Tag: employment

Trend to Watch: State Legislatures Target Restaurants for Mandatory Sexual Harassment Training

In the New Year, two states – New Jersey and Illinois – have proposed legislation requiring restaurants to adopt a sexual harassment training policy and provide anti-sexual harassment training to employees.  While it remains to be seen whether these bills will become law, attempts to target and reform working conditions in the hospitality industry are nonetheless noteworthy, particularly given that unlike New York and California, neither New Jersey nor Illinois have enacted broad legislation requiring private sector employers, regardless of occupation, to provide sexual harassment training to staff.

New Jersey Bill (A4831)

New Jersey Bill A4831 requires restaurants that employ 15 or more employees to provide sexual harassment training to new employees within 90 days of employment and every five years thereafter.  This training requirement would go into effect within 90 days of the law’s effective date.

As to the content of the training, the bill specifies that supervisors and supervisees receive tailored content relevant to their positions/roles that include topics “specific to the restaurant industry” in an “interactive” format, including practical examples and instruction on filing a sexual harassment complaint.  Implicitly recognizing the diverse nature of the hospitality workforce, the bill requires that such training must be offered in English and Spanish.

The bill would also require restaurants to adopt and distribute sexual harassment policies to employees (either as part of an employee handbook or as a standalone policy), though it does not prescribe the contents of such policies.

While the bill cautions that compliance with the act would not “insulate the employer from liability for sexual harassment of any current or former employee,” strict compliance is advisable as the bill creates fines for non-compliance – i.e., up to $500 for the first violation and $1,000 for each subsequent violation.

Illinois Bill 3351

Illinois Bill 3351, the proposed Restaurant Anti-Harassment Act, is broader than the proposed New Jersey legislation in that it applies to all restaurants regardless of the number of employees on staff.  Like its New Jersey analogue, this bill requires restaurants to adopt a sexual harassment policy and provide training to all employees.

The sexual harassment policy must contain the following elements:

(1) a prohibition on sexual harassment;

(2) the definition of sexual harassment under Illinois and federal law;

(3) examples of prohibited conduct that would constitute unlawful sexual harassment;

(4) the internal complaint process of the employer available to the employee;

(5) the legal remedies and complaint process through the Illinois Department of Human Rights;

(6) a prohibition on retaliation for reporting sexual harassment allegations; and

(7) a requirement that all employees participate in sexual harassment training.

Like New Jersey’s bill, the Illinois bill requires separate training for employees and for supervisors/managers, and delineates the topics to be covered in each training.  Specifically, the employee training must include: (i) the definition of sexual harassment and its various forms; (ii) an explanation of the harmful impact sexual harassment can have on victims, businesses, and those who harass; (iii) how to recognize conduct that is appropriate, and that is not appropriate, for work; (iv) when and how to report sexual harassment.   The supervisor training must include the aforementioned topics in addition to: (i) an explanation of employer and manager liability for reporting and addressing sexual harassment, (ii) instruction on how to create a harassment-free culture in the workplace, and an (iii) explanation of how to investigate sexual harassment claims in the workplace.  In addition to these requirements, the training programs must be offered in English and Spanish, be specific to the restaurant or hospitality industry and include restaurant or hospitality related activities, images, or videos, and be “created and guided by an instructional design model and processes that follow generally accepted practices of the training and education industry.”

If enacted, employees would need to receive training within 90 days after the effective date of the act or within 30 days of employment and every 2 years thereafter.

Like New Jersey, the Illinois bill contemplates a $500 fine for the first violation and a $1,000 fine for each subsequent violation.

Recommendation

Restaurants should carefully track the progress of these bills and be on the lookout for similar legislative efforts in other states.  Given that a number of states, including New York and California, already require all private employers (of a particular size) to provide sexual harassment training, restaurants operating in Illinois and New Jersey may want to move towards implementing a sexual harassment policy and training program sooner than later.

 

©2019 Epstein Becker & Green, P.C. All rights reserved.

New Jersey Announces Minimum Wage Increase

Governor Murphy, Senate President Sweeney and Assembly Speaker Coughlin have just announced their plan to increase New Jersey’s minimum wage to $15 per hour. Currently, minimum wage in New Jersey is $8.85 per hour.

Under the proposed plan, minimum wage would increase to $10/hour on July 1, 2019. Minimum wage would then increase by a dollar per year as follows:

  • 1/1/2020 – $11
  • 1/1/2021 – $12
  • 1/1/2022 – $13
  • 1/1/2023 – $14
  • 1/1/2024 – $15

Note that this increase will be delayed for some workers. Seasonal workers and employees at businesses with five or few workers won’t be eligible for the $15 minimum wage until 1/1/26. Agricultural workers will also be subject to different rules. More details on the plan will certainly follow in the coming weeks.

 

© 2019 Giordano, Halleran & Ciesla, P.C. All Rights Reserved
Read more news on minimum wage increases on the National Law Review’s Employment Law Page.

What’s the Lowdown on the Shutdown?

The partial government shutdown continues. The shutdown has captured the attention of Washington politicians and the media, not to mention the hundreds of thousands of federal employees who are currently furloughed or working without pay.

For employers, the shutdown has some important implications. While the Department of Labor (DOL) and the National Labor Relations Board (NLRB) are fully funded through October 2019, the Equal Employment Opportunity Commission (EEOC) is not.

