The California Court of Appeal has ruled that date of birth or a driver’s license number cannot be used to identify individuals in an electronic search of the criminal index of court records. The ruling in All of Us or None v. Hamrick complicates and further restricts how and even whether employers can conduct lawful background checks on job applicants and employees. California law already prohibits an employer with five or more employees from inquiring into or considering the conviction history of an applicant until after the applicant has received a conditional offer of employment. Employers also face restrictions under the Fair Chance Act.
California employers should review their background check policies and ensure they scrupulously comply with the individualized assessment and notice requirements of the state’s law.
IRS Updates Sick Leave Tax Credits
On July 29, 2021, the IRS updated the FAQs relating to paid sick and family leave tax credits under the American Rescue Plan Act of 2021 (ARPA). The update adds provisions that expand the application of tax credits for eligible employers to include wages paid voluntarily for leave taken by employees to 1) accompany other qualifying individuals to obtain a COVID-19 vaccine, and 2) care for such qualifying individuals during their recovery from an adverse condition related to the COVID-19 vaccination.
NJ to Crack Down on Misclassification
Recent New Jersey legislation aims to reduce worker misclassification:
- Assembly Bill No. 1171 requires the Commissioner of Labor and Workforce Development (the “Commissioner”) to create a Statewide database of certified payroll information for certain public works projects. A contractor will now be required to file payroll statements with both the relevant public body for which it is completing the work and the Commissioner, whereas contractors were only required to file with the relevant public body prior to this enactment.
- Assembly Bill No. 5890 grants the Commissioner additional enforcement options in the Office of Administrative Law and in the courts. Employers who do not cooperate with the Commissioner’s investigations may be subject to subpoena, fines up to $1,000 per day, and possible 10 to 90 days jail time for refusing to maintain and report every record required by State wage, benefit and tax laws. This law went into effect on July 8, 2021.
- Assembly Bill No. 5891 establishes the Office of Strategic Enforcement and Compliance (the “Office”), which is created to oversee New Jersey’s wage, benefit and tax laws. This bill sets aside $1 million for this purpose. This Office shall provide business assistance to those requesting businesses who are in “substantial good standing” with the State.
- Assembly Bill No. 5892 makes employee misclassification for the purpose of evading payment of insurance premiums or other employee-related benefits a violation of the New Jersey Fraud Prevention Act. It also specifies penalties for when misclassification occurs, and provides the New Jersey Department of Banking and Insurance resources to investigate such misclassifications. The Commissioner is authorized to levy civil penalties against employers who violate this law and can request the Office of the Insurance Fraud Prosecutor consider bringing charges against the offender. This bill goes into effect on January 1, 2022.
Written by: Gordon M. Berger, Partner
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