Ninth Circuit: Furlough Requires Payment of Final Wages

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  • The Ninth Circuit Court of Appeals determined that furloughed employees are entitled to immediate payment of their accrued vacation time when furloughed without a specific return date.

Discussion

The Ninth Circuit Court of Appeals determined that furloughed employees are entitled to payment of their accrued vacation time immediately upon furlough, even if the employees are not permanently terminated until a later date.

In Harstein v. Hyatt Corporation, a former employee filed a class and Private Attorneys’ General Act (PAGA) claim, alleging that her former employer failed to timely pay the accrued vacation time to employees who were furloughed in March of 2020, even though the employees were not officially terminated from their employment until June of 2020. Under California law, a failure to pay all unused accrued vacation time, along with all other wages earned immediately at the time of termination, triggers penalties of a day’s wages until all final wages are paid (i.e., waiting time penalties), which are generally capped at 30 days.

California’s Labor Code requires that, when an employment relationship comes to an end, employers must promptly pay any unpaid wages to the departing employee. More specifically, when an employer discharges an employee, the wages earned and unpaid at the time of the discharge become due and payable immediately. In deciding this case, the Ninth Circuit relied primarily on a non-binding Department of Labor Standards Enforcement (DLSE) opinion letter and the DLSE’s Policies Interpretations Manual, which state that when an employee is temporarily laid off without a specific return date within the normal pay period, employment should be treated as “terminated,” and therefore, final wages become due to be paid immediately.

The Court found that, because the employees were temporarily laid off in March 2020 for longer than a normal pay period and without notice of a specific return date, the employer should have paid the accrued vacation pay in March 2020 when it issued the furlough, rather than in June 2020 when the furlough became a permanent layoff.

The case has been sent back to the district court for further consideration on whether the employer’s actions were willful, so employers should continue to monitor the progression and interpretations in this case.

Action Items

  1. Review final pay practices and revise for compliance with this updated standard.
  2. Consult with legal counsel regarding specific application of this standard to individual furlough circumstances.

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

California: It’s “Shocktober” Once Again! What is Changing in 2024?

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  • Construction worksites must implement appropriate toilet facilities for female and non-binary employees.
  • Public prosecutors will have the ability to prosecute civil and criminal actions for violations of certain provisions of the Labor Code.
  • The mandatory Wage Theft Notice will be updated for emergency and disaster declarations, and for agricultural worker rights.
  • Grocery worker rights are expanded during change of store ownership.
  • Employment complaints of sexual assault, harassment, discrimination, and retaliation are protected against claims of defamation.
  • “Sensitive personal information” under the CCPA includes personal information that reveals a consumer’s citizenship or immigration status.
  • Noncompete provisions in employment contracts are void.
  • CPRA protects data privacy rights regarding contraception, pregnancy care, and perinatal care, including abortion services.
  • Covered fast food workers must earn $20/hr. as of April 1, 2024.
  • Mandated reporting at long-term care facilities is changed when abuse is caused by another resident of the facility with dementia.
  • People with concealed carry firearms licenses may only enter commercial establishments open to the public with their concealed carry firearms if there is a sign posted notifying them that they may do so.
  • There is a rebuttable presumption of retaliation if an employer takes adverse action against an employee within 90 days following certain protected activities.
  • Minimum wage will increase for covered healthcare workers as of June 1, 2024.
  • Employers must implement a workplace violence prevention plan as part of their Injury and Illness Prevention Plans by July 1, 2024.
  • State mandatory paid sick leave increases to 5 days/40 hours per 12-month period.
  • Employers are prohibited from inquiring about job applicants’ prior marijuana use, subject to limited exception.
  • Employees in the hospitality and business service provider industries who were laid off during the COVID-19 pandemic have rehire rights through December 31, 2025.

Discussion

It’s that time of year again! California’s governor had until October 14th to sign or veto the bills that the state legislature sent to his desk. The employment laws passed this year do not disappoint the tradition of “Shocktober.” The following is a summary of the key bills employers should be aware of. All bills go into effect on January 1, 2024 unless otherwise noted.

ENACTED BILLS

AB 521 | Toilet Facilities at Construction Worksites. In an effort to protect women and nonbinary individuals at construction sites, this bill exempts construction jobsites from the single-user toilet rule, which requires single-user restrooms to be available to all genders. By the end of 2025, the standards board is required to consider adopting regulations that require at least one single-user toilet facility on all construction jobsites, designed for employees who self-identify as female or nonbinary.

AB 594 | Public Prosecution. In addition to the authority already held by the Labor Commissioner to prosecute violations of the Labor Code, this bill gives public prosecutors the ability to prosecute civil and criminal actions for violations of certain provisions of the Labor Code. Prosecution under this bill would be separate from potential recovery under a Private Attorneys General Act (PAGA) lawsuit.

AB 636 | Wage Theft Notice Update; Agricultural Workers Notice. Employers are currently required to provide employees with a wage theft notice pursuant to Labor Code § 2810.5. As of March 1, 2024, this bill amends the required notice to include information about the existence of a federal or state emergency or disaster declaration applicable to the county or counties where the employee is to be employed, and that was issued within 30 days before the employee’s first day of employment, that may affect their health and safety during their employment.

As of March 15, 2024, the bill also requires employers with employees who are authorized to work under an H-2A agricultural visa to include in the Section 2810.5 notice, in Spanish, a separate section describing an agricultural employee’s rights under state law, such as the H-2A visa wage rate, overtime rates, frequency of pay, pay for piece rate workers, rest periods, travel time compensation, employee housing rights, itemized wage statements, sexual harassment prohibitions, workplace safety requirements, improper wage deductions, employee-paid health insurance, rick to sick leave, workers’ compensation coverage, and the right to complain to government agencies and seek advice from collective bargaining representatives. This entire Section 2810.5 notice must be provided to the H-2A visa employee on their first day of work in Spanish and in English upon request.