As a result of the lack of funding, the EEOC is closed until further notice.

WHAT DOES THAT MEAN FOR EMPLOYERS? A FEW THINGS:

  • The EEOC will not begin processing new employment discrimination cases until it reopens.
    However, the EEOC has been clear that the shutdown will not extend the statute of limitations for employees to file charges (300 days for Wisconsin employees). Employees who are close to the filing deadline are being encouraged to file charges by mail while the EEOC’s online portal remains closed to the public. Presumably, charges postmarked within the statute of limitations will be considered timely; however, this extra step may discourage some employees from filing claims.
  • Deadlines assigned to employers cannot be ignored on account of the shutdown.
    For example, a notice of charge dated December 21, 2018 with a position statement due date of January 21, 2019 cannot be ignored. Just as employees remain subject to the statute of limitations for their claims, so too are employers required to continue to meet their deadlines. If an extension is required, you should contact legal counsel as soon as possible. Generally, EEOC staff will not be able to respond to communications.
  • Pending EEOC charges will be suspended during the shutdown.
    This includes claims currently under investigation and those in the EEOC’s mediation program. Likewise, all EEOC litigation will be suspended except in cases where a continuance has not been granted.
  • The government shutdown does not affect state law discrimination claims.
    The Wisconsin Equal Rights Division (ERD) continues to accept discrimination claims, including those normally cross-filed with the EEOC. Employers must continue to respond to communications from the ERD.

Past experience suggests that if and when the EEOC reopens for business, there will be a significant backlog of cases to sort through. Employers should therefore expect the EEOC’s actions and communications to lag in 2019 as the agency works to get caught up on processing, investigating, and resolving cases.

 

Copyright © 2019 Godfrey & Kahn S.C.
This post was written by M. Scott LeBlanc of Godfrey & Kahn S.C.

Read more labor and employment news on the National Law Review’s labor and employment type of law page.

Los Angeles Living Wage Ordinance Amended With Annual Increases

Any employer working with the city of Los Angeles should be aware of recent amendments to the Los Angeles Living Wage Ordinance, which lays out annual cash wage increases, time off and health benefits.

The Los Angeles Living Wage Ordinance (LWO) applies to city contractors and ensures that employees working on city contracts are paid the city’s set living wage (which consists of a cash wage rate and an employer’s health related benefits contribution) and are provided with time off as required by the LWO (at least 96 compensated hours off and 80 uncompensated hours off).

Effective October 15, 2018, the city amended the ordinance to require employer contractors to pay their non-airport employees the following wage going forward:

  • On July 1, 2019, the wage rate for an Employee shall be no less than $14.25 per hour.
  • On July 1, 2020, the wage rate for an Employee shall be no less than $15.00 per hour.
  • July 1, 2022, and annually thereafter, the hourly wage rate paid to an Employee to be adjusted.

In addition to the above base wage, employers must provide health benefits of at least $1.25 per hour to employees towards the provision of health care benefits for employees and their dependents.

For example, if an employer does not currently provide an employee with health benefits as provided in Section 10.37.3 of this article, the employee must be paid an additional wage rate of $1.25 per hour for a total of $14.50 per hour (based on the current $13.25 per hour base rate).

Employers working with Los Angeles Airport Employees must comply with separate wage rates. Effective July 1, 2018 (and adjusted annually thereafter), airport employees must be paid at minimum $13.75 per hour in cash wages and $5.24 per hour in health benefits, for a total economic package of $18.99. The term “total economic package” is not defined in the ordinance. However, it is traditionally interpreted to mean “health related” benefits. “Health related” is defined liberally to include vacation time, health insurance, sick pay, etc.

Because the LWO’s wage rate increases annually, California employers thinking about entering into collective bargaining agreements should consider including flexible language around the annual rate increase.

 

© 2019 Barnes & Thornburg LLP
This post was written by Michael Lee and Barnes & Thornburg LLP.

Connecticut’s Pay Equity Law Prohibits Salary History Inquiries

As of January 1, 2019, Connecticut employers are prohibited from inquiring about prospective employees’ wage or salary histories. Connecticut’s new pay equity law is intended to promote equality in pay and close the wage gap. Under the new law, employers—defined as entities having “one or more employees”—are also prohibited from using a third party to inquire about any applicant’s wage or salary history. Employers may still inquire about the components of an applicant’s compensation structure—for example, retirement benefits or stock option plans—but they may not inquire about the value of any individual component.

Nothing in the law prevents an employer from verifying salary information if a prospective employee voluntarily discloses such information. Additionally, the law does not apply where a federal or state law “specifically authorizes disclosure or verification of salary history” in the employment context.

A private right of action exists for violations of the law, and a prospective employee can potentially recover compensatory damages, attorneys’ fees and costs, and punitive damages. A two-year statute of limitations applies.

In light of this new law, Connecticut employers should revise their employment applications to remove any requests for candidates’ salary histories. Employers that have hiring policies and/or hiring scripts should revise these documents to remove any questions about salary histories. Further, employers may want to affirmatively state that it is the employer’s policy not to make such inquiries. Connecticut employers may also want to ensure that any employees involved in interviewing candidates are trained on the new law and understand that they should not be asking about salary history information. Finally, employers may want to verify that any third parties they are using to help screen candidates are aware of and in compliance with the new law.

