Monthly Archives: April 2024

April 30, 2024

Residence or Incorporation – A Look at Where Guidelines Matter When Drafting Severance Agreements

Mark Wiletsky

Question: When crafting a severance agreement, should you follow the guidelines of the state the employee resides/works in or the state where the company is incorporated?

Answer: The answer depends on a number of factors. Often, companies are incorporated in a state in which they have no presence or operations, e.g., Delaware. Although courts will sometimes allow parties to select a law to govern agreements, including severance agreements, the employee may be able to challenge the agreement if it does not comply with the state in which he or she lives or works. In fact, some states, such as California and Colorado, have certain laws that apply to workers within their state, regardless of what the agreement says. If the agreement is drafted to comply with the laws of the state of incorporation, but not the state in which the employee worked, the release might not be effective or enforceable. Indeed, in the event of a dispute, it can be difficult to justify why the law in Delaware, for example, should apply to a worker in Colorado if the company has no operations in Delaware and the employee did not live or work there. Therefore, the best practice is to review the laws of the states in which the employee lives or works, and where the company is headquartered, to ensure the agreement complies with the laws of both states. If the laws conflict, consider drafting the agreement to comply with the more restrictive laws to ensure the agreement will be enforceable.

April 29, 2024

DOL Issues Final Rule Increasing Salary Limits for Overtime Exemptions – Now What?

Janae Ruppert

By Janae Ruppert and Bryan Benard

The highly anticipated Department of Labor (DOL) final rule is here with a potential July 1, 2024 implementation date. The rule significantly increases the minimum salary threshold for certain overtime exemptions under the Fair Labor Standards Act (FLSA) and could impact millions of employees’ currently exempt from overtime pay and their compensation structures.

Background

Bryan Benard

The FLSA generally requires covered employers to pay employees a minimum wage and, for employees who work more than 40 hours in a week, overtime pay of at least 1.5 times an employee’s regular rate of pay, provided the employee does not fall within a classified exemption. The new rule affects individuals who are employed in positions meeting the requirements for the executive, administrative, professional, and highly compensated employee exemptions. In addition to meeting other requirements outlined in the FLSA related to their specific job duties, employees’ pay must meet certain thresholds to qualify for the exemption.

Final Rule Threshold Increase

Beginning July 1, 2024, the final rule increases the salary threshold for FLSA’s bona fide executive, administrative, and professional employees from $684 per week ($35,568 annually) to $844 per week ($43,888 per year).
Beginning January 1, 2025, the final rule increases the salary threshold for FLSA’s bona fide executive, administrative, and professional employees to $1,128 per week ($58,656 per year).
With respect to the highly compensated employees exemption, beginning July 1, 2024, the final rule will raise the annual compensation threshold from $107,432 to $132,964 per year. Beginning January 1, 2025, the annual compensation threshold for this exemption is raised to $151,164 per year.
Beginning July 1, 2027, and every three years thereafter, the salary thresholds will automatically update, using the methodology in effect at the time of each update.

April 26, 2024

Supreme Court Lowers Bar for Adverse Actions

Mark Wiletsky

by Mark Wiletsky

Can an employee sue under Title VII to challenge a lateral transfer, even if the transfer does not result in a loss of pay? According to a recent U.S. Supreme Court decision, the answer is: Yes. Employers transfer employees, or take other actions, for a variety of reasons. Until recently, so long as those decisions did not significantly or materially impact the employee’s terms and conditions of employment, the employee did not have a viable discrimination claim. That standard is no longer the law of the land. Now, if there was “some harm” as a result of a transfer or other action, and the action was based on an employee’s protected characteristic, the employee can assert a discrimination claim.

Factual Background. From 2008 through 2017, Sergeant Jatonya Clayborn Muldrow worked in a coveted position in the specialized Intelligence Division of the St. Louis Police Department. In 2017, her new commander sought to replace her with a male officer. The new commander did not fire her; instead, he transferred Muldrow to a uniformed role in another department. Although her rank and pay remained unaltered, the responsibilities, privileges, and schedule of her new position significantly differed from her previous role. In Muldrow’s original role, she worked in a “premier position” with high-ranking officials on department priorities in the Intelligence Division. Her new role, she claimed, was less prestigious or focused more on administrative tasks. Muldrow supervised day-to-day activities of neighborhood patrol officers, including approving their arrests, reviewing their reports, and handling other administrative matters; she even did some patrol work herself. As a result of the transfer, Muldrow lost her FBI status and the car that came with it, and she went from a regular Monday through Friday schedule to working a “rotating schedule,” including weekend shifts. Read more >>

April 24, 2024

FTC Bans Noncompetes

Little V. West

By Little V. West

The Federal Trade Commission (FTC) has issued a new rule broadly banning noncompete agreements, marking a sea change in their regulation, which previously has been primarily governed by state law. Once effective, existing noncompete agreements will generally become unenforceable, except for certain highly compensated senior executives. Future noncompete agreements will not be allowed. (See § 910.2). An exception to the rule may apply if the restricted party is selling a business entity, its ownership interests, or operating assets as part of a bona-fide sale. (See § 910.3 (a)). The rule is expected to take effect 120 days after its publication in the Federal Register. Read more >>

