TX Court Will Not Expand Injunction
As a follow-up on the FTC noncompete ban, Texas District Court in the Ryan case denied Plaintiffs' Request To expand the scope of the injunction. The Court did not provide any rationale for the denial other than the Plaintiff and Plaintiff-Intervenors "have not shown themselves entitled to the respective relief requested".
NH Joins Ranks With CROWN Law
NH became the 26th state to implement a CROWN Act (“Creating a Respectful and Open World for Natural Hair”) when Governor Christopher Sununu signed into law HB 1169 which creates a private cause of action for discrimination based on hairstyles relative to a person’s ethnicity. Note that the EEOC, for example, has said that prohibiting a Black employee from wearing her hair in its natural state constitutes race discrimination in violation of Title VII.
US DOL Field Bulletin on AI in the Workplace
The US DOL, Wage and Hour Division recently issued a Field Assistance Bulletin on Artificial Intelligence and Automated Systems in the Workplace under the Fair Labor Standards Act and Other Federal Labor Standards (the “FAB”).
The FAB explains that AI and the use of automated technologies for scheduling, timekeeping, and tracking employee location may undercount hours worked and reminds employers to use human verification to ensure they are paying employees for all hours worked. The guidance also reminds employers ensure that break time, documenting waiting time, paying employees the applicable minimum wage and calculating and paying an employee’s regular rate and overtime premium are all monitored.
The FAB further explains that employers must comply with the FMLA regardless of whether they use AI to track and manage leave. Violations of the FMLA include interfering with, restraining, or denying the exercise of rights provided by the FMLA, including failing to authorize or otherwise interfering with or restraining FMLA leave through an automated management tool.
Texas Can't Nix EEOC Guidance Over Gender Identity
A Texas federal judge refused to grant the state attorney general's request to do away with the EEOC's enforcement guidance over gender identity, saying the state needs to file a new lawsuit and not piggyback on a case that was closed two years ago.
PA County Bans the Box
The Lehigh County Human Relations Ordinance went into effect on June 1, 2024, and expands on 18 Pa. C.S. § 9125. The Ordinance provides that an employer may not:
- Ask whether the applicant has ever been convicted of a crime on an employment application;
- Require a job applicant to disclose prior criminal convictions before an initial interview; or
- Consider conviction records that are unrelated to the applicant’s suitability for employment.
However, employers may request disclosure of prior criminal convictions after an initial interview has taken place. Additionally, employers may use background checks and prior history to determine a candidate’s suitability after the initial interview.
Beware of E-Signing Arbitration Agreements in CA
In a recent CA case, Garcia v. Stoneledge Furniture, LLC, an employee who electronically onboarded. As is typical, she was required to create a unique user name and password. Further, the employee checked a box agreeing to the use of the electronic signature block provided. The employee then e-signed a number of documents, including an arbitration agreement. However, unlike the other documents she signed, the arbitration agreement did not contain the IP address underneath the electronic signature, and did not contain an indication that the employee used her confidential password to access the document. In addition, unlike the other documents, the signature block used a different signature.
The trial court and Court of Appeals found that the declaration of a systems analyst to confirm that Garcia used a unique user/password (so only she could have e-signed) was insufficient because he was “not a percipient witness” to the employee creating the unique user/password and because his declaration lacked sufficient detail regarding the security precautions employed by the company to demonstrate that only that employee could have accessed the arbitration agreement. And, the employee claimed that she did not sign the agreement – a statement that shifted the burden to the employer to prove otherwise. The lack of information in the systems analyst’s declaration was insufficient to overcome this burden and the employer’s effort to compel arbitration was denied.
Caution: if onboarding is conducted electronically, employers should have solid security mechanisms in place to demonstrate that the signature on the agreement could only have come from that specific employee.
Competing Bills To Address Chevron Ruling
Two bills filed in the Senate aim to address federal agencies' rulemaking authority in the aftermath of the US Supreme Court decision that overturned Chevron deference, under which courts deferred to the agencies' interpretations of ambiguous laws. The measure filed by Sen. Elizabeth Warren, D-Mass., would codify Chevron deference into law, while the legislation filed by Sen. Bill Cassidy, R-La., would expand the requirements that federal agencies face in the rulemaking process.
Philly Judge Declines to Block FTC Noncompete Ban
A Pennsylvania federal judge refused Tuesday to temporarily block the FTC's impending ban on employment noncompete agreements, a victory that could be short-lived as the agency awaits a final decision from a Texas federal judge who's already indicated an inclination to stop the regulation. Judge Hodge concluded that the plaintiff "failed to establish a reasonable chance, or probability, of winning.”