 

© 2018, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
Read more employment updates on the National Law Review’s employment law page.

More Employers Were “ICED” in Fiscal Year 2018

The U.S. Immigration and Customs Enforcement agency (ICE) recently released statistics on its worksite enforcement activities for the federal fiscal year ending on September 30, 2018. It should surprise no one that worksite enforcement designed to crack down on the employment of undocumented aliens has skyrocketed.

In FY 2018, 6,848 worksite investigations were initiated, representing a fourfold increase from the prior fiscal year. Similarly, ICE conducted 5,981 audits of employers’ Form I-9s, which is five times the number from the prior year. Criminal and worksite arrests were also way up and readers will recall that immigration law violations are one of the few areas of employment law which can result in direct criminal prosecution.

As stated by ICE, “[our] worksite enforcement strategy continues to focus on the criminal prosecution of employers who knowingly break the law, and the use of I-9 audits and civil fines to encourage compliance.”

What does this flurry of activity mean for employers? Under the Immigration Reform and Control Act of 1986, all employers must verify the identity and work eligibility of all individuals hired by completing a Form I-9 within three days of starting work. While appearing to be fairly simple on its face, many employers fail to pay attention to the details and fail to properly complete and certify that they have carefully verified the identity and work authorization of each hire. This can be especially true when hiring is done in remote locations where there are no trained management personnel to supervise the completion of the I-9.

When an employer receives a Notice of Inspection from ICE, it has three business days after which ICE will physically inspect the I-9s. Noncompliance could result in civil fines or even criminal prosecution. ICE worksite investigations are also designed to look for evidence of mistreatment of workers, human trafficking, and document fraud.

Given the reality that immigration enforcement activities are not likely to update anytime soon, employers are well-advised to take the following steps now:

  • Conduct a self-audit of all of your I-9s and if mistakes are identified take the appropriate steps to correct them. Consult the Handbook for Employers to know how the form must be completed.

  • Review and, where necessary, retrain all employees who are responsible for reviewing the documents presented by the new hire and certifying the accuracy of the form I-9.

  • Be sure you know the right way to fix errors that are identified.

  • Audit the records of any employees who are working under temporary visas. Oftentimes, employers verify work authorization at the time of hire but then fail to track expirations and renewals. What may have been legal at the time of hire may not be the case years later.

© 2018 Foley & Lardner LLP
This post was written by Mark J. Neuberger of Foley & Lardner LLP.
More immigration news at the National Law Review’s Immigration Page.

No vaccine? No job! Court affirms employer’s ability to condition employment upon vaccinations

On December 7, 2018, the U.S. Eighth Circuit Court of Appeals held that an employee who was terminated for refusing to take a rubella vaccine was not discriminated or retaliated against, under the Americans with Disabilities Act, as amended (“ADA”).  See Hustvet v. Allina Health System, Case No. 17-2963.

In this case, Janet Hustvet worked as an Independent Living Skills Specialist. In May 2013, Hustvet completed a health assessment, during which she stated she did not know whether she was immunized for rubella.  Subsequent testing confirmed she was not.  Her employer — Allina Health Systems — then told Hustvet she would need to take one dose of the Measles, Mumps, Rubella vaccine (“MMR vaccine”).  Hustvet stated to an Allina representative that she was concerned about the MMR vaccine because she had previously had a severe case of mumps and had “many allergies and chemical sensitivities.”  Later, Hustvet refused to take the MMR vaccine, and was terminated for failure to comply with Allina’s immunity requirements.  Hustvet then sued Allina, alleging discrimination, unlawful inquiry, and retaliation claims under the ADA and Minnesota state law.  The district court granted Allina’s motion for summary judgment, and Hustvet appealed.

On appeal, the Eighth Circuit first addressed Hustvet’s unlawful inquiry claim; specifically, Hustvet alleged that Allina violated the ADA when it required her to complete a health screen as a condition of employment.  When affirming the district court’s grant of summary judgment, the court explained that the information requested and the medical exam, which tested for immunity to infectious diseases, were related to essential, job related abilities.  Indeed, Allina sought to ensure their patient-care providers would not pose a risk of spreading certain diseases – such as rubella – to its client base.  Thus, the inquiry was job-related and consistent with business necessity.

The court then did away with Hustvet’s discrimination claim based upon failure to accommodate because Hustvet was not disabled and, thus, she could not state a prima facie case of disability discrimination. There was simply no record evidence to support the conclusion that Hustvet’s purported “chemical sensitivities” or allergies substantially limited any of Hustvet’s major life activities. She was never hospitalized due to an allergic or chemical reaction, never saw an allergy specialist, and was never prescribed an EpiPen.  Rather, Hustvet suffered from “garden-variety allergies,” which was not enough to conclude she was disabled.

Finally, the court affirmed the district court’s grant of summary judgment regarding Hustvet’s retaliation claim. In pertinent part, the court reasoned that Hustvet could not show that Allina’s proffered reason for terminating her employment – her refusal to take an MMR vaccine – was a pretext for discrimination.  The record evidence demonstrated that Allina terminated Hustvet’s employment because her job required her to work with potentially vulnerable patient populations, and she refused to become immunized to rubella, an infectious disease.

