On November 2, 2017, three Republican Representatives, Mimi Walters (R-CA), Elise Stefanik (R-NY), and Cathy McMorris Rodgers (R-WA), introduced a federal paid leave bill that would give employers the option of providing their employees a minimum number of paid leave hours per year and instituting a flexible workplace arrangement. The bill would amend the Employee Retirement Income Security Act (“ERISA”) and use the statute’s existing pre-emption mechanism to offer employers a safe harbor from the hodgepodge of state and local paid sick leave laws. Currently eight states and more than 30 local jurisdictions have passed paid sick leave laws.

The minimum amount of paid leave employers would be required to provide depends on the employer’s size and employee’s tenure. The bill does not address whether an employer’s size is determined by its entire workforce or the number of employees in a given location.

Number of Employees Amount Of Sick Leave For Employees With Five Or More Years Of Service Amount Of Sick Leave For Employees With Fewer Than Five Years Of Service
1,000 or more

 

20 days 16 days
250 to 999

 

18 days 14 days
50 to 249

 

15 days 13 days
Fewer than 50

 

14 days 12 days

In addition to paid leave hours, employers would be required to offer at least one of the following flexible workplace arrangements: (1) a compressed work schedule that allows employees to increase their daily hours so as to qualify for a four-day workweek, (2) a biweekly work program that permits employees to work a total of 80 hours over a two-week period, (3) a telecommuting program, (4) a job-sharing program, (5) flexible scheduling, or (6) a predictable schedule. Employees would become eligible to participate in a flexible workplace arrangement once they have worked for the employer for 12 months and at least 1,000 hours.

The bill would not affect state paid family leave insurance programs, such as one about to take effect in New York, nor would it affect job-protection coverage afforded by the Family and Medical Leave Act. If signed into law, the bill would become the first ever federal paid leave law.

The New York City Department of Consumer Affairs (“DCA”) has issued proposed rules  for the implementation of the Fair Workweek Law. The law establishes scheduling practices for fast food and retail workers in New York City and is set to go into effect on November 26, 2017.

With regard to retail employers, the proposed rules include:

  • Workplace notice positing requirements, § 14-02.   The DCA’s notice template is not yet available.
  • Workplace schedule posting requirements, § 14-04.   Retail employers must conspicuously post schedules three days before work begins.   The proposed rule expressly provides that employers may not post or otherwise disclose to other employees the work schedule of an employee who has been granted an accommodation based on the employee’s status as a survivor of domestic violence, stalking, or sexual assault, where disclosure would conflict with the accommodation.
  • Recordkeeping requirements to document compliance, § 14-08(a).   The proposed rule states these records must be maintained “in an electronically accessible format” and show:
    • Actual hours worked by each employee each week;
    • An employee’s written consent to any schedule changes, where required; and
    • Each written schedule provided to an employee.
  • Employee work schedule request requirements, § 14-08(b) and (c).   Within two weeks’ of an employee’s request, retail employers must provide employees with their work schedules for any previous week worked for the past three years. Within one week of an employee’s request, retail employers must provide the most current version of the complete work schedule for all employees who work at the same location, with the exception of those employees with accommodations based on the employee’s status as a survivor of domestic violence, stalking, or sexual assault.
  • Procedural guidance for employees who wish to proceed with a private right action against their employers for violations of the law.

A public hearing on the proposed rules is scheduled for Friday November 17, 2017. The deadline for written comments is 5:00 p.m. on November 17, 2017.

For the second time in as many years, California Governor Jerry Brown has vetoed “wage shaming” legislation that would have required employers with 500 or more employees to report gender-related pay gap statistics to the California Secretary of State on an annual basis beginning in 2019 for publication on a public website. Assembly Bill 1209 (“AB 1209”), which we discussed at length in last month’s Act Now advisory, passed the Legislature despite widespread criticism from employers and commerce groups.  This criticism included concerns that publication of statistical differences in the mean and median salaries of male and female employees without accounting for legitimate factors such as seniority, education, experience, and productivity could give a misleading impression that an employer had violated the law.  Opponents also decried the burden the bill would place on employers to do data collection and warned that it would lead to additional litigation.  In vetoing the measure, Governor Brown noted the “ambiguous wording” of the bill and stated he was “worried that this ambiguity could be exploited to encourage more litigation than pay equity.”