April 23, 2024

10th Circuit Scrutinizes DEI Training Program

Brad Cave

by Brad Cave

Can an employer’s diversity, equity, and inclusion (DEI) program create liability for the discriminatory harassment of white employees? The U.S. 10th Circuit Court of Appeals (whose rulings apply to employers in Wyoming, Colorado, New Mexico, and Utah) recently warned that the training required by a Colorado state agency included some content that could constitute unwelcome race-based harassment. While the court ultimately rejected the employee’s harassment claim, the opinion serves as a good reminder that negative race-based messaging may be illegal no matter which race is the target.

White employee gets the blues over DEI training

Joshua Young worked for the Colorado Department of Corrections (CDOC). Department policy required all employees to complete mandatory DEI training, which included several online modules and incorporated a glossary of terms explaining various DEI themes and several additional videos and books about race.

Young objected to many of the messages in the training. His lawsuit alleged the training included “sweeping negative generalizations” about white people and painted the United States as a racist country. According to him, the training glossary said all white people are racist, and white people created the concept of race to justify the oppression of people of color. The glossary also explained that white people are triggered by feelings of guilt and fear when confronted with racial inequality and injustice, which amounted to “white fragility.” Read more >>

April 17, 2024

Navigating the National Interest Waiver (NIW) for Green Card Pursuit: A Comprehensive Guide

Samantha Wolfe

By Samantha Wolfe

In the pursuit of U.S. permanent residency, employers often turn to the PERM labor certification process to sponsor employees. However, there exist alternative pathways to obtaining a green card, one of which is the National Interest Waiver (NIW). In this article, we’ll explore the NIW option in detail, highlighting its benefits, eligibility criteria, and the application process.

The National Interest Waiver (NIW) Option

The NIW offers qualified individuals a pathway to bypass the labor certification process typically required for employment-based green cards. The Biden administration’s commitment to bolstering America’s global competitiveness through the STEMM fields has further emphasized the importance of the NIW program, expanding opportunities for skilled professionals. Read more >>

April 10, 2024

USCIS Announces New Guidance on the Validity Period for Form I-693 Medical Examination and Vaccination Record

Ann Lee

by Ann Lee

The U.S. Citizenship and Immigration Services (USCIS) has recently announced a significant update regarding Form I-693, Report of Immigration Medical Examination and Vaccination Record. Effective immediately, any Form I-693 that has been properly completed and signed by a civil surgeon on or after November 1, 2023, will no longer have an expiration date. This means that such forms can now be used indefinitely as evidence to demonstrate that the applicant is not inadmissible on health-related grounds.

This decision by USCIS follows careful consultation with the Centers for Disease Control and Prevention (CDC) and takes into account advancements in public health electronic notification systems. However, USCIS officers have reserved discretion to request more evidence or a new or updated Form I-693 if they have reason to believe the applicant’s medical condition has changed since the civil surgeon signed the Form I-693, or that the Form I-693 submitted does not accurately reflect the applicant’s medical condition and the applicant may be inadmissible on health-related grounds. Read more >>

April 5, 2024

Pay Obligations During Doctor-Recommended Leave of Absence

Dana Dobbins

By Dana Dobbins

Question: We have an employee whose essential functions require the use of their hands. They have requested an accommodation, and their physician has recommended time off until specific medical restrictions can be determined. What is our obligation to pay this employee during this doctor-recommended leave of absence?

Answer: Depending on your policies, you may allow or require the employee to use accrued paid vacation or sick leave towards their absence. Beyond paying appropriate sick leave and perhaps applying paid vacation leave, an employer is not otherwise required to pay an employee’s regular wages while the employee is on an extended medical leave of absence. Read more >>

April 4, 2024

AI in the Workplace: Crafting Policies for Employees’ Use of Generative AI

Dana Dobbins

By Dana Dobbins

Artificial intelligence (AI) is becoming increasingly prevalent in workplaces, providing new opportunities as well as new challenges for employers and employees. While AI has the potential to improve efficiency and productivity, its use also raises important questions around issues like privacy, discrimination, and job displacement. Employers who choose to implement AI should consider including a provision in their employee handbook, or a separate policy, specifically addressing its use. Such a provision or policy can help mitigate risks, provide clarity for employees, and demonstrate an employer’s commitment to using AI ethically and responsibly.

Employers who incorporate AI into the workforce should develop policies governing appropriate use of generative AI, regularly update those policies as laws and technology continue to change, and enforce their policies. Employers should consider the following provisions in their AI use policies:

Specify Which Employees May Use AI and Require Prior Approval

For any number of reasons, employers may be willing to let some teams or groups, but not others, use generative AI technology, especially while the employer is still examining how AI can be incorporated in their company or industry. An AI policy should specify which departments, if any, are permitted to use AI. Read more >>