September Updates

REMINDER! EEO-1 Component 2 Reporting is Due September 30th

Employers must report EEO-1 Component 2 data for 2017 and 2018 by September 30, 2019. Component 2 data includes employee compensation and hours worked broken out by race, gender, ethnicity, and job category. The recently released FAQ adds instructions for Component 2 reporting for employees who identify as a non-binary gender. Additionally, it appears that Component 2 reporting will be a one-time exercise given that the EEOC announced it will not be collecting Component 2 data going forward, including collecting 2019 data in 2020. Nonetheless, continue to look for updates should another legal challenge be made to the collection of this data going forward.

DOL Says DOT Drivers Sleeping in Berths While Off-Duty is Unpaid Time

In Opinion Letter FLSA 2019-10, the U.S. Department of Labor (DOL) reviewed whether a driver licensed by the U.S. Department of Transportation (DOT) is required to be paid when sleeping in the truck’s sleeper berth, provided that the employee does not perform any work, is not on call to perform work, and is permitted to sleep. The DOL stated that regulations classify this time as non-working travel time, is presumptively off-duty, and therefore not compensable. Employers should take care to ensure on-duty sleeping time is compensated according to applicable regulations by consulting with legal counsel as needed.

2nd Circuit: Collectively Bargained Arbitration is Governed by the Scope of the Agreement

On July 2, 2019, in Abdullayeva v. Attending Home Care Services, the Second Circuit Court of Appeal stated that a dispute of whether a collectively bargained arbitration agreement should be enforced, is determined by the terms of the agreement and whether it encompasses the employee’s statutory claims. There, the agreement stated that all claims must be arbitrated on an individual basis. The lower court stated that language permitting mediation of claims before arbitration meant that the agreement was not clear and unmistakable in requiring arbitration. The Second Circuit disagreed stating that the issue was not whether the parties agreed to arbitrate, but rather, because the agreement existed and the claims asserted against the employer fell under the purview of the agreement, the claims were subject to individual arbitration.

9th Circuit: The Dynamex Independent Contractor Test Does Not Apply Retroactively – For Now

On July 22, 2019, the Ninth Circuit Court of Appeal withdrew its opinion in Vazquez v. Jan-Pro Franchising Int’l where it had stated that the California Supreme Court’s decision in Dynamex Operations West v. Superior Court applied retroactively. Dynamex adopted a new ABC test for determining independent contractor status. Following Jan-Pro’s petition for rehearing in Vazquez, the Ninth Circuit withdrew its opinion and asked the California Supreme Court instead to decide whether or not Dynamex applies retroactively. While this is a temporary reprieve for employers who have been held to the Dynamex standard for actions taken before Dynamex was decided, it remains to be seen what the California Supreme Court will do with this question. Employers should continue to look for updates on this issue.

New Noncompete Restrictions in Maine, New Hampshire, and Rhode Island

Maine. Any noncompete agreements entered into on or after September 18, 2019 must be disclosed prior to an offer of employment, must be provided to employees at least three business days before it is required to be signed, and cannot take effect until after one year of employment or six months from signing, whichever is later. Additionally, employers cannot enter into noncompete agreements with employees earning 400% or less below the federal poverty level.

New Hampshire. As of September 8, 2019, employers are prohibited from entering into noncompete agreements with employees who earn 200% of the federal minimum wage or less.

Rhode Island. Starting January 15, 2020, employers will be prohibited from entering into noncompete agreements with non-exempt employees, students in an internship or short-term employment, 18 years old or younger, or employees who earn less than 250% below the poverty level.

Applicable employers should have noncompete agreements and restrictive covenants reviewed by legal counsel for compliance.

Arizona: Mini-COBRA and Bona Fide Associations Updates

As of July 27, 2019, Arizona’s mini-COBRA rules define a “small employer” as a business with 1-19 employees for purposes of continuing health care coverage. This aligns the state with federal COBRA’s application to employers with 20 or more employees. Additionally, employers now have two paths available to qualify as a bona fide association (BFA) for purposes of providing health insurance. Employers may review the requirements of Senate Bill 1085 here, and should work with their legal counsel and benefits consultant if initiating a BFA.

