Category: Labor & Employment

It’s Time for Employers to Revisit Their Employment Policies to Be Ready to Address Political Disputes Among Coworkers

With political division in the United States on full display in the midst of a pandemic, Americans are faced with deepening rifts that touch not only their social circles and family units, but also their work lives. It therefore behooves employers to recognize the reality that disagreements about politics are likely to arise in one form or another in the workplace. With that in mind, employers should review their employment policies and related practices to ensure they are ready to address workplace disputes centered on politics, especially in light of the telecommuting arrangements that many employers are still utilizing during the pandemic.

The First Amendment’s right to free speech generally does not cover private employers, so employers are not required to permit their workplaces (virtual or otherwise) to be veritable political soapboxes. That said, employees in the private sector do have certain workplace rights relevant to politics and subject to applicable state law, including—in Texas, for example—the right to paid voting leave and the right to attend political conventions (if eligible to participate or a delegate). Further, employees generally have the right to be free from harassment based on a protected class and have certain protections against workplace bullying or violence of any kind.

Keep in mind that even though a lot of employees are still working remotely during the ongoing COVID-19 pandemic, email accounts, social media outlets, and general virtual connectivity create other avenues for discrimination, retaliation, harassment, bullying, or threats between employees. Frankly, as some assert, the virtual “wall” may embolden individuals to say things that they otherwise would not. Employers must therefore strike an appropriate balance between the competing interests and employment rights in play in a deeply divided workforce when it comes to politics.

The following policies should be reviewed and updated (as necessary) and implemented to strike that balance:

Codes of Conduct and / or Harassment / Discrimination Policies: Generally, neither Texas nor federal laws protect individuals from discrimination based on their political affiliations or political opinions, but some state laws have related protections. See, e.g., Cal. Lab. Code § 1101 (prohibiting employers from discriminating against employees based on employees’ political activities or affiliations); Wis. State. § 111.365(1) (stating that “employment discrimination” includes discrimination against an employee for “declining to attend a meeting or to participate in any communication about religious matters or political matters”). Of course, current political issues involve a number of protected classes, such as race, national origin, gender, and sexual orientation. So the potential for there to be workplace discrimination, harassment, and bullying based on protected classes under the guise of political affiliations or opinions is very real. Employers must therefore ensure they have implemented employment policies prohibiting discrimination (including discrimination and related bullying in a virtual or remote working environment) and establishing procedures for employees to lodge complaints about discrimination. They should also train all employees, including managers, regarding the same.

Social Media: For better or worse, social media outlets have moved even more into the front lines of politics this election cycle. The potential for discrimination and harassment is likewise increasing with the advent of new and more pervasive social media technology. The Texas Workforce Commission (TWC) minces no words about this reality when it states, “while the technology has improved dramatically, there has been no corresponding upswing in common sense or decency in society,” when it comes to social media usage. Social media policies should therefore make clear that employees are not allowed to purport to speak on the employer’s behalf on social media or otherwise use social media outlets to discriminate against or harass coworkers.

Computer / Internet Usage: Similarly, employers should exercise their rights to monitor employees’ work emails and use of company computers and prohibit the use of company technology and Internet to discriminate against or harass coworkers. Such policies should clarify that employees have no reasonable expectation of privacy in company computers and work email accounts. Note, however, that under the federal Stored Communications Act, employers generally do not have the right to monitor employees’ personal email accounts, even if the employee uses a work computer to access the personal account. That said, discriminatory or harassing communications sent by an employee to a coworker using either a work or personal account are potentially actionable and can serve as the basis of a legitimate complaint by the victim of the same.

These are certainly not the only policies that are in play in these unprecedented times, but they are key places for employers to start as they consider these issues in their workplaces. Employers should ensure such policies are up to date and provided to and acknowledged by their employees. And, as always, employers are well-advised to involve their senior management team and appropriate legal counsel when workplace disputes and issues arise, including when reviewing, updating, and implementing personnel policies.

© 2020 Winstead PC.
ARTICLE BY Taylor E. White of Winstead
For more, visit the NLR Labor & Employment section.

“Gig” Workers May Become Eligible to Receive Equity Compensation

The Securities and Exchange Commission (the “SEC”) recently voted to propose temporary rules to permit companies to provide equity compensation to certain workers known as “gig” or “platform” workers.

