On January 20, 2021, Vice President Joseph R. Biden Jr. will be sworn in as the 46th president of the United States. Whichever side of the political spectrum you fall on, there can be no question that this is going to signal changes – and not all of them positive – for employers. For all the tumult of the Trump years, the current administration has helped create an unquestionably employer-friendly environment, largely by rolling back many Obama-era labor priorities, from union organizing to changes in independent contractor law.

Whatever their political orientation, businesses are cautiously eyeing a Biden-Harris administration for signs of “Obama redux,” or perhaps an even more aggressive labor agenda, particularly in the form of Executive Orders from a Democratic administration energized by (or careful to placate) its more progressive elements.

Biden’s actual legislative opportunities in Congress are far more uncertain and run from modest to expansive, largely depending on the results of Georgia’s U.S. Senate runoff elections on January 5, 2021. If Republicans keep control of the Senate, employers should expect more gridlock in Washington. That kind of stalemate may well result in the exact reaction some state legislatures had to Trump: more progressive employment legislation at the state and local levels. But with Executive Orders remaining, recent Presidents’ weapon of choice (a trend for which Trump became known but which, ironically, was ushered in by Obama himself), employers can also expect a Congressionally stymied Biden-Harris administration to compensate with more of the same. We don’t have to look far for evidence of these plans: for example, Biden has already committed to rescinding President Trump’s Executive Order 13950, which directed federal contractors to refrain from conducting diversity and inclusion training.

Other predictions include the following:

Coronavirus

President-elect Biden campaigned on shutting down the coronavirus, not the economy. Employers can expect his administration to issue workplace safety rules for employers to follow on a national level to protect workers from exposure to the virus. The new president could implement these rules quickly even without Senate confirmed leadership at the Labor Department or OSHA.

Expanded family leave and emergency paid sick leave under the Families First Coronavirus Response Act (FFCRA) will expire on December 31, 2020. During the campaign, President-elect Biden indicated that he would support: (1) expanding the additional $600 per week in federal unemployment benefits that expired in July 2020, and (2) an extension of emergency paid sick leave and family medical leave under the FFCRA. Biden would likely support a bill that would make these benefits available to both employees and part-time workers, gig workers, and independent contractors. Senate Republicans favor the inclusion of valuable liability protections for businesses. In the event Senate Republicans keep control of the Senate, President-elect Biden may support a compromise bill with both benefits for employees and employers (for employers making a good faith effort to comply with COVID safety measures).

Additionally, President-elect Biden supports 12 weeks of paid leave for all workers to care for their newborns, newly adopted or fostered children, for their own or a family member’s serious health condition, or to care for injured service members or deal with “qualifying exigencies arising from the deployment” of a family member in the Armed Services.

Misclassification – Employee vs. Independent Contractor

The ping pong that has gone on over the legal definition of an “employee” will likely continue, as President-elect Biden has committed to “work with Congress to establish a standard modeled on the ABC test for all labor, employment, and tax laws.” (The “ABC” test finds its origins in California state law, most clearly embodied in 2020’s Assembly Bill 5, or “AB5,” which is shorthand for “almost impossible to classify workers as independent contractors.”)

Whether the Biden-Harris administration can actually deliver on its promise of legislative action with respect to independent contractor misclassification remains to be seen. However, President-elect Biden’s invocation of California’s ABC test is a strong signal that his administration will ramp up enforcement action designed to root out independent contractor misclassification.

National Labor Relations Board

While a Republican-controlled Senate is unlikely to pass union friendly legislative proposals, President-elect Biden will place individuals on the National Labor Relations Board who share his pro-union views, and who are likely to overrule many of the precedents issued during the Trump administration and who will revive the Obama-era rules expediting union elections, requiring contractors to agree to be neutral with respect to union organizing, and impose a version of the “Fair Pay and Safe Workplaces” order.

OSHA

Similarly, a Biden-Harris administration will likely include the reinstatement of the Obama-era rule requiring employers to publicly disclose occupational illnesses and injuries at their workplaces, which is intended to incentivize compliance with health and safety standards.