California: Hairstyles Soon to Be Protected From Discrimination

Beginning January 1, 2020, SB 188 will amend the California Fair Employment and Housing Act (FEHA) to include protections for hairstyles. Specifically, “race” is defined to include “traits historically associated with race, including, but not limited to, hair texture and protective hairstyles (e.g., braids, locks, and twists). This means that employees may not be harassed or discriminated against for hair texture and hairstyles associated with race. However, FEHA’s exceptions for bona fide occupational qualifications and security regulations may still apply. Employers should have their dress code and discrimination policies updated, and hiring practices reviewed.

Emeryville, CA: Small Independent Restaurant Minimum Wage Hold Repealed

The Emeryville City Council originally voted to put the citywide minimum wage increase on hold for small independent businesses.  However, voters challenged the wage increase hold, forcing the city council to repeal the rule. Now, the minimum wage increase to $16.30 per hour that went into effect on July 1, 2019 applies to all employers. Small businesses should review pay rates to ensure compliance.

Florida: Unemployment Compensation Protections for Domestic Violence Victims

As of July 1, 2019, employees who can show that their voluntary termination was a direct result of domestic violence are eligible to receive unemployment benefits. They must show they engaged in reasonable efforts to keep their job (e.g., through a reasonable accommodation, seeking an injunction, etc.), that domestic violence occurred, and the individual reasonably believes they will be a victim of domestic violence either at work or on their way to/from work.

Indiana: Direct Sellers are Exempt from Minimum Wage Rules

As of July 1, 2019, direct sellers are not considered “employees” for purposes of state minimum wage rules and unemployment compensation, except under limited circumstances. A “direct seller” is someone who is in the business of selling consumer products or services in places other than in a permanent retail establishment, when the performance of services is paid based on sales not number of hours worked, and services are performed pursuant to a written contract that states the individual is not an employee for tax purposes. Employers may review SB 231 here for further detail.

Iowa: Enacts Negligent Hiring Protections for Employers

As of July 1, 2019, HF 650 protect employers from negligent hiring claims based solely on the fact that the employee was convicted of a defined crime. However, there are exceptions. The protections do not apply where the employer knew or should have known about the conviction and the offense was committed by performing duties substantially similar to the position held for the employer. Certain serious criminal offenses are not protected, such as sexual offenses, as are financial crimes related to fraud or the misuse of funds or property where the individual held a fiduciary role on behalf of the employer. Employers should review their pre-employment hiring practices for compliance and potential liability.

Louisiana: Electronic Notice to Employees Permitted for Group Health Insurance Plans

As of August 1, 2019, employers providing group health insurance may consent to electronic delivery on behalf of its covered employees if (1) the covered employee is able to access electronically delivered documents anywhere the employee is “reasonably expected to perform his job duties and such access must be an integral part of those duties,” and (2) the covered employee is notified of the right to withdraw consent to electronic delivery at any time, the process for doing so, and the right to request any document in paper form. Employers should review electronic permissions with their benefits provider for compliance. Review the text of SB64 here.

Kansas City, MO: Enacts Salary History Inquiry Ban

Beginning October 31, 2019, employers with six or more employees will be prohibited from asking job applicants about their salary history, screening job applicants based on current or prior compensation, relying on an applicant’s salary history when deciding whether to offer employment or setting the compensation for the employee, or refusing to hire an applicant for not disclosing their salary history. However, employers are expressly permitted to inquire into an applicant’s compensation expectations. The salary history inquiry ban does not apply in certain circumstances, such as to current employees, to an applicant’s voluntary disclosure of salary history, or when an employee is required within five years of termination. Employers may review the full text of Ordinance No. 190380 here.

New Hampshire: Child Labor Hours Restricted

As of July 14, 2019, no employee under the age of 18 who works more than who nights a week past 8:00 p.m. or before 6:00 a.m. is allowed to work more than eight hours in any shift during that work week, or more than 48 hours total during the week. Employers should review scheduling practices to be compliant with the new requirement.