The Labor Commissioner will provide an updated notice before the deadlines. The revised Section 2810.5 notice can also meet the notice requirements for non-H-2A visa employees.

AB 647 | Grocery Ownership Transfer and Worker Protections. This bill expands existing protections for grocery workers when there is a change in ownership. The protections are expanded to include the purchase or acquisition of a grocery establishment. A grocery establishment is also expanded to include its distribution centers that are used primarily to distribute goods to or from its owned stores. A grocery establishment does not include a retail store that ceased operations for 12 months or more, up from six months. “A successor grocery employer may be the same entity as an incumbent employer when a change in control occurs but the covered employer remains the same.” Importantly, when the sum of both the incumbent and successor grocery employers, immediately prior to the change in control, is less than 300 nationwide, those employers are exempt from the retention rules.

An incumbent grocery employer and any collective bargaining representative must provide the successor grocery employer with information about their employees, which will now include their cell phone number and email address. The bill also adds anti-retaliation protections as well as the ability to bring a lawsuit against an employer for violations of the retention requirements.

AB 933 | Protected Complaints. This bill expands protections for individuals from being subject to defamation lawsuits if they have engaged in privileged “communications”. “Communication” includes factual information related to the individual experiencing sexual assault; an act of workplace harassment or discrimination; failure to prevent an act of workplace harassment or discrimination; aiding, abetting, inciting, compelling, or coercing an act of workplace harassment or discrimination; or an act of retaliation against a person for reporting or opposing workplace harassment or discrimination. If the individual successfully defends a defamation lawsuit involving their protected communication, that individual is entitled to their reasonable attorney’s fees and costs, plus treble damages, punitive damages, or any other relief otherwise permitted by law.

AB 947 | California Consumer Privacy Act (CCPA) Amended. This bill expands the definition of “sensitive personal information” under the CCPA to include personal information that reveals a consumer’s citizenship or immigration status.

AB 1076 | Noncompete Agreements Void. This bill seeks to codify the 2008 ruling in Edwards v. Arthur Andersen LLP, consistent with existing law, which voids noncompete provisions in employment contracts. For previously signed noncompete agreements by employees hired on or after January 1, 2022, employers must notify employees that those agreements are void by February 14, 2024.

AB 1194 | California Privacy Rights Act (CPRA). Under the CPRA, if the consumer’s personal information contains information related to accessing, procuring, or searching for services regarding contraception, pregnancy care, and perinatal care, including abortion services, this bill requires a business to comply with the CPRA’s requirements unless the personal information is used for specified business purposes, is only retained in aggregated and deidentified form, and is not sold or shared. The CPRA requirements restrict businesses from cooperating with a government agency request for emergency access to a consumer’s personal information regarding contraception, pregnancy care, and perinatal care, including abortion services, except that businesses will still have a duty to preserve or retain evidence under California or federal law in an ongoing civil proceeding.

AB 1228 | Fast Food Worker Rights Revised. In 2022, AB 257 enacted significant employer rules for the fast food industry, including a Fast Food Council that would have broad authority. AB 1228 is viewed as a compromise to settle a pending referendum on that law. Going forward, fast food employers of national chains with more than 60 establishments will have a $20/hour minimum wage rate for covered employees as of April 1, 2024. There would still be a Fast Food Council but with less authority than previously envisioned. AB 1228 also does not create joint liability for franchisors and franchisees as the previous law would have. The law will only be in effect through 2029, unless extended by the legislature.

AB 1417 | Mandated Reporting at Long-Term Care Facilities. Existing law requires specified people, known as mandated reporters, to report cases of elder or dependent adult abuse. This bill changes the time a mandated reporter would be required to submit a written report if abuse occurring in a long-term care facility is caused by another resident of the facility with dementia, and there is no serious bodily injury, to be within 24 hours, rather than two hours. The written report must be submitted to the long-term care ombudsman and the local law enforcement agency. In all other instances at a long-term care facility, immediately or as soon as practically possible, but no longer than two hours, the mandated reporter would be required to submit a verbal report to the local law enforcement agency, and to submit a written report within 24 hours to the long-term care ombudsman, the local law enforcement agency, and the corresponding state licensing agency.

SB 2 | Concealed Carry Authorization from Commercial Businesses. In addition to other locations, this bill prohibits people with concealed carry firearms licenses from doing so on any privately owned commercial establishment that is open to the public, unless the operator of the establishment clearly and conspicuously posts a sign at the entrance of the building or on the premises indicating that licenseholders are permitted to carry firearms on the property.

SB 497 | Presumption of Retaliation. This bill creates a rebuttable presumption of retaliation if an employer takes adverse action against an employee within 90 days following certain protected activities, such as making a claim for unpaid wages; bringing a claim or testifying in a proceeding subject to PAGA; or seeking to enforce their rights under the state’s equal pay law.

SB 525 | Minimum Wage Increase for Healthcare Workers. This bill sets a state standard for minimum wage rates for healthcare workers, including those who provide patient care, health care services, or services supporting the provision of health care (e.g., janitors, housekeeping staff, groundskeepers, guards, clerical workers, administrative employees, food service workers, medical billing personnel, and laundry workers). Minimum wage rates are set to go into effect, starting June 1, 2024, as follows:

  • Healthcare facility employers with more than 10,000 workers, and dialysis clinics – $23/hr. in 2024, $24/hr. in 2025, and $25/hr. in 2026.
  • Hospitals with a “high governmental payor mix” (Medi-Cal and Medicare patients), and rural independent hospitals – $18/hr. in 2024, with 3.5% increases annually, up to $25/hr. by 2033.
  • Community clinics – $21/hr. in 2024, $22/hr. in 2026, and $25/hr. in 2027.
  • Other covered health care employers – $21/hr. in 2024, $23/hr. in 2026, and $25/hr. in 2028.

