Last week the Illinois Senate moved forward with Governor Pritzker’s priority to increase the minimum wage to $15/hour by 2025. Read more about it here. We’ll keep you posted as this effort moves forward….
Each year, LP’s Labor & Employment Practice Group is pleased to provide a short checklist of steps that all companies should consider taking to measure their readiness for the coming year. We hope that you find our 2019 Labor and Employment Law Checklist to be a helpful guide to best practices for the year ahead.
Download a fillable PDF here. Print it out for yearlong reference, or get started right away and enjoy the satisfaction of checking some very important items off your list.
- Keep Ahead of Harassment & Discrimination Claims. The #MeToo and #TIMESUP headlines did not slow down in 2018, and preliminary data released by the EEOC showed more than a 50% increase in EEOC charges claiming sexual harassment. In addition, Illinois and New York implemented new requirements relating to harassment policies and training, with Illinois requiring policies for employers that do business with the state or claim EDGE tax credits, and New York implementing strict requirements that apply to all companies with New York employees. The EEOC also issued “Promising Practices for Preventing Harassment” to provide strategies to employers to reduce workplace harassment. Committed and engaged leadership, strong and comprehensive harassment policies, and regular, interactive training tailored to the audience and the organization are the new standard. If you have not conducted training and updated your harassment, discrimination and retaliation policies to meet these standards, put it on the agenda for early 2019.
- Update Policies to Reflect New Reimbursement Requirements. Under a new law targeting employers who require employees to use their personal cell phones for business purposes, Illinois now requires employers to reimburse employees for expenses they incur that are “directly related” to the services they are providing their employer. However, employers can set requirements around how and when requests for reimbursement must be made. It is critical that employers confirm that expense reimbursement policies provide the framework for requesting reimbursement, and that policy manuals are clear that employees are eligible for reimbursement for these expenses, at least to the extent they exceed what the employee would have spent for personal reasons.
- Review Compensation Policies. The gender pay gap continues to draw the attention of lawmakers. For example, California, Connecticut, Delaware, Hawaii, New York, New Jersey, Maryland, Massachusetts, Oregon, Puerto Rico, Vermont and a number of municipalities have adopted laws making it easier to prove discrimination and/or limiting the compensation information that can be requested from applicants. And with the change in leadership in Springfield, Illinois might just follow suit in 2019. Consider reviewing compensation policies to put the emphasis on the value of the work being performed, rather than on what the applicant was paid in his or her last position.
- Confirm Parental Leave Policies Don’t Discriminate. Being more generous with paid leave to new mothers than new fathers can create significant liability if the difference is based on gender and not on the physical act of giving birth or the employee’s designation as a primary care giver. In February 2018, Estee Lauder paid $1 million to more than 200 male workers to settle a charge claiming that the company’s parental leave policy discriminated against male employees. Employers should revisit maternity and parental leave policies to make sure that any difference between the leave being provided to male and female employees is based on a permissible reason.
- Comply with New Military Leave Protections. A new Illinois Law –ISERRA– provides some additional protections beyond those of the Federal USERRA. ISERRA applies to all Illinois employers, regardless of size and requires that a specific notice of rights be posted. Make sure that your team is aware of these new requirements and that the notice is posted in your workplace. Also, if you have a military leave policy, confirm that it reflects ISERRA.
- Are Arbitration Agreements Right for You? After years of uncertainty, the Supreme Court determined that employers can legally require employees to arbitrate any disputes individually. But are these types of agreements right for your company? There are pros and cons of arbitration, so talk with your legal advisors to determine whether the agreements that require individual arbitration make sense for your organization.
- Revisit Workplace Rules Following NLRB Shift. The NLRB, now controlled by Republicans, is undoing many of the standards put in place by the prior NLRB. Many, but not all, of these rules are considered pro-employer, including a more practical approach to determining when handbook policies regarding confidentiality interfere with employees’ right to engage in concerted activity. This means that some of the disclaimers and limitations in employee handbooks that were put into place in response to the “old” NLRB’s standards are no longer necessary. Consider revisiting employee handbooks to clarify policies to be consistent with the current rules.
- Consider Unpaid Intern Standard Changes. For years we have counseled clients not to use unpaid interns or risk a variety of employment claims. However, changes to legal standards from both the courts and the Department of Labor have provided a more practical approach and raises the possibility of treating interns as unpaid. At the heart of the analysis is whether the internship is more for the intern’s benefit or the company’s, and whether the internship is an extension of their education. If you have an internship program that works with students, or are considering one, talk to your legal counsel about whether the internships can be unpaid.
- Update Restrictive Covenants. There has been lots of conversation regarding restrictive covenants. In fact, states are increasingly passing laws related to non-competes. Most recently, Massachusetts passed the most sweeping legislation we have seen in several years, limiting when and how employers can prohibit competition and even requiring additional consideration during the time period in which the employee cannot compete. If your restrictive covenants are more than a few years old, or if they are not specifically crafted to meet the legitimate business needs of the company, it is important to revisit and update them to maximize enforceability.
