In the new issue of Take 5, our colleagues examine five employment, labor, and workforce management issues that will continue to be reviewed and remain top of mind for employers under the Trump administration:
Our colleagues Judah L. Rosenblatt, Jeffrey H. Ruzal, and Susan Gross Sholinsky, at Epstein Becker Green, have a post on the Hospitality Labor and Employment Law Blog that will be of interest to many of our readers in the technology industry: “Where Federal Expectations Are Low Governor Cuomo Introduces Employee Protective Mandates in New York.”
Following is an excerpt:
Earlier this week New York Governor Andrew D. Cuomo (D) signed two executive orders and announced a series of legislative proposals specifically aimed at eliminating the wage gap in gender, among other workers and strengthening equal pay protection in New York State. The Governor’s actions are seen by many as an alternative to employer-focused federal policies anticipated once President-elect Donald J. Trump (R) takes office. …
According to the Governor’s Press Release, the Governor will seek to amend State law to hold the top 10 members of out-of-state limited liability companies (“LLC”) personally financially liable for unsatisfied judgments for unpaid wages. This law already exists with respect to in-state and out-of-state corporations, as well as in-state LLCs. The Governor is also seeking to empower the Labor Commissioner to pursue judgments against the top 10 owners of any corporations or domestic or foreign LLCs for wage liabilities on behalf of workers with unpaid wage claims. …
Our colleague Michael S. Kun, national Chairperson of the Wage and Hour practice group at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers in the technology industry: “Stop! Texas Federal Court Enjoins New FLSA Overtime Rules.”
Following is an excerpt:
The injunction could leave employers in a state of limbo for weeks, months and perhaps longer as injunctions often do not resolve cases and, instead, lead to lengthy appeals. Here, though, the injunction could spell the quick death to the new rules should the Department choose not to appeal the decision in light of the impending Donald Trump presidency. We will continue to monitor this matter as it develops.
To the extent that employers have not already increased exempt employees’ salaries or converted them to non-exempt positions, the injunction will at the very least allow employers to postpone those changes. And, depending on the final resolution of this issue, it is possible they may never need to implement them.
The last-minute injunction puts some employers in a difficult position, though — those that already implemented changes in anticipation of the new rules or that informed employees that they will receive salary increases or will be converted to non-exempt status effective December 1, 2016. …
Our colleague Jeffrey H. Ruzal, Senior Counsel at Epstein Becker Green, has a post on the Wage & Hour Defense Blog that will be of interest to many of our readers in the technology industry: “Decision Enjoining Federal Overtime Rule Changes Will Not Affect Proposed Increases Under New York State’s Overtime Laws.”
Following is an excerpt:
As we recently reported on our Wage & Hour Defense Blog, on November 22, 2016, a federal judge in the Eastern District of Texas issued a nationwide preliminary injunction enjoining the U.S. Department of Labor from implementing its new overtime exemption rule that would have more than doubled the current salary threshold for the executive, administrative, and professional exemptions and was scheduled to take effect on December 1, 2016. To the extent employers have not already increased exempt employees’ salaries or converted them to non-exempt positions, the injunction will, at the very least, appear to allow many employers to postpone those changes—but likely not in the case of employees who work in New York State.
On October 19, 2016, the New York State Department of Labor (“NYSDOL”) announced proposed amendments to the state’s minimum wage orders (“Proposed Amendments”) to increase the salary basis threshold for executive and administrative employees under the state’s wage and hour laws (New York does not impose a minimum salary threshold for exempt “professional” employees). The current salary threshold for the administrative and executive exemptions under New York law is $675 per week ($35,100 annually) throughout the state. The NYSDOL has proposed the following increases to New York’s salary threshold for the executive and administrative exemptions …
Our colleague Daniel J. Green, an Associate at Epstein Becker Green, has a post on the Trade Secrets & Noncompete Blog that will be of interest to many of our readers in the technology industry: “Aggressive New Antitrust Guidance for Human Resources Professionals Threatens Criminal Prosecution for Certain Unlawful Wage Fixing and No Poaching Agreements”
Following up on a string of civil enforcement actions and employee antitrust suits, regarding no-poaching agreements in the technology industry, on October 20, 2016 the Department of Justice (“DOJ”) and Federal Trade Commission (“FTC”) issued Antitrust Guidance for Human Resources Professionals (the “Guidance”). The Guidance outlines an aggressive policy to investigate and punish employers, and individual human resources employees who enter into unlawful agreements concerning employee recruitment or retention.