County owned, affiliated, or operated healthcare facilities have delayed compliance to January 1, 2025.

SB 553/SB 428 | Workplace Violence Prevention Standard. This bill requires covered employers to implement a workplace violence prevention plan (as part of their Injury and Illness Prevention Plans) by July 1, 2024, subject to limited exception. There are also recordkeeping and training requirements. The Cal/OSHA Standards Board must adopt applicable standards by the end of 2026. Starting on January 1, 2025, this bill also permits employers to seek temporary restraining orders on behalf of their workers in response to harassment, or a threat of or actual workplace violence.

SB 616 | Paid Sick Leave Increased. This bill increases the state’s minimum paid sick leave entitlement from 3 days/24 hours to 5 days/40 hours per year. Usage may be limited to 5 days/40 hours and accrual may be capped at a minimum of 10 days/80 hours. The bill also preempts local paid sick leave laws on the topics of no payout on termination, reinstatement of accrued paid sick leave on rehire, lending advanced paid sick leave accruals to employees, calculation of paid sick leave, employee notice of paid sick leave, and timing of payment of paid sick leave.

SB 700 | Marijuana Protections. Except when permitted during a background screen, this bill prohibits employers from inquiring about job applicants’ prior marijuana use. The bill does not preempt federal or state law requiring drug testing for controlled substances, and does not apply to the building and construction industries. Employers may still maintain drug-free workplace policies.

SB 723 | Rehiring Displaced Workers. Existing Labor Code § 2810.8 includes rehiring requirements for those in the hospitality and business service provider industries who were laid off during the COVID-19 pandemic. This bill expands application of the rehiring requirements to include a presumption that covered employees who were separated from employment after March 4, 2020 due to a lack of business, reduction in force, or other economic, nondisciplinary reason were due to a reason related to the COVID-19 pandemic, unless the employer establishes otherwise by a preponderance of the evidence. This means that former employees who meet this criteria must be offered re-employment when positions are available for which they qualify, in addition to other notice and recordkeeping requirements. This law will remain effective through December 31, 2025.

SB 848 | Leave for Reproductive Loss. This bill requires private employers with five or more employees, and public employers, to provide 5 days’ unpaid leave for reproductive loss (i.e., failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction) within three months of the loss event or following the conclusion of other leave then being taken. Leave need not be taken consecutively. For multiple reproductive loss events, total leave is not required to exceed 20 days in a 12-month period. Employees who have worked for at least 30 days prior to the need for leave are eligible.

VETOED BILLS

While that may seem like a daunting list, you may be wondering what got vetoed. Here are a few of those vetoed bills worth noting.

  • AB 575 | Paid Family Leave (PFL) Expansion. This bill would have expanded PFL benefits to an employee taking leave to bond with a minor child within one year of an individual’s assumption of responsibilities for the child in loco parentis.
  • AB 1356 | WARN Act Expansion. This bill would have extended the advance layoff notice required under the WARN Act from 60 days to 75 days. “Covered establishment” would have also covered a group of locations including any facilities located in the state.
  • SB 799 | Unemployment Benefits for Striking Workers. This bill would have extended unemployment benefits to employees who leave work because of a trade dispute.
  • SB 403 | Caste Protections. The bill would have included “caste” as a classification protected against discrimination under FEHA. The Governor vetoed the bill stating that caste discrimination is already prohibited through the current list of FEHA protected categories.
  • SB 731 | Return-to-Work Notice. This bill would have required employers to provide remote employees with at least 30 days’ advance notice that they will be required to return to work in person.
  • SB 725 | Extended Grocery Worker Protections. This bill would have required a successor grocery employer to provide a dislocated grocery worker allowance equal to one week of pay for each full year of employment if the successor grocery employer did not hire an eligible grocery worker following a change in control or did not retain them for at least 90 days following the change in control.
  • AB 524 | Family Caregiver Status Classification. This bill would have added “family caregiver status” to the list of categories protected against discrimination under FEHA.

Action Items

  1. Review applicable bills.
  2. Have employer policies updated for compliance.
  3. Update required notices.
  4. Prepare for minimum wage increases.
  5. Update pre-employment processes regarding marijuana inquiries, if applicable.
  6. Review noncompete agreements with legal counsel and provide required void notice.
  7. Update paid sick leave policies and accruals for compliance.
  8. Have appropriate personnel trained on updated 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

Georgia: Restrictive Covenant Must be Enforceable Under Georgia Law for Foreign Choice-of-Law Provisions

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September 6, 2023

  

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  • The Georgia Supreme Court ruled a restrictive covenant must be enforceable under Georgia law before applying a foreign choice-of-law provision.

Discussion

In Motorsports of Conyers, LLC v. Burbach, the Georgia Supreme Court ruled a restrictive covenant must be enforceable under Georgia law before applying a foreign choice-of-law provision. Here, two motorcycle dealerships sought to enforce a restrictive covenant against a former employee under Florida law. A Florida choice-of-law provision governed the employment contracts containing the restrictive covenants. In its ruling, the Georgia Supreme Court found that applying the Georgia Restrictive Covenant Act (GRCA) is the first step in deciding whether a public policy exception overrides a foreign choice-of-law provision.

The GRCA codified case law distinguishing between restrictive covenants that are reasonable and unreasonable. Reasonable restrictive covenants are those that have limitations on scope, duration, and geographic reach. Contracts that do not have such restrictions are a restraint of trade and contrary to public policy. The GRCA allows courts to blue-pencil such unreasonable restrictive covenants to allow them to be enforced in part under Georgia law. As such, the Court returned the case to the trial court to first apply the GRCA framework prior to determining whether the foreign choice-of-law provision applies. Employers hoping to enforce a foreign choice-of-law provision in Georgia courts should consult with legal counsel first.