NLRB Drops Challenge To Joint Employer Rule
The National Labor Relations Board dropped its appeal of a Texas federal judge's decision vacating its rule expanding its definition of joint employer under federal labor law, saying it wants to consider its approach to the policy in light of the court's decision.
The board remains of the opinion that its 2023 rule meets the procedural and substantive requirements of the Administrative Procedure Act and the National Labor Relations Act," the board said. "Given the litigation posture of the rule, however, the board would like the opportunity to further consider the issues identified in the district court's opinion in the first instance."
NJ Secure Choice Saving Program Deadlines
The New Jersey Secure Choice Savings Program ("Program") has set deadlines for employer compliance. The Program requires certain NJ employers to provide employees with a payroll-funded Roth IRA if the employer has not already established a qualified retirement plan. Recently, RetireReady NJ ("RR") was launched:
- September 15, 2024 is the deadline for employers with 40 or more employees
- November 15, 2024 is the deadline for employers with 25 to 39 employees
Employers, unless they are exempt, must automatically enroll their eligible employees. Employees may opt-out within 30 days. Employees who are hired more than six months after RR is open for enrollment must be enrolled within three months of their hire date.
An employer is subject to penalties if it does not register for RR or provide a qualified retirement plan within one year. The fines escalate depending on how long an employer has failed to comply and how many times the employer has violated the Program.
FL Workplace DEI Training Rules Blocked
A Florida federal judge made permanent a ban on a state law provision that prevents employers from promoting various sex- and race-based concepts in diversity training sessions after the state said it wouldn't challenge an Eleventh Circuit ruling upholding a preliminary injunction on the measure.
MI High Court Restores Strengthened Wage, Leave Laws
The Michigan Supreme Court on Wednesday put back in place higher minimum wage and sick time laws, finding the laws were unlawfully amended by the state Legislature in a controversial move to keep a $12 minimum wage law off the ballot.
PA Bans Non-Competes in Healthcare
Effective Jan. 1, 2025, the “Fair Contracting for Health Care Practitioners Act” (House Bill 1633) restricts the ability of employers and healthcare practitioners to enter into non-compete agreements. The Act applies to any non-competition covenant that “has the effect of impeding” certain healthcare practitioners’ ability to treat or accept new patients. The scope of the Act includes physicians, osteopaths, certified registered nurse anesthetists, certified registered nurse practitioners, and physician assistants.
However, non-compete covenants that do not exceed one year in duration remain enforceable when the healthcare practitioner voluntarily terminates employment but are unenforceable if an employer involuntarily dismisses a practitioner.
IRS Issues “Five newly announced signs of an incorrect ERC claim”
Per the IRS:
“IRS compliance teams have identified these additional five common signs that have been a recurring theme seen on ERC claims. None of these qualify under the rules passed by Congress. The new red flags cover these areas:
- Essential businesses during the pandemic that could fully operate and didn’t have a decline in gross receipts. Promoters convinced many essential businesses to claim the ERC when, in many instances, essential businesses weren’t eligible because their operations weren’t fully or partially suspended by a qualifying government order. Modifications that didn’t affect an employer’s ability to operate, like requiring employees to wash hands or wear masks, doesn’t mean the business operations were suspended. The IRS urges essential businesses to review eligibility rules and examples related to government orders.
- Business unable to support how a government order fully or partially suspended business operations. Whether a business was fully or partially suspended depends on its specific situation. When asked for proof on how the government order suspended more than a nominal portion of their business operations, many businesses haven’t provided enough information to confirm eligibility.
- Business reporting family members’ wages as qualified wages. If business owners claimed the ERC using wages paid to related individuals, those claims are likely for the wrong amount or ineligible. Wages paid to related individuals aren’t qualified wages for the ERC. Generally, related individuals are the majority owner and their:
- Spouse.
- Child or a descendant of a child.
- Brother, sister, stepbrother or stepsister.
- Father, mother or an ancestor of either.
- Stepfather or stepmother.
- Niece or nephew.
- Aunt or uncle.
- Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law.
- Household member, meaning an individual who, for the taxable year of the taxpayer, has the same principal place of abode as the taxpayer and is a member of the taxpayer’s household.
- Business using wages already used for Paycheck Protection Program loan forgiveness. The U.S. Small Business Administration offered the Paycheck Protection Program, which provided SBA-backed loans that helped businesses keep their workforce employed during the pandemic. The PPP ended May 31, 2021, but borrowers could still apply for PPP loan forgiveness.”