Under the Securities Act of 1933 (the “33 Act”), every offer or sale of securities must be registered with the SEC unless the issuer relies upon an exemption to such registration. Recognizing that the offers or sales of securities in the form of equity compensation differ from the regular process of raising capital from investors, a limited exemption is provided to issuers under Rule 701 of the 33 Act. Rule 701 currently exempts certain sales of securities by private companies made to compensate employees, consultants, and advisors.

Through the proposed new Rule 701, the SEC is recognizing the existence of certain types of employment relationships in the “gig economy” that fall outside the scope of the traditional employer-employee relationship. These are the “gig” or “platform” workers who have become important to the economy with the increased use of technology. Gig workers use a company’s internet platform to find a specific type of work or “gig” to provide services to end-users. Some common examples are ride-sharing, food delivery, and dog-sitting services. These workers are generally not considered employees, consultants, or advisors, and thus have not been eligible to receive securities pursuant to compensatory arrangements under Rule 701. Under the proposed amendment to Rule 701, however, companies would be permitted to compensate these platform workers with equity compensation, subject to certain conditions.

For an issuer to compensate platform workers pursuant to the proposed new Rule 701, the platform workers will have to provide bona fide services pursuant to a written contract or arrangement by means of an internet platform or other technology-based marketplace platform or system provided by the issuer. Additionally, the issuer is required to operate and control the platform, the proposed issuance of securities to the platform worker must be pursuant to a written compensation arrangement or plan, the issuer must take reasonable steps to prohibit transfer of the securities offered to the platform worker, and the securities issued must not be subject to individual bargaining or the worker’s ability to elect between payment in securities or cash. The offering per worker must be within certain caps on the amount ($75,000) during a 36-month period and a percentage of the value of the compensation (15%) received by the platform worker during a 12-month period. This exemption, if adopted, would be available for a period of five years.

The proposal is subject to a 60-day comment period following its publication in the Federal Register.

Given the benefits that equity compensation offers to both employers and employees, this exemption should provide benefits to both issuers and platform workers in the “gig economy.”

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.
ARTICLE BY Daniel I. DeWolf of Mintz
For more, visit the NLR Corporate & Business Organizations section.

Costs of COVID-19 Vaccines: What We Do and Don’t Yet Know

The roll-out of vaccine approvals has led to some confusion over what charges consumers might be asked to cover. This echoes the confusion previously discussed with respect to COVID-19 diagnostic and antibody test pricing. But consumers, providers, and others that will have any involvement with vaccine production, distribution, or administration should be aware that the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides different rules for treatment (including testing) than it does for preventative care, like the recently approved vaccines.

The CARES Act provides that all insurance plans that are subject to the Affordable Care Act’s preventative services coverage standards must cover any qualifying coronavirus preventive services, including approved vaccines, without cost-sharing. It also provides that Medicare plans must cover the cost of the COVID-19 vaccine and its administration, without cost-sharing. This coverage applies to both in- and out-of-network providers. In short, if the primary purpose of a medical visit is to receive a covered vaccine, then the vaccine recipient should not be responsible for any out of pocket costs. However, if their appointment or doctor’s visit includes health services unrelated to COVID-19—such as bloodwork—the recipient may be charged for those services.

Notably, federal rules require that coverage must begin to apply within 15 days of a vaccine’s approval by the Advisory Committee on Immunization Practices (ACIP), accelerating the usual timeline required for plans to incorporate a new recommendation. Insurance plans are therefore currently required to cover the cost of both of the vaccines that have been approved in the United States. (The ACIP provided its interim recommendation for the Pfizer-BioNTech COVID-19 vaccine on December 12, 2020 and subsequently issued its interim recommendation for the Moderna COVID-19 vaccine on December 19, 2020.)

Not all health care plans are covered by these requirements. Plans that are not subject to the ACA’s preventative services coverage standards are not subject to the CARES Act and its vaccine coverage requirement. These plans—which could include short-term health plans, fixed indemnity plans, or some grandfathered plans—may take varying approaches to vaccine coverage. It appears that these plans can require that beneficiaries pay cost sharing for vaccines or can exclude recommended vaccines from coverage altogether. Individual states may ultimately require plans to cover the vaccine and waive cost-sharing. Alternatively, the plans may decide, for any number of reasons (including, e.g., concerns about employee health and safety) to provide coverage, though they may or may not decide to waive cost-sharing. At least one such plan has already said that COVID-19 vaccine costs will be “shareable.”

Several open questions remain. First, it is unclear how much the vaccine could cost (either to recipients or to insurers) in the future, following the conclusion of the public health emergency.

