Category: Labor & Employment

Arizona Civil Rights Act Amended to Protect Pregnant Workers

On February 4, 2021, Arizona Governor Doug Ducey signed into law House Bill (H.B.) 2045, which expands protections for pregnant workers under Arizona law. The measure amends the Arizona Civil Rights Act (ACRA) to mirror existing protections under the federal Pregnancy Discrimination Act of 1978, which amended Title VII of the Civil Rights Act of 1964. Arizona legislators passed H.B. 2045 because the ACRA did not previously contain express protections for pregnancy and related conditions. To address the gap between state and federal law, Arizona legislators amended the ACRA to allow the Arizona Attorney General’s Office to investigate and enforce these protections under state law. With the governor’s signature, Arizona joins at least 27 states that have enacted laws specifically prohibiting discrimination against pregnant employees.

Expanded ACRA Protections

H.B. 2045 amends Arizona Revised Statutes (A.R.S.) § 41-1461 to specify that prohibited discrimination “‘because of sex’ and ‘on the basis of sex’ includes because of or on the basis of pregnancy or childbirth or related medical conditions.” Additionally, A.R.S. § 41-1463 now expressly states that “women who are affected by pregnancy or childbirth or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work ….” This language aligns the ACRA with the Pregnancy Discrimination Act’s existing protections.

Pregnancy Discrimination Claims After SCOTUS Decision

Considering that case law regarding Title VII of the Civil Rights Act of 1964 is persuasive in interpreting the ACRA, it is likely that the analysis of claims arising under Arizona’s new protections will follow the analysis of the Supreme Court of the United States in a 2015 case in which an employee sued her employer claiming that her employer did not accommodate her pregnancy-related lifting restriction but accommodated other workers with similar restrictions. Although the Court declined to require employers to provide accommodations to pregnant workers if any nonpregnant workers received accommodations for similar limitations—which would have created a ‘“most-favored-nation’ status” for pregnant workers—the Court did create a new “significant burden” standard to analyze pregnancy discrimination claims.

Key Takeaways

The law is expected to take effect on or about July 19, 2021. For Arizona employers with policies and practices that are already in compliance with the federal Pregnancy Discrimination Act, H.B. 2045 may be of little impact. Arizona employers may nevertheless wish to review their policies and practices to ensure compliance with H.B. 2045, considering, for instance, potential amendments to their equal employment opportunity and/or nondiscrimination policies that include pregnancy and related medical conditions. In addition, Arizona employers may want to familiarize themselves with federal case law and Title VII guidance along with guidance related to the Pregnancy Discrimination Act (which includes pregnancy-related conditions within the definition of sex discrimination under Title VII).

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

ARTICLE BY Nonnie L. Shivers of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
For more, visit the NLR Labor & Employment section.

Free Speech and Expression in the 2021 Workplace

While the presidential election may be in the past, conversations on political and social issues are not. As the new Presidential Administration takes the helm, the pandemic continues, and significant political division persists, conversations on political and social issues are commonplace in many workplaces across the country. Manufacturers are still grappling with the issue of whether and to what extent they can restrict employee speech and expression in the  workplace. Can employees discuss political or social issues at work?  What happens if it causes tension and distraction at work?  Does it matter if it occurs on working time?

Generally, there is no right to free speech in private workplaces since the First Amendment of the U.S. Constitution does not apply to private sector employers. However, such rights may be granted under state laws which vary greatly. Some state laws protect speech and expression, prohibit employees from participating in politics or becoming political candidates, prohibit employers from influencing employees’ votes, prohibit discrimination based on political affiliation of employees, among other laws. For example, under Connecticut law, both public and private employees have free speech protections and employers are prohibited from disciplining or discharging employees for exercising their free speech rights with certain limitations. Specifically, free speech is permissible assuming that it does not interfere with the employee’s job performance or relationship with the employer and addresses a matter of public concern such as terms and conditions of employment, social justice, among other reasons. Therefore, even under Connecticut law, conversations or expressions that disrupt working time and operations, may not be protected.

Certain employee speech is also protected under the National Labor Relations Act (NLRA). The NLRA, which applies to both unionized and union-free workplaces, protects employees’ right to engage in “protected activities” for the purpose of mutual aid and protection. Under the NLRA, employees have the right to engage in speech and expression related to working conditions which could include discussing compensation and benefits, supporting social or political causes such as fair wages, among other issues. Some state laws also protect such speech. Employers are generally not permitted to maintain rules prohibiting such speech except in specific circumstances. Speech related to the workplace and working conditions may also be protected under whistleblower statutes designed specifically to encourage employees to raise such issues.