The Guidance focuses on three types of antitrust violations:
- Wage fixing agreements: agreements among employers to fix employee compensation or other terms or conditions of employment at either a specific level or within a range;
- No poaching agreements: certain agreements among employers not to solicit or hire one another’s employees not ancillary to an overarching pro-competitive collaboration; and
- Unlawful information exchanges: exchanges of competitively sensitive information which facilitate wage matching among market participants.
When: Tuesday, October 18, 2016 8:00 a.m. – 4:00 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:
- Latest Developments from the NLRB
- Attracting and Retaining a Diverse Workforce
- ADA Website Compliance
- Trade Secrets and Non-Competes
- Managing and Administering Leave Policies
- New Overtime Rules
- Workplace Violence and Active-Shooter Situations
- Recordings in the Workplace
- Instilling Corporate Ethics
This year, we welcome Marc Freedman and Jim Plunkett from the U.S. Chamber of Commerce. Marc and Jim will speak at the first plenary session on the latest developments in Washington, D.C., that impact employers nationwide.
We are also excited to have Dr. David Weil, Administrator of the U.S. Department of Labor’s Wage and Hour Division, serve as the guest speaker at the second plenary session. David will discuss the areas on which the Wage and Hour Division is focusing, including the new overtime rules.
In addition to workshop sessions led by attorneys at Epstein Becker Green – including some contributors to this blog! – we are also looking forward to hearing from our keynote speaker, Former New York City Police Commissioner William J. Bratton.
Maryland has now joined New York and several other states that have recently passed legislation expanding state equal pay laws and/or broadening the right of employees to discuss their wages with each other (often called “wage transparency”). The Equal Pay for Equal Work Act of 2016 (“Act”), signed by Governor Hogan on May 19, 2016 and set to take effect October 1, 2016, amends Maryland’s existing Equal Pay law (Md. Code, Labor and Employment, §3-301, et seq.), which applies to employers of any size, in several significant aspects.
First, as to the equal pay provisions, the Act:
- Extends the protections of the law to differentials based on gender identity as well as sex.
- Bars discrimination not only by paying less for work at the same establishment of comparable character or on the same operation, but also by ‘providing less favorable employment opportunities.”
- Defines “providing less favorable employment opportunities” to include assigning or directing an employee into a less favorable career track; failing to provide information about promotions or advancement in the full range of career track offered by the employer; or otherwise limiting or depriving an employee of employment opportunities that would otherwise be available but for the employee’s sex or gender identity
- Expands the definition of “same establishment” to include any workplace of the same employer located in the same county.
- Adds a new exception for a system that measures performance based on quality or quantity of production.
- Explicitly allows an employee to demonstrate that an employer’s reliance on one of the now seven exceptions is a pretext for discrimination.
Second, on the apparent theory that if employees gather more information on wages, employers will be more likely to decrease or eliminate wage disparities, the Act adds an entirely new provision that bars employers from prohibiting any employees from inquiring about, discussing, or disclosing the employee’s wages or those of another employee, or requesting that the employer provide a reason for why the employee’s wages are a condition of employment. It also bars any agreement to waive the employee’s right to disclose or discuss the employee’s wages. In particular, an employer may not take any adverse employment action against an employee for:
- Inquiring about another employee’s wages;
- Disclosing the employee’s own wages;
- Discussing another employee’s wages if those wages have been disclosed voluntarily;
- Asking the employer to provide a reason of the employee’s wages; or
- Aiding or encouraging another employee’s exercise of rights under this law.
