APPLIES TO All Employers with Employees in IL

EFFECTIVE January 1, 2024

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Effective January 1, 2024, the Illinois Paid Leave for All Workers Act will require most employers in Illinois to offer 40 hours of paid leave for any reason to employees. The IDOL updated their FAQs on the IPLAWA, addressing the impact of employer’s existing PTO policies and the denial of leave for certain operational needs. The IDOL also published its first set of proposed regulations implementing the IPLAWA. These include addressing the exemption for pre-existing PTO policies, updates to accrual and carryover for fractional accrual calculation and a carryover cap, as well as new reporting requirements for employers.

Discussion

New FAQS on IPLAWA

On October 18, 2023, the Illinois Department of Labor (IDOL) published updated FAQs for the upcoming Illinois Paid Leave for All Workers Act (IPLAWA). The IDOL also held several informational webinars to address implementation of the IPLAWA. Key takeaways that employers should be aware of include:

Employer’s Pre-Existing PTO Policies. If employers have an existing paid time off policy that provides at least 40 hours of paid leave that can be used for any reason within a 12-month period, they can keep that policy and do not need to abide by the other provisions set forth in the IPLAWA. However, employers must ensure that their pre-existing policy is in place by January 1, 2024, and that it identifies that leave under the policy may be credited against any paid leave entitlement that the employee may have under the IPLAWA.

Denying IPLAWA Based on Operational Needs. The IDOL clarified that nothing in the IPLAWA prohibits employers from adopting a policy that establishes parameters for taking leave, and that employers may deny leave under the law for limited reasons based on the employer’s operational needs (e.g., seasonal, too many people taking leave at the same time, minimum staffing requirements for operations, etc.). However, the FAQs make clear that if an employer is going to deny leave for operational reasons, the employer must include what factors are to be considered and what circumstances may result in denial as part of their written leave policy. The policy must be communicated to all employees and evenly applied.

Proposed Regulations

In addition to the updated FAQs, the IDOL also issued its proposed regulations for implementing the IPLAWA. The proposed regulations are subject to a 90-day notice period before the regulations can be finalized, and the IDOL has indicated that they expect finalized rules to be issued before March 31, 2024. Although they may change during the rulemaking process, employers should be aware of the proposed regulations which are summarized below.

Employer’s Pre-Existing PTO Policies. In line with the FAQs, the proposed regulations also addressed a broad exemption for employers with pre-existing PTO policies. The regulations confirm that employers with a PTO policy that offers employees at least 40 hours of PTO that can be used for any reason per year do not need to change their policies, even if the pre-existing PTO policy provisions do not align with the IPLAWA on other issues (i.e., increment of use, advance notice/pre-approval provisions, and carryover).

Remote Employee Coverage. To address coverage of remote employees, the proposed regulations define an “employee” as one who: (1) works for an employer whose base of operations, regional office, or headquarters is in Illinois and that employee’s work is primarily performed in Illinois; or (2) primarily performs work in Illinois for an employer that performs substantial business in the state, markets its services in the state, or maintains a registered agent within the state of Illinois; or (3) primarily performs work in Illinois and resides in Illinois. When considering whether work is “primarily performed in Illinois,” IDOL will consider the following factors: (a) the ratio of work performed in Illinois versus outside of Illinois; (b) whether the work performed in Illinois is isolated, temporary, or transitory; and (c) whether the work performed outside of Illinois is of the same nature or has the same duties of the work performed in Illinois.

Accrual of Leave. Under the regulations, paid leave accrues at a rate of one hour for every 40 hours worked, but the calculation must be made on a fractional basis based on 15-minute work increments. For example, if an employee works for 75 hours in a biweekly pay period, they will accrue 1.875 hours of paid leave. Practically, this may result in employees accruing leave faster than the law requires. The proposed regulations require that employers always round up, regardless of where on the “dividing line” the time worked exists.

Leave Carryover. Under the IPLAWA, “all” accrued but unused leave must be carried over from one 12-month period to the next. However, the proposed regulations permit employers to establish a policy that caps leave carryover at 80 hours of unused paid leave. Employers can likely expect some additional guidance on this topic specifically, as the proposed regulations move through the rulemaking process.

Use of Leave. Employees may choose to use their paid leave before using any other leave benefits provided by the employer or state law. Similarly, employees can choose to use other leave benefits provided by the employer or another state law before using their accrued paid leave under IPLAWA. For recordkeeping, if employers provide more than one type of leave, the employer should confirm and document what category of leave the employee wishes to draw from for each absence.

