July Updates

Airplane Cargo Loaders Exempt from Federal Arbitration Act Requirements

On June 6, 2022, in Southwest Airlines Co. v. Saxon, the U.S. Supreme Court stated that employers cannot compel airplane cargo loaders to arbitrate their claims under the Federal Arbitration Act (FAA). Specifically, because airplane cargo loaders perform activities within the “flow of interstate commerce” by directly handling goods traveling in interstate commerce, their jobs fell within an FAA exemption excluding workers handling goods traveling across borders. Employers should note the Supreme Court limited its ruling to only those workers who frequently load and unload cargo on and off airplanes that travel in interstate commerce; it does not apply to all airline workers.

 

USERRA Protections Apply to States and Their Employees

On June 29, 2022, in Torres v. Texas Department of Public Safety, the U.S. Supreme Court stated that individuals may bring a civil suit against a U.S. state under the Uniformed Services Employment and Reemployment Rights Act (USERRA). In this case, the Texas Department of Public Safety denied a military veteran’s request for reemployment in a different role to accommodate a service-related disability. Texas invoked the doctrine of sovereign immunity, claiming that a state cannot be named in a lawsuit in federal or state court without its consent. The Supreme Court indicated that the states yielded their sovereignty by joining the United States for the federal purpose of building and keeping a national military. To allow states to avoid liability under USERRA would frustrate the purpose of national military readiness.

 

Fifth Circuit: Directional Driller is an Independent Contractor

On May 11, 2022, in Hargrave v. AIM Directional Services, LLC, the Fifth Circuit Court of Appeals stated that a directional driller responsible for guiding the path of drilling and advising on a well plan was an independent contractor and not an employee under the Fair Labor Standards Act (FLSA). Specifically, the court looked to the following factors to determine an independent contractor or employee relationship: control, respective investments, the worker’s opportunity for profit or loss, skill and initiative required to perform the job, and permanency of the relationship.

 

Eleventh Circuit: No FLSA Administrative Exemption for Property Damage Investigators

On June 27, 2022, in Fowler v. OSP Prevention Group, Inc., the Eleventh Circuit Court of Appeals stated property damage investigators are not exempt from minimum wage and overtime requirements under the administrative exemption of the Fair Labor Standards Act (FLSA). The FLSA administrative exemption requires employers to show job duties are both: (a) office or non-manual work directly related to the management or general operations of the employer or the employer’s customers; and (b) include the exercise of discretion and independent judgment with respect to matters of significance. The court acknowledged that the employees performed production work and not administrative work directly related to the running or service of the business.

 

California: Alcohol Server Training Required by August 31st

Alcohol servers employed by an establishment licensed to sell alcohol for on-premises consumption, must make complete an approximately 4-hour training to receive certification by August 31, 2022. New hires must have certification 60 days from their hire date. AB 1221 requires anyone who is responsible for checking identifications, taking customer orders, and pouring or delivering alcoholic beverages to have a Responsible Beverage Service (RBS) certificate from the Department of Alcoholic Beverage Control (ABC). The certification requirement was delayed due to the pandemic but AB 82 makes the August 31, 2022 deadline official. Alcohol servers need to register as a server in the RBS portal, take the required training from an RBS approved training provider, and take and pass the RBS certification exam.

 

Colorado: Updated Unemployment Insurance Notice for Terminated Employees

As of May 25, 2022, SB 22-234 requires exiting employee notices regarding unemployment insurance to include the employer’s name and address; the employee’s name, address, ID number or last four digits of their SSN; first and last dates worked; year-to-date earnings; wages for the last week worked; and the reason the employee separated from the employer. All employees must receive this notice in electronic or hard copy format regardless of the reason for the separation.

