Category Archives: Uncategorized

June 18, 2024

Looming Deadline For California Employers To Implement A Workplace Violence Prevention Program

By Robert Ayers and Erik Adams

Starting July 1, 2024, California will begin requiring employers to implement a workplace violence prevention program.

What are the New Requirements?

Erik Adams

Robert Ayers

California already requires nearly all employers to implement an Injury & Illness Prevention Plan (“IIPP”) that promotes “safe and healthy work practices.” The new mandate compels California businesses to also create a “workplace violence program” addressing “any act of violence or threat of violence that occurs in a place of employment… that results in, or has a high likelihood of resulting in, injury, psychological trauma or stress.” Employers must adhere to certain recording, recordkeeping, and training requirements related to their workplace violence prevention plan. The plan need not address remote workers, as long as they are “working from a location of the employee’s choice” that “is not under the control of the employer.” Read more >>

June 23, 2021

How to Legally Focus on Diversity, Equity and Inclusion in the Workplace

By Bryan Benard

June brings the confluence of Pride Month as well as the newly minted federal holiday, Juneteenth. Over the last few years, as social justice issues have been at the forefront, many companies have published statements or made pledges committing support to such important topics and issues.

The struggle for employers has always been turning words into action, in a fair, supportive, helpful, and legal way. There are potential pitfalls for employers as they look to increase diversity and inclusion in the workplace, and try to iron out potential equity issues with respect to pay, promotions, and benefits. Employees are also increasingly looking for ways to voice their opinions—and employers are required to balance the broad spectrum of such opinions.

July 22, 2020

Communicating with Employees About a Positive COVID-19 Case in the Workplace

By Brit Merrill, Holland & Hart LLP

Brit Merrill

As the number of COVID-19 cases in the United States continues to rise, one question facing employers is when and what information to communicate to employees about a confirmed case of COVID-19 in the workplace.

When should we tell employees if someone has a confirmed case?

Start communicating as soon as you learn there is a confirmed case. Start with those who were in close contact with the affected employee, defined by the CDC as individuals who were within 6-feet of someone who has COVID-19 for at least 15 minutes during the past 14 days. Read more >>

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.

June 20, 2019

U.S. DOL Proposes New Joint Employer Test

By: Mark Wiletsky

Employers often struggle to determine whether they might be considered “joint employers” with other entities under the Fair Labor Standards Act (FLSA). The U.S. Department of Labor (DOL) is proposing new guidance on this topic, providing much-needed clarity for employers across the country.

DOL’s Proposed Rule Would Clarify Joint Employer Test Under the FLSA

In today’s economy, businesses often work together to provide services or products to consumers and other entities. For example, companies sometimes rely on staffing agencies to augment their workforces, and organizations contract with vendors to provide services such as landscaping, building maintenance, and cleaning. These and other business arrangements create the significant—and often difficult to assess—risk that the associated entities may be deemed “joint employers” under the FLSA, even if they are independently owned and operated. If associated entities are considered joint employers, each may be liable for paying minimum wage and overtime to employees, which can pose huge liability concerns where one entity fails to comply with applicable wage and hour law.

Unfortunately, determining whether two or more entities are in fact joint employers is no easy task. Different courts have formulated different tests for joint employer status, and the tests are often complicated and indeterminate.

March 6, 2019

IRS Attempts to Tighten Rules for Business Meal Exclusions

By William Colgin and John Ludlum

Internal Revenue Code Section 119 (Code Section 119) allows employees to exclude from income the value of any meals furnished by or on behalf of their employer if the meals are furnished on the employer’s business premises for the convenience of the employer. Whether meals are furnished for the convenience of the employer is one of fact to be determined by analysis of all the facts and circumstances in each case. Treasury Regulation 1.119-1 provides that meals furnished by an employer to the employee will be regarded as furnished for the convenience of the employer if such meals are furnished for a substantial non-compensatory business reason of the employer.

Many companies provide meals to their employees, but the rules for excluding this benefit from income are complex and have detailed administration requirements. The taxpayer bears the burden of proving entitlement to such an exclusion. An employer who is claiming exclusion from income and wages for meals furnished to employees for the convenience of the employer must provide substantiation if requested concerning the business reasons. A recent IRS Technical Advice Memorandum issued on February 15, 2019, (“TAM 201903017”) underlines how difficult it can be to prove to the IRS administratively a substantial non-compensatory business reason and provides guidance for employers looking to claim the exclusion.

August 7, 2018

What Do Your Executives Have In Common With Seven-Figure Income College Coaches?

Beth Nedrow

By Beth Nedrow and Jeremy Ben Merkelson

Tax-exempt organizations may be surprised to learn of the practical impact of a statute enacted as part of the Tax Cuts and Jobs Act in December 2017. Section 4960 of the Internal Revenue Code immediately put in place restrictions on what it labels “excess” executive compensation. Some organizations initially concluded that Section 4960 would have little or no impact on them, but many are now finding that the rules have more bite than anticipated.

Section 4960 focuses on compensation paid by a tax-exempt organization to any “covered employee.” A “covered employee” is any person who was one of the organization’s five highest compensated employees for 2017 or any later taxable year. The surprising thing about this definition is that once a person is labeled a “covered employee” for any given year, they will remain in that category for the rest of their life. Read more >>

March 20, 2018

Settlements Reached in Joint-Employer Case That Could Have Affected Franchisors Nationwide

Steven Gutierrez

By Steve Gutierrez

Franchisor McDonald’s USA LLC has agreed to settle the high-profile labor disputes over whether it is a joint employer with its franchisees. Although the settlement still needs to be approved by the administrative law judge overseeing the litigation, McDonald’s and its franchisees negotiated settlement agreements with the National Labor Relations Board (NLRB) to settle allegations of unfair labor practice charges without admitting liability or wrongdoing. In doing so, McDonald’s avoids prolonged litigation and a potentially adverse decision that would have had sweeping ramifications for franchisors and their franchisees nationwide.