There are further considerations that employers may want to evaluate before they take adverse action against an employee for speech or expression in the workplace. Actions taken consistently and uniformly across the company are less likely to run afoul of state or federal anti-discrimination laws. Further, employers that may face issues related to speech in the workplace, might explore implementing a policy addressing workplace standards as well as training managers/supervisors with regard to appropriate practices regarding employee communication in the workplace.

Copyright © 2020 Robinson & Cole LLP. All rights reserved.

ARTICLE BY Abby M. Warren of Robinson & Cole LLP
For more, visit the NLR Labor & Employment section.

COVID-à manger: COVID-19 Takes a Bite out of French Lunch Traditions

The COVID-19 pandemic has changed dining habits across the world, as governments have shut down and restricted indoor and outdoor dining.  Even where restrictions have eased, many avoid sit-down dining out of concern for COVID-19 exposure and rely on take-away for their restaurant meals.  Clearly, the COVID-19 pandemic has limited dining options.

France, however, has decided to provide workers with a new, previously forbidden, dining option, although it remains to be seen how palatable it will be to French employees.  The Labor Ministry has decreed that to contain the spread of COVID-19, French workers now may eat lunch at their desks, which prior to the pandemic, Article R.4428-19 of the French Labor Code prohibited.

Gathering around a table for lunch with friends and colleagues has been long-standing French tradition, reflecting the country’s customs, habits and tastes.  The decree is intended to allow workers to return to the workplace and still limit the spread of COVID-19, by permitting them to lunch alone at their own workspace.  Until now, employers that allowed employees to eat lunch at their desks were subject to a fine, if caught, and employees who ate at their desks faced unspecified disciplinary action.

The French government has long been active in imposing regulations to prevent employers from exploiting their workers and in protecting workers’ rights, such as by imposing a 35-hour workweek, implementing the “right to disconnect” and mandating lunch hours.  Workers have become accustomed to dining out for lunch, and traditionally consider this time away from their work stations as an opportunity to refresh their bodies and minds prior to returning to work for the afternoon.  This simply is part of the French concept of maintaining a proper work-life balance.

While the French government continues to encourage remote work wherever possible, the new measure reflects the government’s effort to encourage businesses to reopen, where they can, with measures in place that will protect employees’ workplace health and safety.  Allowing workers to eat lunch at their desks offers workers and their employers a safer dining option, though arguably at the expense of traditional French cultural norms.  It is yet another example of how the COVID-19 pandemic has challenged, and changed, customary workplace standards.

©2020 Epstein Becker & Green, P.C. All rights reserved.

ARTICLE BY Erika C. Collins and Ryan H. Hutzler of Epstein Becker & Green, P.C.
For more, visit the NLR Global law section.

Legal Industry News: Law Firm Awards, Lawyer Moves Across the Industry and Legal Marketing Updates and Opportunities

Law Firm Awards and Recognition

Womble Bond Dickinson was named a Best Place to Work for lesbian, gay, bisexual, transgender and queer workplace equality, earning a perfect score of 100 percent on the 2021 Corporate Equality Index (CEI) for the seventh year in a row. The CEI is a benchmarking survey administered by the Human Rights Campaign Foundation that measures LGBTQ workplace equality policies and practices.

“Diverse, inclusive workplaces are better equipped to serve 21st Century clients and compete in the global marketplace. It’s no coincidence that many of our clients also were named to the Corporate Equality Index,” said Merrick Benn, Co-Chair of the firm’s Diversity Committee. “Striving for equality and inclusivity is good business—and it’s also just the right thing to do.”

Perkins Coie also received a top rating of 100 percent from the CEI survey, earning them a spot on the Best Places to Work for LGBTQ Equality for the 13th year in a row. Additionally, the firm also achieved Mansfield 3.0 Certification Plus from Diversity Lab in 2020 for its commitment to recruit women, attorneys of color, LGBTQ+ attorneys, and attorneys with disabilities.

“We’re truly honored to be recognized by the Human Rights Campaign Foundation for our enduring LGBTQ+ initiatives and practices which are critical to the success of our inclusive workplace and culture for all our attorneys and staff,” said Genhi Givings Bailey, Perkins Coie’s chief diversity and inclusion officer. “While we know we have more work to do, we remain fiercely committed to building on our record of diversity and inclusion progress.”

Labor and employment law firm Fisher Phillips also achieved a top rating of 100 percent from the CEI survey and were included on the Best Places to Work for LGBTQ Equality list. Fisher Philips said that it ensures both domestic partner benefits and transgender-inclusive health care benefits, in addition to supporting national LGBTQ+ events such as Lavender Law.