Pay Equity

When Vice President-elect Kamala Harris was herself a presidential hopeful, she revealed her intention to make the U.S. a worldwide leader in the fight for pay equity. If Republican control in the Senate remains, it is unlikely that the Biden administration could push through Congress any pay equity legislation imposing significant burden on private employers. However, pay parity standards for federal contractors are likely along with the resuscitation of the Obama-era requirement that pay data be disclosed by employers on EEO-1 reports and a directive to the OFCCP to aggressively enforce prohibitions on wage discrimination by federal contractors.

Arbitration

If the Democrats gain control of the Senate, employers can expect Biden to sign the Forced Arbitration Injustice Repeal (“FAIR”) Act, which is legislation that would prohibit employers from requiring employees to sign pre-dispute arbitration agreements as a condition of employment. If Republicans maintain their Senate majority, the FAIR Act will be blocked in the Senate.

Immigration

The Biden Administration is expected to make it easier for businesses to use immigration to strengthen their businesses.

Minimum Wage

President-elect Biden previously called for a $15 federal minimum wage. The Biden Administration also will seek to eliminate the reduced minimum wage for tipped employees (i.e., the tip credit) and likely will seek an increase in the minimum salary to qualify as an exempt employee under the FLSA.

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So what’s the upshot?  Employers can expect a Biden-Harris administration that is much more worker-friendly than the current administration. Without a Democratic majority in the Senate, don’t expect any groundbreaking labor and employment legislation. Instead, stay focused in the next four years on what made the last four years such a rodeo for employers trying to stay in compliance – a patchwork of Executive Orders, and state and local laws that vary widely from jurisdiction to jurisdiction. As for what might happen if Democrats gain a slim majority in the Senate – check back with us on January 6, 2021.

Kelley Drye’s Labor and Employment team will continue to track and provide updates on the latest legislative and regulatory developments. If you have any questions, please contact our co-chairs, Barbara Hoey and Mark Konkel.

As employers are well aware by now, New York enacted statewide paid sick leave requirements for employers, which took effect on September 30, 2020. We provided an overview of requirements for the new law here. Under the law, New York employers must provide all employees with sick leave and grant employees the ability to use accrued sick time starting January 1, 2021. The amount of sick leave an employer must provide under the law varies depending on an employer’s size and net income.

Recently, New York State issued much anticipated guidance and in a seven page FAQ document regarding the State’s new paid sick leave law. That guidance can be found here.

Although the guidance doesn’t answer every single question employers will have, the FAQs provide clarification as to Definitions, Accruals, Permitted Uses, Who is Eligible, Leave Increments, Rate of Pay, Alternative Accrual System, and Collective Bargaining Agreement and Other Leave Laws, Employee Rights & Protections, and Miscellaneous Questions.

We have excerpted  below a few key FAQs for employers to consider as they continue to work through COVID-19 and employers consider necessary revisions to their leave policies:

If employers choose an accrual based method for calculating leave under the NYPSL, they should be aware that out of state telework may impact an employee’s entitlement. The FAQs suggest that employees are only eligible to accrue sick leave based on hours worked while physically within the state of New York:

DOES AN EMPLOYER HAVE TO PROVIDE SICK LEAVE TO EMPLOYEES WHO TELECOMMUTE OUTSIDE OF NEW YORK STATE?

Employees who telecommute are covered by the law only for the hours when they are physically working in New York State, even if the employer is physically located outside New York State.

With many employees are already working from home, it is also important to note that, under the new law employers cannot require employees to telecommute in lieu of taking sick leave: Continue Reading State Issues Guidance for NY Paid Sick Leave Law

On September 30, 2020, California Governor Gavin Newsom signed into law SB 973, which imposes new pay reporting requirements on certain employers. The law, which takes effect on January 1, 2021, requires employers to file an annual pay data report by March 31 of each year. According to the California legislature, the collection of pay data will permit the state to “more efficiently identify wage patterns and allow for targeted enforcement of equal pay or discrimination laws.” The new law is in response to the Trump Administration’s order in August 2017, suspending an Obama-era wage gap initiative that required employers to submit a federal Employer Information Report (EEO-1) that includes pay data by gender, race, and ethnicity beginning in 2018.