 

District of Columbia: Employees Get More Leave and Employers Get a Tax Cut

The District of Columbia Council recently passed the Fiscal Year 2023 Budget Support Act of 2022, which will expand the amount of employee leave available under the Universal Paid Leave Act (UPLA). As of October 1, 2022, eligible employees will be entitled to up to 12 weeks of parental, family, and medical leave.  Prenatal leave remains unchanged at 2 weeks. The maximum amount of leave taken within a 52-workweek period also increased to 12 weeks.  Eligible employees will also be able to “stack” leave when taking both prenatal and parental leave for a maximum leave of 14 weeks.  This leave stacking does not extend to prenatal and medical leave.

 

Effective July 1, 2022, D.C. employers’ contributions to the Universal Paid Leave Fund is now reduced to 0.26% from 0.62%. Eligible employees also no longer have a waiting period of one week before receiving the paid benefit.

 

Illinois: Contractors Liable for Unpaid Wages of Subcontractors

As of June 10, 2022, HB 5412 and HB 4600 amend the Wage Payment and Collection Act. Certain prime contractors are now liable for unpaid wages and fringe benefits of their subcontractors’ employees for contracts entered into on or after July 1, 2022. The amendments only apply to work done in Illinois exceeding $20,000 involving erection, construction, alteration, or repair of a building, structure, or other private work. Contractors altering or repairing an existing single-family dwelling or single residential unit or who are signatories of collective bargaining agreements on projects where work is being performed are exempt. Employees must provide notice to their employer and the prime contractor with the nature and basis for the nonpayment claim. If after 10 days the claim is unresolved or the parties do not agree to extend the deadline, the employee may file a lawsuit for enforcement.

 

Massachusetts: Wage Act Does Not Apply to Out-of-State Employees

On May 13, 2022, in Viscito v. National Planning Corp., the First Circuit Court of Appeals said that the Massachusetts’s Wage Act did not apply to out-of-state or “wandering workers” who primarily live and work outside of the state. There, the individual had a business with staff in Massachusetts and signed an agreement to provide services to the California-based defendant. The individual later became a resident of Florida and spent more than half his time working from there. After the end of the service relationship, the individual claimed he was misclassed as an independent contractor and was owed wages under the Massachusetts Wage Act. Based on the location of the parties, where the services were provided, and money exchanged, the First Circuit stated that the parties did not have a significant relationship to Massachusetts.

 

Oregon: Overtime Pay for Agricultural Workers Begins in 2023

Beginning in 2023 and phased in over a 5-year process, Oregon will remove overtime exemptions for agricultural workers. The removal of these exemptions significantly expands agricultural workers’ wage and hour rights. Beginning in 2023, employers will have to pay time and a half to agricultural workers who work over 55 hours per week. In 2025, the hour threshold drops to 48 hours until being fully phased out in 2027 to align with the 40 hour threshold for overtime eligibility. Employers of agricultural workers are eligible to receive tax credits between 2023 and 2028 to offset the increase in labor costs. Eligibility for the amount of the tax credit is based on the total number of agricultural workers employed.

 

Tennessee: More Employers Required to Use E-Verify in 2023

Effective January 1, 2023, an amendment to the Tennessee Lawful Employment Act (TLEA) will require employers with at least 35 employees under the same FEIN (regardless of whether they are all in Tennessee) to use E-Verify and maintain the results. If an employer with less than 35 employees wants to use E-Verify but does not have internet access, Tennessee’s Department of Labor & Workforce Development will enroll them in E-Verify or conduct work authorization status checks using E-Verify. There are two new benefits to employers under the TLEA if they use E-Verify: 1) if the employer was not aware the employee was not authorized to work in the U.S., the employer is protected from state claims of wrongful or retaliatory discharge; and 2) there is no state cause of action for discrimination based on national origin for an employee discharged for not being authorized to work in the U.S.

 

Washington: Certain Employees Have No Waiting Period for Benefits Under PFML

Under Washington’s Paid Family and Medical Leave (PFML) program, eligible employees do not receive any pay during the first seven consecutive calendar days starting with the Sunday of the first week of leave. As of June 9, 2022, for eligible employees who are birth parents requiring medical leave immediately after the birth of a child, the waiting period will no longer be required under a new amendment. Also, the law now makes clear that the waiting period will not count against eligible employees’ benefit entitlement.

 

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