The U.S. Department of Labor on Thursday said it was doing away with a Trump-era joint employer rule for determining when multiple employers are jointly liable for labor law violations. However, a formal rescission has yet to be published, but is expected shortly. The change may signal a return to a joint employer standard where the right to exercise control (even in the absence of actually doing so), would be sufficient to establish a joint employer relationship.
IL Wage & Hour Penalties Increased
On Friday, July 9, 2021, Governor Pritzker signed an amendment to the Illinois Wage Payment and Collection Act that increases the penalty for underpaying wages from 2% of the amount of the underpayment per month to 5%.
Asking about Applicant’s Age Illegal in CT
Connecticut’s An Act Deterring Age Discrimination In Employment Applications prohibits Connecticut employers with at least three employees from inquiring into the age of prospective employees. The new law goes into effect on October 1, 2021.
Under the new law, employers (directly or through a third party) may not ask an applicant about the following information on an initial employment application:
- Date of birth
- Dates of attendance at an educational institution
- Date of graduation from an educational institution
But, an employer may request or require such information if:
- The request or requirement is based on a bona fide occupational qualification or need
- The employer has a need for such information to comply with applicable state or federal laws
CA OT Rules Apply To Missed Meal Breaks
A recent California Supreme Court case holds that employers must pay workers for missed breaks at their “regular rate of compensation”, which is consistent with an overtime requirement for payment based on their “regular rate of pay” and therefore includes all nondiscretionary payments, not just hourly wages.
White House Clears Removing Trump Joint Employer
The White House has cleared a U.S. Department of Labor final rule that would repeal the Trump-era joint employer rule. The Trump administration rule shielded companies from shared liability for wage violations. The action signals the imminent release of a rule that will pave a path for shared liability cases. Concluding the review of the rule is the last step before DOL can publish it.
NV Revises Non-Compete Statute
Nevada has amended the Nevada Unfair Trade Practices Act to add new requirements for enforceability of noncompete agreements. Under the amendment, noncompete agreements are unenforceable against individuals who are paid solely on an hourly basis, exclusive of tips or gratuities. When a court revises an overly broad covenant, it must consider any undue hardship that the covenant will cause the restricted party. Employers may not bring an action to enforce such an unenforceable provision.
The amendment also imposes an award of attorneys’ fees and costs to an employee for certain violations.
The amendment goes into effect on Oct. 1. Employers operating in Nevada must carefully draft their noncompete agreements to ensure that their restrictive covenants do not violate the statute, because an employee can bring a declaratory judgment action seeking to invalidate an overbroad covenant and be awarded fees, even if the employer ultimately wouldn’t have litigated the issue.
Is An Audit Forthcoming?
The DOL has begun a new cybersecurity audit initiative for retirement plans. After providing guidance on cybersecurity in April, the DOL quickly began the audit initiative by issuing information and document requests to numerous 401(k) plan fiduciaries. The DOL has stated that ERISA requires plan fiduciaries to take appropriate precautions to mitigate the risks of cybercrime and this new audit activity clearly indicates that companies must take steps to align their cybersecurity programs with the guidance provided or risk being caught flatfooted by a probing and comprehensive audit.
When OSHA’s Covid-19 Emergency Temporary Standard Does Not Apply
There is no specific COVID standard that applies to employers and employees not covered by the recent emergency temporary standard, which applies specifically to employers with employees working in a health care setting. As a result, the OSHA continues to issue citations under the so-called General Duty Clause, Section 5(a) of the Occupational Safety and Health Act, as well as specific standards that OSHA believes are applicable to a given situation. However, OSHA recently updated guidance issued in January that was intended to help employers implement COVID prevention programs and identify risks that could lead to employees being exposed to the virus.
The updated guidance focuses, in particular, on workers who are unvaccinated or otherwise at risk in order to assist both employers and workers in taking appropriate steps to prevent COVID exposure and infection. OSHA encourages unvaccinated workers to get vaccinated as the best defense against contracting COVID.
OT Salary Exemption Threshhold to Change?
Secretary of Labor Marty Walsh has said that the DOL is reviewing the current overtime pay threshold that he said is too low and should be subject to automatic and regular updates.
Currently, the overtime threshold is $684 per week, or $35,568 annually. Workers who earn below the threshold amount are required to be paid overtime, even if they are classified as managers or professionals.
Under the former Obama administration, the DOL finalized a rule that would have raised the threshold to the 40th percentile of earnings for full-time salaried workers nationwide ($47,476) with automatic updates to the threshold every three years. A Texas federal court struck down the rule in 2017 and it was never implemented.
In a March 25, 2021, letter to Walsh, Representatives Mark Takano (D-CA), Alma Adams (D-NC), Bobby Scott (D-VA), and Senator Sherrod Brown (D-OH), urged the DOL to begin the process to update the salary threshold:
“Even before the pandemic, our nation’s weakened labor standards, including an out-of-date federal minimum wage and inadequate overtime pay standards, left too many workers unable to earn enough to provide for themselves and their families. The pandemic has only underscored and exacerbated these conditions. Many workers, including essential workers, are overworked and underpaid. Other workers struggle to work enough hours to make ends meet. These workers deserve a raise.”
The letter further urged the DOL to “adopt a salary threshold in line with the historical high point of salary thresholds—the 55th percentile of earnings of full-timed salaried workers nationwide. This threshold would be at least $82,732 by 2026. We also suggest DOL include annual automatic updates to prevent erosion of the salary threshold over time.”
It’s Not Just the EEOC
To additionally validate mandatory vaccinations in the workplace: The U.S. Department of Justice (DOJ) has released an opinion (originally prepared on July 6, 2021 for the Deputy Counsel to the President) definitively stating that the Emergency Use Authorization (EUA) statute, under which current COVID-19 vaccines were approved by the Food and Drug Administration (FDA), “does not prohibit entities from imposing vaccination requirements” including “to return to work or be hired into a new job.”
Written by: Gordon M. Berger, Partner
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