurances that the goods were produced in compliance with FLSA child labor provisions. The Department of Labor has the authority to assess monetary penalties and file a civil action in federal court to enjoin the shipment of goods via a temporary restraining order, temporary injunction, or permanent injunction. The Guidance also provides examples to illustrate violations and compliance.

Action Items

  1. Review hiring procedures and working conditions of minors for compliance.
  2. Have appropriate personnel trained on control for hot goods.

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

Second Circuit: EPA “Factor Other Than Sex” Affirmative Defense Need Not Be Job-Related

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All Employers with Employees in CT, NY, and VT

EFFECTIVE

October 17, 2023

  

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  • To establish an affirmative defense under the EPA, employers need only prove that a pay disparity results from a differential based on any factor except for sex.
  • The “any factor other than sex” does not need to be job-related.

Discussion

In Eisenhauer v. Culinary Institute of America, the Second Circuit Court of Appeals clarified that the federal Equal Pay Act (EPA) does not require employers to show that a “factor other than sex” defense must be job-related. Instead, a defendant must only prove that the pay disparity in question results from a differential based on any factor except for sex.

Here, a female professor from the Culinary Institute of America alleged that her employer violated the EPA and New York Labor Law by compensating her less than a male professor carrying a similar course load. In its defense, the employer pointed to its sex-neutral compensation plan, which incorporates a collective bargaining agreement and employee handbook, as justification for the pay disparity.

The EPA provides four affirmative defenses to its prohibition of pay disparities based on sex: “(i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.” In reviewing “any factor other than sex,” the Circuit Court said it means every additional factor except for those based intentionally or unintentionally on sex. Therefore, to establish the EPA’s “factor other than sex” defense, a defendant must prove that the pay disparity in question results from a differential based on any factor except for sex. Notably, the Court found that there was nothing in the legislative history to suggest that the term must be job-related or limited in any way.

Action Items

  1. Conduct a wage audit for compliance with the EPA.
  2. Establish a compensation structure with parity.
  3. Have appropriate personnel trained on managing compensation.

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: Conditions on Non-Compensable Work Allowed

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All Employers with IL, IN, and WI Employees

EFFECTIVE

October 5, 2023

  

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  • Employers that provide pay for non-compensable pre- or post-shift activities can impose conditions on such pay.

Discussion

In Meadows v. NCR Corp., the Seventh Circuit Court of Appeals ruled employers that pay for otherwise non-compensable pre- or post-shift activities can impose conditions on that pay. Here, the plaintiff was a customer engineer servicing point-of-sale systems and ATMs. Off-the-clock work was prohibited and work done during regular shifts was to be recorded electronically. If overtime was performed outside this policy, then that time was paid as long as it was recorded in the timekeeping system. The plaintiff performed pre- and post-shift activities and other work during unpaid meal periods like reviewing email, mapping the service route, reviewing work orders, and responding to work calls. His unauthorized overtime was paid but work that was not recorded was not paid per policy. The plaintiff sued for payment of the unrecorded overtime under the Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Law.

The court ultimately found the work the plaintiff performed that was unrecorded was not integral and indispensable to the principal activities of servicing the employer’s systems. Rather, they were incidental to the commute in a company vehicle. The time could be compensable, however, if the employer had a practice of paying for those activities through an express contractual provision or through a custom or practice. Adopting a custom of paying employees for non-compensable activities means the employer also has the discretion to place conditions on that custom.

Action Items

  1. Review overtime and non-compensable time pay practices for compliance.

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

Eleventh Circuit: Clarification on “Qualified Individual” Under the ADA

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All Employers with Employees in AL, FL, and GA

EFFECTIVE

October 11, 2023

  

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  • Former employees cannot sue under the Americans with Disabilities Act (ADA) for post-employment disability discrimination, as they do not meet the definition of a “qualified individual.”
  • Under the ADA, a “qualified individual is someone who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.

Discussion

In Stanley v. City of Sanford, Florida, the Eleventh Circuit Court of Appeals stated that a retiree does not constitute a “qualified individual” with a disability, because they do not hold or desire a position, as required under the Americans with Disabilities Act (ADA). Therefore, the court found that a former employee cannot sue under the ADA for post-employment disability discrimination.

Here, a firefighter for the City of Sanford, Florida was diagnosed with Parkinson’s disease in 2016. Two years later she took disability retirement and continued to receive health insurance through the City. At the time she joined the Department, disability retirees received free health insurance until age 65; however, unbeknownst to her, the City changed its policy in 2003, limiting the continuing health insurance subsidy to 24 months after retirement. Just before her two years was up, the former firefighter brought a claim against the City alleging that the decision to change the retiree health insurance subsidy was disability discrimination in violation of the ADA.

The court dismissed the former firefighter’s claim, finding that she was not a “qualified individual with a disability.” The court pointed out that, under the ADA, a “qualified individual is someone who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires. As a retiree, the former employee did not hold or desire an employment position with the City. Because of this, she could not bring a claim for disability discrimination under the ADA.

That said, the court distinguished between post-employment discrimination claims and retaliation claims under the ADA, noting that a retiree may be able to bring a claim against a former employer because it retaliated against the retiree for exercising rights under the ADA. A plaintiff in a retaliation claim does not have to be a “qualified individual with a disability,” they just have to show they exercised rights under the ADA. Here, the plaintiff did not qualify for a retaliation claim because the decision to change the insurance coverage was made in 2003 and her diagnosis occurred in 2016, so therefore, she did not exercise any rights under the ADA prior to the change.

Action Items

  1. Have appropriate personnel trained on accommodation 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

Eleventh Circuit: FLSA Exemption Tests Clarified

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All Employers with AL, FL, and GA Employees

EFFECTIVE

September 11, 2023

  

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Quick Look

  • Overtime exemption may apply where an employee receives a salary meeting the minimum requirements plus additional compensation paid on any basis, or where an employee is paid on a quantified basis with a minimum salary guarantee if there is a reasonable relationship between the guaranteed amount and the amount actually earned.

Discussion

In Wilson v. Schlumberger Tech. Corp., the Eleventh Circuit Court of Appeals clarified how the Fair Labor Standards Act (FLSA) overtime exemption applies. The FLSA regulations provide two options for an employer to prove that an employee is exempt from receiving overtime pay: (1) the employee receives the minimum weekly salary basis and may receive additional compensation paid on any basis; and (2) the employee’s earnings may be computed on an hourly, daily, or shift basis if they are guaranteed at least the minimum weekly required amount paid on a salary basis regardless of the number of hours, days or shifts worked, and a reasonable relationship exists between the guaranteed amount and the amount actually earned.

Here, an employee received a guaranteed base meeting the minimum exempt salary threshold regardless of the number of hours, days, or shifts worked, in addition to other hourly rates and bonuses depending on the situation. However, his hourly and bonus pay significantly exceeded the salary pay. The question became whether the first or second exemption test applied.

Ultimately, the court said that the first test applies when an employee receives a base salary and additional compensation, and the second test applies when an employee is merely guaranteed a minimum salary but is typically paid on an hourly, daily, or shift basis. Because the employee here received a fixed base salary and additional compensation in the form of hourly rates and other bonuses, the first test applied.

Action Items

  1. Have overtime exemptions reviewed for compliance.

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