However, an employer may in a written policy provided to each employee establish reasonable workplace limitations on the time, place and manner for inquiries relating to employee wages, so long as it is consistent with standards adopted by the Commissioner of Labor and Industry and all other state and federal laws. (For example, under the National Labor Relations Act, rules limiting discussions to non-working time have been held valid). For example, a limitation may include prohibiting discussion or disclosure of another employee’s wages without that employee’s prior permission, except where the employee has access to that information as part of the employee’s essential job functions and uses it to respond to a complaint or charge, or in furtherance of an investigation, proceeding, hearing or action under the Act. Violation of such a policy may be a defense for adverse action.
The Act expressly does not, however, require an employee to disclose his or her wages; diminish employees’ rights to negotiate the terms and conditions of their employment, or the rights provided under any other provision of law or collective bargaining agreement; create an obligation on any employer or employee to disclose wages; permit disclosure without written consent of an employer’s proprietary information, trade secret information, or information otherwise subject to a legal privilege or protected by law; or permit disclosure of wage information to a competitor.
These provisions enlarging employee sharing of wage information are similar to rules that have long existed under the National Labor Relations Act for employees other than managers and supervisor, and recently promulgated by Executive Order 13665 (April 8, 2014) as to employees of federal contractors. These rights are now expanded to all Maryland employees.
The Act further expands the remedies for violation of the equal pay provisions to include injunctive relief and creates a cause of action under the disclosure provisions for injunctive relief and both actual damages and an additional equal amount as liquidated damages. Existing law allowing recovery of attorney’s fees and costs apply to both types of claims. Finally, similar to the provisions of federal Title VII law, the Act now extends the statute of limitations to three years after discovery of the act which a lawsuit is based, rather than just three years after the act itself.
Maryland employers should review any rules they have regarding employee discussions about their wages for compliance with the Act’s protections for such discussions.
Our colleagues Jeffrey Ruzal and Michael Kun at Epstein Becker Green have a post on the Wage & Hour Defense Blog that will be of interest to many of our readers in the technology industry: “DOL Final White Collar Exemption Rule to Take Effect on December 1, 2016.”
Following is an excerpt:
Nearly a year after the Department of Labor (“DOL”) issued its Notice of Proposed Rulemaking to address an increase in the minimum salary for white collar exemptions, the DOL has announced its final rule, to take effect on December 1, 2016. …
According to the DOL’s Fact Sheet, the final rule will also do the following:
- The total annual compensation requirement for “highly compensated employees” subject to a minimal duties test will increase from the current level of $100,000 to $134,004, which represents the 90th percentile of full-time salaried workers nationally.
- The salary threshold for the executive, administrative, professional, and highly compensated employee exemptions will automatically update every three years to “ensure that they continue to provide useful and effective tests for exemption.”
- The salary basis test will be amended to allow employers to use non-discretionary bonuses and incentive payments, such as commissions, to satisfy up to 10 percent of the salary threshold.
- The final rule does not in any way change the current duties tests. …
With the benefit of more than six months until the final rule takes effect, employers should not delay in auditing their workforces to identify any employees currently treated as exempt who will not meet the new salary threshold. For such persons, employers will need to determine whether to increase workers’ salaries or convert them to non-exempt.
Technology employers should note that the Department of Labor’s Wage and Hour Division (“DOL”) has just released a new Family Medical Leave Act (“FMLA”) poster and The Employer’s Guide to The Family and Medical Leave Act (“Guide”).
New FMLA Poster
The FMLA requires covered employers to display a copy of the General FMLA Notice prominently in a conspicuous place. The new poster is more reader-friendly and better organized than the previous one. The font is larger and the poster contains a QR code that will connect the reader directly to the DOL homepage. According to the DOL, however, the February 2013 version of the FMLA poster can continue to be used to fulfill the FMLA’s posting requirement.
The Employer’s Guide to The Family and Medical Leave Act
According to the DOL, the Guide is intended to provide employers with “essential information about the FMLA, including information about employers’ obligations under the law and the options available to employers in administering leave under the FMLA.” The Guide reviews issues in chronological order, beginning with a discussion of whether an employer is covered under the FMLA, all the way through an employee’s return to work after taking FMLA leave. The Guide includes helpful “Did You Know?” sections that shed light on some of the lesser-known provisions of the FMLA. The Guide also includes hyperlinks to the DOL website and visual aids to improve the reader’s experience. Overall the Guide helps navigating the complex FMLA process; however, it does not provide any guidance beyond the existing regulations.
