Tuesday, November 8, 2022 at 12:30pm ET

HR employees are, willingly or not, the guardians of the company’s most sensitive collection of data—its employee’s personal information. Cybercriminals often perceive the human resources department as the perfect gateway into a company’s employee data goldmine. Many scams and information theft are perpetrated through social engineering. Cybercriminals posing as job applicants, recruiters or new vendors pray on the fact that human resource employees often receive emails and attachments from unknown sources. Conversely, because of the central role that HR plays in employees’ lives, many employees reflexively open emails and attachments that appear to be sent from the HR department. Employees are just one click away from granting fraudsters the access they need to install ransomware or steal login credentials, potentially exposing employees’ sensitive and valuable personal information, and resulting in significant losses and legal exposure for your company.

This webinar will cover:

  • Weapons and techniques fraudsters use to infiltrate company systems and current scam trends
  • Proactive best practices for fraud and information theft prevention
  • E! true HR stories: theft, lawsuits, and the one simple move that would have stopped it all
  • What to do when the perpetrators are in-house

To RSVP for this webinar, please click here.

 

With the recent expansion of pay transparency laws in Colorado, New York City, and Washington, it should come as no surprise to employers that California has also opted to expand its existing pay transparency laws.

On September 27, 2022, California Governor Gavin Newsom signed SB 1162, which broadens the state’s pay transparency laws by requiring employers to provide pay scale information and expanding pay data reporting obligations for certain employers.

The earliest of the law’s changes go into effect on January 1, 2023, but employers should now begin the process of updating their existing organizational policies and procedures to ensure timely compliance with the new regulation when it takes effect.  Here’s a brief overview of existing law and the new requirements set forth in SB 1162.

Pay Transparency

Prior to the enactment of SB 1162, under the current law, employers are required to provide an applicant for employment with the pay scale information for the position the applicant is seeking, upon reasonable request.  Current law does not require employers to provide existing employees pay scale information for their current positions.  SB 1162 now affords California employees the right to request pay scale information and adds the additional mandate that employers must include pay scale information in job postings.  The term “pay scale” is defined as “the salary or hourly wage range that the employer reasonably expects to pay for the position.”  Effective January 1, 2023, California employers must comply with the following requirements:

  • Employers must provide their employees with pay scale information for their current positions, when the information is requested.
  • Employers with 15 or more employees must include in any job posting the pay scale information for the position sought to be filled; and
  • Employers must maintain records of a job title and wage rate history for each employee for the duration of his or her employment, plus 3 years after the end of the employment in order for the Labor Commissioner to determine if there is a pattern of wage discrepancy.

Continue Reading Pay Transparency Expansion in California

On November 24, 2022, New York will open a one-year “lookback” window that will revive older sexual abuse claims that were previously barred by applicable statues of limitations and allow victims to file suit against responsible parties regardless of when the abuse occurred.  The lookback window is the result of the recently-enacted Adult Survivors Act (“ASA”). The ASA is an analogue to New York’s Child Victims Act (“CVA”) of 2019. The CVA revived the claims of victims who were under eighteen at the time of abuse. In contrast, the ASA applies to victims who were eighteen or older when the abuse occurred.

Like the CVA, the ASA revives otherwise time-barred claims based on both intentional and negligence theories of relief.  This means that companies that formerly employed abusers may be sued and held liable under vicarious liability theories – such as negligent hiring, training and retention – even where the employer had no direct knowledge or involvement in the abuse. Continue Reading New York Employers Must Take Action to Secure Insurance Coverage for the Coming Wave of Sexual Abuse Claims Under the Adult Survivors Act

Employers can be forgiven for diverting their attention during the past three years to pressing pandemic-related employment issues—vaccine mandates, return-to-work challenges, managing hybrid workforces, with all the novel and thorny legal issues that emerged from a transformed workplace. But in an ever-changing employment law landscape, a new compliance challenge has emerged: federal, state, and local regulations governing the use of artificial intelligence (“AI”) in the hiring process. These new laws and regulations are a perfect storm for liability. They are new and unfamiliar, and they are easy to violate despite employers’ best intentions.

