5th Cir Skeptical About DOL OT Rule
A Fifth Circuit panel told the government during oral arguments last Wednesday that the US DOL needed to provide more substantial reasoning as to how it determines workers' OT eligibility, saying that just because it has set salary thresholds for nearly a century doesn't mean it gets carte blanche.
Further, Judge Jennifer Walker Elrod said that the question wasn't whether the agency was doing a good job setting a salary limit, it was whether Congress delegated the power to the DOL.
MA WC Poster Updated
The MA Department of Industrial Accidents has revised the Notice to Employees poster, and all employers are required to utilize and repost the updated version by September 16, 2024. It can be accessed on the DIA website.
NY Sets IC Requirements
The recently-enacted NY “Freelance Isn’t Free Act” (“Act”) goes into effect on August 28, 2024. The Act will require individuals and entities who engage individual or single owner entity independent contractors (ICs) to enter into a written contract with those independent contractors (physically or electronically), and to provide timely payment to ICs. But, the Act does not apply retroactively to IC relationships formed prior to August 28, 2024.
The Act also imposes new recordkeeping requirements on the hiring party, and strictly prohibits any hiring party from retaliating or discriminating against independent contractors who exercise their rights under the Act. Because the Act applies to any IC arrangement having a value of at least $800, it will likely impact the many businesses throughout the state that rely on the work of independent contractors to operate.
IL To Require Disclosure of Employer Use of IA
H.B. 3773, signed last Friday, amends the IL Human Rights Act to make it unlawful for employers to use AI in recruitment, hiring, promotion, discipline, termination and other terms, privileges or conditions of employment if the technology is discriminatory. The legislation, which goes into effect January 1, 2026, also restricts employers from using ZIP codes as a stand-in for protected classes in addition to requiring companies to notify workers about the use of AI.
OH Recreational Pot and Employment
While OH legalized recreational use of marijuana, Employers’ rights remain the same. Employers are not:
the Department of Labor (DOL) issued new guidance titled “Artificial Intelligence and Worker Well-Being: Principles for Developers and Employers” in May. The guidance offers a framework to address the complexities of AI usage in the workplace.
Here’s a summary of the principles in this framework and what they mean for employers.
The DOL’s new AI principles
The new AI principles hope to encourage the responsible, transparent use of AI in the workplace. The goal is to ensure workers benefit from new opportunities created by AI and protect them from its potential harms.
Here are the eight principles:
The principles apply “during the whole lifecycle of AI — from design to development, testing, training, deployment and use, oversight, and auditing.”
DOL’s AI In the Workplace Guidance
The US DOL issued new guidance titled “Artificial Intelligence and Worker Well-Being: Principles for Developers and Employers” in May. The guidance offers a framework to address the complexities of AI usage in the workplace.
Here are the eight principles:
The principles apply “during the whole lifecycle of AI — from design to development, testing, training, deployment and use, oversight, and auditing.”
TX Fed Court Blocks FTC Non-Compete Rule
Yesterday, a Texas federal judge permanently blocked the FTC’s rule that would ban on noncompete agreements in employment contracts in the basis that the regulation exceeded the agency's authority.
The FTC's ban on noncompete agreements in employment contracts was supposed to go into effect on September 4th.
In a 27-page decision, U.S. District Judge Ada E. Brown granted tax company Ryan LLC and the U.S. Chamber of Commerce summary judgment and rejected the FTC's opposing summary judgment bid.
The judge found that the FTC improperly exceeded its statutory authority by creating a new rule banning noncompetes based on the FTC Act's "housekeeping rules" that lack statutory penalties, as opposed to the statute's "substantive rulemaking power" provisions. She additionally concluded that the "sweeping" rule is an arbitrary and capricious "categorical ban" that violates the Administrative Procedure Act.
As the court held, "In sum, the Court concludes that the FTC lacks statutory authority to promulgate the Non-Compete Rule, and that the Rule is arbitrary and capricious. Thus, the FTC's promulgation of the Rule is an unlawful agency action”.
Previously, the noncompete ban had been cleared by a Pennsylvania federal judge and slightly narrowed by a Florida federal judge, so the Texas federal court was the first to block it outright.
IL Employers Must Disclose Use of AI
IL Gov. Pritzker signed H.B. 3773 last week that will require IL employers to inform employees and applicants about their use of AI technology in making employment decisions. The law also prohibits the use of AI that leads to discriminatory practices against employees. It will now be a potential violation of the IL Human Rights Act by listing the use of AI in a discriminatory manner.
The law takes effect on January 1, 2026.
Davis-Bacon Rule Blocked
A TX Federal court has issued a nationwide preliminary injunction blocking certain of the DOL’s wage rules under the Davis-Bacon Act (DBA), which requires contractors and subcontractors performing construction, alteration, or repair work on federally funded or assisted contracts to pay laborers and mechanics employed under the contract no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area.
On August 23, 2023, the DOL issued a final rule revising the DBA. The final rule became effective October 23, 2023, and applies to new contracts entered into after this date. Through rule made signficant changes to the DBA standards, including extending coverage to workers who are not mechanics and laborers, and expanding the scope of the work covered by the DBA to include work not performed “directly on the site of the work.” Some of the specific changes in the final rule include (1) eliminating the 20% threshold exception for material suppliers in favor of a de minimis standard; (2) applying the DBA’s prevailing wage requirements to work done by truck drivers who make deliveries to work sites; and (3) providing that the DBA’s prevailing wage standards could apply to a contract by “operation of law,” even when the contract did not incorporate the required DBA clauses and wage determinations.
The judge found that (1) elimination of the 20% threshold for material suppliers was contrary to the plain language of the DBA; (2) expanding DBA prevailing wage requirements to truck drivers was arbitrary and capricious; and (3) the DBA may only be applied to contracts containing specific provisions incorporating the required DBA clauses.
LA Job Ordinance To Take Effect
The Los Angeles County Fair Chance Ordinance for Employers takes effect on September 3.
The law applies to employers doing business in LA County with five+ employees.
Employers that conduct background checks must:
CA Min Wage Increasing
CA’s minimum wage will increase to $16.50/hour (up from $16) on January 1, 2025. In turn, the exempt employee minimum salary will increase in CA to $68,640. As CA cities and counties also regulate hourly wages (such as Los Angeles, Los Angeles County, Santa Monica, West Hollywood, etc.), the minimum wage in those jurisdictions may be different than the state rate.
5th Circuit Says “No” To DOL Tip Rule
Last Friday, the Fifth Circuit struck down a US DOL rule on tipped wages. A unanimous three-judge panel said the rule, which clarified when employers can take a tip credit, set a restriction that Congress did not intend in crafting the FLSA and therefore can be set aside under the Administrative Procedure Act. The panel vacated the rule, which had taken effect in December 2021 and was challenged by the Restaurant Law Center and the Texas Restaurant Association.
"The final rule is attempting to answer a question that DOL itself, not the FLSA, has posed," U.S. Circuit Judge Jennifer Walker Elrod wrote on behalf of the panel.
Under the FLSA, employers can take a tip credit and pay workers $2.13 an hour, below the federal minimum wage of $7.25 an hour, with the expectation that tips make up the difference.
IL Right to Privacy in the Workplace Act Amendment
Employees are granted several protections under this amendment:
CA Captive Audience Law Passed
The California Worker Freedom from Employer Intimidation Act is a legislative measure designed to protect employees from coercion or intimidation by their employers regarding their political activities or beliefs. Here are the key points of the Act:
Key Provisions