On January 1, 2024, Illinois will join Maine and Nevada as the only U.S. states to mandate that covered employers provide their employees with earned paid leave that can be used for any reason. Generally, the Paid Leave for All Workers (PLFAW) Act entitles most employees who work in Illinois with up to 40 hours of paid leave for a 12-month period to use at their discretion. Employers will be prohibited from requiring employees to explain why they are taking leave and to provide supporting documentation. Employees may decide how much of their accrued paid leave to take, but an employer’s policy may require that employees take a minimum of two hours of paid leave per occurrence. Employers may develop a notification policy; however, the policy must be reasonable and subject to the following limitations to comply with the new law: If use of paid leave is foreseeable, employers may require employees to provide 7 calendar days' notice before the date the leave is to begin. If use of paid leave is not foreseeable, employers may require employees to provide notice of the leave as soon as is practicable after the employee is aware of the necessity of the leave. In addition, employers will be prohibited from requiring employees to search for or find a replacement worker to cover the hours during which the employee takes paid leave. The paid leave will accrue at the rate of one hour of paid leave for every 40 hours worked; however, employers may opt to frontload employees with 40 hours or a pro-rata share of paid leave at the start of the 12-month period. Exempt employees whose workweek is routinely 40 hours are deemed to work 40 hours per week for purposes of accruing paid leave. Paid time off under the PLFAW Act must be paid at the employee’s regular hourly rate of pay; however, special rules apply for employees who earn tips and/or commissions. Employees may begin using accrued paid leave 90 days after the start of employment or on April 1, 2024, whichever is later. Certain employers will be excluded, including, for example, those with certain student or short-term employees who are employed at an institution of higher education; employees of school or park districts; certain transportation and construction employees; and employees who are subject to a collective bargaining agreement that includes a clear and unambiguous waiver of the new law. Further, Chicago and Cook County employers that provide paid sick leave in accordance with the Chicago and Cook County ordinances on paid sick leave will not be required to provide an additional 40 hours of paid leave. And likewise, employers who already provide at least 40 hours of paid leave for any reason may not be required to provide any additional paid leave to employees if the leave provided aligns with the new statutory requirements. The PLFAW Act contains many nuances, such as when the 12-month period under this new law begins, employer benefits for frontloading the paid leave, notification, posting and recordkeeping requirements, and whether unused accrued paid leave must be paid upon termination. Employers with Illinois employees should begin preparations for complying with the PLFAW Act by contacting their Polsinelli attorney to review their paid leave policies.

The Department of Justice (DOJ) and federal government continue to aggressively pursue antitrust violations and promote the federal government’s interest in heavily limiting the use of non-competition agreements.  While the DOJ has recently been unsuccessful in its target of “no poach” and “no hire” agreements and wage-fixing issues in antitrust trials, employers should not interpret this as a sign the government will back off its efforts to limit the use of non-competition agreements by employers across all industries. With the DOJ taking a more active role in prosecuting antitrust matters, there is a real risk antitrust claims will increasingly gain traction in restrictive covenant litigation.  In fact, the DOJ recently filed a Statement of Interest in a Nevada state court case regarding the enforceability of post-employment restrictive covenants of anesthesiologists.  The DOJ encouraged the state court to consider antitrust principles when evaluating the restrictive covenants, and further asserted its position that post-employment restrictive covenants may constitute impermissible restraints of trade under the Sherman Act, while providing a roadmap for the court to declare the agreements unenforceable on this basis. While the validity of non-competition agreements currently remains controlled by state law, the federal government’s attention to such agreements may ultimately limit the use of such agreements to situations where the agreement is truly necessary to protect a well-defined category of trade secrets.  Employers should keep this in mind when preparing new agreements and take the time to carefully evaluate existing non-compete agreements and hiring practices to determine any potential issues.  And, for employers who have or are contemplating “no hire” agreements with competitors, it is wise to consider how these may be scrutinized if challenged. Polsinelli attorneys continue to monitor actions taken by the federal government involving non-competition agreements and are prepared to assist employers with navigating this everchanging landscape.