The rise of single-click job application programs like “Easy Apply” on LinkedIn or “1 Click Apply” on ZipRecruiter has made it extraordinarily easy for applicants to submit job applications. But as any recruiting manager knows, the task of filtering resumes and job applications for hundreds of applicants per position ranges from difficult to almost impossible. So how does a hiring manager make a “rough cut” from the piles of electronically-submitted resumes and job applications?  Happily, AI offers a powerful tool for making that rough cut; unhappily, AI can result in employment decisions, literally without human intervention, that may violate anti-discrimination laws—or at least, that’s the regulatory concern, as an increasing number of jurisdictions have articulated it.

The idea of using AI in making hiring decisions is simple: machine-based algorithms can identify certain objectively desirable characteristics or experience in candidates, and in theory, those algorithms (precisely because they are supposedly objective) actually reduce the opportunity for human bias. The principal concern of regulators is that, at least so far, AI technology is a black box. To date, there has been little to no meaningful transparency in exactly what the technology is considering and evaluating in that algorithmic process of making the rough cut. The plethora of new regulation is aimed at exactly this perceived lack of transparency. Continue Reading The New Regulatory Frontier: Using AI Tools is About to Become More Difficult

On September 7, 2022, the NLRB issued a notice of proposed rulemaking seeking to replace the Trump-era final joint employer rule, which provided that an employer would be considered a joint employer under the NLRA only where it exercised “substantial direct and immediate control” over the essential terms and conditions of another company’s employee.

The NLRB’s newly proposed rule drastically expands the joint employer standard to encompass relationships where a company holds indirect and unexercised control over the terms and conditions of another company’s employee.

Employers would be wise to begin thinking now how this will impact their business.

Background

The NLRA does not expressly address situations where employees are employed jointly by two or more companies  As a result, the NLRB and courts have typically applied common-law agency principles to determine when one or more entities jointly employ a particular group of employees.

In an Obama-era decision, Browning-Ferris Industries of California, Inc., d/b/a BFI Newby Island Recyclery, 362 NLRB 1599 (2015), the NLRB held that the “right to control, in the common-law sense, is probative of joint-employer status, as is the actual exercise of control, whether direct or indirect.” Id. at 1614. Essentially, the BFI majority found that a company could be deemed a joint employer even where its control over the essential working conditions of another company’s employees was indirect, or in circumstances where it was contractually reserved, but not exercised. Id. at 1613-14.

In February 2020, in an effort to roll back BFI, the Trump-era Board published a final rule that narrowed the joint-employer test to include only those situations where the two employers “share or codetermine” the essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction. The employer-friendly final rule defined “share or codetermine” as the possession and exercise of “such substantial direct and immediate control over one or more essential terms or conditions of their employment as would warrant finding that the entity meaningfully affects matters relating to the employment relationship with those employees.”

The final rule also considered indirect control over essential terms or conditions of employment, contractually reserved control over essential terms or conditions of employment, and control over mandatory subjects of bargaining other than essential terms and conditions of employment into the joint-employer analysis, “but only to the extent [they] supplement[] and reinforce[] evidence of the entity’s possession or exercise of direct and immediate control over a particular essential term and condition of employment.”

The final rule went into effect on April 27, 2020.

The Proposed Joint-Employer Standard (Revisited)

The NLRB’s new proposed rule rejects the 2020 rule’s narrow focus on “direct and immediate control” and returns to the rationale in the BFI decision, stating that “a party asserting a joint-employment relationship may establish joint-employer status with evidence of indirect and reserved forms of control, so long as those forms of control bear on employees’ essential terms and conditions of employment.”

The proposed rule would also expand the definition of “essential terms and conditions of employment,” to include “work rules and directions governing the manner, means, or methods of work performance.”