Employers in the technology, media and telecommunications industry are faced with many workplace management and legal compliance challenges. Among these are trends in the shared economy and rise of the contingent workforce, data privacy and security, and use of social media in connection with recruitment, employee monitoring and termination. At the recent Epstein Becker Green 34th Annual Workforce Management Briefing held at the New York Hilton, members of the firm’s TMT Group including the authors of this post, along with in-house counsel speakers Rebecca Clar of AOL and Blake Reese of Google provided a panel workshop on these hot-button issues. Some of the key take-aways from the workshop include:
Shared Economy & Contingent Workforce
As a result of changes in the post-recession, global economy, there has been a tremendous change in how goods and services are delivered and how consumers acquire these goods and services. As businesses try to meet these demands and save costs associated with full time employees, they have implemented many alternative work arrangements and hired workers through various means including as independent contractors, through staffing arrangements, or temporary solutions. Many workers also have become attracted to the flexibility that these work arrangements can provide to them. However, employers need to be mindful of the potential pitfalls associated with the contingent workforce and take requisite steps to avoid legal risks:
- Worker misclassifications can lead to back pay, overtime, tax, unemployment insurance, and workers compensation violations as well as employee benefit plan eligibility and coverage errors. Ensuring that workers are properly classified is mission critical and employers should self-audit their work arrangements and benefit plans periodically for compliance.
- The NLRB’s decision in Browning-Ferris, coupled with new “quickie” election rules and the Silicon Valley Rising movement have made for a perfect storm of issues. As a result, TMT employers who may not currently be represented by a labor organization should be mindful that non-traditional workplaces and corporations, such as new media, may be targeted for unionizations, and/or may be brought to the bargaining table as a joint-employer who engages third-party workers.
- Given the developments at the Department of Labor, and in particular, the proposed increase in the minimum annual salary requirement in order to meet the salary basis test of the white collar exemptions, there has never been a better and more opportune time to conduct a self-assessment audit in conjunction with counsel.
Data Privacy and Security
In the global, digital world, data privacy and security is top of mind for all organizations and their leaders. Protecting organizational data, as well as that of employees, is imperative and development of data privacy and security policies will become the norm. The issues employers should address in their policies, as well as the ways in which they do business, include:
- Conduct a self-audit of organizational networks and systems for security vulnerabilities and train workers on information security best practices
- Establish audit procedures of vendors engaged to provide services to the organization and any employee benefit plan, especially where the vendor stores information in the cloud or remote data centers
- Address data privacy and security issues in service agreements including notification procedures and indemnification provisions
- Develop a breach response plan
- Obtain cybersecurity insurance
- Remember: data privacy and security are no longer just CIO/CTO/IT issues – instead, these are topics that are increasingly becoming relevant in the employment law and employee benefits space.
Social Media and the Workplace
The use of social media by employers to review background information of prospective employees in the recruitment process, as well as ongoing activities during the employment or leading up to a termination process is highly prevalent. It is easy for employers to search an employee’s name, background and activities on the internet but, how that information is used can have legal implications. Employers should be mindful of the following:
- Always rely on objective criteria set forth in a job description before conducting an online search and retain information among the recruitment team at the organization
- Carefully document reasons for all hiring (and termination) decisions that are consistent with the job description and avoid discriminatory decision making
- Consider separating the search and decision making functions and train employees searching to remove protected categories from summary of results, upon which hiring decision is made
- Develop a company social media policy with counsel that is narrowly tailored to survive NLRB scrutiny, but that safeguards the company’s treasures and secrets.
- Employers can continue to discipline employees for their social media activities, provided that the objectionable conduct does not implicate Section 7 behavior – a fact and circumstances based analysis that may be counterintuitive to HR and in-house personnel.
Employers that address these issues head-on will be able to benefit from the advent of new technologies in the workplace and stay in compliance with applicable laws.