“It is an honor to be recognized for our commitment to LGBTQ equality and inclusion,” said Roger Quillen, Chairman and Managing Partner of Fisher Phillips. “We continue to recruit, hire, develop, retain, and promote the best attorneys regardless of ethnicity, race, gender, religion, sexual orientation, disability, backgrounds, and viewpoints. As an employment firm, we operate under the belief that diversity and inclusion strengthens our ability to serve clients with an assortment of viewpoints and critical insights about the legal issues they are facing in the workplace.”

Ward and Smith launched its new staff internship program in January aimed at increasing diversity in staff positions, including positions such as paralegals, office service assistants and legal administrative assistants.

To launch the internship program, Ward and Smith partnered with Durham Tech, Pitt Community College, Hillside High School in Durham, South Central High School in Greenville and West Craven High School in New Bern.

“An essential part of maximizing our firm’s effectiveness is creating an environment that allows people of different backgrounds, views, and ideas to work together,” said Michael Christman, the firm’s Director of Human Resources. “We decided to be more strategic about our staff recruiting process by creating opportunities, like the staff internship program, to attract a broader range of talent.”

The Deals named Jenifer Smith, a partner and co-chair of the Emerging Growth and Venture Capital practice at DLA Piper, to its 2020 Top Women in Dealmaking list. Smith is one of 48 women on the list, which recognizes women attorneys that are shattering the glass ceiling in M&A sphere and making a difference in the corporate world.

In her practice, Smith focuses on strategic and corporate governance issues, compliance with securities laws and SEC disclosure requirements and serves as an outside corporate counsel to public and private companies.

Law Firm Moves

Gabriel Silva has joined Vinson & Elkins as a partner in New York. His practice focuses on M&A and private equity in the U.S., Latin America, Europe and Asia with a focus on the digital infrastructure sector. Silva is the fourth attorney with a specialization in Latin America to join the firm in New York over the past two years. Previously, Silva was a partner at Linklaters in New York and São Paulo.

“Gabriel is one of the leading young M&A partners in New York, with a strong blend of digital infrastructure, Latin America and general private equity experience,” said Keith Fullenweider, co-head of the firm’s Corporate Department. “His practice fits beautifully with our platform, including our leading infrastructure practice. We have also invested recently in adding experienced lawyers with strong connections and deal experience in Latin America, which Gabriel will certainly enhance.”

Silva earned his Brazilian law degree from Pontifcia Universidade Catlica de São Paulo, and a specialization degree in Brazilian Corporate Law from Fundao Getlio Vargas de São Paulo. He also has an LL.M. degree from Columbia Law School, where he was a Harlan Fiske Stone Scholar.

Arent Fox selected Partner Anthony V. Lupo as the fourth Chair in the firm’s 79-year history, succeeding Mark M. Katz as part of a planned transition. Lupo began his career at Arent Fox in 1995, serving on the Executive Committee since 2002, as co-leader of the Intellectual Property department, and as leader of the Fashion & Retail and Media & Entertainment industry groups.

“I have worked with Tony for more than 20 years, and his incredible enthusiasm for the work, the firm, and our clients is second to none,” said Cristina A. Carvalho, firmwide Managing Partner. “As our new Chair, he will bring his excellent business sense to clients in every industry we serve.”

Lathrop GPM named Kate Tompkins as the leader of the firm’s Intellectual Property Practice Group, marking the first time a business professional was selected for a top leadership role of a practice group at Lathrop GPM. Tompkins joined the group in 2015, helping grow the firm’s Boston office. She has over 25 years of professional services experience. Previously, she served as a Director of Practice Management.

“Kate’s expansive knowledge of our firm’s IP clients, partners, and processes makes her ideally situated to lead our Intellectual Property Practice Group,” said managing partner Cameron Garrison.

Katherine M. Katchen joined the Managed Care + Employee Benefits Litigation Group at the Philadelphia office of Robinson+Cole, bringing more than 20 years of litigation experience in the areas of managed care and insurance law.

Specifically, Katchen’s practice focuses on health insurers, managed care companies, and insurers and third-party administrators in state and federal actions around the country.

“We are pleased to welcome Kate, an experienced litigator, to our growing Philadelphia office,” said Stephen E. Goldman, Managing Partner, Robinson+Cole. “Her broad ranging litigation experience provides depth to our litigation capabilities in the Mid-Atlantic region, and her experience in managed care and employee benefits litigation will be a great complement to our existing vibrant practice. The addition of Kate is another step in the execution of our Strategic Plan of building on our strengths and expanding our capabilities in our major metropolitan geographies.”