However, the same pen that vetoed AB 1209 signed another pay-equity law last week: Assembly Bill 168 (“AB 168”).  AB 168 precludes California employers from asking prospective employees about their salary history information.  “Salary history information” includes both compensation and benefits.  Like similar laws passed recently in several other states and cities, the policy underlying the inquiry ban is that reliance upon prior compensation perpetuates historic pay differentials.  Opponents have argued that such a ban will make it more difficult for employers to match job offers to market rates.  Go to our Act Now Advisory on AB 168 for a comprehensive review of this new law.

On July 19, 2017, the New York State Workers’ Compensation Board (“WCB” or the “Board”) issued its final regulations (“Final Regulations”) for the New York State Paid Family Leave Benefits Law (“PFLBL” or the “Law”). The WCB first published regulations to the PFLBL in February 2017, and then updated those regulations in May (collectively, the “Prior Regulations”).

While the Final Regulations did clarify some outstanding questions, many questions remain, particularly pertaining to the practical logistics of implementing the Law, such as the tax treatment of deductions and benefits, paystub requirements, certain differences between requirements that pertain to self-funding employers and those employers intending to obtain an insurance policy, and what forms and procedures will apply.

As we previously reported, when the PFLBL becomes effective on January 1, 2018, most employees working in New York State will be eligible for paid family leave (“PFL”) benefits. Employers are not responsible for actually providing pay to employees during a period of PFL; rather, employee payroll deductions will fund an insurance policy, which will either be managed by a third party or self-funded by the employer, from which employees will receive PFLBL benefits.

On the same day the Final Regulations were published, the WCB also issued an Assessment of Public Comment (the “Assessment”), which addresses certain public comments to the Prior Regulations. The State has also published two fact sheets – one for employees and one for employers – outlining the basic elements of the PFLBL.

The following summary addresses the updates in the Final Regulations, as compared to the Prior Regulations, as well as some additional insight from the Assessment.

Collective Bargaining Agreements. The Final Regulations clarified that employers that have employees or classes of employees subject to a collective bargaining agreement (“CBA”) are not required to supply such employees with PFL coverage in accordance with the terms of the Law, but only so long as the CBA:

  1. provides paid family leave benefits at least as favorable as those provided in the Law; and
  2. does not include a provision whereby otherwise-eligible employees may waive their rights to paid family leave or otherwise opt-out of the law (except in accordance with the opt-out provisions in the Law for employees who will not become eligible for PFL).

The Final Regulations specify that, except as noted above, a CBA may, indeed, contain paid family leave provisions that differ from the requirements in the Final Regulations. Where a CBA does not provide a different rule, however, the Final Regulations and the Law will govern.

Employee Contributions. The WCB declined to amend the Final Regulations with respect to whether employers must begin employee payroll deductions prior to January 1, 2018. In the Assessment, the Board confirmed that deductions under the Law were permitted to begin on July 1, 2017, but there is no requirement to make deductions prior to January 1, 2018; thus, in 2017, payroll deductions for employee contributions is a permissive choice that employers may make.

Further, the Assessment noted that the Law does not require notification that deductions will begin; however, it is generally best practice to notify employees prior to deducting from employees’ wages. Neither the Assessment nor the Final Regulations address whether as of January 1, 2018, an employer may opt to pay the contributions on its employees’ behalf, or whether alternatively, employers must deduct from employee’s paychecks for this contribution.

