LB4HR – November 2016
Welcome to Legal Briefs for HR, an update on employment issues sent to over 6000 individual HR professionals, in-house counsel and business owners plus HR and legal professional organizations (who have been given permission to republish content via their newsletters and websites), to help them stay in the know about employment issues. Anyone is welcome to join the email group . . . just let me know via reply email you’d like to be added to the list and you’re in! Back issues are posted at www.munckwilson.com under Media Center/Legal Briefs and you can also join the group by clicking on “Subscribe.” I’ve been holding up on sending this out . . . hoping I could share good news and it just arrived! See item 1.
Here’s a collection of turkeys and treats:
- Thankful for This – Judge Amos Mazzant III, a U.S. district judge in Texas, ruled today that the U.S. Department of Labor overstepped its authority in effecting changes to the “white collar exemptions” which were to take effect on Dec. 1 and issued a nationwide preliminary injunction. The action leading up to this ruling was – 21 states’ AGs filed a lawsuit on 9-20-16 in E.D. Texas, seeking injunctive and declaratory relief, with a focus on public sector employers. Plano Chamber of Commerce, Texas Ass’n of Business and 50+ business group filed a lawsuit on 9-20-16 in E.D. Texas, seeking injunctive and declaratory relief, with a focus on private sector employers. The suits were consolidated on Oct. 19 and a motion for preliminary injunction was heard on Nov. 16. For now, employers can disregard the revised regulation which increased the minimum salary needed to maintain certain exemptions to $47,476.00 and provided for automatic, indexed increases to that number. A nice gift before we all head out for the Thanksgiving holiday, wouldn’t you say?
- It’s Really Dead – Rest in peace, persuader rule. The preliminary injunction of June 27, 2016 was made permanent, nationwide, on November 16 with the simple pronouncement that the measure “should be held unlawful and set aside . . . .” The judge excoriated the attempt to require full disclosure of a consultant’s activity to directly or indirectly persuade employees, on behalf of their employer, on whether to agree to collective bargaining and representation by a labor union. The preliminary injunction described the changed rule as “not merely fuzzy around the edges” but “defective to its core.” The order further mused that DOL had overreached far past what Congress intended and was “run[ning] roughshod over the foundations of the legal profession and the fundamental right of everyone to be able to confidentially consult with counsel about anything . . . .” Given the bent of the incoming administration, DOL may decide further appeal of the injunction is just plain silly. National Federation of Independent Business et al v. Perez et al (N.D. Tex. Nov. 2016)
- It’s Almost Dead – The Fair Pay and Safe Workplaces Rule (E.O. 13673 aka the Blacklisting Rule) is a shadow of its former self, after U.S. District Court Judge Marcia Crone (E.D. Tex.) issued an Oct. 24 preliminary injunction to block the portions which would require covered federal contractors to report any of a host of labor law violations (and likely be precluded from doing work for the federal government). What remains are the paycheck transparency provisions which take effect on Jan. 1, 2017 and require notice of independent contractor status, notice of FLSA exempt status and detailed information on overtime, deductions and hours worked. Associated Builders & Contractors of SE Texas v. Anne Rung (E.D. Tex. Oct. 2016) Here is a copy of the order – http://www.politico.com/f/?id=00000157-fbd1-d342-ab5f-fff787fb0000.
- More Contractor News – On Nov. 14, the U.S. Department of Defense issued a class deviation to the Federal Acquisition Regulations (FARs) prohibiting money flowing from 2016 and 2017 appropriations measures to go to any federal contractor using confidentiality agreements to prevent employees or contractors from blowing the whistle on waste, fraud, and abuse. Agency contracting officers are to immediately add language barring such confidentiality agreements to all solicitations, including commercial item purchases. Contractors with existing confidentiality agreements are to notify their workers that the offending provisions are no longer in effect. Contractors’ safeguards for classified information are precluded from the scope of this new requirement.
- In HR We Trust – If you giggled at the multi-million dollar settlements paid by competing companies with informal no-poaching agreements (designed to keep their mitts off of each other’s high-priced tech talent) and thought “I would never do that” you may want to read a new 11-page guidance issued on October 20 by the Department of Justice Antitrust Division and the Federal Trade Commission, posted at https://www.justice.gov/atr/file/903511/download. The agencies are warning they are prepared to sue both companies and individuals (that means you, HR pro), civilly and criminally, who are involved in hiring and compensation decisions which violate antitrust laws. “It does not matter whether the agreement is informal or formal, written or unwritten, spoken or unspoken.” Even if an individual who is a party to such a discussion does not agree to limit pay or recruiting, evidence of discussions and parallel behavior may lead to an inference of agreement. Even exchange of info tied to M&A activity or other collaborative activity (e.g., joint venture) poses antitrust risk, as does periodic wage survey sharing by industry groups. Such exchanges may be OK if:
- A neutral third party manages the exchange;
- The exchange involves information that is relatively old;
- The information is aggregated to protect the identity of the underlying sources; and
- Enough sources are aggregated to prevent competitors from linking particular data to an individual source
- Hush Money – The Pay Equity for All Act (HR 6030), if passed, will amend the FLSA and prohibit employers from screening prospective employees based on their previous wages or salary histories, including benefits or other pay, and further ban any request/requirement that this type of info be disclosed as a condition of being interviewed, considered or hired. The bill also prohibits seeking this info from the job applicant’s current or former employers and from discharging or otherwise retaliating against an applicant or employee who opposed or complained about the employer’s conduct which violates this measure. Penalties include a civil fine (from $5K to $10K) plus special damages for the complainant of up to $10K, plus attorney’s fees. Similar prohibitions are already in place in some states (e.g., MA) and are consistent with the EEOC’s long-standing position on the subject. The concern is that the query can perpetuate unequal pay between male and female candidates, where females have lower past earnings or expectations regarding pay. There are only 24 co-sponsors as of this writing and, no surprise, Congress’ attention is focused elsewhere right now.