Following the enactment of the Victims’ Economic Safety and Security Act (VESSA), Missouri joins over 30 states requiring employers to provide protections to employees who are victims of domestic or sexual violence in the form of leave and accommodations. Missouri employers with 50 or more employees must provide up to two weeks of unpaid leave (one week for 20-49 employees) for employees who are victims of domestic or sexual violence or have a family or household member who is a victim of such violence. Covered employers must also provide reasonable safety accommodations to eligible employees for “known limitations resulting from circumstances relating to being a victim of domestic or sexual violence or being a family or household member of a victim of domestic or sexual violence” unless the accommodation poses an undue hardship resulting from significant difficulty or expense.  Examples of defined accommodations include adjustments to job structure, modified scheduled, leave, safety procedures, and assistance in documenting domestic violence that occurs at the workplace. Employers must also notify all current employees of their rights under VESSA by October 27, 2021 for all current employees and upon hire for all employees hired after October 27.  VESSA also prohibits employers from retaliating or discriminating against employees who seek benefits under the statute in their terms and conditions of employment. Missouri employers should update their handbooks and policies, train supervisors and human resources on the law’s new protections, and ensure the required notifications are timely provided to employees.  If you have any questions about how Missouri’s newly enacted VESSA law or other states’ similar laws applies to your business and employees, contact your Polsinelli employment attorney.

On January 12, 2021, the United States Court of Appeals for the Fifth Circuit announced a new certification standard for collective actions under the Fair Labor Standards Act (FLSA).  The appellate court vacated a grant of conditional certification, ruling that at the outset of the case district courts “must rigorously scrutinize” whether potential opt-in plaintiffs are similarly situated.  This standard requires the court identify the material facts and legal considerations needed to decide whether employees are similarly situated and authorize limited discovery on these issues before deciding conditional certification and authorizing class notice. The Fifth Circuit’s decision explicitly rejects the widely-used two-step FLSA certification process consisting of “conditional certification”—where plaintiffs must, in essence, allege only that potential plaintiffs are subject to an unlawful common policy or practice, with the court revisiting the certification after discovery to make a final decision as to whether plaintiffs and opt-ins are similarly situated. While this ruling is presently binding on district courts in the Fifth Circuit, time will tell if other circuits will adopt this heightened standard and whether the United States Supreme Court will weigh-in on the issue.  Contact your Polsinelli attorney for further guidance regarding this decision and guidance regarding wage and hour matters.

Missouri Governor Mike Parsons recently signed Senate Bill 591, which impacts Missouri employers by significantly restricting the availability of punitive damages.  Beginning August 28, 2020, plaintiffs in Missouri will face a higher pleading requirement and standard of proof for claims of punitive damages. Key Changes To recover punitive damages, plaintiffs must now prove “by clear and convincing evidence that the defendant intentionally harmed the plaintiff without just cause or acted with a deliberate and flagrant disregard for the safety of others.”  This change represents a departure from the previous burden which required only a showing of “complete indifference to or conscious disregard for the safety of others.” In addition to raising the punitive damages standard, plaintiffs will now face a more onerous pleading standard related to punitive claims.  Claims for punitive damages are no longer permitted in initial pleadings.  To assert a claim for punitive damages, a party must seek leave of the court no later than 120 days before the final pre-trial conference or trial date.  Only if the court then determines that the trier of fact could reasonably conclude standards for awarding punitive damages are met, can a party file a pleading seeking punitive damages.  Likewise, discovery of an employer’s assets is only allowed if the court grants plaintiff leave to seek punitive damages. S.B. 591 also contains specific provisions that limit employer exposure where a plaintiff seeks punitive damages against an employer because of an employee or agent’s actions.  Punitive damages are now only recoverable for an employee’s conduct if (1) the principal or a managerial agent of the principal authorized the doing and the manner of the act; (2) the agent was unfit and the principal or a managerial agent of the principal was reckless in employing or retaining him or her; (3) the agent was employed in a managerial capacity or was acting in the scope of employment; or (4) the principal or a managerial agent of the principal ratified or approved the act. Employer Takeaways Missouri’s new limitations on punitive damages will greatly impact if, when, and how claims for punitive damages in employment cases filed under Missouri law are pursued.  Plaintiffs now face a standard that makes them work to not only prove, but even to seek punitive damages.  And these changes come shortly after the new damage caps now in place under the Missouri Human Rights Act.  If you have questions about S.B. 591’s new limitations on punitive damages in Missouri, contact your Polsinelli attorney.

On July 8, 2020, the United States Supreme Court expanded the “ministerial exception” – a legal doctrine that exempts religious employers from certain discrimination laws in Our Lady of Guadalupe School v. Morrissey-Berru.  The decision broadened the reach of the exception, which was previously validated by the Court in 2002 in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC.  Given the broad reach of the recent decision, various religious institutions will now have a strong defense against discrimination claims brought by employees who perform faith-based functions. By way of background, in 2012, the U.S. Supreme Court held in Hosanna-Tabor that the First Amendment barred a court from entertaining an employment discrimination claim brought by a teacher against her religious school employer.  The Court held that the school’s First Amendment right protected religious institutions from state interference on matters of church government as well as those of faith and doctrine. Adopting the “ministerial exception,” the Supreme Court articulated factors for when the ministerial exception should apply. These factors included: whether the employer held the employee out as a minister with a formal religious title; whether the employee’s title reflected ministerial substance and training; whether the employee held herself out as a minister; and whether the employee’s job duties included “important religious functions.” In Morrissey-Berru, two elementary school teachers at Roman Catholic schools in the Archdiocese of Los Angeles filed claims of discrimination.  Agnes Morrissey-Berru sued her employer under the Age Discrimination in Employment Act of 1967 and Kristen Biel sued her employer under the Americans with Disabilities Act.  Both religious employers asserted the ministerial exception and prevailed on summary judgment at the district court level.  However, the Ninth Circuit reversed both decisions, reasoning that, the employers did not satisfy the Hosanna-Tabor factors.  The Ninth Circuit found that the religious entities could not invoke the ministerial exception against these teachers because the teachers did not maintain the title of “minister,” had limited religious training, and only sporadic experience in ministerial activities. On appeal, the Supreme Court held that the Ninth Circuit misapplied the Court’s Hosanna-Tabor ruling.  The Court explained that the previously promulgated four factors were not meant to impose a “rigid formula.”  The Court further held that in deciding whether the ministerial exception is to be applied, a court must “take all relevant circumstances into account and determine whether each particular position implicate(s) the fundamental purpose of the exception.” In finding that the two teachers fell within the ministerial exception, the Supreme Court looked at the teachers’ employment agreements and handbooks.  The respective records unambiguously showed that the teachers were expected to carry out the school’s mission of developing and promoting the Catholic faith. Further, the record showed that the religious employers imposed commitments regarding religious instruction, worship, and personal modeling of the faith and explained that their performance would be reviewed on those bases. Lastly, the Court looked at the fact that the teachers taught religion in the classroom and worshipped and prayed with the students.  Given these circumstances, the Court held that the employers were covered by the ministerial exception, and therefore, their discrimination claims were barred. The Morrissey-Berru decision provides religious organizations a valuable defense that may apply in employment claims alleging discrimination, harassment, or retaliation. Religious organizations should review and update their policies, employee handbooks, and employment offers in light of the ruling and work with counsel to understand the nuanced use of the defense. If you have any questions or need assistance related to the ministerial exception, contact your Polsinelli attorney.

In Bostock v. Clayton County, Georgia, the United States Supreme Court heldthat “an employer who fires an individual merely for being gay or transgender violates Title VII.”  With its decision, however, the Supreme Court left unanswered the question of how protections for religious beliefs and expression intersect with its expansion of Title VII’s protections. Notably, the employer in R.G. & G.R. Harris Funeral Homes, Inc. (one of the three cases consolidated by the Court in the Bostock decision) abandoned its defense based on the Religious Freedom Restoration Act of 1993 (RFRA) at the Supreme Court.  In doing so, the Sixth Circuit’s opinion regarding the RFRA claim remains the only circuit court of appeals decision to have addressed the application of the RFRA in this setting. The RFRA protects an individual’s sincerely held religious beliefs by prohibiting the federal government from substantially burdening an individual’s free exercise of religion, unless it establishes that doing so is the least restrictive means of furthering a compelling government interest.   In Harris Funeral Homes, the Sixth Circuit determined that the EEOC enforcing a transgender employee’s Title VII rights did not substantially burden sincere religious exercise because “tolerating [an employee’s] understanding of her sex and gender identity is not tantamount to supporting it.” In other words, complying with Title VII did not endorse the employee’s transgender status.  The Sixth Circuit also ruled that presumed customer biases could not constitute a substantial burden.  Finally, the Sixth Circuit held that enforcing Title VII was the least restrictive means of achieving the compelling goal of eradicating workplace discrimination. For now, the Sixth Circuit’s opinion will continue to apply in Kentucky, Michigan, Ohio, and Tennessee, and suggests that, at least under certain sets of facts, the RFRA may not shield employers from liability for claims of discrimination based on homosexuality or transgender status in suits brought by the federal government.  If and when a different circuit court of appeals answers the question differently, it is possible this issue could be addressed by the Supreme Court.  The question of whether the RFRA may be asserted as a defense by a private (i.e., non-governmental) party may also eventually arrive at the Supreme Court because there is currently a split of opinion by the circuit courts of appeals on that issue. Outside of the RFRA, the “religious organization exemption” provision of Title VII, 42 U.S.C. § 2000e–1(a), precludes liability for religious organizations and schools from denying employment to workers of other faiths.  This exception has been extended to allow a religious organization to terminate an employee who was no longer in good standing with the church.  With certain religions having sincere beliefs on sexuality, it is likely that courts will have to decide how this specific provision applies to employment decisions based on sexual orientation or transgender status, which is now protected under Title VII. The Supreme Court recognized in Bostock that certain employers may feel burdened by its decision and fear that compliance may require them “to violate their religious convictions.”  Recognizing the questions left open by its decision and the likelihood of such cases, the Supreme Court noted that “other cases may raise free exercise arguments that merit careful consideration.”  Until these cases come to fruition, however, employers should consult counsel and be cautious when relying on largely untested and narrow religious-based exceptions.  Employers should also be cognizant of the potential impact such defenses may have on public and workforce perceptions of the organization. If you have questions regarding the Supreme Court’s expansion of Title VII protections and its implications, contact your Polsinelli attorney.

Today, the United States Supreme Court issued its much-anticipated ruling as to whether Title VII of the Civil Rights Act of 1964 protects employees from discrimination based on sexual orientation and gender identity.  The Supreme Court’s ruling came on three separate cases—two addressing sexual orientation and one addressing gender identity, all consolidated by the Supreme Court in its decision in Bostock v. Clayton County, Georgia [1].  The Supreme Court’s decision was that the answer to these questions was clear.  In a 6-3 opinion written by Justice Neil Gorsuch, the Supreme Court held that an employer who fires an employee for being gay or transgender violates Title VII because “[s]ex plays an necessary and undisguisable role in the decision.” Sexual Orientation In Altitude Express v. Zarda and Bostock, the Court addressed the issue of whether Tile VII’s prohibition of discrimination on the basis of “sex” extends to include sexual orientation. Altitude Express involved a male sky-diving instructor who habitually disclosed his sexual orientation to female clients to alleviate concerns about being strapped to a man for tandem dives.  The instructor alleged he was fired solely because of his sexual orientation in violation of Title VII after a female client complained of inappropriate touching and claimed he informed her of his sexual orientation to excuse his behavior.  While the district court ruled that Title VII does not prohibit discrimination on the basis of sexual orientation, the Second Circuit Court of Appeals held that sexual orientation discrimination is motivated, at least in part by “sex,” and is thus covered under Title VII’s prohibition of sex discrimination. Along similar lines, in Bostock, a male child welfare services coordinator who received criticism for participating in a gay softball league and for his sexual orientation, was terminated for “conduct unbecoming of its employees.”  The employee filed a lawsuit under Title VII, alleging sex discrimination based on sexual orientation.  The district court dismissed for failure to state a claim, and the Eleventh Circuit affirmed in accordance with its rule that it cannot overrule prior Eleventh Circuit panel precedent. Gender Identity In R.G. & G.R. Harris Funeral Homes v. EEOC, the Supreme Court addressed Title VII’s coverage of gender identity, as an extension of its prohibitions of “sex” discrimination (including sex stereotyping).  In Harris Funeral Homes, the employer terminated an employee shortly after the employee, who had previously presented as male, notified her employer that she intended to transition to and present as female.  After the district court granted summary judgment in favor of the employer, the Sixth Circuit reversed, holding that the termination based on the employee’s transgender status and gender identity violated Title VII. The Decision In these three cases, long-term employees were fired shortly after revealing they were homosexual or transgender, and the employers did not dispute that they were fired for that reason.  In deciding the scope of Title VII’s protections, the Supreme Court relied on ordinary public meaning of Title VII’s prohibition of discrimination because of sex to determine that an employer who discriminates on the basis of sexual orientation or transgender status violates Title VII.  The Court explained that homosexuality and transgender status are inextricably linked to sex and that discrimination on such bases thus requires an employer to treat an individual differently because of their sex.  Put another way, the Court articulated that “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”   The Supreme Court’s decision brings federal law in line with the more than 20 states (and numerous additional municipalities) that currently prohibit discrimination on the basis of sexual orientation and gender identity.  With this new ruling, employers should review, and potentially revise, policies to ensure coverage of sexual orientation and gender identity as protected characteristics to comply with new federal law.  Employers should also consider engaging their employees with renewed anti-discrimination, harassment, and retaliation training.  Finally, all employers should also recognize the potential for additional charges of discrimination and lawsuits, and be prepared to respond to the same. If you have any questions or need assistance related to employment decisions in light of this new ruling and the Supreme Court’s expansion of Title VII protections, contact your Polsinelli attorney.  Polsinelli is prepared to assist with questions; updating policies, procedures, and training materials; and providing workplace training. ___________ [1] Bostock v. Clayton County, Georgia, October 2019

With states, cities and counties taking measures to reopen after COVID-19, businesses are also faced with reopening and returning employees to work while still facing many unknowns.  Despite these unknowns, employers must ensure compliance with applicable laws when designing a plan to reopen.  From the typical issues related to classifying employees to more nuanced considerations related to testing, employers must adhere to and consider federal and state wage and hour laws when implementing plans to reopen. Employee Classification Issues When concerns with COVID-19 began, many employers changed their employee structure to cope with economic uncertainties.  Now with reopening and bringing employees back, employers likely will face additional changes to structure their businesses around the new normal following COVID-19.  Generally, when bringing exempt, salaried employees back to work, employers must evaluate how to ensure such employees retain their exempt status.  This includes adhering to the minimum salary requirements and ensuring that the job duties still fit under an exemption.  Otherwise, employers risk liability for misclassification, including but not limited to financial liability unpaid overtime. Employers must also be cognizant on returning exempt employees on a “partial” basis – as the FLSA requires that exempt employees that are working only part of a workweek at the direction of the employer are still entitled to their entire salary for that week. Thus, if an employer has the idea of bringing back an exempt employee for 4 out of 5 work days and considering doing an automatic reduction of salary to account for the reduced schedule, the employer must communicate to the employee beforehand that the employee’s salary will be reduced – as failing to do so may jeopardize the employee’s exempt status. Additionally, salaried employees brought back from furlough, but being paid a lower rate, present unique issues.  When making these changes, employers should ensure that the salary meets federal and state minimum salary levels, that the employee’s responsibilities have not changed so much as to take them out of an exemption category (e.g., that exempt employees, even if given non-exempt duties to cover employee shortages, are still spending the majority of their time on exempt type duties), and that the proper reason for the salary reduction is communicated (e.g., that the reductions are due to the pandemic, correspond with a reduced schedule, etc.). Employers need to also ensure they are complying with applicable state laws relating to properly communicating any salary reductions to employees. Additionally, some employers may have reclassified previously exempt employees to non-exempt due to a change in business needs caused by COVID-19.  Employers should be cautious when deciding to return such employees back to exempt status and should be aware of any notice requirements that must be given to employees when changing their classification.  For example, employers should evaluate the financial circumstances of the company and changing economy before reclassification to ensure that the exempt classification is expected to remain. New Schedules Plans to reopen may include a redesign of schedules which could include staggered shifts, a continued or new focus on teleworking, or an overall change in hours.  Employers must be cognizant of how this will impact all employees, whether exempt or non-exempt. When implementing these changes employers must remember the principle that exempt, salaried employees generally must receive their full salary in any week in which they perform work, with limited exceptions.  As such, if a salaried employee is instructed to perform no work during a given week, the employer must ensure this is enforced or risk liability – meaning that the exempt employee must be prohibited from answer emails, responding to texts, etc.  Similarly, as discussed above, if less work is available but must still be performed each week, employers cannot deduct an exempt employee’s pay due to reduced hours from week to week – rather, the employer must anticipate the reduced hours and set a “new” salary ahead of time that will be paid every week to the employee when they perform work. However, the exempt employees cannot be paid on an hourly, daily, etc. basis, as that will destroy the exemption.  Employers should evaluate whether any changes in workload or duties necessitate reclassification of exempt employees. For non-exempt employees, new schedules may impact the number of hours worked.  Regardless, non-exempt employees must be paid for all hours worked, at the minimum wage necessitated by both state and federal law.  Additionally, as employers evaluate the costs and benefits of allowing teleworking, employers must continue to ensure non-exempt employees are accurately tracking all their time worked and are being paid for all hours worked.   Employers should require that non-exempt employees accurately record rest breaks and meal breaks and ensure that they take such breaks in accordance with applicable law.  Moreover, to ensure that overtime is not only recorded, but also does not place a financial strain on the business, employers may consider requiring that all overtime be pre-approved.    Using Vacation and Other Paid Time Off While businesses are choosing to reopen, some employees may still feel unsafe going into work due to COVID-19.  In addition to determining whether allowing these employees to stay home is a reasonable accommodation under the ADA, employers should consider whether they can appropriately require such employees to use vacation or other paid time off benefits during this time.  Additionally, use of vacation or other paid time off may provide assistance for employers grappling with how to pay exempt employees their required salary, despite such employees not working full weeks. Testing Many employers are instituting testing, such as temperature checks, before enter a worksite or return to work.  When deciding to implement temperature screenings, which are akin to security screenings required before entering work, employers must determine whether employees must be paid for this time.  Whether screenings constitute paid time depends on a business’s location.  Regardless of where a business is located, however, not paying employees for time spent undergoing a screening will always be the riskier approach.  As such, employers should consider whether options to minimize the time spent during a screening are available and comply with local and state orders requiring screenings.

As the COVID-19 pandemic continues, health care workers on the front-lines continue to risk their own health to provide care for patients suffering from or who may have been exposed to COVID-19.  With growing worries regarding the availability of Personal Protective Equipment (PPE) (e.g., N95 masks, face shields, medical gowns and gloves), health care workers across the country are increasingly speaking out. In doing so, though, some health care employers have run into additional problems from an employment law perspective.  Workers are alleging they have been ordered by their employers not to speak out about insufficient PPE—or even more serious, they have been terminated for speaking to the media about the problem.  With these concerns looming and more medical professionals speaking out, hospitals, doctors’ offices, and the like must take care to not violate workers’ rights or take actions that could be construed as retaliatory against those employees.  Health care workers who are terminated or disciplined for raising concerns about inadequate PPE or COVID-19 exposure may have viable wrongful discharge claims under applicable state laws.  The majority of states have explicitly recognized some version of a common-law claim for wrongful discharge in violation of public policy, created to protect workers from termination based on public policy designed to ensure the health, safety, or welfare of the public.  In fact, some states such as California, Illinois, Massachusetts, Michigan, New York, Texas, Washington, and Wisconsin have statutory provisions specifically prohibiting retaliation against health care workers who take certain steps to report health, safety, and/or patient care concerns. Employers of health care professionals should take the following steps to help reduce or eliminate risk. Reviewing the applicable social media and media policies to ensure they include, among others, simple and clear provisions on: a. Patient privacy and posting of patient images; b. Mutual respect; c.  Using disclaimers such as “The views expressed on this [blog, website, post] are my own and do not reflect the view of my employer”; d.  Professionalism; e.  Not allowing social media activity to interfere with work commitments; f. Encouraging workers to talk with the media through public relations offices; g. Not speaking or posting on behalf of the institution, unless pre-approved. Enforcing social media and other applicable policies consistently and in line with past precedent. Not enforcing policies more harshly against those who speak out regarding COVID-19. Focusing on the violation of the policy, not the content of the employee’s speech, when disciplining an employee for violating social media or media policies. Avoiding negative comments about filing administrative complaints (e.g., OSHA) reporting health and safety concerns. Not discouraging such administrative complaints related to COVID-19 concerns. On the federal level, various laws may also give rise to a potential whistleblower complaint arising from PPE-related comments including, for example, OSHA’s whistleblower provisions.  In addition, government-related health care institutions face additional potential liability due to “free speech” concerns.  Employers should also keep in mind that Section 7 rights under the National Labor Relations Act apply equally to union and non-union employees.  Section 7 prohibits employers from interfering with, restraining, or coercing employees exercising their rights to engage in concerted activity for mutual benefit and to discuss working conditions, including through social media policies.  Health care entities should keep these additional considerations in mind when addressing employee conduct. If you have any questions or need assistance related to employment decisions pertaining to your health care workers, contact your Polsinelli attorney.

Since negotiations began last week, people across the country have been anxious to know how Congress’s response to the COVID-19 pandemic would impact them. The Senate has just passed the Families First Coronavirus Response Act (“Act”). The Act will impact how employers address the pandemic and how health care providers are paid for some of the services associated with COVID-19. Unemployment Benefits The Act provides $500 million dedicated to providing immediate, additional funding to states for staffing, technology, and other administrative costs, so long as the state meets certain claim processing requirements. For states with a 10% or more increase in their unemployment rate (over the previous year) that comply with all beneficiary access provisions, the federal government will provide 100% of the funding for Extended Benefits, as opposed to the usual 50%. Emergency Paid Sick Leave Act Employers with fewer than 500 employees and government employers must provide employees with an additional two weeks of paid sick leave for certain COVID-19-related instances. Employers must provide paid sick leave to an employee who is unable to work (or telework) due to a need for leave because: 1. The employee is subject to or is caring for an individual who is subject to a Federal, State, or local quarantine or isolation order related to COVID-19. 2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 or is caring for an individual who has been so advised. 3. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis. 4. The employee is caring for their child due to the closure of their child’s school or place of care, or the unavailability of the child’s care provider, due to COVID-19 precautions. 5. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor. Employees would receive the following amounts of paid sick leave: 1. Full-time Employees – 80 hours 2. Part-time Employees – hours equal to the number of hours that such employee works, on average, over 2 weeks For employees on leave due to being placed in isolation or experiencing COVID-19 symptoms, paid sick leave is paid at their full regular rate, capped at $511 per day and $5,110 in the aggregate. For employees on leave due to the other reasons provided in the Act, paid sick leave is at 2/3 the employee’s regular rate, capped at $200 per day and $2,000 in the aggregate. If an employee works varying hours week to week, the number of hours paid is based on the average number of hours scheduled per day over a 6-month period ending on the date when an employee took leave, or if such information is unavailable, the employee’s reasonable expectation at the time of hiring of the average hours per day the employee would be scheduled to work. After the first day an employee receives paid sick leave, an employer may require the employee to follow reasonable procedures to continue receiving paid sick leave. Sick leave under the Act expires if not used in 2020. State and local paid leave entitlements are not preempted by the Act. Employers are prohibited from discharging, disciplining, or discriminating against an employee who takes leave under this Act or complains or institutes a complaint related to this Act. Employers violating this Act will be considered to have violated the Fair Labor Standards Act (“FLSA”) and will be subject to the respective penalties. The Secretary of Labor may exempt employers with less than 50 employees from the paid sick leave requirements if compliance would jeopardize the business’s viability as a going concern and may also exclude certain health care providers and emergency responders from the definition of eligible employee. The sick time requirements go into effect 15 days after the bill is enacted and expire December 31, 2020. Emergency Family and Medical Leave Expansion Act Employers with fewer than 500 employees must provide 12-weeks of job-protected, partially paid FMLA leave to certain employees prevented from working due to COVID-19. Employees are eligible if they have been employed for at least 30 calendar days (not the 12 months typically required under FMLA). Employers must provide 12 weeks of FMLA leave if an employee is unable to work (or telework) due to the need to care for their minor child because of the closure of the child’s school or care facility, or unavailability of the child’s care provider, due to a declared Federal, State, or local COVID-19 emergency. Employers are not required to provide paid leave during the first 10 days of leave under this section of the Act. Accordingly, pay for the first 10 days would be under paid sick leave. After the first 10 days of FMLA leave, employers must pay an employee no less than 2/3 of the employee’s regular rate of pay under the FLSA for the number of hours the employee would have normally been scheduled to work, up to $200 per day and $10,000 in the aggregate. If an employee works varying hours week to week, the number of hours is based on the average number of hours scheduled per day over a 6-month period ending on the date when an employee took leave, or if such information is unavailable, the employee’s reasonable expectation at the time of hiring of the average hours per day the employee would be scheduled to work. Employees must provide the employer with notice of leave as is practicable. At the end of the leave period, employers must generally reinstate employees to the same or a reasonably equivalent position upon availability. Employers with fewer than 25 employees are not required to reinstate employees under certain conditions. The Secretary of Labor may exempt employers with less than 50 employees from the emergency leave requirements if compliance would jeopardize the business’s viability as a going concern and may also exclude certain health care providers and emergency responders from the definition of eligible employee. The emergency leave requirements go into effect no later than 15 days after enacted and expires December 31, 2020. Employer Tax Credits In order to defray costs, the Act provides a payroll tax credit to employers for “qualified sick leave wages” (i.e., wages required to be paid under the Emergency Paid Sick Leave Act) and “qualified family leave wages” (i.e., wages required to be paid by the Emergency FMLA Expansion Act), subject to certain caps. Employers may claim a credit against Social Security tax liability for each calendar quarter. If the credit exceeds an employer’s social security taxes for a calendar quarter, the excess is generally refundable. Health Care Costs The Act includes several notable provisions aimed at providing coverage for COVID-19 related health care services. Private group and individual health plans must cover COVID-19 diagnostic testing, including the cost of a provider, urgent care, or emergency room visit to obtain the testing, without any patient cost-sharing (this includes deductibles, copayments, and coinsurance). Medicare Part B already covers the cost of a COVID-19 diagnostic test, but the Act expands that coverage to include COVID-19 testing-related services, with no cost-sharing. A “testing-related service” is an outpatient, hospital observation, emergency department, nursing facility, or home service furnished during the COVID-19 emergency that relates to and results in an order for a COVID-19 diagnostic test. Medicare Advantage plans must also cover COVID-19 diagnostic testing and testing-related services without any cost-sharing or prior authorization requirements. Medicaid and CHIP plans are similarly required to cover COVID-19 diagnostic testing and the related visit without any patient cost-sharing. Individuals covered under TRICARE, veterans, and federal civilian workers cannot be charged for any cost-sharing for COVID-19 diagnostic testing and the associated visit. The same is also true for individuals receiving care through the Indian Health Service. During the COVID-19 emergency period, states are permitted to expand Medicaid to uninsured individuals for COVID-19 diagnostic testing and the associated provider visit. Medicaid costs for these individuals will be matched 100% by the federal government. For the period of the public health emergency, the federal government will increase Federal Medical Assistance Percentages (FMAP), the federal funding portion of all Medicaid programs, by 6.2%. Allotments to U.S. territories will also increase. Conclusion Employers, payors and health care providers will need to take immediate steps to adapt to the requirements of the Act. Polsinelli’s Cross-Disciplinary COVID-19 Response Team is at the forefront of these efforts and stands ready to assist.

In addition to bolstering the provisions of its mini-WARN Act (see Part I), New Jersey Governor Phil Murphy also recently signed into law expansive provisions aimed at deterring worker misclassification. Fines for Employee Misclassification A.B. 5839 authorizes New Jersey’s Department of Labor and Workforce Development to fine businesses for intentionally misclassifying workers.  Fines for employers are $250 per misclassified employee for a first violation, and up to $1,000 per misclassified employee for each subsequent violation.  Additionally, employers must pay each misclassified individual up to 5% of the worker’s gross earnings over the past year. Expanded Liability Under A.B. 5840, businesses entering into agreements with labor contractors—e.g., staffing agencies—for workers are now jointly and severally liable and share legal responsibilities for violations of state wage and hour laws and state employer tax laws, including those related to employee misclassification. A.B. 5840 also impacts manager-level employees of businesses found to have violated state wage and hour and employer tax laws.  The law expands individual liability for violations to any person acting on the employer’s behalf to now include managers. Notice Posting Requirements A.B. 5843 requires employers to conspicuously post notices containing the prohibition against misclassification; the standard for whether an individual is an employee or individual contractor; benefits and protections for employees under state wage, benefit, and tax laws; remedies available for misclassification; and how to report alleged misclassification.  Violations may result in the employer being guilty of a disorderly persons offense and a fine of $100 – $1,000. The new law includes an anti-retaliation provision for employees who complain about potential misclassification.  Employers violating the anti-retaliation provision must offer reinstatement to the discharged employee; correct any discriminatory action; and pay the employee considerable damages of reasonable legal costs, lost wages and benefits, and punitive damages equal to two times the lost wages and benefits. Stop-Work Orders and Public Posting of Violators In keeping with the trend of employee protections, A.B. 5838 allows New Jersey regulators to issue an immediate stop-work order for worksites where an employer has been found to have violated New Jersey wage, benefit, or tax laws.  Employers who violate a stop-work order may be fined up to $5,000 per day.  While a stop-work order can be issued while an employer appeals a violation decision, an employer may seek injunctive relief, and must then demonstrate the stop-work order would be or has been issued in error. New Jersey also enacted S.B. 4226, allowing the Department of Labor and Workforce Development to post information of persons who violate state wage, benefit, and tax laws. For guidance on compliance with any of these new laws and regulations in New Jersey, please contact your Polsinelli attorney.

New Jersey continues to become one of the country’s most employee-friendly states.  On January 21, 2020, Governor Phil Murphy signed into law a slate of employee-friendly bills.  In this post, we discuss the significant expansion of rights for employees impacted by mass layoffs.  In our next post, we will cover the wave of laws aimed primarily at combating worker misclassification and expanding potentially liable persons and entities. S.B. 3170 increases notification time and requires severance pay for mass layoffs.  Beginning July 19, 2020, when 50 or more full-time workers are laid off from an establishment in a 30-day period, employers must pay terminated employees severance equaling one week of pay for each full year of employment.  The changes to the law also expand the definition of “establishment” form a single employment site to any single or group of locations in New Jersey, meaning that the 50 affected employees do not need to have been employed at the same physical location. Under the same bill, employers who employ 100 or more employees (whether full-time or part-time) must provide at least 90 days’ notice (instead of 60) of the layoff to affected workers, any union representing affected workers, local officials, and the Commissioner of Labor and Workforce Development.  If an employer fails to provide the required notice to any employee, the employer must pay an additional four weeks of pay to that employee. Employers considering a mass layoff or in the process of mass layoff should consult their Polsinelli attorney to ensure compliance with this new, extensive New Jersey law.