Legal Marketing News and Opportunities

F2 Marketing released Legal Marketing Trends 2021, annual analysis of what Legal Marketers might expect over the next 12 months.  While 2020 was a rollercoaster and predictions for 2021 are a fraught proposition, F2 Marketing provided insights from leaders and legal marketers across the industry, on topics such as Crisis Communications, Google’s Core Web Vitals updates, the rise of digital accessibility and the increasing importance and emphasis on meaningful diversity and inclusion.    While 2020 was challenging in multiple ways for the legal industry, in many ways the pandemic accelerated the adoption of technologies in the legal industry, creating opportunities.  For example, Jennifer Whittier, President ofContactEase points out that the transition to targeted, purposeful client communication necessary in 2020 creates an opportunity to “build a business case for CRM, reintroduce the need for targeted and strategic outreach, and increase engagement among lawyers and clients.”

Learn more here about the F2 Marketing Legal Marketing Trends 2021.

Good2BSocial recently announced the launch of its Good2BSocial Academy, designed to provide legal marketing and business development training for marketing, business development and communication professionals at law firms on demand.  With the goal of enhancing the understanding of digital technologies in a law firm/legal marketing context, this course features multiple courses with webinars, podcasts and certifications.  A unique learning dashboard provides access to the materials created by Good2BSocial over the years on topics ranging from online advertising to marketing automation to account-based marketing, and many more critical areas.  Courses are helmed by industry experts, with real world lessons and built-in takeaways, all neatly organized on an easy to navigate site.

Guy Alvarez cites the positive feedback on their live Digital Marketing Certification course as an impetus to creating the Academy.  He says, “It was a natural next step to create a robust, organized offering that is flexible and accessible to anyone who’s interested in taking their practice and career to the next level.”

Learn more about the Good2BSocial Academy at https://academy.good2bsocial.com

What’s New with the National Law Review

The National Law Review started off 2021 with a bang–after taking a minute to look over the details from 2020, we saw that our main website had over 25 million views over 2020, a 258% YOY increase from 2019 and 54 million impressions overall on all owned properties.  Eilene Spear of the National Law Review, spoke with Guy Alvarez of Good2BSocial on the LegalMarketing 2.0 podcast about this uptick in traffic, you can listen to the interview for more details.  Additionally, Eilene Spear and Guy Alvarez are teaming up to present a webinar on SEO Lessons Learned from The COVID-19 Pandemic, to extrapolate on some of the SEO takeaways from 2020. The webinar is complimentary, and will be held on February 16.

Building on this success, NLR staff members presented a three-part webinar series with McDougall Interactive, drawing out how to create an SEO strategy in 2021. Jennifer Schaller, Billy Thieme and Rachel Popa all contributed their expertise to the webinar series.  In Part 1 Schaller focused on Content Marketing strategies for 2021.  In part 2, Billy Thieme explained SEO principles and illuminated some of the most cirtical SEO strategies.  Rachel Popa discussed best practices in Podcasting, and how to get the most out of a video series or a podcast.

That’s the news for now, but there is much more on the horizon.

Copyright ©2020 National Law Forum, LLC

ARTICLE BY Rachel Popa and Eilene Spear of The National Law Review / The National Law Forum LLC
For more, visit the NLR Law Office Management section.

Ransomware Incident Compromises Unemployment Claim Information of 1.6M in WA

It is being reported that the Office of the Washington State Auditor (SAO) is investigating a security incident, allegedly caused by a third-party vendor, that may have compromised the personal information of up to 1.6 million residents of the state of Washington who filed unemployment claims in 2020.

The SAO is investigating fraudulent unemployment claims filed in Washington in 2020 that reportedly cost the state up to $600 million. In completing the audit, the state utilized a third-party vendor, Accellion, to transmit computer files for the investigation.

According to the SAO, “during the week of January 25, 2021, Accellion confirmed that an unauthorized person gained access to SAO files by exploiting a vulnerability in Accellion’s file transfer service.” The SAO posted on its website that the unauthorized person “was able to exploit a software vulnerability in Accellion’s file transfer service and gain access to files that were being transferred using Accellion’s service,” which occurred in December 2020.

Data that may have been affected includes 1.6 million individuals’ claims made between January 1, 2020 and December 10, 2020, including claims made by state employees. The compromised information includes individuals’ names, Social Security numbers and/or drivers’ license or state ID numbers, bank information and place of employment. In addition, the personal information of some individuals whose information was held by the Department of Children, Youth and Families was also compromised.

What a terrible consequence for those who legitimately lost their job and filed for unemployment benefits. For those whose personal information was used to file a fraudulent unemployment claim, this news throws a massive amount of salt in the wound of being the victim of identity theft.

Copyright © 2020 Robinson & Cole LLP. All rights reserved.
ARTICLE BY Linn F. Freedman of Robinson & Cole LLP

For more, visit the NLR Communications, Media & Internet section.