Action Items

  1. Consult with legal counsel to determine enforceability of restrictive covenants.

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

Illinois: Recent Legislative Updates

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January 1, 2024

  

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  • New hire reporting requirements will require employer reporting of newly hired independent contractors.
  • The Illinois Transportation Benefits Program (TBP) Act will require covered employers to provide covered employees with a commuter benefit.
  • The Smoke Free Illinois Act will prohibit the use of electronic cigarettes in the workplace.

Discussion

The conclusion of Illinois’ most recent legislative session has resulted in several additional laws that affect employee rights or employer obligations. Employers should begin to review these new and amended laws to prepare for their upcoming impacts. All bills go into effect January 1, 2024.

HB 1363 | Amended Gender Violence Act. The Illinois Gender Violence Act is amended to impose potential liability on a covered employer for gender-related violence that is committed in the workplace by an employee or agent of the employer, when the violence arises out of and in the course of employment. The amendment further indicates that an employer is only liable if it: (1) failed to supervise, train, or monitor the employee who engaged in the gender-related violence; or (2) failed to investigate complaints or reports provided directly to management and the employer failed to take remedial action in response to the complaints or reports. The amended law does indicate that an employer who provides training pursuant to Section 2-109 of the Illinois Human Rights Act (i.e., meets the sexual harassment prevention training requirement), then the employer will have an affirmative defense that adequate training was provided to the employee.

HB 1540 | E-Cigarettes Prohibited in the Workplace. The Smoke Free Illinois Act will prohibit the use of electronic cigarettes in the workplace, by amending the definitions of “smoke” or “smoking” to include the use of E-cigarettes.

HB 2068 | Employee Transportation Benefits. The Illinois Transportation Benefits Program (TBP) Act will require covered employers to provide covered employees with a commuter benefit that allows them to use pre-tax dollars to purchase a transit pass or qualified parking via a payroll deduction. The TBP Act covers employees who work an average of at least 35 hours per week on a full-time basis. Covered employers include employers with at least 50 covered employees in specific geographic areas, at an address located within one (1) mile of a fixed route transit service. “Public Transit” is defined under the law as any transportation system within the authority and jurisdiction of the Regional Transportation Authority.

HB 3301 | Independent Contractor Reporting. The new hire reporting requirements under Illinois’ Unemployment Insurance Act are amended to require employer reporting of newly hired independent contractors.

Action Items

  1. Revise new hire reporting procedures to account for new reporting requirement of independent contractors.
  2. Review and revise workplace polices to account for employee transportation benefit requirement and e-cigarette prohibitions.
  3. Update payroll procedures to account for employee transportation benefit.
  4. Review workplace training procedures and employee complaint handling procedures for compliance with requirements under amended Gender Violence Act.

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

New Jersey: Protections for Service Employees During Changes in Ownership

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October 22, 2023

  

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  • AB 4682/SB 2389 creates employment protections for certain service employees during changes of ownership.

Discussion

AB 4682/SB 2389 creates employment protections for certain service employees during changes of ownership. The law defines a service employee as an individual employed or assigned to a covered location on a full or part-time basis for at least 60 days and who is not a managerial or professional employee or regularly scheduled to work less than 16 hours per week. The law specifically covers the following services: care or maintenance of a building or property (e.g., work performed by a security guard; a front desk worker, a janitor; a maintenance employee; building superintendent; grounds maintenance worker; a stationary fireman; elevator operator and starter; or window cleaner); passenger-related security services, cargo-related and ramp services, in-terminal and passenger handling and cleaning services at an airport; or food preparation services at a primary or secondary school, or a tertiary educational institution.

A covered location includes: multi-family residential building with more than 50 units; commercial center or complex or an office building or complex occupying more than 100,000 square feet; primary and secondary school, or tertiary educational institution; cultural center or complex, such as a museum, convention center, arena or performance hall; industrial site or pharmaceutical lab; airport and train station; certain hospitals; state courts; and distribution centers or other facilities whose primary purpose is the storage or distribution of general merchandise, refrigerated goods, or other products.

The law changes how long a successor employer must retain an affected service employee at a covered location, the definition of the “transition period”, and the duration a successor employer must wait before discharging a retained service employee absent just cause for a period of 60 days (reduced from 90 days). A successor employer can retain less than all of the affected service employees during the 60-day transition period if it: 1) finds that fewer service employees are required to perform the work than the predecessor employer had employed; 2) retains service employees by seniority within each job classification; 3) maintains a preferential hiring list of those employees not retained; and 4) hires any additional service employees from the list, in order of seniority, until all affected service employees have been offered employment.

Fifteen days before a covered entity terminates a service contract, it must:  1) request (and have provided to them) a list containing the name and limited job information of each employee on the service contract; 2) provide written notice to any collective bargaining representative of the affected service employees of the decision to terminate the service contract, enter into a new service contract, or sell or transfer the property; 3) ensure that a written notice to all affected service employees describing the pending termination of the service contract, entrance into a service contract, or sale or transfer of the property,  is conspicuously posted at any affected work site; and 4) provide the affected service employees and their collective bargaining representative the name and address of any successor employer or the purchaser or transferee of the property.

Violations of the law may result in fines ranging from $2,500 to $5,000. Covered employers should consult with legal counsel prior to discharging any service employees pursuant to an acquisition.

Action Items

  1. Consult with legal counsel prior to sale or acquisition of covered service locations.
  2. Factor retention plans and processes into change of ownership.

