FEDERAL UPDATES

EEOC and DOL Alliance:  As part of a growing trend toward interagency cooperation, the EEOC and DOL just entered into a new Memorandum of Understanding in which they agree to share information and participate in joint investigations, training, and outreach.  This includes sharing EEO-1 reports, FLSA records, leave interference, and information gathered during an investigation.  The EEOC has similar agreements with other federal agencies (including the NLRB, DOJ, and OFCCP) as part of a growing trend that will likely result in broader systemic investigations, greater scrutiny across multiple agencies, and liability for employers.

Federal Contractors:  As expected, OFCCP is becoming more active, and requiring more data and detailed documentation in less time when contractors are selected for AAP compliance review.  Based on the most recent changes to the Supply and Service Scheduling Letter and Itemized Listing, federal contractors may want to review their OFCCP obligations and establish some additional documentation and recordkeeping procedures to allow a full and timely response in the event they receive an OFCCP scheduling letter.  It appears that OFCCP intends to hold contractors to the 30 response deadline, and will request more extensive data, analysis, and documentation than in prior years.  For example, it will request documentation showing action-oriented programs that address problem areas in the preceding year and showing appropriate outreach and positive recruitment activities reasonably designed to effectively recruit individuals with disabilities and veterans.  They appear to be looking for detailed and tangible information such as records certifying event attendance at job fairs, invoices, and running logs of robust outreach/recruitment activity.  Compiling everything in 30 days may prove to be very difficult.   Now more than ever, it is critical that contractors review their AAP requirements, implement continuous compliance efforts, and follow a reasonable documentation process.

STATE/LOCAL UPDATES

California:  After sifting through more than 2,600 bills introduced this year, the CA legislature officially wrapped up the first year in a two-year cycle and sent several employment related bills to Governor for signature.  He has until October 14th to take final action.  If signed by the Governor, most laws will go into effect January 1.  A brief summary of major new laws we are watching is below – we’ll have more detailed updates next month once they are final.

Paid Sick Leave Increase to 5 days:  SB 616 increases the annual amount of paid sick leave from three days or 24 hours to five days or 40 hours.  It also raises the accrual cap to 10 days or 80 hours, although usage can still be limited to five days or 40 hours.  For union employers, the bill extends the anti-retaliation and procedural provisions to employees covered by a CBA.  The good news is that this bill originally started with an increase to seven days (or 56 hours), but through negotiation was reduced.  The Governor is expected to sign this bill shortly.

Leave for Reproductive Loss:  In addition to bereavement leave, SB 848 would require employers (5+ employees) to provide up to 5 days of unpaid reproductive loss leave to employees who suffer a failed adoption or surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction.  The leave would have to be taken within 3 months, does not have to be consecutive days, and is limited to a total of 20 days per year.

“Caste” Protected Class.  SB 403 would add “caste” as a protected class under FEHA.  This bill attempts to clarify existing law that is widely understood to prohibit caste discrimination as a type of ancestry (already a protected class), by expanding the definition of “ancestry” to include additional markers such as “lineal descent, heritage, parentage, caste, or any inherited social status.”

Family Caregiver Anti-Discrimination Act.  AB 524, would add “family caregiver” as a protected class under FEHA.  A family caregiver is “a person who provides direct care” to a spouse, child, parent, sibling, grandparent, grandchild, domestic partner or a CFRA “designated person”.  The law does not define “direct care”, so it is unclear as to whether it includes both medical and emotional care, or whether it must be ongoing care.  The bill only prohibits discrimination – it does not create an obligation to provide any special accommodations.

Retaliation – Rebuttable Presumption:  SB 497 would create a rebuttable presumption of retaliation if an employer subjects an employee to an adverse action within 90 days of an employee engaging in protected conduct. The bill would also increase the civil penalty from $10,000 generally to $10,000 per employee per violation.

Non-Compete Agreements:  Although California courts have already essentially banned non-compete agreements as illegal restraints of trade, AB 1076 makes it statutory (with a few very limited exemptions such as the sale of a business interest).  It also requires employers to affirmatively notify any current employees, and former employees hired after 1/1/22, that their noncompete agreement is voided by February 14, 2024.  That notice must be delivered by mail and email.  In addition, SB 699 states that any noncompete agreement is unenforceable, even if validly signed in another state.  We expect extensive litigation and jurisdictional fights over this one – employers and any employee they are attempting to hire who is subject to a noncompete in another state should discuss the potential liability with their legal counsel before moving forward.