Biden Administration Requests Review of DOL’s Final “ESG” Rules for ERISA Fiduciaries – What Does that Mean for the DOL’s Final Proxy Voting Rules?

On October 30, 2020, the U.S. Department of Labor (the “DOL”) issued a final rule on “ESG” investing (summarized here) which requires ERISA plan fiduciaries to base investment decisions on financial factors alone, prohibits fiduciaries from selecting investments based on non-pecuniary considerations, and which could restrict “do-good” or “ESG” investing (the “ESG Rule”).  However, the fate of the ESG Rule is currently unclear, as the Biden administration directed the DOL to review the rule in a fact sheet issued on January 20, 2021.

In a separate (but related) rulemaking, the DOL published in the Federal Register on December 16, 2020, a final rule confirming its position that ERISA’s fiduciary duties of prudence and loyalty apply to an ERISA plan fiduciary’s exercise of shareholder rights, including proxy voting, proxy voting policies and guidelines, and the selection and monitoring of proxy advisory firms (the “Proxy Voting Rule”).  The Proxy Voting Rule went into effect on January 15, 2021 (although certain aspects of this rule have later compliance dates, as discussed below).

The ESG Rule and the Proxy Voting Rule were each structured in a manner that would amend the DOL’s “investment duties” regulation at 29 C.F.R. 2550.404a-1.  When the DOL finalized the ESG Rule, it reserved a section of the amended regulation for the final Proxy Voting Rule.  It is uncertain what action the Biden administration will take with respect to the ESG Rule following its review thereof, but it is very possible that the Proxy Voting Rule will have the same fate given how intertwined the two rules are.

The Proxy Voting Rule reflects the DOL’s attempt at clarifying its prior proxy voting guidance that “may have led to confusion or misunderstandings on the part of plan fiduciaries.”  In particular, the DOL acknowledged that there is a view among some that ERISA plan fiduciaries are required to vote all proxies or exercise every shareholder right – the Proxy Voting Rule makes clear that is not the case.  The Proxy Voting Rule instead takes a principles-based approach and details the obligations of fiduciaries when making such decisions in order to satisfy their duties of prudence and loyalty, which include the following:

  • act solely in accordance with the economic interest of the plan and its participants and beneficiaries;
  • consider any costs involved;
    • relevant costs will depend on the facts and circumstances, and could include: direct costs to the plan of determining how to vote and actually submitting the vote; potential reduction of management fees by reducing the number of proxies voted that have no economic consequence for the plan; any out-of-the-ordinary costs or unusual requirements, such as may be the case of voting proxies on foreign corporation shares; or any opportunity costs of voting, such as forgone earnings from recalling securities on loan or any restrictions on selling the underlying shares.
  • not subordinate the interests of the participants and beneficiaries in their retirement income or financial benefits under the plan to any non-pecuniary objective, or promote non-pecuniary benefits or goals unrelated to those financial interests of the plan’s participants and beneficiaries;
  • evaluate material facts that form the basis for any particular proxy vote or other exercise of shareholder rights;
  • maintain records on proxy voting activities and other exercises of shareholder rights; and
  • exercise prudence and diligence in the selection and monitoring of persons (if any) who have been delegated authority to exercise shareholder rights, or who have been selected to advise or otherwise assist with the exercise of shareholder rights.
    • note, however, that a fiduciary may adopt a practice of following the recommendations of a proxy advisory (or similar) firm only if the fiduciary first determines that the service provider’s proxy voting guidelines are consistent with the requirements above.

The Proxy Voting Rule also provides an optional safe harbor for plan fiduciaries that adopt and follow proxy voting policies with specific parameters that are prudently designed to serve the plan’s economic interest.  The safe harbor is intended to reduce compliance burdens with respect to decisions as to whether to vote proxies, and does not apply with respect to decisions as to how to vote proxies.  The safe harbor permits a plan to adopt either or both of the following (though these are not meant to be the exclusive means for compliance):

  • A policy to limit voting resources to particular types of proposals that the fiduciary has prudently determined are substantially related to the issuer’s business activities or are expected to have a material effect on the value of the plan’s investment in the issuer.
  • A policy of refraining from voting on proposals or particular types of proposals when the size of the plan’s holdings in the issuer relative to its total investment assets is below a quantitative threshold that the fiduciary prudently determines, considering the plan’s percentage ownership of the issuer and other relevant factors, is sufficiently small that the matter being voted upon is not expected to have a material effect on the investment performance of the plan’s portfolio (or plan assets under management in the case of an investment manager).