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

New York, NY: Sick and Safe Time Changes

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October 15, 2023

  

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  • Updated regulations to the Earned Safe and Sick Time Act clarify the requirements of covered employees and covered employers, notice of leave, documentation required, and notice of leave balances, accruals, and usage.

Discussion

Effective October 15, 2023, the New York City Department of Consumer and Worker Protection adopted changes to the Earned Safe and Sick Time Act (ESSTA). The most significant changes are:

  • Covered Employees. Employees who physically work outside of the City of New York, including remote employees, are not covered by the ESSTA. If an employee performs hybrid work which requires them to regularly perform, or are expected to regularly perform, work in New York City, the employee is covered by the ESSTA. The hours worked within New York City are counted for the purpose of safe and sick time accrual and usage. The carveout that eliminated coverage for domestic workers has also been removed.
  • Covered Employer. The ESSTA covers private employers with 100+ employees, requiring them to provide up to 56 hours of paid safe and sick time annually. Employers with less than 100 employees only have to provide up to 40 hours of safe and sick time annually. The regulations now clarify the headcount is based on the number of employees nationwide and is determined by counting the highest total number of employees currently employed at any point during the calendar year to date. This includes full and part-time employees, including those jointly employed, on leaves of absence, suspensions, and other temporary absences. Employers who reach the next coverage threshold in headcount must make an immediate, prospective change to the sick and safe time benefits provided.
  • Notice and Documentation. Notice requirements, including the method of notice, must be included in a written policy. Reasonable methods of providing advance notice now also include sending an email to a designated email address or submitting a leave request in a scheduling software system. Also, an absence is foreseeable if the employee is aware of the need to use safe and sick time seven days or more before the use. Otherwise, the absence is unforeseeable. Also, employers requiring written documentation for the need for sick time must reimburse employees for all reasonable costs or expenses incurred in obtaining the documentation, including fees charged by a licensed health care provider. The requirement must also be included in a written policy along with the types of written documentation the employer will accept and instructions on how employees can submit the documentation.
  • Notice of Leave Balances. The requirement of employers to show the amount of safe and sick time accrued and used during a pay period, and the total balance accrued on a pay statement or other written form includes both the total balance and the amount of time available for use if the two amounts differ. Employers using an electronic system to issue pay statements or other documentation must: 1) electronically alert the employee each pay period to the availability of the required information; 2) make the required content readily accessible by the employee outside of the workplace within the electronic system; and 3) maintain accrual, use, and balance information for any past pay period in the electronic system so that it is readily accessible to the employee outside of the workplace.

Action Items

  1. Review and update safe and sick leave policies.
  2. Track employee count to determine if ESSTA needs to be increased during the year.
  3. Update pay stubs to include sick leave accruals, usage, and balances.
  4. Have appropriate personnel trained on the updated 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

October Updates

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EEO-1 Reporting for 2022 Opens October 31st!

From October 31 to December 5, 2023, the Equal Employment Opportunity Commission’s (EEOC) reporting portal will be open for employers to submit their EEO-1 reports for 2022. The 2022 EEO-1 Component 1 Instruction Booklet is available on the EEOC’s dedicated EEO-1 Component 1 website. The 2022 EEO-1 Component 1 Data File Upload Specifications are also available. The EEO-1 Component 1 report is a mandatory annual data collection that requires all private sector employers with 100 or more employees, and federal contractors with 50 or more employees meeting certain criteria, to submit workforce demographic data, including data by job category and sex and race or ethnicity, to the EEOC. Covered employers should prepare to submit the required data.

CMS Proposes Rule for Minimum Staffing Requirements in Long-Term Care Facilities

On September 1, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule titled “Minimum Staffing Standards for Long-Term Care (LTC) Facilities and Medicaid Institutional Payment Transparency Reporting.” If finalized, the proposed rule would require nursing homes across the United States to provide, at a minimum: (1) one onsite Registered Nurse (RN) 24 hours per day, seven days a week; (2) 0.55 RN hours per resident per day; and (3) 2.45 Nurse Aide hours per resident per day. As part of the proposed rule, CMS also aims to strengthen the existing facility assessment process by requiring nursing homes to: (1) assess the specific needs of each of its residents and make adjustments as necessary, including on a shift-by-shift basis; (2) formulate staffing plans designed to maximize staff recruitment and retention; and (3) incorporate the input of staff, including not only management, but also nursing staff and their representatives, as part of the assessment process. As part of the proposed rule, CMS also outlines a phased implementation and a temporary hardship exemption for facilities that can meet certain criteria. The 60-day comment period for the proposed rule runs until November 6, 2023. Affected employers can likely expect a finalized rule to be published later this year.

DOL: Notice of Proposed Rulemaking to Protect H-2A Agricultural Workers

On September 12, 2023, the U.S. Department of Labor (DOL) announced proposed rules to amend regulations governing the certification of temporary employment of nonimmigrant workers engaged in temporary or seasonal agricultural work, commonly known as the H-2A nonimmigrant visa program. The Notice of Proposed Rulemaking focuses on strengthening protections for agricultural workers and providing the DOL with enhanced ability to monitor compliance and take necessary enforcement actions against program violators. Among the changes included in the proposed rule are: 1) required payment of updated Adverse Effects Wage Rates upon publication in the Federal Register rather than 14 days after publication; 2) new notice and compensation obligations in the event an employer must briefly delay the start of work due to unforeseen circumstances; 3) requiring employers who use agents or recruiters to provide copies of all agreements and disclosing the identity and geographic location of persons and entities hired by or working for the foreign labor recruiter; 4) requiring seat belts to reduce the hazards associated with the transportation of agricultural workers; and 5) anti-retaliation provisions to ensure employers do not interfere with workers’ efforts to advocate for better working conditions. There are several other important worker protections in the proposed rule. Employers with H-2A agricultural workers have until November 14, 2023 to provide public comment.