The proposed rule reflects the Board’s view that the NLRA’s purpose of promoting collective bargaining and stabilizing labor relations “are best served when two or more statutory employers that each possess some authority to control or exercise the power to control employees’ essential terms and conditions of employment are parties to bargaining over those employees’ working conditions.”

Members of the public may file comments on the Board’s proposal on or before November 7, 2022 and replies to comments filed during the initial comment period must be filed on or before November 21, 2022.

Thinking Ahead…

Employers should begin to consider how the new joint employer standard will impact their existing business structure. Under the proposed rule, a company would be considered a joint employer if they co-determine not just scheduling, wages, and benefits, but also THE direction of the manner and means of performance, even where they do not retain any direct and immediate control over those terms and conditions.

This means that companies that currently outsource staffing, employee management, and/or human resources may no longer use those attenuated relationships to act as a shield for compliance with the NLRA, including potential bargaining obligations.

Thinking ahead, employers should begin look at their staffing and other third party agreements to determine whether they contain reserved control provisions. Even if never exercised, under the propose rule, such provisions are likely probative of joint-employer status. Companies should also consider whether it is now necessary to retrain managers who oversee employees of another entity, such as a staffing agency.

Back in July 2021, President Biden signed Executive Order 14036 directing the Federal Trade Commission (“FTC”) to “address agreements that may unduly limit workers’ ability to change jobs.” As a result, gallons of ink were spilled by practitioners across the country predicting the downfall of non-compete provisions nationwide, replacing the current patchwork of state laws with something more akin to California.

While these predictions have not yet come to fruition, the FTC recently expanded its non-compete enforcement into an area that caught many by surprise – non-compete provisions executed in conjunction with a business sale. Most who follow this area of the law can be forgiven for not seeing this issue on the horizon, as the fanfare regarding President Biden’s EO mainly focused on non-competes in the employer-employee context. In fact, employer-employee provisions have been an enforcement strategy of state legislatures and attorneys general for the past several years. Few, if any, discussed these agreements as part of business deals.

This is because non-compete provisions in connection with a business sale have traditionally been viewed as a business necessity and not a mechanism that impedes on worker mobility. This concept is so commonly accepted that even California, the state that literally outlawed non-compete agreements, carved out a limited exemption for the “sale of goodwill of business or ownership interest.”  See Cal. Bus. & Prof. Code §16601. Continue Reading Dire Straits? The FTC’s Expanding Non-Compete Enforcement Seeks to Narrow Sale-of-Business Agreements

The Equal Opportunity Commission (EEOC) updated its “Technical Assistance Questions and Answers” as of July 12, 2022 to reflect new standards for COVID-19 screening in the workplace. The updated Q&A can be found here. The revised guidance is based on the “evolving pandemic circumstances” that the EEOC considers when determining compliance with the ADA. The guidance also distinguishes between viral testing and antibody testing – explicitly barring the use of antibody testing for employees re-entering the workplace.

Can Employers Require COVID-19 Screening?

Yes, but an employer must show that testing is job-related and consistent with business necessity. At the beginning of the COVID-19 pandemic, the EEOC’s assessment was that the ADA standard for conducting medical examinations was met for employers to conduct COVID-19 viral test screening of employees. The updated guidance now requires “individual assessment by employers to determine whether such testing is warranted.”

In order for an employer to mandate a COVID-19 viral test as a screening test for new or continued employment, the employer must now show that the test “is job-related and consistent with business necessity.” Whether or not testing is “consistent with business necessity” will be based on whether it is “consistent with guidance from Centers for Disease Control and Prevention (CDC), Food and Drug Administration (FDA), and/or state/local public health authorities that is current at the time of testing.”

The EEOC provides a list of factors that may be considered when determining whether testing is a “business necessity,” including:

“[T]he level of community transmission, the vaccination status of employees, the accuracy and speed of processing for different types of COVID-19 viral tests, the degree to which breakthrough infections are possible for employees who are ‘up to date’ on vaccinations, the ease of transmissibility of the current variant(s), the possible severity of illness from the current variant, what types of contacts employees may have with others in the workplace or elsewhere that they are required to work (e.g., working with medically vulnerable individuals), and the potential impact on operations if an employee enters the workplace with COVID-19.”