If adopted, a proxy voting policy must be reviewed periodically by the plan fiduciary, and may not prohibit the fiduciary from (i) voting the proxy, if the fiduciary prudently determines that the matter being voted upon is expected to have a material effect on the value of the investment or the investment performance of the plan’s portfolio (or plan assets under management in the case of an investment manager) after taking into account the costs involved, or (ii) refraining from voting the proxy, if the fiduciary prudently determines that the matter being voted upon is not expected to have such a material effect after taking into account the costs involved.

The Proxy Voting Rule also reiterates the DOL’s longstanding position that the responsibility for voting proxies rests with the plan trustee, unless the plan trustee is being directed by the plan’s named fiduciary or voting authority has been delegated to an investment manager.  If authority to manage plan assets has been delegated to an investment manager, the investment manager will have the exclusive authority to vote proxies unless the applicable plan documents or investment management agreement specifically provide otherwise.

An investment manager of a pooled investment vehicle that holds assets of more than one employee benefit plan must either (i) reconcile (insofar as possible) any conflicts in the proxy voting policies of such plans, and vote (or abstain from voting) the relevant proxies in proportion to each plan’s economic interest in the pooled investment vehicle, or (ii) develop an investment policy statement consistent with the Proxy Voting Rule that the participating plans must accept before they are allowed to invest in the pooled investment vehicle.

The Proxy Voting Rule does not apply to shareholder rights that are passed through to participants and beneficiaries of individual account plans.  In such a case, the plan trustee must follow the direction of the plan participant or beneficiary, but only if the direction is consistent with the plan terms and not contrary to ERISA.

The Proxy Voting Rule went into effect on January 15, 2021 and applies to the exercise of shareholder rights after such date; provided, that (i) fiduciaries that are not SEC-registered investment advisers have until January 31, 2022 to comply with the requirements to evaluate material facts providing the basis for exercising a shareholder right and to maintain records on proxy voting activities, and (ii) all fiduciaries have until January 31, 2022 to comply with the requirement to confirm that a proxy firm upon whom the fiduciaries intend to rely has proxy voting guidelines that comply with the Proxy Voting Rule and the requirements relating to investment managers of pooled investment vehicles.

The Proxy Voting Rule also removes from the Code of Federal Regulations the DOL’s Interpretive Bulletin 2016-01, which may have been interpreted to permit consideration of a broader set of factors when making determinations regarding proxy voting, as it no longer reflects the DOL’s views on the exercise of shareholder rights.

© 2020 Proskauer Rose LLP.

ARTICLE BY Ira G. Bogner, Seth J Safra and Adam W Scoll of Proskauer Rose LLP
For more, visit the NLR Labor & Employment

DOL Ends PAID Program: Creating a Catch-22 for Employers; Cross Your Fingers or Come Clean?

Following the anticipated agenda of the new Biden administration, on January 29, 2021, the Department of Labor immediately ended the Payroll Audit Independent Determination program (the “PAID Program”) first launched in 2018 by the Department’s Wage and Hour Division. Ending the PAID Program signals that, under the new administration, the Wage and Hour Division will be increasingly focused on payroll policies and practices and will seek to penalize employers without first providing an opportunity to self-report and remedy mistakes.

Employers who fail to comply with the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA) expose themselves to liability for payment of any back wages owed, which are then doubled as liquidated damages, plus certain costs and fees, including attorney fees an employee incurs in pursuing an action against the employer. The PAID Program provided employers potential relief from the significant penalties resulting from a minimum wage or overtime violation, which often happens without any intent or malice on the employer’s part. Under the program, employers could audit their minimum wage and overtime payroll practices, and if such an audit uncovered any FLSA violations, the employer could self-report the same and work with the Department of Labor to ensure all back wage payments were made. Upon doing so, the employer would obtain a release of any FLSA claims relating to the error and avoid potential liability for liquidated damages, other civil penalties, and employees’ attorney fees.

With the PAID Program cancelled, employers who discover minimum wage and overtime violations are left with difficult choices as to remedying such violations. This cancellation, in fact, creates a catch-22 situation for employers—does the employer cross its fingers and hope the violation is never uncovered, or does it come clean and pay its employees back wages, only to signal the violation and open the door for a lawsuit and the associated liquidated damages, penalties and employee attorney fees? While individual circumstances would dictate how the employer should react, of course, losing the opportunity to remedy the situation, make the employees whole, and avoid multiplied liability is an unfortunate development for employers.

As the cancellation of the PAID Program is a likely harbinger of the Biden administration’s treatment of wage and hour issues, now is a good time to review your payroll policies to ensure compliance with the FLSA. This is particularly important for employers who offer pay differentials or other bonus-type payment programs, including those who provide such payments as a reward to their employees for in-person work during the COVID-19 pandemic.

