Employment Training, Practices and Procedures

Featured as our top story on Employment Law This Week: Me too At Work – Sexual misconduct in the C-Suite leads to shareholder lawsuits.

Last month on Employment Law This Week, you heard that sexual misconduct allegations would start impacting shareholder value and reputation. Well, now we’ve got a case study in Wynn Resorts. After the Wall Street Journal uncovered multiple sexual misconduct allegations against Casino mogul Steve Wynn, the company’s stock fell nearly 20%. Wynn resigned a week later, but the company’s troubles were far from over. The company’s  stock has lost $3 billion in value. The first shareholder lawsuit was filed the day Wynn resigned, and to date three suits by shareholders claim that Wynn and the Board breached their fiduciary duties to the company and its shareholders. Bill Milani, from Epstein Becker Green, has more.

Watch the segment below and read our recent post.

Senator Marco Rubio (R-FL) and first daughter Ivanka Trump have teamed up to develop a paid parental leave program in the United States.  While the plan is in its infancy, Senator Rubio reportedly envisions a plan similar to a proposal from the Independent Women’s Forum, calling for a parental leave program funded by new parents’ future Social Security benefits.  Under that proposal, parents could receive up to 12 weeks of benefits to take paid leave at any time in the first year of their new child’s life in exchange for what the Independent Women’s Forum hopes would be six weeks of Social Security benefits in the future.

The Rubio-Ivanka proposal is not without criticism.  Some conservative commentators say the plan would unfairly burden Social Security’s limited resources.  Further, because the Rubio-Ivanka plan would be available regardless of the size of a new parent’s employer, the leave would not be protected under the FMLA if the parent’s employer does not have 50 or more employees within a 75 mile radius.  Liberal critics believe that the proposal will negatively affect women, who generally receive less Social Security benefits than men for reasons of gender-related pay inequity.

While paid family leave is a concept with bipartisan support, proponents disagree about how to fund such a program.  The president’s recent budget plan, which calls for six weeks of family leave paid for by unemployment insurance, appears to be at odds with the Ivanka-Rubio idea.   The Democrat-sponsored Family and Medical Insurance Leave Act (the FAMILY Act) would provide up to 12 weeks of income through a payroll tax on employers and employees.  Employers should continue to monitor discussions and developments in this rapidly changing area.

Retail employers with international operations and who have executives who engage in cross-border travel may particularly wish to read and take note of Daniel Levy’s post, “It’s a Brave New World: Protecting Trade Secrets When Traveling Abroad with Electronic Devices.”

Following is an excerpt:

Consider the following scenario: your organization holds an annual meeting with all Research & Development employees for the purpose of having an open discussion between thought leaders and R&D regarding product-development capabilities. This year’s meeting is scheduled outside the United States and next year’s will be within the U.S. with all non-U.S. R&D employees traveling into the U.S. to attend. For each meeting, your employees may be subject to a search of their electronic devices, including any laptop that may contain your company’s trade secrets. Pursuant to a new directive issued in January 2018 by the U.S. Custom and Border Protection (“CBP”), the electronic devices of all individuals, including U.S. citizens and U.S. residents, may be subject to search upon entry into (or leaving) the U.S. by the CBP. …

Read the full post here.

On December 20, 2017, New Jersey Gov. Chris Christie signed a bi-partisan bill that effectively makes asking about expunged criminal records off-limits during the initial employment application process.

The law, an amendment to the New Jersey Opportunity to Compete Act (“OTCA”), generally referred to as the “Ban the Box” law, applies to employers with 15 or more employees over 20 calendar weeks who do business, employ persons, or take applications for employment within New Jersey. The OTCA generally prohibits employers from making any oral or written inquiry about an applicant’s criminal background during the initial employment application process.

The amendment, which became effective with signing, goes farther. Now, covered employers are barred from seeking information about the current and expunged criminal records of applicants during the early stages of the employment application process. In addition to barring employers from making oral or written inquiries, the amendment also bars employers from doing online searches for an applicant’s criminal record or expunged criminal record.

In New Jersey, individuals who have been convicted of a prior criminal offense up to and including certain felony offenses may apply to the New Jersey Superior Court to have their record expunged. An individual who was convicted for an indictable offense may present an expungement application after 6 years from the date of his or her most recent conviction, payment of fine, satisfactory completion of probation or parole, or release from incarceration. For disorderly persons offenses and petty disorderly persons offenses an individual may present the expungement application after the expiration of a period of 5 years from the date of his or her most recent conviction, payment of fine, satisfactory completion of probation or release from incarceration. The waiting period to expunge juvenile record is decreased from 5 to 3 years.

Employers may ask about criminal records and any expungements after the initial employment application process. Currently, NJ law does not prohibit employers from refusing to hire an individual because of his or her criminal history. However, under the amendment, employers may not refuse to hire an applicant because of a criminal record that has been expunged or erased through executive pardon, unless the refusal is consistent with other applicable laws, rules and regulations.

As 2017 comes to a close, recent headlines have underscored the importance of compliance and training. In this Take 5, we review major workforce management issues in 2017, and their impact, and offer critical actions that employers should consider to minimize exposure:

  1. Addressing Workplace Sexual Harassment in the Wake of #MeToo
  2. A Busy 2017 Sets the Stage for Further Wage-Hour Developments
  3. Your “Top Ten” Cybersecurity Vulnerabilities
  4. 2017: The Year of the Comprehensive Paid Leave Laws
  5. Efforts Continue to Strengthen Equal Pay Laws in 2017

Read the full Take 5 online or download the PDF.