Under the new law, California employers with 100 or more employees, who were required to file an annual EEO-1 report under federal law, are now required to submit a pay data report to the California Department of Fair Employment and Housing (DFEH), that mirrors the reporting requirements of the EEO-1 form. Specifically, the report must include: (1) the number of employees by race, ethnicity, and sex in each of ten broad job categories, and (2) the number of employees by race, ethnicity, and sex whose annual earnings (defined as W-2 income) fall within each of the pay bands established by the U.S. Bureau of Labor Statistics in the Occupational Employment Statistics survey. The report must also include total hours worked by each employee within a given pay band. For reporting purposes, employers will create and submit a “snapshot” pay period in which it counts all individuals who were on the employer’s payroll in any single pay period of the employer’s choice between October 1 and December 31.

Employers with multiple establishments must submit a report for each establishment and a consolidated report that includes all employees. Employers must also provide the data in a format that allows the DFEH to search and sort the information using readily available software. Employers may, but are not required to, provide “clarifying remarks” about information submitted in the report. The law also requires the DFEH to make the reports available to the Department of Labor Standards Enforcement upon request and to maintain the reports for a minimum of 10 years. Additionally, the law authorizes the DFEH to seek an order requiring non-reporting employers to comply.

The new law does not clarify if the reporting requirements apply to employers with more than 100 employees overall (including those employees outside of the state) or only to those employers with more than 100 employees in California.  In addition, it is unclear if California employers will need to report data for all employees, even those who live outside of the state.

In light of these upcoming reporting requirements, California employers should start the process of evaluating whether they are in a position to generate the required data by the March 31, 2021 deadline. If you have questions regarding how to comply with California’s new pay data reporting requirements, please contact Kelley Drye’s Labor & Employment group.

 

 

On September 17, 2020, Governor Newsom signed a historic expansion of the California Family Rights Act (“CFRA”).  Here’s what California employers need to know about the expanded law, which becomes effective on January 1, 2021:

The new law expands which companies are required to provide job-protected family and medical leave.

  • Businesses with as few as 5 employees company-wide must provide 12 workweeks of unpaid protected leave under the CFRA to eligible employees.  There is no requirement that the 5 employees be within a 75-mile radius of one another.

The law also expands the reasons for which employees may take leave.

  • Under the prior CFRA statute, in addition to taking leave to bond with a new child of the employee or to care for the employee’s own serious health condition, an employee could only take CFRA leave in order to care for the employee’s parent, child, spouse, or domestic partner.  The new law permits an employee to also take CFRA leave to care for a grandparent, grandchild, or sibling with a serious health condition (additional covered family members that are not protected under the federal Family Medical Leave Act (“FMLA”)).
  • Employers must also grant up to 12 workweeks of unpaid protected leave during any 12-month period due to a qualifying exigency related to the covered active duty or call to covered active duty of an employee’s spouse, domestic partner, child, or parent in the Armed Forces of the United States.

The new law also eliminates two CFRA exemptions.

  • If both parents of a new child work for the same employer, said employer can no longer limit the amount of leave taken by the parents to bond with their child to a combined total of 12 workweeks.  Employers are now required to provide up to 12 workweeks of bonding leave to each employee.
  • Employers are no longer able to refuse CFRA leave under the “key employee” exception, which allows employers to refuse reinstatement to salaried employees who are among the highest paid 10 percent of the company’s employees within a 75-mile radius.

Smaller companies that were previously exempt from the CFRA should prepare CFRA leave policies and procedures in order to notify employees of their coverage under the law and to ensure that CFRA leave is properly administered after the law becomes effective.  Large companies must update their leave policies and procedures to reflect the new changes.  If you have questions regarding how to comply with the newly expanded CFRA, please reach out to one of Kelley Drye’s Labor and Employment attorneys.

The independent contractor/employee classification conundrum is nothing new. Courts, state legislatures, and even the IRS have developed a slew of multi-factor tests to assess whether a worker is an employee or independent contractor. Mixed among these tests is arguably the most significant-the U.S. Department of Labor’s six-factor test, which is now being given a much-needed makeover. On September 22, 2020, the DOL released a Notice of Proposed Rulemaking, announcing an employer-friendly proposed rule that nixes a balancing test in favor of a test that focuses on the two factors that matter.