Protracted Litigation Over Joint-Employer Status

In 2012, multiple McDonald’s employees filed unfair labor practice charges against their employer, seeking to improve their working conditions. In 2014, former NLRB General Counsel, Richard Griffin, approved filing dozens of unfair labor practice complaints against the larger franchisor, McDonald’s USA, under a theory that McDonald’s USA is a joint employer of the employees of McDonald’s franchises. By pursing the franchisor, the 2014 NLRB signaled that it was attempting to hold the larger, nationwide entity responsible for treatment of its franchisees’ employees.

McDonald’s USA, along with many restaurant, industry, and employer groups, vigorously objected, arguing that a franchisor is not a joint employer with its franchisees and therefore, cannot be held liable for any labor law violations made by a franchisee. The joint-employer test at the time was based on whether the putative employer exercises direct control over the employees and McDonald’s USA argued that it did not exercise such control over its franchisees’ employees.

In 2015, the NLRB issued its controversial decision in Browning-Ferris Industries that significantly broadened the joint-employer test so that an entity could be deemed a joint employer if it reserved contractual authority over some essential terms and conditions of employment, allowing it to have indirect control over the employees. (See our post here.) Under that expanded test, McDonald’s USA faced higher scrutiny from the NLRB as to whether it was a joint employer and whether it retained some indirect control over the employees of its franchisees.

Due to changes in the makeup of the NLRB under the Trump Administration, as well as a new NLRB General Counsel, the NLRB has sought to reverse Browning-Ferris Industries and return to the former joint-employer test that required direct and immediate control. In December 2017, the NLRB overturned Browning-Ferris in its Hy-Brand decision, only to have to vacate Hy-Brand in February 2018 because new Board member William Emanuel should not have participated in that decision. As a result, the 2015 Browning-Ferris joint-employer test is still the standard used to determine joint-employer status under the National Labor Relations Act.

Leaving The Status Quo on Joint-Employer Status – For Now

By settling these cases, both McDonald’s USA and the current NLRB avoid having to litigate and have a judge rule on whether franchisors like McDonald’s can be deemed a joint employer under the current Browning-Ferris test. Although the Board (and Congress) continue to seek to overturn Browning-Ferris, the McDonald’s settlement will push the issue down the road to another day.

According to the NLRB’s March 20, 2018 announcement, the settlement will provide a full remedy for the employees who filed charges against McDonald’s, including 100% of backpay for the alleged discriminatees. The settlement also will avoid years of potential additional litigation.

Take Aways

Franchisors, staffing companies, and other entities who have some contractual authority or obligations related to employees of a second entity need to use caution to ensure that the second entity complies with all applicable labor laws. With the broad Browning-Ferris test in place, entities with reserved contractual control or indirect control of another entity’s employees may be found to be a joint employer under the NLRA. This could open the door to liability for labor law violations as well as union organization and collective bargaining obligations related to joint employees. If in doubt about your exposure, consult with an experienced labor attorney.

Photo credit: AP2013/Jon Elswick

August 23, 2016

Employer Violates NLRA By Barring Employees From Bringing Class or Collective Actions, Says Ninth Circuit

By Brian Mumaugh

Bad news for employers in the ongoing saga of whether an employer violates the National Labor Relations Act (NLRA) by requiring that employees pursue any legal dispute against the company on an individual basis, rather than in a class or collective action with other employees. The Ninth Circuit Court of Appeals recently ruled that the NLRA precludes employees from waiving their right to have disputes heard collectively and an employer that requires employees to waive that right as a condition of employment commits an unfair labor practice. Morris v. Ernst & Young, LLP, No. 13-16599 (9^th Cir. August 22, 2016).

Broad Ruling Extends To Any “Separate Proceedings” Requirement

Accounting firm Ernst & Young required its employees to sign agreements mandating that all legal claims against the firm be pursued exclusively through arbitration and only as individuals in “separate proceedings.” When employee Stephen Morris brought a class and collective action in federal court alleging that the firm misclassified employees denying them overtime pay under the Fair Labor Standards Act, Ernst & Young sought to compel arbitration on an individual basis pursuant to its arbitration agreement. The district court agreed, dismissing the federal court case and ordering arbitration.

Morris appealed, arguing, among other things, that the “separate proceedings” clause violated the NLRA. Morris relied on determinations by the National Labor Relations Board (the Board) in the D.R. Horton and Murphy Oil cases in which the Board ruled that concerted action waivers violate the NLRA. The Ninth Circuit agreed. It ruled that when an employer requires employees to sign an agreement precluding them from bringing a concerted legal claim regarding wages, hours, and terms and conditions of employment, the employer violates the NLRA.

The Court focused on the Board’s interpretation of the NLRA’s statutory right of employees “to engage in . . . concerted activities for the purpose of . . . mutual aid or protection” to include a right to join together to pursue workplace grievances, including through litigation. It characterized this as a labor law case, not an arbitration case. It stated that the problem with the contract was not that it required arbitration, but that it excluded all concerted employee legal claims. The Court explained that the same problem would exist “if the contract required disputes to be resolved through casting lots, coin toss, duel, trial by ordeal, or any other dispute resolution mechanism, if the contract (1) limited resolution to that mechanism and (2) required separate individual proceedings.” Read more >>