Employers in New York City are required to provide their employees with reasonable accommodations related to childbirth and pregnancy. The New York City Commission on Human Rights has published a new factsheet and notice. The notice should be provided to all employees upon hire, and posted in the workplace to provide employees with notice of their rights under the NYC Human Rights Law.

The notice and factsheet outline employers’ responsibilities with respect to pregnant employees, and recommend that employers work with employees to implement accommodations that recognize employee contributions to the workplace and help keep them in the workplace for as long as possible. The notice and factsheet also provide employees with examples of reasonable accommodations, such as breaks to rest or use the bathroom while at work, and time and space to express breast milk at work.

In December 2016 Philadelphia’s City Council passed a Wage Equity Ordinance (“Ordinance”) prohibiting employers from asking applicants for their salary history or to retaliate against a prospective employee for failing to answer such a question.  The law, which was to become effective May 23, 2017, has been stayed pending resolution of legal challenge by the Chamber of Commerce for Greater Philadelphia, alleging that the law violates employers’ First Amendment rights.

Nevertheless, on October 24, 2017, the Philadelphia Commission on Human Relations adopted a regulation  (“Regulation”) implementing the Ordinance. The Regulation seeks to clarify what employers may and may not ask and to further define which employers and applicants are covered by the Ordinance.

Covered Employers and Applicants

The Regulation specifies that the Ordinance the term “Employer” applies only to persons who are interviewing applicants with the intention of filling a position located within the City.

Prohibited Inquiries

Under the Regulation, an employer “shall not include a question on paper or electronic applications asking Prospective Employees to provide their salary history at any previous position.” The Regulation also prohibits employers from asking current employees seeking a new position (located in Philadelphia) about the employee’s wage history from any previous employer.

Permissible Inquiries

Employers may inquire into the applicant’s salary expectations, skill level, and experience relative to the position sought. In addition, employers may use voluntary salary history disclosures an applicant makes “knowingly and willingly” during an interview, provided it is not in response to a question from an employer.

Action Items

Although the Ordinance is currently on hold, employers with positions or offices in Philadelphia may nevertheless wish to prepare for the possibility that the law will become effective by:

  • Identifying jobs that are based in Philadelphia. This will be especially important for positions where an employee may work in more than one location.
  • Preparing a Philadelphia-specific employment application that removes any request for salary history.  The ordinance does not expressly state that it is sufficient to have an instruction on the employment application that directs Philadelphia applicants not to answer salary history questions.

On October 23, 2017, New York Governor Andrew Cuomo signed legislation that amends the Clean Indoor Air Act to ban the use of electronic cigarettes (“e-cigarettes”) everywhere that smoking traditional tobacco products is prohibited.  With this amendment, the Clean Indoor Air Act will prohibit both smoking and vaping in certain indoor areas, including places of employment, as well as certain outdoor areas accessible to the public. This legislation will become effective on November 22, 2017.  Prior to this date,  any required posters and signs will need to be updated to include reference to “No Vaping” or “Vaping” along with the “No Smoking” or “Smoking” signs, or international “No Smoking” symbol.

On September 13, 2017, California legislators passed California Bill AB 450, also known as the Immigrant Worker Protection Act (“the Act”).  The Act is one of three immigration bills currently awaiting Governor Jerry Brown’s approval or veto.[1]

The Act imposes specific restrictions on employers in instances where U.S. Immigration and Customs Enforcement (“ICE”) agents seek access to their workplaces for immigration enforcement. Specifically, the Act prohibits employers from (1) voluntarily consenting to allow an ICE agent to enter nonpublic areas of the workplace absent a judicial warrant; and (2) voluntarily consenting to allow an ICE agent to access, review, or obtain employee records, absent a subpoena or a court order.

Additionally, the Act requires employers to (1) post written notice[2] of an immigration agency’s intent to audit employee records, including I-9 Employment Eligibility Verification forms, within 72 hours of the employer receiving notice of such an inspection; and (2) following an immigration agency’s audit, provide each employee who was found to lack work authorization with a copy of the written results of the inspection within 72 hours of the employer’s receipt.

Violations of the Act may result in a civil penalty of between two thousand dollars ($2,000) and five thousand dollars ($5,000) for a first violation and between five thousand dollars ($5,000) and ten thousand dollars ($10,000) for each subsequent violation, to be enforced by the Labor Commissioner or the Attorney General. All penalties recovered under the Act shall be deposited in the Labor Enforcement and Compliance Fund.

At this time, the ultimate constitutionality of the Act is uncertain under Chamber of Commerce v. Whiting, 563 U.S. 582 (2011), in view of the steep monetary penalties it threatens to impose.

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[1] California legislators also recently passed the California Values Act (which is intended to prevent law enforcement officials from questioning and detaining individuals based on immigration violations alone) and the Immigrant Tenant Protection Act  (which prohibits landlords from reporting or threatening to report the immigration status of their tenants as a form of retaliation or to prompt an eviction.)

[2] No later than July 1, 2018, the Labor Commissioner will release a template to assist employers in complying with the notice posting requirements imposed by the Act.

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.

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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.