This decision comes as welcome news to employers that provide healthcare-related services, and confirms that healthcare providers may condition employment upon taking certain vaccinations, so long as the vaccination is job-related and consistent with business necessity.  Employers with questions regarding implementing or enforcing such policies would do well to consult with able counsel.

 

© Polsinelli PC, Polsinelli LLP in California
This post was written by Cary Burke of Polsinelli PC.

#MeToo Movement Inspires Avalanche of New Laws Affecting California Employers

On September 30, 2018, Governor Jerry Brown signed several bills that will affect California employers. The following summarizes key aspects of these new laws. Unless otherwise noted, the new laws are effective January 1, 2019.

Major Changes to the Definition of “Hostile Work Environment” Harassment

Senate Bill (“SB”) 1300 significantly expands the circumstances in which hostile work environment harassment may be found to exist by rejecting the “severe or pervasive” standard developed and refined over several decades by California courts. Harassment is redefined to encompass a broad spectrum of conduct, specifically:

“Harassment creates a hostile, offensive, oppressive, or intimidating work environment and deprives victims of their statutory right to work in a place free of discrimination when the harassing conduct sufficiently offends, humiliates, distresses, or intrudes upon its victim, so as to disrupt the victim’s emotional tranquility in the workplace, affect the victim’s ability to perform the job as usual, or otherwise interfere with and undermine the victim’s personal sense of well-being.”

Government Code Section 12923, which declares the Legislature’s intent in enacting the new law, will provide guidance about what types of evidence will be sufficient to establish a harassment claim. It states that employees are no longer required to prove that their productivity has declined as a result of harassment. Now, they only need to show that the harassment made it “more difficult” for them to do their job. Even a “single incident of harassing conduct” is now sufficient to create a triable issue of fact, allowing a case to go to a jury. Furthermore, a single remark made by someone unconnected to a termination decision can be circumstantial evidence of discrimination. Finally, the Legislature made it clear that harassment cases are “rarely” appropriate for dismissal at the summary judgment stage.

Employers can be held liable for all forms of harassment – not just sexual harassment – directed at employees by non-employees, such as clients or vendors. This includes harassment based on race, national origin, religion, and other protected characteristics.

Finally, if an employer wins a sexual harassment lawsuit, it cannot recover attorney’s fees and costs unless it can prove that the plaintiff’s action was “frivolous, unreasonable, or groundless” either when filed or after it clearly became so.

Restrictions on Releases and Non-Disparagement Agreements

SB 1300 also prohibits employers from requiring a release of harassment, discrimination, or retaliation claims or to sign a non-disparagement agreement that purports to prevent disclosure of information about unlawful acts in the workplace, if the release is required to get a job, stay employed, or receive a raise or bonus. This does not apply to a negotiated settlement to resolve a claim filed in court, with government agencies, in arbitration, or through an employer’s internal complaint process, provided that the employee has an attorney or an opportunity to retain one.

Extended Statute of Limitations for Sexual Assault

The California Legislature lengthened from three years to ten years the statute of limitations for sexual assault claims. Under Assembly Bill (“AB”) 1619, a plaintiff may now bring a civil action for sexual assault within the later of “[ten] years from the date of the last act, attempted act, or assault with the intent to commit an act, of sexual assault by the defendant against the plaintiff” or “[w]ithin three years from the date the plaintiff discovers or reasonably should have discovered that an injury or illness resulted” from the defendant’s act.

Restrictions on Confidentiality and Testimony Provisions in Settlement Agreements

SB 820 prohibits settlement agreements that restrict plaintiffs from disclosing factual information about harassment claims in judicial proceedings. The bill does not, however, prohibit settlement provisions restricting disclosure of settlement amounts. Furthermore, a provision that shields the identity of a claimant may be included in a settlement agreement at the request of the claimant, unless a government agency or public official is a party to the agreement.

AB 3109 voids settlements that waive the right to testify regarding criminal conduct or sexual harassment, when the party has been required or requested to attend a proceeding by court order, subpoena, or other government request.

Enhanced Protection from Defamation

AB 2770 enhances protections from defamation claims made against sexual harassment claimants and employers that investigate such complaints. Three types of statements are privileged: 1) employee complaints of sexual harassment made without malice and supported by credible evidence; 2) communications made without malice between an employer and other interested persons regarding a sexual harassment complaint; and 3) answers provided without malice by a current or former employer in response to questions from a prospective employer regarding whether the current or former employer would rehire an employee, and whether the decision not to rehire is based on a determination that the former employee engaged in sexual harassment.

Broadened Definition of Non-Employment Related Harassment

SB 224 significantly expands sexual harassment claims in business, service, and professional relationships under California Civil Code Section 51.9. Going beyond the prior definition, which applied to physicians, attorneys, trustees, landlords, and other similar relationships, the law now prohibits harassment by individuals who “hold themselves out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party.” Examples include investors, elected officials, lobbyists, directors, and producers.

The law also reduces the burden to establish a claim, removing the previous requirement that a plaintiff establish that he or she was “unable to easily terminate the relationship.” The law also allows the California Department of Fair Employment and Housing (“DFEH”) to prosecute non-employment based sexual harassment claims, and makes it unlawful to “deny or aid, incite, or conspire in the denial of rights of persons related to sexual harassment actions.”