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As a follow up to our post last year, this week, in a 5-4 decision, the Supreme Court rejected the National Labor Relations Board’s position that class waivers in arbitration agreements violate federal labor law. The Court held that employers can legally require their employees, as a condition of employment, to agree that they will not pursue class action claims against their employers, but rather address legal issues through individual arbitration.
Writing for the majority, Justice Neil Gorsuch stated simply that, “The [Federal] Arbitration Act requires courts to enforce agreements to arbitrate, including the terms of arbitration the parties select.” In support of the decision, he compared the “simplicity and inexpensiveness” of arbitration to “slower, more costly” class actions, which are, in the view of the majority, “more likely to generate procedural morass than final judgment.”
The effects of the decision remain to be seen – Justice Ginsberg read her dissent from the bench, calling for Congress to address the matter. For now, though, employers with arbitration agreements in place will want to add a class-action waiver, and those that do not use arbitration agreements at all may want to reconsider that approach.
Each year, LP’s Labor & Employment Practice Group is pleased to provide a short checklist of steps that all companies should consider taking to measure their readiness for the coming year. We hope that you find our 2018 Labor and Employment Law Checklist to be a helpful guide to best practices for the year ahead.
Download the checkable PDF here. Print it out for yearlong reference, or get started right away and enjoy the satisfaction of checking some very important items off your list.
Deal with the Elephant in the Room and Conduct Harassment Training for Your Workforce. With the headlines around harassment and abuse allegations and the #MeToo and #TIMESUP movements, there is no hotter topic in employment law right now than workplace harassment. Appropriate training ensures both that your employees know how to stop harassment when they experience it and that your company can take advantage of certain defenses to claims that may come up in the future. If your company has not conducted training in the last two years, put it on the agenda for 2018.
Decide on Your Investigation Procedures Now. When serious allegations of harassment and discrimination arise, they need to be investigated by experienced legal and HR professionals in order to get to the bottom of what really happened. Well run investigations also form another foundation in a company’s legal defense. Because speed counts when employees raise issues, determine now which outside investigators are on your short list and how you will approach such investigations.
Determine Whether to Ask About Applicant Pay History. In an effort to eliminate gender discrimination in compensation, many state and local governments have taken steps to ban employers from asking applicants about their pay in prior jobs. For example, California’s law took effect January 1, 2018 and Massachusetts’ law takes effect on July 1, 2018. Making things more complicated it that it’s not entirely clear which state’s law applies when the recruiting process crosses state lines. Employers need to determine if the jurisdictions where they operate have laws of this kind and immediately take steps to change hiring procedures to account for them.
Monitor the Changes at the NLRB. The National Labor Relations Board is now fully controlled by its Republican members, and rulings are already starting to change the landscape for employers. For instance, recent decisions by the NLRB have relaxed the standard applicable to policies in employee handbooks. Consider re-reviewing employee handbooks to take advantage of this change and be aware of how other changes at the NLRB impact your business.
Review Changing Leave Laws. One area where employee rights have continued to expand is in the area of leave laws. For instance, New York has a new law on paid family leave that took effect on January 1, 2018, and California has a law that took effect on that date expanding parental leave rights. Many states and municipalities also have passed new paid sick leave laws. It is important for employers to ensure that their HR teams understand these new laws and that their leave policies encompass the broader rights being given to employees.
Don’t Let Employees Engage in Distracted Driving. When employees drive as part of their job, employers can be held liable for accidents that result from distracted driving. Laws around distracted driving are getting tougher. For instance, Rhode Island recently passed a law banning all mobile phone use by drivers, with limited exceptions for hands-free devices. In Washington, a new law went into effect on January 23rd that prohibits drivers from even holding gadgets at a stop sign or red light. Be sure your policies make clear that safety comes first, appropriately address employee responsibilities while driving and give employees the right to defer calls until they are off the road.
Is It Time to Reconsider Using Arbitration Agreements? Some employers have been reluctant to use arbitration agreements with their employees because of uncertainty about the enforceability of these agreements, particularly in situations involving class actions. Last fall, the Supreme Court head oral argument in a case that is expected to clarify the law in this area. If this ruling ends up being favorable for employers, it may be time to reconsider whether arbitration is a better forum for resolving employee disputes.
Be Careful Gathering Genetic Information. Employers must be careful in how they gather and use genetic information concerning employees and applicants. Congress passed the Genetic Information Nondiscrimination Act in 2008 and approximately 37 states have laws on this topic. As of January 1, 2018, changes to the Illinois Genetic Information Privacy Act prohibit employers from penalizing employees who refuse to provide genetic information. This law was intended to head off efforts to require employees to provide genetic information in wellness programs.
