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July 10, 2020

Traditional ‘Use-It-Or-Lose-It’ Vacation Policies Barred In Colorado—At Least For Now

by Laurie Rogers, Holland & Hart LLP

Laurie Rogers

Under a recent regulation interpreting the Colorado Wage Claim Act (CWCA), Colorado employers are now barred from having policies that permit accrued vacation time to be forfeited if not used within a particular time frame. Instead, under the new regulation, they must compensate employees for all accrued but unused vacation at the time of separation and are otherwise prohibited from having policies requiring the forfeiture of accrued but unused vacation time.

CWCA’s ‘use-it-or-lose-it’ conundrum

The legality of use-it-or-lose-it vacation policies under the CWCA has long been a subject of debate. Section 8-4- 101(14) of the Act defines “wages” and “compensation”— which must be paid out at separation of employment— to include “vacation pay earned in accordance with the terms of any agreement.” The section further provides that if “an employer provides paid vacation for an employee, the employer shall pay upon separation from employment all vacation pay earned and determinable in accordance with the terms of any agreement between the employer and the employee.” Read more >>

May 11, 2020

Time to Review Unlimited PTO Policies

By Tyson Horrocks, Holland & Hart LLP

Tyson Horrocks

Like many businesses, you may have decided to give your employees unlimited PTO – or are considering doing so. The flexibility that unlimited PTO affords helps you attract and retain talent. You also avoid the administrative headaches associated with tracking PTO. And if you terminate the employee, you don’t have to pay out any accrued vacation time. Right? Not so fast.

A recent California Court of Appeal case reminds employers that loosely drafted PTO policies may leave them on the hook for unused vacation days. In McPherson v. EF Intercultural Found., Inc., No. B290869, 2020 WL 1543339, at *1 (Cal. Ct. App. Apr. 1, 2020), the employer purported to have an unlimited PTO policy for certain exempt employees, allowing them to come and go as they pleased so long as they fulfilled their job responsibilities. But the employer did not put this policy in writing, nor did they explain to the employees that paid time off was not a part of their compensation. In the absence of a well-defined policy, the Court found that the employer had an “implied cap” of vacation days based on the customary amount of vacation the employees took. Therefore, the Court held that when the company terminated its employees, it had to pay out the value of the unused portion of the “implied cap.” Read more >>

April 2, 2020

10th Circuit Upholds Hospital’s Rejection of Applicant Under ADA

Mark Wiletsky

by Mark Wiletsky, Holland & Hart LLP

The rules surrounding medical examinations under the Americans with Disabilities Act (ADA) can be tricky. The U.S. 10th Circuit Court of Appeals (whose rulings apply to all Colorado, New Mexico, Utah, and Wyoming employers) recently analyzed the rules in a case involving an employer’s decision to rescind a job offer based on a postoffer, preemployment medical examination. The lessons learned are helpful for all employers that use or consider medical examinations for applicants or employees.

Facts

Elena Sumler applied for a job as a sonographer with the University of Colorado Hospital Authority. Sonographers use their technical skills to obtain and analyze ultrasound images.

The hospital offered Sumler the position, contingent on a medical examination. As part of the medical exam process, she disclosed that she suffers from fibromyalgia and was taking medications, including two narcotic pain medications. She asserted, however, that she wasn’t disabled and had no restrictions preventing her from performing the essential job functions. Read more >>

January 27, 2020

CO Department of Labor and Employment Adopts New Wage and Hour Rules

Read our article about the most recent updates to the COMPS order.

By Brad Williams

Brad Williams

What’s new?

On Wednesday, January 22, 2020, the Colorado Department of Labor and Employment (“CDLE”) adopted the Colorado Overtime and Minimum Pay Standards Order (“COMPS Order”) #36, which replaces Colorado Minimum Wage Order #35. The adopted rules will go into effect on March 16, 2020.

The two most significant changes between Minimum Wage Order #35 and the new COMPS Order that will impact Colorado employers are:

The new COMPS Order applies to all Colorado employers, unless specifically exempted; and
The new order raises the minimum salary threshold required for employees to qualify for exemptions from overtime protections under Colorado law.

The new COMPS Order also makes numerous additional—albeit less significant—changes and clarifications to Colorado wage and hour rules. These include changes and clarifications relating to pre- and post-work time, tips, rest periods, and other issues. Read more >>

January 14, 2020

Summary of California Employment Law Changes for 2020

by Dora Lane and S. Jordan Walsh

Dora Lane

AB 5 (Codifies the “ABC” Test for Contractor Status)

AB 5 codifies the “ABC” Test for determining contractor status which was adopted by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court of Los Angeles. Under the “ABC” Test, a person providing labor or services for remuneration shall be considered an employee rather than an independent contractor unless the employer
demonstrates that all of the following conditions are satisfied:

The worker is free from the control and direction of the employer in connection
with the performance of his or her work—both in contract and in fact;
The worker performs work that is outside the usual course of the employer’s
business; and
The worker is customarily engaged in an independently established trade,
occupation, or business that is of the same nature as the work being performed.

S. Jordan Walsh

Subject to specific exceptions from the definitions of “employee” in the appropriate context, AB 5 applies to claims rooted in: (1) the California Labor Code, (2) California Wage Orders, (3) the California Unemployment Insurance Code, and effective July 1, 2020
(4) the Workers Compensation Code.

There are a number of industry-specific exceptions to AB 5, which must be evaluated on a case-by-case basis. Independent contractors who are members of these industries and meet certain conditions are exempted from AB 5. The bill also exempts business-to-business contracting relationships from the ABC Test if specified conditions are met.

If the ABC Test requirements do not apply to the particular situation, then the employee vs. independent contractor status will be determined by using the multi-factor test articulated in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d
341 (1989).