Second, uninsured vaccine recipients may see differences in billing in the long term. Providers that administer an approved COVID-19 vaccine to uninsured recipients will be reimbursed for vaccine administration costs through a provider relief fund created by the CARES Act. The federal government has not indicated how it will handle these reimbursements if that relief fund should be depleted.

Third, because vaccine coverage arises from the ACA’s preventative services coverage standards, the Supreme Court’s forthcoming decision on a pending challenge seeking to invalidate the law’s individual mandate could greatly impact this area, and potentially eliminate or reduce cost coverage.

Finally, and of particularly salience for price gouging concerns, even though the vaccine itself is free, vaccine recipients might still see bills. Some providers can legally charge an administration fee for giving the shot, according to the CDC. Those providers can seek reimbursement for such a fee from either the recipient’s “public or private insurance company or, for uninsured patients, by the Health Resources and Services Administration’s Provider Relief Fund.” Several states prohibit price gouging for medical services, and it remains to be seen whether and how any fees could be justified or challenged under different state laws.

In summary, most but not all COVID vaccines costs should be covered without cost sharing to recipients, related additional charges for the treatment visit might not be covered, and all the non-covered charges likely are subject to state price gouging laws.

© 2020 Proskauer Rose LLP.
For more, visit the NLR Coronavirus News section.

Mixed-Status Families to Finally Receive Stimulus Checks

Last week, Congress passed the $900 billion coronavirus relief package that was signed into law by President Donald Trump on December 27, 2020. In this package, the U.S. government will allow mixed-status households to receive stimulus checks. In mixed-status families, at least one member of the household must have a Social Security number (SSN). These families were denied stimulus checks in the first round of payments offered in late March this year.

Who Can Expect Stimulus Checks?

United States citizens and legal permanent residents (green card holders) will receive $600 in direct aid, even if they previously filed their taxes jointly with an undocumented spouse. An additional $600 checks will be sent for each dependent child. The new compromise is also retroactive to the mixed-status families where at least one household member has an SSN. These families will receive checks for $1,200 per household and $500 per child as previously allocated by the CARES Act.

Individuals with an adjusted gross income higher than $75,000 in 2019, heads of household who earned more than $112,500, and couples who made $150,000 will not be eligible for the checks. Undocumented immigrants and other non-citizens who do not have an SSN and file individual tax returns are ineligible for aid. U.S. Citizen children will not receive this aid at least one parent has an SSN.

Many undocumented immigrants and some non-citizens are ineligible for Social Security Numbers. They use government-issued Individual Taxpayer Identification Numbers (ITIN) to pay taxes. Deferred Action for Childhood Arrivals (DACA) and Temporary Protected Status (TPS) beneficiaries have Social Security Numbers.

Reactions to the Coronavirus Relief Package

“It was unfair and absurd that millions of taxpayers in need of assistance to feed their families, many in the immigrant community with U.S. citizen children and working on the frontlines, were previously denied access to these survival funds,” said Senate Democratic Leader Chuck Schumer. “I am pleased we were able to extend this economic lifeline to additional families in need.”

“Given there are 5.5 million immigrants working at the front lines of this crisis as essential workers, Congress should provide protection to all tax filers in the U.S regardless of immigration status,” Kerri Talbot, the Director of Federal Advocacy at The Immigration Hub, a lobbying group, said in a statement.

The nonprofit Migration Policy Institute estimated that 14.4 million people in mixed-status families were excluded from relief. This included 5.1 million who are either citizens or green cardholders. Specifically, the figure includes 1.4 million spouses and 3.7 million children who are citizens or legal residents.

©2020 Norris McLaughlin P.A., All Rights Reserved
For more, visit the NLR Election Law / Legislative News section.

Consolidated Appropriations Act, 2021: Unemployment Relief

The latest round of COVID-19 relief in the Consolidated Appropriations Act, 2021 will revive many aspects of unemployment relief rolled out in the CARES Act in March, although the Act reduces many of the original features.