New York: Paid Family Leave Benefit Schedule Update

On August 30, 2019, New York published the updated premium rate for Paid Family Leave (PFL) benefits and maximum employee contribution for coverage in 2020. The state’s PFL is fully funded by employees, and employers must deduct a portion of an employee’s average weekly wage (AWW), not to exceed the statewide average weekly wage (SAWW). Beginning January 1, 2020, employers must deduct 0.270% of an employee’s wages each pay period, up to an annual maximum deduction of $196.72. If an employee’s contributions reach the annual maximum during the year, the employer must stop deducting PFL contributions for that employee for the remainder of the year. Employers should also note that, starting January 1, 2020, eligible employees using PFL benefits will receive 60% of their AWW, up to 60% of the SAWW, for up to 10 weeks of leave. Employers should prepare to adjust payroll practices and have leave policies reviewed for compliance.

New York: Whistleblower’s Immigration Status is Protected

On October 25, 2019, SB 5791 will prohibit discrimination and retaliation of whistleblowers based on an individual’s suspected citizenship or immigration status. This includes contacting or threatening to contact, or reporting or threating to report, the employee or the employee’s family or household members to U.S. immigration authorities or to a federal, state, or local agency. Employers should ensure that managers are trained on the new requirements and have policies updated where applicable.

Ohio: Motor Carrier Drivers Excluded from Definition of “Employee”

As of July 3, 2019, HB 62 excludes drivers of a vehicle or vessel from the definition of “employee” for various employment-related purposes, including for purposes of paying overtime, minimum wage, workers’ compensation, and unemployment insurance. To be excluded, the individual must own or lease the vehicle, be responsible for operating the vehicle, be paid based on work performed not just time expended, control the means and manner of performing the services, have a written contract with the carrier that states the individual is an independent contractor, be responsible for vehicle costs, and be responsible for any economic loss or gain from the arrangement with the carrier.  Employers must still be careful to review employee classification requirements set by the federal government, including the Internal Revenue Service and National Labor Relations Board. Best practice is to have employee classifications reviewed by legal counsel.

Pittsburgh, PA: Paid Sick Leave is Revived by State Supreme Court

Pittsburgh enacted the Paid Sick Days Act (PSDA) in 2015, but the law was subsequently put on hold through legal challenges. On July 17, 2019, the state Supreme Court stated that the city had authority to enact the PSDA because it is related to public health which is within the power of the city to regulate. It is currently unclear when the PSDA will officially take effect; however, employers should start preparing now to implement a paid sick leave policy and comply with applicable payroll and notice requirements.

Vermont: Expunged Records Make Criminal Convictions Vanish

As of July 1, 2019, HB 460 states that expunging a criminal record essentially means that “such person shall be treated in all respects as if he or she had never been arrested, convicted, or sentenced for the offense.” Any inquiry into an expunged record shall be that “NO CRIMINAL RECORD EXISTS.” Employers should review background check processes for consistency with this new update.

Virginia: Updates to Minimum Wage Exemptions and Nondisclosure Agreements

Minimum Wage Exemptions. As of July 1, 2019, newsboys, shoe shine boys, babysitters, ushers, doormen, and concession attendants and cashiers in theaters must be paid minimum wage. However, babysitters working fewer than 10 hours per week are exempt from the requirement.

Nondisclosure Agreements. Employers cannot require, as a condition of employment, an employee or a prospective employee to enter into a nondisclosure agreement that conceals the details of a sexual assault claim. Any such provision is against public policy and is void and unenforceable. Employers should have nondisclosure agreements reviewed for compliance.

West Virginia: Effect of Expunged Criminal Convictions

As of June 7, 2019, expungement of a criminal record is considered as though the criminal matter never happened, and affected individuals are not required to disclose that criminal history on an employment or credit application. Regardless, employers are still able to obtain conviction history information for law enforcement jobs or other positions requiring criminal background checks under state law.

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.

© 2019 ManagEase