September Updates

The DOL Created a New Department to Support Employer Compliance

On August 28, 2018, the U.S. Department of Labor (DOL) announced that it created the Office of Compliance Initiatives (OCI) to compliment the DOL’s enforcement activities by “strengthening and innovating compliance assistance outreach” for employers. As part of this initiative, the DOL launched worker.gov and employer.gov to provide information on federal worker protections and employer responsibilities under federal law. The OCI’s overall goal is to help prevent federal employment violations through compliance education.

OFCCP Staff Must Account for Federal Contractors’ Religious Freedoms

On August 10, 2018, the Acting Director of the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued directive 2018-03.  The OFCCP is typically tasked with enforcing Executive Order 11246, a set of regulations that requires federal contractors to take affirmative steps to ensure equal opportunity in employment for individuals without regard to protected categories (e.g., race, color, religion, sex).  Under the new directive, certain requirements of Executive Order 11246 may not apply to government contractors or subcontractors that are religious entities. The directive provides guidance on how OFCCP staff must act; for example, staff “cannot act in a manner that passes judgment upon or presupposes the illegitimacy of religious beliefs and practices.”

Federal contractors who wish to express religious affiliations should still consult with counsel before proceeding, as the requirements to be considered an eligible religious entity may not apply.  Moreover, covered contractors must still comply with all other provisions of Executive Order 11246.

Federal Contractor Minimum Wage Increase for 2019

On September 4, 2018, the Federal Register included new minimum wage rages for federal contractors. Beginning January 1, 2019, federal contractors must pay covered workers at least $10.60 per hour (a $0.25 increase), and covered tipped employees at least $7.40 (a $0.15 increase). Employers should prepare to update payroll and overtime rates, and post the updated Executive Order 13658 poster.

Sixth Circuit: FLSA Does Not Invalidate Arbitration Agreements

In Gaffers v. Kelly Services, Inc., a group of employees brought a wage and hour lawsuit against the employer.  Although the Fair Labor Standards Act (FLSA) permits employees to bring claims in a collective action, because about half of the 1,600 employees in the lawsuit had signed arbitration agreements, the employer moved to compel individual arbitration under the Federal Arbitration Act (FAA). The employees argued that the FLSA provides a right to collectivize that displaces arbitration agreements under the FAA, making the agreements unenforceable. However, the Sixth Circuit rejected this argument.  Instead, the court acknowledged that employees who did not sign individual arbitration agreements were free to sue collectively, while those who did sign such agreements could not.

Eighth Circuit: USERRA Still Protects Employees Who Don’t Have Guaranteed Working Hours

The Uniformed Services Employment and Reemployment Rights Act (USERRA) is a federal law that provides job-protected leave for employees performing military service.  In Mace v. Corey Willis, et al., the Eighth Circuit Court of Appeal stated that USERRA also protects those who are not guaranteed working hours.

There, employee Kieshia Mace worked part-time as a fitness trainer at Kickbox Dakota and was typically assigned around 13 hours of work per week, but had no guaranteed schedule.  Mace was required to attend three weeks of mandatory military training, was deleted from the company’s scheduling application while on leave, and was later informed that she had been replaced. The Eighth Circuit confirmed that USERRA applies to part-time, temporary, probationary, and seasonal employees, and that the employer erred in willfully failing to promptly reemploy Mace.

Ninth Circuit: Employers Can Prohibit Future Employment With Their Company

On July 24, 2018, in Golden v. California Emergency Physicians Medical Group, the Ninth Circuit Court of Appeal stated that although an employer may not prohibit future employment with third parties that contract with the employer, an employer may prohibit a former employee from future employment with the employer.

There, a doctor’s settlement agreement with his former employer prohibited him from working in any emergency room where the employer was contracted for services, in any facility owned or operated by the employer, and for the employer in the future. The court stated that unreasonable restraints of trade apply to non-compete agreements and any other substantial restraint of character on a person engaging in their profession. However, prohibiting future employment with the employer was not a substantial restraint. Employers are recommended to review settlement agreements and other restrictive covenants for compliance.

California: Update to EDD Workplace Posting DE 1857A

The California Employment Development Department (EDD) revised its “EDD Notice to Employees” (DE 1857A) in May 2018 and published the posting in July.  All California employers registered with the EDD are required to display this notice in a conspicuous location. The EDD encourages employers to always maintain updated postings; however, employers may continue to use the previous version of the DE 1857A until January 1, 2019, at which point the updated version must be displayed.

Employers may download a copy of the posting on the EDD’s website.