Interaction Between Qualifying Leave and Benefits in 2017 and 2018. The Board received a comment asking whether an employee who took leave to bond with his or her child in 2017 will still be eligible for up to the full 8 weeks of PFL in 2018, notwithstanding the leave already taken. The Board stated in the Assessment that employees will, indeed, be eligible for up to 8 additional weeks of leave in 2018 under NYPFLBL, even if the employee exhausted all applicable leave under federal law and the employer’s policies in 2017.

The Law limits the use of PFL and New York State short-term disability benefits (“STD”) in a 52-week period to a total of 26 weeks, which essentially reduces an employee’s eligible for STD based on the amount of PFL used. On the positive side, the Assessment noted that in 2018, the 52-week lookback period includes leave taken in 2017. Thus, an employee who has utilized STD in 2017 will have his or her 26-week allocation during the applicable 52-week period reduced by any STD utilized during 2017 (so long as it was used within the applicable 52-week look-back period).

Waivers of PFL. The Final Regulations revised employers’ requirements to offer a waiver from PFL deductions from permissive to mandatory. The language previously stated that employees who do not meet the PFLBL eligibility requirements “may” be provided the option for a waiver – the “may” has been changed to “shall.” The Assessment clarified that it is the employee’s choice of whether to complete a waiver, not the employer’s.

Coverage Outside New York. The Assessment confirmed that the PFLBL applies to employees who work in New York State. If an employee works outside of New York State, and only “incidentally” works in New York, those employees are not covered by the Law.[1]

Calculation of Daily Benefits. The Final Regulations amended the calculation of benefits when an employee is taking PFL in daily increments (rather than weekly increments). Under the Prior Regulations, if an employee worked a partial week prior to beginning PFL, then, in calculating the level of benefits to which the employee would be eligible for the day(s) off based on the eight weeks prior to taking leave, the employee’s weekly rate could be reduced by the day(s) the employee did not work in that final week. For example, the 8 week period could include a partial week of work, thus reducing the employee’s average wages. The Final Regulations use the same 8-week period as calculating an average weekly wage, which will exclude the final partial week of leave.

Positions with Breaks in Service – Impact on Eligibility. The Final Regulations added a paragraph to the “Eligibility” section, so as to clarify how to calculate consecutive weeks of service for positions that inherently contemplate breaks in service, such as professors who have semester breaks. For such positions, the 26-consecutive week period requirement may be tolled during periods of absence that are due to the nature of that employment. In other words, with respect to such individuals’ employment, the breaks in service would not be considered weeks worked when considering whether the individual had worked at least 26 weeks in the prior 52-week period (for eligibility purposes), but also would not re-start the period of employment to determine eligibility under the Law.

Returning Surplus Contributions. The Board received two comments seeking clarification regarding the requirement to return surplus contributions. The Final Regulations provide that employers shall use the employee contributions to provide PFL benefits, which “means to pay for a policy or self-insure.” The Assessment states that employers are required to return to employees any “surplus amount withheld that exceeds the actual cost” of the annual premium of the PFL policy. No changes were made to the Final Regulations.

Interaction with New York City Earned Sick Time Act (“ESTA”). The Assessment confirms the language in the Prior Regulations that employees may elect to use paid time off (such as vacation, personal days, or sick time) to receive full salary during PFL, but that it is not mandatory. As the PFLBL does not cover an employee’s own illness, PFL would only run concurrently with sick leave under ESTA for purposes of caring for an employee’s family member.

For a summary of the PFLBL, the Final Regulations, and the Assessment, please see this Act Now Advisory.

___________

ENDNOTE

[1] While the Law, Final Regulations, and Assessment do not define “incidentally,” the New York State PFLBL website indicates that employees must work 30 or more days in a calendar year New York to be covered.

When: Thursday, September 14, 2017 8:00 a.m. – 4:30 p.m.