- PSL – That’s paid sick leave, not pumpkin spice latte. Voters in AZ and WA said “yes” to PSL on Nov. 8, joining CT, CA, MA, OR and VT in having statewide mandates of employer-provided paid sick leave. See Stated Differently, below, for more details about what’s brewing in AZ and WA. And stay tuned for what happens at the federal level, given President-Elect Trump’s comments on providing six weeks paid maternity leave, funded by ferreting out unemployment compensation benefits fraud.
- Breathing Room – The IRS issued a notice on Nov. 18, giving employers who are subject to the Affordable Care Act an extra 30 days to distribute ACA reporting forms to their employees. For all the details, here is the notice: https://www.irs.gov/pub/irs-drop/n-16-70.pdf
- Employers Are in the Weeds – You may have never dreamed your employee handbook would include a marijuana policy, but expanding decriminalization of the herb for medical and recreational purposes may require you to clear the haze of confusion for some of your workers. On Nov. 8, CA, MA, ME and NV all voted to OK recreational usage for adults aged 21+ (AZ voters said “no”) and AR, FL, MT (already legal, but standards for prescribing relaxed) and ND voters joined 26 other states in OK’g medical marijuana. The way is much clearer for federal contractors and grant recipients who are subject to the Drug-Free Workplace Act since that federal law requires zero tolerance of drugs and pot is still illegal under federal law. For the rest of you, check out your state law and don’t be surprised by the handful of them that prohibit employment discrimination based on medical marijuana use. In most (but not all) cases, a positive drug test will justify an adverse employment action. One easy clarification you may want to do is to specify that your Drug and Alcohol policy prohibits illegal drug as defined by federal law. Without that underlined part, some employees may argue that their State-sanctioned use means they are not violating your policy.
- I-9 Unveiled – USCIS posted that the new Form I-9 is on the agency website on Nov. 14 and employers must use the new version for all new hires and reverifications as of Jan. 22, 2017. Here is the press release – https://www.uscis.gov/news/news-releases/uscis-revises-form-i-9-used-all-new-hires-us. The form is at https://www.uscis.gov/sites/default/files/files/form/i-9.pdf. There is a new separate page for reverifications. Using the on-line version has been cleaned up, with drop-down options, prompts and error notifications, but it does not accept electronic signatures so be prepared to print and sign, the old-fashioned way. USCIS also announced increased filing fees for employment-based petitions and applications, effective Dec. 23, 2016 at https://www.uscis.gov/forms/our-fees.
- Calendar That – When you purchase that fresh 2017 calendar, flip to June and mark June 12 and 13 as the 24th Annual University of Texas School of Law Labor and Employment Law Conference, to be held at the AT&T Conference Center on the UT campus. Yours truly is chairing this year’s conference and can attest that the planning committee has assembled a meaty slate of topics and speakers to educate, bemuse and amuse you. Stay tuned for more details!
- Stated Differently – Here are some hot topics for you multi-state employers:
Arizona – Effective July 1, 2017, employers with 15+ employees must allow employees to accrue up to 40 hours of paid sick leave per year at a rate of at least one hour for each 30 hours worked. The paid time off can be used for purposes beyond the employee’s own illness/injury and employers may impose a 90-day waiting period at time of hire to delay availability of the accrued days. Unused hours are not required to be paid out upon termination of employment, but such hours will be reinstated to the employee who is rehired within nine months.
California – CA employers are not required to include the monetary value of accrued vacation pay or paid time off on employees’ wage statements. Soto v. Motel 6 Operating L.P. (Cal. Ct. App. Oct. 2016)
Missouri – The “Show Me” state appears poised to become the 27th right-to-work state, with the election of Eric Greitens and a supermajority of Republicans in the Senate. For more info about right to work, check out www.nrtw.org.
New York City – With the cheeky title “Freelance Isn’t Free Act” NYC enacts a new law that grants certain rights to independent contractors including the right to a written contract (if the value of services is $800 or more) that has a host of specified terms and entitlement to double damages if the “freelancer” is not paid by the date in the agreement or within 30 days of completion of service. There appear to be lots of open issues to firm up but you can go to http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=2530972&GUID=61F8754B-80AF-493E-895E-D6D17209776E&Options=ID%7cText%7c&Search and click on the Final copy in the Attachments section if you would like to read the full text.
Washington – Effective January 1, 2018, all employees covered under the State’s Minimum Wage Act are entitled to accrue paid time off at a rate of one hour for every 40 hours worked, with no cap on either yearly accrual or usage. Unused hours are not required to be paid out upon termination of employment, but such hours will be reinstated to the employee who is rehired within 12 months.
- For the Birds – If you like being tweeted and want breaking news on employment law changes (and the occasional random cheer for K-State . . . we are bowling!), follow me on Twitter. I’m at @amross.
Until next time,
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