LA Restricts Physician Non-Competes
Effective January 1, 2025, Louisiana Senate Bill 165 goes into effect. The law limits the length and geographical scope of non-compete agreements for both specialty and primary care physicians. Non-competes for physicians must be no longer than 3 years or 5 years from the effective date of the initial contract or agreement.
Non-compete agreements for primary care physicians must expire within 3 years from the effective date of the initial contract or agreement. A “primary care physician” is defined as any physician who predominately practices in the areas of family medicine, internal medicine, pediatrics, obstetrics, or gynecology.
Non-compete agreements for physicians who do not meet the definition of primary care physician must expire within 5 years from the effective date of the original contract or agreement.
And, the non-compete may only cover the parish where “the physician’s principal practice is located” and any “two contiguous parishes in which the employer carries on a like business.”
Firm Webinar: FTC Non-Compete Rule
Time & Location: Aug 13, 2024, 12:00 PM – 1:00 PM EDT
New Form I-9 Expiration Date
USCIS has extended the current I-9 form (dated August 1, 2023) expiration date from July 31, 2026, to May 31, 2027.
IL Nixes Employer-Sponsored Meetings
On July 31, 2024, Il Gov. J. B. Pritzker signed into law Illinois SB 3649. Effect immediately the law prohibits employers from discharging or disciplining employees who refuse to attend mandatory employer-sponsored meetings if the meeting is designed to communicate an employer’s position on religious or political matters,” as “[e]mployees should not be subject to intimidation tactics, acts of retaliation, discipline, or discharge from their employer for choosing not to participate in employer-sponsored meetings.” The law defines “political matters” to include a reference to an employee’s decision to “support any …labor organization” and is clearly intended to prohibit employer-sponsored meetings about unions (what unions refer to as “captive audience meetings.”).
Et Tu Hawaii?
SB 2715 aka Hawaii's Captive Audience Prohibition Act went into effect July 2, 2024. It expands HI's Unfair Labor Practices Law by prohibiting employers from discharging, disciplining, or otherwise penalizing or threatening any adverse employment action against an employee because the employee declines to:
- Attend or participate in an employer-sponsored meeting, or any portion of a meeting, which communicates the opinion of the employer about political matters; or
- Receive or listen to a communication from the employer that communicates the opinion of the employer about political matters.
MA Adds Pay Transparency Law
On July 31, 2024, Gov. Healey signed HB4890 into law. Effective July 31, 2025, employers with 25+ employees in MA must disclose the pay ranges of employment positions on job postings and provide pay range information to existing employees (i) who are offered promotions, transfers and new positions, or (ii) upon employee request. Pay range is the annual salary or hourly wage range the employer “reasonably” and “in good faith” expects to pay for the position.
Employers with 100+ FTEs in MA must submit their first round of their federal EEO filings to the Secretary of the Commonwealth by February 1, 2025. The secretary will then submit this information (reflecting workforce demographics of race, ethnicity, sex and job category and pay data) to the Executive Office of Labor and Workforce Development.
IL Revises BIPA
Senate Bill 2979 has been signed into law by Gov. Pritzker. It amends the Biometric Information Privacy Act (BIPA) to say private entities that collect or disclose the same biometric identifier from the same person and collection method commits only one violation of the law, and entitles the individual to just one recovery of statutory damages.
The amendment also expands "written release" to include not just informed written consent but now electronic signatures as well, which the statute defines as "an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record."
Previously, employers were being hit with claims that were calculated on a per instance basis (as separate claims for every unlawful scan or disclosure).
OSHA Paid Breaks Standard
The long-awaited OSHA's proposed workplace heat safety rule, which would require paid breaks, raises questions about the agency's authority to regulate break time while nevertheless highlighting how much leeway it has to protect workers.
Red State Challenge DOL OT Rule
A group of 14 red states joined Texas in calling for a federal court to strike down the US DOL’s rule raising salary thresholds for a federal overtime exemption, claiming in a brief that the new rule would hit their states particularly hard.
"The result is that three million workers who would otherwise be exempt from overtime by virtue of their duties will be non-exempt — resulting in transfers from employers to employees of $1.5 billion a year," the states told a Texas federal court last Thursday.
Arkansas, joined by other red states including Alabama and Ohio, says that for decades the DOL has used a low salary threshold to screen out obviously nonexempt employees. The FLSA exempts employees who are employed in an "executive, administrative, or professional capacity" — so-called EAP employees — from overtime pay.
The states asked the court to grant Texas' motion for summary judgment.
"Its new definition of EAP status, which increases the existing threshold by a third after adjusting for inflation, removes millions of employees from exemption who the department concedes would otherwise satisfy its own job-duties test for exemption," the states said. "That redefinition violates the statute."