DOL and EEOC: Disability Resource Guide

To mark the 50th anniversary of the Rehabilitation Act, the Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) released the Commemorative Resource Guide: Recruitment, Hiring, and Employment of Individuals with Disabilities. This resource guide compiles guidance and technical assistance from the federal sector, links to relevant laws and regulations, as well as information on best practices for recruitment, hiring, retention and advancement. Employers covered by the Americans with Disabilities Act should review the guide and update their policies and procedures for compliance.

EEOC Proposes Updated Workplace Harassment Guidance

On October 2, 2023, the Equal Employment Opportunity Commission published updated proposed guidance on workplace harassment, that was initially released in 2017. The updated guidance reflects significant changes in the law during recent years, and explains the legal standards and employer liability applicable to harassment claims under the federal employment discrimination laws enforced by the EEOC. Specifically, the updated guidance provides numerous updated examples to reflect a wide range of scenarios, incorporates updates throughout on current case law on workplace harassment, and addresses the proliferation of digital technology and how social media postings and other online content can contribute to a hostile work environment. The proposed guidance is subject to a 30-day comment period, ending on November 1, 2023.

OSHA: Updated Heat Protection Fact Sheet

The Occupational Safety and Health Administration (OSHA) has updated its fact sheet Protecting Workers from the Effects of Heat. The fact sheet provides information on how to recognize and respond to symptoms of heat illness, the risk factors for heat illness, and methods to mitigate heat hazards in both indoor and outdoor workplaces. The fact sheet emphasizes, like all other workplace hazards, that it is the employer’s responsibility to ensure workers are safe from hazardous heat at work. In addition to learning about the risk factors, employers should review the fact sheet for creating a plan and providing training to employees on recognizing the signs of heat illness.

California: Employer Agent Liability for Discrimination

On August 21, 2023, in Raines v. U.S. Healthworks Medical Group, the California Supreme Court stated that a business acting as an employer’s agent can be held directly liable under the Fair Employment and Housing Act (FEHA) for employment discrimination. There, during post-offer medical screening, an employer’s third-party screening provider required the applicants to complete a health history questionnaire with questions unrelated to their job. Because FEHA defines “employer” to include “any person acting as an agent of an employer, directly or indirectly,” the Court said that the third-party vendor could be directly liable for unlawful discrimination.

Lawrence, KS: New Protections Against Discrimination

As of August 22, 2023, Ordinance 10003 expanded the definition of “race,” prohibiting employers with four or more employees from engaging in employment discrimination on the basis of skin color, facial features, hair texture and protective hairstyles. Lawrence is the first city in Kansas to pass an ordinance affirming the CROWN Act. Employers should have appropriate personnel trained on the requirements and have applicable policies updated.

Minnesota: School Activities Leave Broadened

As of July 1, 2023, SF 3035 broadened the definition of eligible employee under Minnesota’s school activities leave law by removing the length of service requirement, making leave available to employees upon hire. It also clarifies that the leave applies to all employers with one or more employees. The prohibition against employer retribution was expanded to state that employers shall not discharge, discipline, penalize, interfere with, threaten, restrain, coerce, or otherwise retaliate or discriminate against an employee for requesting or obtaining a leave of absence. Employers should update leave policies for compliance.

New Jersey: Employment Tax for Non-Residents

On July 21, 2023, New Jersey Governor Phil Murphy signed Assembly Bill No. S3128/A4694, which establishes an aggressive tax treatment for non-residents who work for New Jersey employers. Specifically, the law follows the Convenience of the Employer rule which subjects employees residing in a different state from their employer’s location to double taxation, unless their state of residence has no income tax. Additionally, the law adopts a tax credit for NJ resident taxpayers who owe income or wage taxes to outside states and establishes a pilot program to incentivize businesses to assign New Jersey resident employees to work within the state. The law provides that, for the taxable years beginning on January 1, 2020, but before January 1, 2024, for any resident taxpayer who: (1) pays income or wage tax for the taxable year by another state; (2) applies for and is denied a tax refund from that state for taxes paid to that state while the resident was within New Jersey; (3) files an appeal with a tax court or tribunal disputing the denial of the requested refund; and (4) obtains a final judgment from the tax court or tribunal resulting in the taxpayer being refunded on taxes paid to the other state, then such resident shall be allowed a credit against the tax otherwise due for the taxable year in an amount equal to 50 percent of the refunded amount.

New York: Updated PFL Contribution Rates

New York state released its updated Paid Family Leave (PFL) contribution rates. Effective January 1, 2024, the employee contribution rate is 0.373% (down from 0.455% in 2023) of gross weekly wages up to an annual maximum of $333.25 (down from $399.43 in 2023). The average weekly wage is $1,718.15 (up from $1,688.19 in 2023). The maximum weekly benefit is increased from $1,131.08 to $1,151.16. Employers should update their payroll calculations accordingly.

Seattle, WA: Paid Sick Leave Expanded to App-Based Workers

Effective January 13, 2024, Seattle’s App-Based Worker Paid Sick and Safe Time Ordinance requires  network companies that facilitate work performed by 250 or more app-based workers worldwide, regardless of where the workers perform work, to provide paid sick leave to eligible app-based workers. Paid sick leave accrues at one hour for every 30 hours worked, and carryover of accrued paid sick leave may be capped at nine days. A network company must implement an accessible system for workers to understand, request, and use their paid sick leave, and must provide each worker with written notice of its policy and procedures consistent with the Ordinance’s 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

DOL Proposes Overtime Exempt Pay Increases!

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APPLIES TO

All Employers subject to the FLSA

EFFECTIVE

TBD

  

QUESTIONS?