October 1, 2019

Shifting the Risks of Employer’s Economic Loss Resulting from Employee Injury: Keyperson Insurance in New Mexico

Republished with permission, originally published in the September 19, 2019 issue of the DRI Life, Health, and Disability Committee News.

by Little V. West

What’s a New Mexico business to do if one of its key employees is absent from work due to a non-work-related injury? A pair of cases, one from the United States Court of Appeals for the Tenth Circuit, and another recently issued by the New Mexico Court of Appeals underscore and illustrate, for both New Mexico insurers and employers why keyperson insurance is important for New Mexico employers. These cases clarify the limits of other kinds of insurance and tort claims in the employment context.

In 1991, the Tenth Circuit Court of Appeals was called upon to decide if New Mexico law permits an employer to recover under an uninsured-motorist policy for economic damages the employer incurred when the corporation’s president was physically injured in an accident by an uninsured motorist. Cont’l Cas. Co. v. P.D.C., Inc., 931 F.2d 1429, 1430 (10th Cir. 1991). The language of the insurance policy at issue provided that the insurer would pay for:

all sums the insured is legally entitled to recover as damages from the owner or driver of an uninsured motor vehicle. The damages must result from bodily injury sustained by the insured, or property damage, caused by an accident.

Id. (emphasis from the original quoted policy document).

September 26, 2019

New Overtime Rule Raises Annual Salary Threshold to $35,568

By Laurie Rogers

On September 23, 2019, the U.S. Department of Labor (DOL) issued its Final Rule relating to exemptions and overtime. The most significant change for employers is an increase to the salary threshold for exempt employees up to $35,568 from the $23,660 threshold established in 2004. The new rule, set to take effect on January 1, 2020, likely means an additional 1.3 million workers will now be compensated for working overtime.

Key Takeaways from the Final Rule

Raises the salary threshold to $684 per week ($35,568 per year) from the currently enforced level of $455 per week ($23,000 per year).
Modifies the total annual compensation threshold for Highly Compensated Employees to $107,432 from the current threshold of $100,000.
Recognizes evolving pay practices by allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10 percent of the standard salary level.
Revises the special salary level for U.S. Territories and motion picture industry workers.

August 1, 2019

New Colorado Employment Laws from 2019 Legislative Session

By Brad Williams

Led by Democratic majorities in both the House and Senate, the Colorado General Assembly passed multiple important employment-related bills during its 2019 legislative session. Colorado’s new Democratic Governor, Jared Polis, recently signed all the bills below into law.

Equal Pay for Equal Work Act (SB 19-085): The most significant employment-related bill passed during the 2019 legislative session, this Act is intended to “ensure that employees with similar job duties are paid the same wage rate regardless of sex.” The Act applies to all public and private employers in Colorado, and prohibits paying employees of one sex a wage rate—defined as all compensation, including hourly wages, salaries, and other compensation—which is less than the wage rate paid to employees of a different sex for substantially similar work. Exceptions include pay differentials based on seniority or merit systems; systems measuring quality or quantity of production; the location where the work occurs; whether the work requires travel; and employees’ education, training, or experience, to the extent reasonably related to the work in question.

The Act prohibits employers from asking about or relying upon a prospective employee’s wage rate history in order to determine his or her wage rate. It allows aggrieved employees to sue for up to three years of backpay for unlawful pay disparities, and separately allows such employees to sue for an equal amount in “liquidated damages,” unless the employer can show its pay violations were in “good faith.” The Act creates an incentive—other than just the risk of lawsuits—for employers to conduct regular audits of their workforces to uncover pay disparities by permitting judges and juries to consider such audits (assuming they occur in the preceding two years) as evidence of an employer’s “good faith.” The Act also permits aggrieved employees to sue for their attorneys’ fees and other damages.

July 1, 2019

2019 Nevada Employment Legislation Updates

by Dora Lane

Over the last two years, the Nevada Legislature has passed a substantial number of laws affecting Nevada employers. Some of the most notable employment laws that recently passed are summarized below.

AB 132 (Pre-Employment Marijuana Drug Testing, effective January 1, 2020)

Starting with one of the most controversial bills, AB 132 addresses pre-employment marijuana screening of job applicants. When the recreational marijuana initiative passed in 2016 (effective 2017), it specifically stated that it did not prohibit “[a] public or private employer from maintaining, enacting, and enforcing a workplace policy prohibiting or restricting actions or conduct otherwise permitted under this chapter.” AB 132 provides that, subject to certain exceptions, it is unlawful for any employer in Nevada to “fail or refuse to hire a prospective employee because the prospective employee submitted to a screening test and the results of the screening test indicate the presence of marijuana.” AB 132 also provides that if an employer requires an employee to submit to a screening test within the initial 30 days of employment, the employee has the right to submit to an additional screening test (at the employee’s expense) to rebut the results of the initial test. The employer is required to accept and give appropriate consideration to the results of the second test.

For the full text of the bill, click here.

June 28, 2019

Avoiding Pitfalls When Trying to Offer Benefits That Exceed the FMLA’s Mandate

By Matthew Cecil

On March 14, 2019 the Department of Labor issued an opinion letter considering whether employers violate the Family Medical Leave Act (FMLA) by expanding the amount of leave given to an employee before designating the leave as protected by the FMLA. This article considers two common FMLA pitfalls addressed in the Department of Labor’s March 14, 2019 Opinion Letter (FMLA2019-1-A): (1) communicating benefits to employees that exceed FMLA requirements; and (2) waiting to designate leave as protected by the FMLA.

Communicating Information to Employees About FMLA Benefits and Benefits That Exceed the FMLA

The FMLA requires employers to provide covered employees with up to 12 weeks of job-protected, unpaid leave each year for qualifying family and medical reasons (or up to 26 weeks for qualifying military caregiver leave).