If Using Biometric Data, Make Sure You Know Legal Requirements. In 2017 we saw a large number of class actions filed under the Illinois Biometric Information Privacy Act (IBIPA) against employers whose employees clock in and out using their fingerprint or a hand scan. These cases, which allege that the employers failed to meet the very specific requirements set out in IBIPA, are still in their early stages, but employers who use fingerprints or other biometric information for time tracking, security access, or other purposes should make sure that they understand and are complying with IBIPA’s requirements.
Review how Marijuana is Treated Under Drug Policies. Recreational marijuana is now legal in seven states, including California, and nineteen states have laws permitting the use of marijuana for medical purposes. In view of the spread of laws permitting marijuana use, many employers have re-examined their drug policies and decided to treat marijuana differently from other illegal drugs. There are pros and cons to these changes and the right move depends to some extent on where an employer has operations, but 2018 may be the time to assess whether you are taking the right approach.
Are You Ready for a Data Breach? In 2017, nine states enacted new or amended security breach laws. Last year, updates to Illinois’ Personal Information Protection Act went into effect expanding the definition of protected information and increasing the notice obligations for breaches. All employers should review the security safeguards being used to protect such information and also plan now for the steps that need to be taken in the event of a data breach.
Understand Pregnancy Accommodation Obligations. Under the Americans with Disabilities Act, employers have an obligation to accommodate pregnancy-related conditions. Now, however, many states are also passing specific laws requiring employers to accommodate employees who are pregnant or breastfeeding. Illinois amended its own Human Rights Act in 2015 to protect pregnant employees, and other states have been catching up. For instance, Vermont and Massachusetts have new laws going into effect in 2018. Employers should be sure that as issues arise, they understand and comply with both their federal and state pregnancy accommodation obligations.
Last week, the Department of Labor (DOL) issued a news release stating that going forward, it will use the seven-factor “primary beneficiary” test — set forth by the 2nd Circuit and applied by other Circuits — to determine whether interns working at for-profit employers are employees under the Fair Labor Standards Act (FLSA), expressly rejecting its previous test from 2010.
The “primary beneficiary” test that will now be applied by the DOL analyses the following seven, non-exhaustive factors:
- The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
- The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands‐on training provided by educational institutions.
- The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
- The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
- The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
- The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
- The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
The DOL noted that this new test will be applied in a “flexible” manner, and that whether an intern qualifies as an employee under the FLSA depends on the unique circumstances of each case.
It is widely agreed that the primary beneficiary test is easier for companies to satisfy than the DOL’s prior test, but it’s too early to tell how much of an impact this change will be. If you do have an internship program, it’s a great time to review intern classifications and make sure that they are being treated properly under employment laws.
Just a day after the newly Republican-majority National Labor Relations Board (NLRB) restored its “direct and immediate control” test for joint employer status and implemented a new employer-friendly test for handbook policies, it took two more big steps: overturning a ruling limiting the changes employers can unilaterally implement in union workplaces and disallowing so-called “micro-units”.
In its decision regarding unilateral changes, the Board restored old precedent that permits employers to unilaterally change policies without the union’s permission – and without first bargaining with the union – if they have taken similar actions in the past.
In its decision regarding micro-units, the Board overturned its 2011 decision that made it easier for unions to organize very small groups of employees (which, in turn, made it easier for unions to get a foothold in an otherwise non-union company). Instead, under the Board’s decision Friday, the old standard – where employers could establish that all employees sharing a community of interest should be included in the same unit – once again stands, and the playing field between unions and employers has become a bit more level.
These rulings aren’t surprising. As we wrote last week, we expect that the trend of employer-friendly decisions will continue, so stay tuned.
The newly Republican-majority National Labor Relations Board (NLRB) has been busy — just yesterday overturning two employee-friendly standards.
First, the Board overturned its decision in Browning-Ferris, which said that “indirect control” or the ability to exert such control over another company’s workers is sufficient to make a you a joint employer. With this ruling, the Board returned to its more employer-friendly joint employer standard, which looks to “direct and immediate” control.
Second, the Board reversed its aggressive position on employee handbook policies and provisions. Previously, the Board had held that a policy is illegal if employees could “reasonably construe” it to prohibit them from exercising their rights to come together (or collectively bargain) under the National Labor Relations Act (NLRA). This standard had been used by the board to find many employer policies (such as social media and confidentiality policies) illegal. However, per yesterday’s decision, the Board will instead be focusing on the “nature and extent” of a challenged policy’s “potential impact on NLRA rights” and the “legitimate justifications associated with the rule” — which together make for a far more pro-employer approach.
Employers now find themselves in a far better position when it comes to joint employer claims and handbook policy challenges. We expect to see additional employer-friendly decisions soon, so stay tuned.