Where: New York Hilton Midtown, 1335 Avenue of the Americas, New York, NY 10019

Epstein Becker Green’s Annual Workforce Management Briefing will focus on the latest developments in labor and employment law, including:

  • Immigration
  • Global Executive Compensation
  • Artificial Intelligence
  • Internal Cyber Threats
  • Pay Equity
  • People Analytics in Hiring
  • Gig Economy
  • Wage and Hour
  • Paid and Unpaid Leave
  • Trade Secret Misappropriation
  • Ethics

We will start the day with two morning Plenary Sessions. The first session is kicked off with Philip A. Miscimarra, Chairman of the National Labor Relations Board (NLRB).

We are thrilled to welcome back speakers from the U.S. Chamber of Commerce. Marc Freedman and Katie Mahoney will speak on the latest policy developments in Washington, D.C., that impact employers nationwide during the second plenary session.

Morning and afternoon breakout workshop sessions are being led by attorneys at Epstein Becker Green – including some contributors to this blog! Commissioner of the Equal Employment Opportunity Commission, Chai R. Feldblum, will be making remarks in the afternoon before attendees break into their afternoon workshops. We are also looking forward to hearing from our keynote speaker, Bret Baier, Chief Political Anchor of FOX News Channel and Anchor of Special Report with Bret Baier.

View the full briefing agenda and workshop descriptions here.

Visit the briefing website for more information and to register, and contact Sylwia Faszczewska or Elizabeth Gannon with questions. Seating is limited.

Amid challenges regarding Philadelphia’s upcoming law prohibiting employers from requesting an applicant’s salary history, the City has agreed not to enforce the upcoming law until after the court has finally resolved the injunction request.

The law, which was set to become effective May 23, 2017, has been challenged by the Chamber of Commerce for Greater Philadelphia (the “Chamber”). The Chamber’s lawsuit alleges that the pending law violates the First Amendment by restricting an employer’s speech because, among other reasons, “it is highly speculative whether the [law] will actually ameliorate wage disparities caused by gender discrimination.” It is also alleged that the law violates the Commerce Clause of the U.S. Constitution, the Due Process Clause of the Fourteenth Amendment, and Pennsylvania’s Constitution as well as its “First Class City Home Rule Act” by allegedly attempting to restrict the rights of employers outside of Philadelphia.

On April 19, a judge for the Eastern District of Pennsylvania stayed the effective date of the law, pending the resolution of the Chamber’s motion for a preliminary injunction. Prior to resolving the injunction, the parties will first brief the court on the Chamber’s standing to bring the lawsuit. This issue, regarding whether the Chamber is an appropriate party to bring this lawsuit, will be fully briefed by May 12, 2017, before the law is set to become effective. However, there are several other issues to be resolved as part of the lawsuit. The City’s decision to stay enforcement of the pending law until all issues are resolved is intended to help employers and employees avoid confusion during the pendency of the lawsuit.

Although the City of Philadelphia will not enforce this law in the interim, employers with any operations in Philadelphia should review their interviewing and hiring practices in case the lawsuit is decided in favor of the City. Further, employers in Massachusetts and New York City will also be subject to similar restrictions on inquiring about an applicant’s salary history when those laws go into effect. Massachusetts’ law is scheduled to become effective in July 2018, and New York City’s law will become effective 180 days after Mayor de Blasio signs the law, which may occur as soon as this week.

Paid Leave_shutterstock_371740363The state of Maryland appears poised to join seven other states and various local jurisdictions (including Montgomery County, Maryland) already requiring employers to provide paid sick and save leave. On April 5, 2017, the Maryland House of Delegates approved a bill previously passed by the Maryland Senate that would require most employers with at least 15 employees to provide up to five paid sick and safe leave days per year to their employees, and smaller employers to provide up to five unpaid sick and safe leave days. Although the bill contains an effective date of January 1, 2018, the actual effective date will depend on action by Governor Larry Hogan.

The following employees are not covered by the bill:

  • Employees who regularly work less than 12 hours a week;
  • Employees who are employed in the construction industry;
  • Employees who are covered by a collective-bargaining agreement that expressly waives the requirements of the law;
  • Certain “as-needed” employees in the health or human services industry.