Expanded Anti-Harassment Training

Under existing law, employers with fifty or more employees were required to provide two hours of anti-harassment training to supervisory employees every two years. Under SB 1343, any employer with five or more employees, including temporary and seasonal workers, must provide two hours of anti-harassment training to supervisors and one hour of training to non-supervisors by January 1, 2020, and then once every two years thereafter. The bill also requires the DFEH to develop these courses and to post them online.

Corporate Boards of Publicly Held Corporations Must Include Female Representatives

SB 826 requires all publicly-held domestic and foreign corporations with principal executive offices in California to have at least one female on their boards by the end of 2019. By the end of 2021, the minimum increases to one female for boards with four or fewer members, two females for boards with five members, and three females for boards with six or more members. “Female” refers to an individual’s gender identification, not designated sex at birth.

The bill directs the Secretary of State to publish online reports documenting compliance. In addition, the Secretary of State may issue fines of $100,000 for failure to file board member information, $100,000 for the first violation of the member requirement, and $300,000 for subsequent violations. Each position not appropriately filled constitutes a separate violation.

Salary History Ban and Pay Scale Disclosure Guidance

Labor Code Section 432.3, enacted in January 2018, requires employers to provide applicants, upon request, with the pay scale for a position. It also prohibits employers from asking about or relying on prior salary in hiring or compensation.

An amendment to this bill enacted in July 2018 provides some necessary clarifications. It defines “pay scale” as a “salary or hourly wage range,” and it clarifies that the salary history ban and pay scale requirement do not apply to current employees. It also explains that employers are not required to provide pay scale information until after the initial interview. Employers are also allowed to ask about salary expectations. Finally, it allows employers to make compensation decisions based on existing salaries, so long as any differential is justified by a bona-fide factor such as seniority or merit.

Limitations on Criminal History Inquiries

Existing law restricts employers from considering applicants’ and employees’ judicially dismissed or sealed convictions or participation in pretrial or post-trial diversion programs. SB 1412 narrows the scope of an exception to this general rule. The bill permits employers to seek information from the applicant or other sources only about an applicant’s “particular conviction,” rather than a “conviction” generally.

An employer may inquire about a “particular” conviction only if: 1) the employer is legally required to obtain information regarding the conviction; 2) the applicant would be required to possess or use a firearm; 3) an individual with that conviction is legally prohibited from holding the position; or 4) the employer is legally prohibited from hiring an applicant with that conviction.

The employer may inquire about the particular conviction under these circumstances even if it has been expunged, sealed, statutorily eradicated, or judicially dismissed. The law further states that it does not prohibit an employer from conducting criminal background checks or restricting employment based on criminal history when legally required to do so.

Paid Family Leave for Active Duty Families

SB 1123 extends California’s paid family leave program to families with members on active duty in the armed forces. Beginning on January 1, 2021, an individual may take up to six weeks of paid family leave a year when participating in a qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child, or parent.

Employment Record Inspection Rights

SB 1252 provides guidance regarding requests to inspect employment records. Employees have a right to receive a copy of their records, not merely inspect or copy them. An employer must deliver a copy within 21 days, and may charge the cost of reproduction to the employee. An employer who fails to provide an employee with a copy of his or her employment records within the 21-day time period will be subject to a $750 fine.

Expanded Lactation Accommodation Requirements

AB 1976 expands the existing lactation accommodation standards to now require that employers create a permanent lactation location in an area other than a bathroom. Before this change, employers were required to provide only an area other than a toilet stall. Employers may create a temporary location if they can demonstrate: 1) an inability to provide a permanent location due to operational, financial, or spatial constraints; 2) the temporary location is private and free from intrusion when needed for lactation; 3) the temporary location is only for lactation purposes when needed for that purpose; and 4) the temporary location otherwise meets state law requirements. If the requirements would create an “undue hardship”, however, the employer must make “reasonable efforts” to provide the employee with an area other than a toilet stall that is in close proximity to the employee’s work area where the employee can express milk in private.

California Construction Employers Temporarily Protected from PAGA Suits

California construction workers will no longer be able to bring suit against their employers under the Private Attorneys General Act of 2004 (“PAGA”) if they work under a collective bargaining agreement that meets certain requirements provided in AB 1654. To qualify, the agreement must: 1) provide for the wages, hours of work, and working conditions of employees, premium wage rates for all overtime hours worked, and for employees to receive a regular hourly pay rate of not less than 30 percent more than the state minimum wage rate; 2) provide for a grievance and binding arbitration procedure to redress labor code violations; 3) expressly waive PAGA’s requirements in clear and unambiguous terms; and 4) authorize the arbitrator to award any and all remedies available under law. This exception expires on the earlier of the collective bargaining agreement’s expiration date or the statute’s repeal date of January 1, 2028.

Petroleum Industry Employee Rest Breaks May be Interrupted

Although California law prohibits employers from requiring employees to work during their meal, rest, or recovery periods, AB 2605 creates an exception for certain workers in the petroleum industry who are covered by a qualifying collective bargaining agreement. Under this provision, employers may interrupt rest breaks taken by employees who hold safety-sensitive positions at petroleum facilities from their duties, to the extent the employee is required to carry and monitor a communication device and respond to emergencies or is required to remain on employer premises to monitor the premises and respond to emergencies. If a rest break is interrupted, an employer must promptly provide an additional rest break. If a rest break cannot be provided, the employer must pay the employee an hour of pay. This bill became effective immediately when it was signed by Governor Brown on September 20, 2018, and it will remain effective until the section is repealed in January 1, 2021.