As the rule currently stands, the DOL has a six-factor test to assess the worker’s economic dependence on the business, including: (1) the business’s control over the workers; (2) the permanency of the relationship; (3)the workers’ investment in facilities and equipment; (4) the skill required to complete the work; (5) the opportunities for profit or loss; and (6) the extent to which the workers’ services are integrated into the business. No one factor is given more weight than any other. Continue Reading It Takes Two: The DOL’s Proposed Rulemaking Regarding FLSA Worker Classification

Today, most Americans live in a jurisdiction that has enacted a “ban-the-box” law (also known as a “fair chance” law).  Ban-the-box laws restrict employers from inquiring about an applicant’s criminal background at various stages of the hiring process.  The purpose of these laws are to enable an ex-offender to display his or her qualifications in the hiring process before he or she must disclose a criminal record.  In fact, the origin of the laws’ colloquial name is the “box” that initial job applicants must check if they have a prior conviction.  These laws benefit an estimated 70 million people in the United States (or almost one in three U.S. adults) who have prior arrests or convictions.

Currently, there is no federal ban-the-box law generally applicable to private sector employers.  However, on December 20, 2019, President Trump signed into law the Fair Chance Act (also known as the Fair Chance to Compete for Jobs Act of 2019) which prohibits federal agencies and government contractors from inquiring about an applicant’s criminal history before making a conditional employment offer, unless a specified exception applies.  The law includes exceptions for law enforcement and national security positions that require access to classified information, and where an employer is legally obligated to conduct a criminal background check before making a conditional employment offer. Continue Reading North Carolina Also Bans-The-Box

Summer is coming to an end, and you know what that means: school is back in session. We’ve previously provided general guidance on the challenges facing students, parents and employers this fall as students return to school during the pandemic. This post focuses specifically on what employers doing business in New York should be considering.

The same overarching analysis applies when determining your obligations if an employee is seeking leave to care for children who would be in school if not for COVID-19:

  • Does FFCRA apply?
  • Does a state or local Emergency COVID-19 leave law apply in our jurisdiction?
  • Does a paid sick leave law apply in our jurisdiction?
  • Does a company benefit or policy apply?

New York has a number of leave laws that are implicated by school closures. Fortunately, employers need not worry about New York State’s Paid Family Leave for purposes of school closures. New York has explicitly stated in its FAQ that a COVID-related school closure is not a qualifying reason for purposes of Paid Family Leave benefits under the law. An employee may, however, avail himself or herself of such benefits if the employee or the employee’s minor dependent child is subject to a mandatory or precautionary order of quarantine or isolation issued by the State, department of health, local board of health, or government entity.

Continue Reading Back to School Cheat Sheet for Employers: New York

The EEOC again updated its Technical Assistance Questions and Answers (Q&A), which we have been following closely, and previously covered on June 11, 2020.

In its most recent update, the EEOC addressed specific questions related to administering COVID-19 tests (Q&A, A.7); permitting employees into the physical workplace, and permissible COVID-19 questions (Q&A, A.8, A.9, A.11, A.12, A.13, and A.14). The EEOC also updated its guidance regarding confidentiality of medical information (B.5, B.6, B.7, and B.8), as well as reasonable accommodations and teleworking (D.8, D.14, D.15, D.16, D.17, and D.18). Continue Reading UPDATE: EEOC Updates COVID-19 Technical Assistance Publication with Q&A

We’ve previously provided general guidance on the challenges facing students, parents and employers this fall.  This post focuses on what employers doing business in California need to consider in response to their employee’s requests for time off work due to school or childcare facility closures.

What are your obligations if an employee is seeking leave to care for children who would be in school or daycare if not for COVID-19 related closures:

  • Does FFCRA apply?
  • Does a state or local Emergency COVID-19 leave law apply in your jurisdiction?
  • Does a paid sick leave law apply in your jurisdiction?
  • Does a company benefit or policy apply?

Continue Reading Back to School Cheat Sheet for Employers: California

We’ve previously provided general guidance on the challenges facing students, parents and employers this fall.  This is the first week of remote school for all Chicago Public School students, and this post focuses on what employers doing business in Illinois need to consider.

The same overarching analysis applies when determining your obligations if an employee is seeking leave to care for children who would be in school if not for COVID-19:

  • Does FFCRA apply?
  • Does a state or local Emergency COVID-19 leave law apply in our jurisdiction?
  • Does a paid sick leave law apply in our jurisdiction?
  • Does a company benefit or policy apply?

Continue Reading Back to School Cheat Sheet for Employers: Illinois