© 2020 Davis|Kuelthau, s.c. All Rights Reserved

ARTICLE BY Anthony J. Steffek of Davis|Kuelthau, s.c.
For more, visit the NLR Labor & Employment section

Flexibility for Flex Accounts – Congress Provides New Relief to Employees

Under the Consolidated Appropriations Act, 2021 (H.R. 133)(the “Act”) (here), which was signed into law on December 27, 2020, new relief is available for employees who participate in health care flexible spending accounts and dependent care flexible spending accounts (“FSAs”).   While the Internal Revenue Service (“IRS”) issued limited relief for FSA participants in 2020 (here), that guidance only expanded opportunities to make mid-year elections.  It did not address the desire of so many employees to extend access to their unspent FSA balances beyond the 2020 plan year.

The changes under the Act are intended specifically to address this concern.  Importantly, the changes are optional.  Employers who implement these changes will likely experience higher costs due to reduced forfeitures and changes in plan administration.  Additionally, changes to health FSAa could adversely affect the participant’s eligibility to contribute (or receive contributions) to a health savings account.  Below is a summary of the changes affecting FSAs:

Larger Carryover Balances

Generally, amounts that remain in an FSA at the end of a plan year are forfeited and no longer accessible to the employee (i.e. the “use-it-or-lose it” rule).  With the elimination of many elective medical procedures, daycare closings, and at-home schooling during the pandemic, many FSA participants were unable to utilize their FSAs in 2020.

Under prior guidance issued by the IRS (here), plans may allow employees to carry over up to a specified dollar amount ($550 in 2021) of the year-end balance for use in the subsequent plan year. Pursuant to the Act, however, there is no dollar limit on the amount that participants may be permitted to carry over with respect to a plan year that ends in 2020 or 2021.  By allowing such a carryover, the employee will have access to the amount carried over to pay or reimburse covered expenses in a subsequent plan year.

Extended Grace Periods

As an alternative to a carryover feature, prior IRS guidance (here) allows a plan to provide for a grace period of up to 2.5 months following the end of the plan year to apply unused balances to covered expenses incurred during that period.  A plan is not permitted to have both a carryover feature and a grace period.  Accordingly, under this relief, a plan with a grace period for a plan year ending in 2020 or 2021 may extend such period for up to 12 months after the end of such plan year.  As with the carryover relief described above, this will allow the employee to apply the unused balances to the payment of covered expenses throughout the subsequent plan year.  Note, however, if the participant was planning on making contributions to a health savings account in 2021 or 2022, the extension of a grace period under a general flexible spending account will cause such participant to be ineligible to make (or receive) such contributions.  Accordingly, the employer will want to ensure that the account is re-characterized as a limited purpose FSA during the extended grace period.

More Permissible Election Changes

As a general rule, elections under an FSA are irrevocable during the year absent a permissible election change event.  As mentioned, the IRS issued guidance in 2020 to temporarily ease the application of these rules.  The Act further allows plans to be amended to permit eligible employees to make a prospective change to their 2021 plan year FSA elections even if there is no change in status event. This relief is particularly helpful for employees participating in calendar year FSA arrangements who did not have an opportunity to consider the effects of the Act’s changes before 2021 elections became final.

Extended Period for Health Care Reimbursements

Participation in a health FSA is generally required to terminate when the employee terminates employment, except to the extent the employee is eligible for and makes a timely election for continuation coverage.  On the contrary, coverage under a dependent care FSA is permitted to run through the end of the year in which such termination occurs (without an affirmative election by the employee).  Under the Act, a health FSA may allow a participant whose employment is terminated during calendar year 2020 or 2021 to continue to receive reimbursements through the end of the plan year in which such participation ceased (including any grace period, as may be extended in accordance with the Act).

Reimbursements for Aged-Out Dependents

An employee enrolled in a dependent care FSA may receive reimbursements of dependent care expenses for a child who has not attained age 13.  The Act, however, increases the age to 14 for those employees who elected coverage under a dependent care FSA during an enrollment period that ended on or before January 31, 2020 and have dependents that attained age 13 during the 2020 plan year.  Pursuant to this relief, an employee may receive reimbursements for expenses incurred for the remainder of the 2020 plan year and may use the balance in the 2021 plan year.

Plan Amendments

These changes are discretionary, but if any one or more of them is adopted, the employer must adopt a retroactive plan amendment not later than the last day of the first calendar year following the calendar year in which the amendment is first effective (i.e. for changes effective for calendar year plan year 2021, by December 31, 2022).

© 2020 Winstead PC.
ARTICLE BY Lori Oliphant of Winstead
For more, visit the NLR Labor & Employment section.