Massachusetts: Railway Unemployment Insurance Act Preempts Statewide Sick Leave

On August 10, 2018, a district court stated that the federal Railroad Unemployment Insurance Act (RUIA) completely preempts Massachusetts’s statewide Earned Sick Time Law (ESTL).  Employers covered by the RUIA challenged the ESTL when it initially went into effect in 2015, arguing that the RUIA (1) requires employers to provide covered employees sick leave benefits, and (2) contains a broad preemption provision.  Now, several years later, the district court concluded that the RUIA was intended to be the exclusive source of sick leave benefits for railroad employers, and that covered employees could not claim sick benefits from state laws.

As a result, employers subject to the RUIA may not be required to comply with Massachusetts’s ESTL provisions, though employers may wish to consult counsel to determine how their sick leave practices will be impacted.

New Jersey: New Bill Expands Ability to Claim Unemployment Insurance Benefits

On August 10, 2018, Governor Murphy signed a bill amending New Jersey’s unemployment insurance law, potentially expanding ex-employees’ ability to collect benefits.

Many states disqualify workers from collecting unemployment when the worker voluntarily foregoes available work to support a collective bargaining objective, or alternatively, requires workers to sit through a lengthy waiting period before unemployment insurance begins.  In New Jersey, and under this new law, employees may be able to collect unemployment insurance benefits if:

1. The labor dispute that prompts the worker’s unemployment is caused by the employer’s failure or refusal to comply with (a) an agreement/contract with the employee (e.g., a collective bargaining agreement), or (b) state or federal laws related to hours, wages, or “other conditions work”;
2. After 30 days, if the unemployment is caused by a strike or other concerted activities by employees;
3. Immediately, if the employer of striking workers chooses to hire permanent replacement workers.

Employers facing labor negotiations should consult with counsel to determine the best strategy to move forward, as New Jersey’s amended unemployment law could potentially prolong labor disputes.

New Jersey: State and Federal Authorities Pledge Stronger Enforcement Against Misclassification

On August 10, 2018, the New Jersey Department of Labor and Workforce Development and the federal U.S. Department of Labor signed Executive Order No. 25, pledging to work together to combat fraudulent misclassification of employees as independent contractors. The agreement signed by the two agencies establishes the Task Force on Employee Misclassification, consisting of representatives from various agencies (including New Jersey’s departments of Treasury, Agriculture, Banking and Insurance, Human Services, etc.).  It promotes coordinated investigations and cross-agency shared resources to support labor enforcement efforts. Employers can read the Executive Order here.

New York City, NY: Anti-Sexual Harassment Poster and Fact Sheet Now Available

In July, we reported on New York City’s expanded employee sexual harassment protections. The New York City Commission on Human Rights has published an English poster that must be displayed by all New York City employers by September 6, 2018.  The Spanish version of the poster is still pending from the Commission.

In addition to the poster, employers must satisfy a secondary notice requirement by either (A) providing new employees notice of their rights upon hire, or (b) incorporating the same information into an employee handbook or stand-alone policy.  Employers may fulfill this requirement by downloading and distributing the Commission’s Fact Sheet beginning September 6, 2018.

South Carolina: Pregnancy Accommodations Poster Now Available

The South Carolina Pregnancy Accommodations Act requires employers to conspicuously display a notice describing employee/applicants’ rights under the Act.  The South Carolina Human Affairs Commission recently amended its Employment Discrimination Poster to incorporate the Pregnancy Accommodations Act.  In addition to displaying this poster, employers must provide this notice to all employees at time of hire no later than September 14, 2018.

Austin, Texas: The City’s Paid Sick Leave is On Hold – For Now

On August 17, 2018, the Texas Court of Appeal issued a temporary order preventing Austin’s paid sick leave law from taking effect on October 1, 2018. The Texas attorney general challenged the paid sick leave law on the basis that it is preempted by state law. In the case at hand, a district court denied a request for a temporary injunction against the law, but the court of appeal issued the injunction while it evaluates whether the district court should have issued the injunction – not whether the city’s law is preempted by state law. All of this may be for naught given that the Texas Legislature is expected to introduce a bill in January that prohibits local governments from enacting paid sick leave ordinances. If that occurs, neither the Austin nor the San Antonio paid sick leave laws will go into effect. Employers should continue to look for updates as they occur.

Seattle, WA: New Employer Obligations for Domestic Workers

Effective July 1, 2019, employers of domestic workers will be required to comply with minimum wage and meal and rest period requirements, to not keep domestic workers’ original documents or personal effects, and to not engage in retaliation for asserting their rights (including threating to report a person’s undocumented immigration status). Employers should review the Domestic Worker Ordinance to prepare for next year.

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.

© 2018 ManagEase