Return to Office Notices/Notice of Remote Work as a Reasonable Accommodation:  SB 731 would require employers to provide 30 days’ written notice (by mail and email) to employees working from home before requiring them to return to work in person.  The notice must include a very specific statement notifying the employee that they have the right to ask for continued remote work as a reasonable accommodation for a disability.

Cannabis:  Under existing law that becomes effective 1/1/24, employers are prohibited from discriminating against applicants or employees due to off duty cannabis use.  Because there is no test for cannabis that differentiates between current and past use, it effectively eliminates any employment action based on a positive test.  SB 700 doubles down on this law by prohibiting employers from requesting information about any prior cannabis use.

Workplace Violence Prevention Plan:  SB 553 would require covered employers to adopt a workplace violence prevention plan by July 1, 2024, including certain recordkeeping and training requirements.  Certain employers are excluded, including employers with fewer than 10 employees working in non-public worksites to the extent they maintain a compliant IILP. The violence prevention plan can be included in the employer’s required Injury and Illness Prevention Program, or as a separate document.  CAL/OSHA is also working on violence prevention standards, which are expected before the end of 2026.

Expanded Mini-WARN Act:  AB 1356 is intended to address the recent mass layoffs at Google, Twitter, Meta and other tech companies, but affects all covered employers regardless of industry.  Currently, the CA WARN Act requires “covered employers” to provide 60 days advance notice before a layoff of 50+ employees or plant closure. This bill would:

• Increase the required notice from 60 days to 75 days.

• Expand the definition of “covered establishment” to include a group of locations (including any facilities located in the state) rather than a single location.

• Require notice to “labor contractor” employees who have performed work at the covered employer for at least six months of the preceding 12 months and for at least 60 hours.

The bill would also prohibit employers from conditioning severance payments related to a mass layoff on a general release, waiver of claims, or non-disparagement or nondisclosure agreement, unless additional consideration for those terms is provided and clearly stated.

Workplace Harassment Restraining Orders:  Current law allows employers to seek restraining orders on behalf of employees to protect them from violence while in the workplace.  SB 428 (eff 1/1/2025) would allow employers to also apply for workplace restraining orders on behalf employees who are being harassed.  Harassment is defined as “a knowing and willful course of conduct directed at a specific person that seriously alarms, annoys, or harasses the person, and that serves no legitimate purpose”.

Health Care Employee Pay (if signed, eff. 6/1/24):  In another last-minute compromise, the legislature addressed an ongoing attempt to raise the minimum wage for certain health care workers in SB 525.  This has been the subject of statewide ballot measure discussions and several attempts to enact local ordinances over the last few years.  This law would create a patchwork of minimum wage requirements that vary by type of healthcare employer.  The bill affects “Covered Health Care Facilities,” which include facilities that are part of an integrated health care delivery system, acute care hospitals, certain licensed skilled nursing facilities, licensed home health agencies, licensed residential care facilities for the elderly (if affiliated with acute care provider or owned, operated or controlled by an acute care hospital, acute psychiatric hospital or parent entity of such hospitals), mental health rehabilitation centers, and more.  The minimum wage requirements generally fall under several categories:

• Large health systems with more than 10,000 workers and dialysis clinics would pay $23 an hour in 2024, $24 in 2025, and $25 in 2026.

• Hospitals with a “high governmental payor mix” (Medi-Cal and Medicare patients) and rural independent hospitals would pay $18 in 2024 (which would gradually increase to $25 by 2033).

• Community clinics would pay $21 in 2024, $22 in 2026, and $25 in 2027.

• Other covered health care employers would pay $21 in 2024, $23 in 2026, and $25 in 2028.

The bill extends beyond just those employees providing patient care.  It also includes support staff such as janitors, housekeeping, groundskeepers, guards, administration, food service, etc.

Fast Food Franchises:  After extensive negotiation, a planned referendum, and a lawsuit, AB 1228 represents a compromise that enacts a $20 minimum wage for large fast food chains, and establishes a Fast Food Council to propose health, safety, and employment standards.  It (currently) only applies to a “fast food restaurant”, which is defined for this purpose as a limited service restaurant that is part of a “national fast food chain”.  A “national fast food chain” is defined as a set of fast food restaurants consisting of more than 60 establishments nationally that share a common brand.

Food Handlers:  SB 476 would require employers to pay all costs associated with an employee obtaining a food handler card, including the time it takes for the employee to complete the training (which would be considered hours worked), and the cost of the food handler certification program.  The bill would also prohibit an employer from conditioning employment on an applicant or employee having an existing food handler card.