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  • The minimum salary threshold for the administrative, executive, and professional exemptions is proposed to increase to $1,059 per week, equivalent to $55,068 per year.
  • The “highly compensated employee” exemption is proposed to increase to $143,988 per year.
  • Exempt employees in the motion picture industry who are paid a specified base rate and meet the duties test will have their base rate increased to $1,617 per week.
  • The proposed rule would automatically update the salary threshold every three years.
  • There are no proposed changes to any of the duties tests under the FLSA overtime exempt rule.
  • Any final rule that gets implemented is not expected until 2024.

Discussion

On September 8, 2023, the U.S. Department of Labor (DOL) published a proposed rule in the Federal Register that looks to increase the minimum salary thresholds for overtime exempt employees. The proposal seeks to increase from the current statutory threshold of $684 per week to $1,059 per week for administrative, executive, and professional exemptions. This would increase annual salary minimums from $35,568 to $55,068 for those employees to be exempt from overtime pay.

Interestingly, the DOL set the measurement for determining the minimum salary threshold based on the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region (currently the South). To arrive at the proposed number, the DOL used data from 2022, but indicated it would use the most recent data available when it issues the final rule. This could result in an even higher minimum salary threshold for exempt employees. The DOL projects that the salary threshold could be $1,140 per week ($59,285 annually) by the fourth quarter of 2023, and $1,158 per week ($60,209 annually) by the first quarter of 2024.

In addition, the proposed rule seeks to raise the “highly compensated employee” exemption from the current threshold of $107,432 to $143,988 per year. Again, the proposed increase is based on 2022 data, and the DOL expects to issue a final rule based on more current data at the time it is issued. Note that not all states recognize the highly compensated employee exemption, so this change may not impact those states like California. Exempt employees in the motion picture industry who are paid a specified base rate and meet the duties test will have their base rate increased from $1,043 per week to $1,617 per week. The proposed rule would also automatically update the salary threshold every three years. There would also be salary thresholds in U.S. territories subject to the federal minimum wage, with some exceptions. Importantly, there are no proposed changes to any of the duties tests under the FLSA overtime exempt rule.

From here, there will be a 60-day comment period through November 7, 2023 to allow the public time to comment on the rule. There will likely be extensions of this time to accommodate the influx of comments expected. Once the comment period is closed, and after all comments are reviewed, the DOL will determine whether to make any changes to the proposed rule. A final rule will eventually be published and it will go into effect within a few weeks of publishing. Considering all of these steps, a final rule is not expected to be in place until 2024. Additionally, litigation challenging the rule will also likely be filed, potentially further complicating the timeline.

Assuming an increase does occur, employers should start preparing now. Determine which employees currently, or who will in 2024, earn between $35,568 and $55,068 per year. Track their weekly hours worked to assess the potential impact of overtime pay versus the cost of a salary increase to remain exempt. To do this, potential overtime pay should be calculated based on what the employee’s regular rate of pay would be, which is based on their total compensation, including things like nondiscretionary bonuses, commissions, and shift premiums. Employers should also have a plan for communicating with employees about any changes in pay as a result of the expected final rule. Keep in mind that some states, like California, New York, and Washington, already exceed the proposed federal minimum exempt salary. Other states may have additional overtime exempt rules to take into consideration.

Although we may not yet know what the final numbers will be, employers should take steps now in order to have a plan in place when the final rule is issued. Continue to look for updates on this emerging topic.

Action Items

  1. Review the proposed rule here.
  2. Review the DOL’s FAQ on regular rate of pay here.
  3. Analyze potential cost of converting employees to either non-exempt or exempt based on the new proposed minimum thresholds.

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

Davis-Bacon Act Final Rule Brings Major Changes for Government Contractors

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APPLIES TO

All Federal Government Contractors and Subcontractors

EFFECTIVE

October 23, 2023

QUESTIONS?

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  • The U.S. Department of Labor (DOL) published a final rule making several changes to the Davis-Bacon Act (DBA) for federal government contractors and subcontractors working on construction projects.
  • The threshold for setting the prevailing wage has been reduced to 30% instead of 50%.
  • New technology projects like solar panels, wind turbines, broadband installation, and installation of electric car charges are now covered by the DBA.

Discussion

On August 8, 2023, the U.S. Department of Labor (DOL) published a final rule making several changes to the Davis-Bacon Act (DBA). The DBA governs wage payment for federal government contractors and subcontractors working on construction projects that are federally funded or assisted. The rule also addresses projects that sought to take advantage of energy tax credits and carbon capture under the Inflation Reduction Act (IRA). Several of the most significant changes are summarized below. However, government contractors are encouraged to review the entire rule to determine the extent of the changes that are set to come.

Expanded Coverage. New technology projects like solar panels, wind turbines, broadband installation, and installation of electric car charges are now covered by the DBA. Certain prefabrication work is also covered as is demolition when it is done to clear the way for new construction. The addition of these categories helps address the tax credits provided by the IRA.

30% Rule Reinstated. The threshold for setting the prevailing wage has been reduced. Now, 30% of workers must be paid a particular wage for that to become the prevailing wage rather than 50% of workers. The same calculation also applies for fringe benefits. The Bureau of Labor Statistics’ wage escalators are also to be used every three years.

Fringe Benefits. Fringe benefits also must be “annualized” with contractors required to obtain DOL review and approval of existing fringe benefits. Approval must be obtained within 18 months after the published rule.

Prevailing Wage Updates. The final rule also changes when and how prevailing wages can be updated. Whenever a contract is extended or modified to include newly scoped work, the prevailing wage can be updated. Long-term, indefinite contracts also require annual prevailing wage updates. Most notably, prevailing wages are a part of the contract by operation of law even if the contracting agency did not include it in the contract.

