2017 Labor & Employment Law Checklist

checkEach 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 2017 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.

Make sure sick leave is available to care for family members.  Under Illinois’ new sick leave law that went into effect January 1, employers that provide paid sick leave for an employee’s own illness or injury must also permit their employees to use that time to care for a family member with an illness or injury.  Other new Illinois laws require that employers with 50 or more employees provide up to 10 days of unpaid leave to an employee who loses a child, and that most employers provide 4 weeks of unpaid leave to address issues related to domestic or sexual violence (greater leave is provided if an employer has more employees).  It is important to confirm that your leave policies and practices reflect these new requirements.

Be ready for new paid leave laws.  Beginning July 1, 2017, employees working in Cook County and the City of Chicago will be entitled to paid sick leave. The rules around the paid leave are somewhat complicated, with different accrual rates and carryover requirements, as well as additional paid leave entitlements when the leave is covered by the FMLA.

Be careful with “No-Fault” and Point Systems.  The laws and ordinances discussed above also prohibit retaliation against employees who take covered leave, which could expose employers who use a “no-fault” or points-based attendance system to liability.  If you use this type of attendance policy, it is important to ensure that time off covered by leave laws is not counted as a point or absence for disciplinary purposes.

Use the revised Form I-9.  There is a new, revised Form I-9 that must be used for all new hires (and any form updates).  The new form may be found at https://www.uscis.gov/i-9.

Don’t require “low wage employees” to sign non-competes.  The Illinois Freedom to Work Act prohibits employers from imposing non-compete agreements on any employee who makes $13 per hour or less. Non-solicitation agreements for low wage workers were not specifically addressed in this new law, but they will likely be a topic of future litigation. Although only law in Illinois, employers in other states should be wary of requiring low-wage workers to sign non-compete agreements, as it has been a hot topic across the country.  For instance, the New York Attorney General has been extremely critical of non-competes for low-wage employees and has publically announced various monetary settlements with employers who require low-level employees to sign non-competes as a condition of employment.

Make sure you are including “magic language” in confidentiality and trade secret agreements.  The Defend Trade Secrets Act of 2016 provides employers with new tools to protect against employees taking or misusing trade secrets.  But to take full advantage of the tools the Act offers, you must include a “notice-of-immunity” in any new or updated agreements with employees, consultants, or independent contractors that govern trade secrets or confidential information. If you have not already done so, you should revise your standard agreements and confirm that any agreement signed on or after May 11, 2016 includes the required notice-of-immunity.

Review and update social media policies and practices.  The Illinois Right to Privacy in the Workplace Act already prohibited employers from soliciting information to gain access to an employee’s social media account.  However, with amendments that became effective on January 1, the law’s reach has been extended to cover all personal online accounts and to specifically prohibit employers from taking steps that would give the employer access to employee accounts.  The amendments don’t prohibit employers from monitoring employees’ activity while at work but do set requirements for how any prohibited information inadvertently obtained is handled.  It is important that you review existing internet and social media policies and practices to make sure that they are in line with these new requirements and that you ensure managers, human resources personnel and IT staff are aware of these standards.

Analyze corporate wellness programs.  The EEOC issued corporate wellness program rules this past year that allow limited incentives for employees and spouses to participate in such programs, but that also include important privacy protections. Review any corporate wellness programs to ensure compliance with the new rules.

Understand and follow new OSHA rules.  While it is not yet clear whether the new administration will be enforcing OSHA reporting rules, the new rules regarding electronic submission of injury information are effective.  This means all employers with 250 or more employees, and employers with 20 or more employees in certain industries, are required to submit certain information electronically for posting on OSHA’s public website. The new OSHA rules also prohibit retaliation against employees for reporting work-related injuries or illnesses, and require employers to inform their employees of their right to report work-related injuries and illnesses free from retaliation.

Consider how marijuana is handled under drug policies.  As more and more states are legalizing marijuana use, whether recreational or medical, it is critical to understand the specifics of the laws in the states in which you operate and review and update your drug and drug testing policies accordingly. 2016 saw new medical marijuana laws passed in Arkansas, Florida and North Dakota, and recreational marijuana legalized in Maine, Massachusetts, and Nevada.  However, marijuana use remains unlawful under federal law.

Watch for state action to implement failed FLSA overtime regulations.  The DOL’s new overtime rules that were scheduled to take effect on December 1 were blocked.  However, some states have indicated that they plan on implementing the now-defunct proposed federal regulations (which would have raised the minimum salary threshold for the white-collar exemptions to $913/week) on the state-level.  Keep an eye on state law to make sure you’re ready for any changes that will impact your company.

California employment agreements can’t choose a different law or venue.  If you have California employees, be aware that a law signed in September 2016 prohibits the use of provisions in employment contracts that would either apply another state’s law or would require that any claims be litigated outside of California. This new standard applies to contracts entered into, modified or extended on or after January 1, 2017.  California also passed protections relating to arbitration.

New Minimum Wages. More than 75% of U.S. states have increased the minimum wage for 2017.  Some of these increases are due to inflation, but others are more targeted – including an increase by $1.95 per hour in Arizona.  Massachusetts now has the highest state minimum wage – at $11 per hour – but many municipalities have minimum wages that are even higher.