Overlap with Local Laws. The proposed regulations confirm that the IPLAWA does not apply to employers located in a municipality where the employer is required to provide paid leave (including paid sick leave) to an employee, but will apply to employers located in a municipality that has “opted out” of the Cook County Earned Sick Leave Ordinance. If either Chicago or Cook County amend their ordinances after January 1, 2024, the employer must comply with the law that provides more generous paid leave benefits to employees.

Employer Reporting and Notice Requirements. The regulations outline several additional reporting and notice requirements that employers must abide by under the IPLAWA. In addition to the IDOL required notice, written policy, and recordkeeping requirements that are specifically outlined in the Act, the proposed regulations require the following:

• Frontloading Notice. Employers must provide written notice to employees informing the employee of the frontloaded amount of leave before that frontload amount is granted to the employee. “Written notice” means a printed or printable communication in physical or electronic format.
• Customized Employee Statement. Employers must post a statement summarizing the employer’s written policy and how an employee can obtain a copy of the policy. This must be provided in English and any other language commonly spoken in the employer’s workplace.
• Access to Policy. Employers must provide employees with a copy of the paid leave policy prior to or upon the commencement of employment or within 90 days after the effective date of the IPLAWA. If the employer regularly communicates with employees through electronic means, the policy must be provided by the regular electronic method.
• Employee Paystubs. Employers must report employee’s paid leave accrual and remaining balance on each paystub, and provide those records to employees upon request. Alternatively, employers may report the accrual and balance on the form that the employer normally uses to notify the employee of wage payments and deductions from wages.

Action Items

1. Review the full proposed regulations for the IPLAWA here.
2. Continue to monitor the IDOL website for updates to FAQ guidance and finalized regulations.
3. Prepare payroll processes for compliance with leave accrual.
4. Have leave policies updated for compliance.
5. Implement required employee notice procedures.
6. Have appropriate personnel trained on leave 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

APPLIES TO All Employers with 25+ MA Employees

EFFECTIVE Pending

QUESTIONS? Contact HR On-Call (888) 378-2456

Quick Look Employers with 25 or more employees must comply with pay transparency requirements. Employers with 100 or more employees must provide EEO data for pay data reporting.

Discussion

HB 4109 may soon require pay transparency in job listings and pay data reporting for Massachusetts employers. Under the proposed pay transparency requirements, employers with 25 or more employees must: (1) disclose the salary or wage range for a position in all job postings; (2) provide the salary range to employees who are offered promotions or transfers; and (3) provide the pay range to employees for their current role, if requested. The pay range must be the annual salary range or hourly wage range that the covered employer reasonably and in good faith expects to pay for such position at that time.

The pay data reporting requirements will apply to private employers with 100 or more employees. Covered employers must submit an EEO data report that includes workforce demographic and pay data categorized by race, ethnicity, sex, and job category. The underlying EEO report will not be considered a public record subject to disclosure, but the data will be aggregated and posted on the Massachusetts Department of Labor website. Notably, there is no private right of action in the law, and the Attorney General’s Office will be in charge of enforcement. The Office will have the power to seek declaratory or injunctive relief and impose fines for violations. Fines can range from $500 to $25,000 per violation, depending on the circumstances.

There was a similar bill in the Senate which is now being reconciled with the House bill. Once the two bills are reconciled, it will head to the Governor who is expected to sign. The law would go into effect one year from the date of signature. Employers should use that time to review their pay practices 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. Review pay practices and EEO-1 reporting data.
6. Monitor the status of the bill for implementation.
7. 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. © 2023 ManagEase

APPLIES TO Federal Government Employees & Federal Contractors

EFFECTIVE September 30, 2023

QUESTIONS? Contact HR On-Call (888) 378-2456

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

Discussion

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

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

Who is impacted by a government shutdown?

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

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

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

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

What is a furlough?

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

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

Are there EEO considerations associated with a furlough?

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

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

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

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

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

Does a furlough require notice under the WARN Act?

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

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

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

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

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

Are furloughed workers eligible for unemployment compensation?

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

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

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

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

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

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

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

Is a furlough a COBRA-qualifying event?

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

Takeaways

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

Action Items

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

---

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase

APPLIES TO All Employers

EFFECTIVE September 13, 2023

QUESTIONS? Contact HR On-Call (888) 378-2456

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

Discussion

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

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

Action Items

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

---

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase

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

EFFECTIVE July 28, 2023

QUESTIONS? Contact HR On-Call (888) 378-2456

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

Discussion

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

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

Action Items

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

---

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase