Key Highlights Menopause protections are emerging at the state level, led by Rhode Island, which became the first state to explicitly prohibit menopause discrimination and require workplace accommodations — highlighting a growing shift in employment law. A significant gap exists in federal law, leaving employees to rely on overlapping protections (sex, age, disability), which creates uncertainty and legal risk for both workers and employers. Employers should prepare proactively, as more states are likely to follow and menopause-related claims are already gaining traction—making it important to consider accommodations and policy updates now. This just in: menopause has entered the legal spotlight. For decades, menopause has existed in a legal gray area, widely experienced but largely invisible in workplace policy. States are now incorporating menopause protections into existing anti-discrimination laws, clarifying workplace law and expectations. In 2025, Rhode Island led the charge by becoming the first state to explicitly cover menopause when it amended its Fair Employment Practices Act to prohibit menopause discrimination and require reasonable accommodations. This approach offers a framework for states looking to fill gaps left by federal law. The Federal Gap Federal anti-discrimination laws — like Title VII, the Americans with Disabilities Act, and the Age Discrimination in Employment Act — do not recognize menopause as a distinct protected category. Instead, employees must rely on overlapping protections — sex, age or disability discrimination — to bring claims. The gray area creates uncertainty for both employees and employers. Rhode Island’s approach cuts through that confusion by declaring menopause its own protected category and treating it as such. By incorporating menopause into an existing pregnancy accommodation framework, the state requires employers to engage in the interactive process and provide reasonable accommodations absent undue hardship. Why Menopause Matters Menopause is not niche — it affects millions of women in the workforce. Common symptoms include hot flashes, fatigue, sleep disruption, headaches, as well as difficulty concentrating, memory lapses and “brain fog.” Managing these physical changes in the workplace is no easy feat. The symptoms of menopause can affect focus, productivity, attendance and comfort — especially in environments with rigid schedules or high cognitive demands. Studies show that menopause often pushes women into early retirement, causing employers to lose valuable contributors, skills, experience, and knowledge prematurely. Put simply: menopause is a workplace issue, not just a personal one. The Expansion Playbook Rhode Island’s law did not reinvent the wheel. Instead, it built onto an existing pregnancy accommodation framework. Folding menopause into an established legal framework may become the dominant model nationwide. It allows legislatures to build upon familiar laws while extending protections to a historically overlooked condition. Momentum Beyond Rhode Island Although Rhode Island is currently the only state with explicit menopause protections, it is unlikely to remain an outlier. The issue is gaining traction in state legislatures, where broader menopause-related initiatives — from insurance coverage to provider training — have been introduced across multiple jurisdictions. For example, New York, California and Virginia are reviewing proposed bills to expand legal protections for people experiencing menopause in the workplace. Historically, the most impactful employment laws have followed a certain trajectory: one state moves first, the rest follow. Menopause protections will likely follow suit. Implications for Employers Employers around the country — listen up! Even if you do not have employees in Rhode Island, this isn’t something to ignore. Courts and agencies are already more receptive to menopause-related claims under existing laws, particularly when symptoms overlap with recognized disabilities or sex-based issues. As state laws begin to diverge, employers operating across multiple jurisdictions may face a growing patchwork of legal obligations. Policies that suffice in one state may fall short in another. Forward-looking employers may consider adopting menopause-related accommodations proactively — such as flexible scheduling, temperature adjustments or modified break policies — rather than waiting for legal mandates. A New Frontier in Workplace Law The explicit expansion of anti-discrimination statutes to cover menopause reflects a broader evolution in employment law: explicitly recognizing under-addressed health conditions. Menopause may represent the next frontier in workplace protections — one that sits at the intersection of sex, age and disability and challenges traditional categories of discrimination law. In the end, this is not a singular issue — it is a workforce reality. People navigating menopause are often at the height of their careers, managing teams and holding institutional knowledge that companies cannot easily replace. State moves to close the gap reflect a growing recognition that when women are supported, organizations succeed. For questions about this evolving legal trend, please contact your Polsinelli attorney.

Key Highlights The Equal Employment Opportunity Commission has held Title VII permits federal agencies to maintain single-sex bathrooms/locker rooms and exclude transgender employees from opposite-sex facilities. While the decision applies only to the federal sector, it provides a roadmap for how the EEOC may analyze bathroom/locker room issues post-Bostock. Six years after the Supreme Court’s 2020 decision in Bostock v. Clayton County reshaped Title VII, the EEOC has addressed an unanswered question from that decision: whether Title VII requires a federal agency to allow a transgender employee to use bathrooms and locker rooms consistent with the employee’s gender identity. Selina S. v. Daniel Driscoll, Secretary, Department of the Army, EEOC Appeal No. 2025003976 (Feb. 26, 2026). Inside the EEOC’s Holding The case involves a civilian employed by the U.S. Army who had used male-designated restrooms and locker rooms without issue. In 2025, the complainant informed management that he identified as a woman and requested access to female-designated facilities. The agency denied the request based on guidance requiring sex-based designation of “intimate spaces.” The EEOC framed the appeal as presenting an issue not “authoritatively addressed” — whether Title VII’s prohibition on discrimination “because of sex” extends to access to sex-designated bathrooms and locker rooms. The analysis relied heavily on Bostock, which held that firing (or refusing to hire) someone “simply for being . . . transgender” is discrimination “because of . . . sex” under Title VII. Bostock, however, left open the question of access to “bathrooms, locker rooms, or anything else of the kind.” Using that framing, the EEOC treated restroom and locker room access as a distinct issue. The EEOC concluded that Title VII permits federal agencies to maintain single-sex bathrooms and similar intimate spaces and to exclude employees from opposite-sex facilities. Exclusion from intimate spaces by itself, the Commission clarified, does not state a plausible Title VII claim. Applying what it characterized as an “equal treatment” approach, the EEOC reasoned that a policy separating bathrooms by biological sex does not constitute unlawful discrimination if applied equally to all employees, regardless of transgender status. According to the majority, men and women are not similarly situated in intimate spaces, and sex-based separation in those contexts reflects privacy interests and biological distinctions rather than discriminatory animus. Given the decision arises in the federal administrative context, judicial review is possible. Federal courts are not required to adopt the EEOC’s interpretation. We anticipate continued litigation in this area is likely, given Bostock’s unsettled scope. Why This Matters While the decision does not apply to private-sector employers, it provides insight into how the EEOC may approach facility-access claims. The decision distinguishes between adverse employment actions based on transgender status — squarely addressed in Bostock— and access to sex-designated intimate spaces, which Bostock did not resolve. Additionally, the ruling does not provide a safe harbor for employers’ decisions concerning employees’ access to intimate spaces. Federal courts remain divided on Bostock’s reach, and many state and local laws expressly require that employees be permitted to access facilities consistent with their gender identity. Employers operating across jurisdictions might consider evaluating whether a uniform nationwide policy creates compliance risk in particular states or municipalities. Workplace safety guidance and other regulatory considerations may also intersect with facility-access policies. For federal contractors and subcontractors, the practical impact may be more immediate. Contractors often operate on federal property and alongside federal employees. Contractors operating on federal property may face operational and employee-relations challenges if agency rules governing facility access differ from internal policies. Contractors might consider reviewing site-specific access protocols, assessing alignment between employee handbooks and federal worksite rules and reviewing supervisor training on addressing related employee concerns. Looking Ahead The contours of Title VII’s application to bathroom and locker room access remain unsettled. Continued litigation is likely, and further judicial clarification may follow. Polsinelli attorneys will continue to monitor developments in light of evolving federal, state and local requirements. Employers with questions about the EEOC’s decision or compliance considerations should consult their Polsinelli Labor and Employment attorney.

Key Highlights Washington to Ban Most Noncompetes: ESHB 1155 renders nearly all noncompetition agreements void and unenforceable effective June 30, 2027. The law provides an expanded definition that targets both traditional noncompetes and contractual workarounds, and it will apply to all covered agreements, not just those executed after the effective date. Narrow Path for Permissible Restrictions: Employers may still use limited nonsolicitation, confidentiality and trade secret protections, but these must be carefully tailored to comply with the law’s stricter standards. Immediate Action Required to Mitigate Risk: Employers should begin auditing agreements, revising templates and preparing required notices now, as the law introduces new compliance obligations and significant litigation exposure for violations. Governor Ferguson signed ESHB 1155 on March 23, banning the use of noncompete agreements between businesses and workers. With this new law, Washington State joins the growing list of states prohibiting or sharply limiting the use of noncompetition agreements.    The Ban The law makes all noncompetition agreements void and unenforceable once the law takes effect, which is expected to be June 30, 2027, regardless of when they were signed. The bill also broadens what qualifies as a noncompetition covenant. In addition to traditional noncompetes, the definition includes certain agreements between performers and venues or intermediaries that restrict lawful performance, as well as provisions requiring a worker to return, repay or forfeit compensation or benefits because the worker engages in a lawful business or profession. In practical terms, this means courts will closely review compensation and benefits arrangements for provisions that may function as a penalty on post-employment competition. For example, clawback terms, forfeiture-for-competition provisions in bonus or equity plans, retention payments that must be repaid only if the worker joins or starts a competing business, and similar disincentives may now be treated as noncompetition covenants if they are triggered by the worker’s decision to engage in lawful competitive work. Permissible Activity Some restrictions remain permissible: Nonsolicitation clauses are permitted but must be “narrowly construed.” Such clauses may bar solicitation of coworkers or customers the worker developed a relationship with for up to 18 months. However, nonsolicitation clauses cannot restrict a former employee accepting or doing business with customers. The sale of business carveout from the previous law remains intact. Specifically, a noncompetition covenant does not include one “entered into by a person purchasing or selling the goodwill of a business or otherwise acquiring or disposing of an ownership interest,” but only if the signer is dealing with an ownership interest representing 1% or more of the business. Confidentiality, trade secret, invention‑assignment provisions, certain sale‑of‑business covenants and limited educational‑expense repayment clauses remain valid. The Notice Requirement For employers that currently use noncompetes, notice is not just a formality — it’s a central compliance obligation. By October 1, 2027, employers must make reasonable efforts to provide written notice to all current and former employees and independent contractors whose noncompetition covenants would otherwise still be in effect, advising them that those covenants are void and unenforceable. The bill does not define “reasonable efforts” to notify employees. To avoid the risks associated with that uncertainty, employers might consider documenting efforts to locate and contact workers, and immediately start identifying contracts that might be subject to this requirement. What Employers Using Noncompetes Can Do Now Review of Existing Agreements: Review employment agreements, contractor forms, separation agreements, equity documents, bonus plans, clawback provisions and other compensation-related terms for provisions that may violate the new law. Review nonsolicitation clauses carefully to ensure they do not run afoul of new restrictions to create an unlawful noncompetition restriction. Assess any repayment or forfeiture provisions that could penalize a worker for engaging in a lawful occupation. Evaluate Enforcement Plans:Evaluate offboarding documents and talking points for language that could be inconsistent with the new statute. Develop training for HR, recruiting and in-house legal teams based on the law and any revisions to the company’s documents. Develop a Notice Plan:Identify affected current and former workers, confirm contact information and document reasonable efforts to deliver written notice. Enforcement and Litigation Exposure The bill authorizes enforcement by the attorney general and private suits by aggrieved persons. If a court or arbitrator finds a violation, the violator must pay the greater of actual damages or a $5,000 statutory penalty, plus attorneys’ fees, expenses and costs. Taken together, these remedies significantly increase litigation risk, particularly for employers using standardized agreements across large workforces or a contractor population. Importantly, the law’s new definitions, rules, remedies and displacement provision, which makes this chapter the controlling framework over conflicting state laws governing worker competition, apply to cases filed on or after June 30, 2027, even if the underlying conduct or agreement predates that date. Proceedings already pending before then continue under the prior version of the statute. Conclusion Employers can begin preparing for the effective date of the new legislation now by gathering agreements, reviewing templates and building a notice process ahead of the effective date. For guidance on noncompetes, nonsolicitation clauses or other restrictive covenant issues, contact your Polsinelli attorney.

Key Takeaways The New Jersey Supreme Court ruled that employers cannot evade state wage obligations based on a worker’s undocumented status in violation of federal immigration law. Employers who knowingly hire or retain undocumented workers must still comply with state wage obligations, regardless of conflicting federal law or alternative compensation agreements. The decision increases legal exposure for employers violating state wage laws based on immigration status. In Lopez v. Marimac LLC, the New Jersey Supreme Court closed the door on a long-debated defense in wage disputes: an employee’s undocumented status. On March 19, 2026, the Court clarified the relationship between immigration status and state wage-and-hour compliance, holding that employers cannot use undocumented status to avoid paying wages. The case arises from an undocumented worker hired in 2015 by the owner of a realty company. After learning of the worker’s immigration status, the employer stopped paying wages and instead offered rent-free housing, claiming that paying formal wages would be “against the law.” Tension Between Federal and State Law The IRCA prohibits employers from hiring or continuing to employ individuals not authorized to work in the United States. These prohibitions apply even after an employer becomes aware of a worker’s unauthorized status. Notably, the statute does not expressly prohibit paying wages for work already performed. The New Jersey Supreme Court’s ruling affirms an impactful proposition: immigration status does not excuse noncompliance with state wage laws. The Court focused on the plain language of the New Jersey Wage Payment Law (WPL) and Wage and Hour Law (WHL), neither of which expressly excludes undocumented workers from their purview. Instead, employers who violate the IRCA must still pay workers for work performed, regardless of immigration status or alternative barter agreements. The Court reasoned that finding otherwise—that federal law preempts state wage and hour protections—would “incentivize employers to hire undocumented immigrants and pay reduced wages.” Enabling this practice would undermine the IRCA’s core objective of preventing the hiring of undocumented immigrants. Expanding Worker Protections in New Jersey The decision aligns with New Jersey’s broader policy trend toward strengthening protections for immigrant workers. For example, New Jersey continues to actively enforce wage-and-hour laws through initiatives like its “Workplace Accountability in Labor List,” which publicly identifies employers with outstanding wage liabilities. Against this backdrop, the Court’s ruling aligns with a consistent policy direction: ensuring that all workers—regardless of status—are covered by baseline employment protections. Implications for Employers The decision underscores the risks of employing undocumented workers while failing to comply with state wage laws. Employers should note several practical implications of the decision, including: Increased Litigation Risk: Undocumented workers may be more likely to bring wage claims using the rationale of Lopez not only in New Jersey, but also in other states. Elimination of a Common Defense Strategy: Arguments that wage obligations do not apply due to a worker’s unauthorized status are unlikely to succeed in New Jersey courts. Compliance is Status-Neutral: Pay requirements, overtime calculations, and recordkeeping requirements apply to all employees, regardless of work authorization status in New Jersey. Heightened Enforcement Exposure: Violations involving undocumented workers may attract additional scrutiny from regulators. Next Steps for Employers Given this recent ruling, it is recommended that employers operating in New Jersey: Conduct wage-and-hour audits to ensure compliance across all employee categories Review policies and training to eliminate any status-based pay disparities Strengthen documentation and payroll practices Consult counsel when addressing workforce compliance issues involving immigration considerations. For questions and assistance regarding this decision and its impact on employers, please contact your Polsinelli attorney. 

Key Takeaways The Illinois Supreme Court Expands the Boundaries of Compensable Hours: The Illinois Supreme Court held that the Illinois Minimum Wage Law (IMWL) does not automatically incorporate federal Portal-to-Portal Act limitations. Rather, the statute requires compensation for off-the-clock work activities. Impact on Compensability: Employer-mandated pre- and post-shift activities may be compensable under Illinois law, even if not compensable under federal law. Effect on Employers: The decision increases potential wage-and-hour exposure for Illinois employers, particularly for off-the-clock activities such as screenings and security checks. Employers should review timekeeping and pay practices to ensure compliance with Illinois-specific requirements. To exclude or not to exclude off-the-clock activities, that is now a pressing question for Illinois employers. On March 19, 2026, the Illinois Supreme Court issued a significant decision clarifying the scope of compensable work under the Illinois Minimum Wage Law (IMWL), with potentially far-reaching implications for employers operating in the state. The ruling arises from litigation involving Amazon warehouse employees who sought compensation for time spent undergoing mandatory pre-shift COVID-19 screenings. The central legal question—certified to the Court by the Seventh Circuit—was whether Illinois law incorporates the federal Portal-to-Portal Act (PPA), which excludes certain “preliminary” and “postliminary” activities from compensable time. A Departure from Federal Limitations Under federal law, the PPA does not require employers to compensate pre- or post-work activities, unless those activities are “integral and indispensable” to the employee’s principal duties. Courts have historically applied this framework to exclude time spent in security screenings or similar activities. The Illinois Supreme Court, however, has now made clear that the IMWL does not incorporate the Portal-to-Portal Act’s categorical exclusions and instead requires an independent analysis under Illinois law. The Court focused on the plain language of the IMWL and the Illinois Department of Labor’s “hours worked” definition, noting that—unlike federal law—neither explicitly excludes “preliminary” or “postliminary” activities. Absent clear legislative intent, the Court declined to read those limitations into the statute. During oral argument, Amazon warned that an expansive interpretation could create liability for routine workplace activities “ranging from walking from their cars, to waiting for an elevator,” to undergoing security procedures. While the Court did not adopt that sweeping formulation outright, the decision leaves open the possibility that Illinois courts will take a more employee-favorable approach than federal law. Notably, the Court did not determine whether the specific activities at issue were compensable, leaving that determination to the Seventh Circuit on remand. A Broader Trend in Illinois Wage Law The ruling is consistent with a recent trend in Illinois Supreme Court jurisprudence interpreting the IMWL expansively. For example, in Mercado v. S&C Electric Co., the Court held that non-discretionary bonuses must be included in the “regular rate of pay” for overtime calculations, rejecting narrower interpretations of compensation. Together, these decisions signal a clear judicial preference for applying the plain language of the IMWL without importing federal limitations that could narrow employee protections. Implications for Employers This decision materially increases potential wage-and-hour exposure for Illinois employers. If broadly applied, the ruling could extend compensability to a wide range of pre- and post-shift activities, including: Health and safety screenings Security checks Required on-site waiting time Other employer-mandated activities performed off the clock. What Should Employers Do Now Employers with Illinois operations should take proactive steps in light of this development: Review pay practices: Evaluate whether employees are required to perform activities before clock-in or after clock-out. Assess compensability: Consider whether such activities could now be deemed compensable under Illinois law, even if excluded under federal standards. Update policies and procedures: Ensure timekeeping practices capture all potentially compensable work. Monitor litigation risk: The decision may spur class and collective actions challenging longstanding pay practices, particularly in industries that rely on pre-shift screening or security protocols. The Illinois Supreme Court’s ruling underscores that compliance with federal wage-and-hour law may no longer be sufficient in Illinois. Because the case will return to the Seventh Circuit for a final determination on off-the-clock compensability, changes to the Illinois Supreme Court’s decision may be on the horizon. In the meantime, employers should anticipate increased scrutiny of off-the-clock work and adjust their practices accordingly to mitigate risk. For questions and assistance regarding this decision and its impact on employers, please contact your Polsinelli attorney. 

Key Highlights DOL Clarifies Bonus Treatment Under the FLSA: In Opinion Letter FLSA2026-2 (Jan. 5, 2026), the Department of Labor confirmed that certain performance-based bonuses must be included in the “regular rate of pay” when calculating overtime. Advance Promises Eliminate Discretion: Bonuses are not considered “discretionary” if the employer communicates the criteria and amounts in advance. Once promised, the employer has “abandoned” discretion under the FLSA. Impact on Overtime Calculations: Because the safety and performance bonuses at issue were non-discretionary, they must be included in the regular rate for any workweek in which they are earned—requiring employers to review bonus programs to ensure proper overtime compliance. On January 5, 2026, the U.S. Department of Labor’s  Wage and Hour Division (the “DOL”) issued Opinion Letter FLSA2026-2 addressing the question of whether an employer must include certain bonus payments in the “regular rate of pay” when calculating an employee’s overtime pay under the Fair Labor Standards Act (“FLSA”). Background: The Employer’s Safety and Performance Bonus Plan The DOL’s letter responds to an inquiry from an employee who worked in the waste management industry inquiring whether certain performance-based bonuses were considered “discretionary bonuses” that could be excluded from the “regular rate” for purposes of calculating overtime for   hourly, non-exempt employee drivers of the employer. Specifically, the employer provided certain performance-based bonuses pursuant to a “Safety, Job Duties, and Performance” bonus plan designed to reward an employee’s punctuality, attendance, consistency in completing daily safety tasks, driving safety, compliance with traffic laws, proper attire, and performance efficiency. The amounts of the bonus, as well as the criteria to earn such bonuses, were communicated to the employees as part of a bonus plan prior to any employee meeting the performance requirements. What Qualifies as a “Discretionary” Bonus Under the FLSA? The DOL concluded that the bonus payments were not discretionary. In its letter, the DOL explained that, to be considered an excludable discretionary bonus under the FLSA, the payment must satisfy three conditions: (1) the fact and amount of the payment must be determined at the sole discretion of the employer; (2) the employer’s determination must occur at or near the end of the period when the employee’s work was performed; and (3) the payment must not be made pursuant to any prior contract, agreement, or promise that causes the employee to expect such payments regularly. 29 U.S.C. § 207(e)(3). The DOL reasoned that while the employer technically had initial discretion in deciding whether it would offer the bonus program, and on what terms, it had communicated the criteria for receiving the bonus to its employees well in advance of their performing work. As a result, the fact and amount of the bonus payments were not made at the “sole discretion of the employer at or near the end of the period” in which the work was performed. This is consistent with the FLSA’s regulations, which provide: “If the employer promises in advance to pay a bonus, he has abandoned his discretion with regard to it.” 29 C.F.R. § 778.211(b). DOL’s Conclusion: Bonuses Must Be Included in the Regular Rate Because the bonuses at issue were not discretionary, the DOL concluded that the employer must include the bonus payments in the regular rate of pay in any workweek for which they are earned when calculating overtime for the drivers. Employer Takeaways and Compliance Considerations Employers providing performance-related bonuses should keep the three factors outlined by the DOL in mind and should review their policies and practices to ensure all such bonuses are properly classified as either discretionary or non-discretionary so that the regular rate is properly calculated when paying overtime. For questions and assistance regarding the inclusion of bonus payments or other issues involving the FLSA or wage-and-hour laws, please contact your Polsinelli attorney.

Key Highlights PAGA reforms elevate the importance of proactive compliance: The 2024 amendments reallocate penalties, expand cure opportunities, and give courts more discretion to reduce penalties for good-faith errors—making prompt remediation and well-documented compliance efforts critical in 2026. Wage-and-hour fundamentals continue to drive exposure: Daily overtime rules, regular rate calculations, evolving minimum wage requirements and strict meal and rest period obligations remain the primary sources of liability despite PAGA changes. Operational gaps can create outsized risk: Payroll misconfigurations, off-the-clock work, missed break premiums and delayed final pay can quickly compound across employees and pay periods, leading to significant penalties and litigation risk. California’s wage-and-hour framework is one of the nation’s most complex and vigorously enforced. In 2024, the California legislature enacted significant reforms to the Private Attorneys General Act (PAGA) affecting civil penalties allocations, employers’ ability to cure certain violations and PAGA case management. Those reforms took effect in 2025 and continue to influence statewide risk exposure in 2026. The PAGA Context: Reforms That Matter in 2026 PAGA deputizes employees to pursue civil penalties on behalf of the State of California and other employees for Labor Code violations. Historically, employers faced large PAGA penalties because: PAGA actions do not require class certification; Penalties could accumulate per employee, per pay period; and Procedural requirements and enforcement timing often created settlement pressure. The 2024 reforms recalibrated several parts of this framework as they: Reallocated civil penalties so that 65% now goes to California’s Labor and Workforce Development Agency and 35% to aggrieved employees (subject to certain adjustments); Expanded cure opportunities to give employers the chance to fix certain violations within defined windows and limit penalty exposure; and Adjusted penalty structures to give courts clearer guidance to reduce penalties for isolated and good-faith errors while preserving high penalties for persistent or bad-faith violations. The PAGA reforms might seem procedural. But in practice, they highlight how documented compliance efforts, rapid remediation and coordinated cross-functional responses to notices carry strategic importance for California employers. Wage-and-Hour Fundamentals That Still Drive Risk Even following the PAGA reform, the underlying wage-and-hour requirements of the California Labor Code remain central to most claims. (1) Overtime Pay California’s overtime structure is distinctive: 1.5× the regular rate for hours over 8 in a day or 40 in a week; and 2× the regular rate for hours over 12 in a day Employers with multistate payroll systems often find that other states’ “weekly-only” overtime rules do not meet California’s daily requirements. Misconfigured systems can systematically underpay overtime, and small errors compound quickly across a workforce. Because overtime is based on the regular rate and not necessarily the employee’s base hourly rate, items like nondiscretionary bonuses and differentials can change the overtime calculation—another common source of underpayment when payroll rules are not configured to California’s requirements. (2) Minimum Wage California’s statewide minimum wage is $16.90/hour in 2026, with many cities and counties requiring higher rates. Industry-specific minimum wages, like in fast food and health care, may also apply. Minimum wage exposure often stems from: Off-the-clock work; Unpaid pre- or post-shift tasks; Misapplied meal or rest period premiums; and Pay practices that inadvertently reduce effective hourly rates. Minimum wage violations also interact with exempt status thresholds, which are tied to the state minimum wage. (3) Meal and Rest Periods California requires a: 30-minute off-duty meal break for shifts over five hours; Second 30-minute meal break for shifts over 10 hours (with limited waiver options); and Paid 10-minute rest breaks for every four hours worked. Missed meal or rest breaks trigger premium wages—one additional hour of pay per violation. Additionally, meal and rest period premiums count as wages, so they must appear correctly on wage statements and be paid in the next regular payroll cycle. (4) Off-the-Clock Work Employers must compensate for all time an employee works. Common “off-the-clock” risks include: Pre-shift setup or security checks; Donning/doffing time; After-shift duties; and Remote work outside scheduled hours. Even small increments of unpaid time can push employees into unpaid overtime. (5) Final Pay and Waiting Time Penalties Final pay must be issued immediately upon termination and within three days of voluntary resignation or immediately with proper notice. Delays—even for legitimate administrative reasons—can lead to waiting time penalties that accrue daily for up to 30 days. Why This Matters California’s recent PAGA reforms do not reduce employers’ wage-and-hour obligations; they reinforce the importance of getting compliance right. While the amendments create new cure and penalty-management mechanisms, the underlying requirements governing overtime, minimum wage, meal and rest periods and final pay remain unchanged and continue to drive litigation risk. Employers should reassess payroll systems, break practices, classification decisions and final pay procedures. For more information about the PAGA reforms or California wage-and-hour compliance, contact your Polsinelli Labor and Employment attorney.

Key Takeaways:  DOL Moves to Reinstate Business-Friendly Independent Contractor Standard: The Department of Labor has proposed rescinding the 2024 independent contractor rule and returning to a more flexible “economic reality” test that emphasizes two core factors — control and opportunity for profit or loss — potentially narrowing federal misclassification exposure under the FLSA. NLRB Restores 2020 Joint Employer Rule: The NLRB has formally reinstated the Trump-era standard requiring “substantial direct and immediate control” for joint employer status, limiting liability based solely on indirect or reserved control and reducing bargaining and unfair labor practice exposure for many businesses. Despite the clocks moving forward this week, federal employer classification standards are turning back. The Department of Labor (DOL) and National Labor Relations Board (NLRB) have recently moved to restore Trump-era employment standards that reshape worker classification for businesses across industries. These developments mark a significant shift in federal labor policy with implications for employers navigating classification, franchising, staffing and gig-economy models. DOL Proposes Rescission of 2024 Independent Contractor Rule After abandoning the Biden administration’s 2024 independent contractor test, the DOL announced a proposed rule on Feb. 26, 2026 to replace its current enforcement scheme under the Fair Labor Standards Act (FLSA), which applied a six-factor “totality of the circumstances” economic realities analysis without assigning weight to any particular factor. Under the DOL’s proposal, the independent contractor standard will again be tested by the “economic reality,” focusing on whether an individual is dependent on an employer or in business for themselves. This signals a return to a more flexible, business-friendly analysis. DOL Wage and Hour Division Administrator Andrew Rogers stated: “Generally, if a worker is economically dependent on an employer for work, he or she is an employee. Generally, if a worker is in business for him or herself and isn't dependent on an employer for work, the worker is an independent contractor.” While the 2024 rule weighed six factors equally, the DOL’s proposal will apply a list of five non-exhaustive factors while elevating two to “core factors”: the nature and degree of control; and the worker’s opportunity for profit and loss. The others become less probative “guideposts”: skill required; permanence of the relationship; and integration into the employer’s production process. The intent is to look at the “actual practice” of the parties rather than what may be contractually or theoretically possible. In emphasizing control and opportunity for profit/loss, the DOL appears to be narrowing employers’ misclassification exposure under the FLSA, particularly in industries where workers exercise meaningful entrepreneurial discretion. Although this shift aligns more closely with Supreme Court and federal appellate precedent, employers should not assume that federal enforcement risk will disappear. Private plaintiffs’ attorneys are likely to continue pursuing collective and class actions, and state-law classification standards remain unaffected. Employers should review their current classification practices and prepare to update policies and training. NLRB Reinstates Trump-Era 2020 Joint Employer Standard The NLRB also formally reinstated the 2020 joint employer rule on Feb. 26 after a federal court vacated the Biden-era’s broader definition. Under the rule, joint employer status requires “substantial direct and immediate control” over one or more essential terms and conditions of employment such that it “meaningfully affects matters relating to the employment relationship.” Further, “substantial direct and immediate control” must have a “regular or continuous consequential effect” on employment terms, not control exercised only on a “sporadic, isolated, or de minimis basis.” Reserved or indirect control alone is generally insufficient. Reinstating the 2020 rule is expected to have an outsized impact on franchisors, staffing companies, private equity-backed platforms and businesses operating through layered contracting relationships. By requiring exercised or direct control, the rule will likely meaningfully limit federal bargaining obligations and unfair labor practice exposure tied to another entity’s workforce. Still, contractual language and day-to-day operational practices must align to avoid inadvertently triggering joint employer status. Employers should review current workforce relationships to assess potential obligations for bargaining and unfair labor practice exposure. Companies with pending NLRB matters or organizing activity should evaluate how the reinstated standard may affect strategy, particularly where joint employer allegations were previously asserted. Why This Matters Together, these developments signify the Trump administration’s employer-friendly approach to rulemaking and reflect a narrower federal interpretation of independent contractor and joint employer standards. While both rules may face continued legal scrutiny, employers should use this moment to proactively review independent contractor models, audit franchise and staffing arrangements, align operations with contractual intent and evaluate classification risks under relevant state standards. Polsinelli will continue to report on any DOL and NLRB updates related to these standards. Please contact your Polsinelli attorney for more information.

Key Highlights New York City’s Earned Safe and Sick Time Act (ESSTA) adds 32 hours of frontloaded unpaid safe/sick time to its existing paid safe/sick time requirements for employers. The ESSTA also expands the permissible uses for both types of leave under the Act to include scenarios tied to caregiving, housing or subsistence proceedings, public disasters and workplace violence. Employers, however, will no longer be required to grant a set number of temporary schedule changes; employees, instead, will enjoy a protected right to request such changes. What Is Changing on February 22, 2026? New York City employers should prepare for significant changes to the City’s ESSTA taking effect February 22, 2026—joining changes to New York state laws affecting disparate impact liability and the use of “stay-or-pay” contracts. The amended ESSTA includes a new bank of 32 hours of unpaid safe/sick time, expanded permissible uses of safe/sick time and a scaling back of obligations under the City’s Temporary Schedule Change Act (TSCA). 1. Employers must provide 32 hours of unpaid safe/sick time in addition to paid ESSTA leave. The ESSTA will require employers to provide employees, upon hire and on the first day of each calendar year, a minimum of 32 hours of unpaid safe/sick time that is immediately available for use. Employers will not, however, be required to carry over unused hours from this unpaid bank to the next calendar year. The Act further contemplates that when an employee needs time off for an ESSTA-covered purpose, the employer generally must provide paid safe/sick time first (if available), unless ESSTA paid time is unavailable or the employee specifically requests to use other leave (e.g., other PTO pursuant to an employer’s vacation policy). One potential issue for employers lies in the Act’s text. It ties the unpaid bank to “upon hire” and “the first day of each calendar year.” With a February 22, 2026, effective date, it is not clear from the statute whether employers must make the unpaid bank available to current employees as of the effective date. Given the short time before the effective date, employers likely will have to make a decision on this point before any additional guidance from the City’s Department of Consumer and Worker Protection becomes available. 2. Employees may now use paid and unpaid safe/sick time for new “covered uses.” ESSTA continues to allow leave for traditional illness/injury, preventive care and care of family members but now expands certain categories and adds new ones, including: Sick Time Additions Leave related to business closure or child school/childcare closure may now include closures tied to a public disaster—not just a public health emergency. Instances in which a public official directs an employee to remain indoors or avoid travel during a public disaster that prevents an individual from reporting for work. Safe Time Additions Circumstances where the employee or a family member is the victim of workplace violence in addition to the existing domestic violence/sexual offense/stalking/human trafficking categories. Certain instances of caregiving for minor children or other care recipients. Legal proceedings or hearings related to subsistence benefits or housing and other related steps necessary to apply for, maintain, or restore benefits or shelter. These expansions overlap with what NYC historically treated as “personal events” under the TSCA’s framework but now more expressly integrates the framework into the ESSTA. 3. The TSCA moves from “must grant” to “right to request” when it comes to temporary schedule requests. Following its effective date, the amendment softens the temporary schedule change regime in the City. Employees remain protected from retaliation for requesting a temporary schedule change, but the law provides that an employer may grant or deny the request, must respond as soon as practicable and may propose an alternative change, which the employee is not required to accept. Employers should keep in mind that independent obligations under federal, state and local accommodation laws remain unchanged, so some schedule adjustments may still be required as reasonable accommodations even where the TSCA request itself is discretionary. Why This Matters These amendments significantly expand the scope and administration of protected leave in New York City. By adding a new unpaid ESSTA leave bank, broadening the reasons that trigger protected absences, and shifting temporary schedule changes to a right-to-request framework, the City increases the risk of missteps in policy drafting, payroll administration and day-to-day management of leave requests. Employers should take time now to evaluate how these changes affect their existing leave, scheduling and reporting practices ahead of the February 22, 2026, effective date. Employers with questions about the amended ESSTA, or who would like assistance assessing or updating their policies and practices in advance of the effective date, should contact their Polsinelli Labor and Employment attorney.

At a Glance Clarified Pay Transparency Requirements Effective Jan. 1, 2026: California employers are now able to publish a good-faith estimate of the salary or hourly wage they reasonably expect to pay a new hire at the time of hire, rather than a general range for the position. Broader Scope for Equal Pay Act Claims: SB 642 expands the definition of “wages” to include nearly all forms of compensation—such as bonuses, equity, benefits, allowances and reimbursements—potentially increasing exposure in pay equity claims and underscoring the importance of reviewing total compensation packages. Longer Statute of Limitations and Expanded Liability Window: The law extends the statute of limitations for Equal Pay Act claims to three years regardless of willfulness, with a six-year look-back period for relief, emphasizing the need for proactive compliance and documentation. Job Posting Requirements Effective January 1, 2026, SB 642, also known as the Pay Equity Enforcement Act, amends pay transparency and pay scale requirements for California employers. The changes clarify the definition of “pay scale” for job posting requirements, broaden the forms of pay considered for assessing Equal Pay Act claims, and extend the statute of limitations to bring civil actions alleging violations of pay reporting statutes. As described in our prior blog post, California requires employers to publish pay scale information on job postings. SB 642 amends California Labor Code § 432.3 to expand the definition of pay scale to a “good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.” Previously, “pay scale” was defined to include the salary or wage range that employer expected to pay for the position generally. The amended definition requires disclosure of what an employer reasonably expects to pay the new hire on the date of hire as opposed to an estimate of the position in general. Equal Pay Act Claims Labor Code § 1197.5 prohibits employers from paying employees less wages for performing substantially similar work based on sex. SB 642 broadens the definition of “wages” and “wage rates” under this section. As a result, alleged violations may consider all forms of pay “including but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning and gasoline allowances, hotel accommodations, reimbursement for travel expenses and benefits.” The law also provides new guidance on when an Equal Pay Act violation may occur, including when: An alleged unlawful compensation decision or other practice is adopted; An individual becomes subject to an alleged unlawful compensation decision or other practice; and An individual is affected by application of an alleged unlawful compensation decision or other practice, including each time wages, benefits or other compensation is paid. SB 642 establishes a statute of limitations of three years after the last date of alleged violation to bring an Equal Pay Act claim, regardless of whether the violation is willful. Previously, the statute of limitations was two years and only three years if the violation was proven willful. The law introduces a look-back period limiting relief to a maximum of six years. Key Takeaways for Employers   The changes to job posting requirements provide relief to employers that provide a “good faith” reasonable estimate in their postings. With the changed definition of “wages” for the purposes of Equal Pay Act claims, employers may wish to review the equity of their pay packages including non-salary compensation to ensure compliance. Employers are advised to consult with counsel on compliance including when new compensation practices are adopted and changed. Polsinelli attorneys will be monitoring new developments in this area and remain prepared to assist employers.

Effective January 1, 2026, numerous state and local government employment laws have taken effect. Below is a non-exhaustive summary of key employment law updates for January 2026. For additional insights, register for the 2026 Employment Law Developments: Key Considerations for Employers webinar here. To navigate each employment law update by state, click here. Please note that the above is a non-exhaustive summary of recent employment law developments. For questions or assistance with employment law compliance in 2026, or to ensure you are informed about the latest updates, please contact your Polsinelli attorney.

Key Highlights New York prohibits arrangements requiring employees to repay or reimburse their employer: The newly enacted Trapped at Work Act bars employers from enforcing agreements that require workers to repay or reimburse training or other costs or payments if they leave employment before a specified period. Ambiguous language creates risk for common compensation practices: Although motivated by controversial training repayment arrangements, many commonplace practices like education stipends, tuition assistance programs, forgivable loans, advanced retention bonuses and certain consulting arrangements may now face challenges. Law applies broadly to workers beyond employees: The Act covers not only employees, but also independent contractors, interns, volunteers, apprentices and other service providers, with only limited statutory exceptions. New York employers are now prohibited from enforcing or requiring so-called “stay-or-pay” contracts that obligate employees to repay money to their employer if they leave employment prior to a stated date.  With the new “Trapped at Work Act,” New York joins other states, including Colorado and California, in protecting employees from requirements to reimburse their employer for employer-provided training. Although the Act and other similar laws have been motivated by criticisms of employer training repayment requirements, the breadth and ambiguity of New York’s new law threaten to go beyond that immediate concern and prohibit or render uncertain many commonplace employee compensation arrangements. The Act prohibits employers from using or enforcing any “employment promissory note,” which is defined as “any instrument, agreement or contract provision that requires a worker to pay the employer, or the employer's agent or assignee, a sum of money if the worker leaves such employment before the passage of a stated period of time,” including any agreement to reimburse training provided by the employer. The scope of the Act is broad, as it applies not only to traditional employees, but also to independent contractors, interns and externs, volunteers, apprentices and sole proprietors providing services. The Act does exclude certain types of agreements from its prohibition, including: Agreements to repay the employer for sums advanced to the employee, other than sums for “training related to the worker’s employment with the employer”; Repayment for property sold or leased to the employee; or Repayments pursuant to a collective bargaining agreement. Although the Act is aimed at controversial arrangements requiring employees to repay their employer for mandatory trainings, it may inadvertently sweep in other commonplace employee compensation frameworks that do not raise similar controversy. These include: Education Stipends: Employers often provide educational or tuition stipends to employees, and it is common to have retention provisions included in such arrangements. It is not clear whether such arrangements would continue to be permissible, given that the funds may not be advanced directly to the employee and the education likely relates to the employee’s position. Forgivable Loans/Advanced Retention Bonuses: Arrangements where funds are fronted to employees, subject to a retention requirement, can potentially fall within the Act’s exceptions, but they must be carefully structured to avoid penalties and enforceability issues. These types of arrangements and bonuses are common in many industries, especially financial services. Liquidated Damages for Consulting Arrangements: Given that the Act applies to independent contractors (even if properly classified as such), it is arguable that a penalty for the contractor’s early termination of the agreement would violate the Act. Even as New York Governor Hochul signed the Act, she noted that its language “was ambiguous in certain respects” and stated that she had agreed with the Legislature to “address these concerns” in the future. Unless and until clarification is provided, however, employers in New York will have to review and carefully modify any agreements that require employees or other workers to repay sums to the employer based on retention considerations.  Failure to do so can lead to the agreement being deemed null and void and subject the employer to fines, ranging from $1,000 to $5,000 for each worker with whom they have a prohibited agreement, as well as liability for attorneys’ fees incurred by the employee in defending against enforcement. For assistance reviewing agreements or other questions relating to this law, be sure to contact your Polsinelli attorney.

Key Highlights: A recent amendment expressly codifies disparate impact liability under the New York State Human Rights Law (NYSHRL) for employment discrimination claims. This comes as the U.S. Equal Employment Opportunity Commission has backed away from disparate impact theories in enforcing federal employment discrimination statutes. The increasing use of Artificial Intelligence (AI) tools in personnel processes and decision-making has the potential to raise disparate impact issues to the extent that AI processes have varying effects on specific groups. New York employers may face increased potential exposure from neutral employment practices, underscoring the importance of proactive review and documentation. New York Governor Kathy Hochul signed Senate Bill S8338 on Dec. 19, 2025, which codifies that a facially neutral employment practice may violate the New York State Human Rights Law (NYSHRL) based on its discriminatory effects, even absent discriminatory intent. While the amendment largely clarifies existing law, it comes at a time when federal enforcement of disparate impact theories has become less certain as the U.S. Equal Employment Opportunity Commission has taken a more restrained approach to pursuing disparate impact claims under federal employment discrimination statutes. Against that backdrop, the amendment underscores the continuing importance of state-law compliance and employer attention to outcome-based employment practices, as well as the purportedly neutral decisions of their AI tools. What the Amendment Does The legislation adds a new subdivision to New York’s Executive Law § 296, providing that, in NYSHRL employment discrimination cases, an unlawful discriminatory practice may be established where an employer uses a policy or practice that actually or predictably results in a disparate impact based on a protected characteristic. The statute makes clear that proof of discriminatory motive is not required. After the employee demonstrates that a particular employment practice causes, or predictably will cause, a disparate impact on a protected class, the employer then bears the burden to establish that the practice is job-related for the position in question and consistent with business necessity. Even if that showing is made, an employee may still prevail by showing the employer’s business necessity could be satisfied by a less discriminatory alternative. The statute also requires that an employer’s justification be supported by evidence and not based on hypothetical or speculative considerations, reinforcing the need for objective validation and documentation of employment criteria. Although disparate impact liability is not a new concept, the amendment injects ambiguity into the analysis by prohibiting policies and practices that “actually or predictably” yield disparate results. This raises the specter of challenges to practices that do not “actually” cause a disparate impact but can be argued to “predictably” do so. Given the litigation climate in New York, this additional language creates another reason for employers to be intentional in assessing the effect, or event "predicted" effect, of personnel practices and policies. Why This Matters Now, Especially as AI Gains Ground in Employment Practices By codifying disparate impact liability, New York has increased scrutiny of ostensibly neutral employment practices — such as hiring criteria, screening tools, promotion standards and compensation structures — that may produce statistically significant disparities. AI tools are often adopted to promote efficiency and consistency and typically would not be viewed as intentionally discriminatory. However, these tools present disparate impact risks to the extent that the data inputs, models or selection criteria underlying those tools have varying effects on specific groups. For example, even in the relatively early phases of AI’s adoption, there have been claims in litigation that an employer’s use of AI training datasets disproportionately composed of one protected group (for example, males) results in an adverse disparate impact to members of other groups (for example, females). The beefed-up disparate impact liability under NYSHRL, combined with New York City’s 2023 regulations on AI use in personnel processes, guide in favor of an intentional approach by employers in using these tools for employment decisions. Looking Ahead This amendment applies to employment discrimination occurring on or after its effective date of Dec. 19, 2025, making proactive compliance efforts particularly important. Employers should consider reviewing key employment practices to assess disparate impact risk, ensure that job-related criteria are well supported, and evaluate whether alternative approaches could achieve business objectives with less discriminatory effect. If you have questions about how this amendment may affect your organization, or would like assistance evaluating existing policies and practices, contact your Polsinelli Labor & Employment attorney.

On July 28, 2025, the United States Office of Personnel Management (“OPM”) issued a memorandum endorsing federal employees expressing their religious beliefs in the workplace. Specifically, OPM Director Scott Kupor instructed government agencies to “allow personal religious expression by Federal employees to the greatest extent possible unless such expression would impose an undue hardship on business operations.” Although this memorandum does not directly contemplate any new direction for private employers, it raises questions about whether this guidance signals impending changes in the private sector. What Does This Mean for the Federal Workplace? The OPM memorandum directs federal employers to permit religious expression in the workplace to the same extent as other non-religious, private expression. Stated otherwise, the OPM is encouraging federal employees to fully express their religious beliefs. This is a unique policy stance that has not been observed in recent memory. The OPM offered a handful of “categories” to demonstrate what religious conduct should be permitted, including: Display and use of items used for religious purposes or religious icons Expressions by groups of federal employees Conversations between federal employees Expressions among or directed at members of the public Expressions in areas accessible to the public The OPM memorandum clarifies that the “undue hardship” exception remains but avoids discussing it in much detail. Absent evidence to the contrary, it is expected that the OPM will utilize the standard endorsed by the Supreme Court in 2023. Groff v. DeJoy, 143 S. Ct. 2279 (2023). In Groff, the Supreme Court held that “undue hardship is shown when a burden is substantial in the overall context of an employer’s business,” “tak[ing] into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, size and operating cost of an employer.” What Type of Belief Is “Religious” According to the OPM? Notably, the OPM memorandum defers to traditional Title VII analyses for determining what would constitute a “sincerely held religious belief” warranting protection. The EEOC has been abundantly clear that protections are not just reserved for traditional, organized religions such as Christianity, Judaism, Islam, Hinduism or Buddhism, but rather a realm of “moral or ethical beliefs as to what is right and wrong which are sincerely held with the strength of traditional religious views.” Further, the Supreme Court has made it clear that it is not a court’s role to determine the reasonableness of an individual’s religious beliefs, and that “religious beliefs need not be acceptable, logical, consistent, or comprehensible to others in order to merit First Amendment protection.” In sum, the best practice for federal employers is to take a broad approach to defining religion in the workplace to avoid any semblance of discriminatory conduct, so long as the expression of these beliefs does not constitute a true “undue hardship.” What About Private Employers? While this memorandum does not apply to private employers, Title VII does. Thus, it raises serious questions about whether the EEOC will follow suit by taking inspiration from the new OPM memorandum. In the past, the EEOC has issued guidance cautioning private-sector supervisors from engaging in religious expression that might reasonably appear coercive due to their supervisory role. The OPM’s memorandum, however, takes a different stance, explaining supervisors should not be treated any differently than non-supervisors on the basis of their workplace roles. It is expected this change of tune will work its way into the private sector sooner rather than later, whether it be through EEOC guidance or private employer policy changes attempting to mimic OPM guidance. Another possibility on the horizon could include whether the federal government issues similar requirements for all federal contractors, which would drastically increase the impact of expansion of religious expression. As with everything in the practice of law between different administrations, time will tell. What Should Private Employers Do Next? As these changes are implemented at the federal level, private employers should take a look in the mirror to see whether their current policies and procedures align with current guidance on religious expression in the workplace. For assistance in reviewing internal policies and procedures on religious expression in the workplace, be sure to contact your Polsinelli attorney.

What You Need to Know: Washington’s new mini-WARN Act applies to smaller employers with 50 or more full-time employees, unlike the federal WARN Act, which only applies to employers with 100 or more employees. The new mini-WARN Act includes a private right of action and penalties for affected employees against employers who violate the requirements. In addition to applying to smaller employers, the mini-WARN Act has broader notice requirements in comparison to the federal WARN Act and excludes specific employees from being part of mass layoffs. On July 27, 2025, Washington State implemented its own version of the Worker Adjustment and Retraining Notification (WARN) Act, officially titled the Securing Timely Notification and Benefits for Laid-Off Employees Act, commonly referred to as a "mini-WARN Act." The mini-WARN Act is a state-level law that complements the federal WARN Act.  Washington joins thirteen other states (California, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, New Hampshire, New Jersey, New York, Tennessee, Vermont and Wisconsin) in implementing mini-WARN Acts. WARN Acts provide protections for employees facing layoffs or business closures. Key Aspects of the Act Notice Requirement: Under the mini-WARN Act, employers must provide at least 60 days' notice before a mass layoff or business closing (business closings can be permanent or temporary). This notice must be given to affected employees, the state, and local government officials and must contain very specific information (including anything required by the federal WARN Act, information regarding the site affected, contact information, specifics regarding the layoff or closure, anticipated dates, names and job titles for those affected, and information regarding relocation of operations/roles). The mini-WARN Act provides some limited exceptions for faltering companies, unforeseeable business circumstances, and natural disasters. The mini-WARN Act also has certain exceptions related to sales of business and mass layoff for specific construction projects. Who is Covered: The mini-WARN Act applies to employers with 50 or more employees in the state of Washington. This is a broader scope than the federal WARN Act, which only covers employers with 100 or more employees. The mini-WARN Act applies to mass layoffs or business closings affecting 50 or more full-time employees, which is similar to the federal WARN Act; however, the “single site of employment” requirement is different in the mini-WARN Act. Under the federal WARN Act, employee counts are based on separations at a single site of employment for both mass layoffs and business closures. Under Washington’s new mini-WARN Act, the “single site of employment” requirement is only applicable to business closings. In other words, the mini-WARN Act will apply to mass layoffs affecting multiple sites if the total layoffs accumulate to 50 or more. Additionally, of note, under the mini-WARN Act, employees are any people employed in the state of Washington by an employer. Employee Protections: By providing 60 days’ notice of a job loss, the mini-WARN Act aims to give employees time to prepare for job loss, seek new employment, or pursue retraining opportunities. The mini-WARN Act also protects employees currently on leave under Washington Paid Family and Medical Leave law by preventing an employer from including such an employee in a mass layoff. Penalties for Non-Compliance: Employers who fail to comply with the notice requirements may face penalties, including up to 60 days of back pay and benefits for each day of violation for each affected employee, $500 per day in penalties, and attorneys’ fees. Employers should familiarize themselves with the new requirements to navigate this evolving landscape effectively. As the mini-WARN Act takes effect, it is crucial for businesses to review their policies and procedures to ensure compliance, especially prior to layoffs, closures, and reductions in work. For questions and assistance regarding the Washington mini-WARN Act, other state mini-WARN Acts, or the federal WARN Act, please contact your Polsinelli attorney. 

What you need to know: DOL will no longer seek liquidated (double) damages in pre-litigation FLSA settlements, limiting recovery to unpaid wages. Liquidated damages still apply in court cases, so employers remain at risk in litigation. Early in the Biden administration, the Wage and Hour Division of the Department of Labor (“WHD”) issued Field Assistance Bulletin No. 2021-2 reversing practices adopted during the first Trump administration and returning to a more vigorous pursuit of liquidated damages from employers in pre-litigation investigations regarding potential violations of the Fair Labor Standards Act (“FLSA”). Now, just a few months into the second Trump administration, the WHD has reversed course again. Pursuant to Field Assistance Bulletin No. 2025-3, FAB No. 2021-2 is rescinded and the WHD will limit all pre-litigation administrative settlements to the recovery of unpaid wages or overtime compensation. It will no longer request any liquidated damages in pre-litigation investigations or resolutions. Liquidated damages are essentially “double damages,” requiring an employer that is liable for minimum wage or overtime compensation violations pay a second amount equal to the unpaid wages. In explaining this new approach, the WHD noted that Congress had “authorized” liquidated damages “only in judicial proceedings – not administrative matters” under the FLSA’s Section 216(c), which allows the DOL to “supervise the payment” of unpaid wages or overtime compensation to employees. It is the WHD’s opinion that is it “not authorized to seek liquidated as part of any payment it supervises under § 216(c).” The WHD also pointed to Section 260 of the FLSA to support its conclusion, because that Section vests courts – not the Agency – with the authority to evaluate employer’s good faith defenses that might preclude a recovery of liquidated damages. FAB 2025-3 states that “[t]he structure of § 260 reinforces that liquidated damages are a judicial remedy, and not an administrative tool available.” The practice of seeking liquidated damages in pre-litigation investigations and settlements began in 2010 under the Obama administration. While the first Trump administration attempted to rein this practice in to an extent with FAB No. 2020-2, the current stance is more aggressive. Of course, liquidated damages remain available in any litigation involving an FLSA violation – whether that litigation is brought by the WHD/DOL or a private party. For questions and assistance regarding WHD wage-and-hour investigations or other issues involving the FLSA or other wage-and-hour laws, please contact your Polsinelli attorney. 

Colorado generally prohibits restrictive covenants, except in narrow circumstances. On May 8, 2025, the Colorado Legislature passed Senate Bill 25-083, which imposes three significant new limitations on the use of restrictive covenants for certain healthcare providers and narrows their application in business sales. These changes will apply to agreements entered into or renewed on or after August 6, 2025. Current Law Overview Under current law (C.R.S. § 8-2-113), non-compete and customer non-solicitation agreements are enforceable only in certain circumstances. For instance, non-competes are enforceable for “highly compensated individuals” when the agreement is reasonably necessary to protect an employer’s trade secrets. However, covenants that restrict a physician’s right to practice medicine after leaving an employer are already void under Colorado law. Key Changes Under SB25-083 Broader Ban on Non-Competes for Healthcare Providers The amendment prohibits non-compete and non-solicitation agreements for certain licensed healthcare providers, even if they meet the "highly compensated" threshold. This includes those who: Practice medicine or dentistry Engage in advanced practice registered nursing Are certified midwives Fall under additional categories listed in C.R.S. § 12-240-113 Liquidated Damages in Physician Contracts Previously, physician employment agreements could include liquidated damages tied to termination or competition. This amendment removes that provision, meaning that: Agreements with unlawful restrictive covenants are unenforceable. Agreements without unlawful provisions remain enforceable and may still carry damages or equitable remedies. It remains unclear whether competition-related liquidated damages are still enforceable under the new law. Expanded Patient Communication Rights Medical providers can no longer be restricted from informing patients about: Their continued medical practice New professional contact information The patient’s right to choose their healthcare provider Confidentiality and trade secret agreements are still allowed, as long as they don’t prevent sharing general knowledge. New Limitations on Business Sale Non-Competes Colorado law has long permitted non-competes in connection with the purchase or sale of a business. SB25-083 narrows this by: Allowing non-competes only for owners of a business interest Placing time limits on non-competes for minority owners or those who received ownership through equity compensation For these individuals, the non-compete duration is capped using a formula: Total consideration received ÷ Average annual cash compensation in the prior two years, or the duration of employment if less than two years. For questions and assistance regarding the upcoming changes to restrictive covenants in Colorado, please contact your Polsinelli attorney.

Sweeping changes to noncompete covenants are set to take effect on September 1, 2025, for health care employers in Texas. These changes stem from recent amendments to Texas’ noncompete statute. These changes will: Expand Texas’ heightened enforceability requirements to nearly all health care practitioners. Impose strict limits on the duration and geographic area of applicable noncompete covenants. Cap the buyout option that must be provided to covered health care practitioners. Who Is Impacted? The recent amendments to Texas’ noncompete statute were enacted through Texas Senate Bill 1318 (SB 1318) that was signed into law by Governor Abbott on June 20, 2025. It will impact Texas-licensed physicians, dentists, nurses (including advanced practice nurses), physician assistants, and health care entities that execute noncompete covenants with the aforementioned health care practitioners. Downstream, these amendments have the potential to alter various health care business models, and the value assigned to health care entities in mergers and acquisitions. What Are the Key Changes? Since 1999, the Texas noncompete statute has imposed heightened requirements for securing enforceable covenants with physicians licensed by the Texas Medical Board. SB 1318 takes these protections a step further by incorporating the following heightened requirements: Mandatory/Salary-Capped Buyout Options – Similar to physicians, mandatory buyout clauses must now be integrated into noncompete covenants with dentists, nurses and physician assistants. The amendments eliminate the statute’s open-ended “reasonable price” requirement and will now require buyout clauses to not exceed a covered individual’s “total annual salary and wages at the time of termination.” For many agreements, this will result in a significant reduction from previous buyout clauses. One-Year Duration – Noncompete covenants that are executed with physicians and other health care practitioners will be limited to one (1) year following the termination of the covered individual’s contract or employment. Five-Mile Radius – The geographic area of noncompete covenants that are executed with physicians and other health care practitioners will now be limited to “a five-mile radius from the location at which the health care practitioner primarily practiced before the contract or employment terminated.” Termination Without “Good Cause” for Physicians – The circumstances of a physician’s termination will impact the enforceability of their noncompete covenant. Noncompete covenants will be void and unenforceable against a physician if they are involuntarily terminated without “good cause,” which is defined as “a reasonable basis for discharge . . . that is directly related to the physician’s conduct, including the physician’s conduct on the job, job performance and contract or employment record.” Importantly, this distinction is limited to physicians. The enforceability of noncompete covenants that are executed with other health care providers will not be impacted by the circumstances of their termination. Clear and Conspicuous Language – Noncompete covenants that are executed with physicians and other health care practitioners must now “have terms and conditions clearly and conspicuously stated in writing.” SB 1318 does not expand further on this requirement, but it will result in noncompete covenants being susceptible to attack on this basis. Managerial/Administrative Carve-Out – Before the enactment of SB 1318, Texas’ heightened enforceability requirements extended to most physician-entered noncompete covenants “related to the practice of medicine” (excluding certain business ownership interests). This created some ambiguity regarding when these heightened requirements were triggered. SB 1318 partially resolves this by emphasizing “the practice of medicine does not include managing or directing medical services in an administrative capacity for a medical practice or other health care provider.” Stated differently, noncompete covenants that are executed with physicians employed solely in a managerial or administrative capacity will not be subject to these heighted requirements. When Do These Changes Go into Effect? The changes go into effect on September 1, 2025. Importantly, these changes are prospective in nature and only apply to noncompete covenants that are entered into or renewed on or after this date—meaning that preexisting noncompete covenants will continue to be governed by Texas’ noncompete laws existing before the effective date of SB 1318. What’s Next? These amendments are consistent with the nationwide trend towards more restrictions on the permissive use of noncompete covenants. While these amendments are not retroactive, it is conceivable that judges may still take these amendments into consideration when analyzing the enforceability of preexisting covenants in future litigation under Texas’ current “no greater than necessary” standard. In turn, employers will need to weigh whether they make these changes on a rolling basis or preemptively amend existing agreements and consider other avenues for protection. Polsinelli attorneys are available to assist covered health care entities in navigating these changes and ensuring that their protectable business interests are adequately safeguarded.

What You Need to Know: Equal Protection Under Title VII: On June 5, 2025, the U.S. Supreme Court unanimously ruled that Title VII’s protections apply equally to all individuals, regardless of whether they are in a majority or minority group, reinforcing a plain-language interpretation of the statute. DEI Implications and Legal Scrutiny: The decision comes amid increasing scrutiny of employer DEI initiatives, highlighting the need for programs to comply with Title VII’s equal treatment requirements for all protected groups. More Changes on the Way? A concurring opinion questions whether the longstanding McDonnell Douglas standard should govern at summary judgment in Title VII cases, possibly foreshadowing more changes to come. In Ames v. Ohio Department of Youth Services, the U.S. Supreme Court unanimously rejected a rule requiring that Title VII discrimination claims brought by “majority-group” plaintiffs meet a heightened evidentiary standard to establish a prima facie case of discrimination. In doing so, the Court held that Title VII applies equally to all groups within its protected classes based on the plain language of the statute that does not differentiate amongst groups. This decision is significant in light of the shifts in the Equal Employment Opportunity Commission’s position on employer diversity, equity, and inclusion (DEI) initiatives. In Ames, a heterosexual woman plaintiff alleged that she was denied a promotion and subsequently demoted due to her sexual orientation. The district court granted summary judgment to the employer on the grounds that the plaintiff failed to meet the Sixth Circuit’s "background circumstances" rule. Plaintiffs who are members of a majority group are required to establish “background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority.” Multiple other Circuits similarly imposed heightened evidentiary burdens on majority group plaintiffs. The Supreme Court unanimously rejected the background circumstances rule, holding that Title VII's text does not support imposing a heightened standard on majority-group plaintiffs. Justice Ketanji Brown Jackson, delivering the unanimous opinion for the Court, stated that Title VII's protections apply equally to all individuals; they do “not vary based on whether or not the plaintiff is a member of a majority group.” While the decision is not necessarily unexpected, the impact of the Ames decision could be heightened given the recent focus on employer DEI initiatives. In recent guidance finding that employer DEI programs that provide benefits to employees based on race or other protected group status may be unlawful, EEOC has similarly expressed that Title VII’s protections and requirements are equally applicable to all protected groups. Also notable is a concurring opinion issued by Justices Clarence Thomas and Neil Gorsuch. In addition to noting their agreement with the majority, Justices Thomas and Gorsuch questioned the lower court’s use of the McDonnell Douglas burden-shifting standard in awarding summary judgment to the employer. The concurring opinion expressed that requiring employees to meet the McDonnell Douglas standard at the summary judgment stage was an excessive burden, and invited future challenges to the standard’s application. The Ames decision underscores the importance of treating all employees fairly under Title VII. Further, the decision emphasizes the need to assess workplace programs for vulnerabilities in light of the EEOC’s DEI focus. For questions or guidance regarding compliance, please contact Valerie Brown, Jack Blum, Earl Gilbert, or your Polsinelli attorney.

What You Need to Know: OSHA’s Updated SST Plan Targets High-Risk Workplaces Using New Data: The revised Site-Specific Targeting (SST) Inspection Plan now relies on injury data from OSHA’s Injury Tracking Application (ITA), focusing on high-hazard, non-construction establishments with 20+ employees. Key Changes Include More Inspections and Industry Focus: The plan expands the number of inspections and emphasizes industries with high injury rates, while dropping “record-only” inspections for sites mistakenly flagged. Proactive Compliance Strategies Are Essential: Companies should prioritize accurate record-keeping, comprehensive safety training, internal audits and building a strong safety culture to ensure compliance and readiness for surprise inspections. The Occupational Safety and Health Administration (OSHA) has recently updated its Site-Specific Targeting (SST) Inspection Plan, a critical development for companies across various industries. This blog will cover the SST Plan, its recent changes, and practical steps to ensure compliance and readiness for inspections. Site-Specific Targeting Inspection Plan Explained The SST Inspection Plan is OSHA's primary method for targeting high-hazard, non-construction workplaces with 20 or more employees. The Plan uses data from the OSHA Data Initiative (ODI) to identify establishments with high rates of injuries and illnesses. By focusing on these sites, OSHA aims to reduce workplace hazards and improve safety standards. Key Changes in the Updated SST Plan There are three important changes that the updated SST Plan introduces: Data Utilization: The new plan places greater emphasis on data from the OSHA Injury Tracking Application (ITA) to identify establishments for inspection. This shift underscores the importance of maintaining accurate and timely injury and illness records. The SST Plan will select establishments for OSHA inspection based on data from Form 300A for the period 2021 to 2023. Increased Inspections: The updated plan expands the scope of inspections, potentially increasing the number of establishments subject to review. This change highlights the need for companies to be prepared for inspections at any time. But there is some good news: now, if an establishment is targeted in error, OSHA won't continue on with a "record-only" inspection. Rather, it will just leave the premises. Focus on High-Risk Industries: The SST Plan now prioritizes non-construction industries with historically high rates of workplace injuries and illnesses. HR professionals and those involved with safety initiatives in these sectors should be particularly vigilant in ensuring compliance with OSHA standards. Advice for Companies To navigate the updated SST Plan effectively, companies should consider the following strategies: 1. Maintain Accurate Records Accurate record-keeping is as crucial as ever under the new SST Plan. Companies should ensure that all injury and illness records are up-to-date and accurately reflect workplace incidents. This includes regular audits of OSHA 300 logs and ensuring that all required documentation is readily available for inspection. 2. Enhance Safety Training Investing in comprehensive safety training programs is essential. HR professionals should work with safety officers to develop training sessions that address specific workplace hazards and promote safe practices. Regular training not only helps prevent accidents but also demonstrates a company's commitment to safety, which can be beneficial during an OSHA inspection. 3. Conduct Internal Audits Regular internal audits can help identify potential safety issues before they become problems. HR professionals should collaborate with safety teams to conduct thorough inspections of the workplace, ensuring compliance with OSHA standards. These audits can also serve as a valuable tool for preparing for potential OSHA inspections. 4. Foster a Safety Culture Creating a culture of safety within the organization is perhaps the most effective way to ensure compliance with OSHA standards. Companies should encourage open communication about safety concerns and involve employees in safety planning and decision-making. Recognizing and rewarding safe practices can also motivate employees to prioritize safety in their daily activities. The Importance of Compliance Compliance with OSHA's SST Plan is not just about avoiding fines and penalties; it is about ensuring the safety and well-being of employees. By understanding the updated SST Plan and implementing the strategies outlined above, companies can play a pivotal role in creating a safer workplace. What the New SST Inspection Plan Means for Employers The updated SST Inspection Plan represents a significant shift in OSHA's approach to workplace safety. For companies, this means taking proactive steps to ensure compliance and readiness for inspections. By maintaining accurate records, enhancing safety training, conducting internal audits, and fostering a safety culture, companies can not only meet OSHA's requirements but also create a safer, more productive work environment. Polsinelli understands the complexities involved with OSHA compliance and is committed to helping employers meet their obligations efficiently and effectively. If you have questions about OSHA compliance, contact Will Vail, Harry Jones, Shivani Bailey, or your Polsinelli attorney.

On May 14, 2025, the Missouri Senate voted 22-11 to repeal portions of Proposition A, the voter-approved initiative that increases the state’s minimum wage and requires employers to provide earned paid sick leave. The legislation repeals two key pieces of Proposition A: The earned paid sick time requirement, which requires employers to provide employees with one hour of earned paid sick time for every 30 hours worked, took effect on May 1. The increase to the state’s minimum wage based on inflation and a rise in the cost of living. Employers who implemented policy changes to meet the paid sick leave requirements now will face the choice of rolling those changes back or leaving them in place. Although Missouri’s minimum wage increased on January 1 of this year and will again increase at the beginning of 2026, these minimum wage increases were not set to increase based on the Consumer Price Index (CPI) until 2027. Accordingly, the increases to minimum wage this year and again in 2026 remain unchanged. Proposition A passed in November 2024 but has faced significant legislative and legal challenges. For instance, several entities brought a lawsuit, alleging the statute violated the Missouri Constitution, among other things. However, on April 29, 2025, the Missouri Supreme Court ruled to uphold Proposition A in Raymond McCarty, et al. v. Missouri Secretary of State, et al., Case No. SC100876. See our earlier blogs on these issues here and here. In the wake of the Missouri Supreme Court’s ruling, Senate Republicans used a rare procedural move to force a vote on the legislation. The bill, passing unchanged through the Senate from the House, will now advance to Governor Kehoe’s desk, and he is expected to sign the legislation into law. If signed, the repeal will become effective on August 28, 2025. Until then, employers must continue to abide by the law as currently written. For questions and assistance regarding compliance with Proposition A and upcoming changes, please contact your Polsinelli attorney.

What You Need to Know The U.S. Department of Labor has announced it will no longer enforce the 2024 independent contractor rule under the Fair Labor Standards Act (FLSA), reverting to the more employer-friendly 2008 “economic reality” test. The 2008 Rule and a reinstated 2019 Opinion Letter—favorable to app-based and gig economy businesses—will guide enforcement actions, emphasizing factors like control, investment, and profit/loss potential to determine worker status. While the shift is seen as beneficial to businesses, employers must continue to monitor developments and ensure compliance with federal, state, and local classification standards to avoid misclassification penalties. On May 1, 2025, the Wage and Hour Division of the U.S. Department of Labor (“DOL”) announced that it will no longer enforce its 2024 independent contractor rule under the Fair Labor Standards Act (“FLSA”). The nixed 2024 rule previously set forth a six-factor test to classify workers as employees or independent contractors based on a “totality of the circumstances test” of non-exhaustive factors. The 2024 rule had been subject to numerous legal challenges in district courts across the country because employers considered it to skew towards classifying workers as independent contractors. Now, the DOL will revert back to the framework set out back in 2008 in Fact Sheet #13 (the “2008 Rule”) until it can develop a revised standard. The DOL’s Guiding Independent Contractor Standard (for now) The 2008 Rule asserts that “an employee, as distinguished from a person who is engaged in a business of his or her own, is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business which he or she serves.” Under this 2008 Rule, the employer-employee relationship under the FLSA is tested by “economic reality” rather than “technical concepts.” It also states that the following factors are considered significant in determining whether there is an employee or independent contractor relationship: The extent to which the services rendered are an integral part of the principal’s business; The permanency of the relationship; The amount of the alleged contractor’s investment in facilities and equipment; The nature and degree of control by the principal; The alleged contractor’s opportunities for profit and loss; The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor; and The degree of independent business organization and operation. Finally, the 2008 Rule provides that certain factors, such as (i) where work is performed; (ii) the absence of a formal employment agreement; (iii) whether an alleged independent contractor is licensed by a state or local government; and (iv) the time or mode of pay, are immaterial to determining whether there is an employment relationship. Impact of the DOL’s Recent Departure from the 2024 Test The DOL’s announcement does not formally revoke the 2024 rule, but it does indicate that changes to the rule will be forthcoming. The DOL will now utilize the Fact Sheet #13 and a 2019 Opinion Letter (which was previously withdrawn) to conduct audits and other enforcement actions. The 2019 Opinion Letter re-instituted by the DOL on May 2, 2025, addresses whether the workers of a virtual marketplace company that provides an “online and/or smartphone-based referral service that connects service providers to end-market consumers” are independent contractors or employees. In essence, the 2019 Opinion Letter concludes that these “on-demand” workers for virtual marketplace companies, who perform services for users (such as transportation, delivery, shopping, moving, etc.), are independent contractors, not employees. App-based rideshare companies and other similar technology-based service companies will be directly impacted by the DOL’s announcement. While these recent DOL announcements are generally viewed as more employer-friendly, time will tell if that is the practical reality of these changes. Don’t forget – state and local laws can impact the analysis of proper worker classification, so employers need to stay vigilant to ensure they are not making any major changes that would violate those pesky geographic nuances. Employers Should Proactively Monitor This Area Employers should evaluate their existing employee classifications in light of these recent developments to ensure that employees are properly classified to avoid violations of the FLSA’s requirements, including minimum wage, overtime, and recordkeeping. This is particularly important for employers to consider because misclassification issues can be costly. Additionally, employers need to stay alert for any further changes because the DOL has signaled that additional rulemaking regarding independent contractor classification under the FLSA is expected. Please contact your Polsinelli attorney if you have any questions related to this important legal development.

Key Takeaways Disparate impact liability holds employers accountable for policies that appear neutral, but disproportionately harm a particular race, sex or a protected group, even without discriminatory intent. This EO significantly reduces federal agency enforcement of disparate impact claims, but importantly, does not impact the risk of a class or individual claim under federal or state laws. Businesses should continue to review hiring and promotion policies for unintentional bias, ensure compliance with federal law and any applicable state laws, and await updated federal guidance from the EEOC. On April 23, 2025, President Trump issued an Executive Order entitled “Restoring Equality of Opportunity and Meritocracy” (“EO”) mandating the elimination of disparate impact liability within Title VI and VII of the Civil Rights Act of 1964. The EO further emphasizes the importance and focus of this administration on the concept of equal employment opportunity. Disparate impact liability is a means by which employers can be held liable for discrimination when their facially neutral policies or practices result in a disproportionate adverse impact on a particular race, sex or a protected class. This theory of liability was recognized by the Supreme Court in 1971 in the case of Griggs v. Duke Power Co., and was later codified by Congress in the Civil Rights Act of 1991. This EO seeks to eliminate the use of this theory of liability to the “maximum degree possible.” To effectuate this goal, the order takes several key steps. First, it revokes several former presidential actions that approved of disparate impact liability. Second, it directs all agencies to deprioritize enforcement of statutes and regulations to the extent that they include disparate impact liability. This order directs the Attorney General to initiate appropriate action to repeal or amend the implementing regulations for Title VI of the Civil Rights Act of 1964 for all agencies to the extent they contemplate disparate-impact liability. In addition, within 30 days of the date of the EO, the Attorney General is to report to the President, in coordination with the chairs of all other agencies, all existing regulations, guidance, rules or orders that impose disparate impact liability and detail steps for their amendment or repeal. This EO also directs the Attorney General and EEOC Chair to assess all pending investigations, civil suits or positions taken in ongoing matters that rely on a theory of disparate impact liability and to take appropriate action consistent with this EO. Further, the Attorney General is to determine whether Federal Authority preempts State laws that impose disparate impact liability. Finally, the EO directs the Attorney General and the EEOC Chair to issue guidance or technical assistance to employers regarding appropriate methods to promote equal access to employment regardless of whether an applicant has a college education, where appropriate. Practically, this EO signals a continued shift in enforcement at the EEOC. It seems unlikely the EEOC will bring any new litigation relying on disparate impact. However, a private right of action for disparate impact still exists under the precedent of Griggs and similar cases, allowing employees to bring claims of discrimination relying on a disparate impact theory. Moreover, state laws may also provide for disparate impact liability. Employers should monitor further guidance that is expected to be issued following this EO. If you have any questions about how these changes may impact you or your organization, please feel free to reach out to Erin Schilling, Gabriel Gomez, Polsinelli’s Executive Action Working Group or your regular Polsinelli attorney.

On April 29, 2025, the Missouri Supreme Court ruled to uphold Proposition A, the voter-approved initiative that increases the state’s minimum wage and requires employers to provide earned paid sick leave. The law will take effect as planned on Thursday, May 1. What is Proposition A? Proposition A raises minimum wage and introduces mandatory earned paid sick leave for most workers. Some of the key provisions of Proposition A include: Raising the minimum wage to $13.75 per hour in 2025 and $15 by 2026 and providing for annual inflation-based increases thereafter. Requiring employers to provide paid sick leave, with workers earning one hour of leave for every 30 hours worked. The Legal Challenge Business associations and other opponents of the measure challenged the law in Case No. SC100876, Raymond McCarty, et al. v. Missouri Secretary of State, et al. Plaintiffs argued that the summary statement and fiscal note summary were so misleading that they cast doubt on the fairness of the election and validity of its results. Further, Plaintiffs argued that Proposition A was invalid because it violated the “single subject” and “clear title” requirements of Art. III, Section 50 of the Missouri Constitution. Majority Opinion The Missouri Supreme Court’s majority held the results of the election adopting Proposition A are valid and dismissed, without prejudice, the claim contending Proposition A violated the single subject and clear title requirements for lack of jurisdiction. Key points from the majority opinion: Ballot Summary: The Court determined that the summary language was not materially inaccurate or seriously misleading to demonstrate an irregularity. Instead, the Court stated that Plaintiffs made conclusory allegations that the summary statement language misled voters but did not offer evidence to support those conclusions. Thus, a new election was not warranted. Single-Subject Rule: The judges declined to rule on whether Proposition A violated the single subject rule—the Court dismissed the claim without prejudice for lack of jurisdiction, stating that the claim had not been properly raised in a lower court before coming to the Supreme Court. Separate Opinion Judge Ransom issued a separate opinion from the majority, stating that she disagreed that the Supreme Court possesses original jurisdiction over election contests. However, Judge Ransom agreed with the majority’s decision if, for argument’s sake, the Court had jurisdiction to hear the challenges. What Happens Next? With the ruling in place: Proposition A will take effect on May 1, 2025. Employers must comply with new minimum wage rates and paid sick leave requirements, including taking immediate steps to implement paid sick leave by May 1. Lawmakers or business groups could still seek legislative revisions or bring new legal challenges. For questions about what your business needs to do to comply with the new law, reach out to your Polsinelli attorneys.

The earned paid sick time provisions of Proposition A are set to take effect on May 1, 2025. Missouri Proposition A requires employers to provide employees working in Missouri at least 1 hour of sick leave for every 30 hours worked and allows carryover of up to 80 of such hours per year. The law applies to almost all Missouri employees, including full-time, part-time and temporary with limited exceptions. For more details on the requirements and background of this paid sick leave law, see our prior blog posts on Missouri Proposition A requirements here and litigation challenge here. While ongoing litigation and legislative efforts seek to delay or modify certain aspects of the law, these initiatives are unlikely to affect the start date or the notice period required by the statute. Therefore, it is essential for employers to begin preparing for the implementation of the law to ensure compliance with the statutory requirements, including the mandatory notice and poster provisions. Notice and Poster Requirements Written Notice to Employees Employers are required to provide written notice of the earned paid sick time policy to all employees by April 15, 2025. The notice must be provided on a single sheet of paper, using a font size no smaller than 14-point. This notice should be distributed along with the employer’s updated written policy. The Missouri Department of Labor & Industrial Relations has provided a standardized notice for employers. Poster Display Requirement In addition to the written notice, Proposition A mandates that employers display a poster detailing the earned paid sick time policy in a “conspicuous and accessible place” at each workplace. This poster must be displayed starting April 15, 2025. The Missouri Department of Labor & Industrial Relations has also provided a poster for this purpose. Litigation Update On March 12, 2025, the Missouri Supreme Court heard oral arguments in a case brought by various business groups and associations challenging the constitutionality of Proposition A. The plaintiffs argue that the Proposition is unconstitutional due to its inclusion of both minimum wage and paid sick time issues on the same ballot. While the Supreme Court has not yet issued a ruling, it typically takes between 100 and 200 days for the Court to render an opinion. Although the outcome of the case may ultimately affect certain provisions of the law, employers should continue preparing for the implementation of Proposition A as currently written, effective May 1, 2025. Legislative Update On March 13, 2025, House Bill 567 passed in the Missouri House of Representatives. This bill seeks to repeal the paid sick leave provisions of Proposition A, delay the scheduled minimum wage increase, and eliminate the annual adjustments to the minimum wage based on the price index. The bill cleared a public hearing in the Senate on March 26, and an executive session will be held on April 7. If the bill passes the Senate and is signed into law by the Governor, it will not take effect until August 28, 2025. As a result, Proposition A will remain in effect beginning May 1, 2025, and employers should prepare for the law to be implemented as currently written. Resources and Support The Missouri Department of Labor & Industrial Relations has developed an overview and frequently asked questions (FAQ) section on its website to assist employers in understanding the requirements of Proposition A and the earned paid sick time benefits. Missouri employers need to review and likely need to update their existing policies regarding sick time and/or paid time off to comply with Missouri paid sick leave requirements. For questions and assistance regarding such changes, please contact your Polsinelli attorney. We are available to help ensure your organization remains compliant with the law.

On March 20, 2025, the Equal Employment Opportunity Commission (EEOC) released two key guidance documents focusing on DEI-related discrimination in the workplace. These documents are written as guidance for employees and outline ways the EEOC believes initiatives could lead to unlawful discrimination, including disparate treatment, reverse discrimination, segregation and harassment. The guidance stresses the importance of regular policy reviews, comprehensive training and legal consultation to navigate DEI-related challenges effectively and remain compliant with Title VII protections. Read the full update. 

On March 14, 2025, the Fourth Circuit Court of Appeals allowed the Trump administration to enforce executive orders (EOs) aimed at restricting Diversity, Equity and Inclusion (DEI) programs while litigation continues. These EOs have sparked legal challenges, with the National Association of Diversity Officers in Higher Education arguing they violate constitutional rights. Federal agencies like the Department of Education (DOE), Department of Health and Human Services (HHS) and the Equal Employment Opportunity Commission (EEOC) are actively investigating and issuing guidance to ensure compliance with the new rules, such as prohibiting the use of race in admissions and hiring decisions. Despite this, 14 state Attorneys General have pushed back, asserting that race can still be considered in admissions if it relates to a student’s personal experiences. Organizations, especially federal contractors, should consider carefully reviewing and updating their DEI policies and practices in light of these ongoing legal developments. Read the full update.

Many state and local government employment laws went into effect January 1, 2025. Here is a non-exhaustive list of 2025 employment law updates. Contact your Polsinelli attorney if you have any questions or need assistance regarding employment law compliance for these legal updates. Polsinelli provides this material for informational purposes only. This material is not intended for use as legal guidance. Please consult with a lawyer to evaluate your specific situation. The choice of a lawyer is an important decision and should not be based solely upon advertisement. Copyright © 2025. Polsinelli PC, Polsinelli LLP in California, Polsinelli PC (Inc) in Florida.

During her 2025 State of the State Address on January 14, 2025, New York Governor Kathy Hochul announced a plan to support workers displaced by Artificial Intelligence (AI) by requiring employers who engage in mass layoffs or closings subject to New York’s state Worker Adjustment and Retraining Notification law (“NY WARN”) to disclose whether AI automation played a role in the layoffs. Governor Hochul stated that the goal of these disclosures is to understand “the potential impact of new technologies through real data.”  The Governor’s announcement states that she is directing the New York Department of Labor to impose this requirement, so presumably the change will be imposed without the need for legislative action. Specific details about the scope of the new disclosure requirement are not yet available. The rise of AI in the workplace has been a matter of concern to many state lawmakers across the nation, as well as federal regulators. In New York, for example, New York City’s 2021 Local Law 144 placed guardrails on employers utilizing AI and other Automated Employment Decision Tools (“AEDTs”) in employment related decisions by requiring bias audits of AEDT tools and employer notice to employees and candidates of their use. Similarly, California nearly passed a law in 2024, SB 1047, requiring notice to employees when an AI system is used in employment decisions. While the bill was stalled out at the end of the 2024 California legislative session, California is expected to propose more AI safety legislation in 2025. Colorado will also impose a new requirement in 2026 for developers and users of employment-related AI to “use reasonable care to protect consumers from any known or reasonably foreseeable risks of algorithmic discrimination in the high-risk system.” At the federal level, the Equal Employment Opportunity Commission (EEOC) issued two guidance documents in 2023 concerning the issues of adverse impact and disability accommodations in the use of AI and machine learning tools in making workplace decisions. These proliferating laws show the need for employers to be intentional about their use of AI tools in making employment decisions. Legal and human resources leaders should familiarize themselves with how their organizations are using AI tools in the employment context, and design policies to ensure that the rapidly proliferating state and local requirements around AI usage are met. 

The Missouri Chamber of Commerce and Industry, along with other Missouri business groups, recently filed a lawsuit in the Supreme Court of Missouri attempting to stop Proposition A from taking effect. The lawsuit asserts five counts requesting the Supreme Court of Missouri set aside and/or invalidate Proposition A: The fiscal note summary was insufficient and unfair because it: fails to address costs to local governments; inaccurately presents Proposition A’s actual fiscal impact; fails to identify direct costs to private employers and state administrative costs; and fails to note the impact Proposition A would have on tax revenues. The summary statement was insufficient and unfair because it: fails to notify voters of the use cap on paid sick time and that it differs depending on total number of employees; improperly suggests that “all employers” would be required to provide one hour of paid sick leave for every thirty hours worked when the actual measure exempts certain employers; mispresents enforcements and oversight authority; misrepresents requirements of Missouri law; fails to properly identify which employees are excluded from the minimum wage increase; mispresents the exemptions for education institutions; fails to notify voters of creation of a new crime for failure to comply; and fails to notify voters that the new sick leave applies to non-health related reasons. Proposition A violates the single subject clause of the Missouri Constitution by including both the minimum wage increase and paid sick leave. Proposition A violates the clear title requirement of the Missouri Constitution because the title has more than one subject. Proposition A treats similarly situated entities different in violation of the Fourteenth Amendment to the United States Constitution and Article I, Section 2 of the Missouri Constitution. The Missouri Supreme Court has yet to set a briefing schedule or hearing on the matter. Absent a decision on the merits prior to January 1, 2025, employers should be preparing to institute the minimum wage provisions of Proposition A. Employers should also be preparing to implement the paid sick leave provisions of Proposition A beginning May 1, 2025. We previously detailed key provisions of Proposition A here. Polsinelli will continue to monitor this lawsuit for further developments. Please contact your Polsinelli attorney for further assistance.

In the 2024 election, Missouri voters approved Proposition A, a measure that raises the minimum wage beginning January 1, 2025, and introduces mandatory earned paid sick leave for most workers effective May 1, 2025. Key Provisions of Proposition A Applicability: Proposition A applies to most private employers and applies to most employees including full and part-time with limited exceptions. Minimum Wage Increase: Proposition A establishes a gradual increase in Missouri’s minimum wage over the next two years. Starting January 1, 2025, employers must pay Missouri employees a minimum wage of $13.75 per hour. The minimum wage increases to $15.00 per hour on January 1, 2026. Beginning January 1, 2027, the minimum wage will either increase or decrease year after year based on the cost of living. Earned Paid Sick Leave: The law mandates that employers provide paid sick leave, allowing employees to take time off for conditions such as personal illness or care of a family member with an illness. Employers can either front-load sick leave, providing employees with their full annual leave at the start of the year or use an accrual system where leave is earned over time. The amount of accrual depends on the number of employees. For example, an employer with fifteen or more employees must provide a minimum accrual of one hour of earned paid sick time for every thirty hours worked. Full-time employees who are exempt from overtime under the Fair Labor Standards Act are assumed to work 40 hours in a work week for accrual calculations—these employees are expected to accrue approximately 70 hours of earned paid sick time per year. Carryover: Employees can carry over up to 80 hours of unused, earned sick leave into the following year. However, an employer does not have to permit an employee to use more than the entitled number of sick time hours available under the statute. For employers with fifteen or more employees, employees are not entitled to use more than 56 hours of earned paid sick time per year, unless the employer selects a higher amount. PTO Policies: In lieu of implementing a second policy, an employer who already has a paid time off policy can modify their existing policy to comply with Proposition A’s requirements. If the paid leave policy meets the accrual requirements and can be used for the same conditions as earned paid sick time, additional earned paid sick time is not required. Payout: Employers are not required to pay out unused sick leave at the end of the year but may choose to do so as part of their policy instead of allowing carryover. Notably, an employer does not have to pay an employee unused earned paid sick time at termination or separation from employment. Impact on Employers Adjustments Required: Employers must comply with the new minimum wage requirements and set up systems to manage paid sick leave. They can opt for front-loading or an accrual method. Employers opting to adjust their paid leave policy to encompass earned paid sick time may do so if their policy complies with Proposition A’s accrual and use requirements. Flexibility: While the wage increases and paid sick leave mandate may increase costs, employers have some flexibility in managing sick leave through carryover limits, payouts, use limits, and discretion to loan sick time in advance. Proposition A introduces significant changes for Missouri minimum wage and paid sick leave. For questions and assistance regarding such changes, please contact your Polsinelli attorney.

New Jersey recently became the newest state to enact pay transparency legislation. On November 18, 2024, New Jersey Governor Murphy signed Bill S2310 (the “Act”) into enactment. The Act will go into effect on June 1, 2025. The Act applies to employers – broadly defined as “any person, company, corporation, firm, labor organization or association which has 10 or more employees over 20 calendar weeks and does business, employs persons or takes applications for employment within this State, including the State, any county or municipality or any instrumentality thereof.” The Act also applies to employment agencies. Beginning this summer, employers must incorporate two new practices under the Act. First, the Act attempts to provide notice of promotional opportunities to the employer’s existing workforce. The Act requires that employers “make reasonable efforts to announce, post or otherwise make known opportunities for promotion that are advertised internally within the employer or externally on internet based advertisements, postings, printed flyers or other similar advertisements to all current employees in the affected department or departments of the employer’s business prior to making a promotion decision.” However, there are exceptions to the notice requirement. Promotions for current employees based on years of service or performance, or instances of emergencies, are not subject to the notice requirement.   Second, the Act requires that employers specify the compensation package offered for new job openings and transfers. Specifically, employers are required to include the hourly or salary rate, or range and general description of benefits in the job advertisements for internal and external new jobs and transfer opportunities. Failure to comply with the Act’s requirements will lead to a summary proceeding with the Commissioner of Labor and Workforce Development. Employers found in violation of the Act are subject to civil penalties ranging from $300 for first time violations and $600 for subsequent violations. Only one violation exists despite an employer listing the opportunity for a new job, transfer or promotion on multiple forums. In anticipation of the Act going into effect, employers should review and update their job posting policies and practices. Employers should provide training to those employees involved in the hiring process to ensure understanding of compliance with the Act. Polsinelli attorneys are available to assist with any questions that may arise in anticipation of the June 1, 2025 effective date and any questions that may arise thereafter.

Many state and local government employment laws go into effect this summer. Here is a non-exhaustive list of mid-year employment law updates. To hear a discussion on what you need to know from 2024 and more information about complying with these changing laws, regulations, and rulings, we invite you to register here for a webinar on September 26 from 1:00 PM to 2:00 PM ET. Contact your Polsinelli attorney if you have any questions or need assistance regarding employment law compliance for these legal updates.

Around the world and across the United States, we see so many languages spoken. People around the world communicate in thousands of different languages. Given the wide origins of workers and companies with international operations, the question arises: to what extent should employers accommodate language needs, as in translating handbooks, policies, notices, or memos? Legally, the answer is murky: states and foreign jurisdictions adopt varying approaches. For example, in the United States, there is a varied patchwork of federal law that can apply requiring notices in languages besides English, while we have some states (Georgia, North Carolina, Michigan, Arizona, Missouri, etc.) that do not have any requirements for translating employment-related documents. In contrast, states like Ohio, Indiana, Maryland, and Washington encourage employers to provide translation or guidance for employment-related documents, while states like New York, Illinois, Virginia, and Massachusetts require notices and posters in languages besides English. Finally, some states like Tennessee, Colorado, Texas, and California have more specific laws and case law on requirements for translating employment-related documents. For employers with international operations, the answer will significantly vary based on an employee’s location. Some countries (like Australia and Switzerland) do not have any requirements, while many countries in Latin America, the United Kingdom, New Zealand, Singapore, etc. have recommended or preferred languages. Other countries like Israel, Denmark, India, South Africa, and Japan have requirements that employers ensure employees understand employment-related documents or that a document in a specific language will prevail in a dispute. However, many countries, such as Belgium, Canada, France, Romania, Ukraine, the United Arab Emirates, China, etc., do have specific language requirements, and some of them are based on regions within countries. It is clear that there is a lot of variety across the United States and around the world on whether employers must translate workplace documents. Employers should tread carefully with languages for employment documents, especially in light of ever-changing statutes across countries. Polsinelli is monitoring these requirements around the world. Contact our International Employment Law group for assistance with employment document translation in jurisdictions around the world, including those that may not have been discussed in this summary.

Chicago employers will soon need to ensure that they provide leave in accordance with a new Chicago law. Specifically, on December 31, 2023, the Paid Leave and Paid Sick and Safe Leave Ordinance will go into effect in the City of Chicago. This new law will require employers to provide Chicago employees up to 40 hours of paid sick leave to be available for use for specific sick leave purposes AND up to 40 hours of paid leave to be used for any reason each year. By December 31, 2023, employers must have a written policy in place, give notice of the policy to their employees, and post a notice to be provided by the City of Chicago. The Chicago ordinance applies to any employers with at least one employee who work at least two hours in a two-week period in the City of Chicago. Employers can choose for paid leave to accrue throughout the year or front-load the required leave for employees at the beginning of the year. If employees accrue leave throughout the year, each covered employee must accrue one hour of paid sick leave and one hour of paid leave to be used for any reason for every 35 hours an employee works. Under the ordinance, employers may have to pay out unused paid leave available for use for any reason upon separation of employment or transfer of employment outside Chicago, depending on the size of the employer. Specifically, employers with 100 or more employees must pay out accrued but unused paid leave that is available for use for any reason upon separation of employment or if the employee transfers to work outside of Chicago. Employers with 51-100 employees must pay out up to 16 hours of this leave through January 1, 2025. After January 1, 2025, these employees will have to pay out all accrued but unused paid leave available for use for any reason. Employers with 50 or less employees have no pay out requirements. Additionally, the pay out requirements do not apply to accrued but unused paid sick leave. Further, Chicago employees must be allowed to rollover up to 80 hours of accrued but unused paid sick leave and 16 hours of general paid leave at the end of the year. If you have questions or would like assistance preparing paid leave policies, contact your Polsinelli attorney.

Employee Handbooks are an important tool to help communicate policies, establish company culture, and protect an organization. However, they can also cause problems for a company if not drafted and implemented carefully, or used across borders without aligning with local law and custom. Join Polsinelli attorneys Harry Jones and Emily Tichenor next Tuesday, October 24, as they address what to include in a Handbook, what you may not want to include in a Handbook, important Handbook updates to make for 2024, and how to make the best use of your Employee Handbook. Register for the SHRM-KC webinar taking place on October 24 at 12:00 PM CT.

Earlier this month, the Fifth Circuit Court of Appeals (covering Texas, Mississippi, and Louisiana) issued an en banc decision in Hamilton v. Dallas County holding employees no longer have to show they were subject to an “ultimate employment decision” in pleading Title VII discrimination claims. Previously, Title VII discrimination claimants in the Fifth Circuit had to establish an “ultimate employment decision” such as hiring, firing, granting leave, promoting, or unfairly compensating employees. Now, plaintiffs need only allege discrimination affecting “terms, conditions, or privileges of employment.” This brings the Fifth Circuit standard in line with many other circuits, including the Fourth, Sixth, Eleventh, and D.C. Circuits. Hamilton involved a Dallas County policy allowing male detention center officers to have full weekends off while female officers were not. The Fifth Circuit was not persuaded that this sex-based scheduling policy was acceptable under Title VII’s statutory text. Hamilton broadens the types of personnel actions providing the basis for a cognizable Title VII discrimination claim in the Fifth Circuit. However, the Court did not define a particular standard for “terms, conditions, or privileges of employment,” other than reminding us that “de minimis workplace trifles” are not enough. At the very least, this decision serves as a worthwhile reminder that “[n]owhere does Title VII say, explicitly or implicitly, that employment discrimination is lawful if limited to non-ultimate employment decisions.” Employers with operations in the Fifth Circuit should review their policies to ensure (1) they are consistent with the new standard and (2) they are being neutrally applied. If you have any questions or need assistance in revising your company’s policies, consult your Polsinelli attorney.

The National Labor Relations Board (the “Board”) issued its long-awaited decision regarding employer work rules that impacts both unionized and non-unionized workplaces. In Stericycle, the Board altered the standard for whether a seemingly neutral workplace rule is nevertheless unlawful. Now, for such a rule to be unlawful, the General Counsel must only prove that the rule has a “reasonable tendency” to chill employees from exercising their rights under the National Labor Relations Act. The new standard is a return to a more expansive interpretation of Section 7 Rights and erodes the balancing test that has been in place since the Board’s Boeing decision. The Board made clear that under the new standard employers may still rebut the General Counsel’s showing by proving that the rule advances a legitimate and substantial business interest. The employer must also demonstrate that they are unable to advance that same interest with a narrower rule. The Board also stated that the new workplace rule standard will be applied retroactively, meaning any workplace rules currently in place will be evaluated under this new standard. If an employer is engaged in a pending case regarding a workplace rule, that rule will also be evaluated under the new standard. The remedy in such a case will be to rescind the rule. Employers should contact their Polsinelli attorneys for assistance in reviewing their workplace rules and handbooks.

Earlier this month, the United States Court of Appeals for the Eleventh Circuit issued a decision restricting employers’ abilities to fight off putative class action claims regarding data breach and cyberattacks on employee personal identifying information (“PII”). In Ramirez v. Paradies, the defendant-employer suffered a ransomware attack on its administrative systems where cybercriminals were able to obtain the Social Security Numbers current and former employees. Later, the Plaintiff in the case (Ramirez) was informed that unemployment assistance claims were filed under his name using his Social Security Number without his authorization. Ramirez filed a class action lawsuit claiming negligence and breach of implied contract.  Ramirez argued the employer should have protected the PII of its employees and because of their failure to do so, he suffered annoyance, anxiety, increased risk of fraud and identity theft, and a diminution in the value of his PII. The district court granted the employer’s motion to dismiss for failure to state a claim on both issues. The Eleventh Circuit reversed and remanded the district court’s decision on the negligence claim, determining the employer did owe a duty of care to its employees to protect PII under Georgia’s tort principles. The Eleventh Circuit in its decision stated, “[w]ithout clear guidance from Georgia courts on the asserted duty to safeguard PII, we must “apply traditional tort law.” The court went on to emphasize the longstanding principle that where there is a special relationship (i.e., an employer and their employee) between parties, a duty of care is owed. The court also determined intervening criminal acts of a third party are not sufficient to insulate an employer from liability where the employer had “reason to anticipate the criminal act.” The court explained that the employer should have been able to anticipate the data breach as a reasonably foreseeable result of (1) the "size and sophistication" of the employer, which maintained a PII database of 75,000 current and former employees and had over $1 billion in sales and (2) failing to adhere to the abundance of industry warnings and advice on how to prevent and detect such an attack. While this case is based on Georgia tort law, the tort principles applied by the Eleventh Circuit (the duty of care, the special relationship between employers and their employees, and the foreseeability of harm) likely extend to nearly every jurisdiction in the country. It is an important reminder for employers to be aware of these longstanding tort principles applying to protection of employee PII, and the importance of protecting such information. Contact your Polsinelli attorney for further guidance regarding this decision and guidance regarding protecting employee data.

On June 29, 2023, the United States Supreme Court issued its ruling in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College (along with Students for Fair Admissions, Inc. v. the University of North Carolina, et al.), bringing an end to a near decade long legal battle regarding affirmative action at universities. The Court struck down affirmative action policies that provide a “plus” or a “tip” to applicants based on race, holding instead that the Constitution and Title VI of the Civil Rights Act (applicable to federally-funded programs) require colorblindness. As it relates to private-sector employers, the decision is only indirectly applicable because such employers are generally not subject to the Constitution’s equal protection clause and are governed by Title VII of the Civil Rights Act, rather than Title VI.  Generally speaking, Title VII case law does not permit the use of race in employment decision-making in the same fashion as universities have used race in admissions decisions.  However, the decision’s strong language regarding the application of Title VI’s language – which is nearly identical to Title VII’s – to affirmative action programs that arguably seek to benefit certain minority groups, will likely bleed over into Title VII case law. Despite the decision, however, affirmative action is not banned, so long as it is not a quota or determining factor.  Employers may continue to focus their affirmative action efforts on increasing the pipeline of qualified applicants from underrepresented groups.  Employers are not required to abandon their ongoing DEI efforts, but should be mindful of the potential for discrimination claims (which may include reverse discrimination claims). It would be prudent to review your company’s DEI commitments and initiatives, along with hiring policies, to ensure they are encouraging diversity while not crossing the line into discrimination.  This is particularly true given the publicity the Supreme Court’s decision has generated. Polsinelli has experience advising employers on crafting compliant affirmative action programs.  If you need assistance with such programs, or have any questions about the decision, including the potential impact on your company, or need assistance in reviewing your initiatives and policies, contact your Polsinelli attorney.

Just in time for the summer holidays, the United States Department of Labor (“DOL”) recently issued an opinion letter providing guidance regarding calculating the amount of leave used when an employee takes federal Family and Medical Leave Act (“FMLA”) leave during a week with a holiday. The DOL explained that, if an employee takes a full week of FMLA leave during a week with a holiday, the holiday has no effect on FMLA leave and the employee will use a full week of FMLA leave. For example, if an employee takes FMLA leave from July 3, 2023 – July 7, 2023, which includes the Fourth of July holiday, the full week will count as FMLA leave and reduce the amount of FMLA leave the employee has available accordingly. If, on the other hand, an employee takes intermittent FMLA leave during a week with a holiday and the employee was not expected or scheduled to work on the holiday, the holiday does not count toward the employee’s FMLA leave. For example, if an employee takes FMLA leave on Monday, July 3, 2023, and Wednesday, July 5, 2023; Tuesday, July 4, 2023, is a company holiday; and the employee works the rest of the week, the employee will use 2 days of FMLA leave. However, if the employee would have been expected or scheduled to work on Tuesday, July 4, 2023 if the employee did not take FMLA leave, and the employee uses FMLA leave to not work on July 4, the Fourth of July holiday counts as FMLA leave and reduces the amount of FMLA leave the employee has available. The DOL noted that deducting a holiday from an employee’s available FMLA leave when an employee takes intermittent leave in a block of less than a week constitutes unlawful interference with an employee’s FMLA rights. Employers should ensure that they properly calculate an employee’s FMLA leave during a week with a holiday. If you have any questions about FMLA requirements, contact your Polsinelli attorney.

On December 29, 2022, President Biden signed the Providing Urgent Maternal Protections (“PUMP”) for Nursing Mothers Act into law. The law went into effect immediately, as we previously reported.  The United States Department of Labor has now issued a field assistance bulletin providing guidance to the Wage and Hour Division on the enforcement of the PUMP Act. The guidance explains that covered employers must “provide nursing employees reasonable break time each time such employee has a need to pump breast milk at work for one year after the child’s birth.” (Emphasis in Bulletin). The guidance further explains that, although an employee and employer may agree to a schedule for pumping, “an employer cannot require an employee to adhere to a fixed schedule that does not meet the employee’s need for break time each time the employee needs to pump.” Additionally, if the employer and employee agree to a schedule, it should be adjusted if the employee’s pumping needs change. The PUMP Act does not require employers to pay employees for break time used to pump, but the guidance clarifies that employers should consider whether breaks need to be paid pursuant to the Fair Labor Standards Act (“FLSA”) and applicable state and local laws. Per the guidance, non-exempt employees should be paid for time spent pumping unless the employee is completely relieved from all work duties. For exempt employees, an employer cannot reduce the employees’ salary to compensate for the pumping break time. In addition to requiring employers to provide time to pump breast milk, covered employers must provide nursing employees a place to pump breast milk at work that is shielded from view, free from intrusion from coworkers and the public, available each time it is needed by the employee, and not a bathroom. The guidance explains that the space must also be functional for pumping and “contain a place for the nursing employee to sit, and a flat surface, other than the floor, on which to place the pump.” Additionally, employees “must be able to safely store milk while at work, such as in an insulated food container, personal cooler, or refrigerator.” Employers may not retaliate against an employee for asserting rights under the PUMP Act, and an employee may file a complaint with the Wage and Hour Division or a lawsuit against an employee for a violation of the PUMP Act. Finally, the guidance reminds employers to post and keep a notice regarding the FLSA’s requirements. The notice is available from the Wage and Hour Division and was recently updated to address the PUMP Act requirements. Employers should ensure that their policies and procedures comply with the updated guidance and that they have an appropriate space available for nursing employees.  If you have any questions about the requirements under the PUMP Act, contact your Polsinelli attorney.

So far in 2023, artificial intelligence (AI) has been at the leading edge of the technological revolution, as the potential applications for tools like ChatGPT have drawn considerable buzz.  In April 2023, we reported on New York City’s first-in-the-nation ordinance imposing notice and audit requirements on the use of artificial intelligence tools by employers.  More recently, the Equal Employment Opportunity Commission (EEOC) issued two guidance documents addressing AI in the HR context, specifically tackling the issues of adverse impact and disability accommodations. Employers are increasingly using AI and machine learning (ML) tools to help optimize employment decisions like hiring, promotions, and terminations.  Some examples of these tools identified in the EEOC guidance include resume scanners to identify promising candidates, employee monitoring software that rates employees based on productivity metrics, virtual assistants or chatbots that question applicants about their qualifications, video interviewing software that evaluates facial expressions and speech patterns, and testing software that provides job or cultural fit scores.  Generally, an AI/ML tool is one that wholly or partially relies on a computerized analysis of data to make employment decisions.  As with many new technologies, however, in some cases, technological advancement may jeopardize legal compliance.  Employers will have to consider the implications of these tools under both new laws (like New York City’s) and older laws like those administered by the EEOC. EEOC’s first guidance document assessed the employer’s obligation to ensure that AI/ML tools used in employment selection procedures do not adversely impact protected classes under Title VII (e.g., gender, race).  An AI/ML tool that has a “substantial” disproportionate impact on a protected class may be discriminatory if it is not job-related and consistent with business necessity or if more favorable alternatives are available.  An adverse impact can occur if a tool awards higher ratings or is more likely to select or reject, members of a certain protected class in comparison to other protected classes.  A few important takeaways from EEOC’s guidance on adverse impact: Employers may be responsible for the effect of third-party software.  EEOC’s guidance signals the agency will look to hold employers responsible for adverse impact even if the AI/ML tool in question is third-party software the employer did not develop.  The guidance states that this responsibility can arise from either the employer’s own administration of the software or a vendor’s administration as an agent of the employer. Employers rely on vendor assurances at their own risk.  Although EEOC encourages employers to “at a minimum” ask their AI/ML software vendors about steps taken to assess adverse impact, EEOC’s position is that reliance on the vendor’s assurances is not necessarily a shield from liability.  Employers still face liability “if the vendor is incorrect about its own assessment.” Self-audits are advisable.  Given the inability to rely on a vendor’s assurances, employers are best served by periodically auditing how the AI/ML tools they use impact different groups.  To do such an audit, employers need access to the AI/ML tool’s underlying data, which is best ensured at the time the tool is implemented. EEOC’s second guidance document addressed the impact of AI/ML tools on individuals with disabilities under the Americans with Disabilities Act (ADA).  The ADA guidance makes clear that this is an altogether different analysis than the Title VII adverse impact analysis described above.  Moreover, because of the individualized nature of the impact of disabilities and the ADA reasonable accommodation analysis, validation of an AI/ML tool, or a statistical finding that the tool does not adversely impact individuals with disabilities generally, are not sufficient to ensure ADA compliance.  Instead, EEOC anticipates a more individualized process in which the employer assesses whether the limitations of a particular employee or applicant’s condition would cause the employee or applicant to be “screened out” or unfairly rated by the AI/ML tool.  EEOC’s guidance anticipates that employers, as a best practice, would provide relatively in-depth notice of the operation of AI/ML tools and the availability of alternative processes in order for the accommodation process to occur. AI/ML offers the potential to transform the workplace, among other business processes, by allowing employers to sort through vast quantities of data and quickly glean actionable insight.  However, EEOC and jurisdictions like New York City have identified the potential for discriminatory biases to be built into AI/ML algorithms, or for these algorithms to disadvantage individuals with disabilities.  In order to avoid running afoul of new laws designed to address AI/ML, and existing laws like Title VII and ADA that went into effect decades ago but nonetheless govern AI/ML use, employers should carefully review their processes for using these tools in the human resources and recruitment context.

As we start to come out of the pandemic, many businesses are deciding to embrace remote workforces on a more permanent basis for a variety of reasons, including cost saving, increased talent pool, and employee satisfaction. However, maintaining a remote workforce also presents the challenge of navigating various state and local laws that may be implicated. In general, the law of the state where the employee is physically located will govern their employment, regardless of where the company is located. Accordingly, it is critical for employers to determine which state and local employment laws apply to their workforce. Among the most critical employment laws that can vary significantly state-to-state are those relating to wage and hour issues. Although some states simply follow federal law, many have their own minimum wage laws, and businesses with remote employees in multiple states will need to ensure they are paying each employee at least the minimum wage required by the state or local jurisdiction where the employee is located. Similarly, many states have their own overtime laws, which may provide for a higher rate of overtime pay or a lower threshold for the number of hours worked before overtime is required. Additionally, certain states have nuanced meal and rest period requirements. Moreover, many states have specific laws regarding the information that must be contained on wage statements, the frequency of pay days, the timing of final pay, and the payment of accrued but unused paid time off. Employers with remote workforces should also be mindful of state and local leave requirements applicable to their employees in various jurisdictions, including family and medical leave and paid sick leave. Importantly, the applicability of these leave laws is often triggered by national employee headcounts (even if only applicable to employees in the state), whereas others are triggered by state headcounts. Even beyond these most common employment laws, numerous other state and local laws can be implicated by having a remote workforce—including those relating to state-specific notices and posters, workers’ compensation, harassment training, background checks, drug testing, and pay transparency laws. In fact, some of the more recent pay transparency laws may apply to job postings for positions open to remote employees across the country, regardless of whether the company ends up hiring an employee in a state with an applicable pay transparency law. Finally, businesses with remote employees should be aware of the tax implications of remote work. Hiring even one remote employee in a new state could require a company to file a corporate tax return in that state or register in the state to withhold payroll taxes. Businesses with remote employees need to consider and stay abreast of the different state and local laws that apply to their workforce and take steps to ensure that they are in compliance with all applicable laws. Polsinelli attorneys are prepared to assist employers with navigating various state laws and adopting compliant practices and policies.

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.

Today is the deadline for covered employers to submit their 2022 workplace injury and illness data electronically on Form 300A to the U.S. Occupational Safety & Health Administration (“OSHA”). Covered employers must submit Form 300A electronically via OSHA’s online Injury Tracking Application. This reporting requirement covers: Employers with at least 250 employees; and Employers with 20 to 249 employees, if they are in a specific industry with historically high rates of occupational injuries and illnesses, such as manufacturing, utilities, wholesale trades, and general freight trucking. For those employers with at least 20 employees that must submit Form 300A based on their industry, OSHA has created a list that is organized by North American Industry Classification System (“NAICS”) codes, which is available by clicking here. Importantly, certain employers are partially exempt from having to report the data regardless of their number of employees, unless OSHA expressly instructs them to report. A list of those partially exempt industries is available by clicking here. All employers, including those partially exempted by reason of company size or industry classification, must report to OSHA any workplace incident that results in a fatality, in-patient hospitalization, amputation, or loss of an eye, pursuant to 29 CFR §1904.39. When submitting Form 300A to OSHA, employers must take care to use their correct employer identification number. Should a covered employer miss the March 2 reporting deadline, it may still submit Form 300A through December 31, 2023, but it may be subject to a monetary penalty. It is important for employers to keep in mind that this reporting requirement is in addition to other OSHA recordkeeping requirements that apply to most employers.  For guidance complying with OSHA’s recordkeeping requirements regarding workplace injuries, contact your Polsinelli attorney.

California employers received welcome reassurance last week that they are free to require employees enter into arbitration agreements as a condition of employment. This is the result of an opinion from the Ninth Circuit last week that affirmed a trial court decision that had invalidated California Assembly Bill 51 (AB 51) before it went into effect. Among other things, AB 51 sought to make it a crime for employers to require employees to agree to arbitrate claims as a condition of employment. This law, therefore, in essence, would have only allowed employers to offer voluntary arbitration agreements to employees and not allow them to make signing an arbitration agreement a condition of employment. It was well-settled that states cannot target the enforcement of arbitration agreements for special treatment. Rather, the U.S. Supreme Court has repeatedly held that arbitration agreements must be treated like any other agreement under state law. That is, if they were lawfully entered (i.e., without fraud, duress or coercion) and are for a lawful purpose, then they must be enforced. In applying this precedent to AB 51, the Ninth Circuit found that California’s attempt to target the creation rather than the enforcement of arbitration agreements was “too cute by half.” This was not the Ninth Circuit’s first bite at this apple, however. In September 2021, this same three-judge panel ruled that parts of AB 51 were NOT pre-empted by the FAA. That panel then withdrew its opinion in August 2022, shortly after the U.S. Supreme Court’s decision in Viking River Cruises v. Moriana (holding that the FAA pre-empts state laws limiting arbitration of individual PAGA claims). In issuing its new opinion, one of the judges changed his mind. This new decision is not necessarily the end of the saga for AB 51. The California Attorney General has several options. He could accept the ruling and stop trying to resurrect AB 51. He could go back to the trial court and fight to revive the law (these decisions have only been preliminary, in other words, the courts are saying that there is a “high likelihood” that the law is pre-empted). He could appeal this decision to the entire Ninth Circuit (therefore, instead of a three-judge panel hearing the matter, it would be 29 judges!). Or he could appeal to the Supreme Court. Employers should stay tuned for what happens next. What Does This Mean For Employers in California Right Now? Employers in California with existing arbitration programs that are mandatory or permit employees to opt out may continue such programs. Companies that have opted to avoid arbitration programs altogether or only provide voluntary agreements (i.e., not make signing a condition of employment) may now want to revaluate whether the time is right to implement an arbitration program. Polsinelli attorneys will continue to monitor and review emerging laws impacting arbitration programs for California employers. For individual guidance and advice, please do not hesitate to reach out to us directly.

The National Labor Relations Board (the “Board”) issued another precedent-shifting decision, this time taking aim at provisions commonly included in severance agreements. In McLaren McComb, an employer now violates Section 8(a)(1) of the National Labor Relations Act (“the Act”) when it merely “proffers” a severance agreement that conditions severance benefits on the waiver or restriction of an employee’s exercise of his or her rights afforded by the Act, including broadly written provisions prohibiting the employee from disparaging the employer or disclosing the terms of the agreement. In its decision, the Board reasoned that a broad non-disparagement provision in a severance agreement is unlawful because “public statements by employees about the workplace are central to the exercise of employee rights under the Act.” Section 7 of the Act provides protections for employees who communicate with a wide variety of third parties (including on social media) regarding terms and conditions of employment, an ongoing labor dispute, and even former supervisors and coworkers. Thus, the Board reasoned, that conditioning receipt of severance benefits on acceptance of a non-disparagement provision has a chilling tendency on workers’ ability to communicate to improve the terms and conditions of their employment and, thus, constitutes a violation of the Act. The Board similarly reasoned that provisions that prohibit disclosure of the agreement’s terms “to any third person” are unlawful because of their chilling effect on the exercise of an employee’s Section 7 rights. While the Act applies to all employers – even those without a unionized workforce –employers still have opportunities to protect themselves. For example, the decision does not apply to employees who are excluded from the Act’s coverage, including supervisors. The ruling also does not grant employees carte blanche to say whatever they want. Rather, the Board placed limitations on its ruling, stating that “employee critique of employer policy pursuant to the clear right under the Act to publicize labor disputes is subject only to the requirement that employees’ communications not be so disloyal, reckless, or maliciously untrue.” Contact your Polsinelli attorney for assistance in navigating the decision’s potential impact on your agreements.

In a recent 4-3 decision, the Illinois Supreme Court held that claims under sections 15(b) and 15(d) of Illinois’ Biometric Information Privacy Act (BIPA) accrue each time a private entity collects a biometric identifier (such as a fingerprint, voiceprint, or retinal scan) from a person and each time a private entity transmits such a biometric identifier to a third party. In Cothron v. White Castle System, Inc., 2023 IL 128004, the Court answered a certified question from the Seventh Circuit Court of Appeals, concluding that “the plain language of section 15(b) and 15(d) shows that a claim accrues under [BIPA] with every scan or transmission of biometric identifiers or biometric information without prior informed consent.” In practical terms, the decision significantly impacts employers and others who routinely collect biometric identifiers, as now each collection or disclosure of a biometric identifier without informed consent—as opposed to just the first such collection or disclosure—could result in statutory fines of $1,000 to $5,000, as well as having to pay the opposing side’s attorney fees and costs. BIPA Background The Illinois General Assembly unanimously adopted BIPA in 2008 in response to growing concern among the public about the collection and use of biometrics. 740 Ill. Comp. Stat. 14/5(d)-(e). Biometrics are “biologically unique” personal identifiers. Id. at § 14/5(c). They include “a retina or iris scan, fingerprint, voiceprint, or scan of hand or face geometry.” Id. at § 14/10. To address the public’s concern, the Act regulates how private entities may collect and handle biometric data and provides a private cause of action for any person “aggrieved by” a violation of the statute. Id. at § 14/20. A successful plaintiff can recover the greater of actual damages or statutory damages of $1,000 for each negligent violation and $5,000 for each reckless or willful violation. Id. The Cothron Opinion The Cothron case came to the Illinois Supreme Court on a certified question from the Seventh Circuit: “Do section 15(b) and 15(d) claims accrue each time a private entity scans a person’s biometric identifier and each time a private entity transmits such a scan to a third party, respectively, or only upon the first scan and first transmission?” Plaintiff, a longtime White Castle employee, alleged that not long after her employment began, White Castle introduced a system that “required employees to scan their fingerprints to access their pay stubs and computers.” Cothron, 2023 IL 128004, ¶ 4. A third-party vendor then verified each scan and authorized the employee’s access. Plaintiff alleged that White Castle violated BIPA by implementing the fingerprint scanning system without obtaining her consent. White Castle moved for judgment on the pleadings, arguing that plaintiff’s action was time-barred because her claim accrued in 2008, which is when White Castle first scanned her fingerprint after BIPA went into effect. Plaintiff argued that a new claim accrued each time she scanned her fingerprints and White Castle sent the data to its third-party authenticator, thereby rendering her action timely with respect to any unlawful scans and transmissions that occurred within the applicable limitations period. The District Court for the Northern District of Illinois agreed with plaintiff and denied White Castle’s motion. The District Court then certified its order for immediate interlocutory appeal to the Seventh Circuit. The Seventh Circuit found the parties’ competing interpretations of BIPA claim accrual reasonable, and so certified this important question of state law to the Illinois Supreme Court. In the Supreme Court, White Castle again argued that under the plain language of sections 15(b) and 15(d), claims can accrue only once—when the biometric data is initially collected or disclosed. White Castle also argued that because BIPA seeks to protect “a right to secrecy in and control over biometric data” and because one can only lose that secrecy and control once, only the initial collection or disclosure of biometric data is actionable. Id. at ¶¶ 33-34. The Supreme Court majority rejected these arguments, concluding that the “injury” for a section 15 claim is not based on an initial loss of secrecy of or control over biometric data; the “injury” is the statutory violation itself. Id. at ¶ 38. Accordingly, each statutory violation supports a separate claim. While observing the potential for large damages awards, the Court determined that was an issue best left to the legislature. The dissenting opinion strongly disagreed. Among other things, the dissenters believe that the statute is best interpreted to say that the injury occurs upon the first scan and later ones do not add to it. The dissent also discussed the possible absurd results of annihilative liability from the majority’s view, remarking that such consequences could not square with legislative intent. Id. at ¶¶ 61-63. Now that the Illinois Supreme Court has answered the certified question, the case goes back to the Seventh Circuit for further proceedings. Key Takeaways In a 4-3 decision, the Illinois Supreme Court ruled that a claim under Illinois’ Biometric Information Privacy Act (BIPA) may accrue each time a private entity collects or discloses biometric identifiers (such as fingerprints and retina scans) without informed consent, as opposed to accruing only with the first collection or disclosure. Because a claim may accrue with each collection or disclosure of biometric identifiers, motions to dismiss on statute of limitations grounds may be more limited. As the majority and dissenting opinions reflect, damages of $1,000 or $5,000 may now be assessed for each BIPA violation, not just the first instance of collecting or disclosing a biometric identifier without informed consent. For example, if an employer requires an employee to scan his or her fingerprint every time they need to access the employer’s computer systems and the employee has not given informed consent, each such scan could result in damages of either $1,000 or $5,000. In other words, damages awards may add up quickly and create severe consequences. Businesses that collect biometric identifiers or information from their employees or customers should seek legal advice regarding their compliance with all aspects of BIPA.

This month, businesses in Missouri will be permitted to sell recreational marijuana products. The permitted sales are one of the many changes that came about because of Constitutional Amendment 3, which legalized the recreational use of marijuana in Missouri. Notably, employers may still prohibit employees from working while under the influence of marijuana and may discipline, discharge, refuse to hire or otherwise take adverse employment action against an individual for their lawful use of recreational marijuana, even when such use occurs during non-work hours and off the employer’s premises. With the increased availability of recreational marijuana products and the inevitable confusion some employees may have as to what is and is not permitted under Constitutional Amendment 3, it is a good time for employers to revisit their policies and messaging concerning drug and alcohol use and drug testing. Employers should be mindful of the dichotomy between recreational marijuana use and medical marijuana use. For questions or assistance in adjusting your drug and alcohol use and/or drug testing policies, please contact your Polsinelli attorney.

The Supreme Court of Illinois recently resolved an outstanding and hotly debated question – claims brought under the Illinois Biometric Information and Privacy Act (BIPA) are subject to a five-year statute of limitations. The Court, in Tims v. Black Horse Carriers, Inc., determined that Illinois’ “catch-all” five-year limitations period applied, as opposed to the one-year statute of limitations applied to claims for libel, slander and the “publication of matters violating the right to privacy.” Prior to the decision, the trial court in Tims determined the five-year statute of limitations applied. The intermediate appellate court overturned, holding that two separate limitations periods applied BIPA claims: five years for claims under section 15(a), (b) and (e), and one year for claims under section 15(c) and (d). The Illinois Supreme Court then clarified the five-year statute of limitations would apply to all BIPA claims. It reasoned that the law favored having a uniform limitations period, the legislative intent and policy of BIPA was better served through a longer limitations period, and statutes that do not include a specific statute of limitations are subject to the five-year statute of limitations. While this decision brings clarity, it also solidifies that a longer limitations period will apply to all BIPA claims. Employers should audit their technologies for use of biometrics and also review their relevant privacy policies and procedures to ensure compliance with all of BIPA provisions, particularly because these claims are often subject to class action litigation.  The experienced employment and privacy attorneys at Polsinelli can help you navigate this review.

Historically, a pregnant woman with a “normal” pregnancy was not considered “disabled” under the Americans with Disabilities Act (“ADA”), and, therefore, there was no requirement for employers to provide her with a reasonable accommodation during pregnancy. Effective June 29, 2023, that rule will change. On December 29, 2022, President Biden signed into law two laws protecting pregnant and nursing mothers. The two laws are the Pregnant Workers Fairness Act (the “PWFA”) and the Providing Urgent Maternal Protections (“PUMP”) for Nursing Mothers Act. Each of these Acts provides new, additional protections to pregnant women. The PWFA provides that covered employers must provide “reasonable accommodations” to allow pregnant workers to perform the essential functions of their positions. PWFA incorporates various definitions from the ADA and, as a result of that, employers must engage in the interactive process with pregnant employees who request an accommodation in order to attempt, in good faith, to reach such an accommodation which may include temporarily adjusting the non-essential functions of the job and/or leave. The PUMP Act, which went into effect immediately, amends the Fair Labor Standards Act and requires certain employers to provide reasonable break time for all employees, including salaried employees, to express breast milk as needed and to provide a clean and private space for nursing mothers to express milk separate and apart from restrooms. Although some state and local laws already provided employees protections and rights similar to those under the PWFA and the PUMP Act, this is the first time these protections and rights apply under federal law. Employers should ensure that their policies and procedures comply with the PWFA and PUMP Act. If you have any questions about the requirements under these laws, contact your Polsinelli attorney.

In November 2020, Colorado voters approved a ballot initiative for a state-run paid family leave benefits program. Under Colorado’s Family and Medical Leave Insurance (“FAMLI”) program, employees and most employers will make contributions into the FAMLI fund, and employees may take 12 weeks of paid leave per year for certain family and medical reasons. Employees who suffer serious health conditions caused by pregnancy or childbirth complications may take up to 4 more weeks of paid leave per year for a total of 16 weeks. Deductions from employee wages for contributions to the FAMLI program begin on January 1, 2023, and employees may begin taking FAMLI leave on January 1, 2024. Although employees cannot take leave until 2024, employers must notify employees of FAMLI benefits by January 1, 2023. Specifically, employers must post a poster available on the Colorado FAMLI Program website by January 1, 2023. The poster must be hung in a prominent and visible workplace location. For employers with remote employees, the poster should be shared electronically with employees. Employers can also prepare for the FAMLI requirements by registering with the My FAMLI+ Employer online system through the Colorado FAMLI Program website. The first premium payments from employers are due April 30, 2023. If you have questions about the FAMLI program, contact your Polsinelli attorney, and continue following the Polsinelli at Work blog in 2023 for more information about the FAMLI program.

Federal law requires employers to post a notice for employees regarding federal anti-discrimination laws. The Equal Employment Opportunity Commission (the “EEOC”) provides the notice, and the EEOC recently released an updated workplace discrimination notice. The notice is titled “Know Your Rights: Workplace Discrimination is Illegal” and is available now on the EEOC website. The updated notice is more “reader-friendly” than the previous version because it uses simpler language and is more visually appealing. The updated notice also provides employees information not previously provided in the previous version. For example, the updated notice notes that harassment is a prohibited form of discrimination; clarifies that sex discrimination includes discrimination based on pregnancy and related conditions, sexual orientation, and gender identity; and provides information about equal pay discrimination for federal contractors. It also includes a QR code that links to the EEOC website about how to file a Charge of Employment Discrimination. Per the EEOC, the notice must be placed in “a conspicuous location in the workplace where notices to applicants and employees are customarily posted.” Employers should also consider sharing the notice digitally to inform remote or hybrid workers of their rights. The EEOC has not set a deadline for employers to post the updated notice, but employers should post the updated notice soon to ensure that they satisfy the posting requirements. Additionally, employers that use a subscription service for required workplace notices should contact their service provider to ensure that they receive the updated version. If you have questions about this notice or other required notices, contact your Polsinelli attorney.

The first jury verdict to address violations under Illinois’ Biometric Information Privacy Act (BIPA) resulted in a $228 million judgment against BNSF Railway. The case involved a class of more than 40,000 truck drivers who had their fingerprints scanned for identity verification purposes – without the required notice and consent – when they visited BNSF railyards to pick up and drop off loads. The jury determined the statute was violated 46,500 times, an amount equal to the number of drivers who had their fingerprints scanned, and that the violations were reckless or intentional, a finding that carries a price tag of $5,000 per violation. The case presents two issues that have yet to be resolved by courts.  The first issue is whether damages should be calculated per person or each time biometric information is scanned. This issue is currently before the Illinois Supreme Court, but no ruling has been issued. The second issue is whether a company who contracts with a third-party vendor who in turn collects biometrics can be held liable for any BIPA violations. This issue is likely to be decided by the Seventh Circuit Court of Appeals if and when BNSF appeals the verdict. Regardless of the ultimate answers to these questions, this case demonstrates the importance of auditing current privacy practices to ensure compliance with applicable law, as well as ensuring third-party contracts have clear provisions regarding compliance and indemnification. This is particularly true as more states enact BIPA-like statutes. If you have questions on your privacy practices, contact your Polsinelli attorney.

As we previously reported, on August 26, 2022, the U.S. Court of Appeals for the Eleventh Circuit issued a decision narrowing the nationwide injunction against the COVID-19 vaccination mandate for federal contractor employees set forth in President Biden’s Executive Order 14042. Although the Eleventh Circuit found the vaccination mandate to be unlawful, it found the nationwide injunction (applicable to all federal contractors across the country) to be overbroad, and reduced to scope of the injunction to apply only to the States and parties that challenged the mandate in the case.  This allows the vaccination mandate to go into effect for federal contractors in the majority of the country.  On October 14, 2022, the Safer Federal Workforce Task Force issued guidance about its intentions and course of action following the Eleventh Circuit’s decision. The new Task Force guidance strongly implies that the federal government will resume enforcing Executive Order 14042’s vaccine mandate.  Before the government does so, however, the Task Force outlines a three-step process that will occur: First, the Office of Management and Budget will notify federal agencies regarding their obligations to comply with the remaining injunctions against Executive Order 14042, which continue in effect. Second, the Task Force will update its guidance regarding COVID-19 safety protocols for federal contractor and sub-contractor workplaces.  Due to the injunctions, the Task Force has not updated its contractor guidance since November 2021, despite great changes in the state of the COVID-19 pandemic since that time.  The October 14, 2022 notice does not provide any hints as to what types of updates the Task Force may make. Third, and finally, OMB will provide additional guidance to federal agencies regarding the resumption of enforcement of contract clauses implementing Executive Order 14042’s requirements.  Prior to this notice, the federal government will continue to not enforce any of Executive Order 14042’s requirements. The timeframes under which these steps will occur are not defined by the Task Force’s notice. As noted above, the Eleventh Circuit’s decision did not affect other pending injunctions prohibiting enforcement of the vaccination mandate against contractors and subcontractors in the States of Missouri, Nebraska, Alaska, Arkansas, Iowa, Montana, New Hampshire, North Dakota, South Dakota, Wyoming, Kentucky, Tennessee, Ohio, and Florida.  In addition, members of the Associated Builders and Contractors also retain the protection of the former nationwide injunction. All other contractors not covered by pending injunctions will need to resume their efforts to comply with Executive Order 14042.  That said, it is unknown at this time how the Task Force will modify its guidance.  For example, will the Task Force now require that covered contractor employees obtain booster shots, in addition to the initial vaccination.  Although the exact contours of the modified guidance are important, there are steps federal contractors can take to begin preparing now, to avoid being caught under potentially short deadlines as the three-step process unfolds over an unknown timeline.

On September 27, 2022, Governor Gavin Newsom approved SB 1162 to significantly expand the pay reporting and pay scale requirements for California employers.  These requirements are effective January 1, 2023. Pay Reporting Requirements SB 1162 amends California Government Code § 1299 and requires private employers with 100 or more employees to submit a pay data report (the “Report”) to the Civil Rights Department (the “Department”) by the second Wednesday of May each year beginning in 2023. The Report must include the following information from the prior calendar year: The number of employees by race, ethnicity and sex in the following job categories: Executive/senior-level officials and managers First/mid-level officials and managers Professionals Technicians Sales workers Administrative support workers Craft workers Operatives Laborers and helpers Service workers The mean and median hourly rate for each combination of race, ethnicity, and sex within each of the above-listed job categories; The number of employees by race, ethnicity, and sex whose annual earnings fall within each pay band used by the U.S. Bureau of Labor Statistics in the Occupational Employment Statistics Survey; The employer’s North American Industry Classification System (NAICS) code; and A section for the employer to provide clarifying remarks regarding the information provided, if any. Private employers with 100 or more employees hired through labor contractors (i.e. an individual/entity that supplies a client employer with workers to perform labor within the client employer’s usual course of business) must submit a separate report to the Department that includes the information above for those employees, along with the names of all labor contractors used to supply employees. Private employers with more than one establishment (defined as an economic unit producing goods or services) must submit a report covering each establishment. The Report must be in a format that the Department can search and sort through readily available software. If a private employer does not comply with these requirements, the Department may seek an order for compliance and recover associated costs.  Additionally, upon request of the Department, a court may impose a civil penalty of no more than $100 per employee for the employer’s failure to file the Report, and a civil penalty of no more than $200 per employee for the employer’s subsequent failure. Pay Scale Requirements SB 1162 amends California Labor Code section 432.2 and imposes new wage disclosure requirements on all private and public employers with 15 or more employees. Since 2018, Labor Code Section 432.2 has prohibited California employers from relying on the salary history of a job applicant in deciding whether to extend an offer of employment or what salary to offer, unless the applicant voluntarily discloses this information.  Employers have also been prohibited from seeking, either personally or through an agent, salary history information about an applicant. SB 1162 expands Section 432.2 to also require covered California employers to affirmatively provide pay scale information (i.e. the range of the salary or hourly rate the employer expects to pay for the position) on job postings, including postings made by third-party job sites used to advertise positions. Covered employers must also provide pay scale information upon request to current employees for their current position. An aggrieved applicant or employee may file a complaint with the Labor Commission within one year of discovering the employer’s violation.  The Labor Commissioner impose may order the employer to pay a civil penalty of no less than $100 and not to exceed $10,000. Employers are required to maintain a record of each employee’s job title and wage history during employment and for three years following the termination of employment.  An employer’s failure to keep records in violation of this section creates a rebuttable presumption in favor of an employee’s claim filed with the Labor Commissioner. Polsinelli attorneys will be monitoring new developments in this area and remain prepared to assist employers.

The California State Legislature adjourned on August 31, 2022. Following the adjournment, several bills with significant implications for employers were presented to Governor Newsom for signature or veto by September 30, 2022. Governor Newsom signed multiple bills, now laws, that California employers need to be aware of going into the new year. Below is a brief overview of the most notable updates. COVID-19 Employee Protections COVD-19 Supplemental Paid Sick Leave (AB 152): Current Covid-19 Supplemental Paid Sick Leave (“SPSL”) was set to expire on September 30, 2022. With the signing of this bill, the current COVID-19 SPSL requirements will be extended through December 31, 2022. This bill does not create a new bank of leave for employees to use but instead provides employees an additional three (3) months to use any banked SPSL. Extension of Workers’ Compensation Rebuttal Presumption for COVID-19 (AB 1751): This bill extends the current rebuttable presumption established for workers’ compensation for COVID-19 to January 1, 2024, as well as extending coverage to certain state employees who were not covered previously. Extension of COVID-19 Notice Requirements (AB 2693): Under previous notice requirements, employers were required to provide notice to individual employees who were potentially exposed to COVID-19. These requirements have been extended to January 1, 2024, but employers are now permitted to post a notice in the workplace for 15 days instead of providing individual notice. Leave Protections Mandatory Bereavement Leave (AB 1949): Effective January 1, 2023, employees with at least 30 days of active service who request bereavement leave upon the death of a covered family member must be provided with at least five (5) days of bereavement leave that does not need to be taken consecutively. Expansion of Those Included as “Designated Persons” Under CFRA and PSL (AB 1041): AB 1041 amends Government Code Section 12945.2 and Labor Code Section 245.5 to expand the California Family Rights Act (“CFRA”) and California Paid Sick Leave (“PSL”). Specifically, the class of people for whom an employee may take leave to care for is expanded to include a “designated person” identified at the time the employee requests the leave under both PSL and CFRA. With this expansion, a “designated person” means any individual related by blood or whose association with the employee is the “equivalent of a family relationship,” including a domestic partner. Other Notable Updates Creation of Fast-Food Sector Council (AB 257): The Fast Food Accountability and Standards Recovery Act will establish a Fast Food Sector Council comprised of 10 members, which will establish standards on minimum wages and other working conditions applicable to certain fast food workers. Most immediately, the Council will have the authority to raise the minimum hourly wage for workers as high as $22 next year. Although AB 257 is set to take effect January 1, 2023, a referendum has been filed seeking to block it until the matter can be put before voters. Retaliation for Emergency Conditions (SB 1044): Effective January 1, 2023, in the event of an “emergency condition,” employers are prohibited from taking or threatening adverse action against any employee who walks off the job because the employee feels unsafe. Employers also cannot prevent employees from accessing their mobile device or other communications device for seeking emergency assistance, assessing the safety of the situation, or communicating with a person to confirm their safety. Employment Discrimination and Cannabis (AB 2188): Effective January 1, 2024, AB 2188 will make it unlawful for employers to discriminate against an individual based on their use of cannabis outside of work or when an employer-required drug test finds non-psychoactive cannabis in the individual’s system (which indicates usage, not impairment). Certain workers are exempt from these protections and the new law will not prohibit drug-free workplace policies or prohibit employers from disciplining employees for the use or possession of cannabis during work hours. Expansion of Pay Data Reporting and Posting of Pay Scale in Job Postings (SB 1162): Effective January 1, 2023, California will join a growing list of states that require the disclosure of pay scales in job postings. Additionally, the existing obligation for California employers to supply pay scale information to job applicants upon request will extend to current employees. The new law also imposes certain recordkeeping requirements relating to job titles and wage rates. SB 1162 further modifies the timing and requirements for the submission of pay data reports by California employers with 100 or more employees. Finally, the law imposes various civil penalties for violations of the above-described requirements. A more detailed summary of these new job posting and pay data reporting requirements is provided here. The above is intended only as a brief overview of these new laws. For a deeper dive into details of these newly passed bills, as well as other California employment law updates, please tune into the webinar What’s on the Horizon: California Employment Law Updates for 2023 on November 1, 2022, at 11:00 a.m. – 12:00 p.m. PT by registering at: https://sites-polsinelli.vuturevx.com/121/3739/landing-pages/rsvp-blank---cle.asp?sid=5260a168-c2be-4c55-86e9-3032624c3d5c. Our team continues to monitor and review emerging laws and employers are always encouraged to reach out with any questions.

The U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act 2010, along with dozens of trade treaties and conventions, forbid consummated (and attempted) improper or unethical payments to government officials or prospective parties to commercial deals by you or your employees or agents. Generally speaking, the FCPA can apply to prohibited conduct anywhere in the world and extends to publicly traded companies and their employees. The FCPA carries with it the prospect of $25 million in fines and 25-year jail terms, but these can be stacked higher. The U.K. law, including its penalties, are even more stringent. Both laws prosecute individuals, but can also punish employers for facilitating such payments. The reach of the FCPA and the U.K. Act is wide and deep, given how difficult it is to avoid “taking action” in the U.S. or in nations linked to the British Commonwealth.  And employers may expose themselves to risk for not training their workforce and requiring third parties to act with integrity. Beyond the need to book every expense accurately, there is a larger and more compelling need to avoid conflicts of interest, report outside interests, win business fairly, and have an anti-corruption culture.  In addressing these important points, employers must consider any number of questions, including: Who is a government official? What is a bribe in various contexts? How much value is “too much”? What about sports event tickets? What about places where “everyone does it that way”? What if we didn’t know the local broker did that? The good news is there is a specific set of actions and documents which can put an employer in much better stead if an agent or employee “goes rogue.” Drawing from real world and practical dilemmas, Polsinelli attorneys can help your leadership teams build better recognition of when an offer crosses the line, react before the line is crossed, lead towards candor, and draft policies and procedures for reporting and correcting questiona

On August 26, 2022, the Eleventh Circuit Court of Appeals issued its long-awaited decision in the federal government’s appeal of a lower court order striking down the Biden Administration’s COVID-19 vaccination mandate for federal contractors and subcontractors.  Although the Eleventh Circuit agreed with the district court that the vaccination mandate exceeded the President’s authority to issue, the appellate court found that the district court’s nationwide injunction was too broad in scope and limited the scope of the injunction to apply only to the parties before the court.  This means that the vaccine mandate could resume in many other states that are not covered by an injunction from another court. A brief history may be helpful:  On September 9, 2021, President Biden issued Executive Order 14042, directing federal agencies to include a COVID-19 vaccination mandate in new federal government contracts, renewals and extensions of existing contracts, and, where possible, existing contracts even in the absence of a renewal or extension.  On September 24, 2021, the Safer Federal Workforce Task Force issued guidance implementing the Executive Order’s requirements.  Several lawsuits were filed in federal district courts across the country challenging the vaccine mandate, leading to the issuance of numerous injunctions of varying scope.  One of these injunctions was issued by the U.S. District Court for the Southern District of Georgia and barred the vaccine mandate in all federal contracts and solicitations nationwide. In assessing the federal government’s appeal of the nationwide injunction, the Eleventh Circuit rejected the government’s argument that Congress had delegated the President authority to impose a vaccine mandate under the Federal Property and Administrative Services Act, also known as the Procurement Act.  Instead, the court held that the Procurement Act only provided limited authority to address the government’s procurement process, not impose health-related measures of vast, national significance. More significantly, however, the court found that the nationwide scope of the Georgia court’s injunction was overbroad and that the injunction should provide relief only to the parties in the lawsuit – i.e., the States of Alabama, Georgia, Idaho, Kansas, South Carolina, Utah, and West Virginia, and the members of the Associated Builders and Contractors (“ABC”).  As a result, the Georgia injunction is now limited to prohibiting the federal government from imposing the vaccine mandate requirement in new or existing contracts with those states or ABC members or considering the mandate in solicitations for which those states or an ABC member is a bidder.  Several other injunctions remain in effect, but cover only contractors in the States of Missouri, Nebraska, Alaska, Arkansas, Iowa, Montana, New Hampshire, North Dakota, South Dakota, Wyoming, Kentucky, Tennessee, Ohio, and Florida.  The federal government can now enforce the vaccine mandate with respect to federal contractors and subcontractors outside of those states and ABC’s membership. As of the morning of August 29, 2022, the Safer Federal Workforce Task Force has not yet updated its website to account for the Eleventh Circuit ruling.  However, contractors outside of the states that remained covered by court injunctions must resume preparations to ensure that all “covered contractor employees,” as defined by the task force’s guidance, are vaccinated against COVID-19 or have a religious or medical exemption from vaccination.

On July 12, 2022, the EEOC revised its informal guidance regarding COVID-19 and related matters in the workplace. In doing so, the EEOC made several revisions concerning employer testing protocols, items to consider for vaccine mandates, among other revisions to FAQs. Most notably, the EEOC revised its guidance regarding viral screening of employees for COVID-19. The EEOC no longer considers viral screening (or testing) to automatically meet the business necessity standard under the ADA as it did at the outset of the pandemic. Rather, employers need to evaluate whether current pandemic and individual circumstances warrant testing to prevent workplace transmission. Those factors must lead to a decision that testing is a business necessity and not just a preferable policy. The EEOC guidance provides the following factors to consider in determining whether circumstances indicate testing would be a business necessity: The level of community transmission; The vaccination status of employees; The accuracy and speed of processing for different types of COVID-19 viral tests; The degree to which breakthrough infections are possible for employees who are “up to date” on vaccinations; The ease of transmissibility of the current variant(s); ·The possible severity of illness from the current variant; What types of contacts employees may have with others in the workplace or elsewhere that they are required to work (e.g., working with medically vulnerable individuals); and The potential impact on operations if an employee enters the workplace with COVID-19 may include. For questions or assistance in adjusting your COVID-19 practices to comply with the EEOC’s guidance, please contact your Polsinelli attorney.

Maryland recently joined nine other states (and the District of Columbia) in providing employees in the state with a right to paid family and medical leave.  Although employer contributions to the paid family and medical leave program will not begin until 2023 and employees may not apply for benefits until 2025, when the law goes into effect it will dramatically expand the leave rights available to Maryland employees because the law applies to employees and employers who are not covered by the federal Family and Medical Leave Act (FMLA). When the new paid family and medical leave program takes effect, employees will be entitled to take up to either 12 or 24 weeks of paid leave per year for the following reasons: To care for a newborn child or a child newly placed for adoption, foster care, or kinship care. To care for a family member with a serious health condition. To attend to the employee’s own serious health condition that prevents the employee from performing the functions of his or her position. To care for a military servicemember with a serious health condition resulting from military service. Due to the deployment of a family member for military service. Ordinarily, an employee is entitled to a total of 12 weeks of leave per year, but if an employee takes leave for both the birth or placement of a child and the employee’s own serious health condition, the leave entitlement expands to a maximum of 24 weeks. The employee is entitled to paid benefits from a state-operated fund in a percentage of their average wages capped at $1,000 per week.  The paid leave fund is funded by employer and employee payroll tax contributions.  Although all employers in Maryland must provide leave, only employers with 15 or more employees (apparently, company-wide) must contribute to the state fund.  Alternatively, employers may establish self-funded private employer plans to provide paid leave, in which case they need not contribute to the state fund.  Any leave the employee takes runs concurrently to their FMLA leave entitlement, if any. The new paid leave law expands federal FMLA in several ways that will increase the number of employees entitled to leave. First, all employers with one or more employees in Maryland are covered by the law, dispensing with FMLA’s requirement that the employer have 50 or more employees within a 75-mile radius.  Second, employees need only be employed for 12 months and work 680 hours in that period to be eligible, decreasing FMLA’s 1,250 hour threshold.  Third, as noted above, employees can in some circumstances be entitled to 24 weeks of leave in a year, doubling the 12 week entitlement under FMLA.  Finally, employees are entitled to take intermittent leave (i.e., leave in small chunks rather than a continuous leave period) for all qualifying reasons, whereas FMLA does not permit intermittent leave for the birth or placement of a child in the absence of the employer’s agreement. As under the federal FMLA, employees are entitled to reinstatement to their former position upon return from leave.  However, the law potentially expands employee job protections by providing that an employee may be terminated only “for cause” while on leave.  It is unclear whether a termination due to a reduction in force or position elimination, which may be permissible under FMLA, would qualify as a “for cause” termination, or whether “cause” will require some affirmative misconduct by the employee.  Because the new law allows employees to recover up to three times the value of lost wages and other compensation, as well as reasonable attorney’s fees, in the event of a violation, employer missteps could carry significant consequences. The new Maryland leave entitlement is a reminder to employers that employee leave and other protections continue to proliferate at the state and local level.  As employers grow increasingly comfortable with remote work as a long-term arrangement, they should remain aware that many state laws, like Maryland’s new law, can be triggered by having a single employee working in the state – even if the employee is working from home.  Employers will need to keep track of the locations from which their employees are working (even as employees are increasingly mobile) and be aware of any specific leave or other entitlements under the laws of those jurisdictions. POLICIES AND PROCEDURESAPRIL 11, 2022

On March 31, 2022, on Transgender Day of Visibility, the EEOC announced that it will expand the available gender options in the voluntary self-identification questions included on its intake forms. The changes will apply to the following stages of the EEOC intake process: The voluntary demographic questions relating to gender in the EEOC’s online portal that is used by the public to submit inquiries about filing a charge of discrimination, as well as the Online Spanish Initial Consultation Form and Pre-Charge Inquiry Form, will be modified to include an option to mark “X” instead of selecting either male or female as the respective gender. The EEOC’s charge of discrimination form will be modified to include “Mx.” in the list of prefix options a Charging Party can use. This change comes in light of the Biden Administration’s Fact Sheet announcing measures several government agencies will be taking to increase inclusion of transgender and non-binary individuals in government services.  These changes will also indicate more clearly for employers when a charging party is making a sex discrimination claim based on their transgender status, pursuant to the Supreme Court’s Bostock decision in 2020. Although the EEOC’s announcement contains no new requirements for employers, employers may consider changing their applications and onboarding documents to include non-binary gender selections and prefix options, consistent with the EEOC’s lead.

On March 15, 2022, the Office of Federal Contract Compliance Programs (OFCCP) issued its first directive of the Biden Administration to address the requirement that federal government contractors and subcontractors perform pay equity audits. Consistent with predictions that the Biden OFCCP would focus on pay equity enforcement, the new Directive 2022-01 highlights the requirement that federal contractors and subcontractors perform regular pay equity audits as part of their affirmative action program (AAP) obligations, and indicates that OFCCP will closely scrutinize the results of these audits during its compliance evaluations. OFCCP’s AAP regulations have long required that a federal contractor “perform in-depth analyses of its total employment process to determine whether and where impediments to equal employment opportunity exist,” including evaluation of “compensation system[s] to determine whether there are gender-, race-, or ethnicity-based disparities.” However, OFCCP has not previously provided specific guidance about the scope of this requirement.  In the new directive, OFCCP appears to take the position that the AAP regulations require that contractors perform a regular, in-depth pay equity audit of their workforce to identify potential disparities. More importantly, OFCCP’s directive also makes clear that the agency intends to request and scrutinize contractor pay equity audits in its compliance evaluations.  Under the directive, if a compliance evaluation “reveals disparities in pay or other concerns about the contractor’s compensation practices,” then OFCCP intends to request documentation of the contractor’s pay equity audits.  Some circumstances that OFCCP identifies as triggering a request for this follow-up information include: 1.     Pay disparities or evidence of pay discrimination among similarly-situated employees. 2.     Employee complaints of pay discrimination or other anecdotal evidence of discrimination. 3.     Inconsistencies in how the contractor is applying its pay policies. 4.     Statistical analyses or other evidence that a group of workers is disproportionately concentrated in lower paying positions or pay levels based on a protected characteristic. If one of these circumstances occurs, OFCCP will seek “a complete copy” of the pay equity audit showing all pay groupings that were evaluated, any variables used, and the results of the analyses. OFCCP will also seek information about model statistics if a statistical analysis is employed and the frequency of audits, communication to management, and how the results were used. The directive also takes an aggressive position regarding the privileged status of contractor pay equity audits.  Contractors commonly perform pay equity audits with the assistance of legal counsel in order to ensure the audit is protected from disclosure by the attorney-client privilege.  In the directive, however, OFCCP takes the position that because its regulations require that contractors maintain and provide OFCCP with evidence of their compliance with the AAP obligations, “contractors cannot withhold these documents by invoking attorney-client privilege or the attorney work-product doctrine.”  The directive does recognize, however, that a contractor may conduct a “separate” pay equity audit for the purpose of obtaining legal advice, not for compliance with OFCCP obligations, which remains privileged.  The directive asserts that the failure to provide pay equity audits in response to an OFCCP request will be considered “as an admission of noncompliance with these regulatory requirements.” The new directive ups the ante for federal contractors and subcontractors to perform regular pay equity audits as part of their AAP compliance efforts.  Such audits have always been advisable as a best practice to identify and rectify potential compensation disparities before they ripen into litigation, but are now a required exercise for those doing business with the federal government.  In light of OFCCP’s aggressive positions about the application of the attorney-client privilege to pay equity audits, contractors and their counsel will also need to carefully structure their audits in order to ensure that at least a portion of the audit remains protected from disclosure.

Beginning on May 15, 2022, employers in New York City must begin listing salary ranges in any advertisements for jobs, promotions, or transfer opportunities. The new measure is the latest in a nationwide trend of state and local laws designed to promote pay equity by increasing employee bargaining power in pay negotiations. Under the new law, any employer with more than four employees in New York City commits an “unlawful discriminatory practice” if it advertises a job, promotion, or transfer opportunity without stating the minimum and maximum salary for that position in the advertisement. Notably, independent contractors are included in the calculation of whether an employer meets the four-employee threshold. The employer must list a salary range extending from the “lowest to the highest salary the employer in good faith believes at the time of the posting it would pay” for the advertised job. The disclosure requirement does not apply to temporary staffing firms. Under the New York City Human Rights Act, the penalties for violations are hefty, as the city can impose a civil monetary penalty of up to $125,000 per violation, or $250,000 for violations that result from an employer’s willful, wanton, or malicious action. The law does not define or specify what types of communications regarding open positions qualify as advertisements. Based on the inclusion of advertisements for promotion or transfer opportunities, it appears that the disclosure requirement applies to internal listings as well as advertisements to the public. In addition, the law requires disclosure of a “salary” range, but does not specify what if any additional disclosure must be made of non-salary compensation like commissions, bonuses, and stock or other equity awards. With the new requirement, New York City joins Colorado in requiring pay disclosures in job advertisements. Several other states, including Connecticut, Nevada, California, Maryland, and Washington have similar laws requiring employers to provide certain disclosures in response to an employee’s request. Other states are currently considering similar bills. This growing nationwide trend underscores the need for employers to review their recruiting and onboarding processes. In addition, the disclosure of salary ranges could lead to pay discrimination claims from employees who discover they fall at the bottom end of an employer’s range. Accordingly, when employers assess the salary range they will include in any public or internal advertisement, they should also consider auditing the compensation of existing employees in the position to ensure that any disparities in pay are justified by legitimate and objectively-identifiable differences in the employees’ positions or backgrounds.

On January 25, 2022, California Governor Gavin Newsom, Senate President pro Tempore Toni G. Atkins, and Assembly Speaker Anthony Rendon announced a framework for an agreement to reactivate California’s COVID-19 paid supplemental sick leave through September 30, 2022.  Although there is no official timeline as to when the official agreement will be effectuated, a few details about the tentative new law have been shared.  First, the paid sick leave will be in effect through September 30, 2022.  Second, the law would apply to businesses with 26 or more employees.  Third, the agreement includes a proposal to restore business tax credits to offset the employer’s paid sick leave expenses. Fourth, employees would be entitled to the paid leave when having to take care of themself or a family-member with Covid-19.  Fifth, full-time employees will be entitled up to 80 hours of paid-time off while part-time workers would be eligible for paid leave equal to the number of hours they typically work in a week. Lastly, under the deal, the COVID-19 sick leave would be retroactive and cover COVID-related absences since Jan. 1, 2022. Polsinelli will of course continue to update clients on future developments with regard to this legislation.

Following the Supreme Court’s ruling earlier this month, the Occupational Safety and Health Administration (“OSHA”) is withdrawing the vaccination and testing emergency temporary standard (“ETS”). The withdrawal is effective upon publication in the Federal Register, January 26, 2022. State OSHA departments are not required to take any action. In its announcement, OSHA stated that it is only withdrawing the vax-or-test rule as an emergency temporary standard, but is not withdrawing the action as a proposed rule. OSHA is now working to finalize a permanent COVID-19 Health Standard. Such a rule will follow the more traditional notice and comment procedures. Employers should still be vigilant to ensure that their policies related to workplace safety and the vaccination of its employees are compliant with local and state orders and laws. Employers should consult their Polsinelli attorneys if they have any questions.

Today, the United States Supreme Court issued two much-anticipated opinions concerning the Occupational Safety and Health Administration’s Emergency Temporary Standard on vaccination and testing (“OSHA ETS”) and the CMS Medicare and Medicaid Programs Omnibus COVID-19 Health Care Staff Vaccination Interim Final Rule (“CMS Vaccine Mandate”). I.  In a 6-3 ruling, the Supreme Court stayed the OSHA ETS from taking effect pending resolution of the case in the U.S. Court of Appeals for the Sixth Circuit. In the per curiam opinion, the Supreme Court stated that the challengers to the OSHA ETS “are likely to succeed on the merits of their claim that the Secretary of Labor lacked authority to impose the mandate.” The Supreme Court further held that the OSHA ETS is not authorized by the Occupational Safety and Health Act. The Court noted that Occupational Safety and Health Administration had never adopted a broad public health regulation before. The “lack of historical precedent” and the broad authority to implement the regulation was a “telling indication” that the OSHA ETS is beyond the agency’s authority. For now, the OSHA ETS is stayed pending resolution of the case in the United States Circuit Court for the Sixth Circuit. As such, this case will now return to the Sixth Circuit where the court will hear the case on its merits, and not just for preliminary relief. Bottom Line: At this time, employers do not need to require their workforce to be vaccinated or to get tested in compliance with the OSHA ETS. II.  In a 5-4 ruling, the Supreme Court stayed temporary injunctions of the CMS Vaccine Mandate issued by the U.S. District Courts for the Eastern District of Missouri and the Western District of Louisiana. In stark contrast to the ruling concerning the OSHA ETS, the Supreme Court opined that the CMS Vaccine Mandate fell within the authorities that Congress conferred upon the Secretary of Health and Human Services. The Supreme Court further held that the CMS Vaccine Mandate was not arbitrary and capricious. Now that the temporary injunctions issued by the U.S. District Courts for the Eastern District of Missouri and the Western District of Louisiana have been stayed, covered employers in all states should take steps, or continue to take steps, to comply with the CMS Vaccine Mandate. Bottom Line: Employers subject to the CMS mandate must comply. CMS released guidance to State Survey Agency Directors concerning the CMS Vaccine Mandate (“Guidance”) in late December 2021 in an effort to help companies comply. Under the Guidance, by January 27, 2022, facilities must have: Policies and procedures in place to ensure that all facility staff, regardless of clinical responsibility or patient or resident contact are vaccinated for COVID-19; and 100% of staff have received at least one dose of COVID-19 vaccine, or have a pending request for, or have been granted qualifying exemption, or identified as having a temporary delay as recommended by the CDC. A facility that is above 80% and has a plan to achieve a 100% staff vaccination rate by February 28, 2022 would not be subject to additional enforcement action. Facilities that do not meet these parameters could be subject to additional enforcement actions depending on the severity of the deficiency and the type of facility (e.g., plans of correction, civil monetary penalties, denial of payment, termination, etc.). By February 28, 2022, covered facilities must have: Policies and procedures in place to ensure that all facility staff, regardless of clinical responsibility or patient or resident contact are vaccinated for COVID-19; and 100% of staff have received the necessary doses to complete the vaccine series (i.e., one dose of a single-dose vaccine or all doses of a multiple-dose vaccine series), or have been granted a qualifying exemption, or identified as having a temporary delay as recommended by the CDC, A facility that is above 90% and has a plan to achieve a 100% staff vaccination rate within 30 days would not be subject to additional enforcement action. Facilities that do not meet these parameters could be subject to additional enforcement actions depending on the severity of the deficiency and the type of facility (e.g., plans of correction, civil monetary penalties, denial of payment, termination, etc.). Finally, facilities failing to maintain compliance with the 100% standard by March 28, 2022 may be subject to enforcement action. Polsinelli attorneys will continue to monitor and report on the OSHA ETS and CMS Vaccine Mandate and will host a webinar regarding the current state of all vaccination mandates next Wednesday, January 19 from 12:00 pm to 1:30 pm CT. Please register to attend here. In the meantime, your Polsinelli attorney can assist with questions you have regarding current vaccine mandates.

On December 22, 2021, the Supreme Court of the United States issued orders granting review of legal challenges to the Occupational Safety and Health Administration’s COVID-19 Vaccination and Testing Emergency Temporary Standard (“OSHA ETS”) and the Centers for Medicare and Medicaid Services Omnibus COVID-19 Health Care Staff Vaccination Interim Final Rule (“CMS Vaccine Mandate”). In a rare move, the Supreme Court set an accelerated timeline for the cases, scheduling oral arguments in both cases on January 7, 2022. Following a ruling out of the United States Court of Appeals for the Sixth Circuit on December 17, 2021, OSHA announced that it would not issue citations for noncompliance with any requirements of the OSHA ETS before January 10, 2022 and will not issue citations for noncompliance with testing requirements before February 9, 2022, so long as an employer is exercising reasonable, good faith efforts to come into compliance with the OSHA ETS. While it is unknown whether the Supreme Court will be able to issue a ruling by OSHA’s January 10, 2022 compliance date, the Supreme Court’s expedited schedule seems to indicate that it is attempting to give employers some finality concerning their obligations under the federal mandates.

A divided panel of the United States Court of Appeals for the Sixth Circuit lifted the stay on the Occupational Safety and Health Association’s Emergency Temporary Standard (“OSHA ETS”) late Friday night (December 17, 2021). The Sixth Circuit had previously been selected at random to hear the consolidated OSHA ETS litigation. As a result of the Sixth Circuit’s ruling, OSHA announced that it would exercise enforcement discretion with respect to the compliance dates of the OSHA ETS.  To provide employers with sufficient time to come into compliance: OSHA will not issue citations for noncompliance with any requirements of the OSHA ETS before January 10, 2022; and OSHA will not issue citations for noncompliance with testing requirements before February 9, 2022. These “extensions” are conditioned on an employer exercising reasonable, good faith efforts to come into compliance with the OSHA ETS. Ultimately, the Sixth Circuit found that the petitioners (Republican-led states, businesses, religious groups, and individuals) were unable to establish a likelihood of success on the merits. In doing so, the Sixth Circuit considered and analyzed a myriad of statutory and constitutional arguments. Two out of the three judges on the panel determined that the petitioners would be unlikely to be successful on their constitutional arguments that OSHA violated the commerce clause or the non-delegation doctrine. Under the Occupational Safety and Health Act, OSHA is required to show that health effects may constitute a “grave danger” in order to warrant an emergency temporary standard. The Sixth Circuit held that the determination as to what constitutes “grave danger” should be left, in the first instance, to the agency. The Sixth Circuit expressly disagreed with, and in effect overruled, the United States Court of Appeals for the Fifth Circuit by holding that OSHA was not required to make findings of exposure in all covered workplaces. The Sixth Circuit held that to require so would mean that no hazard could ever rise to the level of “grave danger.” Ultimately, the Sixth Circuit found that OSHA had shown that COVID-19 is a danger and relied on proper science in issuing the ETS. The Sixth Circuit further held that simply because OSHA did not issue the ETS at the beginning of the pandemic did not mean the agency did not consider COVID-19 an emergency worth addressing. The Sixth Circuit’s decision was appealed this morning to the Supreme Court; however, this appeal does not alter the decision unless and until the Supreme Court rules.  Polsinelli attorneys will continue to monitor further OSHA ETS developments.  In the meantime, employers should resume (or continue) preparations to comply with the ETS requirements. For a summary of the OSHA ETS and its requirements, visit here.

On December 14, 2021, the Equal Employment Opportunity Commission (“EEOC”) supplemented its guidance concerning COVID-19, the Americans with Disabilities Act (“ADA”), the Rehabilitation Act, and other Equal Employment Opportunity (“EEO”) Laws to confirm that COVID-19 can qualify as a disability under any of the three “disability” definitions in the ADA. COVID-19 can be—but is not always—an actual disability under the ADA if it causes a physical or mental impairment that substantially limits one or more major life activities. Similarly, a person with a history of COVID-19 may qualify as a person with a “record of” a disability under the ADA. Pre-existing conditions worsened by the virus may also qualify an employee for protection under the ADA. The EEOC cautioned that an individualized assessment is always necessary to determine whether the effects of a person’s COVID-19 substantially limit a major life activity, such as breathing, concentrating or interacting with others. However, the limitations from COVID-19 do not necessarily need to be consistent or long-term to be substantially limiting. For example, an individual who experiences ongoing intermittent headaches, dizziness and brain fog attributed to the virus may qualify as disabled. An individual diagnosed with COVID-19 who experiences heart palpitations, chest pain and shortness of breath attributable to the virus may also qualify as disabled. However, an employee diagnosed with COVID-19 who is asymptomatic or whose symptoms resolve within a few weeks with no further effects likely does not qualify as disabled, even if the employee is subject to isolation during the period of infectiousness. Employers should be aware that employees may be unlawfully “regarded as” an individual with a disability if they have COVID-19 or if the employer mistakenly believes they have COVID-19. The guidance provides that individuals must meet either the “actual” or “record of” definitions of disability to be eligible for a reasonable accommodation under the ADA. Individuals who only meet the “regarded as” definition are not entitled to receive reasonable accommodation. While employers can voluntarily provide accommodations beyond what is required by the ADA, it may be a violation of the ADA to prevent an employee diagnosed with COVID-19 from returning to the workplace once they are no longer infectious. The EEOC also reiterated the need for flexibility in accommodations, including schedule changes, physical modifications, telework or special equipment. The guidance confirms the importance for employers to carefully evaluate COVID-19’s effects on its workforce on a case-by-case basis.  If you have questions or would like more detailed information, Polsinelli’s Labor & Employment team is here to assist.

On December 7, 2021, Judge R. Stan Baker of the U.S. District Court for the Southern District of Georgia enjoined the federal government from enforcing Executive Order 14042’s COVID-19 vaccination mandate for federal government contractors and subcontractors on a nationwide basis pending a further order from that court.  This ruling follows a November 30, 2021 order that similarly enjoined the contractor vaccine mandate in the states of Tennessee, Ohio, and Kentucky.  This is the latest in a growing number of  court decisions enjoining President Biden’s vaccine mandates, as the federal government has been barred, at least for now, from enforcing each of the three federal vaccination mandates applicable to private sector employers – the federal contractor mandate, the Center for Medicare & Medicaid Services (CMS) mandate, and the OSHA Emergency Temporary Standard. The Georgia litigation challenging the federal contractor vaccination mandate was brought by the States of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia, with the Associated Builders and Contractors (ABC) trade organization also intervening as a plaintiff.  In comparison to the earlier Kentucky ruling, the court based its award of injunctive relief on relatively narrow grounds, finding that the Federal Property and Administrative Services Act’s delegation of authority to the President to set federal procurement policy to achieve the objectives of “economy and efficiency” did not reach so far as to authorize the issuance of public health regulations.  Unlike the Kentucky ruling, the court did not address additional arguments asserting procedural and constitutional deficiencies in Executive Order 14042.  However, the court granted a broader scope of injunctive relief than the Kentucky injunction, finding that the nationwide scope of ABC’s membership required that enforcement of the mandate be enjoined nationwide in order to grant complete relief. We expect that the government will appeal the preliminary injunction to the U.S. Court of Appeals for the Eleventh Circuit.  Notably, on December 6, 2021, the Eleventh Circuit rejected the State of Florida’s challenge to the CMS vaccine mandate, finding that mandate to be within the government’s authority, though the predictive weight of that ruling could be limited because the two mandates were based on independent statutory grants of authority. Pending a contrary ruling from the Eleventh Circuit or the U.S. Supreme Court, the federal government is barred from enforcing Executive Order 14042’s vaccine mandate in any state or territory.  Given the potential that the injunction could be reversed, and the lack of clarity regarding what if any adjustments the federal government would make to the vaccine mandate in that event,  contractors may wish to continue their preparations in order to avoid being caught off-guard.  In addition, the court’s ruling does not prohibit federal contractors who wish to voluntarily implement their own vaccine requirement for their workforces from doing so, though the lack of an enforceable federal mandate means that such employers will need to carefully consider the effect of state laws which limit or prevent employers from requiring vaccination.

On December 2, 2021, OFCCP announced that its Affirmative Action Program Verification Interface (also referred to as the Contractor Portal) is now operative. Through the Contractor Portal, federal government supply and service contractors and subcontractors will be required to certify on an annual basis that they have developed and maintained affirmative action plans (AAP) for each of their establishments or functional units. Construction contractors are not required to certify compliance or register for the Contractor Portal. Beginning February 1, 2022, contractors will be able to register their companies through the Portal. The AAP certification period will then begin on March 31, 2022, and contractors and subcontractors must complete the certification by June 30, 2022.  OFCCP has issued FAQs on the Portal and will also be issuing a user guide in the upcoming months to provide contractors with additional information regarding registration and the certification process. The certification requirement applies to both establishment-based and functional affirmative action plans (FAApPs). Although it is not clear whether a contractor’s failure to make the required certification will flag the contractor to undergo an OFCCP compliance evaluation, the certification requirement appears to raise the stakes for contractors and subcontractors to ensure their compliance with the affirmative action plan requirement.  Some companies doing business with the federal government or with a government contractor may not realize that they have a federal government contract or subcontract that is subject to OFCCP’s equal opportunity clause and the AAP requirement.  Notably, OFCCP’s regulations provide that the equal opportunity clause is deemed to be included in all covered contracts or subcontracts, regardless of whether the clause is explicitly incorporated in the actual contract document.  Accordingly, contractors potentially subject to the AAP requirement (generally, those with federal contracts or subcontracts exceeding $50,000 in value and 50 or more employees) should carefully consider whether they are required to implement an AAP, and do so, ahead of the upcoming certification requirement.

Today, the Sixth Circuit Court of Appeals, based out of Cincinnati, was selected via lottery by the Judicial Panel on Multidistrict Litigation to hear legal challenges to the OSHA ETS. The OSHA ETS was formally issued on November 5, 2021. For more information on the OSHA ETS, check out Polsinelli’s blog posts discussing its impacts on employers with more than 100 employees here. A three-judge panel from the Sixth Circuit will now be randomly assigned to hear the legal challenges to the OSHA ETS. A majority of the judges currently presiding in the Sixth Circuit were appointed by Republican presidents. It is almost assured that the Biden Administration and OSHA will ask the Sixth Circuit Panel to review and repeal the Fifth Circuit Court of Appeals’ stay of the OSHA ETS. In a decision this past Friday, November 12, 2021, the Fifth Circuit reaffirmed its earlier order halting enforcement of the OSHA ETS, noting that the OSHA ETS “threatens to substantially burden the liberty interests of reluctant individual recipients to put a choice between their job(s) and their jab(s).” Just yesterday, in compliance with the Fifth Circuit’s order halting enforcement of the ETS, OSHA issued a statement that it was suspending “activities related to the implementation and enforcement of the ETS” but provided that OSHA “remains confident in its authority to protect workers in emergencies…” and that it is suspending its activities “pending future developments in the litigation.” Polsinelli attorneys will continue to monitor and report on legal challenges to the OSHA ETS.  In the meantime, your Polsinelli attorney can assist with questions you have regarding current vaccine mandates.

On November 18, 2021, District of Columbia Mayor Muriel Bowser signed the “COVID Vaccination Leave Emergency Amendment Act of 2021” (the “Act”). The Act applies to nearly all private employers with employees in the District. The Act (1) establishes new paid COVID-19 vaccine leave requirements and (2) extends the public health emergency leave available under the DC Family Medical Leave Act (“DCFMLA”), which expired November 5, 2021. The Act will remain in effect until February 16, 2022. New Paid COVID-19 Vaccine Leave The Act requires employers provide up to two (2) hours of paid leave for employees to obtain each dose of a COVID-19 vaccine, including boosters. This leave is also available for employees to obtain a COVID-19 vaccine for their child. Additionally, the Act requires employers provide up to eight (8) hours of paid vaccine recovery leave, per dose and during the 24 hour period following the vaccine dose, for employees to recover from the vaccine or to care for their child recovering from the vaccine. This leave is in addition to the two (2) hours of paid leave for employees to obtain vaccinations. Extension of Public Health Emergency Leave The Act also extends D.C.’s declared public health emergency for COVID-19. Under the previously-enacted Coronavirus Support Temporary Amendment Act of 2021, employees were entitled to an additional 16 weeks of unpaid public health emergency leave for COVID-19 related-reasons. However, the public health emergency declaration expired on November 5, 2021. The Act extends the expanded DCFMLA COVID-19 leave until February 16, 2022. Reasons an employee may use the unpaid public health emergency leave include: (1) to care for themselves or a family member after testing positive for COVID-19, (2) the employee is required to quarantine/isolate or care for a family member who is required to quarantine/isolate, or (3) the employee must care for a child whose school/place of care is closed due to COVID-19. Compliance Assistance Below are answers to questions employers may have regarding compliance with the new paid vaccine leave requirements of the Act: 1. May employers require employees to provide documentation supporting their need for paid vaccine leave? Answer: Yes. Employers can require employees, after they return from their leave, to provide their vaccine record or documentation showing the date and time of their (or their child’s) vaccination. 2. Is there a limit to how much paid COVID-19 vaccine leave an employee can use? Answer: Yes. Employees are only entitled to up to 48 hours of paid vaccine leave (including vaccine recovery leave) in a year. 3. Can employers require employees to provide notice prior to taking leave? Answer: Yes. An employer can require employees provide up to 48 hours’ notice prior to taking any vaccine leave. However, in the case of an emergency, employees need only to provide reasonable notice. 4. If employees are subject to a collective bargaining agreement, can they waive the paid vaccine leave requirements of the Act? Answer: No. The Act explicitly prohibits waiver of the paid vaccine leave requirements through collective bargaining agreements. 5. Are employers required to give new employees paid vaccine leave immediately after hire? Answer: No. Employees are not entitled to paid vaccine leave until they have been employed for 15 days. 6. Do these new leave laws expand the amount of leave available to employees under DC and federal law? Answer: Yes. DC’s new vaccine leave, public health emergency leave, and expanded DC FMLA COVID-19 leave are in addition to leave available under DC FMLA, DC Safe and Sick Leave law, and the federal FMLA. For example, under the DC FMLA, employees are now entitled to up to 16 weeks of family leave, 16 weeks of medical leave, and 16 weeks of COVID-19 leave, in addition to the 12 weeks available under federal FMLA. If you have any additional questions about how the Act, or any other related DC COVID-19 leave laws, affect your business, contact your Polsinelli attorney.

Lawsuits challenging the COVID-19 Vaccination and Testing (the “ETS”) issued by the Occupational Safety and Health Administration (“OSHA”) were filed in three additional U.S. Circuit Courts of Appeals on Wednesday, November 10, 2021. Labor unions filed lawsuits in the U.S. Circuit Court of Appeals for the Second, Fourth, and Ninth Circuits. As a result, there are now ETS-related lawsuits pending in the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Eleventh, and D.C. Circuit Courts. According to federal rules, the legal challenges to the OSHA ETS will be consolidated and heard by a single U.S. Circuit Court of Appeals. The Judicial Panel on Multidistrict Litigation will conduct a lottery, expected on November 16, to select which U.S. Circuit Court of Appeals will hear the consolidated litigation. The court to hear the litigation will be drawn “from a drum containing an entry for each circuit wherein a constituent petition for review is pending.” Each court only gets one entry, despite the number of petitions pending before each court. Until the Judicial Panel selects the U.S. Circuit Court of Appeals to hear the litigation via the lottery, all the U.S. Circuit Courts of Appeals can proceed with rulings, as the Fifth Circuit did this past weekend. The labor unions’ move may be a move reflective of an intent by some to increase the odds that the OSHA ETS is upheld. The First, Second, and Fourth circuits all have a majority of Democratic-appointed judges. But it is difficult to predict the future of the OSHA ETS as the panel of judges to hear the case is also selected randomly. Polsinelli attorneys will continue to monitor and report on challenges to the ETS.

As previously reported, Texas, Louisiana, Mississippi, South Carolina, Utah and several other private entities filed suit in the U.S. Circuit Court of Appeals for the Fifth Circuit on November 5 requesting review of the emergency temporary standard regarding COVID-19 Vaccination and Testing (the “ETS”) issued by the Occupational Safety and Health Administration (“OSHA”). The lawsuit was accompanied by an emergency motion to stay enforcement of the OSHA ETS. Today, November 6, 2021, the Fifth Circuit granted the emergency motion to stay enforcement pending further action by the Court. The Fifth Circuit provided the Federal government until 5:00 p.m. Monday, November 8, 2021, to respond to the lawsuit’s request for a permanent injunction. The Justice Department declined to comment and the White House referred comment to the Department of Labor. 

Twenty-six states have filed suit to challenge the emergency temporary standard regarding COVID-19 Vaccination and Testing (the “ETS”) issued by the Occupational Safety and Health Administration (“OSHA”) on November 4, 2021, and published in the Federal Register on November 5, 2021. Federal courts have previously held that OSHA rules are ripe for challenge when the rule is published in the Federal Register. Within hours of publication in the Federal Register, the legality of the OSHA ETS is pending in the 5th, 6th, 8th, and 11th U.S. Circuit Court of Appeals. A coalition including Missouri, Arizona, Nebraska, Montana, Arkansas, Iowa, North Dakota, South Dakota, Alaska, New Hampshire, Wyoming, and five additional private entities (the “Coalition”) filed suit in the 8th U.S. Circuit Court of Appeals arguing that the power to compel vaccinations rests not with the federal government, but with the states. The Coalition argues that OSHA’s ETS goes beyond workplace safety and into public health policy, which the states assert exceeds OSHA’s statutory authority. Lawsuits filed by Texas, Louisiana, Mississippi, South Carolina, and Utah in the 5th U.S. Circuit Court of Appeals, Florida, Alabama, and Georgia in the 11th U.S. Circuit Court of Appeals, and Kentucky, Idaho, Kansas, Ohio, Oklahoma, Tennessee, and West Virginia filed in the 6th U.S. Circuit Court of Appeals similarly challenge the legality of the OSHA ETS. Kentucky, Ohio and Tennessee also filed suit challenging the Biden Administration’s mandate requiring federal contractors to be vaccinated. The lawsuit sets forth similar bases to challenge the federal contractor mandate, alleging that the police power to enforce vaccines rests with the states, not the federal government. Likewise, the states assert that the federal contractor mandate exceeds the President’s statutory authority. Polsinelli will continue to monitor these lawsuits. Contact your Polsinelli attorney if you have any questions regarding the mandates at issue and/or the impact of the lawsuits on your business.

Today, November 4, 2021, the Occupational Safety and Health Administration (OSHA) issued the emergency temporary standard regarding COVID-19 Vaccination and Testing (the “ETS”) previously unveiled in President Biden’s COVID-19 Action Plan.  Employers with a total of 100 or more employees firm- or corporate-wide at any time the ETS is in place are bound by the requirements established in the ETS. The ETS does not cover workplaces that are subject to the Safer Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors and Subcontractors or in settings subject to the OSHA Healthcare ETS. The ETS explicitly preempts state and local laws. The ETS establishes minimum vaccination, vaccination verification, face covering, and testing requirements to address COVID-19 in the workplace. The key requirements of the ETS are: Develop a policy for vaccination – Covered employers must develop, implement, and enforce a mandatory COVID-19 vaccination policy. Employers may elect to implement a policy allowing employees to not be vaccinated, but instead be tested weekly for COVID-19 and to wear a face covering at work. Support employees choosing to get vaccinated – Employers must provide employees reasonable time, up to four (4) hours of paid time, to get vaccinated (this applies to both doses). The ETS also requires reasonable time and paid sick leave for employees to recover from any side effects they may experience from the vaccine. Unvaccinated employees must be tested – Employers must ensure that each employee who is not fully vaccinated is tested at least weekly for COVID-19 (if the employee is in the workplace once a week) or within seven (7) days before returning to work (if away from the workplace for a week or longer). Employers are not required to pay for any costs associated with testing. However, employers may be required to pay for testing under other laws, regulations, or agreements. Employees must notify their employer of a positive test – Employers must require their employees to notify them promptly after receiving a positive COVID-19 test result or diagnosis. Employers must immediately remove any employee who tests positive or is diagnosed with COVID-19, regardless of vaccination status. Employers must require employees who test positive or are diagnosed with COVID-19 to remain out of the workplace until they have met the criteria for returning to work. The ETS does not require employers to pay employees who are removed from work due to testing positive or being diagnosed with COVID-19. Face coverings – Employers must require employees who are not fully vaccinated to wear a face covering when indoors or when operating a vehicle with another person. Any employee who elects to wear a face covering must be allowed to do so. Provide information to employees – Employers must provide information at a readily understandable level to their employees concerning:  the requirements of the ETS and workplace policies and procedures established to implement the ETS, the CDC document “Key Things to Know About COVID-19 Vaccines”, information about protections against retaliation and discrimination, and information about laws that impose criminal penalties for knowingly supplying false statements or documents. A more in-depth analysis of the ETS is available, please email polsinellimarketing@polsinelli.com for more details. For additional CMS information read our latest blog post, CMS Mandates Vaccines for Staff of Medicare and Medicaid Providers and Suppliers. Join us for our upcoming webinar, in which we will discuss federal and state-specific vaccine mandates, exemptions and paths for navigation and implementation: Managing Vaccine Mandates and Exemptions. Tuesday, November 16 | 11:00 AM - 12:15 PM CT Click here to register.

Texas’ Third Special Session ended on October 19, 2021 without the Texas Legislature codifying any law related to Governing Abbott’s recent Executive Order (GA-40), which prohibits entities (including private employers and businesses) from compelling COVID-19 vaccinations. Polsinelli’s summary of this Executive Order can be read here. Absent Texas’ Governor Abbott calling a Fourth Special Session, the Texas Legislature will not reconvene until January 2023—meaning the substance of the Executive Order is unlikely to become state law. The lack of any legislative movement on this issue is noteworthy because Governor Abbott had called on the Texas Legislature to take up this matter—which was introduced as Senate Bill 51 (“SB 51”)—during the Third Special Session. SB 51 was aimed at protecting certain individuals, including employees, from varying levels of vaccine mandates. In going one step further, SB 51 would have made it unlawful if an employer fails to hire, discharges, “or otherwise discriminates against an individual with respect to the compensation or the terms, conditions or privileges of employment because the individual claims an exemption” such as a medical condition or reasons of conscience, including a religious belief. While the Texas Legislature’s refusal to advance this bill does not impact the enforceability of this Executive Order (which remains in place), it does signal that the Texas Legislature does not have an appetite for codifying additional restrictions on what private businesses may mandate with their employees. Once OSHA’s forthcoming Emergency Temporary Standard is issued (which will require covered employers to mandate vaccination or weekly testing with their employees), this may change. In the interim, Polsinelli attorneys will continue to monitor and report on new vaccine mandate developments and are available to answer questions about how employers should navigate these issues.

The Colorado Department of Labor and Employment (“CDLE”) recently issued several proposed rules, including new language defining “vacation pay” for purposes of Colorado’s wage laws. Colorado law has long defined “wages” and “compensation” as including “vacation pay earned in accordance with the terms of any agreement.” C.R.S. § 8-4-101(14)(a)(III). Until recently, there has been significant debate regarding whether Colorado’s statute prohibits so-called “use-it-or-lose-it” vacation policies. On June 14, 2021, the Colorado Supreme Court settled the debate, issuing its highly anticipated decision in Nieto v. Clark’s Market, ruling that employers must pay out an employee’s earned but unused vacation pay upon separation of employment and any handbook provision or agreement to the contrary is not enforceable. 488 P.3d 1140 (Colo. 2021). A lingering question for employers—both before and after the Nieto decision—has been whether leave accrued under a Paid Time Off (“PTO”) policy that can be used for both vacation and other types of leave, including sick leave, is included within Colorado’s use-it-or-lose-it prohibition. On September 30, 2021, the CDLE ostensibly answered the question regarding use-it-or-lose-it policies for PTO in a proposed rule. The proposed rule defines “vacation pay” as “pay for leave, regardless of its label, that is usable at the employee’s discretion (other than procedural requirements such as notice and approval of particular dates), rather than leave usable only upon occurrence of a qualifying event (for example, a medical need, caretaking requirement, bereavement, or holiday).” 7 C.C.R. 1103-7-2.17.1. The CDLE’s new definition of “vacation pay” removes any question that PTO, or a similar policy by any other name, that can be used for vacation, is included within the definition of vacation pay and cannot be forfeited. Employers should review their vacation policies to remove use-it-or-lose-it language as required under the Nieto decision. With respect to PTO policies, while the language in the proposed rule must undergo the rulemaking process—including public comment and a public hearing—and the final rule will not take effect until 2022, employers will also need to prepare to remove use-it-or-lose-it language because PTO policies are included within the CLDE’s new definition of “vacation pay.” As an alternative to use-it-or-lose-it policies, and to limit the amount of PTO they potentially must pay out at separation, employers can consider implementing a cap on accrual. Under such a system, once an employee earns a certain number of vacation (or PTO) hours, the employee no longer accrues further vacation (or PTO) time until taking some of his or her previously accrued time. After using available accrued hours, the employee will once again accrue vacation (or PTO) hours. Under this type of policy, the amount of PTO ever accrued, and therefore potentially paid out at separation, is naturally limited. Contact your Polsinelli attorney if you have questions regarding the new rule or need assistance in review of your PTO policy.

In September, 40 current and former employees of St. Elizabeth Medical Center in Kentucky sued the privately-owned hospital over its mandatory COVID-19 vaccination policy, alleging violations of their constitutional rights, the Americans with Disabilities Act, and Title VII.  The policy required employees to either receive a COVID-19 vaccine or submit a request for a religious or medical exemption prior to October 1, 2021.  Consequences for failure to comply included possible termination of employment. Although the case is still ongoing, on September 24, 2021, United States District Judge David L. Bunning (E.D. Ky.) refused to stop the policy from going into effect during the legal battle.  Judge Bunning determined that the plaintiffs failed to satisfy the stringent standard for obtaining injunctive relief, which requires a strong likelihood of success on the merits, a demonstration of irreparable harm absent an injunction or temporary restraining order, a showing that no substantial harm to others will result from the order, and a demonstration that the public interest will not be disserved. On the first factor, the Court determined that plaintiffs’ likelihood of success on the merits of their constitutional claims is “virtually nonexistent” because St. Elizabeth is not a state actor.  On their ADA claim, the Court found that plaintiffs failed to show that St. Elizabeth had not complied with the requirement that a private employer provide necessary medical accommodations to the vaccine requirement.  The Court cited the fact that as of September 21, 2021, St. Elizabeth had granted either full exemptions or deferments to 75% of employees who had requested a medical accommodation.  The Court also determined that plaintiffs could not state a prima facie case of discrimination under the ADA because they had not sufficiently alleged adverse employment action because of a disability.  On their Title VII claim, the Court found plaintiffs “failed to even suggest that they could raise a prima facie case of religious discrimination” as 11 of the plaintiffs had in fact been granted religious exemptions, some had not sought one, and none had been denied a religious exemption. The Court also found that plaintiffs could not demonstrate irreparable harm, in part because loss of employment and injuries stemming from wrongful termination can be fully compensated by monetary damages.  The Court also rejected plaintiffs claim of irreparable injury to their constitutional rights because constitutional rights are not implicated by the actions of non-state actors. On the final two factors, the Court determined that the balance of the equities weighed in favor of denying injunctive relief, reasoning that plaintiffs’ concerns about the efficacy and safety of the COVID-19 vaccines do not override St. Elizabeth’s right to impose conditions of employment. St. Elizabeth filed a motion to dismiss plaintiffs’ complaint on September 14, 2021.  Although the final disposition of plaintiffs’ challenge remains to be seen, the Court’s determination that plaintiffs did not have a likelihood of success on the merits at the injunction stage is telling.

On October 11, 2021, Governor Abbott issued Executive Order GA-40, stating that no entity in Texas (including private employers and businesses) can compel COVID-19 vaccination by any individual, including an employee or consumer who objects to such vaccination because of (1) personal conscience, (2) religious belief, or (3) medical reasons, including prior recovery from COVID-19. Entities that fail to comply with this order may be fined up to $1,000. The order expressly states that it was enacted in response to the Biden Administration. Last month, the Biden Administration implemented various vaccine mandates for certain employers, including health care facilities that receive funds from the Medicare or Medicaid reimbursement program, federal contractors, and employers with 100 or more employees (once OSHA’s forthcoming Emergency Temporary Standard is issued). In turn, there will likely soon be legal challenges to the scope of the Executive Order—including whether it is preempted by conflicting federal mandates. While the Executive Order allows non-compliant entities to be fined, the order does not expressly address any workplace protections or rights. For example, if an employee is terminated for refusal to comply with an employer’s vaccine mandate (unrelated to a religious and medical exemption), does he or she now have legal recourse? Following the issuance of this Executive Order, discharged employees may attempt to bring what is known as a Sabine Pilot claim. This public policy claim is extremely narrow in application and generally only applies in instances where an employee is terminated for the refusal to perform an illegal act that carries criminal penalties—a scenario that such employees may have difficulty establishing in this context. Additionally, the Executive Order also leaves unanswered whether an employer’s vaccination policy is unlawful in instances where employees have the option to undergo weekly testing in lieu of receiving a COVID-19 vaccine. In a similar scenario, some commercial operators (e.g., concert venues) have sought to avoid Texas’ prohibition on requiring consumers to show proof of a COVID-19 vaccination, by allowing consumers the option to instead produce a negative COVID-19 test. Polsinelli attorneys will continue to monitor and report on new vaccine mandate developments and are available to answer questions about how employers should navigate these issues.

On September 24, 2021, the Safer Federal Workforce Task Force (Task Force) published its expected guidance regarding the COVID-19 vaccination mandate for federal government contractors.  This Guidance defines the specific parameters of the vaccine mandate, as well as other safety protocols that contractors must follow. The Guidance clarifies that all “covered employees” must be fully-vaccinated by December 8, 2021.  An employee is fully vaccinated two weeks after he or she receives all doses of an approved vaccine.  Employees are not required to receive any vaccine booster to qualify as fully vaccinated.  Contractors are required to obtain documentation of each employee’s vaccination status – an employee’s attestation is not sufficient.  In addition, the Guidance provides that prior COVID-19 infection or antibody test results may not be substituted for vaccination. After December 8, 2021, contractors must ensure that employees are fully vaccinated by the first day of performance on a federal contract. The Guidance provides for accommodations from its mandate for employees who communicate that they are not vaccinated due to a sincerely-held religious belief or disability. Contractors are responsible for determining accommodations, even when the employee performs his or her services at a federal worksite. As suggested by the Executive Order announcing the mandate, the vaccination requirement will apply to some employees of federal contractors who do not work on or in connection with a federal contract, and instead perform only commercial work.  A “covered employee,” for purposes of the mandate, includes any full-time or part-time employee who works at a location at which an employee working on or in connection with a contract “is likely to be present.”  So, an employee performing solely commercial work in a facility, building, or campus where contract work is also being performed would likely be subject to the mandate.  The Guidance has a limited exception for situations where commercial and contract workers perform services in distinct areas of the same facility, but the contractor must “affirmatively determine” that there will be “no interactions,” including in common areas like lobbies, elevators, and parking garages, between contract and commercial employees at the facility in order to avoid extending the vaccine requirement to all employees at the facility.  Fully remote workers who perform work on federal contracts from home are also subject to the vaccination mandate. In addition to the vaccine mandate, federal contractors are also subject to new masking and social distancing protocols. Unvaccinated employees (i.e., those who obtain accommodations from the mandate) are required to wear masks in indoor and crowded outdoor areas and maintain a distance of six feet from others at all times to the extent practicable. Vaccinated employees are required to wear masks indoors in areas of high or substantial community transmission, as determined by the CDC. In areas of low or moderate transmission, fully vaccinated employees do not need to wear a mask. Regardless of the transmission level, fully vaccinated employees are not required to socially distance. Contractors are required to check the CDC’s transmission level for any covered work locations on a weekly basis to determine the proper safety protocols. Contractors are also required to ensure that visitors comply with applicable masking and social distancing requirements. Contractors must also designate a specific employee to coordinate COVID-19

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 September 9, 2021, President Biden unveiled a COVID-19 Action Plan that requires, among other things, millions of private-sector employees, health care workers, federal employees, and employees of federal contractors to be vaccinated against COVID-19. The announcement resulted in a political firestorm, leaving many employers wondering how new rules might affect both them and their employees. Announcement. President Biden mandated that employees working (1) within the executive branch of the federal government, (2) for employers with 100 or more employees, (3) at health care facilities that receive funds from the Medicare or Medicaid reimbursement program, and (4) for federal contractors, be vaccinated against COVID-19. Employers with over 100 employees are given the option to ensure their workforce is fully vaccinated or require testing on at least a weekly basis. Employers of over 100. President Biden charged the Occupational Safety and Health Administration (OSHA) with responsibility for issuing an emergency temporary standard related to businesses with 100 or more employees. Specifically what OSHA might order is yet to be seen, but mandatory vaccination or regular testing on at least a weekly basis, plus paid time off to get vaccinated and to recover from any side effects, will be included. Penalties of $14,000 per violation are also anticipated. There will likely be legal challenges regarding OSHA’s authority to issue such standards under current circumstances. To prevail, OSHA must prove that workers are exposed to a grave danger and the standards are necessary to address that danger. Any emergency standard must also be feasible for employers to enforce. Good news for employers seeking consistency may be that any OSHA standard would pre-empt existing rules by state and local governments, except in states with their own OSHA-approved workplace agencies (https://www.osha.gov/stateplans). Those states would have 30 days to adopt a standard that is (1) at least as effective as the OSHA standard, and (2) covers state and local government employees not covered by OSHA. Health care employees. President Biden’s Action Plan provides that the Centers for Medicare & Medicaid Services (CMS) will expand the vaccination requirement it issued for nursing home staff to other health care settings that receive Medicare and Medicaid reimbursement, including but not limited to hospitals, home-health agencies, ambulatory surgical settings, and dialysis centers. Education employees. The Department of Health and Human Services will require vaccinations in Head Start Programs, and schools run by the Department of Defense and Bureau of Indian Education, affecting about 300,000 employees. Federal employees. President Biden’s Action Plan requires all Federal employees to be vaccinated, with exceptions only as required by law (such exceptions include exemptions for employees with religious or medical reasons for avoiding vaccination). Federal employees who do not qualify for such exemptions but nonetheless refuse to be vaccinated will be counseled and disciplined, up to and including potential termination of employment. President Biden also signed an Executive Order directing that the Department of Defense, the Department of Veterans Affairs, the Indian Health Service, and the National Institute of Health extend this standard to employees of contractors that do business with the federal government. We anticipate OSHA to issue the emergency temporary standard and CMS to issue additional guidance related to President Biden’s Action Plan in the coming weeks. We will continue to provide updates as we learn more. If you have questions or would like more detailed information regarding these recent announcements, Polsinelli’s Labor & Employment team is here to assist.

In an attempt to contain the continuing COVID-19 pandemic, President Biden issued two Executive Orders on September 9, 2021 that mandate COVID-19 vaccines for federal government employees and employees of federal government contractors. Although key details of these vaccine mandates have yet to be defined, the new measures appear to build on the administration’s recent mandate for vaccination or testing of contractor employees who work on-site at federal locations.  As a result of these new mandates, federal government contractors will soon be presented with complex and risk-laden decisions as employees seek exemptions, to the extent available, from the vaccine mandate. The Basics of the Executive Orders The first executive order is applicable to federal government employees, and requires the Safer Federal Workforce Task Force (Task Force) to issue guidance requiring a vaccine mandate for federal agency employees.  Federal agencies are then required to implement the Task Force’s guidance “with exceptions only as required by applicable law.”  The second executive order is applicable to federal government contractors, and provides that new government contracts and contract-like instruments must include a clause requiring the contractor and “any subcontractors (at any tier)” to comply with “all guidance” issued by the Task Force.  Pursuant to the terms of the contractor Executive Order, the clause’s requirements are applicable to “any workplace locations (as specified by the Task Force Guidance) in which an individual is working on or in connection with a Federal Government contract or contract-like instrument.”  The Executive Order applicable to federal contractors provides that the Task Force will issue its guidance by September 24, 2021, and outline “definitions of relevant terms,” “explanations of protocols required of contractors and subcontractors,” and “any exceptions” to the vaccination mandate. What Types of Federal Contracts Trigger the Vaccine Mandate? The vaccine mandate is applicable to any contract or contract-like instrument that is entered into, extended, renewed, or has an option exercised on or after October 15, 2021. However, the Executive Order is effective immediately and agencies are “strongly encouraged, to the extent permitted by law” to extend the vaccine mandate to existing contracts not otherwise subject to the Executive Order.  The Executive Order adopts the definition of “contract or contract-like instrument” from the Department of Labor’s minimum wage regulations, and thus presumably excludes procurement contracts excluded from the Davis-Bacon Act and service contracts excluded from the Service Contract Act.  The Executive Order explicitly excludes federal grants, contracts with Indian Tribes, employees who perform work outside of the United States, contracts equal or less than the simplified acquisition threshold (generally $250,000), and subcontracts solely for the provision of products. Which Employees are Covered By the Mandate? The new contract clause will “apply to any workplace locations (as specified by the Task Force Guidance) in which an individual is working on or in connection with a Federal Government contract or contract-like instrument.”  The “on or in connection with” standard is borrowed from the federal contractor minimum wage requirement.  Employees perform services “on” a contract when they perform the work required by the contract, and perform “in connection with” a federal contract when they perform services that are not required by the contract, but are necessary to the performance of the contract’s services, such as custodial, security, or maintenance services at facilities that perform both commercial and government work.  The executive order applies to “any workplace locations . . . in which an individual is working on or in connection” with a contract.  On its face, this would apply the vaccine mandate to full-time remote workers who do not interact in-person with any other co-workers. The Executive Order is ambiguous about several important issues, which will need to be fleshed out by the Task Force’s guidance.  First, in the context of the federal contractor minimum wage requirement, employees who work only “in connection with” a contact are not covered unless more than 20% of their work time is spent performing contract-related services.  Will the same 20% threshold apply to the vaccine mandate?  Second, the Executive Order is phrased to apply to “any workplace locations” where contract work is performed, rather than to employees performing the work.  Arguably, the mandate may cover workers performing only commercial work if there is also government contract work performed at the employee’s “workplace location,” which is itself a potentially ambiguous term pending further guidance from the Task Force. What Exemptions are Applicable? The Executive Order provides that the Task Force should permit only exceptions “required by applicable law.”  Presumably, this would include disability, religious, and pregnancy accommodations that are required by federal statutes. To date, many employers implementing vaccine mandates have struggled with these accommodation requirements, which present complex and nuanced legal issues.  To the extent the Task Force’s guidance regarding exemptions is different than generally-applicable federal law, it will only add to the complexity. Moreover, state law may impose different or additional requirements, including laws in some states protecting workers against mandatory vaccine mandates, which may conflict with the mandate required by the Executive Order.  To the extent there is ambiguity as to which employees are actually covered by the Executive Order, the potentially conflicting obligations under the Executive Order and state laws may pose challenging dilemmas for employers. COVID-19 vaccine mandates present complex legal issues for employers, especially when employees claim a right to religious, disability, pregnancy, or other accommodations. Federal contractors should begin working with counsel now to prepare for the new mandate required by the executive orders, including implementing procedures to communicate with employees regarding the mandate, ascertain employees’ vaccination statuses, and process and address requests for accommodations.

On Monday, July 26, 2021, a group of nearly 60 major medical organizations, including the American Medical Association, American Nursing Association, American Pharmacists Association, American College of Physicians, American College of Preventative Medicine, and American Public Health Association advocated for all health care and long-term care employers to require their employees to be vaccinated against COVID-19. This joint statement, comes in the wake of the recent surge in “highly contagious variants, including the Delta variant, and significant numbers of unvaccinated people, COVID-19 cases, hospitalizations and deaths” in the United States. The joint statement also stressed the ethical obligations for health care workers, “[Vaccination] is the logical fulfillment of the ethical commitment of all health care workers to put patients as well as residents of long-term care facilities first and take all steps necessary to ensure their health and well-being.” In recent weeks, an increasing number of hospitals and health care systems have announced COVID-19 vaccination requirements for their employees. On July 21, 2021, the American Hospital Association released a statement urging all health care workers to be fully vaccinated. The statementencourages health care systems to take certain steps to facilitate an orderly roll out of any mandatory policy, including: Providing exemptions to the policy for medical reasons and accommodations (e.g., a sincerely held religious belief); Following relevant CDC guidelines, OSHA requirements, and other applicable state or federal law and/or guidelines regarding the use of personal protective equipment and other infection control practices for unvaccinated workers who have been granted an exemption or accommodation; Implementing the policy in compliance with applicable local and state laws; Following CDC and FDA guidelines on how to determine which workers are eligible and should be prioritized for vaccination; Monitoring data relating to FDA authorized or approved vaccines that are being distributed; Providing workers with information about the efficacy and safety of the COVID-19 vaccine in an effort to encourage voluntary vaccinations; and Offering flexibility in workers’ schedules to permit time for workers to receive the vaccine and recover from potential side effects. Also announced on Monday, the Department of Veterans Affairs became the first federal agency to mandate all 115,000 of its frontline health care workers who work in Veterans Health Administration facilities, visit VHA facilities, or provide direct care to those VA serves—including physicians, dentists, podiatrists, optometrists, registered nurses, physician assistants, expanded-function dental auxiliaries, and chiropractors—to be vaccinated against COVID-19. Each employee will have eight (8) weeks to be fully vaccinated.

On July 26, 2021, California Governor Gavin Newsom announced that California state workers, workers in health care, and workers in high-risk congregate setting will be required to provide proof of Covid-19 vaccination or undergo weekly testing and wear appropriate PPE.  The publication issued by the Governor’s office, which is not considered a “mandate” (yet) has been published as a “measure” to encourage State Employees and Health Care workers to get vaccinated.  The measure applies to public and private facilities. The new directive will apply to three large groups of employees. First, the measure will apply to California state employees. The new policy for state workers will take effect August 2. The measure provides that testing will be “phased in over the next few weeks.” Second, the measure will apply to employees working at high-risk congregate settings. By way of example (but not limitation) the measure identifies adult and senior residential facilities, homeless shelters, and jails as “high-risk congregate settings.” Employees working at these locations will be subject to the measure beginning August 9. Third, the measure will apply to “health care workers.” Of note, the publication from the Governor separately references “health care workers” and employees at “health care facilities.”  This suggests that health care workers who work outside of health care facilities would be subject to the measure. Unfortunately, Governor Newsom’s directive does not define the term “health care workers.” In previous orders, California’s Public Health Office designated the Health Care and Public Health Sector as a “large, diverse, and open [sector], spanning both the public and private sectors.” (https://covid19.ca.gov/essential-workforce/). In its definition of “health care providers” it included the following:   physicians, dentists, psychologists, mid-level practitioners, nurses, assistants, and aids; infection control and quality assurance personnel; pharmacists; physical, respiratory, speech and occupational therapists and assistants; social workers and providers serving individuals with disabilities including developmental disabilities; optometrists; speech pathologists; chiropractors; diagnostic and therapeutic technicians; and radiology technologists. (https://covid19.ca.gov/essential-workforce/ - (1) Health Care/Public Health – Essential Workforce, Paragraph 1.)  This group of professionals will likely be considered “health care workers” for purpose of the measure.  Additionally, all employees working at health care facilities will likely be subject to the measure as well. California’s Public Health Office also includes within its Health Care and Public Health sector employees working in emergency medical services, inpatient and outpatient care workers, home care workers, and residential and community-based providers. (https://covid19.ca.gov/essential-workforce/ - (1) Health Care/Public Health – Essential Workforce, Paragraph 2.) Of note, while these employees are considered part of the Health Care and Public Health sector, they are not listed under the heading for “health care providers.”  As a result, it is unclear, at this time, whether this latter sect of employees, that do not work at health care facilities, as well as other type of employees listed within the Health Care and Public Health sector, will be considered “health care workers” for purpose of the measure. Employers of health care workers and congregate facilities will be required to follow the measure effective August 9.  Additionally, health care facilities will have until August 23 to come into full compliance. For a full copy of Governor’s Newsom’s statement please click here . Polsinelli attorneys will continue to provide updates, should and when further guidance is published.

On the one year anniversary of the Supreme Court’s decision in Bostock v. Clayton County, the EEOC has issued new guidance to clarify whether employers can segregate workplace restrooms by gender or sex. While not law, this guidance instructs employers how the EEOC will handle sex discrimination charges under its purview. In Bostock, the Court held that the “because of sex” language in Title VII extends protections to sexual orientation and transgender status. However, in the majority opinion, Justice Gorsuch made clear that the Court was not taking a position on the use of “private spaces” and left unresolved the question of whether employers could segregate restrooms by gender or sex. The EEOC’s guidance seeks to clarify confusion stemming from the Bostock decision. The new guidance directs employers that they must allow employees to use the bathroom, locker room, and/or shower that corresponds with their gender identity. Employers may not use anxiety, confusion, or discomfort on behalf of other coworkers as grounds to justify discriminatory policies. If an employer has unisex or single-use facilities, then the individuals can continue to use those as they currently do.  The EEOC has also created a consolidated webpage for resources addressing sexual orientation and gender identity. Interestingly, the guidance was not issued by the full Commission. Rather, the guidance was issued by the Chair of the EEOC and is considered non-binding guidance at the moment. However, employers should expect that the guidance will likely become binding in July 2022 when President Biden will be able to nominate a Democrat to the Commission, thus tilting the ideological majority of the Commission. The new majority may even expand upon Chair Burrows’ guidance. Employers should consult their Polsinelli attorneys for assistance in interpreting and implementing the EEOC guidance.

As California moved forward with reopening most of its economy on June 15, 2021, many employers in the state were left wondering whether and when the California Division of Occupational Safety and Health (“Cal/OSHA”), the state agency tasked with regulating workplaces to protect public health and safety, would update its regulations to conform to the latest guidance from the Centers for Disease Control and Prevention (“CDC”) and the California Department of Public Health (“CDPH”) for vaccinated individuals.  Although Cal/OSHA had previously voted to adopt proposed revisions to the COVID-19 emergency temporary standards (“ETS”) which had been in effect since November 30, 2020, Cal/OSHA subsequently voted to withdraw the proposed revisions and offered to make further revisions in light of updated CDPH face covering guidance and other concerns raised by Board members. Relief finally arrived on June 17, 2021, in the form of revised Cal/OSHA regulations that track the state’s latest COVID-19 public health guidance and instruct California employers regarding rapidly changing state policies on requiring masks, proof of vaccination, and physical distancing in the workplace.  Following the Cal/OSHA Board’s adoption of the revised regulations, Governor Newsom issued an executive order allowing them to take effect immediately on June 17. Among the regulations’ biggest changes are the removal of physical distancing and physical partitioning requirements in the workplace, regardless of employees’ vaccinations status, with certain limited exceptions for COVID-19 outbreaks. In addition to greatly limiting physical distancing and physical partitioning requirements in the workplace, the revised ETS do away with face covering requirements for all employees working outdoors, regardless of vaccination status, with certain exceptions for outbreaks.  Fully vaccinated employees no longer need to wear face coverings indoors, with certain exceptions for public transit, classrooms, health care and long-term care settings, correctional and detention facilities, and homeless shelters.  Vaccinated employees who wish to go mask-less in the workplace must document their vaccination status in one of two ways: (1) by either providing proof of vaccination to their employer; or (2) by self-attesting to their vaccination status.  Employers are required to record the vaccination status of any employee not wearing a face covering indoors and must keep these records confidential. Face coverings continue to be required indoors and in vehicles for unvaccinated employees, and employers are now required, upon request, to provide unvaccinated employees with approved respirators for voluntary use when those employees are working indoors or in a vehicle with others.  When there is a major outbreak of COVID-19 in the workplace, employers must offer respirators to employees regardless of vaccination status and without waiting for a request from the employee.  Employers must also offer COVID-19 testing at no cost to any symptomatic, unvaccinated employees, regardless of whether there is a known exposure to COVID-19, in addition to unvaccinated employees after an exposure, vaccinated employees after an exposure if they develop symptoms, unvaccinated employees in an outbreak, and all employees in a major outbreak. Polsinelli attorneys will continue to monitor state and federal COVID-19 relief efforts and remain prepared to assist employers with navigating these evolving issues.

With so much of the workforce going remote this past year, there has been a huge shift in the way many people view pet ownership. In fact, the national pet adoption rate jumped more than 30% at the beginning of the pandemic, and animal rescue organizations reported an overall increase in adoptions of 30 – 50% in 2020. Not only has the spread of remote work helped match pets to homes, but we know that animals have been shown to reduce stress and provide much needed comfort and social support to many workers during the pandemic. The shift to work-from-home has also opened our doors to our colleagues’ pets, whether meeting them on Zoom or hearing them interrupt conference calls. This has made it seem more normal to have your pet – or your colleagues’ pets – around during the work day. With the potential for going back to the office seemingly closer, some offices are considering whether to go pet-friendly. Here are a few steps to consider before your office makes this decision: Consider Your Workforce and your Workplace Not every office will be the right place for pets, but it could be a perk your employees really appreciate (and could make it easier for employees to come back into the office). Consider if the office space allows for pets to stay in their own areas, out of the way of those who do not feel comfortable with animals around. Think about how easy your employees can take pets outside, or remove them from distracting other employees. Finally, take account of employee pet allergies, and determine what limitations would need to be in place. Require Authorization There should be a process for employees to receive authorization to bring their pet to work, and provide necessary information regarding their pet’s health and vaccine history. Any employee bringing a pet to work must agree to observe certain requirements or risk losing their pet-privileges. Establish Guidelines Employers need to determine what types of pets can come to work (e.g., dogs, cats, fish, etc.), and designate certain areas pet-friendly, and certain areas off-limits for animals. Strict cleaning guidelines should be in place to ensure the workplace remains clean and safe for all. There are also legal concerns when addressing pets at work. Beyond a full pet-friendly policy, employers must remember that pets may need to be allowed as a reasonable accommodation for employees with disabilities. The Americans with Disabilities Act (ADA) requires service animals be allowed in all areas of public access, and employers are required to engage in the interactive process with employees if a pet may be an appropriate accommodation for a disability. The ADA generally requires service animals be allowed in an employer setting, if doing so will not create an undue hardship for the business. This is not the case for emotional support animals, however, which are not necessarily trained for a specific service, but simply to provide comfort and companionship. Either way, when faced with the question, employers should consider whether a pet would be an appropriate accommodation that enables an employee to perform the essential functions of his or her job. For assistance with an office checklist, authorization forms, or general guidance, contact your Polsinelli attorney.

Over the weekend, the U.S. Southern District of Texas issued an order that provides employers—at least in Texas—with greater certainty about the legality of mandatory vaccination policies. In December 2020, the EEOC issued interim guidance that suggested employers may mandate COVID-19 vaccines (subject to reasonable accommodation and sincerely held religious belief considerations). Replying on the EEOC’s guidance, a Houston hospital implemented a mandatory COVID-19 vaccination policy earlier this year. This policy was met with resistance and more than 100 current and former employees joined in a lawsuit against the hospital, seeking to enjoin the enforcement of the policy, arguing that refusal to comply would equate to wrongful termination under various public policy causes of action. Central to the plaintiffs’ lawsuit, they argued that any such mandatory vaccination policy amounted to unlawful coercion (i.e., the threat of termination) for refusal to take an “experimental” vaccine that has only been approved under the FDA’s emergency use authorization. The Court rejected this argument and dismissed the case. The Court concluded that there was nothing illegal or against public policy about receiving the COVID-19 vaccine. While the Court stressed that vaccine safety and efficacy were not considered in adjudicating this case, it also acknowledged that the employer’s mandatory vaccination policy would, in its judgment, provide a safer work environment for employees and patients. Importantly, the Court also emphasized that a private employer’s mandatory vaccination policy does not amount to coercion: “[an employee] can freely choose to accept or refuse a COVID-19 vaccine; however if she refuses, she will simply need to work somewhere else.” While this case serves as an important bellwether, it’s application could be limited—particularly in other states that provide for more expansive public policy claims. The claim chiefly relied on by the Texas plaintiffs is extremely narrow in application and generally only applies in instances where an employee is terminated for the refusal to perform an illegal act that carries criminal penalties. In short, while the legal analysis could differ in other states, employers can now cite at least one legal opinion that has endorsed the use of mandatory vaccination policies. Polsinelli attorneys will continue to monitor COVID-related employment litigation and provide updates. If you have questions about this decision, contact your Polsinelli attorney.

On May 28, 2021, the Equal Employment Opportunity Commission (“EEOC”) provided long-awaited clarification on an employer’s ability to offer incentives to their employees for receiving COVID-19 vaccinations.  This new guidance provides welcomed direction to those businesses looking to encourage workers to get vaccinated rather than adopting a mandatory vaccine policy.  A summary of the EEOC’s guidance on vaccine incentives, as well as other new updates to the EEOC’s previous vaccine-related guidance, is provided below. Vaccine Incentives The EEOC identifies the following options for employers to offer their workers incentives for vaccination under the Americans with Disabilities Act (“ADA”): Employers can offer incentives to employees to voluntarily provide documentation or other confirmation of vaccination received from an independent third party (e.g., pharmacy, personal health care provider or public clinic).  However, any information or documentation collected should be maintained confidentially under the ADA. Employers can also offer incentives to employees for voluntarily receiving a vaccine administered by the employer or its agent, so long as the incentive is “not so substantial as to be coercive.”  Although the EEOC does not go so far as to define “substantial,” it explains that “a very large incentive could make employees feel pressured to disclose protected medical information” when responding to the employer’s pre-vaccination medical screening questions. Although employers can offer an employee’s family member an opportunity to be vaccinated if certain conditions are satisfied, employers cannot require family members to be vaccinated and should not offer employees incentives for family member vaccination. Confidential Medical Information In its updated guidance, the EEOC instructs that the ADA requires an employer to maintain the confidentiality of employee medical information, including documentation or other confirmation of COVID-19 vaccination, regardless of where the employee gets vaccinated.  Accordingly, while employers can require employees provide proof of vaccination (i.e., doing so is not a “disability-related inquiry”), this information must be maintained confidentially and separate and apart from the employee’s personnel file. Reasonable Accommodations The EEOC reiterated that if an employee cannot get vaccinated because of a disability or religious belief, the employer cannot require compliance with a mandatory vaccine policy unless it can demonstrate that the individual would pose a “direct threat” to the health and safety of the employee or others in the workplace.  This determination should be based on consideration of four factors previously-identified by the EEOC, and “should be based on a reasonable medical judgment that relies on the most current medical knowledge about COVID-19,” including the level of community spread, statements from the CDC and/or statements from the employee’s health care provider.  The employer must also take into account the employee’s specific work environment. If the employer determines that the individual would pose a direct threat, it must then consider whether a reasonable accommodation would reduce or eliminate that threat, unless doing so would present an “undue hardship” to the employer.  The EEOC provides specific examples of potential accommodations, including wearing a face mask, social distancing, working a modified shift, making changes in the work environment (e.g., increasing ventilation, limiting contact with others), teleworking, or, as a last resort, reassigning to a vacant position in a different workspace. Finally, the EEOC cautions that employers should consider all options before denying an accommodation request, and that the “undue hardship” consideration may be impacted by the vaccination rate of the workforce and the extent of employee contact with non-employees (whose vaccination status may be unknown). Pregnancy The EEOC’s guidance also clarifies that employees who are not vaccinated because of a pregnancy may also be entitled to certain accommodations under Title VII if the employer makes modifications or exceptions for other employees “who are similar in their ability or inability to work.” These modifications may be the same as the accommodations identified above for employees based on a disability or religious belief. Emergency Use Authorization The EEOC declined to offer any insight on the legal implications of the Emergency Use Authorization for the three available COVID-19 vaccines to date, indicating that “[t]he EEOC’s jurisdiction is limited to the federal EEO laws . . . .”  The EEOC reinforced, however, that federal EEO laws do not prevent an employer from requiring employees to be vaccinated as a condition of entering the workplace, subject to the reasonable accommodation requirements under Title VII and the ADA (and other EEO considerations discussed in its guidance). Updated CDC Mask Guidance The EEOC acknowledged the recently updated guidance from the CDC exempting fully vaccinated individuals from masking requirements, and indicated that the EEOC is considering the impact of this CDC guidance on the EEOC’s own COVID-19 guidance provided to date.  Accordingly, we may see further updates to the EEOC’s technical assistance soon.  For Polsinelli’s own guidance on responding to the CDC’s updated mask guidance, see here. Polsinelli attorneys will continue to monitor and report on any updated guidance from the EEOC and are available to answer questions about vaccine policies and related incentives.

Over the last several months, vaccination rates in the United States increased, COVID-19 cases decreased, and guidance from the Centers from Disease Control and Prevention (the “CDC”) regarding fully vaccinated individuals left employers wondering whether loosened COVID-19 face mask requirements were appropriate. While some state and local leaders took the leap and loosened face mask requirements, the CDC’s guidance still advised that fully vaccinated employees should be required to wear a mask, socially distance, and adhere to other mitigation strategies in the workplace even if they were around other fully vaccinated employees. Yesterday, May 13, 2021, much of the nation celebrated news that the CDC had “changed its tune” and face masks were simply no longer required if an individual is fully vaccinated. But is that what the CDC really said? The Guidance While the news headlines, social media posts, and radio snippets will simply communicate that “fully vaccinated people no longer need to wear a mask or physically distance in any setting” the latest guidance for fully vaccinated individuals actually provides: ·         Fully vaccinated people can resume activities without wearing a mask or physically distancing, except where required by federal, state, local, tribal, or territorial laws, rules, and regulations, including local business and workplace guidance. This distinction is important because EVEN if the CDC says it is okay not to wear a mask, employers CAN still require it. But should they? State/Local Laws While some states and municipalities have already loosened COVID-19 face mask requirements, others remain in place (though changes are likely to come in the next few days). If an employer opts to loosen their COVID-19 face mask requirement, they should ensure that the state/municipality where their workplace is located has no COVID-19 face mask requirements in place that would prohibit their less restrictive policies. What about OSHA? The Occupational Safety and Health Agency (“OSHA”) Protecting Workers: Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace still provides that employers should not distinguish between workers who are vaccinated and those who are not vaccinated when implementing and enforcing COVID-19 safety policies. While OSHA’s guidance may change in the near future, employers should be aware that OSHA’s position remains that employees “who are vaccinated must continue to follow protective measures, such as wearing a face covering and remaining physically distant.” Importantly, following an Executive Order signed by President Joe Biden on January 21 directing OSHA to consider an Emergency Temporary Standard (“ETS”) related to COVID-19, OSHA submitted a draft of an ETS related to COVID-19 to the White House Office of Information and Regulatory Affairs. The ETS will likely be issued soon and may very well implicate the use of face masks in the workplace. Enforcement If an employer is going to loosen COVID-19 safety policies based on the vaccination status of its employees, it becomes absolutely essential to know whether an employee is actually fully vaccinated. While the Equal Employment Opportunity Commission (“EEOC”) has determined that inquiring as to whether or not an employee is vaccinated and/or asking for proof of vaccination is not a disability-related inquiry, follow-up questions or voluntary explanations from an employee may trigger an employer’s liability under the Americans with Disabilities Act (“ADA”) or Title VII. Thus, employers considering whether to loosen their face mask requirements should work with legal counsel to determine the best way to verify whether or not an employee is fully vaccinated. Moreover, employers should be cognizant of applicable state laws that may impact their ability to reveal employee vaccination status. Returning to the Workplace Finally, an employer’s decision regarding COVID-19 face mask policies can have a significant impact on their ability to return employees to the workplace. Many businesses are just beginning to return to the workplace. While some employees may welcome the news that the CDC no longer requires fully vaccinated individuals to wear masks, others may be leery of eased restrictions after working remotely for over a year, even if fully vaccinated. Employers should carefully consider their workforce to determine whether it is practical to adopt policies allowing fully vaccinated individuals not to wear a mask while at work. Polsinelli attorneys will continue to monitor and report on any updated guidance from the CDC, EEOC, and other government agencies, and are available to answer your questions about vaccine-related policies.

This is part three of a 3-part series, and the second of several posts addressing remote work considerations arising out of the COVID-19 pandemic. This series explores tips from companies that have figured out how to run a business with a remote workforce, with advice on how to help re-engage your remote workforce, or, if you already have a good system in place, how to make sure you keep employees productive and satisfied.  Don’t miss Tip One and Tip Two. Tip Three: Decide on Communication Rules. And tell employees. If employers leave the choice of the communication venue - and the way employees should communicate with management and each other - up to employees, employers may be disappointed. If there is no set standard, and no one knows what is expected of them, there is likely going to be frustration from both sides. However, you can create a synchronous culture where your team is expected to communicate at regular intervals during the day, or via a certain platform when they need to share ideas, ask questions, or merely check-in. For some office cultures, that could mean employees know they must communicate with each other and share when they will be away, whether for lunch, a rest, or dealing with homeschooling (which is where flexibility comes in). Setting standards and executing communication strategies can easily be done through technology, by having employees change their status, or send a Teams message, or Slack their colleagues with updates throughout the day. This past year has shown that with remote work comes a lack of situational cues; we do not have the in person interactions that help us understand and see our colleagues’ efforts and output (reducing trust). This results in miscommunications, and a host of problems that follow. Therefore, drafting a well-designed remote work policy with communication as a key component will go a long way. If the remote work environment has been set up well, with expectations clearly defined, and continued and ongoing communication as a key component, there is no reason it cannot work just as good, or better, than an in-office set-up. The overall advice is to treat employees like professionals, and your workforce will thank you for it by making your organization more successful.

This is part two of a 3-part series, and the second of several posts addressing remote work considerations arising out of the COVID-19 pandemic. This series explores tips from companies that have figured out how to run a business with a remote workforce, with advice on how to help re-engage your remote workforce, or, if you already have a good system in place, how to make sure you keep employees productive and satisfied.  Don’t miss Tip One and Tip Three. Tip Two: Be Flexible and Trust. The companies that were working remotely before the pandemic have been teaching and guiding us through this past year, and one major lesson is the ability (and need) to be flexible in the remote environment. For most employers, there is less of a need to require employees to be “on” at all moments of the day. If nothing else, remote work during a pandemic - with home schooling and child and family responsibilities increased during the normal workday - has shown us that employees can manage their time to work best for them, and still get their work done. Flexibility depends on trust. The remote work environment presents us with the requirement to trust employees, yet building trust in a remote environment can be difficult. Without the opportunity to observe a coworker working diligently, or bringing notes to a meeting, or sharing insights with colleagues in the hallway, can make trust hard to embrace. But rapport between coworkers and interpersonal trust is what helps employees understand and ultimately help each other (which is critical to a successful enterprise). So how do you get it? Monitoring and micro-managing to ensure output does not tend to work (in fact, it never works). Employees under surveillance know they are not trusted, and that results in employees with higher levels of anxiety and stress. This, then, results in increased burnout and dissatisfaction, undermining the entire point of a company’s goal, which is to improve work product and output. The first step in building trust is for leadership to show, and put trust in, employees who will then in turn trust leadership; according to the Harvard Business Review this is called reciprocal leverage. The more trust your employees have in the leadership of the company, the more stability they feel, and the more likely they will be to work productively and seek to impress. But how do you know if they are doing the work?  Check-ins and a review of employee production will generally tell you what you need to know. Is your workforce producing work product and output? If it has declined, or is notably absent, there is a problem that must be addressed. If not, perhaps embracing flexibility and trust is working. Employers can and should take action through discussions or discipline when the remote work requirements are not being met. Trusting the employee to continue to perform and produce quality work does not mean remaining on the sidelines if that does not appear to be successful. The idea, however, is that it can be the exception, not the rule.

This is part one of a 3-part series, and the second of several posts addressing remote work considerations arising out of the COVID-19 pandemic. This series explores tips from companies that have figured it out, and have advice on how to help re-engage your remote workforce, or, if you already have a good system in place, how to make sure you keep employees productive and satisfied. For employers that did not have much experience with remote work pre-pandemic, 2020 was a steep learning curve. Part of this change has been how to manage – and maintain – office culture and employee engagement when everyone is behind a screen. Because employee engagement and productivity are so directly linked, it is imperative that employers consider both. Leadership should keep in mind that it matters – and is worth the effort – to ensure that workers are in an environment (whether remote or otherwise) where they can thrive, are appreciated, and feel they are providing value. Employee engagement also coincides with better communication, lower absenteeism, fewer health and safety issues, and ultimately, reduced legal risk. Tip One: Make Small Talk a Part of Your Meetings. This idea may make many cringe, considering a large number of employees are suffering from “Zoom fatigue,” and the endless work day that bleeds into home and family time. But a small act of deliberately making space for colleagues to just talk, on a more personal level, can increase a team’s connection and bring a bit of levity to what can become overly structured, endless, meetings. This can be as simple as starting a team meeting with a check-in, or an icebreaker, or perhaps including an agenda item that requires participants to share opinions and conjecture. What we have learned over this year of increased remote work environments is that maintaining and growing a company’s culture should not – and does not have to – stop because we are not all in the same room. Casually chatting with a colleague while grabbing coffee, or stopping to talk in the hallway, or catching up over lunch, leads to feeling part of something bigger, sparks ideas, and helps increase happiness and satisfaction at work. Now we just have to do it a little differently, and be more purposeful to ensure that it happens. Click here to read Tip Two. Click here to read Tip Three

As more businesses prepare to return to the workplace, employers everywhere are evaluating whether to mandate COVID-19 vaccination as a condition of employment or simply encourage vaccination. For many employers, this decision hinges on the company’s ability to offer employees incentives to take the vaccine – including paid time off, cash, or gifts. However, offering incentives can implicate a variety of legal issues under state and federal statutes, including the potential for such incentives to violate wellness program rules. With so much legal uncertainty surrounding vaccine incentives, many employers have been reluctant to offer incentives that might otherwise encourage vaccination and expedite the process of safely returning employees to work. In early February, over 40 organizations from a wide array of industries submitted a letter to the Equal Employment Opportunity Commission (“EEOC”), requesting that the EEOC quickly provide clarity “on the extent to which employers may offer their employees incentives to vaccinate without running afoul of the Americans With Disabilities Act and other laws enforced by the EEOC.” On April 15, 2021, the EEOC finally answered the call of these businesses, announcing that it “expects to update its technical assistance about COVID-19 to address these [vaccine incentive] issues, among others, and that work is ongoing.” The EEOC did not go so far as to provide a date by which this guidance would be issued, but businesses will be eagerly awaiting. Polsinelli attorneys will continue to monitor and report on any updated guidance from the EEOC and are available to answer questions about vaccine policies and related incentives.

Employer obligations to provide paid sick and family leave under the Families First Coronavirus Response Act (FFCRA) ended on December 31, 2020. On December 27, 2020, President Trump signed the Consolidated Appropriations Act of 2021 (CAA), extending the payroll tax credits available to employers who voluntarily decided to continue to provide FFCRA-type leave through March 31, 2021. Last week, President Biden signed the American Rescue Plan Act of 2021 (Rescue Plan). Among other things, the Rescue Plan extends the availability of the payroll tax credits to employers through September 30, 2021. Additionally, for those employers who opt to continue to provide FFCRA-type leave, the Rescue Plan makes several significant changes to how the FFCRA is to be implemented with regard to both Paid Sick Leave (two weeks/up to 80 hours of paid leave) and Emergency Family and Medical Leave (originally up to 10 weeks of paid Family and Medical Leave). Changes to Paid Sick Leave The Rescue Plan resets the 10-day/80-hour limit for Paid Sick Leave starting April 1, 2021.  This means, if employees have previously exhausted their entitlement to Paid Sick Leave under the FFCRA, they now have another 10-days/80-hours for use. The Rescue Plan also adds three additional qualifying reasons for Paid Sick Leave.  These include: Obtaining a COVID-19 vaccine; Recovering from any illness or condition related to the COVID-19 vaccine; or Seeking or awaiting the results of a COVID-19 diagnosis or test if either the employee has been exposed to COVID-19 or the employer requested the test or diagnosis. Changes to Emergency Family and Medical Leave A major change is the Rescue Plan’s elimination of the requirement that the first two weeks of Emergency Family and Medical Leave (EFML) be unpaid.  Now, if an employee qualifies for EFML, they are eligible for a full 12 weeks of paid leave (assuming they have not previously used any EFML or other leave under the Family and Medical Leave Act (FMLA)).  Consistently, the Revenue Plan increases the total cap for EFML from $10,000 to $12,000. Another important change is the expansion of qualifying reasons to use EFML. Currently, employees can only use EFML if they need time off to care for a child whose school or daycare is closed due to COVID-19 related reasons. Under the Rescue Plan, however, EFML can be used for any of the qualifying reasons found under Paid Sick Leave.  This means, if an employee qualifies for Paid Sick Leave and needs leave beyond the 10-day entitlement for Paid Sick Leave, the employee could take up to an additional 12 weeks of EFML (assuming they have not previously used any EFML or time off under the FMLA).  In practical terms, after April 1, 2021, an employee could potentially take up to a total of 14 weeks of paid FFCRA leave. Finally, the Rescue Plan contains non-discrimination language for both Paid Sick Leave and EFML. The penalties come in the form of losing the tax credit option. If an employer opts to voluntarily provide FFCRA leave and discriminates with respect to leave: (1) in favor of highly compensated employees; (2) in favor of full-time employees; or (3) on the basis of employment tenure, the employer will not be able to obtain tax credits for any leave paid under the FFCRA framework. With this new benefit comes a big question for employers – whether to extend these FFCRA credits to employees? It is worth considering, given the benefit of providing paid time off to encourage employees to get vaccinated and to ensure the safety and health of their workforce by supporting COVID-related absences due to exposure and illness. (And being able to do so without such a financial hit to the business is a big plus). What employers must be prepared for, however, is being ready to provide potentially 14 weeks of leave to employees.  At this time, it is not clear whether employers can pick and choose what types of paid leave they will provide under the FFCRA; for example, some employers may want to offer the two weeks of Paid Sick Leave but not offer the 12-weeks of EFML.  We know that failure to comply with any requirement of the Emergency Family and Medical Leave Expansion Act or the Emergency Paid Sick Leave Act disqualifies the employer from obtaining tax credits for leave paid under either Act. When that rule is coupled with the non-discrimination language, it appears an employer could arguably choose to provide Paid Sick Leave or Emergency Family and Medical Leave, or both. But in doing so, employers need to understand that they must follow the entirety of the provisions related to each leave option. This means, while employers can choose to provide only one type of leave, employers cannot change the rules; they cannot pick and choose the qualifying reasons for leave, or make other changes to how the leave should be applied. The Rescue Plan’s provisions related to the FFCRA become effective April 1, 2021.  We anticipate the Department of Labor and/or Internal Revenue Service will issue additional guidance or FAQs to assist employers with some of these open questions, and we will continue to provide updates as we learn more. If you have questions or would like more detailed information regarding these recent changes, Polsinelli’s Labor & Employment team is here to assist.

On February 25, 2021, in In Donohue v. AMN Services, LLC (2021) San Diego Superior Court, Case No. 37-2014-00012605-CU-OE-CTL, the California Supreme Court weighed in on two important issues pertaining to meal periods.  First, the Court held that California employers cannot round time punches for meal periods (although it is arguably permissible for work start and stop times).  Second, the Court held that employee time records showing non-compliant meal periods raise a rebuttable presumption of meal period violations and are sufficient to defeat a defendant’s dispositive motion for summary judgment. The Court emphasized that California’s meal period requirements are designed to prevent even minor infringements on employees’ meal periods and that rounding employees’ meal period time punches for even a de minimus amount violates state law. In Donohue, the defendant-employer, a healthcare services and staffing company, used a timekeeping system that rounded employees’ time punches for meal periods to the nearest 10-minute increment.  For example, if an employee punched out for lunch at 11:03 a.m. (rounded back to 11:00 a.m.) and punched back in at 11:24 a.m. (rounded forward to 11:30 a.m.), the system recorded a 30-minute meal period (even though only 21 minutes had actually elapsed).  The Court found that this rounding policy resulted in many employees not taking their full 30-minute meal breaks. The Court also noted that employees were paid a premium payment only if the employee proactively indicated that their meal period was missed, short, or late.  As a result, the Court found that there was sufficient evidence to suggest that employees worked over five hours before taking their meal break in violation of California Labor Code § 512 and Industrial Welfare Commission Wage Order No. 4-2001.  The case now heads back down to the Court of Appeals where the parties will submit further briefing on the plaintiffs’ meal period claims. Additionally, in reversing the defendant’s motion for summary judgment win, the Court ruled that records that demonstrate a non-compliant meal period raise a rebuttable presumption of labor code violations, which, the Court clarified, can be overcome by presenting evidence that either (1) the employees were compensated for noncompliant meals or (2) the employees were provided compliant, 30-minute, duty-free meal periods during which time the employee voluntarily chose to work. The Donohue decision serves as helpful guidance on two fronts.  First, it should be used as a warning for employers who use rounding policies for recording meal periods.  Employers who apply time rounding policies in the meal period context likely need to suspend these practices.  Moreover, based on the court’s guidance, employers that utilize general rounding practices should be wary of the potential problems that rounding policies may cause.  Second, employers should utilize paper or electronic acknowledgement forms from employees that confirm that employees are taking their meal breaks and rest breaks on a daily basis or, to the extent they are not, that this is documented as either a voluntary decision by the employee, or if it is not voluntary, that the employee is paid their statutory premium payment. Polsinelli attorneys will continue to monitor developments in this area and remain prepared to assist with any questions regarding timekeeping policies or other employment law issues.

On January 27, 2021, the Commonwealth of Virginia became the first state in the country to adopt permanent COVID-19 workplace safety and health standards. As we noted in a previous article, Virginia adopted an emergency temporary workplace safety and health standard in July 2020 to aid in preventing the spread of the pandemic. With Governor Ralph Northam’s approval on January 27, 2021, the permanent standard superseded the July 2020 emergency temporary standard. The permanent standard applies to all employers in the Commonwealth of Virginia that fall within Virginia Occupational Safety and Health’s (“VOSH”) jurisdiction. Accordingly, most private employers in Virginia and employees of the Commonwealth and local governments must comply.  Private and public institutions of higher education are deemed to be in compliance if they have established plans certified by the State Council of Higher Education in Virginia and are acting in compliance with those plans, provided that the certified plans ensure an equivalent or greater level of protection for employees than the VOSH standard. Like the emergency standard, the permanent standard classifies occupations based on “exposure risk level” and requires adherence to various practices based on the risk level of a given occupation. An occupation can have a “very high,” “high,” “medium,” and “lower” exposure risk level based on the risk of transmission. In determining exposure risk levels, employers must consider: (1) the job tasked performed; (2) whether the workplace is indoors or outdoors; (3) the presence of the virus in the workplace; (4) the presences of a person known or suspected to have the virus; (5) the number of employees in relations to the size of the workplace; (6) working distance between employees; and (7) the frequency and duration of close contact employees have with co-workers and other people. The permanent standard further requires employers to ensure that employees practice social distancing in the workplace by making announcements, posting signs, decreasing the density of employees, and adhering to Virginia’s occupancy limits. Employers must also provide employees access to hand sanitizer and cleaning supplies, develop procedures for sanitation, and train employees on ways to prevent the spread of COVID-19. If employees must share a vehicle for work, they must wear the appropriate personal protective equipment (“PPE”). While the permanent standard resembles the July temporary standard, the standards differ in important ways. Under the permanent standard, employers must report to the Virginia Department of health if two or more employees test positive for COVID-19 within a 14-day period instead of reporting each positive COVID-19 test as required by the temporary standard. In addition, the permanent standard prohibits employers from requiring employees who are absent due to the pandemic to provide a negative test before returning to work. Rather, employers must use the symptom-based method based on the Centers for Disease Control and Prevention’s guidelines. The standard also regulates how face masks must be worn, sets limits on the use of face shields, and requires employers to implement ventilation controls in the workplace. Notably, the standard does not contain any provisions regarding how employers can manage employees with vaccine-related issues. Employers in Virginia should prepare and follow comprehensive infectious disease preparedness and response plans to address the requirements in the standard. When preparing the plan, employers should consider including all required training, safe conduct in the workplace, policies and expectations regarding what employees must do if they experience symptoms and receive a positive test, and provisions for returning to work. Although the standard does not address it, employers should also consider ways to handle vaccine-related employee issues in accordance with applicable law. Please feel free to contact us for general advice regarding compliance with the standard or assistance in preparing a complaint plan.

On January 19, 2021, the EEOC issued its second Annual Performance Review (or report card), evaluating the agency’s accomplishments in FY20 in comparison to the EEOC’s Strategic Plan for Fiscal Years 2018-2022. The Plan describes three strategic objectives and goals on which the EEOC must focus. The Plan also identifies 12 performance measures for use each year in gauging the EEOC's progress through fiscal year 2022. For 2020, the EEOC found that it fully met 10 of the 12 performance measures, and partially met two performance measures. Thus, in 2020, the EEOC’s grade fell slightly to an A- from the A+ it awarded itself in the first Annual Performance Review released in early 2020 for FY19. Practically, the EEOC’s Annual Performance Review allows employers a very important peek behind the curtain for insights into areas on which the EEOC may focus its enforcement efforts.

Between now and June of 2021, most Americans will have the chance to be vaccinated against COVID-19.  For vaccination to bring the pandemic to an end, a large percentage of Americans will need to get vaccinated.  Employers will play a key role in helping to educate the general public about the new vaccines as they encourage (and, in some cases, require) employees to get vaccinated.  As part of our ongoing effort to assist employers during the pandemic, we have prepared a new video to help employers educate employees about the new vaccines and the benefits of vaccination.  This video summarizes key information from recent guides prepared by the CDC, Johns Hopkins University and the U.S. EEOC.  The video also includes instructions on how individuals can sign up for more information and/or register for vaccination with their local county or city health department.  Please feel free to use and share this video with your workforce. You may watch by clicking here.

Numerous employment lawyers and articles have addressed whether employers should mandate or strongly encourage employees to get vaccinated when the COVID-19 vaccination is available to them. Fewer have provided reminders to employers regarding the steps and precautions necessary following an employee’s vaccination. First, employees should be strongly reminded that they are not fully vaccinated (and maximally protected) until both of two required vaccine doses are administered. As a result, the CDC’s precautions—including mask wearing, social distancing, and hand washing—must continue to be followed even if a dose of the vaccine has been received.  CDC guidance on proper precautions can be found here. Most importantly, even after employees are fully vaccinated with both injections, they must remember the vaccination is not like a Monopoly “get out of jail free” card. No vaccine is foolproof regardless of the illness it is intended to prevent. COVID-19 vaccinations are no different—they are not 100% effective and it is still not known if and to what extent they prevent transmission of the disease. As a result, employees should continue to act and follow all CDC guidelines as if they have not been vaccinated. We advise that employers provide their employees with these important reminders in writing and obtain agreement from their employees that they will continue to follow all precautions until medical experts’ guidance provides otherwise.

In response to the recent Emergency Use Authorization granted by the U.S. Food and Drug Administration (“FDA”) for the COVID-19 vaccine, the Equal Employment Opportunity Commission (“EEOC”) published guidance today outlining employer compliance mandates under the Americans with Disabilities Act (“ADA”), Title VII of the 1964 Civil Rights Act (“Title VII”) and the Genetic Information Nondiscrimination Act (“GINA”). The EEOC’s guidance addresses a number of pressing questions posed by employers and employees alike regarding the vaccine. Some of the more important takeaways from today’s guidance include the following: The administration of an FDA-approved or authorized COVID-19 vaccine to employees is not a “medical examination” for purposes of the ADA, and, therefore, may generally be required by employers under federal law. Although the vaccine is not considered a “medical examination” under the ADA, pre-screening questionnaires given to employees by an employer in connection with a vaccination may implicate the ADA’s provision on disability-related inquiries. In such case, the employer would need to demonstrate that the pre-screening questions are “job related and consistent with business necessity.” If an employer requiring a COVID-19 vaccine determines that an employee who cannot be vaccinated due to a disability poses a direct threat at the worksite, the employer cannot exclude the employee from the workplace (or take any other action) unless there is no other way to provide a reasonable accommodation (absent an undue hardship) that would eliminate or reduce this risk. Under the ADA, “undue hardship” is defined as “significant difficulty or expense” incurred by the employer in providing an accommodation. Employers requiring the vaccine must also provide a reasonable accommodation for an employee’s sincerely held religious belief, practice or observance that prevents the employee from receiving the vaccination unless doing so would pose an undue hardship under Title VII. Notably, under Title VII, “undue hardship” is defined as having more than a de minimis cost or burden on the employer. Title II of GINA is not implicated when an employer administers a COVID-19 vaccine to employees or requires employees to provide proof that they have received a COVID-19 vaccination. However, if any pre-screening questions by the employer ask about genetic information (e.g., immune systems of family members), such inquiries could violate GINA. This new guidance sheds further light on how employers might best structure their employee policies and procedures relating to COVID-19 vaccinations in the coming months.  Employers who choose to mandate the vaccine should consider requiring vaccination from a pharmacy or other third-party health care provider to avoid the ADA implications associated with any pre-screening vaccination questions.  These employers will also want to educate and train their managers and supervisors so that they are prepared to field and appropriately respond to any requests for accommodation, and should carefully consider privacy laws surrounding the employer’s receipt and maintenance of employee medical information.  Further, employers must be prepared to consider all applicable state laws that may impact their ability to mandate COVID-19 vaccinations. Employers who are inclined to simply encourage employees to get vaccinated may want to consider certain measures to promote participation, including, but not limited to, making the vaccine convenient and accessible by providing vaccinations on-site or near the workplace, covering any cost associated with the vaccine, and/or ensuring that employees are compensated for time spent getting vaccinated. Polsinelli attorneys are prepared to assist with navigating these critical issues surrounding the arrival of the COVID-19 vaccine.

In the last two weeks, the California Legislature has enacted numerous bills relating to employer obligations in light of COVID-19.  Five of these bills have already been signed into law by Governor Newsom.  The remainder may still be signed by Governor Newsom on or before September 30, 2020, which will trigger either an immediate or a January 1st effective date.  Below is a summary of the legislation signed into law by Governor Newsom. AB 2257 - AB 2257 modifies the statutory scheme of AB5. AB5 was itself enacted in 2019 and codified the strict “ABC Test” for classifying workers as independent contractors. AB 2257 adds over fifty categories of workers that are exempt from the “ABC Test” and instead are subject to the more moderate “Borello multi-factor test,” for purpose of determining independent contractor status.  For a detailed discussion regarding AB 2257, please click here. AB 1867 - AB 1867 touches on three areas of employment.  First, the bill provides 80 hours of paid supplemental sick leave for California employees of employers with 500 or more employees nationwide and for health care providers or emergency responders that have been exempted from paid sick leave under the federal Family First Coronavirus Response Act.  Second, the bill provides for hand-washing requirements and further leave entitlements for food sector employees. Third, the bill requires employers to update their wage statements or other written notice regarding the amount of supplemental paid sick leave.  For a detailed discussion regarding AB 1867, please click here. SB 1159 - Creates a disputable presumption, under specific circumstances, for an employee who suffers illness or death resulting from COVID-19 on or after July 6, 2020 through January 1, 2023, that the employee contracted COVID-19 in the course and scope of employment.  The disputable presumption is raised under the following circumstances: (1) the employee tests positive for COVID-19 within 14 days after a day that the employee performed labor or services at the employee’s place of employment; (2) the day on which the employee performed labor or services at the employee’s place of employment at the employer’s direction was on or after July 6, 2020; and (3) the employee’s positive test occurred during a period of an outbreak at the employee’s specific place of employment. A more detailed discussion regarding SB 1159 is forthcoming on Polsinelli at Work. AB 685 – Requires employers to report an outbreak of COVID-19 to local public health officials. The new law also requires employers to report known cases to employees who may have been exposed to COVID-19 within one business day. Further, the new law expands Cal/OSHA’s authority to issue stop work orders for workplaces that pose a risk of an “imminent hazard” relating to COVID-19, i.e., hazards threatening immediate and serious physical harm. A more detailed discussion regarding AB 685 is forthcoming on Polsinelli at Work. SB 1383 - Expands the obligation to provide up to 12 workweeks of unpaid job-protected leave during any 12-month period for certain covered reasons to small employees (with as little as 5 employees) not covered before. Further, previously, leave for purposes of caring for a family member was available only if the family member was the employee’s child, a parent, spouse, or domestic partner.  SB 1383 permits eligible employees to care for grandparents, grandchildren, and siblings, unlike under the prior CFRA statute.  However, employees still need to meet eligibility requirements, predominantly - 12 months of service and 1,250 hours worked in the previous 12-month period, to qualify for family and medical leave.  A more detailed discussion regarding SB 1383 is forthcoming on Polsinelli at Work. These recent changes in California law overlay with the U.S. Department of Labor’s recently published regulatory guidance on September 14, 2020, relating to paid leave entitlements under the federal Family First Coronavirus Response Act (FFCRA), which, among other things, significantly narrows the definition of who is a “health care provider” that may be excluded from the FFCRA’s paid leave entitlement.  For a detailed discussion regarding the DOL’s new guidance, please click here.

As the nation battles the COVID-19 pandemic, California has been simultaneously grappling with one of the hottest employment law issue: the classification of workers as employees or independent contractors.  On September 4, 2020, California Governor Newsom signed into law AB 2257, a bill designed to clarify issues that arose from AB 5, which became effective January 1, 2020.  In light of the changes outlined below, companies should review their policies and agreements with independent contractors to ensure proper classification. AB 5 codified the California Supreme Court holding in Dynamex Operations West, Inc. v. Superior Court and adopted the “ABC” test to determine whether independent contractors should be treated as employees with various exceptions.  Under the “ABC” test, workers are presumed to be employees unless they satisfy three conditions: The worker is free from the employer’s control and direction in connection with the work performed, both under the contract and in fact; The work performed is outside the usual course of the employer’s business; and The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed. AB 5 included an extensive list of exemptions for specific occupations and business relationships, resulting in confusion for many employers.  While AB 5 initially seemed to target the gig economy, its broad language has affected industries statewide.  In the nine months since AB 5 became effective, the bill has generated significant controversy as California businesses were forced to quickly develop strategies whilst combatting the litany of misclassification civil actions that emerged from AB 5.  Simultaneously, the Legislature immediately introduced dozens of stand-alone bills to amend the new law.  AB 2257 is the first of these post-AB 5 bills to become effective. AB 2257: The Latest Changes Occupation Exemptions: Under AB 5, certain occupations were excluded from the ABC test, including doctors, lawyers, dentists, licensed insurance agents, accountants, architects and engineers, private investigators, real estate agents, and hairstylists.  AB 2257 expands this list to include translators, appraisers, home inspectors and registered foresters.  AB 2257 also strikes the 35-assignments per year cap from AB 5, allowing freelance writers, translators, photographers, videographers and illustrators to work as independent contractors without regard to the number of assignments taken from one client. Entertainment Industry: AB 2257 also creates additional exemptions for the entertainment industry, with a particular focus on musicians and performers.  Recording artists, songwriters, lyricists, composers, proofers, managers of recording artists, record producers and directors, musical engineers, musicians, vocalists, music album photographers, independent radio promoters, and certain publicists are included in the exemptions.  Musicians who engage in a single-engagement live performance event are also exempt from the ABC test.  However, musicians who perform as a symphony orchestra, in a musical theater production, or at a theme or amusement park are not exempt from the ABC test.  Musicians who headline at a venue with more than 1,500 attendees or those who perform at a festival that sells more than 18,000 tickets per day are also not exempt from the ABC test.  For comedians, improvisers, magicians, and storytellers, AB 2257 does provide an exemption, but imposes the following conditions: (i) the individual performer performs original work they created and retains the intellectual property rights for such work; (ii) he or she is free from the hirer’s control; and (iii) the individual performer sets their own terms of work and negotiates rates. Referral Agencies: AB 2257 also makes significant expansions to the types of services that can qualify for the referral agency exemption.  AB 2257 adds to the list: consulting, youth sports coaching, caddying, wedding and event planning, and interpreting services.  AB 2257 clarifies that this exemption is not limited to those identified, leaving room for additional types of services to be added to this already expansive list.  AB 2257 does, however, make certain that the following services are not included: high-hazard industry services, janitorial, delivery, courier, transportation, trucking, agricultural labor, retail, logging, in-home care, or construction services other than minor home repair.  As a result, ride-share services, such as Uber or Lyft continue to be expressly excluded from the laundry list of exemptions. Business-to-Business Contracting Relationships: Importantly, AB 2257 expands the “business-to-business exemption” to apply to sole proprietors.  Previously, under AB 5, this exemption was only applicable to business entities that were incorporated.  AB 2257 provides a further exemption for sole proprietors under the “single-engagement exemption,” which provides the ABC Test will not apply for a single-engagement event, provided certain conditions are met.  AB 2257 also broadens the business-to-business exemption to include situations where a public agency or quasi-public corporation retains a contractor.  Another important amendment in AB 2257 is it no longer requires that a business service provider “actually contracts” with other businesses “without restriction form the hiring entity.”  Instead, AB 2257 merely requires that the business service provider can contract with other entities and maintain a clientele.  This amendment allows greater flexibility for entities which, for example, not have actually contracted with other businesses, so long as they have the opportunity to do so.  On that same front, AB 2257 also relaxes restrictions to allow business service providers to provide services directly to the customers of a contracting business. AB 2257 contains several additional significant amendments and nuances that California employers must carefully examine when navigating the ever-changing landscape of independent contractor law.  While further legislation and additional litigation is on the horizon, AB 2257 was made effective when signed and remains the current law in California.  Polsinelli attorneys are closely examining recent developments and remain prepared to assist you in developing business policies to comply with these measures.

On September 9, 2020, California Governor Newsom signed AB 1867. The new law provides for “gap” paid sick leave coverage for California employees who are otherwise exempt from emergency paid sick leave coverage provided under the federal Families First Coronavirus Response Act (“FFCRA”). In addition to providing paid leave, the law requires employers to comply with urgent-notice and posting requirements. General Requirement The new law is intended to act as “gap” paid leave for California employees who are employed by employers that are exempt under the federal Family First Response Care Act. The new California law applies to (1) employers with 500 or more employees; or (2) health care providers or emergency responders (working for a public or private entity of any size). The law provides for up to 80 hours of COVID-19 Supplemental Paid Sick Leave (“CSPSL”) for covered workers. Covered Employers The Act applies to private employers with 500 or more employees in the United States. For purposes of calculating the number of employees, “employees” includes: (i) all employees currently working, (ii) employees on leaves of any kind, (iii) employees of temporary placement agencies who are jointly employed under the Fair Labor Standards Act, and (iv) day laborers. Alternatively, the obligation to provide CSPSL applies to public and private entities of any size with respect to any health care providers or emergency responders which the entity employs, which have been excluded from sick leave under the FFCRA. Qualifying Reasons for Paid Sick Time A covered employer must provide an employee supplemental paid sick leave under the Act for any of the following reasons: The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19; The employee is advised by a healthcare provider to self-quarantine or self-isolate due to concerns related to COVID-19; or The employee is prohibited from working by the employer due to health concerns related to the potential transmission of COVID-19. Note that unlike the federal leave requirement, this new law does not provide for paid leave for reasons related to school closures. Additionally, the law does not expressly provide for paid leave to take care of a family member who may have contacted Covid-19. However, the law obligates an employer to provide CSPSL if an employer has a policy or practice of requiring that an employee self-isolate from the employer’s physical workspace due to risk of potential transmission after close contact with an individual diagnosed with Covid-19. The law is silent with respect to employees who are required to self-isolate but are capable of telecommuting. This analysis will have to be undertaken on a case-by-case basis. Covered Full-Time Employees An employee qualifies for the full 80 hours of CSPSL if the employee satisfies either of the following criteria: The employer considers the employee to work “full time”; or The employee worked or was scheduled to work, on average, at least 40 hours per week for the employer in the two weeks preceding the date the employee took CSPSL. Covered Part-Time Employees For part-time employees the minimum amount of CSPSL is calculated as follows: If the employee has a normal weekly schedule, the total number of hours the employee is usually scheduled to work for the employer over two weeks; If the employee works a variable number of hours, 14 times the average number of hours the employee worked each day in the six months prior to taking COVID-19 supplemental paid sick leave or, if the employee has been employed for less than six months, over the entire period the employee has worked for the employer; or If the employee works a variable number of hours and has worked for the employer over a period of 14 days or fewer, the total number of hours the employee has worked. Supplemental to Regular Paid Sick Leave Already Provided/ Retroactive Designation CSPSL must be provided in addition to any paid sick leave the employer already provides to employees. An employer may not require an employee to first use other paid leave provided by the employer. However, if an employer previously provided employees with leave for CSPSL reasons described above (separate or in addition to regular paid-sick leave), and which compensated the employee at an amount equal to or greater than what CSPSL requires, the employer may count the hours of the other paid benefit or leave towards the total number of hours CSPSL. If an employer provided non-compensated COVID-19 related leave separate or in addition to regular paid-sick leave), the employer will have the option of retroactively compensating the covered worker to satisfy the Act’s compensation requirements. Upon compensation, an employer will be able to credit these hours towards CSPSL requirements. Compensation for Paid Sick Time Employees using COVID-19 supplemental paid sick leave must be compensated at their regular rate of pay for their last pay period. Notice Requirements The Labor Commissioner has posted the following model notices that an employer must display that explains the nature of CSPSL. Food Sector Workers - https://www.dir.ca.gov/dlse/COVID-19-Food-Sector-Workers-poster.pdf Non-Food Sector Workers - https://www.dir.ca.gov/dlse/COVID-19-Non-Food-Sector-Employees-poster.pdf The Bill requires that the notice must be posted at workplaces before September 19, 2020.  Therefore, applicable companies that have not done so yet must do so as soon as practicable. Alternatively, the bill provides that if an employer’s employees do not frequent the workplace, then it may disseminate the notice through electronic means, such as by email. Employers must also provide notice in a wage statement (or a separate writing provided on pay day) of an employee’s available CSPSL each pay period. That requirement takes effect in the first pay period following the date of enactment. Expiration of the Law The requirement to provide COVID-19 supplemental paid sick leave expires on December 31, 2020, or upon the expiration of any federal extension of the Emergency Paid Sick Leave Act (whichever is later). Food-Sector Employers In April of 2020, Governor Newsom signed Executive Order (EO) N-51-20, which provided CSPSL for food sector workers. In large part, AB 1867 codifies the executive order’s language. However, AB 1867 differentiates from the prior Executive Order in a couple of ways. First, AB 1867 provides the aforementioned expiration period whereas the executive order was to be applicable only during the pendency of the statewide stay-at-home order. Additionally, AB 1867 clarified that that “food facilities” are defined as all entities codified under California Health and Safety Code section 113789. Additionally, AB 1867 codifies food-sector employer’s obligation to permit employees to wash their hands every 30 minutes. Polsinelli attorneys are closely examining recent developments and remain prepared to assist you in developing business policies to comply with these measures.

On September 11, 2020, the United States Department of Labor (DOL) issued revisions to the Rule implementing the Families First Coronavirus Response Act (FFCRA) to clarify workers’ rights and employers’ responsibilities regarding FFCRA paid leave.  The revised Rule will take effect on September 16, 2020. The Ruling The revised Rule is the DOL’s response to a ruling entered on August 3, 2020, by the United States District Court for the Southern District of New York (District Court) in a lawsuit filed by the State of New York challenging certain provisions of the Rule.  As previously reported, the District Court granted partial summary judgment in favor of the State of New York and ruled that four parts of the Rule were invalid:  (1) the requirement that paid sick leave and expanded family and medical leave are available only if an employee has work from which to take leave (the “work-availability requirement”); (2) the definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption; (3) the requirement that an employer consent in order for an employee to take intermittent leave under the FFCRA; and (4) the requirement that an employee submit documentation to their employer as a pre-condition to leave.  Following the District Court’s ruling, employers in New York faced uncertainty as they evaluated whether and how to apply the FFCRA. The Revised Rule In recognition of the “pressing need for clarity in light of the District Court’s decision,” the DOL issued the revised Rule “to reaffirm its regulations in part, revise its regulations in part, and further explain its positions.” Work-Availability Requirement The revised Rule first reaffirms the work-availability requirement, explaining that an employee may only take paid sick leave or expanded family and medical leave under the FFCRA to the extent that any qualifying reason is a but-for cause of his or her inability to work.  Thus, if an employer has no work for the employee to perform, the employee is not entitled to paid sick leave or expanded family and medical leave under the FFCRA. Employer Approval for Intermittent Leave Likewise, the revised Rule reaffirms that employer approval is needed to take intermittent FFCRA leave in all situations in which intermittent FFCRA leave is permitted.  On this point, the DOL explained that the employer-approval condition balances the employee’s need for leave with the employer’s interest in avoiding disruptions to operations. According to the DOL, the employer-approval condition allows both employers and employees flexibility in agreeing upon telework and scheduling arrangements that may reduce or even eliminate an employee’s need for FFCRA leave by reorganizing work time to accommodate the employee’s needs related to COVID-19. The Definition of “Health Care Provider” With regard to the definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption, the revised Rule adopts an amended regulatory definition including: (1) the FMLA definition of “health care provider” (any employee who is a health care provider under 29 CFR 825.102 and 825.125), and (2) any other employee who is capable of providing health care services, meaning he or she is employed to provide diagnostic services, preventive services, treatment services, or other services that are integrated and necessary to the provision of patient care and, if not provided, would adversely impact patient care. While the DOL’s expanded definition of “health care provider” is broader in scope than the classic FMLA definition of “health care provider,” the DOL made clear that it is not enough that an employee works for an entity that provides health care services.  Certainly the revised definition includes nurses, nurse assistants, medical technicians, and any other persons who directly provide patient services, and would also include individuals whose work impacts diagnostic, preventative, and treatment services, such as lab technicians.  Other employees covered by the revised definition include those who provide services that if not provided would adversely affect patient care.  The Supplementary Explanation that precedes the revised Rule explains that examples include, individuals who bathe, dress, hand feed, or take vital signs of patients, individuals who set up equipment for medical procedures, and individuals who transport patients and samples.  The DOL also provided a non-exhaustive list of employees who are excluded from the definition of “health care provider,” including IT employees, building maintenance staff, human resources personnel, cooks, food services workers, records managers, and billers.  According to the DOL, the services provided by these employees may be related to patient care but they are too attenuated to be integrated and necessary components of patient care.  As such, healthcare employers should immediately evaluate the revised Rule and its impact on their leave decisions. Timing of FFCRA Documentation Finally, the revised Rule clarifies that an employee is not required to submit documentation concerning the need for leave prior to taking paid sick leave or expanded family and medical leave, but rather should submit documentation as soon as practicable.  The DOL notes that in most cases, the requirement to submit documentation will be when the employee provides notice of the employee’s need for leave.  However, when the need for expanded family and medical leave is foreseeable, such as when an employee receives advance notice of a school closure, the employee is likewise required to provide notice as soon as practicable, which would occur before taking leave. Updated FAQs In addition to issuing the revised Final Rule on September 11, 2020, the DOL updated its FAQs to reflect its new guidance concerning the application of the FFCRA. Next Steps for Employers It is yet to be determined whether the revised Rule will satisfy the concerns addressed in the District Court’s ruling, or whether the DOL will face additional challenges by the State of New York or other jurisdictions.  Regardless, employers should apply the FFCRA consistent with the revised Rule and should consult counsel with any questions.  Importantly, health care employers who may have exempted some or all of their employees from the FFCRA based on the DOL’s prior definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption should consult with counsel to determine the new scope of exempted employees and the proper path forward for their organization.

The Office of Federal Contract Compliance Programs (“OFCCP”) recently issued new FAQ guidance on how federal government contractors should treat non-binary employees (i.e., those who do not exclusively identify as either male or female) in their affirmative action programs (“AAP”).  OFCCP instructs that contractors should include non-binary employees in AAP documents, but should exclude their data when conducting the gender-based analyses required by OFCCP’s AAP rules.  This means that non-binary employees should not be considered when determining gender-based placement goals and analyzing potential gender-based disparities in personnel activity and compensation systems. The new guidance also reminds contractors that they may not ask applicants or employees for documentation to prove their stated gender identity.  As a refresher, some other gender identity-related guidance from prior FAQs include that: OFCCP does not require contractors to collect data about the non-binary gender identification of applicants or employees, but contractors may voluntarily choose to do so. Contractors’ AAP obligations do not require outreach activities towards LGBT applicants or employees, but contractors may voluntarily choose to do so. If an employee self-identifies their gender, including as non-binary, the contractor may not override that identification based on its visual observation or other records. Under EEOC guidance, data regarding non-binary employees may be separately reported in EEO-1 form submissions. The new OFCCP FAQ provides some certainty for contractors and helps alleviate the conflict between OFCCP’s prior gender-binary framework and society’s rapidly-advancing understandings – often reflected in state, and now federal Title VII, law – of gender identity.  However, many thorny questions about the treatment of non-binary employees for AAP or other OFCCP compliance purposes remain unaddressed.  Because OFCCP accepts gender identity-based complaints from employees, and those complaints can now potentially be raised in a federal lawsuit under Title VII, contractors should take care in addressing these evolving issues. Federal government contractors can find additional updates on OFCCP and other contractor-specific compliance developments at Polsinelli’s Government Contractor Update blog.

On April 1, 2020, the United States Department of Labor (DOL) issued a Final Rule implementing the Families First Coronavirus Response Act (FFCRA).  Shortly thereafter, the State of New York filed suit against the DOL, arguing that several features of the Final Rule exceeded the DOL’s authority under the FFCRA. Yesterday, the United States District Court for the Southern District of New York granted partial summary judgment in favor of the State of New York and “vacated” four aspects of the Final Rule. Specifically: (1) the “work-availability requirement”; (2) the definition of “health care provider” for purposes of the “health care provider or emergency responder” exemption; (3) the requirement that an employer consent in order for an employee to take intermittent leave under the FFCRA; and (4) the requirement that an employee submit documentation to their employer as a pre-condition to leave. The Court’s ruling could have a significant impact on how FFCRA leave is administered in New York, and potentially across the Country if other states follow in New York’s footsteps. First, without the “work-availability requirement,” an employee is entitled to paid FFCRA leave even if an employer is temporarily closed or they are placed on furlough because the employer does not have work.  The Court analogized a furloughed employee to a teacher on paid parental leave who would still be considered to be on “leave” even if school is called off for a snow day. Although the Court invalidated the requirement, on this issue the Court acknowledged that the statutory language on this point was ambiguous, and that the DOL has the authority to issue guidance on the matter.  Further, while the Court held that the DOL’s “barebones explanation for the work-availability requirement is patently deficient,” it did not find that the conclusion was inconsistent with the statute.  As a result, even leaving aside the possibility of a different outcome on appeal, the DOL may be able to address the Court’s concern through a more thoroughly reasoned explanation of its interpretation. Second, the Court’s Order dramatically narrows the scope of the “health care provider or emergency responder” exemption, which allows an employer of an employee who is a health care provider or emergency responder to exclude the employee from taking leave under the FFCRA.  The DOL’s Final Rule defined a “health care provider” much more broadly than the statute as: anyone employed at any doctor’s office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, Employer, or entity.  This includes any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions. The DOL’s broad definition provided many health care related employers the option to apply the exemption to virtually all of their employees. By vacating the Final Rule’s definition of “health care provider,” the only positions clearly included within the definition are those identified in the Family and Medical Leave Act’s (FMLA) definition of “health care provider,” which is limited to “a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate)” or “any other person determined by the Secretary to be capable of providing health care services.” (A listing of those other persons is available here).  In rejecting the DOL’s definition, the Court acknowledged that the DOL, though the Secretary of Labor, has authority to expand the definition of the term beyond what is set forth in the statute.  However, it required that there be “at least a minimally role-specific determination” with respect to the application of the exemption.  As a result, even absent an effective appeal, the DOL could take steps to refine this definition, in which case it will be more likely to receive deference from a reviewing court. The Final Rule permits employees to take FFCRA leave intermittently only if the employer and employee agree, and even then, only for a subset of qualifying reasons where there is a minimal risk that the employee will spread COVID-19 to other employees. On this point, the Court agreed with the limitation on the reasons for which employees may take intermittent leave but vacated the requirement that an employer must consent to intermittent leave. Accordingly, the ruling would not require employers to grant intermittent leave when there is a risk of spreading COVID-19 to other employees. However, this decision indicates that employers who do not currently permit intermittent leave under circumstances where there is not a risk of spreading COVID-19 may be at risk if they do not do so going forward. Finally, the Court found that the requirement that an employee submit documentation concerning the need for leave as a condition precedent to taking FFCRA leave was inconsistent with the notice provisions contained in the FFCRA. At this point, it is unclear whether the DOL will move to stay the order pending appeal to the Second Circuit.  What is clear, unfortunately, is that employers are once again faced with uncertainty as they evaluate whether and how to apply the FFCRA.  The Court’s opinion does not apply beyond New York, and it does not mean that the problems with the DOL’s Final Rule cannot be remedied, but employers should take notice and consult with counsel to determine the proper path forward for their organization.

The Families First Coronavirus Response Act (FFCRA) requires covered employers – those with 500 or fewer employees – to provide eligible employees with up to two weeks of paid sick leave and up to twelve weeks (ten of which are paid) of expanded family and medical leave for specific coronavirus related issues. Included is leave for employees if they are unable to work or telework due to a need to care for their child whose school or place of care is closed due to COVID-19 related reasons.[1] However, what is considered “closed” for purposes of the law? What if school will resume but be completely or partially virtual? The Department of Labor has provided an answer. If a school or place of care has moved online – where children are expected to complete assignments at home – then it is indeed considered “closed” for purposes of the FFCRA, and employers are required to provide leave to eligible employees. Employees must provide an explanation for the reason for leave; for purposes of a school or daycare closing this includes the name of the child, the name of the school, and a statement that no other suitable person is available to care for the child.[2] Under rules governing certain other labor laws, school is considered open and in session even if it is being taught virtually. For purposes of the FFCRA, however, an employee will qualify for leave because the physical location where the child receives instruction is closed, even where some or all instruction is being provided online. Importantly, the IRS will consider the documentation sufficient to substantiate the employer’s eligibility for the tax credits if the documents indicate that the school is closed only physically but is still in session. The IRS has provided the following instruction with respect to the documentation needed for this type of leave request: In the case of a leave request based on a school closing or child care provider unavailability, the statement from the employee should include the name and age of the child (or children) to be cared for, the name of the school that has closed or place of care that is unavailable, and a representation that no other person will be providing care for the child during the period for which the employee is receiving family medical leave and, with respect to the employee’s inability to work or telework because of a need to provide care for a child older than fourteen during daylight hours, a statement that special circumstances exist requiring the employee to provide care. Finally, employers should take note that even where an employee has been working remotely despite having his or her child at home over the summer does not mean that the employee cannot now take leave as schools resume virtual learning. As the DOL explains, there may be many different legitimate reasons an employee did not take leave previously, but now will seek to do so. “While you may ask the employee to note any changed circumstances in his or her statement as part of explaining why the employee is unable to work, you should exercise caution in doing, lest it increase the likelihood that any decision denying leave based on that information is a prohibited act.” [1] 29 C.F.R. § 826.20(a)(v)(b). [2] 29 C.F.R. § 826.100(e).

As clinical trials continue across the world for a COVID-19 vaccine, many employers are asking whether they will be able to require employees to take the vaccine when it becomes available in the United States. Like with so many questions surrounding COVID-19, the answer is not entirely clear.  In general, employers can require vaccination as a term and condition of employment, but such practice is not without limitations or always recommended. The U.S. Occupational Safety and Health Administration (“OSHA”) has taken the position that employers can require employees to take influenza vaccines, for example, but emphasizes that employees “need to be properly informed of the benefits of vaccinations.”  OSHA also explains that “an employee who refuses vaccination because of a reasonable belief that he or she has a medical condition that creates a real danger of serious illness or death (such as a serious reaction to the vaccine) may be protected under Section 11(c) of the Occupational Safety and Health Act of 1970 pertaining to whistleblower rights.” In March 2020, the Equal Employment Opportunity Commission (“EEOC”) issued COVID-19 guidance specifically addressing the issue of whether employers covered by the Americans With Disabilities Act (“ADA”) and Title VII of the Civil Rights Act of 1964 (“Title VII”) can compel all employees to take the influenza vaccine (noting that there is not yet a COVID-19 vaccine). In responding to this question, the EEOC explained that an employee could be entitled to an exemption from a mandatory vaccination under the ADA based on a disability that prevents the employee from taking the vaccine, which would be a reasonable accommodation that the employer would be required to grant unless it would result in undue hardship to the employer.  Under the ADA, “undue hardship” is defined as “significant difficulty or expense” incurred by the employer in providing an accommodation.   Additionally, Title VII provides that once an employer receives notice that an employee’s sincerely held religious belief, practice, or observance prevents the employee from taking the vaccine, the employer must provide a reasonable accommodation unless it would pose an undue hardship to the employer as defined by Title VII, a lower standard than under the ADA.  Under Title VII, employers do not need to grant religious accommodation requests that result in more than a de minimis cost to the operation of the employer’s business.  However, analogous state laws may impose stricter standards. In light of these exemptions and the risk of discrimination, the EEOC has advised that it is best practice to simply encourage employees to take the influenza vaccine rather than to mandate it.   Although we can presume that the EEOC will issue similar guidance when a COVID-19 vaccine is approved, the threat imposed by COVID-19 to the health and safety of others may make employers more inclined to require vaccination. Moreover, this threat and the necessary safety measures required of employers with unvaccinated employees may render exemptions to the COVID-19 vaccine more burdensome.  However, employers must also consider that employees may respond negatively to a vaccination requirement, and adverse reactions to the vaccine could lead to workers’ compensation claims. Accordingly, employers contemplating any policy mandating a COVID-19 vaccine should be prepared to carefully consider the threat posed to the health and safety of their employees, the risk of future claims, and employee morale.  Moreover, employers must be prepared to carefully consider the reasons for any employee requests for exemptions.

As part of Polsinelli’s efforts to help employers and employees maintain a healthy workplace during the pandemic, we have released the third video in our “Work Together, Healthy Together” series: “Stay Healthy As America Reopens.” This video is aimed demonstrating the importance of social distancing and mask wearing by showing how COVID-19 spreads through respiratory droplets in the air. The video features new data, images and video from recent studies, along with remixed vintage film footage to help keep the content entertaining. As COVID-19 continues to surge in communities across the country, it is critical that employers and employees work together to safely navigate the return to work by paying attention to three simple things that can help people avoid potentially infected respiratory droplets: Time, Barriers and Distance (TBD). The video includes practical tips for navigating TBD in the workplace and in day-to-day life. We hope that you will find this video helpful and encourage employers to share it with their workforce.

On July 15, 2020, the Virginia Department of Labor and Industry’s Health and Safety Codes Board (“Board”) voted 9-2 to adopt emergency temporary standards designed to prevent the spread of COVID-19 in the workplace. As businesses slowly reopen around the U.S., Virginia is the first jurisdiction in the country to adopt a COVID-19 workplace health and safety standard. The standard applies to every employer within the Commonwealth that falls under the Virginia Occupational Health and Safety Program (“VOSH”). The standard classifies occupations based on “exposure risk level” and requires adherence to various practices based on the risk level of a given occupation. Based on the potential of contracting and spreading COVID-19, an occupation can have a “very high,” “high,” “medium,” and “lower” exposure risk level. In determining exposure risk level, the factors employers must consider include, but are not limited to: (1) the job task performed; (2) whether the workplace is indoors or outdoors; (3) the presence of the virus in the workplace; (4) the presence of persons known or suspected to have the virus; (5) the number of employees in relation to the size of the workplace; (6) working distance between employees; and (7) the frequency and duration of close contact employees have with co-workers and other people.  The standard makes clear that the use of face coverings alone does not establish a “lower” exposure risk level. What does the standard require Virginia employers to do? Employers within every exposure risk levels must assess their workplaces for hazards and job tasks that could expose employees to COVID-19, inform employees of methods for self-monitoring, and encourage employees constantly to monitor their health. The standard also requires employers to develop policies for employees who experience COVID-19 symptoms to report their statuses when no alternative diagnosis has been made. Employers may not allow employees known or suspected to have COVID-19 to report to work until they are cleared to return to work, unless teleworking is an option. The standard also requires employers to ensure that their sick leave policies are flexible and compliant with public health standards and other applicable law, including the Families First Coronavirus Act (“FFCRA”). To track COVID-19 exposures, employers must develop a HIPAA-compliant procedure for receiving positive COVID-19 test results for employees, temporary employees, and the employees of subcontractors in the workplace within the previous 14 days from the date of the positive test. Employers must notify potentially exposed employees and the Virginia Department of Health within 24 hours of the potential exposure, ensuring that the names of the individuals who contracted the virus remain confidential. Employers that rent workspace must notify the building owner within 24 hours of discovering two or more positive results. If there are three or more positive results, the employer must notify the Virginia Department of Labor and Industry with 24 hours. Moreover, employers must implement policies and procedures for allowing employees known or suspected to have COVID-19 to return to work. These policies must require employees to first consult with appropriate healthcare professionals. Although the standard allows employers to use a “symptom-based” system to determine if employees are eligible to return to work, employers may require employees and contractors to also undergo a test under the “test-based” system before employees are permitted to return. For asymptomatic employees, the employer may use a “test-based” system or a “time-based” system.  Employers must pay for all testing required by its policies. To comply with the standard, employers must ensure that employees practice social distancing in the workplace by making announcements, posting signs, decreasing the density of employees, and adhering to Virginia’s occupancy limits. In addition, employers must eliminate or restrict employees’ access to breakrooms and common areas. If access to the common areas is restricted, the employer must post guidelines outside of the entrances that encourages social distancing and provide instructions on sanitizing shared surfaces. If employees are required to share a vehicle for work, they must wear the appropriate personal protective equipment (“PPE”). Employees with medical conditions that would be exacerbated by wearing a surgical mask can be excluded. When do Virginia employers have to comply with the standard? Most of the standard takes effect 60 days after its effective date. The requirement that employers train employees on infectious disease preparedness and response plans, however, becomes effective within 30 days of the effective date. The emergency standard will automatically expire within six months. If the Governor lifts the State of Emergency in the Commonwealth, the Board passes a permanent rule, or the Board repeals this standard, the standard will no longer apply. Practical Tips for Compliance Virginia employers should consider preparing a comprehensive infectious disease preparedness and response plan that covers all of the required information to ensure compliance with the standard. The plan should include all required policies and expectations regarding what employees must do if they experience symptoms and receive a positive test, and provisions for returning to work. Please feel free to contact us for assistance in developing a comprehensive plan that complies with the standard or general advice on compliance with the standard.

While elected-officials determine the feasibility of reopening America’s classrooms and workplaces, there is little certainty as to what life will look like in the fall for employers and employees alike. Will students be in classrooms? Will all or most workplaces be open? If the year begins with remote learning, how will working parents juggle personal and professional obligations? As the school year approaches, employers should be prepared to address work-from-home, employee leave, childcare, and related issues. Issues Facing Working Parents As COVID-19 cases currently surges in the West and South, it appears likely that some school districts and universities will implement remote learning, staggered schedules, or a hybrid of in-person and remote learning for the upcoming school year. Under any of these scenarios, working parents may need to work from home (sometimes called “telework” or “working remotely”) or arrange for child care. To further complicate matters, many child care programs have been closed for safety or business reasons. Work From Home To ensure fair, consistent, and equal treatment for all employees, employers should develop or revise their work from home policies to reflect the current environment (depending on the scenario, a separate “COVID-19” work from home policy may be necessary). Many local and state governments have passed executive orders requiring employers to allow work from home arrangements to promote social distancing. As such, employers should consider which job duties need to be conducted on-site and how to arrange for other duties to be conducted off-site. Additionally, the work from home policy should include information such as: wage and hour issues (scheduling, break periods, etc.), break periods, productivity standards, responsiveness, connectivity and data security issues, protection of confidential information, and other related issues. Most importantly, employers must draft and implement the policy in a way that does not discriminate against employees based on a legally protected characteristic. Leave Requirements Whether working from home or on-site, employees may be entitled to paid or unpaid leave to care for a child. As such, employers should be aware of the various leave laws that could be triggered. Under the Families First Coronavirus Response Act, certain employers are required to provide paid sick leave (at two-thirds the employee’s regular rate of pay) to an employee who cannot work because the employee has to care for a child due to school or child care provider closure. Additionally, several cities and states have passed paid leave laws which could be triggered depending on the particular circumstances of the employee’s need for leave. The Family Medical Leave Act (FMLA) entitles eligible employees of covered employers to take up to 12 weeks of unpaid, job-protected leave for specified family and medical reasons. If an employee’s child is sick, the employee may be entitled to FMLA leave. If the child is not sick, employers are not required to provide FMLA leave to employees caring for dependents who have been dismissed from school or child care, according to the Department of Labor’s guidance on COVID-19 issues. Employers should check their state’s FMLA laws for relevant provisions. Other Options Family-friendly employment practices improve recruitment, retention, diversity, and productivity. In addition to work from home arrangements and complying with leave laws, employers can implement other family-friendly practices to support the workforce and improve employee engagement, including: Implement staggered or split shifts to allow parents to care for children during normal working hours and complete their assignments through the remainder of the day Allow for “compressed weeks” (longer, four-day weeks) or “expanded weeks” (five-day weeks encompassing the weekend) Ensure each employee has a “back-up” to take over assignments in cases of emergency Provide equipment necessary to work from home or reimburse related expenses Provide child care onsite, contract with nearby childcare facilities for discounted childcare costs, or circulate information about child care in your community Allow employees to take voluntary furloughs as needed, or to work reduced hours for reduced pay. Productivity Concerns Employers should take steps to prevent, and if necessary address, employee abuse of remote work policies. In some industries, companies can track employee engagement – regardless of where the work is being performed – through simple metrics such as billable hours, sales figures, or quotas. Other companies may find it more difficult to determine whether their employees are actually “working” from home. Regardless, the easiest way to determine what your employees are doing is through communication, such as weekly group chats or individual check-ins. In addition to checking the status of various projects, business leaders can hold employees accountable before major issues arise and assess employee morale in these uncertain times. Moreover, there are a variety of technology solutions to evaluate productivity. Project management software provides visibility into when tasks are completed, who completes the task, and whether it is completed on time. There are also more “opaque” methods to analyze productivity such as checking an employee’s VPN log or use of employee software. Employers should ensure that they not make any promises they may not be able to keep the longer the virus and school or child care closures exist. Employers may, at some point, be required to evaluate the need for involuntary furloughs or layoffs. Employers also should ensure that their telework policies include the corrective action that will follow for policy violations, and issue corrective action in a consistent, fair, and nondiscriminatory fashion.

On June 16, 2020, the Colorado Legislature passed the Healthy Families and Workplaces Act which becomes effective on January 1, 2021 for employers with 16 or more employees and on January 1, 2022 for employers with 15 or more employees and creates paid sick leave in Colorado.  Specifically, upon hire, employees begin accruing paid sick leave at the rate of one hour for every 30 hours worked, up to 48 hours and employers have the option of granting paid sick leave in one lump sum up front.  Unlike other jurisdictions that require a “waiting period” before employees may begin using paid sick leave, the Colorado Act entitles employees to use paid sick leave immediately upon accrual.  Accrued sick leave carries over from year-to-year up to a maximum of 48 hours, and employers can limit usage of the basic paid sick leave to 48 hours per year. Paid sick leave can be used for paid sick days for illness, injury, or condition of, or preventative care for, the employee or, as needed, the employee’s family member and for specific circumstances involving domestic violence, sexual assault, or stalking.  The request from the employee can be written or verbal. Additionally, there is a one-time allotment of two weeks of additional paid sick leave during a public health emergency.  Unused basic paid sick leave may be counted towards the two weeks.  Subject to certain time constraints, employees may take additional paid sick leave for various reasons similar to those under the Families First Corona Virus Response Act.  Upon termination, there is no payout of accrued but unused sick leave.  Like other statutes affecting employee rights, there is both a notice and posting requirement. Colorado employers should review and update their leave policies in light of the Healthy Families and Workplace Act.  For questions relating to the Act or paid sick leave compliance generally, please do not hesitate to reach out to your Polsinelli attorney.

In light of CDC Interim Guidelines stating antibody test results “should not be used to make decisions about returning persons to the workplace,” the EEOC released guidance on June 17, 2020 indicating that employers should not require antibody tests before permitting employees to return to the workplace. According to the EEOC, an antibody test constitutes a medical examination under the Americans with Disabilities Act (ADA), and employers can only require ADA medical examinations of employees if the examination is “job related and consistent with business necessity.”   Consistent with the CDC’s Interim Guidelines, the EEOC has determined an antibody test is not “job related and consistent with business necessity”, and therefore, any such testing required by an employer violates the ADA.  However, the EEOC was quick to note that a viral test, i.e. testing for an active case of COVID-19, is permissible, and the prohibition on antibody testing could be revised in the future if the CDC’s recommendations change. The EEOC’s COVID-19 guidance continues to evolve.  For example, the EEOC recently updated its guidance to address other topics and provided the following: Employees are not entitled to an accommodation under the ADA in order to avoid exposing a family member who is at higher risk of severe illness from COVID-19 due to an underlying medical condition. Employers should be diligent in responding to and addressing pandemic-related harassment, such as demeaning, derogatory, or hostile remarks directed to employees who are, or are perceived to be, of Chinese or other Asian national origin. Employers may send a general notice to all employees designated to return to the workplace noting that the employer is willing to consider requests for accommodation or flexibilities on an individualized basis. Requests for an alternate method of screening before entering the worksite due to a medical condition are reasonable accommodation requests, and should be handled as such. Employers cannot involuntarily exclude older workers from the workplace, even if for benevolent reasons such as protecting employees at a higher risk of COVID-19. Employers should evaluate sex discrimination considerations when providing flexibilities, such as telework or modified schedules to employees with school-aged children. A full text of the most current “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws” can be found here.  COVID-19 continues to create new and unique situations for employers, especially as businesses begin to reopen.  Polsinelli’s Labor and Employment team is available to help navigate these challenges and ensure compliance with the numerous laws that apply to employers managing a workforce during these unprecedented times.

States and businesses are on their own based on a CDC official’s statement to the Associated Press that the much-anticipated “Guidance for Implementing the Opening up America Again Framework” (“Guidance”) will “never see the light of day.” The 17-page CDC Guidance report or playbook was expected to be released on Friday, May 1. Reports this morning, however, stated that the Guidance was “shelved.” The document, described in various news stories last week, was “far more detailed” than prior CDC materials related to the reopening of businesses across the nation. News articles also reported that the Guidance had "site-specific decisions related to reopening schools, restaurants, summer camps, churches, day care centers and other institutions." One explanation for shelving the project focused on concerns that the virus is affecting different states and communities in unique ways; there simply is no “one-size-fits-all.” While this sentiment is true in certain respects, there are many common questions businesses / employers must ask themselves, strategically analyze, and plan to handle as they bring employees, customers, and other third parties back into their work spaces. The materials available in a new 40+ page Polsinelli “COVID-19 411, Employer Playbook for Occupational Health and Business Continuity” and at Polsinelli’s COVID-19 Blog: What Your Business Needs To Know will help businesses think through state and local requirements, and health department recommendations. Polsinelli attorneys are also prepared to assist in the development or review of new forms, checklists, signage, policies, and procedures businesses must develop on their own, given this new information. Section 1 of Polsinelli’s “Employer Playbook” provides an easy to use “Opening up America” chart for employers based on guidelines from the United States, along with a summary of orders in various states (effective as of May 1, 2020). Section 2 provides employers guidance as they plan to re-open – analyzing policies and new compliance requirements, continuing to build their pandemic response plan, and preparing to communicate how new requirements, recommendations, policies, and procedures will affect employees and others personally. Section 3 discusses how, as employees return to work, employers should or may develop an illness detection program, including screening employees and others for symptoms, taking temperatures, and even (when appropriate) requiring testing. Section 4 describes how employers can set up and begin their Advance Contact Tracing programs even before anyone reports an infection. Section 5 provides employers with immediate steps to take when someone reports an exposure in the workplace. And, finally, a list of Do’s and Don’ts is available as a general reminder of various actions employers should or should not take. Additional information, including up-to-date interactive maps and financial assistance for businesses, may be found on at the Polsinelli’s COVID-19 Blog: What Your Business Needs to Know. We strongly encourage you to contact your Polsinelli attorney or a member of the Labor & Employment Department for assistance as you plan your successful future. If you would like to receive a copy of the “COVID-19 411, Employer Playbook for Occupational Health and Business Continuity” or speak to a Polsinelli attorney, please email 411_Employer_Playbook@Polsinelli.com.

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.

Following a series of local city ordinances aimed at closing the gap left by the Families First Coronavirus Response Act (“FFCRA”), on April 16, 2020, California Governor Gavin Newsom signed into law Executive Order N-51-20, mandating that certain Hiring Entities offer up to 80 hours of “COVID-19 Supplemental Paid Sick Leave” to essential Food Sector Workers, including farm workers, grocery workers, and food delivery workers, who perform work for or through the Hiring Entity.  Here are answers to key questions regarding the new law: Which hiring entities must offer COVID-19 Supplemental Paid Sick Leave? A covered “Hiring Entity” is defined as a private entity, including delivery network companies and transportation network companies, with 500 or more employees nationwide. In determining whether they meet the employee threshold, hiring entities must count full-time employees, part-time employees, employees on leave, temporary employees who are jointly employed by the hiring entity and another employer, day laborers supplied by a temporary placement agency, and all common employees of joint employers or employees of integrated employers.  Although independent contractors should not be counted, contractors may be entitled to leave under the new law (see below).  Finally, employees who have been laid off or furloughed and not subsequently reemployed should not be counted. Who is eligible to take COVID-19 Supplemental Paid Sick Leave? For an individual to be an eligible “Food Sector Worker” they must: Satisfy one of the following three criteria: Works in one of the industries or occupations defined in Industrial Welfare Commission (“IWC”) Wage Orders 3 (Canning, Freezing, and Preserving Industry), 8 (Industries Handling Products After Harvest), 13 (Industries Preparing Agricultural Products for Market, on the Farm) or 14 (Agricultural Occupations); or Works for a Hiring Entity that operates a “food facility,” as defined in Health & Safety Code § 113789(a)-(b) (e.g., restaurants and grocery stores); or Delivers food from a food facility for a Hiring Entity. AND Be an Essential Critical Infrastructure Worker, and therefore, exempt from Executive Order N-33-20 or other statewide stay-at-home orders. AND Leave their residence to perform work for the Hiring Entity. NOTE: The new law appears to apply not just to employees but also contractors and “gig economy” workers.  The law conspicuously avoids the use of the terms “employer” and “employee,” and specifically provides that for purposes of all applicable Labor Code sections, all Food Sector Workers shall be considered “employees” and any Hiring Entity shall be considered an “employer.” What are the qualifying reasons for taking COVID-19 Supplemental Paid Sick Leave? To take COVID-19 Supplemental Paid Sick Leave, a Food Sector Worker must experience one of the following qualifying events: The Food Sector Worker is subject to a Federal, State or local quarantine or isolation order related to COVID-19; or The Food Sector Worker is advised by a health care provider to self-quarantine or self-isolate due to concerns related to COVID-19; or The Food Sector Worker is prohibited from working by the Hiring Entity due to health concerns related to the potential transmission of COVID-19. Hiring Entities must immediately grant leave upon the oral or written request of an eligible Food Sector Worker. How much sick leave must be provided to eligible Food Sector Workers under the new law? Full-time Food Sector Workers can take up to 80 hours of paid sick leave, including workers who worked or were scheduled to work, on average, at least 40 hours per week in the two weeks preceding the date they take the leave; Part-time Food Sector Workers with a normal weekly schedule can take up to the total number of hours they are normally scheduled to work in a two week span; Part-time Food Sector Workers with a variable schedule can take up to 14 times the average number of hours worked each day in the six (6) months preceding the date the worker takes the leave.  If the worker has worked less than six (6) months, the calculation should be based on the entire period the individual worked for or through the Hiring Entity. COVID-19 Supplemental Paid Sick Leave should be paid out at a rate equal to the highest of the worker’s: (1) regular rate of pay for their last pay period; (2) the state minimum wage; or (3) the local minimum wage.  The total amount paid per day is capped at $511 and no more than $5,110 in the aggregate. When is the program effective? The law is effective as of April 16, 2020 and will be effective during the pendency of any statewide stay-at-home orders issued by the State Public Health Officer.  However, if a Food Sector Worker is taking COIVD-19 Supplemental Paid Sick Leave at the time of the expiration of all applicable orders, the worker may still take their full amount of leave. How does this program interact with the FFCRA and other forms of leave? It does not interact with the FFCRA. This ordinance only impacts Hiring Entities with greater than 500 workers in aggregate.  The FFCRA only applies to employers with fewer than 500 workers in aggregate.  Regardless, the two leaves would run concurrently. However, COVID-19 Supplemental Paid Sick Leave is in addition to any paid sick leave available under California’s paid sick leave law set forth in Labor Code section 246.  Moreover, a Hiring Entity may not require a Food Sector Worker to use any other paid or unpaid leave, paid time off or vacation time before the worker uses their COVID-19 Supplemental Paid Sick Leave. Is a Hiring Entity exempt if it already provides paid leave for these same reasons? A Hiring Entity is not required to provide a Food Sector Worker with COVID-19 Supplemental Paid Sick Leave if, as of April 16, 2020, the Hiring Entity provides the worker with a “supplemental benefit,” such as paid leave, for the same reasons and in an equal or greater amount as that afforded under the new law. What happens if a Hiring Entity does not comply with the new law? The new law expressly authorizes the Labor Commissioner to enforce the COVID-19 Supplemental Paid Sick Leave, leave which shall be considered “paid sick days” and enforced accordingly under Labor Code sections 246(n), 246.5(b)-(c), 247, 247.5 and 248.5.  Any Food Sector Worker denied COVID-19 Supplemental Paid Sick Leave can file a claim with the Labor Commissioner pursuant to Labor Code sections 98 or 98.7. A Food Sector Worker can also pursue any other remedies provided by state or local laws, including Business & Professions Code section 17200. Do covered entities need to provide notice of the new law? Yes, Hiring Entities must display a poster in a conspicuous place regarding the rights afforded under the new law, in compliance with Labor Code section 247.  The Labor Commissioner has made available a model notice for purposes of complying with this obligation.  If a Hiring Entity’s Food Sector Workers do not frequent a physical workplace, the Hiring Entity may disseminate notice through e-mail or other electronic means. Are there any other requirements under the new law? In addition to the paid sick leave requirements discussed above, the Executive Order expressly provides that Food Sector Workers working in any food facility shall be permitted to wash their hands every 30 minutes and additionally as needed.  This requirement is to be enforced pursuant to applicable provisions of the Retail Food Code. For questions relating to this new California COVID-19 Supplemental Paid Sick Leave, please do not hesitate to reach out to a Polsinelli attorney.

As employers begin seeing rays of light at the end of the tunnel and start thinking of reopening, a question at the forefront of those preparations is whether they can test their employees for COVID-19. Such a test would qualify as a medical examination subject to restrictions under the Americans with Disabilities Act (“ADA”). Specifically, an employer would need to be able to establish that the test was job related and consistent with business necessity. The Equal Employment Opportunity Commission (“EEOC”) has now provided guidance making clear that employers can take this step. Before COVID-19 broke onto the scene, the EEOC had provided guidance for employers regarding how to respond in the face of a pandemic. That guidance served as the basis for employer decisions as they attempted to navigate a myriad of novel situations created by the novel coronavirus, but it did not specifically address COVID-19 testing. In its original guidance regarding COVID-19, the EEOC acknowledged that the spread of COVID-19 is a “direct threat,” and that temperature screenings were therefore appropriate. In guidance released on April 23, 2020, the EEOC expanded that guidance to clarify that employers may choose to administer COVID-19 testing to employees before they enter the workplace to determine if they have the virus. Nevertheless, employers must still ensure that any testing is consistent with ADA requirements, including that the tests being used are accurate and reliable. On this issue, the EEOC pointed employers to guidance from the U.S. Food and Drug Administration about what may or may not be considered safe and accurate testing. Additionally, while testing evaluates whether an employee is infected at the time of the test, it is really only a snapshot of that moment in time and employees who test negative could subsequently become infected. As a result, employers must still continue to implement other safety measures, such as social distancing and other hygiene requirements. In addition to ensuring accurate testing methodologies, employers should also receive written consent from employees before requiring mandatory testing. Polsinelli has worked with a number of testing providers, and can assist employers in implementing effective testing regimens.

Due to the COVID-19 pandemic, schools in the United States have generally suspended brick-and-mortar operations nationwide and are almost exclusively conducting classes through remote learning for the remainder of the academic year. Providing learning support and other care to children staying home due to school closures necessitates a meaningful level of adult supervision by parents who would often otherwise be working. Relatedly, parents of younger children are grappling with a need to work while supervising their toddlers as many child care facilities, including before and after school care programs, are also closed. In light of the ongoing nature of the pandemic, various summer programs for children are following suit. As the pandemic continues without a vaccine or other effective drug therapies, federal, state, and local governments are attempting to develop more advanced infection control plans for re-opening public activities including schools, child care facilities, and summer programs. Whether those programs do, in fact, re-open, many families may opt to keep their children home to minimize the risk of COVID-19 infection. As children idle longer at home and parents struggle with an ongoing gap in child care, U.S. employers and their workforce face significant uncertainty in addressing child care matters during this unprecedented pandemic. Juggling child care and work will likely continue to affect workforce productivity and adversely impact employers of all sizes well into the summer. The federal government attempted to provide some relief to families through the passage of the Families First Coronavirus Response Act (“FFCRA”), which requires most employers with fewer than 500 employees to provide certain pandemic-related paid leave benefits to employees. Details regarding the benefits provided under the FFCRA can be found here, but they include paid leave benefits for employees who are unable to work due to the need to care for one or more minor children whose school or place of care [1] is closed, or whose child care provider is unavailable, due to COVID-19 related reasons.  As it relates to child-care related leave connected to COVID-19, the FFCRA requires employers to foot the bill for up to 12 weeks of paid leave for eligible employees. The first two weeks of leave (up to 80 hours) may be paid under the Emergency Paid Sick Leave Act (“EPSLA”) [2].  After the initial two weeks of leave, an eligible employee may take up to an additional 10 weeks of paid leave under the Emergency Family and Medical Leave Expansion Act (“EFMLA”). The paid leave benefit is capped at $200 per day and $10,000 total for each eligible employee, and employers may take a dollar-for-dollar credit against their quarterly payroll tax payments. However, considering the pandemic may continue for many months, the paid leave provisions of the FFCRA are unlikely to be adequate in addressing the challenges employers and employees now face, and will continue to face as they head into summer. Unfortunately, the fact that the school year will be ending soon will not eliminate the need for child-care based leave if the pandemic persists. The FFCRA recognized this by including summer camps and summer enrichment programs. As a result, maintaining a flexible approach relating to the use of these paid leave benefits may prove crucial to allowing caregivers to effectively continue in the workforce into the summer.  Ultimately, however, it appears increasingly likely that employers need to prepare for longer term implications of children staying at home through the summer. While employees and employers must both agree for these paid leave benefits to be taken intermittently, reaching an agreement that allows for the pacing of a workforce’s utilization of EPSLA and EFMLA leaves may extend the benefit longer than it would otherwise be available. For example, an employee may be able to work half days over 20 weeks rather than take a full 10 sequential weeks off, or work two or three days a week, similarly extending the benefit. Where employers and employees can reach agreement on flexible scheduling, such staggering of leave may help struggling parents patch together a schedule that both allows productive time for their job every week as well as allows necessary supervision of their children while they are at home. However, unlike traditional FMLA, the Paid FMLA Leave is just that - a paid benefit, and therefore, employees may be less incented to stagger the use of this benefit. That said, staggering this benefit over the course of the remaining academic year and summer may be exactly what is required for employees to manage through what everyone hopes to be the worst of the pandemic. If your company has questions about the legal implications of their employees’ longer term child care challenges and those employees’ rights under the Families First Coronavirus Response Act, contact the authors of this article or the Polsinelli attorney with whom you regularly work. [1] “Place of care” is defined for purposes of the benefits described in this post as a physical location where care is provided for the child while the employee works for the employer.  Place of care is broadly defined as a physical location that does not have to be solely dedicated to such care and includes day care facilities, preschools, before and after school care programs, schools, homes, summer camps, summer enrichment programs and respite care programs. [2] This is provided the eligible employee has not already taken all or part of available EPSLA leave for a COVID-19 another qualifying reason.  If the eligible employee has exhausted such entitlement, the employee may utilize accrued but unused paid leave to cover the gap under EFMLA leave becomes available.

Nearly every essential business that remains open during the Coronavirus Disease 2019 (COVID-19) pandemic is faced with the possibility that coronavirus could show up in the workplace, or that its employees are concerned that it will. This leaves employers with the potential to receive a complaint from the Occupational Safety and Health Administration (OSHA), the principle federal agency designed to ensure workplace safety, a sub agency within the U.S. Department of Labor (DOL).  Because these complaints require a written response within a week, employers must be ready. As of early April, nearly 4,000 complaints have already been filed with OSHA across the country. These complaints claim employers have not done enough to protect employees from COVID-19, including claims of insufficient personal protective equipment (PPE), a lack of COVID-19 response training, and the failure to maintain social distancing in the workplace. Of those complaints, just under 30% of them were from the health care industry, and the other 70% came from various sectors, including manufacturing and retail. So what do employers need to know? OSHA has now issued an Interim Enforcement Response Plan to guide its area offices and compliance safety and health officers in handling and responding to COVID-19 complaints. The enforcement plan includes instructions for regional offices to assess complaints, when inspections may be warranted, and to move certain claims to the top of the priority list. Importantly, OSHA is directing its officers to maximize their review electronically before attempting an inspection and will consider an employer’s “good faith efforts” to comply with OSHA standards. In response to an OSHA complaint, and to potentially avoid an on-site inspection, employers should be prepared to provide the following information to OSHA: A written pandemic plan as recommended by the CDC. Procedures in place for hazard assessment and protocols for PPE use with suspected COVID-19 employees. A summary of decontamination procedures. Recorded and maintained medical records related to worker exposure incidents and other OSHA required recordkeeping, including whether any employees have contracted COVID-19, have been hospitalized as a result of COVID-19, or have been placed on precautionary removal or isolation. Where applicable, information regarding the respiratory protection program, and respirator policies related to COVID-19, in compliance with 29 CFR § 1910.134. Training records, including records of training related to COVID-19 exposure and prevention. Documentation and provisions created regarding obtaining and providing appropriate PPE (though OSHA is instructing its field offices to exercise “discretion” when assessing PPE complaints, considering the nationwide shortage during the outbreak). Where applicable, information regarding airborne infection isolation rooms or areas and periodic testing procedures. (OSHA is referencing previously published Tuberculosis guidance). Employers should also keep in mind the relevant OSHA standards at play. There is no specific OSHA standard that covers COVID-19. However, the recent guidance has provided a list of OSHA standards that may be applicable: 29 CFR § 1904, Recording and Reporting Occupational Injuries and Illness. 29 CFR § 1910.132, General Requirements - Personal Protective Equipment. 29 CFR § 1910.133, Eye and Face protection. 29 CFR § 1910.134, Respiratory Protection. 29 CFR § 1910.141, Sanitation. 29 CFR § 1910.145, Specification for Accident Prevention Signs and Tags. 29 CFR § 1910.1020, Access to Employee Exposure and Medical Records. Section 5(a)(1), General Duty Clause of the OSH Act. Most commonly referenced is the General Duty Clause, 29 USC 654(a)(1), which requires employers to furnish to each worker: employment and a place of employment, which are free from recognized hazards that are causing or are likely to cause death or serious physical harm. This clause has been interpreted to require employers to understand their industry and safety standards, provide information to employees regarding rights and duties, and to generally ensure that employees have available safe tools and equipment in their workplace.  A violation of the general duty clause exists when: (1) the employer failed to keep the workplace free from a recognized hazard that (2) caused or was likely to cause death or serious physical harm and (3) a feasible option existed that – had it been implemented – would have materially reduced the likelihood of the existence of the hazard. Overall, the guidance explains that the most recent CDC guidelines should be used to assess potential workplace hazards and – importantly – to evaluate the adequacy of an employer’s protective measures for its workers. This means employers should continue to monitor the CDC website and update their procedures and actions based on the most current CDC recommendations. Employers who receive a complaint from OSHA should seek advice from counsel to ensure a timely and thorough response is provided.

During this COVID-19 pandemic, many unions have argued their members are in a proverbial Catch-22.  While employees understand they should not go to work with symptoms of COVID-19, they also cannot miss a paycheck.  Complicating matters for those employees, especially those who work as health care providers or first responders, they are exempt from the sick leave benefits provided by the Families First Coronavirus Response Act (“FFCRA”), leaving them to either use their accrued PTO or take the leave unpaid.  In these situations, unions have demanded to negotiate paid sick leave or “hazard pay,” even though most collective bargaining agreements do not obligate employers to engage in such mid-term bargaining. Perhaps understanding this quandary, the Illinois Workers’ Compensation Commission (“Commission”) approved an emergency rule, effectively immediately and for the next 150 days, where health care providers and first responders with COVID-19 are assumed to have contracted it at work, and, hence, are eligible for workers’ compensation benefits.  These benefits include a portion of the employee’s compensation (typically 2/3s) and payment for all medical bills related to the diagnosis. It is likely that, even in the absence of this emergency announcement, employees who directly treat patients with COVID-19 would have access to workers’ compensation benefits.  What was unexpected was the emergency rule allows any employee who works for “essential businesses” to also claim these benefits without requiring proof they caught the virus at work.  Those who work at nursing homes, grocery stores, pharmacies, restaurants open for delivery/curbside service, marijuana dispensaries, etc. can file for comp benefits even if they were not treating COVID-19 patients in the discharge of their duties.  As of April 16, Illinois had over 25,000 confirmed cases of COVID-19; with this new rebuttable presumption, cost of workers’ compensation insurance may skyrocket. Employer organizations such as the Illinois Manufacturers’ Association, Illinois Retail Merchants Association, and the Associated Beer Distributors of Illinois have vowed to fight the emergency rule, including litigation.  At issue is the Commission’s authority to enact a policy outside the legislative process without providing more than 24 hours’ notice (and possibly violating the Illinois Open Meetings Act). Employers in Illinois should consult their in-house or outside counsel, their insurance carrier(s), and any attorneys appointed by those carriers to discuss any questions they may have regarding this development.

On April 7, 2020, Mayor Eric Garcetti signed into law the ordinance recently passed by the Los Angeles City Council mandating that certain large employers offer up to 80 hours of “COVID-19 Supplemental Paid Sick Leave” to employees working within the City of Los Angeles, with some notable modifications to the original ordinance.  The new law, which is effective immediately, was passed in response to the COVID-19 pandemic and to supplement the recently passed Families First Coronavirus Response Act (“FFCRA”).  Here are answers to key questions regarding the new law (which have been updated to reflect Mayor Garcetti’s modifications): Which employers must offer COVID-19 Supplemental Paid Sick Leave? Employers with (i) 500 or more employees within the City of Los Angeles; or (2) 2,000 or more employees nationally.  Some limited exceptions are noted below. Which employees are eligible for the COVID-19 Supplemental Paid Sick Leave? For an employee to be eligible, they: Must work within the geographic boundaries of the City of Los Angeles; Must have worked for the same employer from February 3, 2020 to March 4, 2020; Must experience one of the following qualifying events: A public health official or health provider requires or recommends the employee isolate or self-quarantine to prevent the spread of COVID-19; or The employee is at elevated risk because they are least 65 years old or has an underlying health condition such as heart disease, asthma, lung disease, diabetes, kidney disease, or weakened immune system; or The employee needs to care for a family member who is not sick but who public health officials or health providers have required or recommended  isolate or self-quarantine; or The employee needs to care for a family member because their senior care provider, school, or childcare provider is closed.  This is only applicable to an employee who is unable to secure a “reasonable alternative caregiver.” Employers may not require a doctor’s note for the employee to utilize the supplemental leave, and must grant upon the oral or written request of an eligible employee. How much sick leave must be provided to eligible employees under the new law? Full-time employees can take up to 80 hours of paid sick leave, which shall be calculated based on an employee’s average two week pay over the period of February 3, 2020 through March 4, 2020; Part-time employees can take to up to the average number of hours they worked in a two-week span over the period of February 3, 2020 to March 4, 2020; The total amount paid per day is capped at $511 and no more than $5,110 in the aggregate; If an employee is jointly employed by two or more employers, they are only entitled to the aggregate amount of leave specified for employees of one employer. Are there any exemptions? Yes, the following individuals are exempt: Emergency Personnel, including all first responders, gang and crisis intervention workers, public health workers, emergency management personnel, emergency dispatchers, law enforcement personnel, and related contractors and others working for emergency services providers; Health care providers, including those defined by the U.S. Secretary of Labor to be capable of providing health care services under the FMLA and those working at a licensed health care facility; Employees that provide global parcel delivery services; and Employees of government agencies working within the course and scope of their public service employment. Additionally, the following employers are exempt from the new law: Employers who have a paid leave or paid time off policy that provides a minimum of 160 hours of paid leave annually; New businesses that started in the City or relocated from outside the City on or after September 4, 2019 through March 4, 2020, and were not in business in the City in the 2018 tax year.  Certain construction businesses and film producers are excluded from this exemption; and Any business or organization that was closed or not operating for a period of 14 or more days due to a city official’s emergency order because of COVID-19 or provided at least 14 days of leave. A collective bargaining agreement in place on the effective date of the new law may also supersede the new mandate if it contains COVID-19 related sick leave provisions.  When the collective bargaining agreement expires or is open for renegotiation, COVID-19 Supplemental Paid Sick Leave can also be expressly waived if explicitly set forth in the agreement in clear and unambiguous terms. When is the program effective? The law is effective as of April 7, 2020 and will be effective until two calendar weeks after the expiration of the COVID-19 local emergency period. How does this program interact with the newly passed FFCRA? It does not.  This ordinance only impacts employers with greater than 500 workers in aggregate.  The FFCRA only applies to employers with fewer than 500 workers in aggregate.  Regardless, the two leaves would run concurrently. Is there any offset if our Company recently offered employees paid time off or other paid leave for these same reasons? An employer’s obligation to provide COVID-19 Supplemental Paid Sick Leave is reduced for every hour the employer allowed the employee to take leave, not including previously accrued hours, for any of the reasons listed above on or after March 4, 2020. COVID-19 Supplemental Paid Sick Leave is in addition to California or Los Angeles-mandated paid sick leave. What happens if an employer does not comply with the new law? Under the new ordinance, an employer must not retaliate against an employee for exercising their rights under the new law.  Any employee claiming a violation under this ordinance may file an action in the Superior Court of the State of California and may be awarded reinstatement, back pay and COVID-19 Supplemental Paid Sick Leave unlawfully withheld, and other equitable relief.  A court may also award reasonable attorneys’ fees to a prevailing employee. For questions relating to this new Los Angeles City law, please do not hesitate to reach out to a Polsinelli attorney.

A growing number of states, along with Puerto Rico, the Navajo Nation and a significant number of counties and municipalities, have issued mandatory “shelter in place” or “stay at home” orders. To read more about these orders, click here. Many other states, counties, and municipalities have ordered that all nonessential work stop in their areas. Although the shelter in place orders are more restrictive (significantly limiting the movement of residents and the operation of businesses in each affected jurisdiction), the essential work only orders are also incredibly disruptive to employers and employees alike. For more information about shelter in place and other orders, please see our COVID-19 resource library. While there is a distinct chance the federal government will issue similar restrictions for the entire country in the near future, at this time no federal agency has mandated the closure of businesses. There are, however, many federal agencies actively involved in managing the pandemic crisis. Particularly, the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency issued guidance to state and local “critical infrastructure” workforce of multiple industries: in other words, the employees whose services are essential for certain businesses that must remain open during the COVID-19 pandemic. This guidance will advise employers along with additional jurisdictions as they develop their “red alert” orders. It will also guide all jurisdictions in interpreting their own orders as they make enforcement decisions or otherwise interpret their orders based on the circumstances as they unfold. Every business needs to prepare for the possible imposition of such orders regardless of the current situation in their state. While the shelter in place orders have some differences, they typically have the following common characteristics: Businesses not deemed “essential” are ordered to cease operations or greatly restrict operations to work that can be completed by employees remotely in their homes. Only essential employees or employees needed for minimum basic operations may leave their homes to support “essential businesses.” Residents must stay in their homes except to engage in “essential activities,” when they are qualifying employees of an essential business, or for outdoor exercise during which social isolation practices must be practiced. Travel is greatly restricted with a handful of exemptions. Both the shelter in place and nonessential business restriction orders have significant implications for all businesses, which is why we have created a devoted team to assist businesses with the following steps: Interpret the specific requirements of each applicable order. Determine if the business qualifies as an essential business. If the business qualifies as an essential business, determine the minimum basic operations of the business and which workers qualify as essential employees. Develop notices to employees regarding the essential status of the business, and written confirmation or certifications for essential employees to present when stopped by or dealing with police or public agencies charged with enforcing the order. Review staffing needs and placement options, including paid and unpaid leaves, furloughs, and layoffs. Develop effective notices to suppliers, vendors, and customers regarding the status of the business under the order. Consider possible support and assistance offered at the state and federal level to support businesses impacted by these orders. Given how quickly this situation is evolving, it is imperative that all businesses develop a clear strategy for dealing with these orders and limitations. Please call your Polsinelli attorney or email COVID19Questions@Polsinelli.com for immediate assistance. *This post was originally published on March 22, 2020

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.

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (the “Act”), requiring employers with fewer than 500 employees to provide paid leave benefits related to the COVID-19 pandemic under the Emergency Family and Medical Leave Expansion Act (“Paid FMLA Leave”) and Emergency Paid Sick Leave Act (“Paid Sick Leave”). The details of the Act are set out in our earlier Blog post here. Since the Act was passed, there has been much discussion about how employees across related companies should be counted for purposes of coverage. Today, the Wage and Hour Division of the Department of Labor issued a “temporary regulation” or rule that clarifies this issue, which can be found here.[i]  The temporary rule remains in effect through December 31, 2020 when these provisions sunset.  In evaluating this issue, it is important to note that the two leave requirements arise in different portions of the Act. The right to Paid FMLA Leave is set forth in Division C of the Act, which amends the existing statutory text of the Family and Medical Leave Act (“FMLA”). The right to Paid Sick Leave is set forth in Division E of the Act. While both Divisions of the Act set the threshold for covered employers at “fewer than 500 employees,” neither provides express direction on how this number should be calculated across related entities. Today’s rule specifically addresses this issue. Pursuant to § 826.40 of the rule, which addresses issues related to employer coverage, aggregation of employees will occur in relation to both benefits when an employer meets either the “Integrated Employer” or “Joint Employer” tests. As a general matter, the legal entity which employs the employee is the “employer.” Where one corporation has an ownership interest in another corporation, it is a separate employer unless it is an “Integrated Employer” or a “Joint Employer.”[ii] To determine whether separate entities are considered an “Integrated Employer,” the Department of Labor considers “the entire relationship” between the parties “reviewed in its totality” based on the following four factors: (i) Whether there is common management; (ii) Whether the entities’ operations are interrelated; (iii) Whether there is centralized control of labor relations; and (iv) The degree of common ownership/financial control of the entities. If the factors indicate the entities are an Integrated Employer, the employees of all entities making up the Integrated Employer are counted to determine employer coverage and eligibility for Paid Sick Leave and Paid FMLA Leave. Even if separate entities are not considered an Integrated Employer, the Department of Labor may consider separate entities a “Joint Employer” if the entities each exercise some control over the work or working conditions of an employee. Notably, the joint employer test does not require common ownership. Joint employers may be separate and distinct entities with separate owners, managers, and facilities. Nevertheless, if an employee performs work that simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, the separate entities may be considered a Joint Employer. To evaluate whether an employee’s work simultaneously benefits two employers, the DOL applies a four-factor balancing test assessing whether the potential joint employer: (i) Hires or fires the employee; (ii) Supervises and controls the employee’s work schedule or conditions of employment                              to a substantial degree; (iii) Determines the employee’s rate and method of payment; and (iv) Maintains the employee’s employment records. The potential joint employer must actually exercise—directly or indirectly—one or more of these indicia of control to be jointly liable under the Act; however the potential joint employer’s maintenance of the employee’s employment records alone will not lead to a finding of joint employer status.  DOL guidance on the Joint Employer test can be found here. If two entities are found to be joint employers, all of their common employees must be counted in determining whether the Paid Sick Leave and Paid FMLA Leave obligations apply. Employers should exercise caution in oversimplifying the Integrated Employer and Joint Employer analyses to avoid coverage under the Act. An employer who takes the position that they are an Integrated Employer or Joint Employer for purposes of avoiding coverage under the Act may later find they waived their ability to assert they are separate entities in litigation or other disputes. Employers are encouraged to consult with counsel to determine coverage under the Act. [i] This rule is different from guidance the DOL provided recently in the form of FAQs. [ii] 29 CFR 825.104(c)(1).

On April 1, 2020, the Wage and Hour Division of the Department of Labor (“DOL”) issued temporary regulations (“Regulations”) to implement the Public Health Emergency Leave (“Emergency FMLA Leave”) and Emergency Paid Sick Leave (“Paid Sick Leave”) benefits available under the Families First Coronavirus Response Act (“the “Act”). The Regulations took immediate effect, on the effective date of the Act, and remain in effect through December 31, 2020, when the Act expires. The Regulations expand on the DOL’s guidance or “Families First Coronavirus Response Act: Questions and Answers,” which were issued late the week of March 23 and updated over the following weekend.  In some instances, the Regulations are inconsistent with the DOL’s former guidance – particularly with regard to: (1) The reasons an employee may take Paid Sick Leave, (2) The applicability of the integrated employer and joint employer tests which are used to determine the number of employees for purposes of coverage under the Act, and (3) The documentation employers may request to determine an employee’s eligibility for leave under the Act. The DOL updated its previous guidance or Questions and Answers on April 1, 2020 (here), to conform to the Regulations. A brief summary of several sections that (1) depart from the DOL’s former guidance or (2) provide new information the DOL did not previously address is below. Government Orders The Regulations expand the qualifying reasons for Paid Sick Leave to include containment, shelter-in-place and stay-at-home orders.  However, an employee is only entitled to Paid Sick Leave if the order “cause[s] the Employee to be unable to work even though his or her Employer has work that the Employee could perform but for the order.” Significantly, the Regulations further broaden “Subject to a Quarantine or Isolation Order” to include: when a Federal, State, or local government authority has advised categories of citizens (e.g., of certain age ranges or of certain medical conditions) to shelter in place, stay at home, isolate, or quarantine, causing those categories of Employees to be unable to work even though their Employers have work for them. Advice to Self-Quarantine The Regulations state that an employee has been “advised by a health care provider to self-quarantine due to COVID-19 concerns” for purposes of Paid Sick Leave if: (i) A health care provider advises the Employee to self-quarantine based on a belief that— (A) the Employee has COVID-19; (B) the Employee may have COVID-19; or (C) the Employee is particularly vulnerable to COVID-19; and (ii) following the advice of a health care provider to self-quarantine prevents the Employee from being able to work, either at the Employee’s normal workplace or by Telework. Similarly, the Regulations provide that an employee may take Paid Sick Leave to care for another who has received any of the same recommendations.  On that point, the Regulations explain that to qualify for Paid Sick Leave, the other person must be: an Employee’s immediate family member, a person who regularly resides in the Employee’s home, or a similar person with whom the Employee has a relationship that creates an expectation that the Employee would care for the person if he or she were quarantined or self-quarantined. For this purpose, ‘individual’ does not include persons with whom the Employee has no personal relationship. Seeking a Diagnosis With respect to people who suspect that they are ill, the Regulations clarify that if an employee is taking leave because they are “experiencing COVID-19 symptoms and seeking medical diagnosis,” the employee’s Paid Sick Leave “is limited to the time the Employee is unable to work because the Employee is taking affirmative steps to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test.” Employer Coverage The Regulations provide that all common employees of joint employers or all employees of integrated employers must be counted together to determine coverage under the Act.  We have covered this issue in more detail here. Notice of Need for Leave and Documentation of Need for Leave The Regulations regarding documentation of the need for leave are a departure from the DOL’s former guidance, which suggested that an employer could require a variety of documents with a request for Paid Sick Leave or Emergency FMLA Leave.  The Regulations provide that an employer may not require a notice of the need for leave to include documentation beyond what is listed below. Before taking either Paid Sick Leave or Emergency FMLA Leave, all employees must give their employers documentation that includes: (1)  The employee’s name; (2)  The date(s) for which leave is requested; (3)  The qualifying reason for the leave; and (4)   A written or oral statement that the employee is unable to work because of the qualifying reason for leave. Before taking a Paid Sick Leave or Emergency FMLA Leave, some employees must additionally provide: o   For an employee subject to a federal, state or local quarantine or isolation order related to COVID-19: the name of the government entity that issued the Quarantine or Isolation Order o   For an employee advised by a health care provider to self-quarantine due to COVID-19 concerns: the name of the health care provider who advised the employee to self-quarantine due to concerns related to COVID-19. o   For an employee caring for an individual subject to a federal, state or local quarantine or isolation order or a health care provider’s advice to self-quarantine due to COVID-19 concerns: either (a) the name of the government entity that issued the Quarantine or Isolation Order to which the individual being cared for is subject or (b) the name of the health care provider who advised the individual being cared for to self-quarantine due to concerns related to COVID-19. o   For an employee caring for the employee’s child whose school or place of care is closed or the child’s care provider is unavailable due to a public health emergency) or Emergency FMLA Leave: the name of the employee’s child (or children), the name of the closed or unavailable school or child care provider, and a representation that no other suitable person will care for the employee’s child when the employee takes Paid Sick Leave or Emergency FMLA Leave. In addition to the information specifically identified, the Regulations generally state that an employer may request that an employee provide additional material as needed to support the employer’s request for tax credits pursuant to the Act.  And, the Regulations state that employers are not required to provide an employee’s request for leave if the employee fails to provide materials sufficient to support the applicable tax credit.  With respect to documents required for tax credits, the Regulations refer to https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs (“IRS FAQs”) for more information. Significantly, neither the Regulations nor the IRS FAQs specify any additional information employees must provide an employer to take Paid Sick Leave based on experiencing COVID-19 symptoms and seeking medical diagnosis or for employees experiencing any other substantially similar condition specified by the federal government. While the Regulations answer questions about the process of requesting leave under the Act, the Regulations leave open questions about: Whether employers can require additional documentation substantiating the need for leave after a Paid Sick Leave or Emergency FMLA Leave is approved. Whether the DOL will issue additional Regulations or the IRS will issue additional guidance on the documentation process in the coming weeks. Recordkeeping Finally, under the Regulations, an employer must: Retain all documentation related to an employee’s request for or entitlement to Paid Sick Leave or Emergency FMLA Leave for four years, regardless of whether the leave was granted or denied. Document and keep any oral statements an employee provided to support a request for Paid Sick Leave or Emergency FMLA Leave for four years. Have an authorized officer document that the employer is eligible for the small employer exemption to the Act when the employer denies an employee’s request for Paid Sick Leave or Emergency FMLA Leave (and keep such documentation for four years). Notably, the Regulations provide that a small employer must post a notice regarding the Act, even if the employer determines that it is exempt.

Since the Families First Coronavirus Response Act was signed on March 18, 2020, employers of health care providers have wondered how much of their workforce would be eligible for paid sick leave and emergency FMLA leave. (Our prior blog post on this topic is available here.) Just in time for the April 1 effective date of the FFCRA, the Department of Labor has provided new guidance. (The guidance is available here) While existing FMLA regulations provided exemptions for a number of specific provider types, many employees of health care facilities would not have been exempt. Under the DOL’s updated guidance, the health care exemption applies to everyone employed at a: doctor’s office hospital health care center health clinic pharmacy post-secondary educational institution offering health care instruction medical school nursing facility retirement facility nursing home home health care provider facility that performs laboratory testing facility that performs medical testing local health department or agency The guidance also includes a catch-all category for employers similar to the listed employers. Further, the guidance allows exemptions for employees of entities that provide services to or maintain the operations of any of the employers listed above. Accordingly, all clinicians and non-clinical staff members working for health care employers or their contractors / vendors are exempt – they do not qualify for either paid sick leave or emergency FMLA leave under the FFCRA. While the definition of health care provider is quite broad, the DOL urges employers to “be judicious” in exempting workers apparently based on its concern that employees could spread COVID-19 if leave is not available. This guidance is an important reminder to employers to consider how their policies may influence whether an employee who is sick will feel incentivized to come to work.

For any employer that has gone through it, receiving news that one of your employees has been diagnosed with or was exposed to COVID-19 is a scary and revealing experience. What was once – even just 10 days ago – remote and hypothetical, immediately becomes real; raising urgent questions that require immediate, potentially-life-saving answers and actions. Perhaps the most urgent of these questions involves “contact tracing” – the required process of identifying every individual who came into close or direct contact[1] with the infected individual in the workplace within the last 14 days so those individuals may self-quarantine, closely monitor themselves for possible symptoms, and otherwise take steps to help prevent setting off entirely new chains of transmission. As employers look to implement critical mitigation strategies in accordance with guidance from the CDC (e.g., social distancing, limiting travel, staggering work schedules, regular health checks), employers must also give serious thought now to how contact tracing will be handled if, and when, an employee contracts (or likely contracted) COVID-19. Delay or uncertainty in creating a reliable and accurate “contact list” will delay efforts to notify employees that they should self-quarantine and closely monitor themselves for possible symptoms of COVID-19. In this crisis, employees are looking to their employers for information to help them make informed decisions about how they can protect themselves, their families and their communities. It’s an unprecedented moment for employers. Employers who are not prepared to generate a comprehensive and accurate “contact list” immediately following a possible exposure have limited options. They are left with issuing vague exposure notices that provide little actionable information to employees and potentially exacerbate the fear and anxiety many workers are already experiencing. Such employers also face the risk that health authorities will recommend or require a prolonged closure of operations pending completion of a contact tracing investigation. Current retroactive contact tracing efforts also suffer significant practical limitations – they depend on the collection of information after the fact, with all of the fallibilities that human memory and time can bring. Sorting through these challenges with relatively low level outbreaks may be manageable, but not so in the current global pandemic. The strain on already strained health authority resources is a recognized problem. In the healthcare setting, the CDC has already suspended its valuable, but resource consuming contact tracing efforts, with one CDC official recently explaining that “Dedicating resources to contact tracing and ‘retrospective risk assessment’ takes resources away from other critical infection prevention and control measures…” So what can an employer do? One answer is surprisingly simple: set social distancing rules and then identify, limit, trace and audit employee contacts that do not comply with those social distancing rules before any diagnosis. A well-developed Advance Contact Tracing (“ACT”) program incorporated into an employer’s overall Pandemic Response Plan puts employers and employees in a rare position of control in these seemingly uncontrollable times. Here is one possible approach to rapidly establishing an ACT Now program: Set Social Distancing Rules. First, consider whether your operation is subject to and able to comply with strict social distancing requirements. In some environments, it may be possible to achieve perfect compliance with rules such as those prohibiting employees from coming within 6 feet of each other for any prolonged period. (See, CDC’s “Consider establishing policies and practices for social distancing.”)  However, it would be a potentially serious error to simply rely on the hope that individuals have perfectly adhered to strict social distancing as part of your pandemic response plan. Even in those workplaces where it is theoretically possible to achieve perfect compliance, human error, emergencies and unforeseen situations may lead to close or direct contact between coworkers and should be expected. An effective ACT Now program will take this into account. Identify. Based on a careful assessment of your company’s physical sites, layout(s), organizational structure and processes, identify the expected or “presumptive” list of likely close or direct contacts that an employee may be expected to have throughout the day. The exercise need not be overly complicated. For most employers, the data needed to perform this exercise already exists in a readily sortable format; namely, in the company’s HR Information System (HRIS), which can be filtered by location, function, immediate supervisor or team lead. This exercise will also help identify administrative controls (e.g., policies or procedures) and engineering controls (e.g., partitions or barriers) that could be implemented to further enhance social distancing efforts. Engaging in this exercise before any exposure will also save valuable time if a future diagnosis occurs – providing an immediately available potential contact list that can be used in support of initial self-quarantine recommendations. Limit. For those workplaces where direct or close contact is necessary and unavoidable (e.g., to safely perform a task), contacts should be limited to the smallest possible team. In establishing these teams, consider the potential impact of a positive diagnosis within the team --- all members of the team would be required to self-quarantine, so define teams with redundancy and continuity in mind. Don’t put everyone who can perform a critical function on the same team. Expect the Expected --- Create Daily Exception Reporting: Establish an easy to use exception reporting process to trace contacts outside of the contact team or that otherwise violate the employer’s social distancing rules. A daily form (paper or electronic) at the end of the work day (for supervisors and/or individual employees) could work. A dedicated email box or even hotline number could be especially helpful. If done properly, employers need not roll out new or complex technological solutions, though such solutions could be effectively utilized (e.g., card swipe, security camera or other tracking or security systems). Foster Voluntary Contact Reporting. Successful voluntary contact reporting depends on creating an environment where employees do not fear retaliation or adverse consequences to themselves or others for fully disclosing their contacts (See, the CDC’s “Maintain Healthy Business Operations”). Do not use voluntarily reported contacts as a basis for discipline (e.g., for violating social distancing rules). Consider how reports can be kept as confidential as possible to eliminate potential barriers to full disclosure (for example, an employee may be reluctant to tell a direct supervisor about contacts during the day with friends). Consider implementing comprehensive COVID-19 related leave benefits so employees will not worry that voluntary reporting will result in friends and colleagues being forced into leave without pay if an exposure occurs. For some employers (i.e., those with fewer than 500 employees), the cost of such benefits may be reimbursed under the Families First Coronavirus Act. Communicate & Train. ACT Now is easy to communicate and train as part of an employer’s overall pandemic response program. The message is simple: (1) Maintain Social Distancing; and (2) Keep Calm and Track Close Contacts. Provide manager and supervisor training so they understand their roles and responsibilities in the process and can help effectively re-enforce the steps individual employees can and should take to reduce their risks of exposure. Audit & Improve. Advance contact tracing data will be valuable on rolling 14-day day periods. The information should be reviewed regularly to ensure accuracy, including by conducting periodic interviews with supervisors and employees to validate the accuracy of the information. Of course, an effort should also be made after a diagnosis to also attempt to confirm the accuracy of the contact list with the patient (if they are available). The audit process will also help identify opportunities for improvement --- i.e., by identifying possible ways to reduce each employee’s direct or close contacts in the workplace, as recommended by the CDC. Finally, the audited ACT data may be helpful in determining whether a COVID-19 diagnosis resulted from a workplace exposure (triggering potential OSHA reporting obligations under 29 CFR 1904). Polsinelli can assist in rapid implementation of an ACT Now program, including by helping to rapidly (in 24 hours) create and implement the needed policies, communications, exception reporting processes, training and audit procedures. This is something that employers can do now and improve on a rolling basis. Given the “slow, staged progression back to normalcy” expected in the current pandemic, an ACT Now program can be a valuable tool in the coming months as employers work toward an orderly return to daily life. [1] Close contact is defined as:  a) being within approximately 6 feet (2 meters), of a person with COVID-19 for a prolonged period of time (such as caring for or visiting a patient; or sitting within 6 feet of a patient in a healthcare waiting area or room); or b) having unprotected direct contact with infectious secretions or excretions of the patient (e.g., being coughed on, touching used tissues with a bare hand). https://www.cdc.gov/coronavirus/2019-ncov/hcp/guidance-risk-assesment-hcp.html?deliveryName=FCP_8_DM21038

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a $2 trillion stimulus package aimed to benefit both individual taxpayers and businesses. This update provides a summary of those provisions of the CARES Act directly impacting employer sponsored health and welfare benefit plans, retirement plans and limitations on executive compensation. Expansion of Telehealth Services With very limited exceptions, prior to the CARES Act, a high deductible health plan (“HDHP”) that provided coverage below fair market value for services incurred prior to satisfying the plan’s minimum deductible would jeopardize a participant’s eligibility to make contributions to a health savings account (“HSA”). The CARES Act creates a safe harbor allowing an HDHP to provide free or discounted coverage of telehealth services prior to the participant otherwise satisfying the applicable minimum deductible and still allowing the HDHP participant to remain HSA eligible. Note, that although this safe harbor became effective immediately upon enactment of the CARES Act, it only applies for plan years beginning prior to December 31, 2021 and is not mandatory. This new safe harbor will be a critical component of employer sponsored medical plans as officials continue to advocate for the use of telehealth services in order to limit exposure to the coronavirus. Reimbursement of Over-the-Counter Drugs and Products The CARES Act once again makes over-the-counter drugs includable as qualified medical expenses for purposes of payment and/or reimbursements from HSAs, Flexible Spending Accounts, Health Reimbursement Accounts, and Archer Medical Savings Accounts. Not only does the CARES Act unwind this change that had been made by the Affordable Care Act in 2010 to exclude over-the-counter drugs as qualified medical expenses, but it goes one step further by adding that the costs for menstrual care products are likewise a qualified medical expense which is reimbursable. Under the CARES Act, this change as to what is included as a qualified medical expense is effective for expenses incurred after December 31, 2019. Payment of Employee’s Student Loans With respect to payments made by an employer (or holder of student loan) beginning on March 27, 2020 and ending December 31, 2020, the CARES Act amends Internal Revenue Code Section 127 to permit employers to contribute up to $5,250 toward the payment of certain employees’ student loans. This is an expansion of the otherwise qualified education expenses already permitted to be paid by an employer on a tax-favored basis under Code Section 127. Retirement Plans Penalty–Free Coronavirus Related Distributions. At any time during 2020, retirement plans and IRAs may permit distributions of up to $100,000, free of the otherwise applicable 10% early distribution penalty, for plan participants (1) who themselves have been diagnosed with SARS-CoV-2 or COVID-19 by a test approved by the Centers for Disease Control (CDC), (2) have a  spouse or dependent who has been diagnosed by such a test, or (3) who experience adverse financial consequences as a result of being quarantined, furloughed, laid off, or suffered reduced working hours, or who is unable to work due to lack of child care. The CARES Act allows a plan administrator to rely on a certification provided by the participant that he or she satisfies the above-described criteria. Unlike typical hardship distributions, this special coronavirus-related distribution may be repaid to the plan, or contributed to another eligible retirement plan, at any time over the three-year period commencing on the date the distribution was received (and there is no requirement that the repayment occur in a single payment). Further, Federal income tax withholding is not required at the time of distribution, and the participant may spread the taxation of the amount distributed over a three-year period to the extent that he or she does not otherwise repay the amount to the plan during that three-year period. Retirement Plans and IRAs are not required to permit coronavirus-related distributions, therefore plan amendments will be required in order to provide for such distributions. Under the CARES Act, such amendments will not be required any earlier than the end of the 2022 plan year. Plan Loan Relief and Increases. The CARES Act increases the limit on new loans from eligible retirement plans and provides for an up to one-year extension on the repayment of existing loans. With respect to new loans, the current maximum dollar limit of $50,000 is replaced with $100,000, while the maximum loan percentage is increased from the current 50% account balance limit to 100% of the account balance. These optional loan provisions are applicable only to the same participants who are eligible for the coronavirus-related distributions described above, and are available for the 180 day period following enactment of the CARES Act. With respect to loans already in repayment status, the CARES Act allows repayments otherwise due from the date of enactment through December 31, 2020 to be delayed for one year from the original due date. Subsequent loan repayments must be adjusted to reflect the delay in the 2020 repayment, including the accrual of any interest during that time. The individuals to whom this provision applies are the same as those covered by the provision permitting coronavirus-related distributions. As with the coronavirus-related distributions, employer’s wishing to implement the loan relief provisions of the CARES Act will need to amend their plans accordingly, but no amendments are required to be adopted prior the end of the 2022 plan year. Delayed Required Minimum Distributions. Employers with defined contribution plans (e.g., 401(k), 401(a), 403 (a) and (b), and 457(b) plans) may elect to implement a one-year delay on required minimum distributions (“RMDs”). Note, this optional delay does not apply to defined benefit plans.  The delay applies to both 2019 RMDs that needed to be taken by April 1, 2020 and 2020 RMDs. Employers should begin working with their third party plan administrators as soon as possible in order to implement this optional delay with respect to any 2019 RMDs. Delayed Minimum Funding Requirements. The CARES Act postpones the timing of minimum funding contributions for single-employer retirement plans that would otherwise become due during 2020. As a result, all quarterly payments due with respect to the 2020 plan year, as well as final payments for the 2019 plan year, are all due January 1, 2021. An Employer should take into consideration, when deciding whether to delay funding of its contributions, that interest will accrue from the original due date through the payment date of January 1, 2021. Compensation Limits Tied to Government Loans The CARES Act provides for loans and loan guarantees to business and nonprofit organization, and while those loans and loan guarantees are critically needed to provide liquidity to companies, they come with tight restrictions on compensation paid to certain officers and employees. Specifically, in order to receive such a loan, the company must agree to cap all compensation of employees receiving more than $425,000 per year to the amount of compensation paid in 2019, and any severance pay or other benefits payable upon termination cannot exceed twice the 2019 compensation amount. Further, any officers or employees receiving total compensation of $3 million or more cannot receive total compensation in excess of (i) $3 million plus (ii) 50% of the excess over $3 million. For example, an officer who was paid $5 million in 2019 may only receive $4 million during the period in which the restrictions apply. Under the CARES Act, these restrictions remain in place until one year after the date the loan or loan guarantee is no longer outstanding. For air carriers or contractor that receives financial relief under the air carrier worker support provisions of the CARES Act, the same limits on compensation apply but such limits remain in effect during the two-year period beginning on March 24, 2020 and ending on March 24, 2022. Affected companies are also restricted from making stock repurchases and issuing dividends. There are many unanswered questions related to what must be taken into account as “compensation” for purposes of the above restrictions, as well as whether amounts may be made-up once the restrictions lapse. Further guidance from the Treasury Secretary is anticipated and will guide decisions related to the affected employees’ compensation. In the meantime, organizations and businesses that intend to take advantage of the new loans programs should begin to identify employees and officer impacted by the compensation restrictions and plan accordingly. In addition to the compensation restrictions discussed above, organizations and businesses that employ between 500 and 10,000 employees that receive loans or loan guarantees will be required to “make a good-faith certification that the business or organization will remain neutral in any union organizing effort for the term of the loan.” The CARES Act does not define “neutral” or provide guidance on what exactly is a “union organizing effort.”  Neutrality agreements involving union organizing attempts typically require the employer to refrain from urging its employees to oppose union representation.  Other neutrality agreements require employers to accept unionization of its employees without a secret ballot election.

The current wave of “shelter in place” and other similar orders has triggered concern among many businesses – large and small – about their own business continuity. The lack of clarity around what such restrictions require (and don’t require) and when they will be fully lifted has created considerable and understandable confusion and anxiety. Polsinelli has been assisting clients with navigating the rules around who is and is not “essential” and, therefore, able to work (at least outside of their home). Thought needs to be given now, however, to where employers should be by April 7th(ish) – when employees in some states may be able to start returning to work. The CDC has made clear that while strict containment measures are critically important at the moment - to help “flatten the curve” - they are not indefinite. The CDC refers to these efforts as a “15 day pause.”  Most of these orders are set to expire between April 7 and April 21.  The CDC cautions, however, that “15 days may not be long enough and will depend on a variety of factors from community to community.” But what comes next? The CDC describes a “slow, staged progression back to normalcy” and urges communities to “begin planning for an orderly return to daily life.” The CDC further offers ample guidance as to the steps that employers can take to help prepare for that “slow, staged progression back to normalcy.” Employers have a rare opportunity now to “retool” for the return to normalcy. We will offer further guidance in the coming days and weeks, but here is a rough blueprint: Expect the Expected. The return to normalcy will be slow. When restrictions ease, it is likely that some significant containment measures will remain, including with respect to identifying and isolating individual cases and restricting travel to and from regions that are experiencing on-going community transmission. Review your contingency plans. Can production, distribution or operations be transferred between locations to minimize disruption when necessary? Are workers cross-trained in critical functions? Have you diversified your global supply chain or begun planning to do so mitigating the risks posed by any one region? Reconfigure your physical facilities. Move work stations; move tables; space them out; mark lanes; develop user-friendly signs; plan to add hand sanitizer stations (at least when supplies catch up). Reconfigure administrative safeguards. Many employers have had a crash course in remote work. Don’t expect remote work to end on April 7. Improve and refine it. Use it whenever possible to reduce workplace congestion and enhance physical distancing efforts. Moving beyond remote work – review your hours of operations and consider new approaches. Stagger or create new shifts.  Reduce congestion and allow for increased environmental cleaning. Design a robust COVID-19/Pandemic Response Plan. It’s not too late to develop (or improve) your response plan. The current pandemic is not likely to end soon, though it will hopefully be improved by the 15 day pause effort around the country. Again, look to the CDC for guidance. An effective playbook should be: Flexible and involve substantial employee input. Tested against (1) your experience to date and (2) a focused discussion or exercise testing whether the plan has gaps or problems that need to be corrected. Transparent – share your plan with employees and explain what human resources policies, workplace and leave flexibilities, and pay and benefits will be available to them.  Employees will need to be and feel safe at work if they are to be productive. Rooted in best practices – talk to other businesses in your communities (especially those in your supply chain), chambers of commerce, and associations to improve community response efforts. Polsinelli will help facilitate these efforts. Begin now. April 15 is no longer tax filing day. April 7th(ish), however, is fast approaching and is just as important a deadline.

Employers have faced many questions as they prepare for the effective date of the Families First Coronavirus Act (FFCRA).  Many of those questions remained unanswered after the Department of Labor issued its “Families First Coronavirus Response Act: Questions and Answers” on Tuesday, February 23, 2020.  The DOL added to its guidance late Thursday, February 25, addressing some of these outstanding issues: What does it mean to be “unable to work” to qualify for leave under the FFCRA?  An employee is unable to work if the employer has work available for the employee to perform, either at a worksite or remotely, and the employee is unable to perform that work because of a COVID-19 qualifying reason.  A common example is if an employer has telework available, but the employee cannot perform the telework because the employee has a young child who needs supervision because the school is closed due to COVID-19. On the other hand, if the employer’s worksite is shut down, for example under a stay at home order, and the employee’s work cannot be performed remotely, the employee likely does not qualify for leave—the employee is able to work, the work is just not available.  Note, though, that a stay at home order is different from a quarantine or self-isolation order.  Employees under a quarantine/isolation order might be entitled to leave. Do laid off or furloughed employees qualify for leave?  No.  Once an employee is laid off or furloughed, whether before or after April 1, that employee is no longer eligible for leave under the FFCRA.  The same is true even if the employee is laid off or furloughed while on leave provided by the FFRCA.  The same is also true if an employer closes the worksite, before or after April 1, even for a brief or temporary period.  In sum, an employee is not entitled to leave under the FFCRA during the period while the business is closed, even if the closure was caused by a federal, state, or local order.  Similarly, an employee cannot use leave under the FFCRA for hours reduced by an employer, even if the reduction in hours was related to COVID-19. Can an employer require documentation showing an employee’s need for leave?  Yes.  An employer can and should require an employee to provide documentation showing the COVID-19 qualifying need for leave, such as a closure notice on a school website or a copy of a government order placing the employee under quarantine.   Indeed, an employer must require and retain documentation to claim for the tax credit available under the FFCRA.  There are no designated FFCRA forms.  However, an employee requesting emergency FMLA for a COVID-19 qualifying reason that rises to the level of a “serious medical condition” must continue to provide the medical certifications required under the FMLA. Click here for the fact sheet. Can FFCRA leave be used intermittently?  It depends.  If an employee is teleworking, the employee may use emergency FMLA or paid sick leave in any increment the employer agrees to.  If an employee is performing work at the employer’s worksite, the employee may use emergency FMLA or paid sick leave intermittently to care for the employee’s child(ren) whose school is closed or childcare is unavailable because of COVID-19 related reasons with the employer’s permission.  However, an employee must use emergency paid sick leave continuously in full day increments if the employee is subject to an isolation or quarantine order, has been advised by a healthcare professional to self-quarantine, is experiencing COVID-19 symptoms, or is caring for someone isolated because of or suffering from COVID-19 symptoms.  In these situations, the employee must use the emergency paid sick leave continuously until the employee exhausts the leave available or no longer has a qualifying reason for the leave.  Note the DOL’s guidance encouraged flexible, voluntary arrangements when the employee needs leave to care for a child who is out of school or does not have childcare due to COVID-19. Can FFCRA leave be used in conjunction with unemployment benefits?  Not under federal law.  Under federal law, an employee receiving paid leave under the FFCRA is not eligible for unemployment insurance benefits.  However, benefits may be available under state law as states have the authority to offer unemployment benefits to workers whose pay has been reduced. The full text of the DOL’s Q&A is available here.

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (the “Act”), requiring employers with less than 500 employees to provide Public Health Emergency Leave and Paid Sick Time to employees impacted by the Coronavirus pandemic.  The details of the Act are set out in our earlier Blog post here. Health care providers and first responders on the frontline of the pandemic have a critical need to understand how this requirement impacts their operations during this critical moment.  In evaluating this issue, it is important to note that the two leave requirements, one for child care and the other for illness, arise in different portions of the Act.  The right to Public Health Emergency Leave is set forth in Division C of the Act, which amends the existing statutory text of the Family and Medical Leave Act (“FMLA”).  The right to Paid Sick Time is set forth in Division E of the Act, which creates a new statute known as the Emergency Paid Sick Leave Act. Both of these Divisions address the application of leave provisions to health care providers.  Specifically, the FMLA amendment provides that the Secretary of Labor may issue regulations excluding certain health care providers from the definition of “Eligible Employee”.  The Emergency Paid Sick Leave Act provides that the Secretary of Labor may issue regulations “to exclude certain health care providers and emergency responders from the definition of employee under section 5110(1) including by allowing the employer of such health care providers and emergency responders to opt out.” Additionally, both the FMLA amendments and the Emergency Paid Sick Leave Act allow an employer of an employee who is a health care provider or an emergency responder to elect to exclude a health care provider from coverage under these expanded worker benefits.  The Act provides that the term “health care provider” as it is used in the FMLA amendments shall have the same meaning given to the term under Section 101 of the FMLA.  There is no similar provision in the Emergency Paid Sick Leave Act.  However, employers may look to the FMLA for guidance. The term “health care provider” is defined in Section 101(6) of the FMLA to mean (A) a doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate) by the State in which the doctor practices; or (B) any other person determined by the Secretary to be capable of providing health care services. The Secretary of Labor subsequently issued regulations expanding this definition to include the following: Podiatrists, dentists, clinical psychologists, optometrists, and chiropractors (limited to treatment consisting of manual manipulation of the spine to correct a subluxation as demonstrated by X-ray to exist) authorized to practice in the State and performing within the scope of their practice as defined under State law; Nurse practitioners, nurse-midwives, clinical social workers and physician assistants who are authorized to practice under State law and who are performing within the scope of their practice as defined under State law; Christian Science Practitioners listed with the First Church of Christ, Scientist in Boston, Massachusetts. Where an employee or family member is receiving treatment from a Christian Science practitioner, an employee may not object to any requirement from an employer that the employee or family member submit to examination (though not treatment) to obtain a second or third certification from a health care provider other than a Christian Science practitioner except as otherwise provided under applicable State or local law or collective bargaining agreement; Any health care provider from whom an employer or the employer's group health plan's benefits manager will accept certification of the existence of a serious health condition to substantiate a claim for benefits; and A health care provider listed above who practices in a country other than the United States, who is authorized to practice in accordance with the law of that country, and who is performing within the scope of his or her practice as defined under such law. The phrase “authorized to practice in the State” means that the provider must be authorized to diagnose and treat physical or mental health conditions. Based on these definitions, it is clear that a large number of employees in the health care industry may be excluded from coverage under the Act at the employer’s discretion. Less clear is whether the Secretary of Labor will adopt regulations excluding all health care providers or allowing health care employers to opt out of Emergency Paid Sick Leave. To date, the Secretary of Labor has not issued express guidance on this issue.

Unemployment benefits are a joint federal-state program. While the federal government provides some guidelines, every state has its own rules on unemployment benefits, making navigation of the rules challenging for employers who have employees in multiple states. Complicating the unemployment process are quickly evolving changes to state unemployment standards in response to COVID-19. The general questions that determine unemployment eligibility are: A. Is the employee out of work or did the employee experience a reduction in work income through no fault of the employee? B. Is the employee ready and able to work? C. Does the employee meet qualifying work and wage requirements? (Each state has requirements for wages earned or time worked during an established period of time referred to as a “base period.”) D. Is the employee receiving income replacement such as sick, disability, or severance pay that offsets or replaces unemployment? (Some states reduce unemployment benefits for qualifying employees by other income replacement the employee may be receiving.) In operation, the availability of unemployment benefits will depend on the circumstances surrounding the employee’s unemployment and state law: If an employee is on leave by choice, such as to care for himself/herself or others, self-quarantine, or FMLA, then unemployment benefits are generally not available because the employee is unable to work. Note that some states are making exceptions here for absences related to caring for oneself or others who have tested positive for or have been exposed to COVID-19. If there is a layoff or furlough (temporary or otherwise), then unemployment benefits are typically available to affected employees because the affected employee is able to work. If an employer reduces an employee’s hours, then unemployment benefits are typically available depending on the state and the amount of the reduction in hours. In many states, benefits are available under a “work share” program if certain criteria are met. If there is forced leave by an employer, such as a 14-day quarantine, the availability of unemployment benefits will depend on the jurisdiction. The United States Department of Labor (“DOL”) has clarified in published guidance that individual states have the authority to make changes to unemployment based on COVID-19, concerns such as extending the availability of unemployment benefits to eligible employees when: (1) An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work; (2) An individual is quarantined with the expectation of returning to work after the quarantine is over; or (3) An individual leaves employment due to a risk of exposure or infection or to care for a family member. In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19. A majority of states have taken action to modify their usual unemployment rules. For example, California has stated it will remove the waiting week period that usually applies to unemployment, meaning that employees will receive benefits starting on day one. Missouri has specifically stated that it would allow benefits for a forced quarantine by the employer. In light of the global pandemic, unemployment benefits rules may rapidly change in coming weeks. Pending federal legislation proposes further relief including additional money for unemployment benefits and relief to employers for charges related to unemployment benefits paid due to COVID-19. In addition, states continue to monitor their processes and institute changes to respond to the current economic landscape. Employers are free to offer employees information on filing for unemployment, but should note that state unemployment agencies are making frequent changes that may provide for unemployment benefits for COVID-19-related issues. Below is a list of resources for states that have taken action in response to COVID-19 issues and, for states where action has not yet been taken, a link to the general unemployment site:

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.

Despite many politicians and employers discussing the option for employees to work at home, there are millions of employees who simply cannot do that. Bartenders, restaurant servers, cashiers, and many others have no one to serve and nothing to ring up when they work at home. Employers of such employees accordingly have a difficult decision to make when business is at an all-time low or they have been shut down. Most cannot afford to pay employees during this time period and hope employees will qualify for unemployment benefits. The question for these employers thus becomes–to fire, or not to fire. This is where a work furlough comes into play. A work furlough is essentially a temporary layoff that qualifies for unemployment benefits. Furloughs rose in popularity some years ago when businesses had to cut costs. Most employers knew employees who worked from paycheck to paycheck would suffer a financial hardship if the employees lost their jobs. Employers did not want to terminate employment. These employers wanted to minimize the negative impact, psychologically and monetarily, a termination brings, and the hard feelings an employee may carry following termination. Employers wanted employees who were already-trained to return to work at the end of a furlough, rather than having to start the hiring process from scratch. Work furloughs generally have a set beginning and end date, similar to the 15-day shut-down ordered in many cities. The employer does not pay the employee during the furlough. Employees, however, generally qualify for unemployment compensation benefits. Employers who want to maintain better relations should tell their employees to apply for unemployment benefits on the first day of the furlough. This ensures the employees will receive the maximum compensation possible. Even an employee who uses vacation time or personal time may qualify for unemployment benefits. Usually there is a one week waiting period before an employee is eligible to receive any unemployment benefits. Many states have benevolently waived this one week waiting period for job losses suffered due to the pandemic. In these states, employees will receive benefits beginning “day 1.” The employee will receive compensation during the second week and any later weeks during which the employee is not working. Any employee who files after the first week of the furlough must use the second furlough week as the waiting period. The employee, therefore, loses a week of unemployment compensation. Even if the furlough period is only one week in length, employees should file for benefits. This helps the employee if the employer is forced to extend a furlough or put employees on furlough again later that same year. The one-week waiting period only applies to the first week when the employee did not work during the first furlough. The employee does not have to wait yet another week to receive benefits (compensation) during any furloughs that take place within 12 months of the first furlough. While furloughs are an excellent option for employers to consider, any employer considering termination or a furlough must carefully consider all state and local laws; the state emergency declarations and laws issued, given the pandemic; and federal law, including any relief package or whether the number of employees furloughed triggers obligations under WARN.

As you are aware from various updates this past weekend, certain cities have closed their schools (bars and restaurants, etc.), and are encouraging or requiring employees to work from home. People who return from risky travel or learn they may have been exposed are self-quarantining. These are certainly signs that many more employees will be working from home or telecommuting regardless of where they are located. A few tips you may send to employees. We hope they may help you and your employees prepare for and, ultimately, work from home for a period of time. Take home, each day, everything you need for telecommuting in case (1) we move to a “telecommuting” or a “work at home” recommended or required policy, (2) your child’s school is closed, (3) you wake up feeling ill (in any way), (4) a loved one wakes up feeling ill and needs your help or you prefer to self-quarantine, (5) you are in a high-risk health category, or (6) you decide at some point you prefer to telecommute. Consider whether meetings of any size, internal or external, might or should be postponed or handled by telephone or videoconference (rather than in person). Use the terms “working from home,” “telework,” or “telecommuting,” rather than we closed our office. The office may be physically empty or mostly empty, depending on what is needed, but “we closed our office” sounds like we are not working. We want to avoid giving anyone that impression. Treat your day like a normal work day to the greatest extent possible. Get up at your regular time, shower, get dressed for work, set up a desk or office area for yourself if you do not already have such an area. End work when you normally stop. Contrary to popular belief, individuals who telecommute often over-work in the beginning, which leads to burn out. Try to remove or limit distractions, including children, puppies, laundry, etc. Having a specified desk / work area, especially one where you can shut a door, will help set boundaries around working time and “no distractions.” If two parents or adults are working from home, work together to share all responsibilities. Try to schedule your most mentally intensive work during, for example, the early morning before anyone else is awake, during your child’s nap time, when your kids are engaged doing something, etc. Synchronize breaks with your children’s or pets’ schedule. (We all know some of this is not as easy as it sounds, especially when children are involved.) Make sure your working area is safe, clean, comfortable (in an ergonomically correct manner), well ventilated, and well-lit. You should have enough electrical outlets to safely power all equipment needed with all wires and electrical cords secured and out of the way. Prepare in advance for periods during which there may be a lack of focus or motivation. This is natural when the energy around your work is not as high as it might be when numerous others are working around you. Use one of many productivity methods available, including the Pomodoro Technique, or my favorite – Eating Live Frogs: Do the Worst Thing First, to help maintain periods of focus and streamline productivity. Anticipate technical problems, which are a huge hassle in the office but even more frustrating when out of the office. Make sure you have a good WiFi or MiFi connection (or both available). Call the Help Desk as often as needed. Arrange for your equipment to be swapped out if the problem is severe. Beware of feelings of isolation or loneliness. The statistics support that people who telecommute tend to lose their sense of community, belonging, etc. Reach out to co-workers in a meaningful, professional AND social way via phone, FaceTime, Zoom, etc. Send funny stories, jokes. In other words, stay in touch as human beings. Working from home or telecommuting is not an ideal situation. We accordingly hope this is a SHORT experience for each of you and your employees. Please do not hesitate to reach out to your Polsinelli contacts if you have additional questions or issues.

In response to the Coronavirus (“COVID-19”), the Internal Revenue Service advised that a health plan that otherwise satisfies the requirements to be a High Deductible Health Plan (“HDHP”) under section 223(c)(2)(A) will not fail to be an HDHP merely because the health plan provides medical care services and items purchased related to testing for and treatment of COVID-19 prior to the satisfaction of the applicable minimum deductible. As a result, the individuals covered by such a plan will not fail to be eligible individuals for purposes of whether their contributions to HSAs are deductible. The notice provides HDHPs the flexibility to provide health benefits for testing and treatment of COVID-19 without application of a deductible or cost sharing. The notice directs individuals to consult their particular health plan regarding the plan’s coverage of testing and treatment of COVID-19, including the potential application of any deductible or cost sharing. As a result TPAs and employers should be prepared to provide such information.

On Wednesday, March 11, 2020, President Trump signed an Order that prohibits foreign nationals from traveling to the U.S. if they have the have been physically in the European countries making up the Schengen area within the 14 days prior to departure.  These countries include: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, and Switzerland.   It should be noted that the United Kingdom is currently excluded from the list of countries.  The ban will take effect on Friday, March 13, at 11:59 P.M EDT. Exceptions to the travel ban include: U.S. Citizens, U.S. Permanent Residents (LPR), and Spouses of U.S. Citizens and LPRs. However, they may be subject to additional screening upon arrival.  Additional exceptions are included in the Proclamation, and we encourage anyone who is or has been present in the Schengen area in the previous 14 days and needs to return to the U.S. to read the Proclamation carefully to determine the applicability of the exceptions and restrictions.  Travelers should contact their airline regarding return to the U.S. Those planning to return to the U.S. must be traveling on a flight that departs before 11:59 P.M. EDT on Friday. Companies with foreign workers based in the U.S. who may be traveling overseas should take action immediately to assess the legal status of the workers and determine if emergency relocation back to the U.S. is needed.  Those returning from overseas should be advised to expect additional screening upon re-entry, and if necessary, heightened monitoring or quarantine for a period of at least 14 days after re-entry. Polsinelli attorneys are closely monitoring the effects of the Covid-19 virus spread on the global mobility needs of U.S. employers.  Should you have any questions, please reach out to your Polsinelli immigration attorney.

According to the Centers for Disease Control and Prevention (“CDC”), there are currently tens of thousands of reported cases of the disease (recently named “COVID-19”) in China, with a growing number of cases in various international locations. In the United States, the CDC has confirmed 14 cases and has tested a total of 426 individuals. Another 39 people infected with the disease have been repatriated to the United States. Although most of these illnesses are associated with travel from Wuhan, the United States has reported at least two instances of person-to-person spread of COVID-19. The COVID-19 outbreak presents a host of employment law concerns for U.S. employers across all industries, but in particular, those in high-risk environments (such as healthcare) and those with employees engaged in international travel. The following are some guidelines to help employers respond to the outbreak: Educate Employees For employers that might be impacted by the disease, reassure employees that management is monitoring the outbreak, including travel restrictions and guidance, and supply employees with reputable resources regarding COVID-19, its transmission, and how to prevent exposure. Employers should avoid offering medical opinions or unreliable information that might create unnecessary fear and anxiety among employees. Advise employees to check the CDC’s most recent guidance and recommendations before any international travel. Actively encourage and flexibly permit employees to stay at home if they have symptoms of acute respiratory illness, and remind employees of applicable sick leave or paid time off that might be available to them. Remind employees of applicable policies and procedures for reporting concerns and requesting leaves of absence and other accommodations. Train supervisors and managers on how to respond to such requests. To ensure consistent messaging and uniform application of company policies, appoint a dedicated individual in human resources to field and respond to questions, concerns and requests related to COVID-19. Ensure a Safe and Healthy Workplace Encourage respiratory etiquette, hand hygiene and routine cleaning of commonly touched surfaces in the workplace. Employers should also provide appropriate health and sanitation supplies around the workplace. Comply with Occupational Safe and Health Administration (“OSHA”) regulations for maintaining a safe and healthy workplace. Although all industries should follow OSHA’s recommendations and industry-specific guidance, precautionary measures are required for certain industries (such as healthcare) with a high risk of exposure to infectious disease. If an employee is confirmed to have COVID-19, inform fellow employees of their possible exposure to COVID-19 in the workplace, but maintain confidentiality about an employee’s health so as not to run afoul of the Americans with Disabilities Act (“ADA”) or similar state laws. Healthcare providers may also need to take into account any obligations under the Health Insurance Portability and Accountability Act (“HIPAA”) and consider public health reporting requirements, public safety needs, and the protection of its employees and patients. Review and Implement Policies If possible, temporarily suspend work travel to affected areas and stay abreast of current travel guidance from reputable health organizations. Requiring travel to high risk areas could expose employers to liability under OSHA or other employment laws. If an employee refuses to work or travel because of concerns related to COVID-19, carefully consider whether such concern is reasonable and consistent with current CDC guidance before insisting on travel or taking any disciplinary action. Consider implementing a temporary policy requiring employees that have traveled to affected regions (or are in direct contact with people who have traveled to affected regions) to stay at home for 14 days following their return (the suspected incubation period). This policy should be applied uniformly and not targeted at specific employees based on race, country of origin, or any other protected characteristic. Consider any request for accommodation arising from or related to COVID-19 just as the company would any other request for disability accommodation. An employee infected with COVID-19 (or even “regarded as” having the illness) could be protected under the ADA or similar state law as a “qualified individual with a disability.” Provide all necessary leaves required under state and federal law and/or company policy. A COVID-19 diagnosis will almost certainly qualify as a “serious health condition” under FMLA or equivalent state law. Once an employee has exhausted all leave, employers may still need to consider affording additional time off as a reasonable accommodation. Review any telecommuting policy and facilitate remote working where applicable. Employers should use caution in requiring employees to work from home simply because they display certain symptoms, as many of the early symptoms of COVID-19 share similarities with the common cold. If faced with telecommuting requests by employees with concerns of potential exposure, employers should assess whether such concern is reasonable before refusing this accommodation. Avoid making any medical inquiries or requiring medical examinations of employees absent a reasonable belief that an employee’s medical condition poses a “direct threat” to the workplace, as required by the ADA. “Direct threat” is defined as “[a] significant risk of substantial harm to health or safety of self or others that cannot be eliminated or reduced by reasonable accommodation.” 29 C.F.R. § 1630.2(r). In determining potential risk of COVID-19 infection, employers should rely only on guidance from reputable public health agencies and avoid making any determinations of risk based on race or country of origin. Failure to do so could violate state and/ or federal discrimination laws. To read the CDC Interim Guidance for Businesses and Employers to Plan and Respond to COVID-19, click here. Five Takeaways for Employers The impact of COVID-19 is constantly evolving and will continue to present a host of legal issues for employers. Regardless of industry or location, employers should take the following action: 1.     Closely monitor and communicate developments from U.S. public health authorities. 2.     Implement appropriate policies and procedures to respond to and manage the concerns of employees. 3.     Ensure a safe and healthy workplace in compliance with all federal and state regulations and guidelines. 4.     Protect the privacy of employees. 5.     Consult legal counsel to navigate the various OSHA and employment laws implicated by the outbreak. For more information, please contact one of the authors or your Polsinelli attorney.

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.

In an unpublished opinion, the Colorado Court of Appeals recently held that a departing employee's right to vacation pay at separation is dependent on the company's policies.  Nieto v. Clark’s Market, Inc., 2019 COA 98. In this case, the employer had a policy stating than an employee was not entitled to payment for unused vacation time if the employer discharged her or if she voluntarily quit without giving two weeks' notice. The employee quit without giving the requisite two weeks' notice and the employer did not pay her for unused vacation pay.  Thereafter, the employee filed suit. In its decision, the Court rejected the employee’s claim that her vacation pay was "earned and determinable," and, thus, owed to her on discharge pursuant to the Colorado Wage Claim Act (“CWCA”). Therefore, the employer did not owe her for that vacation time. The Court observed: Nothing in the CWCA creates a substantive right to payment for accrued but unused vacation time.  Rather, "the employee’s substantive right to compensation and the conditions that must be satisfied to earn such compensation remain matters of negotiation and bargaining and are determined by the parties’ employment agreement rather than by statute." The Court concluded by writing: In sum, reading Sections 8-4-101(14)(a)(III), 109(a), and 121 together, we hold that the [employer’s] unused vacation policy doesn't violate the CWCA.  [The employee’s] right to compensation for approved but unused vacation pay depends on the party's employment agreement.  And that agreement unequivocally says that the vacation pay she seeks wasn't vested given the circumstances under which she left the [employer’s] employ." The Nieto case is certainly good news for employers.  Even if not binding precedent, its rationale can be used to support a “use it or lose it” policy.  However, it may be prudent to still rely on a "cap on accrual" policy as a way of controlling an employer's liability to a separating employee for vacation pay.  Employers with questions regarding vacation payout policies and other employment policies would do well to consult with able counsel.

On April 24, 2019, Dallas followed Austin and San Antonio to become the third city in Texas to adopt a mandatory paid sick leave ordinance (the “ordinance”).  The ordinance, set to go into effect on August 1, 2019, provides: All private employers with 15 or more employees must provide 8 days of earned sick time (“EST”) annually to employees who work at least 80 hours per calendar year within the City of Dallas. Employers with less than 15 employees must provide 6 days of EST per year. Employees will accrue one hour of EST for every 30 hours worked, unless an employer’s policies establish an accrual rate of a fraction of an hour increment. Employees will become eligible to accrue EST at the commencement of employment, or the effective date of the ordinance, whichever is later, and can begin using EST as soon as it accrues.  However, employers can implement a 60-day waiting period for new hires so long as that employee’s term of employment will be at least one year. Employees may use EST for their own, or a family member’s, physical or mental health or preventative care; or for medical attention, services, or legal actions as a result of domestic abuse, sexual assault or stalking. Employees may carry over accrued but unused EST, up to the maximum yearly cap, unless the employer grants the employee at least the minimum required amount of EST at the beginning of each year. Employers must: (i) provide monthly statements to employees regarding an employee’s accrued EST; (ii) post a notice of the ordinance; and (iii) include notice of the ordinance and its requirements in the employers’ handbooks. The ordinance provides for a civil penalty of up to $500 for each violation. Importantly however, penalties will not be assessed until April 1, 2020 unless an employer’s violation is related to the anti-retaliation provision of the ordinance. What’s Next? Dallas business groups have voiced concerns regarding the ordinance, and may file suit to attempt to enjoin it.  However, the ordinance is currently set to become effective August 1, and employers would do well to begin preparing now to comply with the new sick leave requirements.  Employers with questions about the ordinance – or sick leave generally – should consult with competent counsel.

The Equal Employment Opportunity Commission (EEOC) requires employers with at least 100 employees (and federal contractors with at least 50 employees) to file an EEO-1 Report with a count of employees by establishment and job category with race, ethnicity, and gender information for each employee.  This part of the EEO-1 is now referred to as Component 1. In 2016, the EEOC implemented a pay data requirement for the EEO-1 Report, referred to as Component 2.  Component 2 requires the disclosure of the total number of full- and part-time employees by demographic category divided into 12 pay bands for each EEO-1 job category, and hours worked by all employees in each band. Before the original deadline for Component 2 pay data, the Office of Management and Budget (OMB) paused the U.S. Equal Employment Opportunity Commission’s collection of Component 2 pay data. A lawsuit initiated by both the National Women’s Law Center and the Labor Council for Latin American Advancement followed, arguing that the OMB’s decision halting the expanded data collection was without cause. National Women’s Law Center v. Office of Management and Budget, Case No. 1:17-cv-02458-TSC. This case remains pending in the U.S. District Court for the District of Columbia.  The Court’s August 25, 2018 ruling in this case reinstated the requirement to collect Component 2 data. What now? Employers must report Component 1 gender, race and ethnicity information for all covered employees on a single payroll date between October 1, 2018 and December 31, 2018. The portal will remain open for filing Component 1 data until May 31, 2019.  Employers who need an extension to meet the Component 1 deadline may contact the EEOC for a one-time 2-week extension by contacting E1.EXTENSIONS@EEOC.GOV.  An employer requesting a longer extension must provide the EEOC with a rationale therefor. Requests for extensions will not be accepted after May 31, 2019. When is Component 2 pay data due?  Following the Court’s ruling in National Women’s Law Center, the EEOC first indicated it would likely begin collecting Component 2 data for both calendar years 2017 and 2018 starting sometime in mid-July. Further, the current published deadline for submission Component 2 data is September 30, 2019. EEOC Chair Victoria Lipnic acknowledged that these “first-ever pay data collections,” which are now required in a relatively short time frame, will be difficult to accomplish. However, the EEOC is “committed to meeting the Court’s order, working with employers, and making this happen by the end of September.” On May 3, 2019, the Department of Justice filed a Notice of Appeal in the National Women’s Law Center case, which does not stay the current district court orders or alter EEO-1 filers' obligations to submit Component 2 data. What now? Employers should review our previous post for additional insights on EEO-1 reports, and how to avoid common pitfalls when preparing employer Component 1 data. Employers should also consider hiring experienced counsel to assist with filing their Component 1 and 2 data, in light of these new requirements. Polsinelli will continue to provide updates on the filing of Component 2 data when as it becomes available.

Colorado appears poised to join a number of states that prohibit employers from inquiring into a job applicant’s criminal history on an initial employment application.  On April 30, 2019, the Colorado legislature sent House Bill 19-1025 (the “Bill”) to Governor Polis’ desk.  Assuming Governor Polis signs the Bill, Colorado will join a number of other states and “ban the box.”  If the Bill is signed into law, Colorado employers will be prohibited from: Stating in an employment advertisement that a person with a criminal history may not apply for the position; Stating on any form or application for employment that a person with a criminal history may not apply for the position; and Inquiring into or requiring an applicant to disclose any criminal history on an initial employment application. Employers may still obtain a publicly available criminal background report on a job applicant at any time. The above-listed prohibitions will not apply if: Federal, state, or local law or regulations prohibit employing a person with a specific criminal history to the position; The position is designated by the employer to participate in a federal, state, or local government program to encourage the employment of people with criminal histories; or The employer is required by federal, state, or local law or regulation to conduct a criminal background check for the position, regardless of whether the position is for an employee or an independent contractor. Critically, the Bill does not create a private cause of action or a new protected class under existing anti-discrimination laws.  However, the Bill does include staged penalties after the first violation. If signed into law as expected, the Bill’s provisions will become effective September 1, 2019 for employers with 11 or more employees, and September 1, 2021 for all other employers.

Recently, the U.S. District Court for the Southern District of Alabama issued a decision reminding employers to take care when reviewing and responding to charges of discrimination. In Payne v. Navigator Credit Union, the defendant employer moved to dismiss the plaintiff employee’s claim for disability retaliation on the grounds that the plaintiff failed to exhaust her administrative remedies. Specifically, the employer argued that the plaintiff failed to allege in her EEOC Charge that she was retaliated against, and was precluded from pursuing a retaliation claim in court. When making its argument, the employer pointed out that the plaintiff had not “checked the box” for “retaliation” on her EEOC Charge nor did she use the word “retaliation” when describing how she had allegedly been harmed.  Nevertheless, the court ruled that the plaintiff’s allegation in the charging document that she was terminated shortly after informing her employer of her need to take medical leave for cancer treatment was sufficient to place the employer on notice of the a claim for  retaliation. This decision suggests that some courts will grant plaintiffs wide latitude to define their claims in litigation.  Employers facing an agency charge, or that have questions regarding responding to inquiries from administrative employment agencies, should consult with competent counsel.

On March 28, 2019, the U.S. Department of Labor (“DOL”) announced a proposed rule to update the regular rate requirements under 29 CFR part 778 and section 7(e) of the Fair Labor Standards Act (“FLSA”). The FLSA requires employers to pay non-exempt employees overtime compensation for any time worked over 40 hours in a workweek. The overtime rate equals one and one-half times the “regular rate,” which is defined as “all remuneration for employment paid to, or on behalf of, the employee,” with some exceptions. More specifically, the regular rate must include wages, bonuses, commissions, and any other forms of compensation. Court decisions interpreting what must be included in the calculation of the “regular rate” have caused confusion for employers, who may be unsure whether offering non-exempt employees extra perks could increase the regular rate and, by extension, overtime pay. In addition, the uncertainty stemming from what must be included in the “regular rate” could lead to costly wage and hour actions by employees. When announcing the new proposed rule, the DOL opined that the current regulations “do not sufficiently reflect … developments in the 21st-century workplace,” and stated that the following forms of compensation would be excluded from an employee’s regular rate: the cost of providing wellness programs, onsite specialist treatment, gym access and fitness classes, and employee discounts on retail goods and services; payments for unused paid leave, including paid sick leave; reimbursed expenses, even if not incurred “solely” for the employer’s benefit; certain reimbursed travel expenses; discretionary bonuses; benefit plans, including accident, unemployment, and legal services; and tuition programs, such as reimbursement programs or repayment of educational debt. The proposed rule also seeks to clarify whether other forms of compensation, such as payments for meal periods, call-back pay, and others, must be included in the regular rate. The proposed rule will remain open to comments until May 28, 2019. Employers with questions regarding the calculation of the “regular rate” (or other compensation-related issues) would do well to consult with able counsel.

On March 21, 2019, in a 9-3 en banc decision, the U.S. Eleventh Circuit Court of Appeals clarified the “similarly situated” standard for comparator evidence in employment discrimination cases.  Lewis v. City of Union City, Georgia, 15-11362, 2019 WL 1285058, at *2 (11th Cir. Mar. 21, 2019) (en banc).  Specifically, the Court ruled that a comparator will only be found to exist where they and the plaintiff are “similarly situated in all material respects.” This “all material respects” standard focuses on “substantive likeness,” and should be resolved on a case-by-case individual basis. Critically, the Court observed that this standard should provide employers with the “necessary breathing space to make appropriate business decisions.” In what many consider to be a win for employers, the Court also ruled that comparator evidence should be analyzed during the prima facie stage of the McDonnell Douglas burden shifting analysis. Indeed, the Court flatly rejected the plaintiff’s argument that comparator analysis should “be moved into the pretext stage,” stating that “doing so would effectively shift to the defendant the burden of disproving discrimination – which is precisely what the Supreme Court has forbidden.” The Lewis decision may lead to a review by the United States Supreme Court to resolve an apparent Circuit split on the issue of the similarity of comparators, as the Eleventh Circuit expressly rejected the more lenient standard adopted by the Seventh Circuit.  Stay tuned to Polsinelli at Work for further updates.

Colorado’s 2019 legislative session began on January 4 and concludes May 3, 2019.  Several proposed bills may affect employers, including these two: HB19-1025 HB19-1025 is Colorado’s 2019 “Ban the Box” proposal. Formally known as the Colorado Chance to Compete Act, the bill would prohibit employers from stating in job advertisements or on employment applications that a person with a criminal history may not apply for a position. Employers also would be prohibited from inquiring about an applicant's criminal history on an initial employment application form. However, an employer may obtain a job applicant's publicly available criminal background report at any time. The bill contains several exceptions, such as for particular jobs that require criminal background checks or prohibit people with certain criminal histories from holding the position. Note the bill does not create a private cause of action for a violation of its provisions; rather, the Colorado Department of Labor and Employment would be charged with enforcing the bill’s requirements through issuance of warnings and orders of compliance for violations, as well as the imposition of civil penalties for subsequent violations. If enacted, this measure would become effective September 1, 2019 for employers with 11 or more employees, and effective September 1, 2021 for all other employers. SB19-085 SB19-085 concerns the creation of the “Equal Pay for Equal Work Act” in Colorado and expands current Colorado law prohibiting employers from discriminating in rate of pay based on sex. Significantly, the proposed bill, applicable to all Colorado employers, would create a private right of action in district court. Further, it would prohibit an employer from (1) seeking the wage rate history of a prospective employee, (2) relying on a prior wage rate to determine a wage rate, (3) discriminating or retaliating against prospective employees for failing to disclose their wage rate histories, and (4) discharging or retaliating against employees for asserting their rights under the bill. Moreover, the bill would require employers to demonstrate that any wage differentials are based on one or more of the following factors: ·         a seniority system; ·         a merit system; ·         a system that measures earnings by quality or quantity of production; ·         geographic location; ·         relevant education, training or experience; or ·         regular and necessary travel. Additionally, the bill would require employers to announce promotion opportunities to all employees, as well as the pay range for job openings. Stay tuned for developments on these and other 2019 Colorado bills that may impact employers.

Many employers offer paid leave, including sick leave or paid time off, as a benefit beyond the unpaid leave entitlements of the Family and Medical Leave Act (“FMLA”).  State or local laws may also require paid leave beyond FMLA entitlements.  Seeking to maximize time off work, employees may ask to take paid leave before commencing 12 weeks (or 26 weeks, in the case of military caregiver leave) of unpaid FMLA leave.  While generous employers may consider approving such a pro-employee arrangement, by Opinion Letter dated March 14, 2019, the United States Department of Labor (“DOL”) prohibited this approach. The DOL’s March 14, 2019 Opinion Letter requires the FMLA entitlement period to run from the earliest possible date, regardless of employers’ paid leave policies or employees’ preferred sequencing of leave.  In addition, employers “may not designate more than 12 weeks of leave (or 26 weeks of military caregiver leave) as FMLA leave.”  The DOL’s March 14, 2019 Opinion Letter departs from DOL Opinion Letter No. 49 (1994), which authorized employers to “extend” FMLA benefits by delaying the start of the FMLA leave period until after employees exhausted paid leave benefits. With appropriate notice in written policies and in the FMLA-required Rights and Responsibilities Notice, employers may continue to require employees to take paid leave concurrently with unpaid FMLA leave.  Alternatively, employers may let employees choose whether to take paid leave concurrently with FMLA leave, or take FMLA leave as unpaid and save paid leave for later use.  In all cases, according to the DOL, the first 12 (or 26) weeks of FMLA-qualifying leave in the calendar year must be designated as FMLA leave. The many procedural requirements of the FMLA can be a trap for the unwary.  Guidance from experienced counsel can help to avoid interference with employees’ FMLA rights, while minimizing the risks of FMLA fraud and misuse.

Since 2011, the number of Fair Credit Reporting Act (FCRA) lawsuits filed annually has continued to climb. The data demonstrates that employers struggle with compliance, especially regarding the FCRA’s disclosure requirements. Under the FCRA, an employer must provide an applicant or an employee with a “clear and conspicuous” disclosure that a “consumer report” -- commonly referred to as a background check -- may be obtained for employment purposes.  Importantly, before running the background check, the disclosure must be provided in a document that consists solely of the disclosure.  These disclosure requirements have proven problematic for employers in practice. In 2017, the U.S. Ninth Circuit Court of Appeals clarified that a FCRA disclosure cannot contain a liability waiver. Just last month in Gilberg v. California Check Cashing Stores LLC, the Ninth Circuit ruled that the FCRA disclosure cannot contain any additional disclosures that may be required by applicable state law. In that case, the Court reinstated class claims that the employer’s disclosure violated the FCRA because the disclosure provided to job applicants was not clearly written, nor was it contained in a “standalone” document. The Gilberg case makes clear that a court will closely scrutinize any extraneous information contained in the FCRA-required disclosure, regardless of the purpose for its inclusion. The offending language in Gilberg contained disclosures mandated by separate state laws. Stated simply, if the language included in the disclosure is not necessary to clearly and conspicuously advise an applicant or employee of FCRA rights, it likely should be excluded. Employers should take care to review any FCRA disclosures with legal counsel to ensure compliance, as any mistake, no matter how small, may expose the employer to liability on an individual or class-wide basis. Employers with questions regarding the FCRA would do well to consult with able counsel.

In Wadler v. Bio-Rad Laboratories, Inc., the U.S. Court of Appeals for the Ninth Circuit adopted a limited, plain meaning construction of the types of reports that are protected by the Sarbanes-Oxley Act’s (SOX) whistleblower provision and in the process partially reversed an $11 million jury verdict in favor of a corporate general counsel. In Wadler, a corporation’s general counsel believed that the corporation was violating the Foreign Corrupt Practices Act’s (FCPA) bribery prohibition and recordkeeping requirements and reported his findings to the corporation’s board.  After an outside investigation found no evidence of an FCPA violation, the corporation terminated the general counsel’s employment.  The general counsel filed SOX and other claims against the corporation alleging, among other things, that he was retaliated against for reporting the suspected FCPA violation.  The general counsel subsequently prevailed at trial. The Ninth Circuit reversed the judgment in favor of the general counsel as to his SOX claims because his reporting of alleged FCPA violations was not protected activity under SOX.  The Court found that SOX only protects employees who report violations of specific statutes, of which FCPA is not one.  The district court had ruled that FCPA fell into the category of “any rule or regulation of the Securities and Exchange Commission,” which is identified in SOX, because FCPA is an amendment of and codified in the Securities and Exchange Act and is enforced by the SEC.  But, the Ninth Circuit held that under plain meaning construction of SOX, an SEC “rule or regulation” encompassed only administrative rules or regulations and not a statute like FCPA.  The Ninth Circuit also rejected the general counsel’s argument that the remedial purpose of SOX – i.e., to clamp down on corporate misconduct – required a broader interpretation of what constituted protected activity. Since Section 806 of SOX was enacted in 2002, federal courts have generally adopted expansive interpretations of the scope of protected activities. This Ninth Circuit decision is one of several recent federal decisions which instead limit protected activities to complaints concerning the specific statutes, rules, and regulations enumerated in SOX.Stay tuned to Polsinelli at Work for further updates.

In February 2019, the New York Commission on Human Rights (the “Commission”) issued guidance regarding employment discrimination based upon natural hair or hairstyles. Specifically, the Commission announced its position that “grooming or appearance policies that ban, limit, or otherwise restrict natural hair or hairstyles associated with Black people generally violate the New York Commission on Human Rights Law’s (“NYCHRL”) anti-discrimination provisions.” The Commission further stated that harassment based on aspects of an employee’s appearance associated with his/her race is also prohibited. According to the Commission, Black hairstyles are a protected racial characteristic under the NYCHRL “because they are an inherent part of Black identity” and because “there is a strong, commonly-known racial association between Black people and hair styled into twists, braids, cornrows, Afros, Bantu knots, fades, and/or locs.” Pursuant to the Commission’s guidance, examples of policies or practices that may violate the NYCHRL include: Prohibiting twists, locs, braids, cornrows, Afros, Bontu knots, or fades; Requiring employees to alter the state of their hair, e.g., through the use of chemicals or heat, to adhere to company appearance standards; Limiting the number of inches hair can grow from the scalp, thereby limiting Afros; Requiring that only Black employees obtain supervisory approval before changing hairstyles; Informing only Black employee that they risk losing their jobs if they do not change or alter their hair; Prohibiting Black employees with locs from positions that are customer facing; Refusing to hire Black applicants with cornrows because the style is contrary to the employer’s “image”; Requiring Black employees to hide their hairstyle under hats or visors; and Restricting natural hair styles or styles associated with Black people to promote a cultural image, appeal to a customer, or “under [a] speculative health and safety concern.” Though the guidance focuses largely on hairstyles closely associated with Black people, the Commission further advised that policies that implicate religious groups or other protected classes may also violate the NYCHRL. For example, policies that prohibit employees from wearing “uncut hair or wearing untrimmed beards. . . may impact Rastafarians, Native Americans, Sikhs, Muslims, Jews, and other religious or cultural minorities.” Importantly, the guidance does not state that employers cannot have policies that require a neat and orderly appearance. In addition, employers may impose hair bans or restrictions because of a legitimate health and safety concern, but only after other alternatives, such as a hair nets, head coverings, and hair ties, are considered and deemed unworkable. The Commission has announced its intention to investigate claims of racial discrimination based on this guidance. Thus, employers with four or more employees in New York City would do well to evaluate any current grooming and/or appearance policies to assure compliance and minimize legal risk.

Recently, the U.S. Ninth Circuit Court of Appeals ruled in Robles v. Domino’s Pizza that an employer’s websites and mobile applications, or “apps,” are subject to the strictures of the Americans with Disabilities Act, as amended (“ADA”). In Robles, a man with visual impairments filed a proposed class-action lawsuit against Domino’s, alleging violations of the ADA because its website and app were not compatible with screen reading software. The district court dismissed the lawsuit, holding that while Domino’s website was a “place of accommodation” subject to Title III of the ADA, applying the ADA to the website violated Domino’s due process rights because the U.S. Department of Justice (DOJ) had failed to provide helpful guidance concerning the ADA’s application to websites, despite promising to do so since as early as 2010. On appeal, the Ninth Circuit reversed and sent the case back to the district court for further proceedings.  Significant to employers with a website or mobile app, the Court held: 1.    Domino’s is a “place of public accommodation” subject to Title III of the ADA; 2.    “Places of public accommodation” are required, under the ADA, to provide auxiliary aids and services to individuals with disabilities. This requirement applies to Domino’s website and mobile app; and 3.    Domino’s received fair notice that its website and mobile app must comply with the ADA, and thus its due process rights were not violated. Specifically, the Ninth Circuit ruled that despite the DOJ’s failure to provide guidance, Domino’s had sufficient notice that its website and mobile app should comply with the ADA because the ADA itself articulates “comprehensive standards” for compliance. Problematically for employers, the Court did not adopt any specific guidelines for compliance, such as the Web Content Accessibility Guidelines 2.0 (“WCAG 2.0”).  Rather, the Court concluded that Domino’s website and mobile app “must provide effective communication and facilitate full and equal enjoyment of Domino’s goods and services to its customers who are disabled.” Note that the Roblesdecision may lead to more litigation regarding whether an employer’s website and/or mobile apps are ADA-compliant.To minimize litigation risk, employers may wish to work with an accessibility expert and/or competent counsel to analyze and potentially remediate any ADA compliance issues.

Although it may seem counterintuitive that an employer should keep time for an exempt employee, there may be sound reasons at times for doing so.  In a recent case in California, Furry v. East Bay Publishing, LLC (January 4, 2019), the Court of Appeals of the State of California ruled that the consequences for failure of the employer to keep time records required by statute falls on the employer and not the employee.  In that situation, the Court indicated that imprecise evidence of time can provide a sufficient basis for damages. In Furry, the employee alleged, among other things, that his employer failed to pay minimum and overtime wages. After a bench trial, the trial court concluded the employer did not keep detailed records of the hours worked by the employer and failed to meet its burden of proof that the employee was exempt from the laws pertaining to overtime and minimum wage.  However, the trial court found the employee’s testimony regarding his work hours to be “uncertain, speculative, vague and unclear” and refused to award any damages for overtime and minimum wages. When reversing the trial court’s decision on the issue of damages, the Court of Appeals agreed with the employee that a relaxed standard of proof applies when the employer fails to keep time records.  The Court observed that “once an employee shows that he performed work for which he was not paid, the fact of damages is certain; the only uncertainty is the amount of damage.”  Under those circumstances, an employee can use “imprecise evidence,” such as time estimates from memory, to meet the relaxed standard that was applicable. The Court explained the shifting burdens of proof: “[A]n employee has carried out his burden if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of the work as a matter of just and reasonable inference.  The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee’s evidence.  If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate.” The Bottom Line When an employer properly classifies employees as exempt, then time records and timekeeping do not seem important. However, if the exemption is challenged and not proper, then the employer may need evidence of the time worked or some other evidence or approximation of time worked. Without this evidence, the employer may be exposed to liability based on the testimony of the employee. Employers with questions regarding time recording or wage and hour laws would do well to consult with competent counsel.

Super Bowl LIII is fast approaching.  The Big Game always brings excitement, and can stoke friendly rivalries between employees rooting for different teams.  To ensure Super Bowl fever doesn’t cause the office to boil over, employers should consider the below tips to keep the workforce cool, calm, and productive as game day draws near. 1. Revisit and Communicate Time-Off Policies Super Bowl LIII kicks off at 6:30 p.m. eastern time, and the game will likely last until (at least) 10 p.m.  Couple the late end time with the eating and celebrating that accompanies most Super Bowl parties, and odds are good that some employees will show up late to the office the next day (or will call out). To that end, employers may wish to take the opportunity, early, to revisit with employees the organization’s workplace vacation or paid time off (PTO) policy. Additionally, management officials should communicate the employer’s time-off policies and process/system for time-off requests and approvals, paying attention to communicating any first-requested, first-approved, workplace coverage and seniority requirements, before employees (and HR) find themselves confronted with denied requests, disappointments, and morale issues. 2. Address the Dress Code Workplace dress codes vary across professions, industries and even specific company/office cultures. For some employers, the big game may provide a great – and sometimes, needed – opportunity to reiterate to employees attire that is, and is not, appropriate in a particular workplace. Maybe team jerseys, hats, and tees are encouraged in some workplaces, but in others, they are considered too casual for business casual. Remind employees, again, of the organization’s dress code policy. If the employer has not implemented a formal dress code policy, consider taking the opportunity to work with management to develop, and communicate, a policy that informs employees of appropriate attire in the particular workplace. At a minimum, communicate the employer’s expectations for workplace attire. Finally, always review applicable federal, state and local laws and guidance for applications of dress code requirements among certain protected classes. 3. Remind Employees of Standards of Conduct Playful banter between employees rooting for opposing teams has the potential to turn sour quickly.  Employers may wish to take the opportunity to remind their workforce of the employer’s standards of conduct and to treat all employees, customers, and vendors with courtesy and respect.

In October 2016, the American Association of Retired Persons (AARP) sought an injunction against the implementation of the Equal Employment Opportunity Commission’s (EEOC) final rules on wellness programs, alleging that the final rules did not effectively protect the privacy of AARP’s members, among other things. On December 20, 2017, the United States District Court for the District of Columbia agreed with the AARP and ordered that the EEOC regulations governing wellness programs incentives be vacated effective January 1, 2019.  Now that the D.C. Circuit’s decision has taken effect, employers who wish to consider moving forward with wellness programs will want to keep a watchful eye for new regulations. Commentators anticipated that the EEOC would submit new proposed wellness program rules by June 2019.  However, by motion to the D.C. Circuit dated January 15, 2019, the U.S. Department of Justice, on the EEOC’s behalf, provided that, “[i]t would also be permissible for the EEOC to decide never to issue such regulations, or for the EEOC to study the issue for several years before commencing  new rulemaking.”  In other words, the EEOC advised the court that it may take a “wait and see” approach to forming new corporate “wellness rules,” and also signaled its position that the court does not have the power to direct the agency to adopt any new rules. Given the uncertainty surrounding the EEOC’s wellness rules, employers should review whether any wellness program incentives comply with the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).  Employers with questions regarding their wellness programs would do well to consult competent counsel. Stay tuned to Polsinelli at Work for further updates.

In New Prime Inc. v. Oliveira, -- U.S. – (2019), the Supreme Court made two primary holdings: First, notwithstanding its recent decision affirming the ability of parties to an arbitration agreement to delegate issues of arbitrability to an arbitrator through contractual agreement, there are still limits on that ability.  Second, the Federal Arbitration Act’s (FAA) “transportation” exception applies to transportation workers, regardless of their classification as employees or independent contractors.  As such, employers should be wary of relying on form arbitration agreements and the FAA to default disputes with transportation workers to arbitration. New Prime is an interstate trucking company that entered into an operating agreement with truck driver Oliveira.  The operating agreement classified Oliveira as an independent contractor and contained a mandatory arbitration provision whereby the parties agreed that any disputes arising out of the parties’ relationship, including disputes over the scope of the arbitrator’s authority, should be resolved by an arbitrator.  Oliveira believed that he and other drivers were employees entitled to minimum wage, and, thus, the arbitration provision could not be enforced because they were covered by the FAA’s “transportation” worker exception.  New Prime argued that, due to the parties’ delegation of gateway issues to an arbitrator, an arbitrator should decide whether the “transportation” exception applies, and that it should not apply because it applies only to employees, not independent contractors like Oliveira. The Court first held that before it can use the FAA’s power to enforce a contractual agreement of the parties to delegate issues of arbitrability (also called “gateway” questions) to an arbitrator, the Court (not an arbitrator) must decide whether the FAA applies to the contract at all.  Thus, the Court was required to consider whether Oliveira falls into the FAA’s “transportation” worker exception.  This holding is not inconsistent with the Supreme Court’s decision last week in Henry Schein Inc. v Archer & White Sales, Inc., which reaffirmed the right of parties to delegate gateway questions to an arbitrator. The Court next decided whether Oliveira, who very well might be an independent contractor, falls into the “transportation” exception.  The “transportation” exception provides that “nothing” in the FAA “shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  The parties did not dispute that Oliveira was a “worker[] engaged in . . . interstate commerce,” leaving the Court to decide the term “contracts of employment.”  After reviewing the plain meaning and usage of the word when the FAA was enacted in 1925, the Court concluded that at that time it usually meant “nothing more than an agreement to perform work,” and held that the FAA’s transportation worker exception applies to employees and independent contractors. While the trend of court decisions has favored enforcement of arbitration agreements, employers cannot assume that delegation provisions in arbitration agreements will immediately remove an arbitration dispute from a court to an arbitration proceeding under the FAA.  For classes of workers excluded from the FAA, like employee and contract truck drivers, it will not.  Employers should seek counsel to help maximize the enforceability of arbitration agreements under the FAA, if applicable.  Such agreements must evidence a transaction involving commerce and not trigger an exception to the FAA.  Alternatively, employers may be able to use state arbitration laws or state contract common law to help funnel disputes to arbitration.

On December 7, 2018, the U.S. Eighth Circuit Court of Appeals held that an employee who was terminated for refusing to take a rubella vaccine was not discriminated or retaliated against, under the Americans with Disabilities Act, as amended (“ADA”).  See Hustvet v. Allina Health System, Case No. 17-2963. In this case, Janet Hustvet worked as an Independent Living Skills Specialist. In May 2013, Hustvet completed a health assessment, during which she stated she did not know whether she was immunized for rubella.  Subsequent testing confirmed she was not.  Her employer -- Allina Health Systems -- then told Hustvet she would need to take one dose of the Measles, Mumps, Rubella vaccine (“MMR vaccine”).  Hustvet stated to an Allina representative that she was concerned about the MMR vaccine because she had previously had a severe case of mumps and had “many allergies and chemical sensitivities.”  Later, Hustvet refused to take the MMR vaccine, and was terminated for failure to comply with Allina’s immunity requirements.  Hustvet then sued Allina, alleging discrimination, unlawful inquiry, and retaliation claims under the ADA and Minnesota state law.  The district court granted Allina’s motion for summary judgment, and Hustvet appealed. On appeal, the Eighth Circuit first addressed Hustvet’s unlawful inquiry claim; specifically, Hustvet alleged that Allina violated the ADA when it required her to complete a health screen as a condition of employment.  When affirming the district court’s grant of summary judgment, the court explained that the information requested and the medical exam, which tested for immunity to infectious diseases, were related to essential, job related abilities.  Indeed, Allina sought to ensure their patient-care providers would not pose a risk of spreading certain diseases – such as rubella – to its client base.  Thus, the inquiry was job-related and consistent with business necessity. The court then did away with Hustvet’s discrimination claim based upon failure to accommodate because Hustvet was not disabled and, thus, she could not state a prima facie case of disability discrimination. There was simply no record evidence to support the conclusion that Hustvet’s purported “chemical sensitivities” or allergies substantially limited any of Hustvet’s major life activities. She was never hospitalized due to an allergic or chemical reaction, never saw an allergy specialist, and was never prescribed an EpiPen.  Rather, Hustvet suffered from “garden-variety allergies,” which was not enough to conclude she was disabled. Finally, the court affirmed the district court’s grant of summary judgment regarding Hustvet’s retaliation claim. In pertinent part, the court reasoned that Hustvet could not show that Allina’s proffered reason for terminating her employment – her refusal to take an MMR vaccine – was a pretext for discrimination.  The record evidence demonstrated that Allina terminated Hustvet’s employment because her job required her to work with potentially vulnerable patient populations, and she refused to become immunized to rubella, an infectious disease. This decision comes as welcome news to employers that provide health care-related services, and confirms that health care providers may condition employment upon taking certain vaccinations, so long as the vaccination is job-related and consistent with business necessity.  Employers with questions regarding implementing or enforcing such policies would do well to consult with able counsel.

In 2016, the Occupational Safety and Health Administration (“OSHA”) published a rule (the “2016 Rule”) – found in  29 C.F.R. § 1904.35(b)(1)(iv) – related to post-incident drug testing and workplace safety incentive programs that left many employers confused. Fortunately, on October 11, 2018, OSHA published a memorandum designed to clarify the 2016 Rule and how it may be enforced (the “2018 Memo”). OSHA’s 2018 Memo can be found here. Post-Incident Drug Testing The 2016 Rule prohibited employers from retaliating against employees for reporting work-related injuries or illnesses. Subsequently, OSHA interpreted the 2016 Rule to prohibit employers “from using drug testing (or the threat of drug testing) as a form of adverse action against employees who report injuries or illnesses,” thus limiting employers to drug testing when there was a “reasonable possibility” that drugs or alcohol contributed to the accident or injury. See Supplementary Information to 2016 Rule, which can be found here. The 2018 Memo clarifies that an employer-mandated post-incident drug test would only violate the law “if the employer took the action to penalize an employee for reporting a work-related injury or illness rather than for the legitimate purpose of promoting workplace safety and health.” In addition, most instances of workplace drug testing are permissible under the law, including random drug testing, drug testing unrelated to the reporting of a work-related injury or illness, and drug testing to evaluate the root cause of a workplace incident. Safety Incentive Programs On the topic of safety incentive programs, the 2016 Rule warned that such programs “might be well-intentioned efforts by employers to encourage their workers to use safe practices,” but “if the programs are not structured carefully, they have the potential to discourage reporting.” See Supplementary Information to 2016 Rule. The 2018 Memo explains that incentive programs that reward employees who report near-misses or hazards, or programs that reward employees with prizes or bonuses at the end of an injury-free month, are lawful so long as they are not implemented in a manner that discourages reporting. To assure proper reporting, OSHA recommends that employers take steps to “create a workplace culture that emphasizes safety” by, for example, implementing: Incentive programs that reward employees for identifying unsafe conditions in the workplace. Training programs reinforcing reporting rights and responsibilities and the non-retaliation policy. A mechanism for accurately evaluating employees’ willingness to report injuries and illnesses. OHSA’s clarifications in the 2018 Memo are helpful to employers as they work to establish and implement policies aimed at maintaining and encouraging a safe working environment. Employers with questions regarding the 2018 Memo would do well to consult with competent counsel.

Recently, a hospital was sued for negligent hiring after one of its surgical technicians exchanged a vial of saline solution for a vial of painkiller before a surgery was set to commence.  The surgical technician was caught and promptly fired, and turned over to law enforcement authorities.  However, a subsequent investigation revealed that the surgical technician had a history of drug diversion at his former jobs that had gone undiscovered, despite the fact that the hospital hired a background check company to perform a pre-hire check.  What can companies do to minimize the risk of hiring unqualified workers?  Below, we outline the reasons employers should consider adopting a pre-employment background check process. There are a number of reasons for employers to develop an effective pre-employment background screening process.  The most basic reason is that it is just good business; reduced employee turnover from hiring the right person will likely save the employer money and time.  In the United States, the median length of time U.S. workers stayed with their employer was estimated to be 4.2 years, down from 4.7 years in 2014 and 4.3 years in 2015.  Robust hiring practices can help reverse this trend. The indirect costs to employers of replacing employees, such as 1) the loss of institutional knowledge that comes with a revolving work force; 2) increased training and ramp-up time; and 3) the damage caused to valuable customer relationships because of employee inexperience  can be even higher.  Higher quality candidates – procured through a robust screening process – can result in the delivery of higher quality products and service. Moreover, the failure to implement an effective system for pre-employment screening can lead to legal exposure.  What can employers do to minimize these costs and risks?  Key elements of a robust pre-employment background screening system often include: Verifying a candidate’s stated previous employment; Verifying a candidate’s stated education and credentials; Checking whether a candidate was arrested or convicted for a felony or misdemeanor; Verifying a candidate’s stated military records, if appropriate; Reviewing available credit reports. Also, consider whether to review a candidate’s social media profile. Employers with questions regarding implementing or conducting background screenings of potential new-hires would do well to consult with competent counsel.

In Exby-Stolley v. Board of County Commissioners, No. 16-1412, 2018 WL 4926197 (10th Cir. Oct. 11, 2018), the Tenth Circuit Court of Appeals held that for an individual to succeed on a failure to accommodate claim under the Americans with Disabilities Act (“ADA”), he or she must establish an adverse employment action, i.e., one that materially adversely affects the terms, conditions, or privileges of employment. See 42 U.S.C. §12112(a). When reaching its decision, the Tenth Circuit relied on two principles: first, read the statutory language and second, do not rely on dictum. Analyzing the ADA, the Court first reviewed the language in 42 U.S.C. § 12112(a), which states: No covered entity shall [1] discriminate against a qualified individual on the basis of disability [2] in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment. The Court then noted that subsection (b) states the term “discriminate against a qualified individual on the basis of disability” includes “not making reasonable accommodations to the known physical or mental limitations of an otherwise qualified individual with a disability.” 42 U.S.C. § 12112(b)(5)(A). Based on the plain meaning of the statute, the Tenth Circuit concluded that failure to make a reasonable accommodation was a type of discrimination which, to be actionable, must be “in regard to” an adverse employment action. Rejecting the cases cited by the dissent, the majority opinion relied on another familiar principle: courts are not bound by dicta, which are “statements and comments in an opinion concerning some rule of law or legal proposition not necessarily involved nor essential to determination of the case at hand.” TAKEAWAYS To employers, the case is important in that, at least under federal law in the Tenth Circuit, for an employee to have an actionable failure-to-accommodate claim, he or she must prove the failure to accommodate resulted in an adverse employment action.

Employers may face risks of departing employees, particularly involuntarily terminated employees, taking the employer’s confidential information or trade secrets with them when they leave.  Putting aside  the employee’s motivation—a desire to compete, spite, or something else entirely—employers should consider protective measures to limit, if not completely cut off, an employee’s access to confidential information and trade secrets attendant to termination of employment. Here are four best practices to limiting an employee’s access to confidential information and trade secrets proximate to termination of employment: 1.  Cut off the employee’s access to Company computer systems during, but not before, the termination meeting.  Use the element of surprise to the Company’s defensive advantage.   An employee who notices that access to Company computer systems has been cut off may sense the impending termination and take efforts to obtain conceal, access, or destroy Company confidential information in paper form or on electronic media. 2.  Remind the employee of all post-employment confidentiality obligations and restrictive covenants during the termination meeting.  The termination meeting may be the last point of direct communication between a departing employee and the employer.  Whether or not the employee heeds the warnings given, the Company is in a better position to enforce its rights having given the departing employee notice of the employee’s obligations, and a paper copy of any applicable agreements. 3.  Gather all Company devices from the departing employee as soon as possible.  The longer the departing employee has access to Company devices, the more likely the devices (and any confidential or proprietary data thereon) will become lost or compromised.  The employee should be given a deadline by which devices at the employee’s home or elsewhere outside the workplace should be returned to the Company. 4.  Consider financial incentives for departing employee compliance.  Employers may condition severance pay, if offered to the departing employee, upon the return of all Company confidential information and devices.   Likewise, in some but not all states, employers may implement policies that condition payout of accrued and unused vacation upon prompt surrender of Company devices and compliance with post-employment confidentiality obligations.

In certain circumstances, an employee may begin a leave of absence prior to being eligible to take leave pursuant to the Family and Medical Leave Act (“FMLA”). What if, during the employee’s leave, she subsequently reaches her FMLA eligibility date? Does the employer have to offer FMLA to the employee – who was not eligible for FMLA at the start of her medical leave – when she reaches the 12-month, 1,250-hour requirement while out on leave? Before addressing that specific question, it is helpful to review the FMLA’s basic framework. Basic Framework: The FMLA is a federal law requiring covered employers to provide eligible employees with job-protected, unpaid leave for certain qualified medical and family reasons, including, but not limited to, family illness, pregnancy, military family leave, and adoption. Employers are required to maintain health benefits for employees taking FMLA leave during the covered leave period and are prohibited from retaliating against an employee for exercising FMLA rights. Under the FMLA, eligible employees are entitled to up to 12 weeks of leave. To be eligible for leave under the FMLA: An employee must have been employed with the employer for 12 months; The employee must have worked at least 1,250 hours during the 12 months prior to the start of FMLA leave; and The employer has employed 50 or more employees within a 75-mile radius of the worksite. When an employee’s eligibility is triggered: It isn't always easy to determine when an employee’s eligibility commences. For instance, Covered Employer hires Employee on May 1, 2017, and Employee works a full-time schedule. Employee requests leave pursuant to the FMLA for a serious health condition beginning on April 1, 2018, when she has worked more than 1,250 hours, but not yet worked a full 12 months for Covered Employer. Covered Employer has a policy that provides up to six weeks of non-FMLA leave for employees with serious health conditions. Per the Covered Employer’s leave policy, the Employee’s leave is approved to start on April 1, 2018, for the full six weeks, which continues beyond May 1, 2018. Is the employee entitled to an additional 12 weeks of FMLA-protected leave once she becomes eligible for FMLA leave on May 1, 2018? Simply, yes. Under the FMLA, the determination of whether an employee has met the hours of service requirement and has been employed by the employer for a total of at least 12 months is made as of the date the FMLA leave is to start.  Per the FMLA, an employee can be on non-FMLA leave when she satisfies the 12-month eligibility requirement, and, in that event, “any portion of the leave taken for an FMLA-qualifying reason after the employee meets the eligibility requirement would be FMLA leave." Stated another way, an employer’s policies and/or practices determine whether to grant non-FMLA leave for an employee who is not yet eligible for FMLA leave (unless there is an applicable state family or medical leave law). But once an employee becomes eligible for FMLA leave, an employer may not count any non-FMLA leave taken prior to the employee’s eligibility date toward the employee’s guaranteed 12 weeks of FMLA leave. Thus, in the example above, Employee is eligible for up to 12 additional weeks of FMLA leave as of May 1, 2018 (the eligibility date).  Accordingly, Employee could potentially take leave for up to 16 weeks, which consists of four weeks of leave prior to her FMLA eligibility in April 2018, and up to an additional 12 weeks of FMLA leave beginning May 1, 2018. The application of FMLA to real-life situations can be very complicated.  It is prudent to consult with your employment attorneys when making FMLA-related decisions.  Stay tuned to this blog for further clarification of the FMLA and other employment-related laws.

On July 13, 2018, the U.S. Department of Labor (“DOL”) issued a Field Assistance Bulletin (“FAB”) to provide guidance to field-office staff regarding whether caregivers, such as nurses and health aides, qualify under the Fair Labor Standards Act (“FLSA”) as employees of registries that connect caregivers with people who need their services, such as senior citizens or individuals with disabilities and/or certain medical conditions, or are independent contractors. The majority of the FAB summarizes previous guidelines issued by the DOL, such as Conducting a background check and/or verifying references and credentials, does not make a caregiver an employee of the registry.  Note, however, that screening for subjective characteristics, such as likeability, would indicate an employment relationship. Facilitating matches between clients and caregivers based on their parameters and preferences does not establish an employment relationship, so long as the registry does not maintain control over hiring and firing of the caregiver. Facilitating communication between clients and caregivers is acceptable and does not create an employment relationship, so long as the registry does not directly assign specific caregivers based on subjective factors (i.e., likeability). Allowing the caregiver unrestrained profit/loss opportunities (e.g., no maximum number of hours, no limitations on the engagement in other ventures, etc.) tends to show that there is not an employment relationship. Informing the client or caregiver about normal pay rates in the area is not sufficient to create an employment relationship, nor is relaying communications on preferred rates of pay. However, the below factors are indicative of an employment relationship between a registry and a caregiver: The registry maintains the ability to hire or fire a caregiver. Taking extra steps to evaluate “subjective factors that the registry values” rather than “performing basic quality control and verification checks” such as consideration as to whether a prospective caregiver is a likeable person or interviewing the caregiver’s references. Charging “fees that fluctuate based on the number of hours that a caregiver works” for the client indicates an “ongoing interest in the employment relationship, including in the number of hours the caregiver works and whether those hours are tracked accurately.” This type of fee arrangement “may indicate that the registry is the caregiver’s employer.” Conversely, if the fees are issued on an initial basis, as well as “per service” fees for administrative activities, rather than on an hourly basis, it is more likely the parties have entered into an independent contractor relationship. Requiring the creation and confirmation of a caregiver’s hours worked may indicate the existence of an employment relationship. Mandating how services must be provided. Critically, “the analysis does not depend on any single factor” and the Wage and Hour Division of the DOL “will consider the totality of the circumstances to evaluate whether an employment relationship exists between a registry and a caregiver.” As we have previously reported, the standards governing employment and independent contractor classification are constantly changing.  Businesses, especially in labor intensive industries and the sharing economy, should closely track these standards and consult competent counsel with any questions.  We will track how the FAB affects future DOL Wage & Hour investigations and whether it is cited persuasively by courts interpreting the FLSA.

Many Colorado physician employment agreements and equity agreements require physicians to pay liquidated damages if the physician competes with his/her former employer after leaving the organization.  The payment of damages are a work-around of the Colorado statute on restrictive covenants, which provides that a physician cannot be prevented from practicing through a restrictive covenant, but permits an organization to require a physician to pay for damages caused by termination of the employment or equity agreement, including damages caused by competition. Two recent legal developments suggest that health care organizations should take a look at their agreements that contain damages provisions for Colorado physicians. 1. On March 8, 2018, a division of Colorado’s Court of Appeals announced a decision criticizing a physician liquidated damage provision.  Crocker v. Greater Colorado Anesthesia, P.C., 2018COA33.    Specifically, the decision stated that because Colorado’s statute provides that physicians can be required to pay damages “related to the injury suffered,” a liquidated damages provision must be reasonable compared to the actual damages experienced after the physician’s departure and competition.  In other words, the decision stated that, unlike other liquidated damage provisions, courts should not assess whether the liquidated damage provision was reasonable when signed, but whether the liquidated damage provision is reasonable at the time of enforcement and in comparison to actual damages experienced.  Importantly, the decision did not state that physician liquidated damages provisions are categorically unenforceable.  Moreover, there are grounds for later courts to conclude these statements are non-binding dicta.  Nevertheless, the decision highlights an issue that is likely to be raised in future cases and should prompt health care organizations to act. 2. Effective April 2, 2018, the legislature amended Colorado’s statute on restrictive covenants to ensure access to care for patients with rare disorders.  As a result of this amendment, physicians are permitted to notify and continue to treat or consult for patients with rare disorders when they leave one organization for another.  Additionally, the statute protects physicians and the organizations that employ them from paying damages for notifying and providing treatment or consultations for patients with rare disorders.  Rather than defining criteria for rare disorders, the statute uses a list compiled and maintained by the National Organization for Rare Disorders, Inc. In response to these developments health care organizations should take the following steps: Review the method used when setting the liquidated damages formula or amount. Assess with experienced counsel whether it demonstrates a desire to and is an attempt to reach an amount that is reasonably related to actual damages. Test the liquidated damage formula or amount against actual experience to assess whether the amount is reasonably related to actual damages. Review accounting and other administrative procedures with experienced counsel to ensure that the organization will be able to prove any  actual damages suffered. Assess with experienced counsel whether the liquidated damages formula or amount should be revised in light of the rare conditions amendment. Evaluate whether training should be provided to physicians and administration about revisions to the liquidated damage provisions and the rare conditions amendment.

If an employer is being audited by the US Department of Labor (DOL), there are several steps the employer can take to proactively prepare for and ultimately defend its practices: 1. Review immediately and react to the audit request. Carefully review the DOL’s audit request and promptly advise management and legal counsel. In certain circumstances, the employer may work with the auditor regarding scheduling the date(s) of the audit. 2. Provide responsive existing documents; check your employee rights posters.  Work with legal counsel to provide documents responsive to the auditor’s request for information.  Note employers are not required to specially create new documents for an audit.  Prior to the visit by the DOL, ensure applicable employee rights posters are displayed, including Family and Medical Leave Act (“FMLA”) rights (if the FMLA applies to your business). 3.  Expect employees to be interviewed.  Determine whether the auditor will request employee interviews.  Auditors may interview employees regarding a host of issues, including, but not limited to, exempt/non-exempt status, overtime pay, payroll scheduling, child labor, travel time, on-call time, PTO, training time, volunteer time, wage deductions, and FMLA practices (where applicable). During interviews, employees are often asked to describe their regular daily duties. Note an employee’s own description of his/her work duties is generally determinative regarding any Fair Labor Standards Act (“FLSA”) exemptions. 4.  Beware Protected Health Information. Ensure any protected health information (“PHI”), including medical records, remains separate from employees’ general personnel files.  Note employers must retain certain FMLA documentation including, but not limited to, any records of disputes between the employer and employee about FMLA-related issues. 5.  Protection of Commercial and/or Proprietary Information. Trade secret information may need to be protected or redacted (and marked as redacted).  In other situations, it may be possible to mark documents as “Business Confidential” or “Proprietary/Privileged.” 6. Expect DOL Follow-up.  Often, an auditor will conduct follow-up interviews or request additional information from the employer.  The DOL may also conduct a debriefing discussion with the employer regarding any legal issues that may exist and whether any penalties or back wages may be due.

Summertime, and the livin’ is easy . . . Ella Fitzgerald’s voice brings images of crackling heat, warm breezes and long, languid days. But, when the temperatures rise outside, human resource managers can find their workforce temperatures rising as well. As summer progresses, the season presents unique workforce management issues. Here are four tips for keeping your workforce temperatures cool, calm and productive during the long, hot summer. 1. Revisit and Communicate Time-Off Policies School’s out; kid’s out. Academic summer breaks can lead to workplace absences and increased requests for time off (paid and unpaid) as parents juggle summer break child care, summer program involvement, family vacations, and those ubiquitous summer camps. HR professionals should take the opportunity, early, to revisit with employees the organization’s workplace vacation or paid time off (PTO) policy. Additionally, HR professionals should communicate the employer’s time-off policies and process/system for time-off requests and approvals, paying attention to communicating any first-requested, first-approved, workplace coverage and seniority requirements, before employees (and HR) find themselves confronted with denied requests, interrupted vacation plans, disappointments and morale issues. 2. Address the Dress Code The arrival of warmer weather can find employee dress leaning more to the casual side of life, reflecting the more relaxed pace of life outside the workplace. While workplace dress codes vary across professions, industries and even specific company/office cultures, summer’s longer days provide a great – and sometimes, needed – opportunity to reiterate to employees  attire that is, and is not, appropriate in a particular workplace. Maybe sandals, flip-flops, shorts, summer tanks and tees are encouraged in some workplaces, but in others, they are considered too casual for business casual. In other, more buttoned-up, workplaces, business casual itself remains too casual, even during the summer. Remind employees, again, of the organization’s dress code policy. If the employer has not implemented a formal dress code policy, take the opportunity to work with management to develop, and communicate, a policy that informs employees of appropriate attire in the particular workplace. At a minimum, communicate the employer’s expectations for workplace attire. Finally, always review applicable federal, state and local laws and guidance for applications of dress code requirements among certain protected classes. 3. Check the Severe Weather Policy Hurricanes, severe thunderstorms, tornadoes – summer can also mean casting a wary eye to the sky (and the forecast). HR professionals should also ensure the employer is prepared should inclement weather cause a major disruption to its business, or to the welfare of its employees. Employers should develop, and communicate, a plan/policy regarding specific steps when severe weather strikes. Some questions to ask, and answer for employees: If severe weather strikes during business/operations hours, what is the plan for sheltering in place? When will the employer close or remain open during a storm or other severe weather outbreak? How will the employer communicate an office closure or reduced-hours schedule? Will employees be allowed to telecommute if the office/facility closes or transportation becomes an issue Will the office/facility be available for sheltering purposes during extreme weather events? 4. Ensure Any Unpaid Internship Program is Compliant With Wage Laws Summertime can bring an influx of interns to a workplace. The Fair Labor Standards Act (FLSA) generally requires “for profit” employers to pay employees for all time worked. However, under certain limited circumstances, interns may not be considered “employees” under the FLSA, in which case they may not be required to be compensated for their work. When it comes to unpaid workplace internships, the U.S. Department of Labor and courts have developed the “primary beneficiary test” to determine whether an intern is, or is not, an “employee” under the FLSA. Employers should review the following factors when determining whether an intern may be unpaid for his/her internship: 1.       The extent to which the intern and the employer clearly understand there is no expectation of compensation. Any promise of compensation, express or implied, suggests the intern is an employee – and vice versa. 2.       The extent to which the internship provides training similar to that which would be given in an educational environment, including clinical and other hands-on training provided by educational institutions. 3.       The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit. 4.       The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar. 5.       The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning. 6.       The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern. 7.       The extent to which the intern and the employer understand the internship is conducted without entitlement to a paid job at the conclusion of the internship. This review should be flexible; no single factor determines whether an internship should be paid or unpaid. The unique circumstances of each internship will require reviewing all of the factors. Additionally, any housing or food stipends – for example – should be clearly designated as unrelated to wages. HR professionals should also consult with in-house or outside labor and employment counsel for questions regarding any workplace policy, regardless of season.

Employers face a host of compliance challenges under state and federal law when an employee suffers a workplace injury.  As we recently reported, employers must consider the legal implications of the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA) when litigating workers’ compensation claims.  Employers should also be cognizant of their obligations under the Occupational Health and Safety Act (OSHA) and the Genetic Information Nondiscrimination Act (GINA). Workers’ Compensation and the FMLA Generally, state workers’ compensation laws require the provision of benefits to employees who sustain relatively minor, temporary job-related injuries as well as for permanently disabling serious injuries.  Additionally, the FMLA provides eligible employees with up to twelve weeks of unpaid, job-protected leave per year.  Eligible employees may take leave under the FMLA to care for a spouse, child or parent who has a serious health condition or because of their own serious health condition.  Under the FMLA, a “serious health condition” includes an illness, injury, impairment, and physical or mental condition involving inpatient care in a hospital, hospice, or residential medical care facility or continuing treatment by a health care provider.  Thus, a workplace injury or illness that qualifies as a serious health condition may entitle an eligible employee to FMLA leave. Workers’ Compensation and the ADA The ADA prohibits employers from discriminating against qualified individuals because of their disability.  The ADA defines a disability as (1) a physical or mental impairment that substantially limits a major life activity, (2) a record of such an impairment, or (3) being regarded as having such an impairment.  If an employee suffers a workplace injury that qualifies as a serious health condition and meets the ADA’s definition of an individual with a disability, the ADA, FMLA, and state workers’ compensation laws are implicated, and the employee could be entitled to job-protected leave and may also require a workplace accommodation. OSHA and GINA OSHA requires employers to provide a safe and healthful workplace to employees.  Among other obligations, OSHA requires employers to timely report and keep records of work-related injuries and illnesses.  In addition, employers are prohibited from discharging, retaliating or discriminating against any employee because the employee has exercised rights under OSHA. Finally, GINA prohibits employers from discriminating on the basis of genetic information.  Among other obligations, GINA requires employers who seek medical certifications in support of leave or accommodation requests- including FMLA leave- to affirmatively notify employees of GINA’s limitations on requests for genetic information. In light of the interplay between state workers’ compensation laws, the FMLA, ADA, OSHA, and GINA, employers should pro-actively evaluate and manage their workers’ compensation, FMLA, and ADA issues concurrently at the time of an employee’s injury, while an employee is on leave due to a workplace injury or illness, and after an employee has exhausted any leave or workers’ compensation benefits to ensure compliance with OSHA and GINA.

Employers may regulate the length, style, and neatness of employees’ hair in the workplace through so-called grooming policies, unless the hair style is a matter of sincere religious observance posing no more than a minimal burden on the employer.   A more complicated issue arises when grooming policies prohibit certain hairstyles that are culturally associated with race, such as dreadlocks.  Untangling this issue, on which few courts have spoken, the U.S. Eleventh Circuit Court of Appeals (binding in Alabama, Georgia, and Florida) held that employers may enforce a grooming policy that prohibits dreadlocks, despite a close cultural association to race. In Equal Employment Opportunity Commission v. Catastrophe Management Solutions, 852 F.3d 1018 (11th Cir. 2016), the Eleventh Circuit affirmed that Title VII protects against discrimination based on certain immutable characteristics, including race and sex.  On the other hand, Title VII’s mandate of equal employment opportunity does not prohibit discrimination based on practices that are culturally associated, even closely, with race or sex.  This reasoning aligns with the long-standing authority that employers may impose different hair-length and other grooming requirements for men and women. The employer in Catastrophe Management Solutions did not violate the law by denying a job offer to an African-American applicant who refused to cut her dreadlocks in order to secure a job.  Thus, in Alabama, Georgia, and Florida, grooming policies that explicitly prohibit dreadlocks or other hairstyles with a cultural significance closely tied to race may be enforced. This issue is complicated by the fact that Title VII does not define “race.”  Courts outside the Eleventh Circuit may interpret Title VII differently, by taking a different view of the breadth of Title VII, or a different functional definition of race.   The hairy issue of hair in the workplace in many states presents yet another reason to have an employee handbook regularly reviewed by experienced legal counsel.

On February 15, 2018, Austin became the first city in Texas to adopt a mandatory paid sick leave ordinance (the “ordinance”).  To prepare for compliance, Texas employers with employees in Austin will want to review the ordinance’s requirements: Effective October 1, 2018, all private employers with 16 or more employees must provide 8 days of earned sick time (“EST”) to employees who work at least 80 hours per calendar year. Employers with 6-15 employees must provide 6 days of EST per year. Employees will accrue EST at a rate of one hour for every 30 hours worked, in one-hour increments, and will accrue EST at the commencement of employment, or the effective date of the ordinance, whichever is later. Employees may use EST for their own, or a family member’s, physical or mental health or preventative care; or for medical attention, services, or legal actions as a result of domestic abuse, sexual assault or stalking. Employees may carry over accrued but unused EST, up to the maximum yearly cap, unless the employer grants the employee at least the minimum required amount of EST at the beginning of each year. Employers must: (i) provide monthly statements regarding an employee’s accrued EST; (ii) post a notice of the ordinance; and (iii) include notice of the ordinance and its requirements in the employers’ handbooks. The ordinance provides for a civil penalty of up to $500 for each violation. Effective October 1, 2020 employers with 5 or fewer employees must provide 6 days of EST each year. What’s Next? Local businesses currently oppose the ordinance.  On April 24, 2018 the Texas Public Policy Foundation filed suit in Travis County [Austin] on behalf of seven plaintiffs -- including the Texas Association of Business, National Federation of Independent Business, and the American Staffing Association -- challenging the ordinance as preempted by state minimum wage law and as violative of the Texas Constitution. In addition, the Workflex in the 21st Century Act (the “Act”), currently pending before the U.S. Congress, could neutralize the Austin ordinance and the growing number of county and city ordinances across the country regarding mandatory paid sick leave. Under the Act, employers that allow for paid time off and offer their employees options for flexible work arrangements would qualify for ERISA coverage and, thus, would likely pre-empt state and local paid leave and workflex laws.

On April 4, 2018, Airlines for America, a trade association and lobbyist organization for U.S. airlines, filed a lawsuit in federal court in Massachusetts against the Massachusetts Attorney General challenging the state’s paid sick leave requirements.  On behalf of its members, Airlines for America seeks declaratory and injunctive relief to invalidate Massachusetts’ Earned Sick Time Law and to prohibit its enforcement with respect to flight crew and ground crew personnel.  This is the second lawsuit filed by the airline association in recent months challenging paid sick leave laws.  In February 2018, Airlines for America filed a similar lawsuit challenging Washington’s paid sick leave law which we discussed here. By way of background, Massachusetts voters passed the Earned Sick Time Law on November 4, 2014.  The law requires employers with 11 or more employees to provide paid sick leave to employees at the rate of one hour of paid sick leave for every thirty hours worked, up to 40 hours per year.  The law applies broadly to Massachusetts employers and employees and does not include exemptions for employees covered by collective bargaining agreements that provide for paid sick leave, or airline employees under the Railway Labor Act. In this case, Airlines for America alleges that applying the Massachusetts Earned Sick Time Law (the “law”) to the airline industry violates the United States Constitution -- specifically, the Fourteenth Amendment’s Due Process Clause and the Commerce Clause -- because of the law’s application to employees outside the state of Massachusetts and its negative impact on interstate commerce.  Airlines for America further contends the law is preempted by the Airline Deregulation Act because it negatively impacts carrier’s “prices, routes, and services.” Airlines for America further alleges that without these exemptions for airline employees, carriers will have to comply with a patchwork of inconsistent state and local paid sick leave laws, which will cause an undue burden on the airlines’ operations, and that such protections are not necessary because the airlines already provide generous paid sick leave benefits to employees in their collective bargaining agreements. Along with the Washington lawsuit, this legal challenge is an important development for airline employers as they attempt to determine the best way to comply with the patchwork of paid sick leave laws sweeping the nation, while still operating a vast network of flights and mobile employees across state lines.  Future court rulings may provide much needed guidance on these important issues.  Be sure to check back for future updates as we will continue to monitor litigation in this area.

On March 5, 2018, in a decision styled Shell v. Burlington Northern Santa Fe Railway Company, Case No. 15-cv-11040 (N.D. Ill. Mar. 5, 2018), the U.S. District Court for the Northern District of Illinois suggested liability could attach where an employer regarded an obese individual as disabled, in violation of the Americans with Disabilities Act, as amended (“ADA”). As previously reported in this blog, courts have held that obesity is not a disability under the ADA.  To qualify as a disability, a physical or mental impairment must substantially limit a major life activity. However, the Equal Employment Opportunity Commission has issued interpretive guidance providing physical characteristics, such as weight, do not qualify as disabilities unless they are (a) outside of a “normal” range and (b) result from a physiological disorder. In this case, BNSF Railway (“BNSF”) maintained a policy prohibiting employees with a body mass index (“BMI”) over 40 from holding safety-sensitive positions based on its belief that such individuals are at a substantially higher risk of developing medical conditions that “can manifest as a sudden incapacitation or a serious impairment of alertness or cognitive ability.”  Ronald Shell applied for the position of the intermodal equipment operator, a job category that BNSF classified as safety-sensitive because it involves using heavy equipment.  However, a post-offer physical established that Shell’s BMI was 47.5 and his conditional job offer was withdrawn.  Shell filed suit, alleging discrimination under the ADA, and BNSF moved for summary judgment. In support of its Motion for Summary Judgment, BNSF argued that Shell was not protected by the ADA because obesity -- by itself -- is not a disability.  The Court acknowledged controlling precedent on this point and further found that BNSF did not regard obesity as a disability.  However, the Court pointed to the fact that BNSF’s policy is based on concerns that someone with a BMI over 40 “would develop sleep apnea, diabetes, or heart disease” and become incapacitated.  All of these conditions, the Court noted, are disabilities.  As a result, the Court held that BNSF was “acting based upon an anticipated worst case scenario derived from precisely the sort of myth, fear, or stereotype which the ADA is meant to guard against,” and denied summary judgment under the “regarded as” prong of the ADA. While this issue is likely to receive additional consideration from the appellate courts, in the meantime employers should continue to use caution when dealing with employment issues related to obesity. Shell v. Burlington Northern Santa Fe Railway Company, Case No. 15-cv-11040 (N.D. Ill. Mar. 5, 2018).

On January 10, 2018, the Northern District of California certified a state-wide class of non-exempt hourly employees who allege that they were not fully compensated for all time spent submitting to their employer’s bag inspection requirements. (Heredia v. Eddie Bauer, LLC, January 10, 2018, Freeman, B.). In this case, the employer maintained a formal written policy that required all hourly employees who carried a bag that could be used to conceal merchandise to submit to a personal property or bag inspection by a member of management before leaving the store at the end of their shift. Problematically, the written policy at issue was silent as to: Whether employees must clock out before or after undergoing the required inspections. Whether managers needed to inform employees that the inspections would be conducted on-the-clock. The employer claimed that all members of management were trained to conduct all bag inspections and to inform all employees that bag inspections were on-the-clock. When certifying the class, the Court found that both the commonality and typicality requirements of Rule 23 were met since there was a common question about whether the inspections were to be conducted off-the-clock or on-the-clock. The Court dismissed arguments that class treatment was inappropriate because not all hourly employees carried bags to work, finding that even if they did not carry a bag they were still required to inform management that they did not have a bag before leaving the store. The Court also dismissed the employer’s argument that the written policy did not specifically state that the inspections had to be conducted off-the-clock and were therefore not a policy or practice that resulted in off-the-clock inspections in every instance. A takeaway for employers enforcing a bag inspection: the policy should state that the inspection must occur while the employee is on-the-clock.  This will inform employees that they must stay clocked in for the inspection and will reinforce to management that they must ensure employees are clocked-in until the inspection is complete.

On February 6, 2018, Airlines for America, a trade association and lobbyist organization for the American airline industry, filed a lawsuit in federal court in Washington State against the Washington Department of Labor & Industries challenging the state’s enforcement of its paid sick leave requirements against airline employers.  On behalf of its members, which include carriers, Airlines for America seeks declaratory and injunctive relief to invalidate Washington’s new Paid Sick Leave Act and to prohibit its enforcement with respect to flight crewmembers, such as pilots and flight attendants. Airlines for America is challenging the application of  Washington Paid Sick Leave Act to the airlines on the grounds that it violates the United States Constitution -- specifically, the Fourteenth Amendment’s Due Process Clause and the Commerce Clause -- because the law also applies  to employees outside the state of Washington and has a negative impact on interstate commerce. The lawsuit also challenges the sick leave law on the basis that it is preempted by the Airline Deregulation Act because it negatively impacts carriers’ “prices, routes, and services.” Washington voters passed the paid sick leave law in November 2016 and it took effect on January 1, 2018. In addition to establishing a statewide minimum wage, it requires employers to provide paid sick leave to employees at the rate of one hour of paid sick leave for every thirty hours worked. The law applies broadly to Washington employers and employees.  It does not include exemptions typically seen in other state and local paid sick leave laws for employees covered by collective bargaining agreements that provide for paid sick leave, or flight crewmembers under the Railway Labor Act. Without these exemptions for airline employees, carriers will have to comply with a patchwork of inconsistent state and local paid sick leave laws, which will cause an undue burden on the airlines’ operations. This legal challenge is an important development for airline employers as they determine the best way to comply with the paid sick leave laws sweeping the nation, while still operating a network of flights and mobile employees crossing state lines. Future court rulings may provide much-needed guidance on these important issues. Be sure to check back for future updates as we will continue to monitor this litigation.

The Pension Benefit Guaranty Corporation (“PBGC”) recently updated and expanded its Missing Participant Program. For most defined benefit plans with missing participants, this program has been a required step in the termination process since 2006. The new regulation, effective January 22, 2018, expands the program to include, on a voluntary basis, terminating defined contribution plans and thereby alleviates problems that employers have had since the Internal Revenue Service (“IRS”) and Social Security Administration (“SSA”) ceased helping to find missing participants through their letter forwarding program. Now, plan sponsors of terminating defined contribution plans may transfer accounts of missing participants to the PBGC to liquidate the plan and, hopefully, reunite missing participants with their accounts. The new PBGC program does not yet replace existing guidance from the U.S. Department of Labor (“DOL”) regarding missing participants. For example, DOL Field Assistance Bulletin 2014-01, identifies an Individual Retirement Account (“IRA”) as the preferred disposition of a missing participant’s account and does not envision the possibility that the account may be transferred to the PBGC. However, the preamble to the final regulation indicates DOL’s intent to review and possibly revise its guidance to coordinate with the PBGC’s final rule. In addition, below we review some common plan termination compliance snafus and how to avoid them:  Final Amendment(s): Regardless of the type of plan document, or how long ago it was restated, the document must be updated for all law changes up to the date of termination.  To a certain extent, the termination of a plan accelerates the amendment deadline for any recent law changes.   If the document is not properly updated, the qualified status of the plan will be at risk. Successor Plan Issues: Plan sponsors often assume that terminating a plan will enable participants to take a distribution.  This may not always be the case.  There is a rule applicable to terminating 401(k) plans, which may prohibit participants from taking a distribution until they actually separate employment.  This rule may be triggered if the plan sponsor maintains another plan or adopts a “successor” plan. Partial Termination:Upon plan termination, all affected participant accounts must become 100% vested.  However, similarly accelerated vesting must occur if there is a “partial termination” of the plan. A partial termination may occur when, for example, more than 20% of plan participants are laid off in a particular year. The IRS has published a website devoted to this concern. Filing Form 5310 with the IRS: A plan sponsor may request that the IRS issue a favorable determination letter upon plan termination. While not required, this is often advisable to provide assurance that the plan is not disqualified (through audit or otherwise) after final distributions have been made. Terminating a plan is often necessary. However, great care should be taken to ensure that the plan is properly wrapped up rather than unraveled.

By now, most employers are familiar with their obligations under the Americans with Disabilities Act of 1990 (ADA) to not discriminate against, and possibly provide accommodations for, qualified individuals with disabilities. However, these same employers may not be aware of the newest frontier of plaintiffs’ lawsuits — claims that company websites do not comply with the ADA. Title III of the ADA prohibits discrimination on the basis of disability in the activities of places of public accommodations. Places of public accommodations include businesses that are generally open to the public, such as restaurants, movie theaters, schools, day care facilities, recreation facilities, hospitals, and doctors’ offices. Title III of the ADA also requires newly constructed or altered places of public accommodation, as well as commercial facilities (privately owned, nonresidential facilities, including factories, warehouses or office buildings whose operations affect commerce), to comply with ADA standards. At the time of the ADA’s passage, the internet was not a consideration in the ADA’s provisions or implementation. However, given the internet’s now prevalent use for consumer applications, the ADA’s requirements now extend to include company websites. The growing consensus of the courts and the United States Department of Justice (DOJ), the agency responsible for enforcing Title III of the ADA, is that websites are places of public accommodation that must comply with the ADA. State laws may also impose similar compliance obligations on companies. The DOJ is reviewing websites for compliance. In actions brought by the DOJ, monetary damages and civil penalties may be awarded. Civil penalties may not exceed $50,000 for a first violation or $100,000 for any subsequent violation. Private parties may also file suit to obtain court orders to compel companies to bring their websites into compliance with the ADA’s public accommodation provisions. No monetary damages are available in such suits under federal law; however, reasonable attorneys’ fees may be awarded — making these attractive potential class actions for plaintiffs’ attorneys. State laws may also provide for monetary damages. The DOJ has not yet established binding regulations governing website ADA compliance, and is not expected to do so until 2018 However, it appears to be a near certainty that the DOJ will adopt the current “Web Content Accessibility Guidelines (WCAG-2.0) Level AA” (WCAG) as the relevant regulations. The WCAG explain how to make web content more accessible to people with disabilities. Web content generally refers to the information in a web page or web application, including natural information such as text, images, and sounds and code or markup that defines structure, presentation, etc. Until the adoption of binding regulations, the plaintiffs’ bar and the DOJ seem to be treating WCAG as the de facto standards for ADA compliance. Therefore, compliance with WCAG is highly recommended. Evaluating reasonable accommodation issues for applicants and employees is complicated enough. To keep pace with companies’ ever-growing list of compliance obligations, companies are strongly encouraged to seek counsel to determine whether their websites comply with the ADA and any applicable state laws.

The start of the year is prime time for employers to review employee handbooks. Many policies remain the same year after year. Employers may wish to pay attention to certain policies due to recent changes in the law. 1. Defense of Trade Secrets Act (DTSA) notice. If your company has a confidential-information policy or requires employees to sign non-disclosure agreements, then you should consider including notice of the DTSA’s immunity exceptions. Such notice permits the company to seek all available remedies under the DTSA should a given employee breach their obligations to keep certain information confidential. 2. Protected classes. Employers should review the list of protected classes in their policies prohibiting discrimination, harassment, and retaliation in order to ensure compliance with federal, state, and local laws. For example, the Equal Employment Opportunity Commission (EEOC) views sexual orientation and gender identity discrimination as a form of sex discrimination—and some cities and states prohibit such conduct. 3. Nursing mother policy.The Patient Protection and Affordable Care Act (ACA) requires employers subject to the Fair Labor Standards Act (FLSA), (unless they have fewer than 50 employees and can demonstrate that compliance would impose an undue hardship), to provide unpaid, reasonable break time for an employee to express breast milk for one year after her child’s birth. Several states and some municipalities have similar requirements. 4. Drug and alcohol-free workplace policy.With an increasing number of states enacting both medical and recreational marijuana use laws, employers should consider revising policies to clearly tell employees the employer’s stance on drug testing and how the use of marijuana (even when outside of the workplace) may impact the results of such tests and employment opportunities. In addition to the above considerations, the National Labor Relations Board (NLRB) has focused its attention on numerous handbook policies in its quest to protect employees’ rights to engage in protected, concerted activity. Employers should ensure their policies concerning confidential investigations, workplace recordings, positive employee attitudes, social media and communications, solicitation, and dress code comply with current NLRB decisions.

The Family and Medical Leave Act requires employers with 50 or more employees to permit eligible employees to take covered unpaid medical or caregiver leave.  How can an employer respond when an employee approved to take FMLA leave is later suspected of taking FMLA leave for an improper purpose, such as to moonlight at another job,  go on vacation, or  avoid undesirable work assignments? Nothing in the FMLA statute or regulations prevents employers from ensuring that employees who are on leave from work do not abuse their leave.  Fraud and dishonesty in the use of FMLA leave may be grounds for termination of employment.  An employer suspecting FMLA fraud or abuse may investigate and take action to deter future FMLA abuse. Below are several options to consider: Interviewing the Employee. Employers can investigate suspicious circumstances suggesting FMLA abuse by interviewing employees about their actions and whereabouts on the day(s) in question. Before interviewing the employee, the employer may gather publicly available information (e.g., social media) about the employee’s relevant activities. Other employees who may have witnessed relevant events may also be interviewed.    An employee’s inability to explain, or lack of credibility when explaining, his or her relevant actions or whereabouts may support a finding that the employee has lied or engaged in FMLA misuse.  When interviewing an employee in this context, it is suggested to consult with counsel to ensure the questions do not include prohibited medical inquiries or discourage or interfere with the legitimate taking of FMLA leave.  Private Investigation. Surveillance by a private investigator can document an employee’s physical movements and activities inconsistent with the taking of FMLA leave. Engaging counsel can help to ensure a proper scope of surveillance and that the employer is presented with appropriate facts upon which to assess the suspicion of FMLA fraud or abuse. Recertification.Employees who take intermittent FMLA in a pattern (e.g., every Friday) or under objectively suspicious circumstances (e.g., several employees take FMLA leave on the day after the Super Bowl) may be required to recertify the taking of FMLA. Although employers cannot challenge the medical opinions of the employees’ health care providers as part of recertification, the recertification request may deter future FMLA abuse. If recertification is not timely provided, FMLA can be denied. Recertification may be requested in conjunction with an employee interview or surveillance. Experienced counsel can guide employers through the strategic use of these and other techniques to investigate and deter FMLA fraud and abuse.

The U.S. Department of Transportation’s (“DOT”) new Final Rule modifying DOT regulation 49 CFR Part 40 (“Final Rule”) became effective January 1, 2018.  Specifically, the Final Rule affects employers of employees in safety sensitive positions, and includes changes to the types of drugs for which employers can test, as well as the manner in which employers submit specimens for testing. Changes to Drug Testing Panel The Final Rule modifies the drug testing panel to include testing for semi-synthetic opioids (i.e., hydrocodone, oxycodone, hydromorphone, and oxymorphone). In addition, the Final Rule 1) changed the name of the category of drugs to be tested from “opiates” to “opioids;” 2) removed testing for methylenedioxyethylamphetaime (MDEA); and 3) added testing for methylenedioxyamphetamine (MDA).  Now, the drugs for which employers must test employees subject to the Final Rule include marijuana, cocaine, amphetamines, phencyclidine, and opioids. Changes to Specimen Collection Employers and Consortium/Third Party Administrators are no longer required to submit blind specimens to laboratories. Under the prior regulation, an employer sent a blind specimen to a laboratory, accompanied by a Federal Drug Testing Custody and Control Form, with a fictitious donor name for quality control purposes to see whether the laboratory’s results matched the known contents of that particular blind specimen. Because no false positive results have been found in the last 25 years of drug testing through testing blind specimens, the DOT removed the blind specimen testing requirement. Other Notable Changes The Final Rule additionally changed Medical Review Officer (MRO) practices. In particular, a “prescription” is now defined as a legally valid prescription consistent with the Controlled Substances Act (CSA). This is a significant change: the CSA classifies marijuana as a Schedule I drug, so a prescription for medical marijuana under state law does not qualify as a legally valid prescription for DOT drug testing purposes. Furthermore, the Final Rule modifies the timing regarding when a MRO must communicate to a third party that the MRO considers an employee may be medically unqualified for their position or may pose a significant safety risk when performing a safety sensitive function.  Specifically, if an MRO determines that a legally prescribed medication may make the employee medically unqualified or cause him/her to pose a significant safety risk, the MRO must provide the employee with up to five business days to have his/her physician contact the MRO to discuss whether the medications can be changed to either a prescription that does not make the employee medically unqualified or a prescription that does not pose a significant risk before the MRO may report a safety concern to a third party, including the employer. Employers would do well to examine their DOT drug testing procedures to ensure compliance, and may do so with the assistance of able counsel.

In 2017, the Centers for Disease Control reported that more than one-third of U.S. adults are obese.  But does that mean that one-third of U.S. adults are disabled?  Not necessarily.  The California Supreme Court decided twenty-five years ago in Cassista v. Community Foods, Inc. that obesity can qualify as a disability under the state anti-discrimination statute if it results from a physiological condition affecting a basic bodily system, and limits a major life activity.  However, the California Court of Appeal’s recent decision in Cornell v. Berkeley Tennis Clubseems to have eased a plaintiff’s burden of proving obesity qualifies as a disability. The plaintiff in the case, Ketryn Cornell, who was objectively obese, was employed by the Berkeley Tennis Club (the “Club”) for more than 15 years, holding positions as a life guard, tennis court washer and pool manager during her tenure.  She received positive performance reviews, raises, and bonuses until she was terminated for allegedly concealing a recording device when attempting to record a board meeting.  Recording a private conversation without every participant’s consent is a crime under California law.  Ms. Cornell denied planting the recording device and sued the Club under the Fair Employment and Housing Act (FEHA) alleging, among other things, that the Club discriminated against her and harassed her because of her disability -- obesity.  In support of her claims, Cornell produced evidence that her supervisor made several insensitive remarks and took several actions regarding her weight, including 1) suggesting that she undergo weight-loss surgery; 2) directing the kitchen staff not to give her extra food because “she doesn’t need it;” and 3) refusing her request that the Club special order a uniform that would fit as an accommodation.  The trial court granted the Club’s motion for summary judgment, holding that Cornell failed to produce evidence that her obesity qualified as a disability. The Court of Appeal reversed as to the discrimination and harassment claims.  On the discrimination claim, the Court held that the Club failed to show that Cornell could not establish that her obesity had a physiological cause. Importantly, the Court found that a physiological cause could include a genetic cause and, to defeat summary judgment, it was sufficient for Cornell’s doctor to find a genetic cause based on nothing more than her body mass index.  The Court also determined that the Club’s failure to adequately investigate the recording allegations and the discriminatory comments of her supervisor were sufficient evidence to defeat summary judgment.  As to the harassment claim, the Court found a triable issue as to whether the alleged harassment was sufficiently severe and pervasive.  Although the supervisor’s inappropriate comments about Cornell’s weight, standing alone, were too isolated to preclude summary judgment, the Court also considered evidence that the supervisor reduced Cornell’s hours, passed her over for internal jobs, and paid her less.  Taken together with the weight-based comments, the Court concluded this evidence was sufficient to preclude summary judgment on the harassment claim. In light of Cornell, California employers should take complaints of obesity discrimination and requests for accommodation based on obesity seriously.  As with other bases of discrimination and harassment, California employers should consult with experienced employment counsel to ensure that effective policies are in place to prevent disability discrimination and harassment and to investigate obesity-based complaints when they arise.

On January 5, 2018, the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) reissued 17 Opinion Letters that were previously issued in January of 2009 in the waning days of the Bush administration. The Obama administration promptly withdrew the Opinion Letters in March, 2009, “for further consideration.” Subsequently, the Obama DOL discontinued the practice of issuing Opinion Letters in favor of publishing more Administrator Interpretations. The requirements of the Fair Labor Standards Act (FLSA) and the Family Medical Leave Act (FMLA) are established by statutes and regulations promulgated by the DOL.  Employers or other interested parties may seek guidance from the WHD regarding interpretation of the FMLA and FLSA.  In response, the WHD may provide official written explanations of the FLSA or the FMLA requirements through Opinion Letters. Notably, Opinion Letters are intended to be “fact-specific,” based on the facts presented in the individual inquiry. The 17 re-issued Opinion Letters are fact-specific. Many of the re-issued Opinion Letters are based on specific job positions in specific industries, i.e., the exempt status of civilian helicopter pilots, the exempt status of project superintendents of a commercial construction company, and the exempt status of clinical coordinators and business development managers for a temporary medical professional provider.  Other reissued Opinion Letters opine regarding calculating the regular rate of pay for firefighters and alarm operators under a collective bargaining agreement, the exempt status of client service managers at an insurance company, and the application of the retail or service exemption to plumbing sales/service technicians, compensation of “on-call” hours of ambulance personnel. The Opinion Letters do not create “new law,” but rather may provide employers with guidance as they navigate the strictures of the FMLA and the FLSA.  Employers concerned with whether a given Opinion Letter may apply to their specific problem would do well to discuss the matter with able counsel. For a complete list of the re-issued Opinion Letters (including a link to the Opinion Letters), visit https://www.dol.gov/whd/opinion/flsa.htm. 

Employers, take note:effective January 1, 2018, 18 states, as well as several cities across the country, increased the minimum wage. Companies with employees in Alaska, Arizona, California, Colorado, Florida, Hawaii, Maine, Michigan, Minnesota, Missouri, Montana, New Jersey, New York, Ohio, Rhode Island, South Dakota, Vermont, and Washington should review their pay practices to ensure compliance with the new state minimum wage rates. Additionally, according to the Economic Policy Institute, 39 localities across the United States have adopted a minimum wage above even their own state’s minimum wage.  Legislators in Oregon, Maryland, and Nevada have introduced bills to increase the minimum wage in their respective states in 2018. And in cities and counties in California, Illinois, Maryland, Maine, Minnesota, New Mexico, and Washington, D.C., ordinances to raise the local minimum wage rate are being considered as well. With these changes, 29 states and Washington D.C. have a higher minimum wage than the federal minimum wage rate. Thus, employers with employees in more than one state must ensure compliance with federal law, and may also have to ensure compliance with state and local law regarding minimum wage. With the constant changes in minimum wage rates coming at both the state and local level, employers would do well to audit their pay practices in the New Year.

Recently, we reported that the “new” National Labor Relations Board (“NLRB” or the “Board”) has commenced the anticipated roll back of decisions and procedures rendered by the Obama Administration’s NLRB. On Friday, December 15, 2017, the NLRB issued another important decision with far-reaching implications for all employers. In Boeing Company, 365 NLRB No. 154 (2017), the NLRB established a new standard for evaluating whether workplace rules, policies, or employee handbook provisions unlawfully interfere with employees’ exercise of rights under Section 7 of the National Labor Relations Act (“NLRA”). Under the new standard established in Boeing, the NLRB will balance the impact an employer’s proffered rule may have upon an employee’s Section 7 rights to engage in protected concerted activity against the employer’s business justification for the rule. The NLRB indicated it would categorize the results of future decisions in three ways: Category 1 will include rules the NLRB designates as lawful because (i) the rule, when “reasonably interpreted,” does not prohibit or interfere with the exercise of Section 7 rights; or (ii) the potential adverse impact on protected rights is outweighed by the employer’s business justification(s) for the rule. Category 2 will include rules warranting individual scrutiny on a case-by-case basis as to whether the rule would prohibit or interfere with Section 7 rights, and if so, whether any adverse impact on employees’ protected conduct is outweighed by legitimate justifications. Category 3 will include rules that the NLRB will designate as unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on employees’ Section 7 rights is not outweighed by legitimate business justifications. The Board specifically identified employer policies that would prohibit employees from discussing wages or benefits with each other as an example for this third category. The three categories identified by the NLRB represent a classification of results from the NLRB’s application of the new test and are not part of the test itself. The NLRB will determine in future cases the types of additional rules that fall into each category. The new balancing test established in Boeing Company overrules the “reasonably construe” standard in place since 2004. Under the “reasonably construe” standard, the NLRB could conclude that a proffered work rule violated the NLRA so long as an employee could “reasonably construe” the rule to interfere with their Section 7 rights. The Board’s new balancing test seeks to provide employees, employers and unions with greater clarity and certainty. While it will take time to determine the full impact of the Boeing decision, the fact that the new balancing standard requires the NLRB to consider the business purpose of a rule is a remarkable shift in the Board’s evaluation of workplace rules, policies and employee handbook provisions. In light of the new balancing test, employers should consider clearly articulating the business justification(s) for workplace rules, policies, and procedures, particularly those that could conceivably implicate rights arising under Section 7 of the NLRA.

Pursuant to Wage Orders promulgated by California’s Industrial Welfare Commission, most non-exempt employees in California are entitled to a paid 10 minute rest break for every 4 hours worked or major fraction thereof. In December 2016 the California Supreme Court clarified in Augustus v. ABM Security Services, Inc. (2016) 2 Cal. 5th 257, 260, that during said rest breaks, “employers must relieve their employees of all duties and relinquish any control over how employees spend their break time.” As we anticipated when this decision first came out, there has been a steady uptick in litigation about this matter as the courts work to define the nature of relinquishing control in the context of a 10 minute rest break. Prior to Augustus, the California Labor Commissioner, Division of Labor Standards Enforcement (“DLSE”) directed that employers could require employees to stay on the premises during rest breaks. However, in the wake of Augustus, in November 2017, the DLSE published updated guidance on the provision of rest breaks to California non-exempt employees and made clear that employers “cannot impose any restraints not inherent in the rest period requirement itself,” including whether employees may leave the premises. As the New Year approaches, California employers should ensure they are meeting the requirements of California rest break law. California businesses should: Review and update policies to reflect that employees entitled to rest breaks may take them at the location of their choosing; Train managers and supervisors on requirements for rest breaks for California employees to ensure expectations are properly communicated; and Communicate to eligible employees their rights regarding rest breaks. If you have concerns that your business may have unintended liability for the provision of rest breaks or you have concerns about remaining compliant, please contact your Polsinelli attorney.

In two recent developments, the “new” National Labor Relations Board (“NLRB” or the “Board”), which includes two Members nominated by President Trump, has commenced the anticipated roll back of decisions and procedures rendered by the previous Administration’s NLRB. 1. The NLRB General Counsel can no longer demand settlements with a full remedy for all violations. In UPMC, 365 NLRB No. 153 (December 11, 2017), the Board reversed a 2016 decision that prohibited settlements of NLRB complaints over the objection of the NLRB General Counsel (Prosecutor) and the party filing the charge, unless the settlement provided complete remedies for all violations alleged in the Complaint. The 2016 decision, United States Postal Service,364 NLRB No. 116 (2016), had overturned decades-long NLRB precedent established inIndependent Stove, 287 NLRB 740 (1987). In the UPMCmajority’s (Chairman Philip Miscimarra, Member William Emanuel, Member Marvin Kaplan) view, requiring a settlement of all violations with a full remedy for the employees (and union) “imposed an unacceptable constraint on the Board itself which retained the right under prior law to review the reasonableness of any … settlement terms” offered by Respondents (employers and unions). According to theUPMC majority, the 2016 USPSdecision unduly restricted the settlement of NLRB cases and ignored the risks inherent in NLRB litigation. The UPMC decision now allows a Respondent, with approval of the Administrative Law Judge, to settle a case without providing full and complete relief, so long as the resolution is “reasonable.” This approach should facilitate more settlements, and reduce the costs and uncertainty inherent in litigation (for employers and the NLRB). The dissent strongly disagreed with what it called “an eleventh hour” decision during Republican Chairman Miscimarra’s last week as a Board member. However, Chairman Miscimarra will soon likely be replaced by another Republican. 2. The NLRB seeks comments on quickie elections – is more change likely? The day after the UPMCdecision, the NLRB published a Request for Information (“RFI”) in the Federal Register seeking prompt public comments about the controversial 2014 Election Rule, commonly referred to as the “quickie election” rule. Specifically, the RFI seeks public input from December 13, 2017 until February 12, 2018 regarding the following three questions: Should the 2014 Election Rule be retained without change? Should the 2014 Election Rule be retained with modifications? If so, what should be modified? Should the 2014 Election Rule be rescinded? The “quickie election” rule, effective since April 2015, impacted NLRB elections in three main ways: It significantly shortened the time period between the date a petition for election is filed and the date of the election. As a result, elections frequently took place approximately three weeks after the petition was filed. This period shortened employers’ time to respond to the union’s campaign efforts from approximately 6 weeks to 23 days. It considerably restricted the scope of any pre-election challenges that might result in litigation, such as individual voter eligibility issues, unless the question relating to eligibility affected twenty percent (20%) of the proposed unit. Eligibility issues, including determining who is a supervisor and thus is precluded from voting, were generally delayed until after the elections if the union won. It forced employers to disclose a substantial amount of private employee information to the unions, including providing unions with employee contact information. In particular, the employer is required to disclose, for the first time, employee personal email addresses and phone numbers, including all cell phone numbers. Previously, only mailing addresses needed to be disclosed. While the “quickie election” rule has not substantially increased union election win percentage, opponents of the rule have objected to the limited time it provides employers to communicate with employees regarding the election, the deferral of election eligibility issues until after the election, as well as the procedural challenges. Takeaways Moving forward, interested parties should monitor the new Board’s actions. The recent developments indicate the new Board could likely overturn some of the decisions rendered and procedures proffered by President Obama’s NLRB.

Earlier this year, we reported that the San Francisco Board of Supervisors passed legislation to assist working mothers by requiring employers to provide additional accommodations for lactation. On January 1, 2018, the Lactation in the Workplace Ordinance (the “Ordinance”) takes effect. The City of San Francisco’s Office of Labor Standards and Department of Public Health (collectively, the “City”) has published sample forms and guidance for employers to consider when preparing such policies. As a brief refresher, the Ordinance requires virtually all employers (there is no minimum employee threshold) to provide employees a lactation location that is (1) not a bathroom, (2) free of intrusion, (3) clean and safe, (4) available as needed and (5) that has a surface (e.g., a counter or table), electricity, and a chair. There must also be a sink and refrigeration nearby. The space provided may be the employee’s normal work area or a multipurpose room to the extent it meets these requirements. Because of ambiguity regarding the Ordinance’s key terms, the City also has published a “Best Practices and Legal Requirements Checklist” for employers to consider when developing lactation policies. To be clear, the information contained on the checklist goes beyond the legal requirements, and the City advocates that employers—to the extent possible—dedicate a permanent, private room or space for lactation, to include the following: Internal lock, clock, adjustable temperature control, footstool, Wi-Fi, telephone, mirror, lockers, partition, hospital grade breast pump, tape and pen for labeling containers, amongst other things; Reservation system to use the room; External signage; Regular janitorial servicing; and Access to educational literature and resources. The City also proposes several “best practices” for employers to consider when accommodating lactation breaks requested by employees. These include providing employees, upon request, with temporary reduced hours or modifications to job duties, job sharing, flex time, alternative work schedules, and/or telecommuting. If practicable and not otherwise prohibited, the City also encourages employers allowing caregivers to bring the child to the workplace for feedings. While not expressly required by the Ordinance, these “best practices” shed light on how City regulators may interpret the Ordinance’s provisions when determining whether an employer is in compliance with the Ordinance. Please contact your local Polsinelli employment lawyer if you have questions about this Ordinance or would like us to review your company’s policy and approach to compliance with this new law.

On December 4, 2017, the Department of Labor (“DOL”) proposed a rule that will rescind the 2011 regulation prohibiting restaurants, bars, and other service industry employers from requiring front-of-house employees, such as servers, to share tips with back-of-house workers, such as cooks and dishwashers. The current rule does not require tipped employees to share their tips with non-tipped employees; however, the proposed rule, which was first announced in July, will allow employers to require tipped employees to split tips with their co-workers. “The proposal would help decrease wage disparities between tipped and non-tipped workers,” the DOL said in a statement Monday. Under the Fair Labor Standards Act (FLSA), the federal law which governs minimum wage and overtime, employers may take what is called a “tip credit,” meaning they can pay tipped employees less than the minimum wage (the federal tipped minimum wage $2.13 however some states require more) so long as the tips earned by a given employee will increase their wage rate to at least $7.25 an hour (or the state minimum wage, if higher).  Under the DOL’s new rule, employers may choose to not take a tip credit by paying all employees minimum wage. If an employer pays everyone minimum wage, the employer could decide how to split tips received from customers as the tips would no longer be the property of the employee. The proposed rule only applies to employers who pay tipped employees at least the federal minimum wage of $7.25 an hour (or the state minimum wage, if higher than the federal minimum wage) and allow compensation sharing through a “tip pool” with employees who usually do not receive tips, such as cooks and dishwashers. The DOL will accept public comments on the proposed regulation for 30 days (until January 4, 2018). If you have questions about how the proposed rule will affect your business, contact the Labor and Employment attorneys at Polsinelli.

Medical leaves pose operational and legal challenges for employers. As we have previously addressed, those challenges multiply when the employee’s medical leave stems from a workplace injury and workers’ compensation laws are added to the employer’s compliance challenges. Indeed, such injuries can result in the employee seeking leave for an indefinite amount of time. To avoid the uncertainty and difficulties caused by employee absences of indefinite duration, some employers have implemented a “maximum leave” policy – a policy that limits the total amount of leave (from all laws and policies) that an employee can take in a given period of time. However, even a very generous maximum leave policy could violate the Americans with Disabilities Act (ADA), as some courts have held that extended leave can be considered a “reasonable accommodation” of an employee’s disabling condition. Similarly, the U.S. Equal Employment Opportunity Commission has taken the position that “maximum leave” policies are subject to exceptions in the interactive process and that an employer should reasonably accommodate an employee seeking an exception unless doing so will cause an undue hardship. Below are three steps that an employer can take to reduce the risk of an ADA violation when implementing a “maximum leave” policy. 1. Maintain Flexibility The EEOC has recently obtained multi-million dollar consent decrees and settlements from employers that sought to enforce maximum leave policies with respect to disabled employees.  An employer that implements a maximum leave policy may need to consider granting an employee leave beyond the “maximum” allowed leave as an accommodation under the ADA. Accordingly, employers may wish to consider including a statement in any maximum leave policy which provides that there are situations where leave time beyond the stated limit will be granted. 2. Communicate Carefully with Employees Some employers send form letters to employees who are approaching the end of the maximum leave period, which state that the employee must either return to work at the end of the maximum leave period or face termination. The EEOC’s guidance on maximum leave policies suggests that it may consider these communications to violate the ADA. Employers may wish to consider tempering those letters and adding a request that the employee advise the employer by a date certain if the employee believes they may need further leave as an accommodation. 3. Train Employees Employers may wish to train employees that leave may be granted as an accommodation under the ADA and that a maximum leave policy does not prohibit such an accommodation. In particular, employers would do well to train human resources officials, other employees who implement the policy, and all managers on the need to maintain flexibility regarding maximum leave policies to avoid running afoul of the ADA.

In a post-Defend Trade Secrets Act world, employers have a host of civil remedies available to them for the misappropriation of trade secrets under both state and federal law. To obtain relief, an employer must establish that the information it claims is subject to trade secret protection is, in fact, protected as confidential and secret. Below we outline five actions an employer might consider to demonstrate it has taken the necessary measures to protect the secrecy of its confidential information. Written agreements with employees who have access to trade secrets.These agreements may contain confidentiality, non-disclosure, non-solicitation, or non-competition provisions. To be effective, it is critical that such agreements define clearly what constitutes “confidential information,” and include a clause affirmatively requiring the return of such “confidential information” upon the termination or resignation of the employee. Written policies governing employee conduct.Employers should set forth clear rules for marking and maintaining confidential information, such as written instructions related to copying and sharing of confidential information. Employers can also include restrictions on the sharing or disclosure of confidential information in employee handbooks or other policies that are shared with all employees. Limiting employee access to trade secrets.This may include limiting physical access to documents stored in hard copy, by, for example, limiting locations where the confidential information is maintained, locking those locations, and tracking individuals accessing the information. Employers should also take care to protect electronically-stored information by, for example, employing password protection on documents and databases containing confidential information, restricting access to such documents on external devices, and implementing security monitoring measures. Limiting outsiders’ access. Similarly, employers should limit outsider access to areas housing confidential physical documents and devices with access to electronically stored information. Depending on the information, this may include the use of security guards or cameras, perimeter fencing, visitor badges with log in and out procedures, and security card access to certain areas. Controls on public dissemination.Employers may consider designating an employee to review and approve publicly disseminated information, including publications, presentations, promotional materials, and website content to ensure trade secret information is not inadvertently disclosed. Employers should also carefully evaluate the scope of information shared in meetings with potential partners or customers, and may further consider requiring meeting participants to enter into non-disclosure agreements if confidential information must necessarily be shared. Employers should remember that any security measures should be regularly monitored, audited, and updated to maintain their effectiveness. Efforts to maintain these procedures may pay dividends should the employer have to pursue a former employee for trade secret theft.

On November 26, 2017, New York City will join other cities, such as San Francisco and Seattle, when its predictive scheduling laws take effect and require retail employers to give employees a minimum amount of advance notice of their work schedule. Covered retail employers will be required to provide employees with written schedules at least 72 hours before the first shift on the work schedule and to conspicuously post the schedule at least 72 hours before the beginning of the scheduled hours of work. Employers must also update the schedule and directly notify affected employees after making changes to the work schedule, as well as transmit the work schedule electronically, if that is how schedules are regularly communicated. Which Retailers Are Covered? This legislation applies to “retail businesses,” which are defined as entities with 20 or more employees engaged primarily in the sale of consumer goods at one or more stores within the city. The good news for small retailers is that the law does not impact single location, “mom and pop” shops that have fewer than 20 employees. For purposes of the legislation, “employees” are defined as full-time, part-time and temporary employees (including seasonal/holiday workers). If the number of employees fluctuates (over the holidays, for example), the number of employees is determined for the current calendar year based upon the average number of employees who worked for compensation per week during the preceding calendar year. If the employer operates a chain business, then the total number of employees in that group of establishments must be counted. “Consumer goods” means products that are primarily for personal, household, or family purposes, such as appliances, clothing, electronics and groceries. What This Means for Retail Employers This holiday season, the flexibility of retail employers when scheduling shifts to meet day-to-day business needs is about to change, just as retailers hit the busiest time of the year. Retail employers will not be permitted to: Schedule an employee for an on-call shift; Cancel a regular shift for a retail employee within 72 hours of the scheduled start of such shift; Require a retail employee to work with fewer than 72 hours’ notice, unless the employee consents in writing; and Require a retail employee to contact a retail employer to confirm whether or not the employee should report for a regular shift fewer than 72 hours before the start of such shift. The law also requires retail employers to provide an employee, upon request, with his/her work schedule, in writing, for any week the employee worked within the prior three years. Upon request, retail employers will also be required to provide the most current version of the work schedule for all employees at that work location, regardless of whether changes to the work schedule have been posted. What Remains the Same for Retail Employers Some important scheduling flexibility will remain intact for retail employers. For example, employers will still be able to give an employee time off at the employee’s request and/or allow an employee to trade shifts with another employee. Retail employers may also make changes to employees’ work schedules with less than 72 hours’ notice if the employer’s operations cannot begin or continue due to matters beyond their control, such as: Threats to the retail employees or the retail employer’s property; Failure of public utilities or the shutdown of public transportation; Fire, flood or other natural disaster; or State of emergency declared by the president of the United States, governor of the state of New York or mayor of the city. Penalties for Violations Employers are subject to penalties equal to the greater of $500 for each affected employee or the employee’s actual damages. For failing to provide and post work schedules, employers are subject to penalties of $300 for each affected employee. Other remedies are also available, including injunctive and declaratory relief, and attorneys’ fees. Conclusion When the law takes effect on November 26, New York will be the latest city to enact a predictable scheduling law, but it will not likely be the last. San Francisco, Seattle and other municipalities have enacted similar laws and the trend continues to grow. National retailers that rely on fluid personnel schedules should check the jurisdictions in which they operate to ensure they are in compliance with applicable law.

Employers across the country should think twice before asking job applicants about their salary history. As we reported earlier this year,  a number of state legislatures (and some local governments) considered legislation this past session designed to prohibit inquiries into wage history, in an effort to fight wage discrimination and the gender pay gap. Philadelphia's ordinance is currently on hold pending a legal challenge. However, New York City's law became effective on October 31, 2017, and the city recently released guidelines for both employersand employees regarding proper--and improper--inquiries.  Albany County, New York also recently banned inquiries regarding wage history; the ordinance was signed by the County Executive on November 6, 2017 and will become effective 30 days after filing with the New York Secretary of State. Likewise, San Francisco enacted a salary history ban ordinance this summer. A ban on such inquiries will go into effect for the entire state of California effective January 1, 2018. Asking about applicant's salary history in Oregon is prohibited effective October 2017 (although some provisions of the law will not be effective until 2019) and the law in Puerto Rico also became effective earlier this year. Delaware's statute becomes effective in December 2017. Moreover, the Illinois legislature passed a salary history ban this past term, but Governor Bruce Rauner vetoed the legislation. The Illinois House of Representatives voted to override the veto, but earlier this month the Senate failed to obtain the votes needed to override the veto. Governor Rauner stated that he was not opposed to the legislation, but wanted the law to more closely match what had been enacted in other states, such as Massachusetts, where an employer may ask about wage history after an applicant has been offered a job. Governor Rauner's objection to the Illinois legislation highlights a significant issue for employers: differences between laws enacted in various jurisdictions where a company may have employees. While the law in one jurisdiction (such as Delaware and New York City) may allow an employer to ask an applicant about salary expectations, the law in other jurisdictions is not so clear. Similarly, while California and New York City allow employers to take voluntarily disclosed salary history into account, laws in other jurisdictions are silent as to whether (and how) voluntarily disclosed salary history may be used by the employer. It is widely expected that the Illinois legislation will be reintroduced in the upcoming legislative session. In addition, a number of other states (including Idaho, Maryland, New York, Rhode Island, Texas and Virginia) will likely re-visit the issue during their respective 2018 legislative sessions. Consequently, employers wishing to act proactively should consider taking the following steps as part of their routine interviewing and hiring practices: Eliminate wage history questions from job applications, especially those that are used in multiple jurisdictions; Train both hiring managers and human resources personnel regarding what inquiries are permissible in a given jurisdiction, taking into account that in some instances an applicant may reside in a state with a different law than that of the physical location of the company headquarters or the individuals involved in the hiring decision; Evaluate how wages are set for particular positions and create salary bands based on market wage conditions; and Create a system of documenting when an applicant voluntary discloses salary information to insure compliance with laws.

With the smells of turkey, stuffing, and cranberry sauce about to fill kitchens across the country next week, people are getting ready for the holiday season. And as Norman Rockwell has taught us, nothing says the holidays more than a blanket of snow on the ground. But what happens when that blanket of snow prevents employees from reporting to work? Or, even worse, causes an employer to shut down its business for the day? Do you, as an employer, still have to pay your employees? As with most compensation issues, the answer depends on whether the employee is exempt or non-exempt. If weather conditions cause an employer to shut down operations and close, exempt employees are still entitled to pay for the duration of the closing, assuming the business is closed less than a workweek. The rationale is that the exempt employee is available for work, but it is the employer who has made the work unavailable to the employee. On the other hand, when an employer closes shop due to inclement weather, non-exempt employees are not entitled to wages during the closing. Of course, the employer has the discretion to allow non-exempt employees to use PTO during the closing. But what happens when the employer remains open despite inclement weather, and the employee does not report to work? If the employee is classified as non-exempt, the same rules apply – the employee is not entitled to wages during the absence, but the employer has the discretion to allow the non-exempt employee to use PTO for the absence. As for exempt employees, the answer can be a little more complicated. An exempt employee who stays home even though the employer is open for business is not entitled to pay for that day because the employee chose to remove him or herself from the workplace for personal reasons. If the employer has a PTO policy and the employee has accrued time, the employee can use PTO to cover his or her absence. In the event the employee has no accrued PTO available, the employer can reduce the employee’s pay for the absence—in full-day increments only—without violating the salary-basis test of the FLSA. However, this assumes that the exempt employee performs no work during the day while away from the office. If the exempt employee performs any work from home (e.g., answering emails, taking calls, working on the computer, etc.), the exempt employee is working and, thus, is entitled to his or her full salary for that day. Now, if the employee only works from home during some of the work day and takes some work time off, the employer may make deductions from the exempt employee’s PTO bank for the time not worked. However, the employee must still be compensated for the entire day of work – even if the employee does not have enough PTO in his or her bank to cover the partial day. It is imperative to ensure employees are properly compensated during inclement weather – particularly exempt employees so there is no risk of losing the exemption. Of course, it is recommended to engage qualified wage and hour counsel to help you navigate this tricky compensation area.

On September 7, 2017, the U.S. Court of Appeals for the Eleventh Circuit determined that different treatment based on an employee’s breastfeeding is prohibited by the Pregnancy Discrimination Act (“PDA”). In Hicks v. City of Tuscaloosa,No. 16-13003, the plaintiff worked for a police department, and only eight days after she returned from job-protected pregnancy leave, the plaintiff was reassigned from the narcotics task force to the patrol division. Along with a reduction in pay and different job duties, the plaintiff’s new position as a patrol officer required that she wear a ballistic vest all day, which was not required in her prior position in the narcotics task force. Before plaintiff began work in the patrol division, her doctor wrote a letter recommending that she be considered for alternative duties because the ballistic vest was restrictive and could cause breast infections that would lead to an inability to breastfeed. The police chief offered the plaintiff a safe beat with access to lactation rooms and priority in receiving breaks. However, the police chief refused to consider the request for alternative duty and informed the plaintiff that she could either wear a specially fitted vest or not wear a vest at all. The plaintiff viewed specially fitted vests as ineffective because of the gaping holes they left, and believed that not wearing a vest was too dangerous. Accordingly, she resigned that day and subsequently filed suit. Among other issues, the Eleventh Circuit addressed whether the plaintiff was constructively discharged when presented with alternative options for ballistic vests. The court observed that Title VII of the Civil Rights Act, as amended by the PDA, prohibits discrimination “on the basis of pregnancy, childbirth, or related medical conditions.” The court was tasked with determining whether breastfeeding qualified as a “related medical condition[],” and found that it did. The court explained that the PDA includes a broad catchall phrase, and that it is “a common sense conclusion” that breastfeeding is a gender-specific condition covered by that phrase. Indeed, breastfeeding “clearly imposes upon women a burden that male employees need not – indeed, could not, suffer.” The court also emphasized the U.S. Supreme Court’s prior conclusion that the entire purpose behind the PDA is to guarantee women the basic right to participate fully and equally in the workforce, without being denied the right to full participation in family life. When holding that the PDA covered physiological conditions post-pregnancy, the court observed that the PDA would be rendered a nullity if women were protected during pregnancy, but could be thereafter terminated for breastfeeding attendant to that pregnancy. The Eleventh Circuit added the caveat, however, that its ruling did not require that employers provide special accommodations to breastfeeding workers. The plaintiff in Hicks had not sought a special accommodation, but rather “alternative duty,” which her employer had previously granted to employees with temporary injuries. This decision is a critical reminder to employers to act with caution when pregnant or breastfeeding employees request job-related accommodations. Failure to act in conformance with the PDA risks exposure to legal liability, so employers would do well to consult with counsel during the interactive process.

While the FMLA provides for protected time off, it does not provide for paid sick leave.  However, paid sick leave laws are gaining popularity at the state level.  Rhode Island is poised to become the eighth state, in addition to the District of Columbia, to approve a paid sick leave law for employees, if the law is signed by the governor as expected. Paid sick leave laws – as opposed to the Family Medical Leave Act that provides certain employees up to 12 weeks of unpaid, job-protected leave per year – typically grant employees a minimum number of paid sick hours or days each year, and govern the permissible reasons for employees to take such leave. Below is a snapshot of the states that have passed paid sick-leave laws and what you should know about them: Rhode Island If signed into law, as expected, Rhode Island’s paid sick leave law will go into effect on July 1, 2018. Requires employers with 18 or more employees to provide employees with paid sick leave as follows: Up to 24 hours of paid, protected leave in 2018 32 hours of paid, protected leave in 2019, and 40 hours of paid, protected leave every year thereafter. Employers with fewer than 18 employees do not have to provide paid sick leave, but are still required to provide protected unpaid leave in the same amounts as listed above. Employers can also issue employees their full allotment of leave at the start of each year to avoid tracking an employee’s accrual of paid sick leave. For employers that already provide paid sick leave in an amount equal to or greater than what is provided for in the law, no change in existing policies will be required. Washington Starting January 1, 2018, employers in Washington will be required to provide their employees with paid sick leave. Most employees will accrue paid sick leave at a minimum rate of 1 hour of paid sick leave for every 40 hours worked (including part-time and seasonal workers). Any unused paid sick leave of 40 hours or less must be carried over to the following year. Accrual of paid sick leave may begin on the 90th calendar day after the start of employment. Arizona Effective July 2017, Arizona’s law requires 24 hours of paid sick leave annually for employers with 14 or fewer workers, or 40 hours of paid sick leave for entities with 15 or more employees. An employer can request proof or documentation of necessary time off only after an employee has been absent three days in a row. Employers must document accrued paid sick leave for each worker and post notices, and pay stubs must show the amount of paid sick leave used and the amount available for use. Employers must maintain paid sick leave records for 4 years. Vermont Beginning in 2017, Vermont employers with 6 or more employees must allow workers to earn paid sick leave, accruing 1 hour of earned paid sick leave for every 52 hours worked. Employers with 5 or fewer employees must begin offering paid sick leave in 2018. Employers can limit the amount of earned paid sick leave accrued to 24 hours per year in 2017 and 2018. However, beginning in 2019 the cap increases to 40 hours per year. At the time of hire, Employers are required to inform new employees of the law and must display a required posting. Oregon Oregon’s paid sick leave law applies to all employers with 10 or more employees. Employers must provide up to 40 hours of paid sick leave per year. Employees start to accrue one hour of paid sick leave for every 30 hours worked, or 1-1/3 hours for every 40 hours worked, immediately when an employee begins working, but new employees may be required to wait until their 91st calendar day of employment touse paid sick leave. An employer can “front-load” – or give 40 hours of paid sick leave all at once at the start of the year – and avoid tracking accrual rates, carryover entitlements, and usage. California California’s law requires employers to offer a minimum amount of paid sick leave based on an accrual rate of 1 hour of paid sick leave for every 30 hours worked, or offer employees a lump sum at the beginning of each year that equals three days (24 hours) of paid sick leave. Employers must document how many days of paid sick leave employees have available on their pay stub, or on a separate document that is issued with an employee’s paycheck. Employees can roll over up to 48 hours of accrued, untaken paid sick leave (which can be limited to 24 hours per year). Employers must have a system in place to calculate, track, and report each employee’s paid sick leave balance, provide a written copy of the sick leave policy to employees at the time of hire, and display a poster explaining the sick leave policy. Employers must keep paid sick leave records for up to three years. Massachusetts All employers must provide a minimum rate of 1 hour of sick time for every 30 hours worked, up to 40 hours of sick leave per year. Only employers of 11 or more employees must provide earned sick time that is paid. Smaller employers do not have to provide paid leave, but are still required to provide protected leave in the same amounts as listed above. The law applies to full-time, part-time, seasonal, and temporary employees, but not independent contractors. Washington D.C. All employers with one or more employees are covered by the earned sick leave law. Employers with 100 or more employees must provide 1 hour of paid leave for every 37 hours worked (not to exceed 7 days per calendar year); Employers with at least 25, but not more than 99 employees, must provide 1 hour of paid leave for every 43 hours worked (not to exceed 5 days per calendar year); Employers with 24 or fewer employees must provide 1 hour of paid leave for every 87 hours worked (not to exceed 3 days per calendar year). The law covers both full and part-time employees, and temporary and contract workers. Connecticut In 2012, Connecticut became the first state in the nation to provide paid sick leave. The law applies to businesses that employ 50 or more individuals, and provides non-exempt “service workers” with paid sick leave that accrues at a rate of 1 hour per 40 hours worked, limited to a maximum of 40 hours per year (the law excludes most manufacturing and certain tax exempt organizations). Service workers must have worked an average of at least 10 hours a week in the most recently completed calendar quarter to be eligible, and cannot begin using accrued sick leave until they have completed 680 hours of employment. At the time of hire, employers must give notice of the law, the amount of sick leave provided, that retaliation for use of sick time is prohibited, and that an employee may file a complaint with the Labor Commission for a violation. Employers should be aware more than 28 cities or local jurisdictions also have sick leave ordinances in place, including New York, Chicago, San Diego, Los Angeles, and San Francisco.

Employers considering selling their business spend large amounts of time preparing the books, improving EBIDTA, fine-tuning marketing strategies, and reducing redundancies, among many other tasks, to improve the sale price. Yet six skeletons in the employment closet, discussed below, could cause serious problems during due diligence and halt an impending sale-of-business transaction: Does your handbook present a healthy company?A company’s employee handbook is often the first place the employment law specialist looks to assess the health of a company. For example, if the company does not have a harassment policy, an equal employment opportunity policy, an immigration compliance policy, or a disability accommodation policy, questions arise regarding whether these laws and related best practices have been followed by the company. Further, a company may have policies that are unlawful, which could cause the buyer’s specialist to request additional information and documents to further investigate the company’s practices. Accordingly, the company should review and update its handbook on a regular basis, especially if there is a significant change in the law that should be reflected in the company’s policies. Are your workers properly classified? The on-going struggle of whether to classify a worker as an employee or an independent contractor remains a highly litigated area in employment law. With a larger workforce, problems in this arena could implicate significant monetary liabilities. Companies should ensure they have carefully reviewed and determined whether workers are properly classified as employees or independent contractors. This area of law is a current target of U.S. Department of Labor investigations, and improper classification could result in civil money penalties. Are employees properly classified as exempt or nonexempt? Similar to the above misclassification problem with independent contractors, misclassifying employees as exempt can have expensive repercussions including back wages, liquidated damages, and attorneys’ fees that could scare a potential buyer away. Companies should examine job descriptions, which should be up to date and accurate, to confirm that the company’s exempt employees are performing exempt duties, and ensure that company is satisfying the salary basis test and the required salary threshold. Do your employee-related agreements have key provisions? Depending upon the structure of the company and the importance of certain key employees, “change in control” provisions and related severance consequences in executive employment agreements may be important for the company’s continued viability post-closing, which is of importance to any buyer. If the ability to enforce the restrictive covenants binding the company’s employees is an important asset to a buyer, ensure such agreements are in place, and have proper assignment clauses (to the extent permitted under applicable state laws). In addition, companies should review current employment agreements and consider other tools, such as retention agreements, to keep key employees in place. Beware of systemic issues!Potential exposure to a class action suit claiming systemic violations of law will impact the sale of a business because of cost considerations and the potential for pubic notoriety. Companies should address and resolve current and former employee complaints and perform periodic employment audits to avoid being blind-sided by class action claims. Do you have a collective bargaining agreement with a labor union? In most cases, if the selling company is subject to an existing relationship with a labor union, the National Labor Relations Act requires the selling company to notify the union concerning the transaction and to provide a meaningful opportunity to bargain with the union over the effects of the sale. The “decision” to sell is oftentimes described as being within management’s prerogative. However, sometimes the “decision” to sell is limited by contractual language contained within the parties’ collective bargaining agreement. To avoid any surprises, companies should determine whether the agreement contains a “successors” clause, which provides that the agreement is binding on successors. Although a successors clause does not automatically bind a purchasing employer to the terms of an existing collective bargaining agreement, a union could seek a preliminary injunction enjoining the employer from selling its business pending arbitration over the employer’s duty to assure that the purchaser would assume the terms of the collective bargaining agreement.

A recent decision rendered by the Third Circuit Court of Appeals serves as a timely reminder that employers must consider the legal implications of the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA) when litigating workers’ compensation claims. In Zuber v. Boscov’s, the Court determined that a release obtained in a workers’ compensation case did not act as a bar to later-asserted FMLA claims. The case arose when former employee Craig Zuber sustained an injury on the job and filed a workers’ compensation claim against his employer, Boscov’s. Workers’ compensation benefits were awarded. Shortly thereafter, Zuber’s employment was terminated. Zuber and Boscov’s entered into a settlement agreement in connection with Zuber’s workers’ compensation proceedings. Three months later, Zuber sued Boscov’s, alleging FMLA interference and retaliation, and retaliation under Pennsylvania common law. The district court granted Boscov’s motion to dismiss on the grounds that the settlement agreement released all claims, including FMLA claims. The Third Circuit reversed. Although the FMLA regulations were amended in 2008 to expressly permit settlement or releases of FMLA claims based on past conduct without approval by the U.S. Department of Labor (DOL) or a court, the Third Circuit held that the settlement agreement between Zuber and Boscov’s did not release Zuber’s FMLA claims. The Third Circuit’s decision is based on Pennsylvania contract principals and its interpretation under those principals of the contract’s language. In essence, the Court read the language to mean that the parties intended to only release the work injury claim and damages arising there from. The ruling comes as no surprise given the fairly narrow language in the release; specifically, the release language did not contain general language, such as a clause releasing “any and all claims against Boscov’s,” and it did not expressly mention the FMLA. The ruling does, however, remind employers of thiskey, unstated takeaway: Workers’ compensation claims are inherently tied up with ADA and FMLA issues. Employers and their HR and legal professionals must consider whether an employee’s rights and an employer’s obligations under the FMLA and/or ADA may be triggered, even though an employee is only seeking workers’ compensation benefits. Zuber’s allegations are such an example. He claimed that Boscov’s failed to notify him of his FMLA rights after he reported his injury to Boscov’s, and that Boscov’s failed to designate his absences as FMLA-protected leave, then retaliated against him for exercising his FMLA rights. Potential FMLA and ADA claims must be front of mind when litigating workers’ compensation claims, especially because workers’ compensation counsel are often different from counsel later retained to handle FMLA and ADA lawsuits. Admissions and evidence amassed for workers’ compensation purposes can create FMLA and ADA hurdles down the road if not approached strategically. If done right, workers’ compensation proceedings can significantly benefit employers in later FMLA and ADA litigation.

It appears to be a common scenario: An employee becomes ill, exhausts his or her Family and Medical Leave Act (FMLA) provided leave, and then requests more leave as a “reasonable accommodation.” Must an employer grant additional leave? On September 20, inSeverson v. Heartland Woodcraft, Inc., the Seventh Circuit Court of Appeals answered that it does not. In this case, the plaintiff employee suffered back problems and exhausted his FMLA leave. He subsequently requested two additional months of leave beyond his FMLA leave allotment to undergo surgery. The employer declined the request, and told the employee that his employment would end when his FMLA leave expired. However, the employer made clear the employee was free to reapply for employment when he was cleared by a physician to return to work. The employee sued the employer pursuant to the Americans with Disabilities Act (ADA), claiming the employer did not reasonably accommodate his disability when it failed to grant him an additional leave beyond that provided by the FMLA. When rendering its decision, the court observed that the ADA is an anti-discrimination law, not a medical leave entitlement, and that a “reasonable accommodation” under the ADA is limited to measures that will allow an employee to work. An employee needing “long-term medical leave” cannot work and is therefore not a “qualified individual with a disability” under the ADA. Stated another way, because the employee here could not work, he was not a “qualified individual with a disability,” and was thus not subject to the ADA’s protections. Moreover, extended leave is not a reasonable accommodation because it does not give the employee the means to work, but rather excuses his not working. However, the court emphasized that its decision applied to long-term absences and that additional time off beyond that required by the FMLA for intermittent or short-term leave (no more than a couple of days or a couple of weeks) might be considered a reasonable accommodation in certain circumstances. This decision gives employers with employees who request long-term medical leaves some measure of comfort. Yet the Seventh Circuit’s ruling is likely not the final say on the matter, and could be appealed to the U.S. Supreme Court. Employers that are considering taking employment action against employees on long-term leave would do well to consult able counsel prior to doing so, as running afoul of the ADA or FMLA could prove costly.

Employers often spend time and resources on well-crafted policies, but then do not communicate and train to the policies. Time and again, employers are reminded to review and update their HR policies. Of course, it is important for employers to update policies because statutes change; regulations are revised; and case law is reinterpreted. A new and/or revised employee handbook may need to be rolled out. However, issuance of a handbook – no matter how current – may not sufficiently inform employees of the policies. Often overlooked is the need to train and re-train employees, supervisors and managers, about the policies, and how they are to be implemented. Human resource policies without training can, and often do, create problems for employers almost as significant as having no policies at all.  For example, employer drug and alcohol policies often state that employees will be tested if there is “reasonable suspicion” of drug or alcohol abuse or that the employer will conduct random testing. Yet, how many employers provide instruction to their supervisors about what to look for to establish “reasonable suspicion”? How is the random testing conducted? Policies without regular, on-going training by qualified instructors set traps for employers. If employment litigation occurs, the employee’s counsel will likely inquire about implementation of the employer’s polices and instruction around important questions that arise in the workplace. Lackluster training (or no training at all) permits counsel to argue that the employer may not seriously enforce the policies, and as a result the employer is indifferent to the very policies it claims to promote. Employers should not only review and regularly revise human resources policies, but also conduct recurrent training by qualified experts on these policies.

Hurricane Harvey and Hurricane Irma serve as a reminder that employers have some legal obligations to employees during natural disasters. Employers should have a plan in place when preparing for a natural disaster, such as an inclement weather policy, a communications plan and a crisis management plan, and should be mindful of the below tips when creating a crisis management plan to avoid employment-related lawsuits and/or agency action after a disaster. Employee Safety Employers must exercise caution if asking employees to assist with preparing for and cleaning up after a natural disaster. Employers are responsible for the safety and health of their workers and for providing a safe and healthy workplace, which includes protecting workers from anticipated hazards associated with preparing for and cleaning up after a natural disaster. Employees who lack the proper training to perform such work face significant risk and may fail to heed necessary precautions when assessing or cleaning up damage to the workplace. Alternatively, employers may do well to consider contracting with a professional disaster recovery service to minimize risk to employees post-disaster. Employers should review the Occupational Safety and Health Administration’s (OSHA) guidance for handling hazardous conditions before a natural disaster strikes and incorporate that guidance into their crisis management plan. Visit the U.S. Department of Labor’s Occupational Safety and Health Act (OSHA)’s website for additional information on workers’ rights, employers’ obligations, and other services required under OSHA. Compensating Workers for Work Performed Exempt Employees: Employers may have to close their business in the middle of a workweek or pay period due to a natural disaster. When this occurs, employers are required under the Fair Labor Standards Act (FLSA) to pay an entire weekly salary to exempt employees who are paid on a salary basis if they work any portion of the workweek. Nonexempt Employees: Employers are generally not required under the FLSA to pay nonexempt employees if the employer is unable to provide work to those employees during a natural disaster. Instead, hourly workers must be paid for the actual time they work. Actual work:Employees may be forced to take on new responsibilities to aid in preparing for or cleaning up after a natural disaster. For example, a security guard may be tasked with cleaning up debris after a storm. Although the security guard’s duties don’t typically include cleaning up the store, the employer must compensate the guard for all time worked. An employer must compensate an employee for performing any activity that is primarily and necessarily for the benefit of the employer. Volunteers: After a natural disaster, employers may receive offers from employees to volunteer with the employer’s recovery process. An employer must exercise caution when deciding whether to allow workers to “volunteer” with such efforts, as employers may be required to compensate “volunteers” who perform work that can be construed as compensable time worked. In addition, private non-profit organizations must compensate employees who “volunteer” to perform the same services they ordinarily perform in the regular course of business. Working remotely: After a natural disaster, employers may have no choice but to allow their employees to work remotely. Even if working remotely isn’t typically permitted, employers may wish to implement a mechanism to capture time worked at home before and after a disaster strikes. If the employer doesn’t have a proper mechanism to capture and record time worked remotely, then it can be exposed to liability under the FLSA, state or local wage and hour laws, and obligations under specific employment contracts. Requests for Leave Employers typically receive an influx of requests for time off from employees immediately before and after a natural disaster. Although employers are not required to provide employees time off in all circumstances, such as to clean up damage to their personal property, there are certain situations in the aftermath of a disaster in which an employee may qualify for time off under the Family Medical Leave Act (FMLA). Post-disaster, employers should be mindful of employees’ need to take legally-protected leave. The trauma and stress of the storm or the storm’s aftermath may trigger anxiety, depression, or a mental illness, not to mention possible physical injury, and the employee may be eligible for FMLA leave to care for herself or a close family member. In addition, the employer may also be required to provide leave as an accommodation pursuant to the Americans with Disabilities Act (“ADA”). Takeaways There are a number of employment-related issues employers must consider when creating an inclement weather policy or crisis management plan. Consult with Polsinelli’s Labor and Employment attorneys before creating your policy or plan to minimize employment-related risks.

On August 8, 2017, the United States District Court for the District of Connecticut held in Noffsinger v. SSC Niantic Operating Co., LLC d/b/a Bride Brook Health & Rehab Ctr. that federal law does not preempt the Connecticut Palliative Use of Marijuana Act (PUMA). PUMA prohibits employers from firing or refusing to hire qualified applicants or employees who are legally prescribed medical marijuana, even following a positive drug test. This case of federal first impression may have wide-ranging implications for employers that conduct drug testing in states that have legalized medical marijuana and have laws that protect medical marijuana users from adverse employment decisions based solely on their use of medical marijuana. Plaintiff Katelin Noffsinger was prescribed a daily dose of Marinol (capsulated synthetic marijuana) to treat symptoms arising from post-traumatic stress disorder, which she took only at night. Bride Brook, a nursing home, extended an offer of employment to Noffsinger, contingent upon passage of a drug test. Noffsinger disclosed her Marinol prescription to Bride Brook, and, as anticipated, tested positive for marijuana metabolites. Thereafter, Bride Brook rescinded her job offer. Noffsinger filed a lawsuit against Bride Brook alleging a violation of PUMA’s anti-discrimination provision. Bride Brook moved to dismiss, and argued that PUMA is preempted by the Americans with Disabilities Act (ADA), the Controlled Substances Act (CSA), and the Food, Drug and Cosmetic Act (FDCA) based on the theory of “obstacle preemption,” whereby state laws are preempted if they “stand as an obstacle to the objectives of Congress.” The court denied Bride Brook’s motion, and held that PUMA did not create an “actual conflict” with any of the three federal statutes. First, the CSA did not preempt PUMA because the CSA does not prohibit employers from hiring or employing individuals who use illegal drugs. Second, the ADA did not preempt PUMA because, while the ADA allows employers to prohibit the illegal use of drugs in the workplace, PUMA does not authorize individuals to use marijuana while at work, and the ADA does not address use of drugs outside of the workplace. Finally, the FDCA did not preempt PUMA because the FDCA does not regulate employment, but PUMA does. The Noffsinger decision creates further complications for employers that conduct drug testing for marijuana, particularly in states that have enacted laws that protect medical marijuana patients from adverse employment actions based solely on their use of medical marijuana. While the Noffsinger decision is not binding on other courts, courts in other jurisdictions with similar medical marijuana statutes might follow its lead. Therefore, employers may wish to reevaluate policies that either automatically deny employment to, or require termination of, an employee following a positive drug test resulting from the employee’s use of prescribed medical marijuana.

Despite the National Labor Relations Board’s (“NLRB”) increasing scrutiny of common workplace policies, including those prohibiting employees from secretly recording conversations in the workplace (i.e., no-recording policies), two recent cases suggest employers may establish overriding business interests justifying restrictions on workplace recordings and provide guidance on crafting policies that don’t run afoul of the National Labor Relations Act (NLRA). In June 2016, the Second Circuit Court of Appeals affirmed the NLRB’s ruling (discussed here), that Whole Foods Market Group, Inc. (“Whole Foods”) violated the NLRA by maintaining an overbroad no-recording policies. Whole Foods Market Group Inc. v. NLRB, 2nd Cir., Nos. 16-0002-ag, 16-0346 (June 1, 2017) (Summary Order). The NLRB has held that the “mere maintenance” of overbroad bans on workplace recordings violates the NLRA because they impermissibly chill employees in exercising their Section 7 rights. Whole Foods’ policies prohibited employees from recording staff meetings or other workplace conversations without prior management approval or consent of all involved, and contained no exception for workplace recordings protected by Section 7, such as recordings of picketing or unsafe working conditions. Therefore, the Second Circuit agreed with the NLRB that employees could reasonably interpret the policies to prohibit protected activity, and the policies unlawfully interfered with employees’ rights under Section 7 to engage in concerted activities. Importantly, the Court stopped short of holding that “every no-recording policy” would violate employees’ Section 7 rights. Indeed, the Court ruled that Whole Foods’ justification for its policies, promoting open dialogue among employees, did not outweigh the “chill” such policies could have on employees’ exercise of their protected rights. However, a policy placing “some limits” on workplace recording may not violate the NLRA if it is narrowly tailored to further an employers’ business interest. Similarly, the NLRB heard a challenge to a no-recording policy maintained by Mercedes-Benz U.S. International Inc. (“Mercedes-Benz”), which also contained no exception for concerted activity. There, the NLRB declined to find that the policy was facially unlawful at the summary judgment stage, noting that in previous decisions the NLRB has permitted employers to introduce evidence regarding asserted business justifications. Because Mercedes-Benz argued that its policy furthered legitimate business interests – protecting proprietary and confidential information, maintaining safety and production standards, and open communications – the NLRB ruled that Mercedes-Benz could introduce evidence of its business justifications. It remains to be seen whether Mercedes-Benz’s business interests will ultimately justify its no-recording policy in the eyes of the NLRB. While it is difficult to predict how the NLRB will treat no-recording policies, there are several actions employers may take to minimize the risk that a workplace policy prohibiting secret recordings will be found unlawful: Ensure any no-recording policy is narrowly tailored to further legitimate business interests, such as protecting proprietary, confidential, and trade secret information, maintaining safety and production standards, and promoting open employee communications. Include an express statement in any no-recording policy explaining the justifications for the restrictions on workplace recording and clarifying that the policy is not intended to limit employees’ rights to engage in protected activity under Section 7. Consult with counsel before disciplining an employee for secretly recording a workplace conversation or interaction. For further guidance on handling secret employee recordings, click here.

In the fall of 2014, the Occupational Safety and Health Administration (OSHA) conducted an investigation of a treatment center which provided behavioral health care for adolescents and adults in the form of inpatient and partial hospitalization. OSHA determined that the treatment center violated Section 5(a)(1) of the Occupational Safety and Health Act (the “Act”), commonly known as the General Duty Clause, by not having a workplace violence prevention program in place, and assessed a proposed penalty of $7,000 to the employer. An additional $2,000 in penalties were proposed for alleged record keeping and fire safety violations. The employer filed a notice of contest. As often happens when a notice of contest is filed, OSHA and the employer reached a settlement, resulting in a reduction of the proposed penalties to $4,500. The settlement also memorialized the employer’s abatement obligations – which included the implementation and maintenance of a stand-alone written Workplace Violence Prevention Program. The parties agreed that abatement would occur by November 23, 2016, which was 180 days after the parties reached their settlement. On December 19, 2016, a patient at the treatment center punched and scratched an employee, resulting in injuries that were serious enough to warrant 14 missed days of work. When OSHA performed a follow-up inspection in 2017, it learned of the December 2016 incident, as well as two more incidents that occurred after the first of the year. Because of the recurrence of violence in the workplace, OSHA concluded that the employer had failed to adequately abate the workplace violence violation and issued a new citation, with a daily penalty assessed for each day that the violation remained unabated. With the maximum daily penalty in 2016 set at $12,600, what originally was a $9,000 penalty had grown to $197,730 in proposed penalties. The employer has stated its intention to contest this citation. The moral of the story: OSHA takes the threat of workplace violence very seriously, especially in the health care setting. According to data compiled by the Bureau of Labor Statistics, workers in the Health Care and Social Assistance sector (NAICS 62) face a substantially increased risk of injury due to workplace violence. To address this growing concern, OSHA published “Guidelines for Preventing Workplace Violence for Healthcare and Social Service Workers,” which can be accessed here. On December 7, 2016, published a request for information (RFI) seeking comments about possible rule making to specifically address workplace violence from customers/patients in a new OSHA standard. And, although the comment period for the RFI ended in April, 2017, the U.S. Government Accountability Office recently submitted a letter to Secretary of Labor Acosta with a priority recommendation that the DOL complete its study on workplace violence in health care and determine whether regulatory action is needed.

The flu season brings additional challenges to hospitals and other health care providers, as they experience an increase in volume of patients who have the flu or flu-related symptoms or who are at higher risk of serious complications from the flu. Health care providers have implemented flu vaccination polices to protect vulnerable patients as well as employees and their families. However, flu vaccination policies can create a legal risk for health care providers, particularly when those policies mandate vaccination for employees. In a recent case, the EEOC represented three employees who claimed they were terminated for failing to get vaccinated, as they claimed being vaccinated violated their religious beliefs in violation of Title VII of the Civil Rights Act. The court, when denying the employer hospital’s motion for summary judgment, held that the hospital had not shown that it had reasonably accommodated the employees' religious objections to vaccination or that a reasonable accommodation would have caused an undue hardship for the hospital. On the other hand, the court ruled, the EEOC had not proven the opposite. In April 2016, the EEOC sued the hospital, alleging it fired at least three employees whose sincerely held religious beliefs forbade them from getting flu shots--the hospital's policy mandated flu vaccination for employees unless they were granted an exception. The hospital argued that the employees were fired because they missed the hospital's deadline to request an exemption from the policy. The judge observed that the hospital had granted approximately 75% of employees' exemption requests over several preceding years and a jury should decide whether allowing employees to file exemption requests beyond the policy's deadline was a reasonable accommodation. According to the judge, a jury should also decide whether exempting employees who work with "vulnerable [patient] populations" from the vaccination policy would "increase costs to the hospital." A jury would also need to determine whether the employees held sincere religious beliefs that prohibited them from getting a flu shot. Mandatory flu vaccination policies can also create legal issues when an employee's health status could be compromised or harmed if vaccinated. Flu vaccinations can present a serious health risk to an employee with a history of severe reaction to flu vaccines or an ingredient in the vaccine, or has or may have Guillian-Barre syndrome. Health providers with mandatory vaccination policies will inevitably face the question: What do we do when an employee refuses to be vaccinated? To minimize risk, the employer should engage in an interactive dialog with the employee to identify the basis for the refusal and potential accommodations. Many hospitals have allowed an employee to continue to work without vaccination provided the employee wears a mask. Other potential accommodations include transfer to a position with no patient contact or no contact with flu-vulnerable patients, or a leave of absence. Drafting an effective and lawful policy, and consistent application of the policy, are essential to minimizing the legal risks when mandating that employees be vaccinated.

Massachusetts and 28 states have legalized medical marijuana, and an additional 16 states permit “low THC” use. Federal law, however, still outlaws marijuana use, regardless of ailment or disability. In light of these conflicting laws, how should an employer handle a medical marijuana user who fails an employer’s drug test? While courts in New Mexico, California, and Colorado have held that employers are not required to accept an employee’s medical marijuana usage, a recent Massachusetts decision shows that employers should proceed with caution. On July 17, 2017, the Supreme Judicial Court of Massachusetts held that employers may be required to allow disabled employees to use medical marijuana outside of work. In Barbuto v. Advantage Sales and Marketing, LLC, the plaintiff used medical marijuana at home two to three nights a week to treat her Crohn’s disease, as permitted under Massachusetts’ Medical Marijuana Act. Subsequently, the plaintiff accepted an entry-level position and was presented with the employer’s required drug test. The plaintiff disclosed her medical marijuana use, provided a doctor’s certification, and stated she would not use marijuana before or during work. Initially, the employer stated that failing the drug test “should not be a problem,” but then terminated the plaintiff when the test came back positive. The plaintiff filed suit against the employer for disability discrimination under Massachusetts law (among other claims), which the trial court dismissed, and the plaintiff appealed. On appeal, the plaintiff argued that she was a “handicapped person” due to her Crohn’s disease, and that she was capable of performing the essential functions of her job with a reasonable accommodation – i.e., using marijuana at home. The employer argued that the accommodation was unreasonable because using marijuana violated federal law. The Supreme Judicial Court of Massachusetts found that using medical marijuana was a permissible accommodation when “medical marijuana is the most effective medication for the employee’s debilitating medical condition, and where any alternative medication whose use would be permitted by the employer’s drug policy would be less effective.” The court noted that the potential for violating federal law was inconsequential because the “only person at risk of Federal criminal prosecution for her possession of medical marijuana is the employee.” Thus, the plaintiff should have been permitted to pursue her disability discrimination claim. The court cautioned that its decision did not mean that the plaintiff would ultimately prevail on her claim. The employer still had an opportunity to prove that using marijuana would impose an undue hardship on performance or safety, or would cause the employer to violate contractual or statutory obligations. Employers with employees in multiple states would do well to familiarize themselves with the current plethora of marijuana laws, as states such as Arizona, Delaware, and Minnesota provide that an employee cannot be terminated for testing positive for marijuana, so long as that employee is in possession of a valid medical marijuana card. As the court in Massachusetts made clear, running afoul of state marijuana laws could expose an employer to liability.

In the past two weeks, the San Francisco Board of Supervisors passed bills to assist working mothers who are nursing their infants and to address gender pay disparities. Lactation Locations The first bill, passed on June 20, 2017, requires San Francisco employers to create lactation policies, including a written policy that provides for employees to request a lactation accommodation, and provide a space for mothers to express breast milk. Employers also will be required to provide working mothers a break for lactation. The break may run concurrently with the employee’s normal paid breaks.  However, any additional needed break time may be paid or unpaid at the employer’s discretion. Under this bill, which imposes additional space requirements beyond those called for in the California Labor Code, San Francisco employers must provide employees a location for lactation that is not a bathroom, is free of potential intrusion, is clean and safe, and has a surface (e.g., a counter or table), electricity, and a chair. There must also be a sink and refrigeration nearby. The room or location may be the employee’s normal work area provided it meets these requirements. The location may also be used for other purposes, provided the primary function of the room is designated as a lactation location for the duration of an employee’s need to express breast milk. If an employer uses a multi-purpose location, it must provide notice to employees that the primary use of the location is for lactation, which will take priority over other uses. In multi-tenant buildings where an employer cannot provide a lactation location in its own workspace, an employer can meet the requirements of this ordinance by providing a location shared by multiple employers, so long as that location will accommodate the number of employees who desire to use it. To be exempt from the proposed law, an employer must show that a lactation accommodation presents an “undue hardship,” which would require demonstrating that the requirement would cause “significant expense or operational difficulty when considered in relation to the size, financial resources, nature, or structure of the Employer’s business.” This Ordinance becomes effective on January 1, 2018. Equal Pay The second bill, first passed on June 27, 2017, and finally passed on July 11, 2017, prohibits San Francisco employers from considering the current or past salary of an applicant when determining whether to hire an applicant or the salary to offer the applicant. The law prohibits employers from asking applicants about current or prior salary, and further prohibits employers from disclosing a current or former employee’s salary unless that person’s salary history is publicly available or if the employee consents. An employer may consider an applicant’s current or past salary only if the applicant discloses his or her salary information voluntarily and without prompting. As a reminder, even if this information is voluntarily disclosed, salary history alone cannot be used to justify paying any employee of a different race, sex, or ethnicity less for doing substantially similar work under similar working conditions under California Labor Code Section 1197.5. Employers may still discuss with applicants salary expectations and any unvested equity or other deferred compensation/bonuses forfeited by the applicant resigning from his or her current employer. This Ordinance becomes effective on July 1, 2018. Upon the effective date, employers are required to post a notice in the workplace advising employees of their rights under the ordinance. San Francisco Mayor Ed Lee is expected to sign both bills. For San Francisco employers, both ordinances will require a careful review of existing policies and procedures for: (1) employees to make a request for a lactation accommodation and (2) hiring managers and recruiters to review job applications, interview candidates, and make salary determinations.

In 2016, U.S. private employers and government agencies reported more than 1,000 data security breaches, up 40 percent from 2015. Recent high profile examples include: 2014 theft of unencrypted laptops at Coca-Cola, which compromised sensitive data concerning 74,000 then-current and former employees; 2016 incident in which a Boeing employee sent personal data regarding 36,000 employees across a four-state area in a spreadsheet to his spouse; and 2017 breach that compromised data from 95,000 job applicants at McDonalds Canada. Employers confronting the seemingly daunting task of protecting sensitive and private employee data may look to computer security expert Gene Spafford’s famous conclusion: “The only truly secure system is one that is powered off, cast in a block of concrete and sealed in a lead-lined room with armed guards.” But, in the real world, employers must power on their computer systems absent a protective concrete barrier and armed guards. What steps must employers take when the security of employee data is breached or an unauthorized access and compromise has occurred? Let’s take a look. All states, except for Alabama and South Dakota and the District of Columbia, require notification to affected individuals when personal information regularly gathered and stored by employers, such as Social Security numbers and driver’s license information, is compromised. In the last few years, twelve states have reinforced data breach notification laws. Some notable examples include: Illinois – In 2016, Illinois amended its data breach notification law to expand the categories of protected data to include health insurance information, medical information, unique biometric data and an individual’s user name or email address, in combination with a password or security prompt and corresponding response that would permit access to an online account (for example, log-in credentials). Tennessee– In 2016, Tennessee amended its data breach notification law to define a breach as any “unauthorized acquisition of computerized data that materially compromises the security, confidentiality, or integrity of personal information maintained by the information holder.” The Tennessee law defines personal information to include an individual’s first name or first initial and last name, when combined with his or her (1) Social Security number, (2) driver’s license number or (3) information that would permit access to a financial account. Earlier this year, the Tennessee legislature clarified that its 2016 amendment does not apply to information encrypted pursuant to the Federal Information Processing Standard 140-2, so long as the encryption key is not obtained by an unauthorized person. Virginia – Last year, Virginia became the first state to expand its data breach notification law to specifically require employers and payroll service providers to notify the attorney general upon discovering “unauthorized access and acquisition of unencrypted and unredacted computerized data containing a taxpayer identification number in combination with the income tax withheld for that taxpayer” where the employer or provider reasonably believes the breach “has caused, or will cause, identity theft or other fraud.” In an effort to thwart W-2 phishing scams, the attorney general’s office will notify the Department of Taxation of the compromised employer. The Department may, in turn, use that information to flag taxpayers whose W-2 information might be misused to obtain a false tax return. As recent years demonstrate, data breach notification laws continue to develop as breach risks increase and data scammers adapt to changing laws. Employers seeking to manage and reduce their liability risk for data breaches can adopt certain practices as they monitor continuing state law developments: Exercise reasonable care when collecting and maintaining personal identification or other sensitive information regarding employees and applicants. Actively monitor applicable state law requirements in states where offices or other operations are maintained. Develop, review and revise as necessary administrative, physical and technical personal information safeguards. Develop, review and revise as necessary a security incident response plan in accordance with applicable breach response requirements. Develop and implement a security incident response team trained to comply with pertinent data breach notification laws. Develop relationships with identity protection services and vendors that support the security incident response plan. Conduct mock breach incident simulations/drills testing safeguard and incident response effectiveness.

A National Labor Relations Board (“NLRB” or “the Board”) Administrative Law Judge (“ALJ”) has issued another reminder to employers to be careful when drafting employee handbooks. In May 2017, a Board ALJ invalidated 10 different sections of the company’s employee handbook, including a section that required employees to report their co-workers’ potential violations of handbook rules or other conduct that could “hurt” the company. The consolidated ruling resolved five separate cases filed by the Communications Workers of America (“CWA”). The CWA challenged many different provisions of the company’s employee handbook on the grounds that the rules were unduly ambiguous, or so overbroad that they could cause employees not to exercise rights under the National Labor Relations Act (“NLRA”) to engage in protected and concerted activities. These rights, guaranteed by Section 7 of the NLRA, include the right to discuss wages, hours, and other terms and conditions of employment. The ALJ accepted the CWA’s arguments, and struck down as unlawful a rule that required employees to report conduct that “could” be “viewed as dishonest, unethical or unlawful,” or that “could cause” the company “to lose credibility with its customers, business providers or investors.” Indeed, the ALJ explained that the rule, referred to as the Speak Up Provision, infringed upon employees’ Section 7 rights to “criticize or protest” their employer’s business practices. The Speak Up Provision was also found to be overbroad as drafted. Specifically, the Speak Up Provision could chill employees from such conduct as discussing wages and hours or other conditions of employment, as such conduct could conceivably “cause” the company “to lose credibility with its customers, business providers or investors.” Moreover, the rule did not pass scrutiny because it “fail[ed] to explain what would be permissible conduct, leaving it up to the employees to guess . . . at their own peril.” In addition, the ALJ invalidated other handbook rules that 1) barred employees from using company resources, “including emails,” to solicit or distribute information; 2) prohibited employees from disclosing their employee records; and 3) prohibited employees from disparaging the company, its services, its products, or other employees. This recent decision is another timely reminder to employers that any employee handbook policies must be carefully drafted so that employees understand that protected Section 7 activities are not prohibited.

Earlier this month, the Ninth Circuit further confirmed the importance of strict compliance with the Federal Credit Reporting Act’s (FCRA) disclosure requirements. In Syed v. M-I, LLC, the Ninth Circuit held that the employer willfully violated the FCRA by including a liability waiver in its disclosure form. The FCRA specifically requires an employer to provide a disclosure form to a prospective employee consisting “solely of the disclosure” in advance of the background check if the results of the background check will be used or considered for “employment purposes.” The FCRA separately provides that the disclosure form may also include the employee or applicant’s written authorization, which the employer must also obtain in advance of the background check. As detailed in an earlier post, the simpler the form, the more likely the form is compliant with the FCRA’s technical requirements. The employer argued that because the FCRA allows a disclosure form to include an employee authorization, the term “solely”, as used in the statute, did not really mean solely, and thus the disclosure could also include a liability waiver signed by the employee. The court explicitly rejected this argument, and highlighted the fact that the FCRA expressly provides for a singular exception to include the employee authorization in the disclosure form, which reflected Congress’s intent to exclude any implied exceptions. The court further determined that the inclusion of a liability waiver in the disclosure form constituted a willful violation of the FCRA, which exposes an employer to punitive damages in addition to damages assessed per violation (per employee or applicant receiving a defective disclosure form), plus attorneys’ fees. Although Syed is a case of first impression, the decision confirms the strict approach district courts across the country have taken in interpreting the provisions of the FCRA. Seemingly innocent violations of the FCRA—such as extraneous language in the FCRA-mandated disclosure form—can expose an employer to extensive liability. Employers cannot simply rely on the forms provided to them by consumer reporting agencies, and should consult legal counsel for a review of their processes related to background checks.

The Department of Labor’s (DOL) final rule establishing paid sick leave for employees of federal contractors is effective as of January 1, 2017. The final rule follows President Obama’s September 7, 2015 Executive Order 13706 (the “Executive Order”) on this subject, which we wrote about here. Is Your Organization Covered? The Executive Order and the DOL’s final rule apply to “new” contracts awarded on or after January 1, 2017. Contracts entered into before that date will be considered “new” contracts if the contract is renewed through bilateral negotiation on or after January 1, 2017, or in some cases if the contract is amended or extended. The DOL’s final rule covers four major types of contracts: A procurement contract for construction covered by the Davis-Bacon Act (DBA); A contract for services covered by the Service Contract Act (SCA); A contract for concessions, including any concessions contract excluded from coverage under the SCA by Department of Labor regulations at 29 CFR 4.133(b); or A contract in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public. If Covered, 4 Steps To Take Now If your organization’s contracts are subject to the final rule, consider taking these steps now: A. Make sure your sick leave policy allows for carryover that meets the final rule’s requirements and implement an accrual method if you do not already have one. The final rule requires an employee be allowed to carryover up to 56 hours of leave. The DOL has clarified that if the company uses an accrual method, it can cap accrual at 56 hours. In contrast, the DOL also clarified that if the company provides sick leave to its employees as a lump sum at the beginning of the year, then the company would have to give each employee an additional 56 hours of sick leave each year. B. Make sure your leave policy provides leave for domestic violence. Domestic violence-related leave includes leave for care from a health care provider or for physical or mental conditions arising from domestic violence, as well as leave to obtain counseling, seek relocation, seek assistance from a victim services organization, take related legal action, including preparation for or participation in any related civil or criminal legal proceeding, or to assist certain family members with these actions. C. If state law allows, do not provide for payout of accrued, but unused sick leave.The final rule does not require employers to pay out accrued, but unused sick leave. Employers should note that if the employer rehires an employee within 12 months of separation, the employer must reinstate the employee’s accrued, but unused sick leave balance as it existed on the separation date. D. Consider whether it makes sense to have a PTO policy that includes sick leave or a separate sick leave policy.The DOL has stated that a company’s existing PTO policy could fulfill the requirements of the final rule, but some companies may find it advantageous to have separate policies for sick leave, especially with the varying sick leave requirements under state and local law. For more information on other paid sick leave laws see our earlier blog posts.

It is full steam ahead from the executive and legislative branches on plans to “repeal and replace” the Affordable Care Act (ACA). As a result, employer medical plan coverage may again be significantly altered. On January 23, 2017, Senators Bill Cassidy (R-LA) and Susan Collins (R-ME) proposed the Patient Freedom Act 2017, to serve as a replacement for the ACA. The key feature of the proposed legislation would allow states to select the form of health care regulation to implement for residents. Under the legislation, states may either: Opt to comply with the ACA, including mandates; Opt not to seek federal assistance; or Opt to receive funding equal to 95% of the federal premium tax credits and subsidies and federal match for Medicaid expansion. Such funding would be used to create Health Savings Accounts (HSA) for residents. The legislation further provides that states would be allowed to select the regulatory format of their choice in 2018, and start providing coverage by 2019. Under the proposal, the individual mandate, employer mandate and benefit mandates of the ACA would be repealed. However, consumer protections such as the prohibitions on annual and lifetime limits on coverage, pre-existing condition exclusions and discrimination will remain in place. Additionally, the Patient Freedom Act would continue to allow dependent children to remain covered by their parents’ insurance until age 26, and would provide coverage for serious mental health and substance abuse disorders. The introduction of the Patient Freedom Act follows an Executive Order by President Trump that instructs the Department of Health and Human Service (HHS) to “waive, defer, grant exemptions from, or delay the implementation” of provisions of the ACA. While the Executive Order does not fully repeal the ACA, it provides HHS with discretion regarding the extent to which the law will be enforced. Polsinelli will continue to monitor developments surrounding this issue. Please contact the authors or your Polsinelli attorney if you have any questions.

On January 9, 2017, the 7th Circuit (in a decision by Judge Richard Posner) issued a timely reminder that employers should exercise caution when reneging on work-at-home promises. In Wink v. Miller Compressing Company, the employer initially granted an employee’s request for intermittent Family and Medical Leave Act (FMLA) leave to take her autistic child to therapy and daycare. Approximately six months later, the employee’s son could no longer attend daycare, and the employer granted the employee’s request to work from home two days per week and use FMLA time while she was caring for her son rather than working. After the employee successfully worked from home for several months, the employer informed her that it was undergoing serious financial difficulties and could no longer allow the remote work arrangement. On a Friday, a human resources (HR) representative gave the employee an ultimatum: show up for work on Monday at the office or face termination. The employee responded it would be nearly impossible to find care for her son on such short notice. The HR representative then made a costly mistake: he incorrectly informed the employee that the FMLA covers leave from work only for doctor’s appointments and therapy. In actuality, the FMLA entitles employees to take leave to care for family members with serious health conditions, which includes those with autism. While not addressed in this specific case, HR directors can be held individually liable under the FMLA. The following Monday, the employee appeared at work and informed her employer that she was unable to find care for her son and that she needed to return home. She then left work and was immediately terminated. The employer reflected in paperwork that the employee’s last day of work was the preceding Friday. The employee then brought suit, alleging, among other things, that she was terminated in retaliation for exercising her FMLA rights. The jury returned an award for the employee on her FMLA retaliation claim. The employer appealed and the 7th Circuit upheld the award and even raised the award of attorney’s fees from 80% to 100%. In the decision, Judge Posner reasoned that since the employee had successfully worked from home in the preceding months, the jury’s best inference was that the company was angered by her request to stay home. This inference was supported by the HR representative’s “phony line” that she could not use FMLA leave to care for her child, which contradicted the express language of the statute. The FMLA can present difficult scenarios for employers, especially when addressing remote work arrangements. Moreover, when an employer has agreed to arrangements for mid- to long-term periods of time, the employee is more likely to claim that the employer has implicitly acknowledged that the arrangement is covered by the FMLA and should continue on without any foreseeable conclusion, even if it exceeds the 12 week limit under the statute. Employers and their HR personnel benefit from training on the FMLA and its regulations as well as legal counsel on the developing case law in this area.

The Americans with Disabilities Act of 1990 (“ADA”) treats mental illness the same as physical disabilities for purposes of coverage. However, dealing with an employee’s mental health condition can be particularly challenging for employers because the traits that confer protected status are not always visible or otherwise noticeable. An employee’s diagnosis of depression or other mental illness can easily subject a well-meaning employer to potential liability. According to charge data from the Equal Employment Opportunity Commission (“EEOC”), the number of charges of discrimination filed with the EEOC based on mental health conditions are on the rise. During the 2016 fiscal year, the EEOC resolved almost 5,000 charges of discrimination based on mental health conditions, obtaining approximately $20 million for individuals with mental health conditions who were discriminated against based on a disability. The EEOC has responded by issuing a publication on the rights of job applicants and employees with mental health conditionsto raise awareness about the protections the ADA affords individuals with mental health conditions and using its enforcement power to protect individuals with mental health conditions. The EEOC continues to aggressively pursue such cases. For example, on November 30, 2016, the EEOC filed suit against Stevens Transport, Inc. (“Stevens Transport”), alleging that Stevens Transport discriminated against a U.S. Air Force veteran because of his bipolar disorder. Specifically, the EEOC alleges that the individual was a qualified candidate and Stevens Transport unlawfully refused to hire him in violation of the ADA. According to the EEOC’s complaint, the candidate applied to be a commercial truck driver with Stevens Transport. As part of the application process, candidates are required under Federal Motor Carrier Safety Administration (“FMCSA”) regulations to take a physical exam, submit a sample for drug testing, and fill out a medical history questionnaire. The EEOC alleges the candidate was told he could not be hired as a truck driver for Stevens Transport “per company policy” because of the medicine he takes to control his bipolar disorder, even though he presented a report from his medical provider indicating he was safe to drive. However the physician with whom the company contracted to conduct FMCSA-required medical examinations advised that he not be hired because of his medications. Given the rising number of charges of discrimination filed with the EEOC based on mental health conditions, the EEOC’s interest in protecting individuals with mental health conditions, and the challenges posed by mental illnesses, employers should consider the following steps to minimize liability: Remind Managers and Supervisors to involve human resources personnel when employees indicate they may need an accommodation for a mental health condition, and/or exhibit behavior affecting their work such as difficulty concentrating, interacting with others, communicating, eating or sleeping; Document objective concerns regarding an employee’s behavior; and Engage in one-on-one discussions with the employee to determine if the nature of the employee’s mental health condition impacts the employee’s ability to perform the essential functions of their job, with or without an accommodation.

The Equal Employment Opportunity Commission’s (EEOC) final rules on wellness programs have withstood an initial legal challenge from the American Association of Retired Persons (AARP). On May 16, 2016, the EEOC issued final rules that, among other things, clarified how certain terms of the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply to wellness programs. Specifically, the final rules explain how a wellness program may be “reasonably designed” to promote health or prevent disease, an EEOC requirement for wellness programs. The final rules also define how an employee can be deemed a “voluntary” participant in a wellness program. These terms had been left undefined prior to the adoption of the final rule, and had caused consternation for employers seeking to comply with the EEOC wellness program rules. In addition, the rules allow employers to provide incentives up to 30 percent of self—only coverage for workers participating in a wellness program that includes a disability related inquiry or medical examination (including a tobacco related screening). In October 2016, AARP filed suit challenging the final rules and seeking a temporary injunction to prevent the rules from taking effect on January 1, 2017. Specifically, AARP argued that the final rules did not protect the privacy of its members because they effectively allowed employers to force workers to participate in wellness programs by allowing employers to levy a penalty upon employees who choose not to participate. The United States District Court for the District of Columbia denied AARP’s motion for preliminary injunction, and thus the rules have gone into effect as scheduled. Employers may proceed with implementing their wellness programs by relying on the final rules – but proceed with caution. Although the court did not enter a preliminary injunction, AARP’s case against EEOC is still going forward, and a permanent injunction is still possible after further briefing.

This past election, voters in California, Maine, Massachusetts, and Nevada approved ballot measures to legalize marijuana for recreational purposes. As discussed in a previous blog post, California’s ballot measure passed overwhelmingly in favor of legalization. Below, we discuss Maine, Massachusetts, and Nevada’s approved ballot measures, and whether those measures affect an employer’s ability to enact and enforce policies restricting the use of marijuana by employees. Maine Maine voters approved "Question 1," which allows for the recreational cultivation, possession, use, and sale of marijuana to adults over the age of 21. Maine’s new law does not affect an employer’s ability “to enact and enforce workplace policies restricting the use of marijuana by employees or to discipline employees who are under the influence of marijuana in the workplace.” However, an employer is prohibited from refusing to employ a person 21 years of age or older “solely for that person’s consuming marijuana outside of” the employer’s property. Maine employers should seriously consider whether drug testing applicants for employment is necessary and consistent with business necessity, as rejecting an applicant solely because they use marijuana could lead to liability. Massachusetts Massachusetts voters voted “yes” on "Question 4," which legalizes the recreational use, cultivation, possession, and sale of marijuana. Like the new Maine measure, Massachusetts’s new law does not require an employer to permit or accommodate the use of marijuana in the workplace. Nor does the new law “affect the authority of employers to enact and enforce workplace policies restricting the consumption of marijuana by employees.” Nevada Nevada voters approved "Question 2," which legalizes the recreational possession, cultivation, sale, and use of marijuana for adults over the age of 21. Nevada’s new law does not prohibit employers from “maintaining, enacting, and enforcing a workplace policy prohibit or restricting” the use of marijuana. In addition, Nevada employers may conduct workplace drug testing in limited circumstances, such as upon a contingent offer of employment or if the employer has a reasonable suspicion an employee is impaired at the workplace. Key Takeaways Currently, eight states allow for the possession, cultivation, sale, and use of recreational marijuana, and approximately half of the states have legalized marijuana for medicinal purposes to varying degrees. However, marijuana is still classified as a "Schedule I Drugs" and remains illegal under federal law, and the above-listed sates still allow employers to craft policies limiting marijuana use by employees. With the patchwork of state marijuana laws continuing to change, employers should consult with able counsel to enact sensible drug polices in the workplace.

On December 22, 2016, the California Supreme Court issued its decision in Augustus v. ABM Security Services, Inc. and held that, during required rest breaks, “employers must relieve their employees of all duties and relinquish any control over how employees spend their break time.” The Court interpreted the California Labor Code and IWC Wage Orders and its decision in Brinker Restaurant Corp. v. Superior Court(2012) 53 Cal.4th 1004 — which addressed meal break requirements — and determined that meal breaks and rest breaks should receive parallel treatment by employers. ABM required security guards, while on break, to keep radios and pagers on and to respond to tenant calls while on break. In a split opinion, the majority of the Court held that even though state law and regulations don’t mention this sort of on-call time, “one cannot square the practice of compelling employees to remain at the ready, tethered by time and policy to particular locations or communications devices, with the requirement to relieve employees of all work duties and employer control during 10-minute rest periods.” Specifically regarding rest breaks, the Court determined: On-call rest breaks do not meet the requirements of Labor Code §226.7 or the IWC Wage Orders. An employer must ensure rest breaks are provided and no work is required during that time, in the same way that meal breaks are required under Brinker. How can your business comply with Augustus? Your business may be unintentionally subject to liability for these rest break claims. Below are five tips employers should consider to avoid running afoul of the Augustus decision: Check your handbooks and policies and review your rest break provisions; Relieve employees of allduties during their rest breaks; Have employees separately clock their time during their rest breaks; Train managers and supervisors to not disturb employees taking their rest breaks; and Discontinue the use of on-call duties during rest breaks. By aligning rest break requirements with meal break requirements, the California Supreme Court is sending a message that businesses should manage their rest breaks in the same way they manage meal breaks. Given this signal, we expect there to be an uptick in California litigation on the provision of off-the-clock rest breaks. If you have concerns that your business may have unintended liability under Augustus or you have concerns about remaining compliant with the California rest break requirements, please contact your Polsinelli attorney.

In this series, we consider changes that President-elect Trump’s administration could effect through federal agency action (or inaction), including at the Equal Employment Opportunity Commission (EEOC), the Department of Labor (DOL), the Occupational Safety and Health Administration (OSHA), and the National Labor Relations Board (NLRB). Our first post focused on changes at the DOL. This second blog focuses on changes that might be made at the Occupational Safety and Health Administration (“OSHA”) and the Equal Employment Opportunity Commission (“EEOC”). Occupational Safety and Health Administration (OSHA) The Trump administration could appoint new OSHA leadership with officials who are less enforcement-minded. In addition, these new appointments could advocate for the adoption of less stringent regulations, and could direct their focus on compliance assistance as opposed to enforcement and litigation. The Obama administration’s Severe Violator Enforcement Program (SVEP), launched in 2010,  currently concentrates “OSHA's resources on inspecting employers who have demonstrated indifference to their OSH Act obligations by committing willful, repeated, or failure-to-abate violations.” Pursuant to the SVEP, enforcement actions for severe violator cases include, among other things, mandatory follow-up inspections, corporate-wide agreements (where appropriate), and enhanced settlement provisions. Given President-elect Trump’s repeated campaign promises to decrease regulation and create a “business-friendly” atmosphere, OSHA may not prioritize follow-up inspections, and could impose lower fines or less severe penalties upon employers that violate the Act. Equal Employment Opportunity Commission Similarly, the Trump administration could alter the EEOC’s current employment priorities regarding systemic discrimination, binding arbitration agreements, and LGBT rights. Systemic Discrimination Enforcement Currently, one of the EEOC’s major priorities is to investigate and file systemic discrimination cases as a means to enhance recoveries to larger groups. Systemic investigations increased by 250 percent from 2011 through 2015, and the EEOC has successfully prosecuted 94 percent of its systemic lawsuits over the past ten years. In addition, the EEOC tripled the amount of monetary relief recovered for victims of systemic discrimination from 2011 through 2015, compared to the relief recovered from 2005 through 2010. However, President-elect Trump’s nomination of Andrew Puzder to the position of Secretary of Labor suggests that he will also appoint individuals to the EEOC who are less concerned with investigation and enforcement, and more focused on compliance assistance. Binding Arbitration Agreements The EEOC currently takes the position that forcing an employee to agree to arbitrate any discrimination claims against their employer is unlawful. The commission’s position stems from a policy statement issued in 1997, which provides that “agreements that mandate binding arbitration of discrimination claims as a condition of employment are contrary to the fundamental principles evinced in [the employment discrimination] laws.” In a bid to appear more “employer friendly,” the Trump administration may de-emphasize the EEOC’s focus on binding arbitration agreements, which would allow employers more freedom to determine the best way to resolve disputes with their employees. LGBT Rights The EEOC’s Strategic Enforcement Plan makes clear that applying the protections of Title VII to lesbian, gay, bisexual and transgender individuals is a “top Commission enforcement priority.” Over the last eight years, the EEOC’s attorneys have repeatedly litigated cases in support of this position, and have had success at the ALJ level. For example, in Macy v. Holder, the EEOC ruled that transgender bias is a form of gender discrimination prohibited by Title VII. In addition, in Baldwin v. Foxx, the EEOC “issued an administrative opinion that held for the first time that Title VII extends to claims of employment discrimination based on sexual orientation.” Moreover, the EEOC filed its first-ever federal court Title VII suits over transgender rights in 2015, asserting that Title VII’s prohibition on sex discrimination include discrimination based on gender stereotyping. While President-elect Trump has not made his enforcement priorities clear, it is possible that he could direct the EEOC to temper its focus on LGBTQ protections in the workplace, particularly because at least one Circuit court is currently considering whether Title VII’s protections apply to LGBTQ individuals.

On November 8, California, along with Massachusetts and Nevada, legalized the recreational use of marijuana. With marijuana now legal in seven states, “the percentage of Americans living in states where marijuana use is legal for adults rose above 20 percent[.]” In light of this change, California employers have expressed concern regarding the continuing viability of their existing drug testing and use policies, which often contain general prohibitions on the use of illegal substances. Fortunately, Proposition 64 directly addresses this concern, making clear that it does not affect: “[t]he rights and obligations of . . . private employers to maintain a drug and alcohol free workplace or require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growth of marijuana in the workplace, or affect the ability of employers to have policies prohibiting the use of marijuana by employees and prospective employees, or prevent employers from complying with state or federal law.” This provision codifies and extends the California Supreme Court’s decision in Ross v. Ragingwire Telecommunications, Inc., 42 Cal.4th 920 (2008) holding that employers are not required to accommodate an employee’s use of medicinal marijuana, even though its use was legal under state law. The court also concluded that employers could conduct, and make employment decisions based on pre-employment drug tests that screened for marijuana. In light of the holding in Ross and the clear language of Proposition 64, employers with policies containing blanket prohibitions on the use of drugs (including marijuana) likely remain lawful. Nevertheless, employers may observe an uptick in marijuana use of as a result of the Proposition. Thus, employers should review their existing policies and practices regarding drug testing current employees, as California law imposes numerous limits on such tests. For example, employers may generally not compel employees (except those in safety-sensitive positions) to undergo a drug screening without “reasonable suspicion” of impairment. Mandating an improper test could result in claims for invasion of privacy and wrongful termination. Compliance-minded employers should consult with experienced employment counsel to review policies and practices regarding drug screenings. In addition, management and human resources professionals should be prepared to address employee inquiries regarding marijuana use in light of Proposition 64.

The California legislature has given employers a slew of reasons to be nervous in recent years. From mandatory paid sick leave to the Fair Pay Act, the waters remain treacherous for California employers. The following summarizes the notable legal changes for 2017 employers should prepare for in the New Year. 1. Wage and Hour Increased Minimum Wage: Effective January 1, 2017, the California minimum wage will increase to $10.50 per hour for employers with more than 25 employees. Employers with 25 or fewer employees are not subject to the increase until 2018. The statute provides for annual increases until the minimum wage reaches $15.00 per hour for large employers in 2022 and for small employers in 2023. Increases in the minimum wage will also increase the minimum salary requirements for exempt employees, because exempt employees in California must generally earn a minimum salary of at least twice the state minimum wage for full-time work. Thus, employers should review and, if necessary, adjust the salaries of their exempt employees to avoid losing their exempt status. Notably, a number of localities, including Berkeley, San Jose, and Los Angeles will also increase the required minimum wage in 2017. Employers must consider the increasing number of local minimum wage ordinances when reviewing their wage and hour practices . Overtime for Private School Faculty: Presently, the faculty at private elementary or secondary academic institutions are generally exempt from overtime if, among other things, they earn a monthly salary of at least twice the state minimum wage for full-time employment. AB 2230 provides that effective July 1, 2017, the salary requirement for the overtime exemption will be tied to the salary paid to public school employees in the district or county in which the private school is located. Note that AB 2230 does not apply to tutors, teaching assistants, instructional aides, student teachers, day care providers, vocational instructors, or similar employees. Posting Requirements for Salons: AB 2437 requires that any entity regulated by the Board of Barbering and Cosmetology post a notice in English, Spanish, Vietnamese, and Korean regarding misclassification, minimum wage and overtime, tips, and other wage and hour issues. The Board is required to ensure compliance with the posting requirements when it conducts facility inspections. AB 2437 further directs the Labor Commissioner to create a model notice on or before June 1, 2017. The posting requirement is effective July 1, 2017. Other Legal Changes: The legislature made other changes to existing law regarding wages, including: Effective January 1, 2017, AB 2535 clarifies that itemized wage statements issued to employees exempt from minimum wage and overtime need not indicate the number of hours worked. Effective July 1, 2018, SB 3 expands the Healthy Workplaces, Healthy Families Act of 2014 to provide paid sick leave to providers of in-home support services. 2. New Requirements Regarding Fair Pay In 2015, California passed landmark legislation intended to address sex-based pay disparities. See Lab. Code § 1197.5. Critically, the law made it more difficult for employers to legally justify sex-based pay differences. SB 1063, which is effective on January 1, 2017, expands the new Fair Pay Act’s standards to race and ethnicity-based pay disparities as well. 3. Employment Agreements and Forum Selection SB 1241 imposes significant limits on forum selection and choice of law provisions in employment agreements. Effective January 1, 2017, employers cannot require, as a condition of employment, that employees agree to: Adjudicate a claim arising in California outside of the state; Forfeit any substantive protection of California law with respect to a controversy arising in California. These limits do not apply if the employee is represented by legal counsel when negotiating the disputed contract. SB 1241 permits a court to award attorneys’ fees to an employee enforcing his or her rights under the new law. 4. Notice, Record-Keeping, and Background Checks The legislature created numerous new record-keeping and notice requirements in 2016, including: AB 1978 imposes new training and record-keeping requirements on employers in the janitorial industry related to wages and sexual harassment. California law requires employers to notify employees that they may be eligible for the Federal Earned Income Tax Credit. AB 1847 requires employers to also provide employees with a specified notice regarding potential eligibility for the California Earned Income Tax Credit. AB 2337 requires employers with 25 or more employees to provide a notice of rights regarding leave for victims of domestic violence, sexual assault, or stalking and related protections against retaliation. The new law directs the Labor Commissioner to prepare a notice satisfying the requirements of AB 2337 on or before July 1, 2017. The employer is not obligated to provide notice until the Labor Commissioner posts the required form. Finally, the legislature imposed a new limitation on employer background checks. AB 1843 prohibits employers from asking an applicant to disclose “any adjudication by a juvenile court or any other court order or action taken with respect to a person who is under the process and jurisdiction of the juvenile court law.” Employers further may not utilize such an adjudication as a factor in determining a condition of employment. The law provides a limited exception to this rule for certain health care facilities. In conclusion, compliance-minded employers should consult with experienced employment counsel to ensure they are ready for the New Year. Contact Michele, Brian, or the Polsinelli Labor and Employment practice for advice on complying with new laws in 2017.

With the New Year just weeks away, employers with Illinois employees should be aware of several new statutory sick leave provisions that will go into effect in 2017. Specifically, Chicago, Cook County (which encompasses Chicago and many of its surrounding suburbs), and the State of Illinois have each provided employees with various sick leave protections scheduled to go into effect: Chicago – The Chicago Minimum Wage Ordinance was amended to provide eligible employees up to 40 hours of paid sick leave during each 12-month period. The eligibility threshold is relatively low: an employee need only (a) perform 2 hours of compensable work within the City of Chicago, and (b) work at least 80 hours for a covered employer within any 120-day period. To qualify as a “covered employer”, an entity must maintain a business facility within the City limits or be subject to any of the City’s licensing requirements. There is no minimum employee threshold. The leave provided is not in addition to any leave already provided by an employer, but any plan already in place must meet the Ordinance’s minimum requirements. Qualifying employees accrue one hour of leave for every 40 hours worked, up to the 40 hours during each 12-month period. The amendment goes into effect on July 1, 2017, and can be found here. Cook County – The Cook County Earned Sick Leave Ordinance also goes into effect on July 1, 2017, and largely mirror’s Chicago’s ordinance. A covered employee is anyone who, in any particular two-week period, performs at least two hours of work for an employer while physically present within the geographic boundaries of Cook County. Because Cook County encompasses the suburbs surrounding Chicago, a significant number of additional employees will qualify for the benefit. As with the Chicago Ordinance, employees can carry over 20 hours of accrued, but unused sick leave into the following year; provided, however, that if the employer is subject to the federal Family Medical Leave Act, the carryover limit is raised to 40 hours. The Cook County Ordinance can be found here. Illinois – The Illinois Employee Sick Leave Act does not establish a minimum sick leave benefit; rather, it allows employees to use accrued sick leave to care for a family member. An employee may use up to half of the employee’s accrued sick leave for absences related to the illness, injury, or medical appointments of a family member. The term “family member” is defined to include the employee’s child, spouse, domestic partner, sibling, parent, mother or father-in-law, grandchild, grandparent, or stepparent. The statute becomes effective on January 1, 2017, and can be found here. There are various exceptions and qualifications applicable to each provision. Employers should evaluate their coverage under each if they maintain employees and facilities in any of these locations.

On November 8, 2016, voters in Arizona approved a ballot measure requiring Arizona businesses to provide employees with paid sick leave. In approving the new Minimum Wage and Paid Time Off Initiative, Arizona joins a handful of states (as well as some municipalities) that have enacted paid sick leave laws. Below are five things Arizona employers need to know prior to the law taking effect on July 1, 2017. 1. How much paid sick leave must be provided? Most private sector employers in with operations in Arizona are subject to the new law. The minimum paid sick leave requirements are as follows: Employees working for employers with 15 or more employees are entitled to accrue up to 40 hours of paid sick leave per year. Employees working for employers with fewer than 15 employees are entitled to accrue up to 24 hours of paid sick leave per year. 2. How does sick leave accrue? Regardless of the size of the employer, employees must accrue paid sick leave at the rate of at least one hour for every 30 hours worked. 3. How can employees use paid sick leave? Employees can use their paid sick leave hours for a variety of reasons, including: Their own mental or physical illness, injury, or health condition; The mental or physical illness, injury, or health condition of a family member; Absences related to abuse, stalking, sexual violence, or domestic violence of either the employee or the employee’s family member; and/or When a public health emergency causes the employee’s workplace to close, or the employee’s child’s school or daycare to close. 4. Who is a “family member”? The new law defines a “family member” broadly to include: Children of any age (including biological, adopted, or foster children, as well as legal wards and children of a domestic partner); Parents (including biological, foster, stepparents, adoptive parents, and legal guardians of the employee or the employee’s spouse or domestic partner); Spouses and domestic partners; Grandparents, grandchildren, or siblings of the employee or the employee’s spouse or domestic partner; or Other individuals related by either blood or affinity whose close association with the employee is the equivalent of a family relationship. 5. What happens when an employee leaves their job? Employers need not pay out unused and accrued paid sick leave time to employees whose employment ends for any reason. However, employees who are rehired by the same employer within nine months of termination are entitled to reinstatement of all accrued paid sick leave time. So for example, employers who conduct temporary layoffs and bring back employees within nine months must reinstate all of those employees’ accrued sick leave time. Arizona employers take note: the new Minimum Wage and Paid Time Off Initiative also contains important notice and record keeping requirements. Please contact Polsinelli attorneys with any questions regarding compliance

It seems that employers were right to be concerned with the United States Supreme Court’s decision to “punt” in its May 2016 opinion in Spokeo Inc. v. Robins, after two United States District Courts reached opposite outcomes in opinions issued last month. Spokeore presents one of many recent putative class actions brought under the Fair Credit Reporting Act (“FCRA”), wherein plaintiffs allege “technical” or “procedural” violations of the FCRA’s oft-byzantine compliance requirements. Most employers are by now aware that the FCRA’s broad scope sets out strict compliance procedures for employers who wish to use criminal background checks for “employment purposes.”  In the Spokeo opinion, which was discussed in greater depth in a prior blog post, the Supreme Court remanded back to the Ninth Circuit with instructions to determine whether plaintiffs’ alleged harm was sufficiently “concrete” to confer Article III standing. Though the Court openly hinted at its disapproval of such procedural class actions (e.g. “It is difficult to imagine how the dissemination of an incorrect zip code…could work any concrete harm.”), it did not definitively hold that such claims could never satisfy Article III’s standing requirements. Taking cues from Spokeo, class action defendants in Nokchan v. Lyft, Inc.and Moody v. Ascenda USA, Inc. filed motions to dismiss on the grounds that plaintiffs had not alleged “concrete” injuries. In both cases, plaintiffs had previously advanced the now well-worn argument that defendants’ “disclosure and authorization” forms were not compliant with 15 U.S.C. §§ 1681b(b)(2)(A)(i)-(ii). In Lyft, the United States District Court for the Northern District of California agreed with defendant, granting its motion and dismissing the case without prejudice. The Lyft court noted that plaintiff “has not alleged that he suffered any real harm,” nor had he claimed to have been “harmed by the background check in any way.” In Ascenda, however, the United States District Court for the Southern District of Florida, denied defendant’s motion to dismiss, holding on strikingly similar facts that noncompliance with §§ 1681b(b)(2)(A)(i)-(ii) was not “akin to the dissemination of an incorrect zip code” and did in fact represent a sufficiently “concrete” injury. While the recent FCRA case law might be divergent, the message to employees remains clear: make sure your FCRA forms are compliant.

The number of collective class actions filed continues to rise year after year. Employers should be vigilant in ensuring compliance with the Fair Labor Standards Act (“FLSA”). With the new Department of Labor (“DOL”) regulations going into effect December 1, 2016, now is an optimal time for employers to review pay classifications and pay practices. Here are six steps to address when conducting an FLSA audit: 1) Employee duties: The first step of the audit is to monitor employee duties and responsibilities. It is important to identify the exact job duties and responsibilities employees actually perform, prior to assessing whether employees are classified and compensated properly. 2) Job descriptions: The next step of the audit is to review employee job descriptions to match the duties employees are actually performing. Because job responsibilities may change over time, employers should make sure that they regularly monitor and update job descriptions. 3) Job classification: After job descriptions have been updated, employers should analyze whether employees are properly classified as independent contractors, non-exempt employees, or exempt employees. Misclassification of employees as exempt from overtime pay may subject employers to liability under state law (minimum wage, unemployment insurance, workers’ compensation funds,  and state taxes) and federal law (overtime compensation, benefits, including health insurance or FMLA, and minimum wage). 4) Compensation review: Effective December 1, 2016, the salary threshold for “white collar” overtime exemption increases from $455 to $913 per week, and the annual compensation requirement for highly compensated employees increases from $100,000 to $134,004 annually. Employers must review exempt employee salaries to ensure compliance with the new regulations. Employers may use non-discretionary bonuses and incentive payments, including commission, to satisfy up to 10% of an exempt employee’s salary, as long as payments are made on a quarterly or more frequent basis. 5) Record keeping: Next, employers should review whether they are maintaining required time and pay records for employees, including potential overtime. Employers need to put systems in place to track potential time off of the clock such as 1) access to company email, 2) automatic lunch deductions for breaks that employees may not have taken, 3) instant messaging or text messages on company issued cell phones, 4) donning and doffing time or 5) whether an employee has to log into computer systems before clocking in. Employers should retain records for a minimum of three years. 6) Safe harbor policy: Finally, employers should implement a policy in employee handbooks or manuals clearly prohibiting off-the-clock work by non-exempt employees and improper pay deductions, along with a complaint mechanism, reimbursements for mistakes, and a good faith commitment to comply with all applicable pay laws. It is important to note that the Safe Harbor Provision of the FLSA does not protect employers who willfully violate the statute after employees have complained about pay practices. Conducting an audit can be daunting and tedious while leading to many twists and turns. Because many of the regulations may be difficult to interpret, contact the wage and hour attorneys at Polsinelli with any questions.

The number of charges filed with the US Equal Employment Opportunity Commission alleging disability discrimination has increased steadily over the past five years. In its recently updated Strategic Enforcement Plan, the EEOC announced that one of its key priorities will be pursuing claims of pay disparity among disabled workers. Employers must be prepared to respond appropriately when they learn that employees have medical restrictions which may affect the employees’ ability to perform an “essential function” of the job. While most employers are generally aware of the duty to engage in the “interactive process” to determine if an accommodation is reasonable (or necessary), conventional wisdom provides (and the applicable regulations confirm) that an employer need only discuss possible accommodations when an employee affirmatively puts the employer on notice of the need for an accommodation. In Kowitz v. Trinity Health, a divided Eighth Circuit Court of Appeals (covering the states of Missouri, Iowa, Minnesota, North Dakota, South Dakota, Nebraska, and Arkansas) appears to have changed the standard, suggesting that the onus is on employers to discuss possible accommodations upon learning that an employee is returning to work with some type of restriction which may affect the individual’s ability to perform his or her job duties. Kowitz worked as a Respiratory Therapist and later took on additional duties as a lead technician in the blood gas laboratory. Her employer, a medical facility, required all employees in the department where Kowitz worked to be certified in Basic Life Support (BLS) to respond to potential medical emergencies. Kowitz took FMLA leave for surgery related to spinal stenosis and, after her leave concluded, returned to work with some additional restrictions, which were accommodated. At about the same time as Kowitz returned to work, the medical facility realized that several employees in the department, including Kowitz, did not have current BLS certification. All employees were asked to recertify by a date certain. While Kowitz took, and passed, the written portion of the BLS test, her physical restrictions prevented her from taking the physical part of the test (which requires actual physical compressions to establish CPR skills) by the established deadline. After Kowitz sent a letter to her employer noting that she would not be able to take the test for at least four additional months due to her physical limitations from the surgery, she was terminated. The trial court found that the employer had no duty to accommodate because Kowitzwas unable to perform the essential function of her job (completing the required BLS certification). The Eighth Circuit (in a 2-1 decision) reversed, holding that since the employer knew from the letter and the prior FMLA leave that Kowitz may need additional time to take the physical portion of the test, it had a duty to engage in the interactive process, even though Kowitz  did not make a specific request for an accommodation (such as a longer time period to take the test). In light of the Court’s decision in this case, employers should consider the following steps to minimize liability for failure to accommodate claims: Remind Managers and Supervisors of the need to involve human resources personnel when employees return from leave and  have restrictions; Insure that employees returning from FMLA or similar leave have a return to work release stating they have no restrictions or, in those cases where they have  restrictions, engage in one-on-one discussions with the employee to determine if the restrictions can be accommodated; Review job descriptions to verify that they accurately list the essential functions of a position so that, if the situation arises, there is no question as to which job functions are “essential” and which are not.

Employers that use background checks should be familiar with the requirements of the federal Fair Credit Reporting Act (“FCRA”). As we have discussed on this blog, prior to obtaining a consumer report on an employee or applicant for employment, an employer must provide notice and obtain written consent. If an employer decides to take adverse action against an employee or applicant based in whole or in part on the contents of a consumer report (such as deciding to terminate an employee’s employment or deciding not to hire an applicant), the employer must comply with the FCRA’s adverse action requirements. In addition to the requirements of the FCRA, employers should be aware that some states have laws which impose additional restrictions or obligations on employers with respect to consumer reports. State laws can increase employers’ obligations concerning the use of employee and applicant background checks. For example, the FCRA does not restrict employers from obtaining credit reports, a type of consumer report, on employees or applicants. Under California law, however, an employer may only request a credit report for employment purposes when an individual holds or is applying for one of the following positions: A managerial position. A position in the California’s Department of Justice. A sworn peace officer or other law enforcement position. A position for which the information contained in the report is required by law to be disclosed or obtained. A position that involves regular access, for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment, to all of the following types of information of any one person: Bank or credit card account information. Social security number. Date of birth. A position in which the person is, or would be, any of the following: A named signatory on the bank or credit card account of the employer. Authorized to transfer money on behalf of the employer. Authorized to enter into financial contracts on behalf of the employer. A position that involves access to confidential or proprietary information, including a formula, pattern, compilation, program, device, method, technique, process or trade secret that (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who may obtain economic value from the disclosure or use of the information, and (ii) is the subject of an effort that is reasonable under the circumstances to maintain secrecy of the information. A position that involves regular access to cash totaling ten thousand dollars ($10,000) or more of the employer, a customer, or client, during the workday. See Cal. Lab. Code § 1024.5(a). Prior to requesting a credit report on a California employee or applicant, California’s Consumer Credit Reporting Agencies Act requires, among other things, that the employer provide notice to the individual identifying the specific basis under the Labor Code allowing the employer to request a credit report. California is just one example. Other states that have enacted laws regulating employer use of consumer reports, often called mini-FCRAs, include Arizona, Georgia, Kansas, Maine, Massachusetts, Minnesota, New Jersey, New York, Oklahoma, and Washington. Employers should be careful to comply with any applicable state law requirements, in addition to the provisions of the FCRA, when requesting consumer reports on employees or applicants.

With the holiday season approaching, now is a good time to review some practical tips for an employer when addressing suspected abuse of FMLA leave by an employee, although these tips represent best practices year round. An earlier post provided insight into measures an employer can take to prevent the abuse, but what is an employer to do when it receives information indicating the abuse is ongoing or has already happened? 1. Conduct a thorough investigation before contacting the employee. Employers may receive information, directly or indirectly, from other employees which raise suspicions about another employee’s abuse of leave. Those co-workers can be a valuable source of information to the employer. Employers can also use resources such as social media or private investigators, subject to any state law limitations, to gather information. 2. Schedule a meeting with the suspect employee. During this meeting, the employer should inquire about the employee’s reason for absences on the dates in question and whether the employee can provide any information or documents corroborating legitimate FMLA use on those days. The employee’s use of FMLA leave should track the employee’s medical certification upon which FMLA leave was approved. The employer should provide the employee a fair opportunity to account for his or her leave without “accusation” of abuse from the employer. If the employer has evidence suggesting FMLA fraud or abuse, the employer may ask the employee to explain. The employer may then assess the credibility and truthfulness of the employee’s explanation. An employer should take caution when scheduling this meeting with the suspect employee. While an employer may be anxious to address suspected abuse of leave, contacting an employee while on leave may lead to an interference claim. Counsel can advise an employer about when and how to address suspected leave abuse with the offending employee. 3. In the event of termination, document everything.Clearly worded employment policies, including social media and leave abuse policies, can legally support an employer’s decision to terminate an employee’s employment for FMLA fraud or abuse. The employer’s investigation and subsequent meeting with the employee should be documented to demonstrate the full and fair investigation conducted by the employer, and that the employer’s ultimate decision was made in good faith, based upon evidence then available to the employer. Such documentation is important for defending against any FMLA interference or retaliation claims that may follow.

As millennials continue to negotiate workplace perks, such as flexible hours, gourmet cafeterias, gym memberships, and on-demand laundry services, employers may be confronted with employees who seek to bring pets to work for convenience, companionship, or to promote creativity and calmness. Beyond providing reasonable accommodations (absent showing an undue hardship) for disabled employees with services animals, here are some considerations for employers regarding voluntary pet policies. Pros and Cons Recent studies and articles advocate for pet-friendly workplaces, citing a number of benefits to companies and workers. Benefits include increased worker morale, co-worker bonding, attracting and retaining talent, and lower stress coupled with higher productivity. On the other hand, permitting pets in the workplace presents a number of issues. For example, according to a leading asthma and allergy organization, as many as three in ten people suffer from pet allergies, meaning someone at work is likely allergic to Fido or Fifi. A significant number of people also have pet phobias, for example, resulting from a traumatic dog bite incident. Other concerns may include workplace disruption due to misbehaved animals, mess, and time-wasting. Five Tips for Effective Pet Policies If the Pros outweigh the Cons, the next question is: “[w]hat should I put in a pet policy?” Here are five things to consider when preparing a pet-policy: Ask Around: Offer employees an opportunity to provide feedback before implementing a pet-policy. Doing this allows the company time to confirm employee interest in the idea and address any concerns or issues before employees bring pets to work. Set a Schedule: Establish a schedule for pet-friendly work days, e.g., once a week or month, to provide structure and predictability so that the company and employees can plan, either to bring their pets (or allergy medicine) or to work remotely, for days when pets may be at the office or jobsite. Provide Pet Space: Designate certain areas as pet-friendly. This benefits everyone. For areas where pets are welcome, provide perks like snacks, cleaning supplies, and toys. Designate entrances and exits that pet owners can use to bring their animals in and out. Space planning also helps employees who prefer to keep their distance, as boundaries provide notice of places to avoid. Offer Pet Benefits: Certain federal and/or state laws prohibit companies from permitting pets (not to be confused with ADA service animals) at work. Offering employees other benefits like pet insurance, pet bereavement, pet daycare, and financial help for pet adoption are other ways companies can support their pet-owning workers, even if pets can’t come to work. Waivers and Insurance: No list is complete without accounting for the chance something may go wrong. Consider requiring employees who bring pets to work to sign a waiver of liability for the company. Similarly, companies should check with their insurance to make sure that they are covered in the event an animal causes an injury in the workplace. What about the ADA? Voluntary pet policies should be considered separate from a company’s obligation to provide disabled workers with a reasonable accommodation, which may include use of a service animal at work. Three questions to consider when an employee asks to bring a service animal to work as an accommodation include: (1) does the employee have a disability; (2) is this a service animal, meaning is it trained to perform specific tasks to aid an employee in the performance of the job; and (3) is the service animal a reasonable accommodation. If a service animal results in complaints from other employees (e.g., allergies, phobias, disruption), employers may consider other accommodations, or take other steps to address these complaints. The Job Accommodation Network, a service of the U.S. Department of Labor, Office of Disability Employment Policy, has some helpful tips for accommodating service animals. Where the issue is more complicated, contact your Polsinelli employment lawyer to discuss the circumstances more closely.

Time off is important to employee morale and productivity. However, because the Colorado Wage Act requires employers to pay for accrued but unused vacation time in an employee’s final paycheck, overly generous policies can be costly. Accrued unused vacation time is not “priceless,” and we offer three legal developments and reasons for Colorado employers to re-visit their vacation and time off policies now. 1. School Activities In 2009, the Colorado legislature passed the Parental Involvement in K-12 Education Act. The legislation requires employers to provide employees with 18 hours of unpaid leave per academic year to attend certain school activities. Many employers made one of three revisions to policies in response:  provisions creating school activities leave; statements that the existing policy was sufficient to meet the statutory requirements; or increased vacation or time off allowances to provide additional time that could be used, among other things, for school activities. Because the statute included an automatic repeal provision, it ended relatively quietly on September 1, 2015. However, many employers did not revise the changes they made to their policies. 2. “Use-it-or-Lose-it” To avoid paying out large amounts to employees at separation, many employers adopted “use-it-or-lose-it” policies. Plaintiffs’ attorneys have long taken the position that such policies violate the Wage Act by forfeiting vacation time that has been earned. In late 2015, the Department of Labor informally announced that it would target employers with “use-it-or-lose-it” policies for enforcement actions. A month later, the Department of Labor issued written guidance that seemed to temper that announcement. The guidance starts with a broad statement that “use-it-or-lose-it” policies are permissible. However, the guidance later clarifies that such a policy violates the Wage Act if it deprives employees of earned vacation time and/or wages in lieu of that time. Since most “use-it-or-lose-it” policies provide no compensation for unused vacation time that is “lost,” the guidance signifies that the Department of Labor will consider such policies to be a violation of the Wage Act. Based on the language of the Wage Act, there is a significant risk that a court would agree. 3. Final Pay Many Colorado employers have abandoned traditional sick and vacation time distinctions for paid time off that can be used for any reason. Because those policies do not distinguish between sick and vacation time, the entire paid time off allowance is considered vacation time that must be paid out in an employee’s final pay check. However, many people involved with payroll and developing policies do not realize the legal impact of such policies. Action Items for Employers Review policies for references to the Parental Involvement in K-12 Education Act, which can now be removed. Consider whether to end school activities leave policies or return time off allowances to the pre-legislation levels. Review “use-it-or-lose-it” policies with counsel and assess risks and alternatives. Consider whether alternatives to lump-sum paid time off policies will better control payouts at separation.

Employees’ secret workplace recordings are nothing new to many employers, but a recent, high-profile settlement may tempt employees to record their employers more often. In early September 2016, Fox News settled sexual harassment and retaliation claims of former anchor Gretchen Carlson for $20 million. Carlson had secretly taped the network’s CEO and President Roger Ailes for more than a year. Employers should assume their employees are recording them in the workplace and act accordingly. The proliferation of smartphones with built-in recorders has made audio recordings possible at virtually all times. Most states allow one-party consent for recordings, which is accomplished when the party doing the recording knows they are recording, and therefore “consents.” Here are five tips for handling secret employee recordings: Speak carefully in disciplinary and even routine meetings in which the terms and conditions of employment are being discussed. The words and voice of a supervisor making comments can be construed as evidence of discrimination or harassment. If an employee discloses a recording of unlawful conduct, take immediate action to investigate the situation and, if warranted, discipline the employee engaging in the conduct. Refrain from disciplining the employee who secretly recorded, even if you have a company policy prohibiting secret recording. Such action – and even a tone of voice – expressing unhappiness with the employee’s conduct can be evidence of retaliation. Be aware that the National Labor Relations Board has the opinion that a blanket ban on employee recordings violates the National Labor Relations Act. This issue is not settled in the courts, but such a ban increases the risk of a claim that the employer is violating the NLRA. If you discover an employee is recording a meeting, react very carefully and without anger or accusations. Calmly tell the employee you do not want to be recorded and ask the employee to stop recording. If the employee refuses to stop recording, end the meeting and seek the advice of human resources or legal counsel. Mandate that all employees – supervisors and non-supervisors – regularly receive comprehensive anti-discrimination and harassment training, and that such policies are enforced. A positive workplace culture, with clear policies and training against unlawful workplace conduct, reduces the risk of secret recordings by employees. Finally, some plaintiff’s attorneys tell clients to record their employers as a matter of course. Knowledgeable counsel should be aware which attorneys do that. If you receive a charge of discrimination or similar claim from a plaintiff’s attorney, consult with legal counsel to discuss the likelihood that recordings exist.

Some very loud whistles have been blowing across corporate America since 2011 – whistles valued at $107 million, in fact. The United States Securities and Exchange Commission announced on August 30, 2016, that since its whistleblower program began in 2011, they have awarded more than $107 million total to 33 individuals who voluntarily provided the SEC with original and useful information that led to a successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the SEC’s monetary sanctions in a matter exceed $1 million.     The SEC encourages employees to report suspected wrongdoing, because they, according to Acting Chief Jane Norberg, “are in unique positions behind-the-scenes to unravel complex or deeply buried wrongdoing.” And, last year alone, employees responded by providing nearly 4,000 tips to the agency. With this kind of incentive from the SEC and other government agencies, as well as a growing number of successes in whistleblower lawsuits, it is more important than ever for companies to get advice on a regular basis from a multi-faceted team, including corporate, employment, and white collar crime attorneys. Moreover, companies must be strategic and proactive in their approach to implementing an effective whistleblower protection and anti-retaliation system.     Key elements of an effective whistleblower protection and anti-retaliation system include: Clear and visible leadership commitment and accountability. This is truly the most important piece of the puzzle. Without sincere support from the top, no internal whistleblower program can succeed. The creation of a true “speak-up” organizational culture focused on prevention, including encouraging employees to raise all suspicions and issues quickly and insuring the fair resolution of such issues. Independent, protected resolution systems for employees and third-parties who believe they are experiencing retaliation as a result of raising concerns.   Specific training to educate all employees about their rights and available protections (including both internal and external programs). Specific training for managers who may receive complaints or information from employees, requiring the manager to be considerate of the employee making the report, to be diligent, and, most importantly, to act on the information with no corporate tolerance of the “just telling me as a friend, not as a manager” excuse. Internal monitoring and measurement of corporate compliance efforts and the effectiveness of the speak-up and non-retaliation culture, without contributing to the suppression of employee reporting. Independent auditing to determine if the whistleblower protection and anti-retaliation system is actually working.

In recent guidance, the IRS advised that policies implemented by employers to prevent part-time and seasonal employees from working 30 hours or more per week may not be sufficient to prevent liability under the Affordable Care Act (ACA) employer mandate.   If an employer is an applicable large employer (ALE), minimum essential health coverage must be offered to at least 95 percent of full-time (30 hours per week) employees (FTEs). An employer becomes an ALE when the company employs at least 50 employees (computed by aggregating part-time employees and determining full-time equivalents) who work on average a minimum of 30 hours per week. The ACA penalizes employers who fail to provide minimum essential coverage to their FTEs through a penalty tax structure.   To prevent such penalties, some employers have implemented policies to restrict part-time and seasonal employees (non-FTEs) from working an average of 30 or more hours per week. However, the IRS recently specified that these policies are not enough to avoid liability.  Actual hours count – even if performed in violation of an employer’s policy. In Information Letter 2016-0030, the IRS responded to an employee’s inquiry (yes, it was really the employee asking the question!) regarding whether an employer’s policy against non-FTEs working more than 29 hours per week could prevent the employer from being liable for penalty taxes. The IRS stated that the employer could still be liable for failing to provide minimum essential coverage if it did not offer coverage to an employee who violates the policy and works on average more than 30 hours per week in any given month. Thus, it is essential that employers closely monitor employee hours and adherence to these policies. Should a part-time or seasonal employee subject to the restricted hours policy average 30 or more hours per week in any given month, the employer still may be able to avoid the penalty.  First, if minimum essential coverage that is affordable and provides minimum value is offered to at least 95 percent of the employer’s FTEs (including any who are FTEs as a result of violation of the restricted hours policy), no penalty will apply. Further, if the employer offers minimum essential coverage (but it either is not affordable or does not provide minimum value), if the employee does not obtain coverage on the Marketplace for which the employee receives tax credit, no penalty is due with respect to that employee. As a result of the guidance, ALEs should: Implement, monitor and enforce policies against non-FTEs working in excess of 30 hours per week and reduce work schedules as necessary to avoid violations; Instruct supervisors not to approve additional hours for employees subject to the policy; Include employees that violate the policy and work on average 30 hours or more per week in the ALE computation and offer such employees coverage if necessary to comply with the ACA; and Carefully determine whether employees may be excluded from employer provided coverage, e.g., where they do not have Marketplace coverage or are not eligible for the tax credit.

On July 6, 2016, Pokémon Go was released in the United States. Almost overnight, the location-based, augmented reality game became a national, if not global, phenomenon. You cannot turn on the television, listen to the radio, read news headlines, or even walk out your front door without hearing about the game or seeing individuals using their smartphones and tablets to “find” and “capture” digital creatures that virtually appear at specific locations. While Pokémon Go may sound like a harmless, albeit distracting, “video game,” it poses a risk to cyber security and raises concerns about data vulnerability in company databases and systems. Games like Pokémon Go require users to download and install an application on the users’ phones or tablets. Users are not always aware if they have downloaded an infected version of the application, which may allow hackers to spy on the victim’s phones and gain access to their data. Some infected versions of the Pokémon Go application have contained a backdoor called DroidJack. DroidJack gives attackers complete access to mobile devices, including user text messaging, GPS data, phone calls, camera—and any business network resources they access.    Even if an employee does not download an infected version of an application, there are still cyber security concerns. Individuals are often quick to download the latest application to access or share data for games like Pokémon Go, without scrutinizing what they are granting the application access to. In the event of a hack targeting a popular application like Pokémon Go, attackers have the potential to access all the data of application users who have not limited the application’s access to their data, including proprietary business information.   In light of the popularity of games like Pokémon Go and the inevitability that similar games or social media applications will become widespread, employers should take measures to deal with how and where business mobile devices can be used to ensure their proprietary information is not being captured by third parties. Electronic device policies can be very effective in limiting an employer’s cyber security risk where the policy requires employees to refrain from downloading and accessing smartphone apps, websites, programs and files that may pose a security risk if the electronic device is used to connect to sensitive corporate information. Employers should also consider updating electronic device policies to require employees to install company encryption software for protecting sensitive data with an agreement signed by employees to not modify the software.

When employees are absent from work for an extended period of time due to injury, illness, or other reason, a common question that arises is whether employers must continue providing health insurance during the absence. The answer depends upon the circumstances, including the reason for the employee’s absence, the size of the employer, the terms of the health plan, and the applicability of one or more federal laws, including FMLA and COBRA. In many cases, the issue is resolved by answering three questions: 1. Does the FMLA apply? For employers with more than 50 employees, the Family and Medical Leave Act applies to eligible employees who have been employed for at least 12 months, who have accumulated at least 1,250 hours of service in the past 12 months, and who work where the employer has at least 50 employees within 75 miles. Eligible employees who have a serious health condition, or who take leave to care for a qualifying family member, are entitled to continue employer-sponsored health care during FMLA leave. The employer must continue to pay its share of health care premiums for the employee during FMLA leave. If an employee exhausts FMLA leave or is otherwise not eligible or entitled to FMLA leave, the employer’s obligation to continue paying its share of health insurance premiums stops. But there may remain an obligation to continue health care coverage under COBRA or analogous state law. 2. If the FMLA does not apply, is COBRA or a similar state law triggered? COBRA gives employees and their qualified beneficiaries the opportunity to continue health insurance coverage under the company’s health plan at the employee’s expense when a “qualifying event” would normally result in the loss of eligibility. “Qualifying events” include not only resignation and termination of employment, but also reduction of an employee’s hours or a leave of absence causing the employee to lose coverage under the terms of the employer’s health plan. The threshold for reduced hours or absences disqualifying an employee from plan coverage depends upon the terms of the particular health insurance plan. Where the employee loses coverage under the terms of the plan, COBRA provides an opportunity for the employee to purchase continuation coverage at the employee’s expense. Employers with fewer than 20 full and part-time employees are not subject to federal COBRA, but may be subject to state COBRA laws for small employers. 3. Is there another source of payment? Whether or not an employer must continue health coverage under the FMLA or provide continuation coverage under COBRA or a similar state law, the reason for the employee’s absence could trigger other obligations or sources for payment of medical expenses and insurance premiums. For example, if an employee is unable to work due to a workplace injury, workers’ compensation may cover injury-related medical expenses and lost wages. At the same time, the terms of the employer’s health plan may require coverage to continue during a workers’ compensation leave of absence. Finally, even where the employer’s coverage obligations cease, short- and long-term disability policies may provide an employee a source of funding for payment of insurance premiums.

Several large employers announced the adoption of paid family leave policies in 2015. Some employers have implemented these policies as “good ideas” and others because several states have passed legislation that mandates paid family leave. Since California enacted the first paid leave mandate in 2004, several states have passed similar laws, including Rhode Island, New Jersey, Connecticut and New York. Additionally, Maryland has proposed a paid leave mandate. As more states mandate paid leave, employers should understand the implications these laws can have on the workplace. State mandated paid family leave allows employees to take time away from work to: 1) provide care for and bond with newborn or recently adopted children, and/or; 2) act as a caregiver to a family member suffering from a “serious illness.” The period of paid time granted varies from state-to-state, with a range of 4 to 12 weeks. However, some legislative measures, such as a new ordinance in San Francisco, include a threshold minimum number of employees before an employer is subject to the mandate. During paid family leave, employees are generally entitled to receive a percentage of their regular compensation, capped at a fixed amount. In California, employees will transition from an entitlement of 55% to 70% of their wages during their leave in 2018. The increase will be capped at one third of the State’s average weekly wage of $1,121. Similarly, New York’s newly enacted law will entitle employees to 50% of their weekly wage, capped at 50% of the statewide average weekly wage of $1,300. Additionally, some mandates require protection of an employee’s job security. In New York, New Jersey and Rhode Island, the law requires employee to be restored to the position they previously held or a position that provides equivalent seniority, status, benefits and pay. The mandates do not increase, reduce or modify the employee’s current benefits. Key questions to consider regarding the impact of mandated paid family leave on the workplace include: What percentage of compensation has your state’s law mandated be paid? How long does your state’s law provide for a leave of absence? Does your state’s law require job protection? Does your state’s law provide a cap on benefits? If so, what is the cap? How does your state’s law define a “family member” for the purpose of providing care for a family member with a serious illness? Does your state’s law require a threshold number of employees before paid leave becomes mandatory? If you have employees in multiple states, will you adopt a uniform policy for all employees, only provide state mandated benefits, or adopt a policy somewhere in between? How will you manage the additional cost incurred by complying with these laws, particularly with laws increasing minimum wages? As paid family leave laws gain national attention, additional states may begin to consider implementing similar laws. We will continue to follow changes and monitor how the changes affect employers and benefit plans. Please contact us if you would like assistance drafting a paid family leave policy.

On June 2, 2016, Los Angeles Mayor Eric Garcetti signed an ordinance into law that will entitle eligible employees in L.A. to up to 48 hours of paid sick leave per year. On June 7, San Diego voters approved a similar ordinance that will provide eligible employees with up to 40 hours of paid sick leave per year. Both cities’ new laws will require employers operating there to provide more paid sick leave than is required—24 hours per year—under current California state law. (Polsinelli’s coverage of California’s paid sick leave law is available here, here, and here.) Both ordinances also increased the minimum wage to $10.50 per hour in 2016, and to increase annually thereafter. L.A. Ordinance No. 184320 For employers with 26 or more employees, the ordinance takes effect on July 1, 2016, at which point employees must begin accruing or be granted paid sick leave. For employers with 25 or fewer employees, the ordinance takes effect on July 1, 2017. Eligible employees are employees who work 30 or more hours in L.A. within a year of starting their employment. And unlike state law, there are no exceptions for specific classes of employees. Employees will be eligible to use accrued sick leave after their 90th day of employment or July 1, 2016, whichever is later. Employers may either grant employees all 48 hours of paid sick leave every 12 months or have it accrue in increments of one hour for every 30 hours worked. Accrued but unused paid sick leave must be allowed to carry over to the following year up to 72 hours. Employers do not have to pay out accrued, unused sick leave when an employee separates from the company.  But employers do have to reinstate the accrued, unused leave if the employee is rehired within a year. San Diego Ordinance No. O-20390 San Diego employers must also provide employees with one hour of paid sick leave for every 30 hours worked in the City. The paid sick leave component of the ordinance takes effect July 11, 2016. In addition, while limited to 40 hours per year, employers must allow employees to carry over accrued, unused leave and the ordinance does not currently include an accrual cap. Employees will be eligible to use accrued sick leave after their 90th day of employment. An employer who provides an amount of paid leave, including paid time off, paid vacation, or paid personal days off sufficient to meet the paid sick leave requirements, and who allows that paid leave to be used for the same purposes, and under the same conditions as sick leave, is not required to provide additional paid sick leave to employees. Employers are not required to pay out accrued, unused sick leave at termination. However, they must reinstate the accrued, unused leave if the employee is rehired within six months. This post provides only a brief, selective overview of the cities’ new laws. Employers with employees in Los Angeles, San Diego, and other states and cities with paid sick leave ordinances should act now to ensure they are in compliance. We encourage employers to contact their Polsinelli employment attorneys for assistance to create or revise their sick leave policies and procedures as appropriate and to further discuss the details of these new laws.

On May 11, 2016, President Obama signed into law the federal Defend Trade Secrets Act (DTSA), which now provides a federal claim for misappropriation of trade secrets. Under the new law, owners of trade secrets may seek remedies, including damages, for any loss incurred by the misappropriation; court orders allowing civil seizure to recover stolen trade secrets; injunctive relief forbidding additional misappropriation; and, in certain cases, double damages and attorneys’ fees. The DTSA also provides immunity to whistleblowers from liability for confidential disclosure of a trade secret to the government or in a court filing. To have the full range of remedies available under the DTSA, employers must give notice of the whistle blower immunity to employees in “any contract or agreement with the employee that governs the use of trade secret or other confidential information,” including existing contracts that were updated on or after May 12, 2016. Employers must also advise employees that an individual who has filed suit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret under certain conditions. Thus, employers should begin taking action now to preserve rights and remedies under the DTSA. The terms and phrases “contract or agreement” and “trade secret or other confidential information” suggest that the notice requirement is not limited to just employment contracts or trade secrets as defined by the statute. The DTSA defines an employer’s “employees” broadly to include any individual performing work as a contractor or consultant, hence employers will need to be sure those individuals receive notice of the whistleblower immunity under the DTSA. Where the contractors or consultants performing the work are companies, employers should determine whether notice has been received by the individuals doing the work on behalf of those companies acting as contractors or consultants. The DTSA expressly prohibits employers from recovering double damages or attorneys’ fees where they have failed to comply with the notice requirements. The DTSA does not, however, prescribe prohibition as the sole penalty – which may give rise to unintended causes of action against non-compliant employers in the future. One could also imagine efforts to introduce evidence of an employer’s non-compliance by an employee who has filed suit for retaliation, in the same manner that the employee might attack a non-existent or inadequate conventional anti-retaliation policy (i.e. “the employer was just trying to keep me in the dark so I wouldn’t know my rights”). Thus, employers should take the following steps with regard to notice of the whistleblower immunity required by the DTSA to avoid the loss of remedies and prevent other unintended consequences of failing to comply with the new law: Update employee handbooks to include notice of the DTSA’s immunity exceptions to all employees. Supply notice of the whistleblower immunity under the DTSA in any contract entered into or updated as of and after May 12, 2016. Evaluate contracts or agreements with independent contractors and consultants to ensure all individuals providing the work receive statutory notice.

The maximum penalty that the Occupational Safety and Health Administration (OSHA) can assess for a violation of an OSHA standard has been a constant source of consternation within the agency as well as with workers’ rights advocates. The statutory maximum, which currently is set at $70,000 for willful and repeat violations and $7,000 for serious and other than serious violations, has remained unchanged since 1990. The Protecting America’s Workers Act (PAWA), first introduced by Senator Edward Kennedy in 2004, and reintroduced in each congressional session since 2004, sought to increase the maximum amount of statutory penalties as well as make other changes to the Occupational Safety and Health Act. In each congressional session, PAWA died in committee. But a little known section of the Bipartisan Budget Act of 2015, which authorized funding for federal agencies through September 30, 2017, will change all of this. Section 701 of the Bipartisan Budget Act of 2015 contains the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015, which requires OSHA and most other federal agencies to implement inflation-adjusted civil penalty increases. The Inflation Adjustment Act requires a one time “catch-up adjustment” that is based upon the percent change in the Consumer Price Index in October of the year of the last adjustment and October, 2015. Subsequent annual inflation adjustments are also required. On February 24, 2016, the Office of Management and Budget issued guidance on the implementation of the Inflation Adjustment Act. This guidance set the catch-up adjustment multiplier for OSHA penalties at 1.78156 – which roughly equates to an increase in the maximum penalty per violation as follows: The Inflation Adjustment Act allows OSHA to request a reduced catch-up adjustment if it demonstrates the otherwise required increase of the penalty would have a negative economic impact or that social costs would outweigh the benefits. But given published comments from OSHA administrators over the years, which were openly critical of the current statutory maximum amount, the prospect for any such reduction request is remote. OSHA is required to publish the new penalty levels through an interim final rule in the Federal Register no later than July 1, 2016. The new penalty levels will take effect on August 1, 2016. Because OSHA is subject to a six-month statute of limitations, it is possible that violations occurring on or after March 2, 2016 will be subject to the new maximum penalty amounts if OSHA uses the entire six month period before issuing the citation and assessment of penalties. The Inflation Adjustment Act does not impact OSHA’s discretion to reduce a proposed penalty in accordance with its current procedures, which take into account the size of the employer, the gravity of the violation, the employer’s history of prior violation, good faith compliance and “quick fix” abatement measures. The Act also does not govern those States which have OSHA approved plans. However, because States have to establish that their plan is as effective as federal OSHA, one would expect that OSHA will develop guidance that requires the States to increase their maximum penalty levels to comport with the new federal penalty amounts. In the meantime, employers would be well-advised to conduct a self-audit of their workplace safety programs to ensure compliance with applicable state and federal OSHA standards.

Colorado, like a number of other states, has enacted a state statute that prohibits job action, such as termination of an employee, for engaging in lawful off-duty conduct during non-working hours. The Colorado statute contains two primary exceptions that allow employers to take job action if: (1) the off-duty activity relates to a bona fide occupational requirement or is reasonably and rationally related to the employee’s employment activities and responsibilities; or (2) is necessary to avoid, or avoid the appearance of, a conflict of interest with any of the employee’s responsibilities to the employer.  Employers in Colorado (and states with similar laws) should be mindful of case law that seeks to morph the exceptions to fit modern technology and social trends. Originally proposed by the tobacco industry to protect off-duty smokers from employment termination, the Colorado off-duty conduct statute has been consistently applied in a myriad of contexts far beyond off-duty smoking.  For example, last year the Colorado Supreme Court held in Coates v. Dish Network that an employer did not violate the off-duty conduct statute when it terminated an employee for smoking marijuana while off work, even though possession of marijuana is legal under state law in Colorado. Because possession of marijuana remains illegal under federal law, the court concluded that smoking marijuana was not lawful off-duty activity. In a recent case, Williams v. Rock-Tenn Services, Inc., the Colorado Court of Appeals addressed the question of whether an employee who was terminated for failing to attend a work-related meeting while he was on pre-approved vacation triggered protection under the off-duty conduct statute. The Colorado Court of Appeals affirmed the trial court’s dismissal of the claim, finding that the employee’s actions (missing a senior management meeting) were not protected under the Colorado statute. The court found that the employee’s allegations established that the conduct was reasonably and rationally related to his employment activities, and was therefore excepted from the statute. Specifically, required attendance at a meeting to discuss a failed audit of the plant the employee managed was inherently connected with the employee’s job. The court noted that the off-duty conduct statute is designed to protect employees from termination for private, personal activities, not from adverse employment consequences resulting from going on a vacation that conflicted with a meeting reasonably and rationally related to the employee’s job. The court noted that, while firing the employee for missing a post-audit meeting to take pre-approved vacation may seem unfair, it was within the company's business judgment to do so.

In recent years, churches, movie theaters, schools, and office buildings have all been affected by headline-grabbing violence.   Not all workplace violence makes the news, however.  The United States Department of Labor defines workplace violence as “any act or threat of physical violence, harassment, intimidation, or other threatening disruptive behavior that occurs at the work site,” noting that workplace violence may include anything from  “threats and verbal abuse”  to physical assaults and  homicide.  Workplace violence has its origins in many places, including acts of domestic violence that manifest in the workplace.  While no particular workplace is exempt, OSHA statistics reveal that significant injuries resulting from assault disproportionately affect the health care and social services sectors, while the Bureau of Labor Statistics notes that workplace violence occurs more frequently for individuals employed in the retail, transportation and protective service occupations.  Overall, nearly 2 million American workers report having been victims of workplace violence each year. Liability for workplace violence can occur in a variety of contexts, including under OSHA’s “general duty” clause, state workers’ compensation laws, and/or general theories of negligence.  Because many states have recently enacted and/or amended their conceal/open carry laws, and others have enacted some type of law specifically addressing the presence of guns at work, employers may want to review work place violence policies to ensure that the policies not only comply with the relevant state and local laws, but also consider providing training and/or drills to insure that workers know how to respond in the event of an actual or potential threat of violence. Workplace violence policies should account for all types of “violence”-ranging from verbal threats to physical assaults to gun violence.  Employers should consider supplementing workplace violence policies with policies designed to reduce tension in the workplace, including “open door” policies to air grievances and EAP counseling programs designed to allow for both counseling and support (recognizing that many instances of workplace violence arise in the context of domestic assault).   Employers should schedule regular drills so employees know how to react in the event a situation does arise.  In addition, workplace violence policies should include, at a minimum, the following provisions: Zero tolerance policy for possession of weapons, threats and/or violence Training for supervisors, HR and executives on how to recognize threats and respond appropriately Compliance with state law conceal/open carry, “parking lot” or other laws relating to the presence of guns in the workplace Anti-discrimination provisions indicating that employees will not be discriminated against due to firearm status, especially in those states where questioning on such factors is prohibited; If an employer leases space,   coordinating  with the owner of the property to comply with relevant laws Postings regarding any prohibitions on possession of firearms in connection with state law Procedures for reporting threats of violence or fear of violence in the workplace Compliance with any state laws relating to protection of domestic violence victims

A job description is a useful tool for employers from hiring through termination of employment.  Often times, though, job descriptions are not given the time and attention they deserve. This is unfortunate because job descriptions are the cornerstone of employee discipline and evaluation, and are often cited in litigation.  A job description does more than set forth an employee’s basic job duties. In today’s world of increased litigation brought under the Fair Labor Standards Act (“FLSA”) and the Americans with Disabilities Act (“ADA”), the job description continues to be a pivotal document. A job description that adequately and accurately describes the duties actually performed by employees will help protect an employer much more than a vague over-scoping job description. When it comes to claims brought pursuant to the FLSA, ADA, or other statutes, it does not matter how carefully worded or creative the job description is—the question will always be “does this description adequately reflect the duties actually performed by the employee?” Here are eight items to consider when drafting or revising job descriptions. The listed job duties should reflect the actual duties performed by the employee.  In wage and hour litigation, which is an increasing focus of the plaintiffs’ bar, job descriptions are not determinative of whether an employee is exempt or non-exempt. Rather, the fact finder looks at the duties actually performed by the employee. However, if a job description adequately reflects the duties actually performed by an employee, more credence is given to the employer’s paperwork and bolsters the employer’s credibility. Identify the essential functions of the job. Discrimination claims under the ADA have been at a steady rise. In all ADA litigation, the question is “can the employee perform the ‘essential functions of the job?’” It is not uncommon in litigation for the essential functions of the job to be at issue. Specifically identifying the essential functions of the job in a job description allows an employer to demonstrate that the employee was on notice of  the essential functions, and allows it to have a resource any time it is engaging in the interactive process to determine whether a reasonable accommodation is available.  Be precise. When describing the essential functions of a job and the job duties within a job description, it is important to be as precise as possible. This again ensures that expectations are clearly communicated to the employee, and that there are no surprises as to expectations. This includes ensuring that any physical requirements (e.g., lifting restrictions, standing requirements, etc.) adequately reflect the position’s physical requirements. Creating physical requirements that are in excess of the job’s actual requirements lead to disputes regarding proper accommodations, as well as arguments that the requirement has a discriminatory effect on individuals with disabilities. Administrative agencies have recently taken to scrutinizing physical requirements even more than past years during investigations to ensure that the requirements are narrowly tailored to the position in question. Audit positions and update regularly. Often times, as a company grows, some job positions’ duties and roles change (e.g., duties expand, a position is turned into two positions, etc.). Thus, it is important for employers to regularly audit job descriptions by comparing them to the duties actually performed by the employees. This ensures accuracy and helps demonstrate that the employer is aware of changes. If a job description no longer reflects the duties actually performed by an employee, they should be revised accordingly. The job description should be parallel to the standards on which the employee is being evaluated. Job descriptions should reflect the duties for which the employee is being evaluated. This gives the employee notice of the company’s expectations and helps mitigate any excuses by an employee that they “did not know” the expectations put upon them. This also assists with informal and formal discipline between evaluation periods. Use language to reflect duties that fall under an exempt status. The FLSA’s exemptions are a hot topic of litigation. Misclassification claims are rampant in federal courts. If, after performing an audit, it is determined that an employee is exempt under the FLSA, it is recommended to craft and use language directly from the FLSA’s regulations and statutory language to describe the duties actually performed by the employee. This helps tie the employee’s duties to the FLSA exemption relied upon. Have an attorney review. FLSA exemptions and identifying appropriate duties as “essential functions” is a tricky task – particularly with the rate the law has been changing. It is suggested to have job descriptions reviewed by legal counsel to ensure they are sufficient and that employees are properly classified. Periodic review and audit of job descriptions by legal counsel can also provide defenses against certain damage and liability claims brought in litigation. Obtain the employee’s signature. Having an employee acknowledge, in writing, that he or she has received and understands the contents of the job description – as well as the corresponding expectations – helps avoid later arguments that the employee did not know the expectations placed on him or her. Taking the time to craft a well thought out and accurate job description will always pay dividends. It not only communicates performance expectations to the employee, but it assists the company in disciplining, evaluating, terminating, and/or accommodating employees. Job descriptions are also essential in helping set the ground work for defenses in litigation, including claims brought under the FLSA and the ADA. If it has been a while since you reviewed your job descriptions and determined whether they need to be revised, it is highly recommended that you do so in the near future.

Over the past several years, the line between independent contractors and employees has blurred.  The Department of Labor’s zeal to convert independent contractors to employees has led to a significant increase in the number of misclassification investigations, and the collection of millions of dollars in back wages, penalties, and interest (i.e., $74 million in fiscal year 2015 alone). Under the guise of fighting for a worker’s minimum wage, overtime compensation, family and medical leave, unemployment insurance, and safe workplaces, independent contractors have greatly benefitted by this increased oversight. Recently, bona fide independent contractors received a similar “gift” from the judiciary, when the Fifth Circuit Court of Appeals (composing the states of Texas, Louisiana, and Mississippi) held that independent contractors working for companies receiving federal assistance may bring disability discrimination lawsuits under the Rehabilitation Act, 29 U.S.C. §701, et seq. In Flynn v. Distinctive Home Care, Inc., Case No. 15-50314 (5th Cir. Feb. 1, 2016), a federal contractor at Lackland Air Force Base learned of several patient complaints about an independent contractor pediatrician, which the pediatrician attributed to her recently diagnosed Autism Spectrum Disorder-Mild (formerly known as Asperger’s Syndrome). The federal contractor denied the pediatrician disability accommodations and terminated her contract. The pediatrician sued the federal contractor under the Rehabilitation Act for wrongful termination, hostile work environment, and failure to provide reasonable disability accommodations. The district court held that the pediatrician could not sue for discrimination under the Rehabilitation Act because she was an independent contractor, not an employee. On appeal, the Fifth Circuit reversed and remanded. Following the lead of the Ninth Circuit Court of Appeals (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington, along with territories Guam and the Northern Mariana Islands), it distinguished the Rehabilitation Act from the Americans with Disabilities Act (“ADA”), the similar statute that protects disabled employees from discrimination in the private sector. Whereas the ADA provides for discrimination claims relating to “terms, conditions, and privileges of employment,” Section 504 of the Rehabilitation Act bans discrimination “under any program or activity receiving federal assistance.” This language showed that Congress did not intend for the Rehabilitation Act to require Defendant to be Plaintiff’s “employer.” The Fifth Circuit disagreed, however, with a similar case in the Eighth Circuit (representing the states of Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota), which required a defendant to “employ” a plaintiff in order to have standing under the Rehabilitation Act. This may set the stage for possible Supreme Court review to resolve the circuit split, something that it declined to do the last time it considered this issue in 2010. Businesses that receive federal funds and operate within the Fifth or Ninth Circuits should review their independent contractor policies and ensure compliance with the ADA/Rehabilitation Act, as if those contractors were employees. Businesses in other states outside the Eighth Circuit should consider doing so as well, to reduce the risk of future claims.

Under the Affordable Care Act (ACA), employers with at least 50 full-time employees (“FTEs) must generally offer qualifying health insurance to all employees who work at least 30 hours or more per week. A company that fails to satisfy this so-called “employer mandate” faces the possibility of significant penalties under the ACA. As a result, the ACA amplifies many risks for companies with respect to their employment classifications and the delivery of health care benefits to their employees. ACA Implications for Employers In response to these uncertainties, some employers have gone so far as to reduce the hourly work schedules of some employees to less than 30 hours per week to avoid any additional costs under the ACA employer mandate.  In what is believed to be a case of first impression (and was  discussed in our previous blog post), the plaintiffs in Marin v. Dave & Buster's, Inc., S.D.N.Y., No. 1:15-cv-036081 challenged their employer over the reductions to their work schedules by filing a class action suit in federal court in May 2015. Specifically, current and former employees alleged that Dave & Buster’s, the national restaurant chain, violated the protections under Section 510 of the Employee Retirement Income Security Act (“ERISA”) by intentionally interfering with their eligibility for benefits under the company’s health plan. They also claimed damages for lost wages and demanded the restoration of their health coverage, as well as reimbursement of their out-of-pocket medical costs. In response to the lawsuit, Dave & Buster’s filed a motion to dismiss and argued that the plaintiffs’ ERISA Section 510 claim failed as a matter of law because there was no guaranteed “accrued benefit” over future health insurance coverage for hours not yet worked.  On February 9, 2016, the United States District Court for the Southern District of New York denied the company’s motion to dismiss.  The court found that the complaint “sufficiently and plausibly” alleged enough facts to support a possible finding that Dave & Buster’s intentionally interfered with the plaintiffs’ rights to receive benefits under the company’s health plan. The court noted that the complaint referenced specific e-mails and other communications that the plaintiffs allegedly received when their work schedules were reduced, as well as public statements by senior executives and disclosures in the company’s securities filings, which overtly explained that the workforce management protocols were instituted to thwart the potential impact of the ACA on the company’s bottom line. While the decision on the motion to dismiss does not necessarily mean that the employer will ultimately lose, it does signal the court’s willingness to allow the plaintiffs to develop their legal theories in subsequent court filings. One can also question the impact to the court, at least initially, of the company’s open and obvious disclosures about its reasoning for reducing the employees’ work schedules.  Based on the strong wording of the court’s ruling, however, these obvious and seemingly bold statements certainly did not help the company’s request for an early exit from this case.  As a result, the court may eventually allow robust discovery which could, of course, be cumbersome and expensive for the company. Takeaways for Employers In light of this case development, companies that are subject to the ACA employer mandate should review their compliance strategies now to address any risks with their employment classifications and the delivery of future health care benefits to their FTEs, and also take heed in the manner as to how they communicate any reductions in employees’ work schedules.

In the second of our webinars on The Ruby Files: Managing the Challenging Employee, we continue to follow Ruby as her changing circumstances present her employers with a variety of legal complications. Still employed by a major hospital, Ruby has developed carpal tunnel syndrome and persistent migraines, which she claims interfere with her ability to work and requests ADA accommodations as well as FMLA time off. Her employer initiates the accommodation interactive process, but before this process can proceed, Ruby’s supervisors report performance problems and that Ruby is posting on Facebook about her alleged medical conditions. Ruby is terminated for poor performance, after which her attorney sends the hospital a demand letter. The company responds with a notice that her claims are subject to an arbitration agreement. Polsinelli’s Labor & Employment and Health Care attorneys will cover the legal hot buttons covered in this webinar, specifically: ADA accommodations and FMLA time off requests Requirements for documentation of alleged medical conditions How to properly document performance issues Progressive discipline policies Termination of an employee for performance with a medical condition seeking an accommodation Management of post-separation allegations Register for the webinar HERE, or learn more about the series HERE.

Employer-sponsored wellness programs have served as an excellent resource to assist employers in cutting the cost of providing health care for employees, improving employee productivity and increasing company stock performance. Often, wellness programs include health assessments and biometric testing. Recently, through both lawsuits and the issuance of regulations, wellness programs have been under attack by the EEOC as violating the ADA. However, in a win for wellness programs (as well as employees and employers), the U.S. District Court for the Western District of Wisconsin, in EEOC v. Flambeau, Inc., Case No. 3:14-cv-00638-bbc (W.D. Wis. Dec. 31, 2015),  struck down the EEOC’s efforts by ruling that wellness programs that are part of a bona fide health plan are protected from ADA application. In Flambeau, the Court held that a voluntary wellness plan, which required employees to complete a preliminary health assessment and biometric testing to participate in an employer-sponsored group health plan, was protected under the ADA’s “safe harbor” provision, which exempts bona fide benefit plans. The Court held that because the information was: 1) collected in an aggregate form; 2) anonymous; and 3) for the purpose of administering a self-funded, self-insured health insurance plan, the ADA safe harbor applied. This decision follows the Eleventh Circuit’s decision in Seff v. Broward County, 691 F.3d 1221 (11th Cir. 2012), which held that an employer’s wellness program fit within the ADA’s safe harbor provision. These cases are a big step forward for employers that provide group health plans to their employees. The cases demonstrate that the courts support an employer’s right to institute voluntary wellness programs for the purpose of collecting information about health risks existing among their workforce without violating the ADA. Further, these decisions allow an employer to link participation in these voluntary programs to their employees’ ability to participate in employer-sponsored group health plans. The ability to institute these programs may help employers to predict and underwrite the costs of health insurance programs, as well as provide more effective programming to assist employees in improving their health and meeting their goals. In turn, this will have a beneficial effect on employee productivity and company performance. Under the decisions in Flambeauand Seff, a wellness program meets the ADA safe harbor provision if: The employee’s participation in the program is voluntary (though an employee’s participation in the program may be required for participation in the benefit plan); The wellness program is part of a “bona fide” benefit plan; Information is collected anonymously; The information collected is obtained in an aggregate form (other than information regarding an employee’s tobacco use); and The purpose of the program is to assist in the administration of an employer-sponsored group health plan, including calculating costs, selecting premiums and adjusting co-pays. To avoid potential ADA violations, employers should carefully consider whether and how their wellness programs are tied to their major medical and other “bona fide benefit plans.”  It is unlikely that the EEOC will stop challenging wellness programs, but court decisions are encouraging.  We will be monitoring this matter for further developments.

"Heaven has no rage like love to hatred turned, Nor hell a fury like a woman scorned," spoken by Perez in Act 3, Scene 2, The Mourning Bride (1697).  William Congreve's words (often misattributed to Shakespeare) might be paraphrased in the workplace to "Hell hath no fury like an office romance gone bad."  As Valentine's Day approaches, it is a good time for employers to review and revisit their office romance policies. While an actionable hostile environment exists only if the complainant can prove the conduct is "unwelcome," many office romances do not last and, if they end badly, create the potential for allegations of sexual harassment and retaliation that can adversely affect office morale and result in litigation. According to a 2015 CareerBuilder survey, 37 percent of workers have dated a co-worker and, of those, 25 percent have dated someone higher in the organization, including a boss.  These numbers are not surprising given the amount of time employees spend at work as compared to at home or engaged in other activities.  While employers undoubtedly desire a workplace with a culture of compatibility, rancor - and potential liability - can develop from romantic relationships.   Even when a supervisor is consensually involved with a subordinate employee, other members of the team may believe that their co-worker is receiving special treatment with respect to work assignments or other terms and conditions of employment.  While such a relationship is not illegal, it can create feelings of ill-will among co-workers that may affect corporate culture.  Perhaps more dangerous, however, is the potential liability if the relationship sours and the subordinate employee claims that the relationship was actually not consensual, but coerced, resulting in allegations of quid pro quo harassment, a hostile work environment and/or claims of retaliation.       Employers should consider implementing policies outlining permissible and prohibited conduct concerning dating relationships with co-workers.  These policies may prohibit relationships between those in supervisory/subordinate relationships, or between workers and vendors or clients.  The policy should reference the company's anti-harassment policy and remind employees how to report unwanted conduct.  The policy should detail alternatives if employees do engage in a relationship (such as the possibility of transfer to a new position with no reporting relationship or, if the policy is violated, discipline or discharge).   And, although it may not be particularly romantic, companies should consider the use of "love contracts" for those situations where employees (especially those in supervisory/subordinate situations) are engaged in consensual relationships.  These contracts can be signed by all involved and remind both employees of the conduct that is appropriate in the workplace, and have both employees acknowledge that the relationship is consensual. 

Most likely, you have heard employment attorneys speak about the importance of documenting employee performance, behavior and discipline.  Because such documentation can be key evidence when defending against a claim or litigation brought by a current or former employee, employers should be vigilant when training on effective documentation.  Here are six best practices to consider:     Best Practice No. 1: Consider WHO will be reading the documentation The potential audience of documentation should be considered when framing the scope of and the manner in which the documentation is prepared. Documentation may be read internally within the company, by an administrative (state or federal) agency investigator in response to an employee claim or agency audit, by a current/former employee’s attorney to draft a demand letter or by a judge and jury in litigation. In addition, be sure to include legal counsel on any communications addressing legal issues or the advice or instruction of counsel to maintain the attorney-client privilege of such matters.   Best Practice No. 2: Consider WHAT events to document There are a number of opportunities where creating effective documentation can later serve to protect the company if a conflict arises: (1) counseling, discipline and termination of employment; (2) discrimination  and harassment complaints; (3) promotions and demotions; (4) events that could lead to adverse employment actions (e.g., attendance, co-worker altercations, customer complaints, insubordination and layoff/RIFs); (5) the interactive process for ADA accommodation requests; (6) EEO or harassment training provided to employees; and (7) other situations - use business judgment and common sense. Best Practice No. 3: Consider WHEN to document (and when to destroy) Employment-related documentation should be created contemporaneously to the event (at or very near the time the event occurs). Documentation can also be in the form of a supervisor’s log that may involve more frequent, brief entries. Any follow-up discussions on issues previously documented should also be memorialized. For the destruction of documentation, it is important to have a well-organized, well-publicized (to managers and HR) document retention policy and timeline, which addresses exceptions for the receipt of a claim, litigation, a government investigation or audit or the instruction of legal counsel. Best Practice No. 4: Consider WHERE to maintain the documentation Employment documentation should be maintained in a secured location. In most cases, the documentation should be stored in the employee’s personnel file (or a separate medical file, if related to medical issues). If supervisors maintain files separate from central personnel records, care should be given to document forwarding practices and procedures to ensure that documentation is not lost when a supervisor or employee terminates employment. Best Practice No. 5: Consider WHY you are preparing the documentation It is more difficult to refute a fact if there is a contemporaneous writing to support it.  Although preparing documentation may be a time-consuming process, there are a number of tangible benefits to consistent documentation processes. Today, there are an increasing number of discrimination charges being filed (that may lead to lawsuits) and audits conducted by agencies. Memory lapses and time lags can diminish the accuracy of information that may be needed later. Written documentation may bolster the credibility of testimony. Detailed documentation also can serve as evidence to counter allegations of pretext and inferences of discrimination, which may be instrumental in supporting the summary judgment of claims in litigation. Best Practice No. 6: Consider HOW to prepare the documentation If the employment documentation is handwritten, ensure it is legible. Typed or electronic documentation is preferred, because its text can be readily searched. Standardized forms generated using performance management software can reduce reliance on email and other more transitory forms of communication, and reduce the associated burdens of preservation and searching. When preparing the documentation, give careful thought to the language used. Below is a suggested list of “dos” and “don’ts”: DON’T use: Editorial comments / personal opinions (e.g., “Employee gave more whiny excuses about doctor’s appointments”) Unsupported conclusions / accusations (e.g., “Employee is a drunk”) Derogatory comments Generalities (e.g., “Employee has a bad attitude”) Legal terms / labels (e.g., “Employee engaged in sexual harassment”) Absolutes (e.g., “Employee always misses deadlines”) Proxy adjectives (e.g., “too emotional”) Hedge language (e.g., “Employee seems to be making mistakes”) Abbreviations Sarcasm Promissory language (e.g., placing Employee on “six months’ probation”) Speculation Excuses for the Employee (e.g., “We know Employee tried his best, but . . .”) Inaccurate statements, even if they are to be “nice” (e.g., providing “restructuring” as reason for discharge when it is really for cause) Confusing language, spelling and grammar errors DO use: Date (including year) Specific facts (e.g., “Employee is disrespectful to her co-workers and said.…”) Accurate and honest statements Explanations regarding document’s purpose Direct quotes Witnesses / others involved Meeting attendees (names and titles) Reference to Company rules, policies, procedures for support Confirm Employee’s access to Company policies and procedures Drafter’s printed name, signature and title For disciplinary documents, previous counseling that may not have been documented For disciplinary documents, Employee’s signature (or reference refusal to sign) and any comments Be direct (e.g., include specific expectations of the Company and why the Employee said they are not meeting those expectations) Action plan / next steps (e.g., specific changes Employee needs to make, goals and how Employee is going to achieve those goals, consequences for failing to achieve goals) Finally, when in doubt about taking adverse employment action, consider seeking the advice of counsel.

The first webinar is now available in our year-long analysis of Ruby R. Breaker, a fictitious employee whose workplace behavior is based on real life employment situations.  Listen here. "Non-Exempt and the DOL Audit? It Really Isn’t a Question" follows Ruby as she applies to work at a hospital, is hired as a Unit Manager, and is classified as an exempt manager. Her job description includes duties such as helping the employees she supervises, but Ruby ends up spending most of her time performing clerical duties. Frustrated, Ruby calls the Department of Labor (“DOL”) to complain about not getting paid over-time, and a subsequent DOL investigation of the hospital ensues. Meanwhile, Ruby requests time off from work during the work day to attend in-vitro fertilization appointments, claiming FMLA and ADA coverage.  Polsinelli’s Labor and Employment and Health Care attorneys dissect interactions between Ruby and her manager, and provide take-aways that can be applied to your business. More on "The Ruby Files": Over the course of 2016, we will follow Ruby throughout a period in her career during which she will work for various industries, including health care and technology. Ruby will claim to be misclassified, constructively discharged, and sexually harassed. Ruby will present additional challenges to her employers, raising current issues with which all employers can identify. This will be an advanced series which will delve into real life, complex issues with legal analysis and practical solutions.  Learn more about the series and upcoming dates here.

Employers that choose to do business with the federal government now have another pay regulation to mind.  The Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) recently issued a Final Rule that prohibits federal contractors and their subcontractors from barring employees from discussing, disclosing or inquiring about compensation.  Per the OFCCP, the Final Rule goes into effect on January 11, 2016 and is aimed at eliminating any purported “culture of secrecy” regarding employee pay. What the Rule Covers The Final Rule prohibits covered employers from enacting policies or practices that would prevent applicants or employees from freely discussing their pay with each other.  Specifically, the Final Rule prohibits a covered employer from discriminating or retaliating against employees or applicants for discussing pay.  A covered employer cannot refuse to hire an applicant for asking about employee pay.  Nor may a covered employer discipline or discharge an employee for asking about pay or discussing pay with other employees.  However, the OFCCP has made it clear that covered employers will not be required to disclose information regarding employee pay to either applicants or employees. What Businesses are Covered? The OFCCP’s Final Rule will cover almost any entity that chooses to do business with the federal government.  Specifically, the Final Rule applies to: Businesses operating under a federal contract or sub-contract valued above $10,000; Businesses that operate under federal contracts or sub-contracts that, in the aggregate, are valued above $10,000; Businesses in possession of a governmental bill of lading; Businesses that serve as depositories of federal funds; or Businesses that act as issuing and paying agencies for U.S. savings bonds and notes in any amount. The rule also covers businesses that modify existing covered contracts on or after January 11, 2016. Actions Covered Employers Must Take The Final Rule also requires covered employers to disseminate a “Pay Transparency Policy Statement” to their employees.  The statement must be included in an employee handbook or manual (if one exists), and must also be either posted electronically or posted physically in a place where it will be seen by employees and applicants. In light of these significant changes, covered employers would do well to speak with a labor and employment attorney to ensure compliance with the OFCCP’s new Final Rule.  If 2015 is anything to go by, 2016 will see increased investigation and enforcement rates by the OFCCP.

Wearable technology in the workplace has evolved far beyond 20th-century relics such as wireless headsets and walkie-talkies. Employers now can track and analyze proprietary measures of worker productivity and other results-driven metrics through devices worn on the wrist or elsewhere on the body. Leveraging robust streams of real-time data can implicate various employment laws and associated legal responsibilities to employees. In addition, collected data may be subject to a preservation duty, discoverable in litigation, and, in some cases, relevant to legal claims by employees. Wearable technology can both foster and challenge employment law compliance. The Americans with Disabilities Act (ADA) requires employers to engage in an interactive process with qualified employees, to identify appropriate disability accommodations. Employers who aggregate data on employee productivity through wearable technology may use such metrics to assess whether an employee’s desired accommodation or any accommodation, is reasonable. Data could also be used to document that a desired accommodation poses an undue burden on business operations. On the other hand, an employee may rely on productivity data to argue that a termination decision for poor performance was pretext for unlawful discrimination or retaliation. Employers that rely on objective productivity data to make day-to-day personnel decisions should do so consistently and document any deviations by identifying other legitimate business reasons.  Moreover, should an employer rely on an employee’s objective data for a personnel decision, the employer may be obligated to preserve and produce the data of other employees for comparison purposes. Technology that tracks employee movements is potentially problematic in the context of protected concerted activities. Employees have the right to gather to discuss unionization, or other terms and conditions of work, on breaks and outside working hours, without employer interference or coercion. To reduce the risk of a claim of interference or chilling of protected activities, employers should disable or require employees to surrender wearable technology outside of working time. Finally, employers should exercise extreme caution before using wearable technology to assess employee productivity by gathering biometric data. Such data most likely must be gathered and stored in accordance with HIPAA regulations governing protected health information, and its use in employment decisions may trigger the requirements of the ADA and the Genetic Information Nondiscrimination Act (GINA). While there are endless possibilities for leveraging technology to assess employee productivity, care must be taken to implement advancements without discriminating against or disparately impacting protected individuals. For an additional examination of wearable technology and the implications on cybersecurity from the perspective of Polsinelli’s Privacy and Data Security attorneys, please visit the Polsinelli on Privacy blog here.