Suggested Actions

In light of these changes, California employers should consider taking the following actions:

  • Train managers, recruiters, human resource professionals, and other relevant staff regarding these new requirements and restrictions.
  • Educate all employees, especially supervisory employees, about laws prohibiting harassment, including SB 1300’s expanded definition of harassment, and train employees on how to appropriately respond to complaints of harassment.
  • Update policies, procedures, and agreements in light of SB 1300’s new restrictions on non-disparagement agreements and releases and SB 820’s and AB 3109’s restrictions on confidentiality provisions in settlement agreements.
  • Update training policies, procedures, and materials to comply with SB 1343’s expanded requirements for sexual harassment training for all employees.
  • Consider updating procedures and policies regarding employment references to third parties to permit disclosures regarding eligibility for rehire. Employers should designate a single person or a human resources professional to provide references in order to ensure that disclosures fall within AB 2770’s defamation privilege.
  • Begin planning for SB 826’s requirements for female representation on corporate boards.
  • Ensure that application forms, candidate questionnaires, interview outlines and scripts, and other screening and hiring materials omit inquiries regarding salary history and inquiries regarding criminal history, consistent with applicable law.
  • Prepare policies and procedures for complying with the salary history ban’s pay scale disclosure requirements. Such policies and procedures should comply with the requirements described above.
  • Consider asking applicants about their salary expectations, rather than salary history. If an employee voluntarily offers salary information, contemporaneously document that the employee introduced the information into the discussion.
  • Review criminal history screening policies, procedures, and forms to ensure compliance with the restrictions on criminal history inquiries. Prepare policies for dealing with criminal history to avoid ad hoc decision-making by managers and consider involving human resource professionals.
  • Contemporaneously document any individualized assessments regarding an applicant’s suitability for employment based on criminal history information.
  • Update written policies regarding qualifying exigencies related to military service.
  • Ensure policies for responding to employee requests for records; permit employees to obtain copies of such records.
  • Ensure that there is an available space for lactation in the workplace that complies with the new requirements.
  • Reach out to us if you have any questions, concerns, or need guidance with respect to these new laws or your company’s obligations to comply with them.
Copyright 2018 K&L Gates.
This post was written by Spencer Hamer and Catherine C. Smith of K&L Gates.

Nurse Staffing Ratios May Be Coming to a Hospital Near You

On November 6, 2018, when Massachusetts voters go to the polls to select a new Governor and other key elected officers, they will also consider Ballot Question 1, which will mandate rigid registered nurse staffing ratios for hospitals across the Commonwealth effective as of January 1, 2019. This proposal would make Massachusetts the second state in the United States to have specific staffing ratios mandated in all units. This initiative follows only California, which passed a less comprehensive law through the legislative process in 1999 and provided over five (5) years for hospitals to implement by 2004.[1] The Massachusetts ballot initiative process, like that of some other states, allows the voters to write entirely new law into books. Question 1 appears to be the most heavily-fought ballot initiative in Massachusetts in recent memory. While Massachusetts seems to be the only state this year with a nurse staffing ratio as a referendum ballot initiative,[2] unions nationally will focus on the results of this year’s effort.

What is Question 1?

Question 1, if passed, would mandate highly-prescriptive and specific nurse-to-patient ratios based on the type of patients/units in hospitals, regardless of market, acuity of the patient, physician orders, or nursing judgement. Hospitals are required to implement a written plan detailing the maximum number of patients to be assigned to a registered nurse by unit at all times, while also “concurrently detailing the facility’s plans to ensure that it will implement such limits without diminishing the staffing levels of its health care workforce.”

Hospitals would also be required to develop a “patient acuity tool” for each unit to be used to determine whether the maximum number of patients that may be assigned should be lower than the assignment limits in the law. Notices regarding the patient assignment limits must be posted in conspicuous places, including each unit, patient room, and waiting area.

What are the Ratios?

The specific ratios mandated are summarized as follows (nurse:patient):

  • Step-down/intermediate care 1:3
  • Post anesthesia care (PACU) 1:1; PACU post-anesthesia 1:2
  • All units with operating room (OR) patients 1:1; OR patients post-anesthesia 1:2
  • Emergency Services Department: 1:1, 1:2,1:3, or 1:5 depending on the emergent or urgent nature of a patient which often changes by the minute
  • Maternal child care patients:
    • Active labor, intermittent auscultation for fetal assessment, and patients with medical or obstetrical complications 1:1
    • During birth and for up to two hours immediately postpartum 1:1 for mother and baby; when the condition of the mother and baby are determined to be stable and the critical elements are met, 1 nurse may care for both the mother and the baby(ies)
    • During postpartum for uncomplicated mothers or babies 1:6 (either 6 mothers or babies, 3 couplets of mothers and babies, or, in the case of multiple babies, not more than a total of 6 patients
    • Intermediate care or continuing care babies is 1:2 for babies
    • Well-babies 1:6
  • Pediatric 1:4
  • Psychiatric 1:5
  • Medical, surgical and telemetry patients 1:4
  • Observation/outpatient treatment 1:4
  • Rehabilitation units 1:5
  • All others 1:4

How Would the New Law be Enforced?