Wage Determination Geography. Urban and rural counties are to be counted together for the purpose of calculating the prevailing wage. There is no longer a prohibition on mixing and matching rural and urban data to determine the wage rate. Where states use different wage rate calculations for their own state-funded construction projects, the DOL is allowed to incorporate the stage wage determination into the federal process.

Whistleblower Protection. Individuals engaged in protected whistleblowing are entitled to reinstatement, back pay, compensatory damages including damages for emotional distress in the event of retaliation.

DOL Expanded Powers. The DOL is now empowered to withhold funds from contractors engaged in multiple federal construction projects. Also, controlling shareholders, members of an entity holding a prime contract, or participants or partners of a joint venture of partnership holding the contract can be held liable for underpaid prevailing wages in addition to the prime contractor.

Increased Recordkeeping. Contractors now must retain all contracts, subcontracts, bids, proposals, amendments, modifications, and extensions for a period of at least three years after all the work on the prime contract is completed. This is in addition to the existing requirement of retaining certified payrolls and back-up wage payment information for the same retention period.

These points only address a few of the major changes in the 800+ page final rule. Federal contractors and subcontractors on construction projects are highly encouraged to review the changes with their legal counsel to make sure they are able to comply with the new requirements.

Action Items

  1. Review the final rule here.
  2. Update policies and procedures for compliance, if applicable.
  3. Consult with legal counsel to update prevailing wage calculations and ensure compliance with the new 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

More NLRB Decisions Change the Employer Landscape

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APPLIES TO

All Employers Subject to the NLRA

EFFECTIVE

As Indicated

QUESTIONS?

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Quick Look

  • “Quickie” union elections will be reinstated as of December 26, 2023.
  • NLRB announced a new framework for determining when employers are required to bargain with unions without a representation election.
  • Employers cannot justify discretionary unilateral changes as a “past practice” during a contractual hiatus or during negotiations for a first contract.
  • An employer’s past practice of unilateral changes that was developed under a management-rights clause in a collective-bargaining agreement cannot authorize unilateral changes made after the agreement expires and while bargaining for a new agreement is under way.
  • Concerted advocacy by statutory employees on behalf of nonemployees is protected by the NLRA when it can benefit the statutory employees.
  • NLRB returned to the “totality of the circumstances” test for determining whether employees intending to induce group action by fellow employees are engaged in protected concerted activity.

Discussion

The National Labor Relations Board (NLRB) has been very active recently. There have been a number of recent rulings impacting union elections, bargaining, and the overall determination of concerted activity. Even where employers may not currently have a union presence, the changes make it easier for a union to be elected. In a time where unions are seeing a significant resurgence, employers should be aware of recent changes.

“Quickie” Union Elections. As of December 26, 2023, “quickie” union elections will return to their 2014 status. Pre-election hearings will generally be scheduled to open approximately 10 days sooner than under the current 2019 rule. The new rule eliminates the existing 20-day period between the direction of an election and the election itself in favor of elections being held on the “earliest date practicable.” Pre-election hearings will be limited to issues regarding whether the election should take place. Litigation of any eligibility and inclusion issues will be delayed post-election unless those issues must be resolved to determine whether an election should even be held. The employer’s Statement of Position responding to the representation petition will generally be due approximately three days sooner under the new rule, and unions may respond verbally at the start of the pre-election hearing rather than filing a written response.

Representation Election Proceedings. On August 25, 2023, in Cemex Construction Materials Pacific, LLC, the NLRB announced a new framework for determining when employers are required to bargain with unions without a representation election. When a union requests recognition on the basis that a majority of employees in an appropriate bargaining unit have designated the union as their representative, an employer must either recognize and bargain with the union or promptly file an RM petition seeking an election.  However, if an employer who seeks an election commits any unfair labor practice that would require setting aside the election, the petition will be dismissed, and—rather than re-running the election—the Board will order the employer to recognize and bargain with the union.

Employer’s Duty to Bargain. On August 26, 2023, in Wendt Corporation, the NLRB overruled Raytheon Network Centric Systems (2017) in part saying that allowing employers to justify discretionary unilateral changes as a “past practice” during a contractual hiatus or during negotiations for a first contract was inconsistent with Supreme Court precedent and the National Labor Relations Act (NLRA). That same day, in Tecnocap, LLC, the NLRB overruled another part of Raytheon saying an employer’s past practice of unilateral changes that was developed under a management-rights clause in a collective-bargaining agreement cannot authorize unilateral changes made after the agreement expires and while bargaining for a new agreement is under way.

Protections Advocating for Nonemployees. On August 26, 2023, in American Federation for Children, Inc., the NLRB reversed its 2019 decision in Amnesty International, returning to longstanding precedent that concerted advocacy by statutory employees on behalf of nonemployees is protected by the NLRA when it can benefit the statutory employees. “Standing in solidarity can be a protected act regardless of the employment status of those you stand with—the question is simply whether, in helping others, employees might help themselves and get help in return.”

Concerted Activity Test. On August 25, 2023, in Miller Plastic Products, Inc., the NLRB returned to the “totality of the circumstances” test for determining whether employees intending to induce group action by fellow employees are engaged in protected concerted activity under Section 7 of the NLRA. Section 7 establishes the right “to engage in . . . concerted activities for the purpose of . . . mutual aid or protection.” “To be protected under Section 7 of the Act, employee conduct must be both ‘concerted’ and engaged in for the purpose of ‘mutual aid or protection.’” The Board overruled Alstate Maintenance, LLC, (2019), which the Board said had narrowed the test for determining concerted activity.

Action Items

  1. Review the Quickie Union Election final rule and fact sheet.
  2. Review policies and procedures for compliance.
  3. Have appropriate personnel trained on the definition of “concerted activity” as it impacts potential discipline related to employer policies.
  4. Review changes with legal counsel 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