The Act provides $286 billion for unemployment relief, which includes the following:

  • Reinstates enhanced federal unemployment insurance, providing an additional $300 per week for all workers receiving unemployment benefits through March 14, 2021. This replaces the earlier $600 added subsidy that expired in July.
  • Expands and extends the Pandemic Unemployment Assistance (PUA) program through March 14, 2021. Coverage extends to the self-employed, gig workers, and others in non-traditional employment.
  • Extends the Pandemic Emergency Unemployment Compensation (PEUC) program through March 14, 2021, providing additional weeks of federally funded unemployment benefits to individuals who exhaust their regular state benefits.
  • Increases the maximum number of weeks an individual may claim benefits through regular state unemployment plus the emergency federal programs to a total of 50 weeks.
  • Allows workers who have PUA/PEUC time left on March 14, 2021 (and who remain otherwise eligible) a “transition period” to continue to use the time for an additional three weeks, through April 5, 2021.
  • Affords states options for retaining an individual’s 2020 weekly benefit amount through March 14, 2021, ensuring that individuals will continue to receive maximized state benefits through the duration of PUA/PEUC as the new benefit year rolls in.

The Act also includes a technical amendment that confirms that shared work plans qualify as unemployment benefits for purposes of the $300 subsidy payment. For new filers, some states may reinstate the waiting week for receipt of benefits, as the Act reduces reimbursement from 100% to 50%.

Jackson Lewis P.C. © 2020
For more, visit the NLR Labor & Employment section.

The Vaccines are Coming: Should Employers Mandate?

As COVID-19 vaccines become more widely available, employers wishing to implement a COVID-19 vaccination policy must consider, among other things, two important questions.  This alert addresses these two fundamental questions.

Can employers implement a mandatory COVID-19 vaccination policy?

The EEOC recently released COVID-19 vaccination-related guidance for workplace vaccination policies and implied that employers can implement a mandatory vaccine policy, but that they must consider the ADA and Title VII of the Civil Rights Act of 1964 when doing so. For example, pre-screening vaccination questions may implicate the ADA’s general prohibition on disability-related inquiries.  An employer can avoid having to establish that such pre-screening questions are job-related and necessary by:

  • Implementing a voluntary policy
  • Arranging for employees to receive the vaccine from a third party that is not contracted with the employer

Additionally, both the ADA and Title VII provide grounds for an employee to be exempted from a mandatory vaccination policy. Under the ADA, an employee can seek a medical exemption if the employee has a disability covered by the ADA that prevents the employee from taking the vaccine. Also, under Title VII, an employee can seek a religious exemption if compliance with the mandatory vaccination policy would violate the employee’s sincerely held religious belief. Employees qualifying for a medical or religious exemption are entitled to a reasonable accommodation unless the employer cannot accommodate the employee without undue hardship. Reasonable accommodations under the ADA and Title VII may include:

  • Personal protective equipment
  • Temporary reassignment
  • Telework

Discussion of medical and religious exemptions, however, risks getting the proverbial cart before the horse.  The way in which the vaccines are now coming “onto the market” introduces considerable doubt as to whether an employer can currently mandate vaccination of its employees.  We now turn to that question.

How does the FDA’s emergency use authorization (EUA) affect the ability of employers to mandate vaccinations?

Given the unprecedented scope of this world-wide pandemic, the FDA, as it has authority to do in times of national emergency, used an expedited process to authorize the two available COVID-19 vaccines for “emergency use.” It is not entirely clear at this time what ramifications the emergency use authorization (EUA) will have for employers who want to mandate the vaccines for their employees.

Under FDA rules, any drug (or vaccine) approved for emergency use must be accompanied by a patient “fact sheet.”  As stated on the FDA website, the “FDA must ensure that recipients of the vaccine under an EUA are informed, to the extent practicable given the applicable circumstances, that FDA has authorized the emergency use of the vaccine, of the known and potential benefits and risks, the extent to which such benefits and risks are unknown, that they have the option to accept or refuse the vaccine, and of any available alternatives to the product.”

What can employers make of this language on opting to refuse or accept?  Generally speaking, the FDA does not have jurisdiction over employer-employee relations. Other agencies, such as the EEOC and the Department of Labor, have primacy in that sphere.

The EEOC took note of the EUA status of the vaccines in its recent guidance, but did not ban mandatory vaccination policies.  It is not the place, however, of the EEOC to enforce FDA statutes or policy.  Instead, the EEOC seemed to proceed with an acknowledgment that some employers might mandate vaccinations. It is as if the EEOC is unwilling to either sanction or disavow the FDA’s position on EUA rights of refusal.  Rather, the EEOC was addressing employment issues within its purview should an employer mandate vaccination.

Where does this leave the employer? 