Question 1 also requires the state’s Health Policy Commission (HPC) (as opposed to the Department of Public Health, which is the state authority to license and regulate hospitals and other health care providers) to promulgate regulations and conduct inspections governing the implementation of the initiative.  The HPC is a six year old independent state agency charged with monitoring health care spending growth, it does not have the staff or infrastructure to conduct routine hospital surveys to monitor internal facility management and operations. It is also important to note that the proposed ballot would restrict the HPC by preventing it from issuing any delays, temporary or permanent waivers, or modifications of the ratios. Thus, even if the HPC believed that the January 1st  implementation date was unfeasible, it may be prohibited from offering waivers.

The HPC may report violations to the State Attorney General, who could file suit to obtain injunctions as well as civil penalties of up to $25,000 per violation and up to $25,000/day for continued violations.

The Impact if Question 1 Passes

Coalitions have lined up on both sides of Question 1.  Each side has painted dramatically-different pictures of a future for the industry with mandated nurse staffing ratios. The supportive nursing union has cast the initiative as being relatively small dollars for the industry, costing only $47 Million for all hospitals in the state in total according to their study.[3],[4]  The Massachusetts Health and Hospital Association and a broad-based coalition of health care providers and other nursing organizations opposed to the initiative point to studies estimating that the cost will be in excess of $1 Billion to the industry.[5]  Increased costs are based on the need to recruit new nurses, as well as the across-the-board increases in pay. There will be a need to hire 5,911 registered nurses within 37 business days to comply with January 1st  deadline and this is in a state that already has a shortage of approximately 1,200 registered nurses.[6]  Individual community hospitals are reporting projected additional expenditures that amount to more than the $30 Million per year, with teaching hospitals anticipating increased expenditures higher than that.[7]

On October 4, 2018, the HPC issued its independent report on the estimated costs of Question 1, essentially validating the opposition’s concerns, and projecting annual increased costs of $676 Million to $949 Million, and noted that the projections were “conservative.” The HPC study undercounted costs as it only looked at increased costs in certain units, and excluded costs associated with increased staffing in emergency departments, observation units, outpatient departments, or any costs for implementation or to non-acute hospitals.[8]  Wage increases of 4 – 6% are predicted in the HPC study, based on the California experience with across-the-board staffing requirements in place, and estimated increases of total health expenditures in Massachusetts of 1.1 – 1.6%, with increases of 2.4 – 3.5% for hospital spending alone, again, based on a conservative and partial analysis. Thus, it appears that the industry fears of greater than $1Billion in annual increased expenses are valid.

Ancillary adverse impacts anticipated by the HPC included reduced access to emergency care, increased wait times, decreased patient flow, increased “boarding,” and more ambulance diversions.

The HPC also compared Massachusetts to California hospitals and concluded that there was “no systematic improvement in patient outcomes post-implementation of ratios.”

What Should Hospitals be Doing Now?

Question 1, if passed, would only apply to Massachusetts licensed hospitals.  But hospitals and health systems in other jurisdictions should be prepared for similar efforts in their states. The following are some initial steps hospitals should be considering

Access Management.  Access problems will be common starting in January if Question 1 passes. Elective procedures, non-emergent appointments and other services may need to be curtailed effective January 1, 2019.  Hospitals will need to meet staffing levels on that day with respect to then-current inpatients and outpatients.  Avoiding new admissions in December may be necessary to assure the hospital is not in instant violation on New Year’s Day. Early patient contact to warn about the possibility of rescheduling procedures will prudent.

Payer Contract “Reopeners.”  Payer contracting “reopeners” should be added to managed care contracts now. The hospital community has been watching the interest of the unions in pushing nurse staffing ratios in Massachusetts and other states for a number of years. Health systems and hospitals negotiating long-term contracts with payers have often included “reopeners” to permit the hospital to revisit contract rates even during the term of an agreement if certain extreme events come to pass.  Hospitals in all jurisdictions are encouraged to consider adding such reopeners to their agreements today.

Massachusetts hospitals should review their payer contracts now to confirm if they have the right to a mid-term reopening and, if so, provide notice immediately upon passage to their payers that the hospital will need to renegotiate rates to address the increased costs. Charge masters will also need to be reviewed immediately.

Union status? Based on their efforts to rally public support around Question 1, the Massachusetts Nurses Association is trying to do an end-run around the collective bargaining table where their past efforts on the issue of staffing ratios have failed.  Health systems and hospitals should review their collective bargaining agreements to determine whether they are in a position to trigger a reopener during the term of the contract to address the numerous monetary and non-monetary consequences of rigid staffing ratios contemplated by Question 1.

Unit Closure Plans.  If passed, hospitals in Massachusetts will likely need to immediately assess whether and how they could comply with these new ratios. Units that already operate at a loss, or for which meeting the staffing requirements is impossible, should be closed or reduced to the smallest possible patient compliment.  Closure plans and negotiations will need to commence immediately.