New York:

Noncompetes.  Although a very strict ban on noncompete agreements was passed by the legislature earlier this summer, Gov. Hochul has conspicuously failed to sign it into law.  There is still time, but many consider the delay an indication that further negotiation is coming.

Criminal Wage Theft:  Under a new law effective immediately, wage theft may now be classified as criminal larceny.  Criminal larceny refers to stealing property, and the new law expands the definition of “property” to include “compensation for labor services”.  Larceny becomes a felony in New York if it involves at least $1,000, and in the case of wage theft the amount can be aggregated across multiple employees.  Jail time may also be involved.  Although it’s not clear how seriously prosecutors will pursue this type of crime, New York employers should be extremely cautious when failing to pay employees the full amount they are due, or when making deductions from paychecks.

Worker’s Compensation:   For employees suffering work-related injuries, the minimum disability benefits are increasing to $275 per week in 2024, $325 in 2025, and one-fifth of the state average weekly wage in 2026.

Proposed Pay Transparency Regulations:  The NYDOL issued proposed regulations just in time for the effective date of the new pay transparency law (4+ employees, eff 9/17/23).  The agency is accepting public comment on the proposed rules through November 13, 2023, so changes or additional rules may be forthcoming after that date.

Highlights of the current proposed rules include:

• Jobs physically performed outside New York are included if they report to a NY location, but an “incidental or infrequent” presence in New York for the occasional meeting or conference, or communication with New York-based employees, are not enough for the law to apply.

• Employers are responsible for ensuring that third parties posting on their behalf (such as a recruiter or job listing website) comply with the law, but are not liable for sites that “scrape” or aggregate and post noncompliant job advertisements without the employer’s knowledge or consent.

• Although the rules stop short of requiring job descriptions for all positions, they do appear to require job descriptions except in “limited circumstances”, such as where the name of the position clearly indicates the duties (i.e. a dishwasher, or cashier).

• Unlike some other states, benefits and “other compensation” disclosures are not required.

• The “range of compensation” cannot be open-ended, such as “$22.50/hour and up” or “up to $75,000 per year.” There must be a minimum and a maximum range, unless it is an exact and inflexible amount such as “$22.50/hour ” or “$75,000 per year.”

• For roles meant to cover multiple geographic regions or levels of seniority, the pay disclosure must also include differentials.

• If pay includes tips, bonuses or other forms of compensation and benefits beyond standard base pay, the employer is permitted to include it but cannot factor other compensation into the pay range. For example, a posting can state “$20 per hour plus tips” or “$20 per hour plus an additional estimated $10 per hour in tips,” but cannot be aggregated as “$30 per hour including tips.”

• The pay range must be a good-faith estimate at the time of the posting, and may be based on factors such as the current job market, hiring budget, current employee compensation levels, and anticipated required experience and education levels. The final negotiated pay can be outside the posted range, but any evidence of deliberate misrepresentation or posting an overly broad pay range will violate the “good faith” standard.

• If the range is so extensive that it won’t fit in the space allotted, it can be a separate attachment as long as it is easily accessible without cost, and the body of the posting provides clear and conspicuous instructions (such as a link) for accessing it.

“Captive Audience” Meetings:  The Governor signed a new law that prohibits employers from requiring non-managerial employees to attend meetings where the primary purpose is to discuss the employer’s opinions on religious or political matters, effective immediately.  Political matters include those related to union organization, and the law is widely understood to be mainly targeted at an employer’s response to unionization efforts.  A posting requirement was also added.

FLSA Overtime:  The 2nd Circuit just upheld an award of nearly $18 million against the City of New York for failing to pay overtime to EMT’s and paramedics.  The time system was set up to pay them for their scheduled shift regardless of when they scanned in/out, even though the City should have known that they needed to scan in early/late to prepare or exchange equipment.  In reviewing the verdict, the Court reaffirmed the FLSA rules by explaining that employers must compensate employees for work the employers requires, is aware of, or should have been aware of.  Employers can require employees to submit overtime, and in many cases their failure to do so releases the employer from liability.  However, where an employer has knowledge of the work being performed or should know that additional time before or after a regular shift is needed to adequately perform the job, an employee’s failure to request overtime will not release the employer from liability.

If you’d like to speak to an HR expert about your business, connect with us.       

Asure Software provides this information for general information purposes only.  We are not attorneys, and the information in this update should not be relied upon or regarded as legal advice.  This information may not be accurate or complete as it relates to a particular company or situation, and does not reflect all developments or laws in all jurisdictions.