OSHA Issues Updated COVID-19 Guidance in Compliance with President Biden’s Executive Order

As directed by President Joe Biden’s Executive Order issued on January 21, 2021 requiring the Federal Government to take swift action to protect workers from the COVID-19 pandemic, the Occupational Safety and Health Administration (“OSHA”) has released updated guidance on how to prevent exposure and the spread of COVID-19 in the workplace.

The guidance entitled “Protecting Workers: Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace” was posted on OSHA’s website on January 29, 2021.  As with OSHA’s previous recommendations, this guidance is not mandatory and does not have the same legal effect as an OSHA standard.  However, it does give some insight into what OSHA expects to include in an emergency temporary standard (“ETS”) which the new Administration wants the agency to consider and potentially implement by March 15, 2021.

Most employers will be familiar with the elements in the guidance, but here are some of the significant new measures addressed in the guidelines:

  • Employers should provide all workers with face coverings (i.e., cloth face coverings, surgical masks), unless their work task requires a respirator.  Many states did not require this and OSHA did not previously recommend employers purchase masks.
  • Provide a COVID-19 vaccine at no cost to eligible employees.
  • Do not distinguish between vaccinated workers and those who are not vaccinated for purposes of implementing safety measures.
  • Minimize the effect of quarantine and isolations by implementing non-punitive policies, and provide paid sick leave. Employers with less than 500 employees are encouraged to provide FFCRA leave which is still available (though not mandatory) through March 31, 2021 under the Families First Coronavirus Response Act.
  • Provide guidance on screening and testing.
  • Assign a workplace coordinator responsible for COVID-19 issues.

OSHA’s guidance related to the COVID-19 pandemic continues to evolve and further changes are expected with President Biden’s new Administration.  James “Jim” Frederick, a former United Steelworkers safety official, has been named by the Administration to act as the head of OSHA on an interim basis.  Mr. Frederick has indicated that in that role he will be focused on drafting and implementing an enforceable emergency COVID-19 standard.  While these efforts may be opposed by various industry groups, employers need to be aware of these potential new developments so they can take appropriate steps to ensure that they are following the best recommendations to address the pandemic and provide their employees a safe and healthy working environment.

Jackson Lewis P.C. © 2020

ARTICLE BY Raymond Perez, II and Mary L. Bradley of Jackson Lewis P.C.
For more, visit the NLR Labor & Employment

The First 48 Hours – A New OSHA COVID-19 Standard on the Way?

In President Biden’s first 48 hours on the job, he issued approximately 30 executive orders.  One of these is an Executive Order on Protecting Worker Health and Safety.  The Order, as the title implies, directs the federal government to “take swift action to reduce the risk that workers may contract COVID-19 in the workplace.” The Order further requires the issuance of “science-based guidance” to achieve this goal.

Under the Order, the Secretary of Labor (Al Stewart was designated as the Acting Secretary of Labor, effective January 20, 2021, pending Senate confirmation of the nominee, Boston Mayor Marty Walsh) is to:

  • By February 4 – issue “revised guidance to employers on workplace safety during the COVID-19 pandemic;”
  • Consider whether emergency temporary workplace standards are necessary, including wearing masks in the workplace – and, if deemed necessary – to issue the new standard by March 15;
  • Undertake a review of OSHA’s present enforcement efforts, and determine whether immediate or long-term changes are necessary to “better protect workers and to ensure equity in enforcement;”
  • Launch a national enforcement effort focused on COVID-19-related violations that put the largest number of workers at serious risk or are contrary to anti-retaliation principles; and,
  • Coordinate a multidepartmental, multilingual outreach campaign to educate workers on their rights under the safety and health laws, including through engagement with labor unions, community organizations and industries – with a special emphasis on communities that have been the hardest hit by the pandemic.

OSHA (the Occupational Safety and Health Administration) has a comprehensive web page devoted to COVID-19, which includes identification of applicable regulations, enforcement memoranda, recording and reporting requirements, links to various pandemic-related “tools” and “resources,” as well as specific workplace guidance by industry.

To date, OSHA had not issued any new temporary or other regulatory standards applicable to workplaces aimed specifically at COVID-19.  Rather, OSHA’s principal deputy assistant secretary under the Trump administration, Loren Sweatt, testified to Congress in 2020 that OSHA did not believe such new standards were necessary because “OSHA has standards in place to protect employees and employers who fail to take appropriate steps to protect their employees may be violating them. Such standards include conducting hazard assessments, ensuring sanitation and cleanliness, providing PPE, and requiring training and education, as well as the general duty clause itself.”

As the number of fatalities in the U.S. has more recently climbed exponentially, it is very likely that OSHA, under the Biden administration, will proceed in a different direction.  Stay tuned for further developments.

ARTICLE BY Daniel A. Kaplan of Foley & Lardner LLP
For more, visit the NLR Labor & Employment section.