Employers choosing to implement a mandatory vaccination policy ought not ignore the FDA’s edict that a candidate for a vaccine shot must be told that they have the option to refuse the vaccine authorized under an EUA.  That right has its source in federal law and reflects the balancing act that the FDA undertakes when it shortcuts its process to get a vaccine or drug out to the people in times of emergency.  If an employer terminates the employment of an employee who has asserted their right to refuse the vaccine (due to the EUA), the employer may face a wrongful discharge suit in state court alleging a violation of public policy.  These causes of action have, at their core, the principle that an employee should not have to choose between a right conferred by law and keeping their job.

In expressing caution on the implementation of mandatory vaccination policies, we are quite aware of the extraordinary nature of this pandemic.  It may be that a court will limit the reach of the FDA’s requirement of “a right of refusal,” and hold that such does not override an employer’s interest in having a safe workplace.  There just is not much guidance for an employer at this time.  As a practical matter, for most employers there will not be enough vaccines available in the next couple of months to worry over mandation issues.  Also, although there is no timetable for full FDA approval of the vaccines, once that occurs, then the requirement of the vaccine dispenser to affirmatively advise the patient of the option to refuse drops out of the picture.  Thereafter, the employer may mandate vaccination, subject to the medical and religious exemptions discussed above.

The severe and pervasive nature of the COVID-19 pandemic has created unprecedented challenges for employers.  We continue to monitor developments at the national and state level.  We will continue to update our clients on a regular basis.

© Steptoe & Johnson PLLC. All Rights Reserved.
For more, visit the NLR Coronavirus News section.

2021 State Minimum Wage Increases

Several states’ minimum wage rates will increase in 2021. The following chart lists the state (and certain major locality) minimum wage increases for 2021—and future years, if available—along with the related changes in the maximum tip credit and minimum cash wage for tipped employees.

The federal minimum wage will remain at $7.25 per hour for non-tipped employees and $2.13 per hour for tipped employees. Where a state or locality has implemented a minimum wage rate that is higher than the federal rate, covered employers are required to pay the applicable state or local minimum wage rate. Although not included in the chart below (because the state rate is not scheduled to increase in 2021 or an increase has not yet been announced), the following additional states and the District of Columbia currently have minimum wages higher than the federal rate: Delaware ($9.25); District of Columbia ($15.00); Hawaii ($10.10); Nebraska ($9.00); Rhode Island ($10.50); and West Virginia ($8.75).

Michigan Minimum Wage Update. The minimum wage in Michigan had been scheduled to increase from $9.65 to $9.87, effective January 1, 2021 (please see the below chart for the state’s increase schedule). On December 11, 2020, however, the Wage and Hour Division of the Michigan Bureau of Employment Relations announced that the scheduled increase was unlikely to happen because the state’s current unemployment rate for 2020 remained above 8.5 percent (the threshold above which a minimum wage increase cannot occur by statute). The Wage and Hour Division has stated that if, as expected, the unemployment rate does not fall below 8.5 percent when the final 2020 numbers are released, then Michigan’s minimum wage will remain at $9.65 per hour ($3.67 for tipped employees) as of January 1, 2021. The minimum wage rate will not increase to $9.87 per hour until the first calendar year following a year for which the unemployment rate was below 8.5 percent.

Minimum Wage Increases for 2021

January 2021 increases are in bold text. As noted above, jurisdictions that will not see increases in their minimum wage rates in 2021 (unless an increase is determined and/or announced at a later time) are not included in the chart below.

State Minimum Wage Maximum Tip Credit

Minimum Cash Wage

(Tipped Employees)
Alaska

$10.19 (current)

$10.34 (effective January 1, 2021)

 Tip credit not allowed. Tip credit not allowed.
Arizona

$12.00 (current)

$12.15 (effective January 1, 2021)

Flagstaff:

$13.00 (current)

$15.00 (effective January 1, 2021)

$15.50 (effective January 1, 2022)*

*Or $2.00 above the Arizona statewide rate, whichever is higher.

$3.00 (current) (set tip credit amount)

 

Flagstaff:

$3.00 (current)

$3.00 (effective January 1, 2021)

$2.50 (effective January 1, 2022)

 

$9.00 (current)

$9.15 (effective January 1, 2021)

Flagstaff:

$10.00 (current)

$12.00 (effective January 1, 2021)

$13.00 (effective January 1, 2022)

 
Arkansas

$10.00 (current)

$11.00 (effective January 1, 2021)

$7.37 (current)

$8.37 (effective January 1, 2021)