Under the bill, an employer may not be required to allow an employee to:

(1) earn more than 40 hours of earned sick and safe leave in a year;
(2) use more than 64 hours of earned sick and safe leave in a year;
(3) accrue a total of more than 64 hours at any time;
(4) use earned sick and safe leave during the first 106 calendar days the employee works for the employer.

The bill also preempts local jurisdictions from enacting new sick and safe leave laws except for amending existing laws enacted before January 1, 2017, i.e. the existing law in Montgomery County.

The bill passed with enough support in both chambers to survive a promised veto by Governor Hogan, who favored an alternative that would require the benefit only for companies with at least 50 workers and make tax incentives available for smaller companies that offered the leave. However, if he still vetoes the bill, lawmakers will not have an opportunity to override the veto until next year’s legislative session beginning on January 10, 2018, which means the bill would not take effect until after January 1, 2018, and could possibly be subject to amendment in the next session.

*Marc-Joseph Gansah, a Law Clerk – Admission Pending in the firm’s New York office, contributed to the preparation of this blog post.

Our colleague Steven M. Swirsky, a Member of the Firm at Epstein Becker Green, has a post on the Management Memo blog that will be of interest to many of our readers in the retail industry: “NLRB Acting Chair Dissents Point to Likely Changes to Board Election Rules and Employee Handbook and Email Standards.”

Following is an excerpt:

NLRB Acting Chair Philip Miscimarra has given the clearest indication to date of what steps a new Republican majority is likely to take to reverse key elements of the Labor Board’s hallmark actions of the Obama administration once President Trump nominates candidates for the Board’s two open seats and the Senate confirms. In each of these cases, Miscimarra highlighted his earlier opposition to the majority’s changes in long standing precedents and practices. …

Read the full post here.

Our colleagues Brian G. Cesaratto and Adam S. Forman, at Epstein Becker Green, have a post on the Technology Employment Law blog that will be of interest to many of our readers in the retail industry: “Phishing Scam Targets Human Resources and Payroll Departments.”

Following is an excerpt:

Human Resources and Payroll should advise employees in their departments to be on the lookout for the latest tax season phishing scam designed to steal employees’ tax related information and social security numbers. Given the regular frequency of these types of attacks, employers should be taking appropriate steps to safeguard employee Personally Identifiable Information (“PII”).  At a minimum, Human Resources should have in place written policies regarding the handling of employee PII and provide training designed to protect employee PII against a data breach.  Because Human Resources works with employee PII on an everyday basis, it may be the best equipped to secure sensitive personnel information against the type of fraudulent scheme highlighted in the recent IRS alert. …

What preventative steps can be taken to guard against these attacks? Human Resources should ensure that policies and procedures are in place requiring that the sending of employees’ confidential tax related information by email only be done with 100% confidence that the intended recipient is within the organization and has requested the information. Indeed, the IRS advises that employers consider adopting written policies that govern the electronic distribution of confidential employee Form W-2s and tax related information. …

Read the full post here.

Our colleagues Brian W. Steinbach and Judah L. Rosenblatt, at Epstein Becker Green, have a post on the Heath Employment and Labor blog that will be of interest to many of our readers in the retail industry: “Mayor Signs District of Columbia Ban on Most Employment Credit Inquiries.”

Following is an excerpt:

On February 15, 2017, Mayor Muriel Bowser signed the “Fair Credit in Employment Amendment Act of 2016” (“Act”) (D.C. Act A21-0673) previously passed by the D.C. Council. The Act amends the Human Rights Act of 1977 to add “credit information” as a trait protected from discrimination and makes it a discriminatory practice for most employers to directly or indirectly require, request, suggest, or cause an employee (prospective or current) to submit credit information, or use, accept, refer to, or inquire into an employee’s credit information. …

Read the full post here.