Make sure you are complying with new state and local laws.  State legislatures were very busy in 2016, resulting in many new laws for 2017.  On the immigration front, Tennessee recently joined eight other states (AL, AZ, GA, LA, MS, NC, SC and UT) in requiring mandatory use of E-verify for most private employers, while California has implemented new protections for employees around the documentation presented to establish eligibility to work in the U.S.  Both California and Massachusetts passed new equal pay laws, with the Massachusetts law being the first ever to prohibit inquiries into past compensation before an offer is made.  Several states also implemented new laws relating to background checks (CA, CT, VT), access to personnel files (CO, OR), and weapons in the workplace (MO).  And this is just a sampling.  Make sure that you keep abreast of legal developments in the areas where your company operates so that you can comply with these standards.

Revised Form I-9 Issued — start using no later than January 22, 2017

United States FlagThe U.S. Citizenship and Immigration Services (“USCIS”) has issued a revised Form I-9. The new form, which was released in both a smart digital version and a paper version, can be found at https://www.uscis.gov/i-9. The revisions to the digital version include, among other things, drop-down lists and calendars, and embedded instructions for completing each field. Employers must start using the new form no later than January 22, 2017. With USCIS’s recent announcement that fines for I-9 violations will significantly increase, we encourage employers to start becoming familiar with and using the new forms as soon as possible.

 

Federal Judge Blocks New Overtime Rules

In a surprise ruling, a federal judge in Texas today issued a nationwide injunction preventing the new overtime rules issued by the Department of Labor from going into effect on December 1.  Twenty-one states had filed suit against the U.S. Department Labor challenging the validity of the new rules.  In granting the request for a preliminary injunction, U.S. District Judge Amos Mazzant decided that the states were likely to succeed in their challenge and that there would be irreparable harm if the rules were allowed to go into effect next month.

As discussed in prior posts, the rules would have implemented a new minimum salary threshold of $913/week for employees falling within the “white collar” exemption under the Fair Labor Standards Act.

Although it is clear that the rules will be delayed as a consequence of the ruling, it is not clear whether this delay will be measured in weeks or months.  It also is possible that the injunction may lead the incoming Trump administration to roll the rules back in their entirety or to implement one of the compromise positions urged on the administration by business groups.

Until further action by the court or the Department of Labor, employers who have not yet taken steps to comply with the new overtime rules may want to put any contemplated changes on hold.  We will provide further information about developments in this area as soon as they occur.

 

New Overtime Regulations Effective December 1st: Are you ready?

The new salary minimum for employees to be considered exempt under the White Collar exemptions becomes effective in just 7 business days.  Companies that haven’t already taken steps to confirm compliance and plan for this change need to act quickly to meet this deadline.  While litigation seeking to stop the regulations is still pending, it is likely that the regs will go into effect as scheduled on December 1st.

As we’ve previously reported, the new regulations more than double the salary minimum for the Executive, Professional and Administrative exemptions from $455/week ($23,660/year) to $913/week ($47,476/year).  The new regulations also increase the minimum salary for the Highly Compensated Employee exemption (though employers should keep in mind that some state minimum wage laws, including Illinois’, don’t adopt the Highly Compensated Employee exemption).

Employers need to act now to confirm that all employees who are classified as exempt under the White Collar exemptions are paid at least the new salary minimum.  Likewise, to the extent that the new regulations have led you to reassess other employees’ exempt status, it is important to act before they become effective.

We would be happy to answer any questions you might have regarding how employees are classified, the logistics of converting employees to non-exempt status and recording their time, and other related issues.

New California Law Bans Choice Of Law Provisions In Employment Agreements

signing-contractCalifornia has passed a new law prohibiting employers from requiring workers to litigate claims under other states’ laws.

The law, which applies to agreements entered into, modified or extended beginning January 1, 2017, states that any agreement to pursue employment-related claims, including arbitration, outside of California or under the laws of another state violates public policy and is “voidable by the employee.” The new law codifies existing case law finding such choice of law provisions invalid.

This new law serves as a great reminder for California employers to review their employment agreements to make sure that they do not choose another state’s law. Likewise, multi-state employers with operations in California should make sure that the documents being signed by California employees either choose California law or are silent on what state’s law applies.

White House Speaks Out On Limiting Non-Compete Agreements

pillarsThis week the White House issued a statement encouraging state lawmakers to ban non-compete agreements for workers who: (i) fall below certain wage thresholds; (ii) likely do not possess trade secrets; (iii) work in occupations related to public health and safety; or (iv) would suffer “undue adverse impacts” from being limited by a non-compete (such as those terminated without cause). The White House further encouraged states to require that non-compete agreements be presented to employees before a job offer or a significant promotion has been accepted so that it can be considered as part of the offer.

According to the White House, “[i]n adopting these strategies, states can help ensure that workers can move freely from job to job, without fear of being sued … Even in states that choose to enforce noncompetes, we have heard from experts that only in rare cases is a noncompete the best option for an employer to use, over and above the host of other legal frameworks — including trade secret protections, nonsolicitation agreements and nondisclosure agreements.” State officials from a number of states, including Illinois, released statements supporting the White House’s announcement.

It remains to be seen whether any states follow the White House’s suggestion and enact they types of provisions being recommended. We will keep you updated on any developments.

Motion Filed to Stop New Overtime Regulations… but for now keep focusing on December 1st deadline!

pillarsThis week twenty-one states filed an emergency motion for a nationwide injunction to block the new overtime regulations that are set to go into effect on December 1st.  However, as we’ve previously reported, the success of this and other efforts to stop or delay the regulations is far from clear.  Unless and until one of these efforts is successful, companies should move forward with their planning and make sure that they are prepared to be in compliance on December 1st.