Massive Recruitment Efforts.  While there are believed to be a few hospitals that may already meet these staffing levels (at some times), most hospitals will need to recruit many more registered nurses, as well as have additional nurses standing by for fluctuations in patient loads on various units on a daily basis.  As noted above, the law will require hiring nearly 6,000 RNs in the fourth quarter of this year.[9]

Conclusion

If Question 1 passes, conservative projections estimate extreme new costs will be incurred by Massachusetts hospitals, which will result in both reductions in levels of service, and increased costs to payers and patients.  It is important to note that the dire circumstances of the ballot has led to an increasing large number of nursing organizations and physician groups in Massachusetts to all oppose Question 1. While Massachusetts hospitals are making plans akin to natural disaster preparedness, hospitals in other states should watch carefully these events to be ready should similar initiatives arise locally.

———————————

[1] A few other states have limited ratios in certain special types units (like intensive care units), but Question 1 applies to all hospital units.

[2] See http://www.ncsl.org/research/elections-and-campaigns/ballot-measures-database.aspx(June 6, 2018); downloaded on October 8, 2018.

[3] See https://www.massnurses.org/news-and-events/p/openItem/11083

[4] See https://safepatientlimits.org/wp-content/uploads/Shindul-Rothschild-Esti…

[5] See https://www.protectpatientsafety.com/get-the-facts/

[6]  See Mass Insight Global Partnership, Protecting the Best Patient Care in the Country, Local Choices v Statewide Mandates in Massachusetts (April, 2018)  http://www.bwresearch.com/reports/bwresearch_mha-nlr-report_2018Apr.pdf (“Mass Insight Study”)

[7] See Financial impact of nurses ballot question? Depends who’s counting, Priyanka Dayal McCluskey, Boston Globe (Sept. 17, 2018).  https://www.bostonglobe.com/metro/2018/09/17/financial-impact-nurses-ballot-question-depends-who-counting/mlS4yZa5IB8hcDaFZ7ojXM/story.html

[8] See Analysis of Potential Cost Impact of Mandated Nurse-to-Patient Staffing Ratios, October 3, 2018, https://www.mass.gov/doc/presentation-analysis-of-potential-cost-impact-…

[9] Mass Insight Study.

 

© 2018 Foley & Lardner LLP
This post was written by Lawrence W. Vernaglia and Donald W. Schroeder of  Foley & Lardner LLP.

New Federal Overtime Rule Expected in Early 2019

It doesn’t seem that long ago that employers were busily preparing for the new overtime rule that would have doubled the minimum salary level for the “white collar” exemptions from $23,660 to nearly $48,000.  That new rule—finalized in May 2016 and set to take effect on December 1 of that year—was struck down by a Texas federal court in late November 2016.

President Trump took office in January 2017, and the DOL—with less interest in so aggressively raising wages as the predecessor administration—pushed the pause button on revisions to the overtime rule.  In public comments, however, Labor Secretary Alexander Acosta, who assumed the post in late April 2017, repeatedly indicated that he favors some increase in the minimum salary threshold for exemption, which was last raised in 2004 (and before that, in 1975).

In July 2017, the DOL began seeing public comment on a revised overtime rule, publishing a Request for Information in the Federal Register.  The comment period closed in September 2017.

In its Spring 2018 Regulatory Agenda, the Trump Administration formally announced its intention to issue a Notice of Proposed Rulemaking (NPRM) in January 2019 “to determine what the salary level for exemption of executive, administrative, and professional employees should be.”

So what should employers expect in a new overtime rule?  Likely an increase in the minimum salary for exemption to something in the low-to-mid $30,000s.  This would be consistent with Secretary Acosta’s comments on the issue, but still considerably lower than the level proposed by the Obama Administration.  It would also be significant lower than some state law minimum salaries for exemption (consider New York’s minimum for exempt executive and administrative employees, which will climb to $58,500 at the end of 2018).

Another thing we could see in a new overtime rule are more modern examples of how the various exemptions might apply in today’s workplaces.  The DOL included a number of new examples in its sweeping revisions to the overtime exemption rules in 2004.  It would make sense to revisit those examples, and to consider additional examples, given how the workplace has evolved in the last 15 years.

It’s also possible the DOL will depart from a one-size-fits-all salary minimum and propose different tests for smaller or non-profit employers.  Small businesses, non-profits, and educational institutions were among the loudest voices in opposition to the 2016 overtime rule changes, and would be among the hardest hit by any increase in the minimum salary levels.

What I don’t expect from a new overtime rule are automatic future increases (which were part of the 2016 rule) or a change from a qualitative to a quantitative (e.g., California-style) primary duties test.

I also don’t expect any new overtime rule to take effect before 2020.  Even assuming the DOL meets its expected deadline of proposing a new rule in January 2019, it will likely receive (and have to review) hundreds of thousands of public comments.  (The DOL received more than 270,000 comments in response to the proposed overtime rule that was finalized in 2016.)  In all likelihood, the DOL will give employers plenty of lead time to plan and prepare for any increases in the minimum salary for exemption.  So for employers who are not subject to more stringent state rules around exemption, it’s likely you have at least a year and a few months before you’d have to implement any changes.

 

© 2018 Proskauer Rose LLP.
This post was written by Allan Bloom of Proskauer Rose LLP
Learn more labor and employment news on the National Law Reviews Labor & Employment page.