Employers that intend to mandate testing should monitor evolving CDC guidance. Continue Reading The EEOC’s Updated Guidance on Employer COVID-19 Safety Requirements

Join Kelley Drye’s Labor and Employment team for the 2022 WORKing Lunch Series, which includes five webinars focused on the latest trends and developments in workplace law. Sign up for one, some, or all of the programs below. Invite a colleague, grab your lunch and let’s take a deep dive into these timely employment topics.

Tuesday, September 13, 2022 at 12:30pm ET
Pay Equity & Transparency: Rising Workplace Trends

New York, which has over 9.3 million workers and counting, will soon join other jurisdictions in a growing trend of state and local pay transparency requirements for employers across the country. Currently there are 17 states (and numerous cities) that have laws requiring pay transparency and/or prohibit salary inquiries by current/prospective employers. Additionally, the recent focus on pay equity laws, both state and federal, has served as a catalyst for increased scrutiny by government agencies and resulted in an uptick in related class action lawsuits in recent years.  While transparency is generally a virtue, compliance with the ever-evolving pay transparency and pay equity laws across multiple jurisdictions can create a quagmire of issues in attracting and retaining talent—not to mention the HR and legal landmines.

This webinar will cover:

  • New pay transparency laws
  • Review of pay equity and salary history ban laws
  • Insights on compliance
  • Practical implications for talent acquisition and retention

Continue Reading Complimentary L&E Webinar Series

On June 24, 2022, the U.S. Supreme Court issued its decision in Dobbs v. Jackson Women’s Health Organization, overturning Roe v. Wade and holding that there is no constitutionally protected right to abortion.  While the Dobbs decision does not make abortion illegal, it does permit states to make abortion illegal under state law. Whether employers assume new risks in covering abortions (including aiding or abetting someone in receiving an abortion) under their health plans is now a matter of state law.  In the wake of this decision, employers now need to consider what they can legally do to support employees (and their covered dependents) who wish to terminate a pregnancy, including those who need to do so due to a medical condition or emergency.

Fully Insured and Self-Insured Plans

The implications of the Dobbs decision for group health plans will differ depending on whether a plan is fully insured or self-insured.  Since states generally have the power to regulate fully insured health plans, insurance policies would need to comply with the law of the state where the policy is issued; fully insured health plans in states where abortion is banned would not be able to provide abortion benefits.  Employers with such plans would therefore want to review their plan documents, insurance policies, and governing state laws, and should explore alternatives with their carriers and brokers as needed to see if there is still a way to provide assistance for abortion services.  Employers may also want to consider the possibility of switching to a self-insured plan, as doing so would give them more discretion in terms of plan design (as discussed below).  If this is not possible, there could still be other alternatives available such as establishing an HRA that covers any unreimbursed expenses for medical care (which includes abortion procedures which constitute “medical care” under IRS rules).  The HRA would need to either be integrated with the employer’s medical plan to comply with the Affordable Care Act or structured as an Excepted Benefit HRA (with different implications with respect to eligibility, funding, and other features).  Kelley Drye is available to assist employers wishing to learn about an HRA approach. Continue Reading Impact of Dobbs Decision on Employee Benefits

A few weeks ago, we hinted at the possibility that the United States Supreme Court may overturn parts of the California Supreme Court’s decision in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (Cal. 2014). Our prediction was spot on as the US Supreme Court did just that in a big win for employers.

BACKGROUND

Historically, California employees could avoid their arbitration clauses in part by asserting claims brought under California’s Private Attorney General Act (“PAGA”). PAGA allows employees to stand in the shoes of the State of California to enforce particular Labor Code violations that were – before the enactment of PAGA – only enforceable by the California Labor Workforce Development Agency.

Continue Reading US Supreme Court Overturned CA Supreme Court Decision