October Updates

OFCCP Releases new FAQs on Independent Contractors, Compliance Evaluations, and AAP

The U.S. Office of Federal Contract Compliance (OFCCP) has released three FAQs that provide guidance on the below topics:

• Validation of tests used by contractors to select employees
• The OFCCP’s concept of “practical significance” when conducting adverse impact analysis
• Distinction between employees and independent contractors, and how worker types integrate with Affirmative Action Plans

Federal contractors should review the updated FAQs for compliance.

Ninth Circuit: ERISA Claims May be Arbitrated

On August 20, 2019, in Dorman v. Charles Schwab Corp., the Ninth Circuit stated that claims brought under ERISA for breach of fiduciary duty may be arbitrated when the plan contained an arbitration clause, including class action waiver. This is a shift from prior rulings and may lead to significant changes in the way ERISA claims are managed.

California: PAGA-only Claims May Not Seek Unpaid Wages

On September 12, 2019, in ZB N.A. v. Superior Court (Lawson), the California Supreme Court stated that an employee suing exclusively under PAGA may not seek to recover unpaid wages. The Court also confirmed that PAGA claims are exempt from arbitration agreements. Employers should review any current PAGA claims with legal counsel for further guidance.

Petaluma, CA: Minimum Wage Increases on January 1, 2020

Come July 1, 2020, employers of 26 or more employees in Petaluma, CA must pay a minimum wage of $15.00 per hour.  Employers of 25 or fewer must pay a minimum wage of $14.00 an hour.  On January 1 of each year thereafter, businesses of all sizes must pay a minimum wage of $15.00 per hour plus the Consumer Price Index (CPI) increase for the San Francisco Bay Area region.  In addition to making payroll changes, Petaluma employers must post a notice about the minimum wage ordinance.

Colorado: Courts Are Not Required to Blue Pencil Noncompetition and Nonsolicitation Agreements

On July 25, 2019, in 23 LTD v. Herman, the Colorado Court of Appeal stated that trial courts are not required to blue pencil (modify) unenforceable noncompetition or nonsolicitation agreements. The courts have discretion to modify these agreements, or void the entire nonconforming provision if overly broad, but the contracting parties are ultimately responsible for writing agreements that do not conflict with Colorado state law and public policies. Employers should take extra care to ensure agreements are enforceable without the need for revision, because it is unclear what any individual court may do with invalid terms.

Massachusetts: Counting 1099-MISC Workers for Paid Family Medical Leave

The Department of Family and Medical Leave recently updated its FAQs to clarify how 1099-MISC workers should be factored in to the Paid Family Medical Leave (PFML) requirements. Specifically, PFML covers 1099-MISC workers who work in Massachusetts, do not qualify as independent contractors, and who make up more than 50% of their employer’s workforce. The 1099-MISC contractor must live in the state and perform services as an individual entity in the state, and not qualify as an independent contractor for purposes of the state unemployment statute. Employers should review independent contractor status with legal counsel for compliance.

New Jersey: Hairstyles are Protected under the Law Against Discrimination

The New Jersey Division of Civil Rights (DCR) recently issued guidance on race discrimination based on hairstyle. Specifically, employers may not discriminate against individuals based on “hairstyles that are inextricably intertwined with or closely associated with race.” Employers cannot have “grooming or appearance policies that ban, limit, or restrict hairstyles closely associated with Black people, including, but not limited to, twists, braids, cornrows, Afros, locs, Bantu knots, and fades.” The same protections apply to hairstyles associated with a particular religion. Employers should review grooming and dress policies for compliance.

Bernalillo County, NM: Enacts Wellness Act

Effective July 1, 2020, certain employers in Bernalillo County must provide employees with Earned Paid Time Off (EPTO) that can be used for any reason. Specifically, the new Employee Wellness Act applies to employers with at least two employees, who are required to apply for a county business registration, and have a physical location in the county’s unincorporated limits (excluding certain areas like Albuquerque and Tijeras). There are numerous exceptions to which employees are covered under the new ordinance.

Beginning on the 90^th day of employment, employees accrue one hour of EPTO for every 32 hours worked. The minimum annual accrual cap starts at 24 hours per year, and is increased by 16 hours per year through 2022. Employers must pay out accrued EPTO at termination. Further, there are notice requirements and anti-retaliation provisions. Employers should prepare to update PTO policies for compliance.

New York: Hairstyles are Protected under the State Human Rights Law

As of July 12, 2019, the New York Human Rights Law now protects “traits historically associated with race, including but not limited to, hair texture and protective hairstyles,” including braids, locks, and twists, under the definition of “race.” This means that individuals may not be harassed or discriminated against for hair texture and hairstyles associated with race. Employers should update grooming and appearance policies for compliance.

Toledo, Ohio: Salary History Inquiries Banned

Effective July 4, 2020, employers of 15 or more workers in Toledo, Ohio are prohibited from asking about or screening applicants’ salary history, or relying upon salary history when making an offer of employment (even if salary history is voluntarily disclosed by the applicant).  The new ordinance hopes to address pay equity by reducing practices that perpetuate existing wage inequality.

There are few exceptions to this rule: (a) employers and applicants may discuss the applicant’s compensation expectations; (b) the prohibitions do not apply to internal transfers or promotions, or former employees re-hired within 5 years of the individual’s separation date if the employer maintained salary history data; (c) employers may verify information learned in a voluntary/unprompted disclosure of the salary history, as long as this information is not relied upon when determining the compensation offer.

South Carolina: State Supreme Court Abolishes Common Law Marriage

The South Carolina Supreme Court recently stated that all marriages under South Carolina law, entered into after July 24, 2019, require a license, and common law marriages will no longer be recognized. Employers need to be aware of the changes, in particular for benefit plans and leave policies, especially those in compliance with the federal Family and Medical Leave Act.

Dallas and San Antonio, TX: Paid Sick Leave Update

The Dallas and San Antonio paid sick leave ordinances are still a matter of discussion. As previously reported, the Dallas ordinance went into effect on August 1st, but it remains unclear if it will be challenged by a future legislative action. Conversely, San Antonio agreed to delay implementation of Paid Sick and Safe Time (PSST) until December 1, 2019 so that it could review and modify the law by November 7^th to withstand the legal challenge pending in federal court. Employers should continue to look for updates on this topic.

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.

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