 $2.63 (current) (set cash wage amount)
California

Employers with 26 or more employees:
$13.00 (current)
$14.00 (effective January 1, 2021)
$15.00 (effective January 1, 2022)Employers with 25 or fewer employees:
$12.00 (current)
$13.00 (effective January 1, 2021)
$14.00 (effective January 1, 2022)
$15.00 (effective January 1, 2023)Los Angeles (City):
Employers with 26 or more employees:
$15.00 (current) (no change)

Employers with 25 or fewer employees:
$14.25 (current)
$15.00 (effective July 1, 2021) Los Angeles (County – unincorporated areas):
Employers with 26 or more employees:
$15.00 (current) (no change)

Employers with 25 or fewer employees:
$14.25 (current)
$15.00 (effective July 1, 2021)Oakland:
$14.14 (current)
$14.36 (effective January 1, 2021)

Pasadena:
Employers with 26 or more employees:
$15.00 (current) (no change)Employers with 25 or fewer employees:
$14.25 (current)
$15.00 (effective July 1, 2021)

San Diego:
$13.00 (current)
$14.00 (effective January 1, 2021)

San Jose:
$15.25 (current)
$15.45 (effective January 1, 2021)

Santa Monica:
Employers with 26 or more employees:
$15.00 (current) (no change)

Employers with 25 or fewer employees:
$14.25 (current)
$15.00 (effective July 1, 2021)

*Reminder: this list of California localities with published 2021 increases is not exhaustive; others may see increases in 2021 as well.

 Tip credit not allowed. Tip credit not allowed.
Colorado

$12.00 (current)

$12.32 (effective January 1, 2021)

Denver:
$12.85 (current)
$14.77 (effective January 1, 2021)
$15.87 (effective January 1, 2022)

 

$3.02 (current) (no change)

Denver:
$3.02 (current) (state rate; no change)

$8.98 (current)

$9.30 (effective January 1, 2021)

Denver:
$9.83 (current)
$11.75 (effective January 1, 2021)
$12.85 (effective January 1, 2022)
Connecticut $12.00 (current)
$13.00 (effective August 1, 2021)
$14.00 (effective July 1, 2022)
$15.00 (effective June 1, 2023)		 Tipped service employees other than bartenders:
$5.62 (current)
$6.62 (effective August 1, 2021)
$7.62 (effective July 1, 2022)
$8.62 (effective June 1, 2023)
Bartenders:
$3.77 (current)
$4.77 (effective August 1, 2021)
$5.77 (effective July 1, 2022)
$6.77 (effective June 1, 2023)		 Tipped service employees other than bartenders:
$6.38 (current) (set cash wage amount)   Bartenders:
$8.23 (current) (set cash wage amount)
Florida $8.56 (current)
$8.65 (effective January 1, 2021) Further increases determined by ballot initiative approved 11/3/20:
$10.00 (effective September 30, 2021)
$11.00 (effective September 30, 2022)
$12.00 (effective September 30, 2023)
$13.00 (effective September 30, 2024)
$14.00 (effective September 30, 2025)
$15.00 (effective September 30, 2026) 		 $3.02 (current) (no change) $5.54 (current)
$5.63 (effective January 1, 2021) Further increases determined by ballot initiative approved 11/3/20:
$6.98 (effective September 30, 2021)
$7.98 (effective September 30, 2022)
$8.98 (effective September 30, 2023)
$9.98 (effective September 30, 2024)
$10.98 (effective September 30, 2025)
$11.98 (effective September 30, 2026)
Illinois $10.00 (current)
$11.00 (effective January 1, 2021)
$12.00 (effective January 1, 2022)
$13.00 (effective January 1, 2023)
$14.00 (effective January 1, 2024)
$15.00 (effective January 1, 2025)Chicago:
Employers with 21 or more total employees:
$14.00 (current)
$15.00 (effective July 1, 2021)Employers with 4-20 total employees:
$13.50 (current)
$14.00 (effective July 1, 2021)
$14.50 (effective July 1, 2022)
$15.00 (effective July 1, 2023)		 $4.00 (current)
$4.40 (effective January 1, 2021)
$4.80 (effective January 1, 2022)
$5.20 (effective January 1, 2023)
$5.60 (effective January 1, 2024)
$6.00 (effective January 1, 2025)Chicago:
Employers with 21 or more total employees:
$5.60 (current)
$6.00 (effective July 1, 2021)Employers with 4-20 total employees:
$5.40 (current)
$5.60 (effective July 1, 2021)
$5.80 (effective July 1, 2022)
$6.00 (effective July 1, 2023)		 $6.00 (current)
$6.60 (effective January 1, 2021)
$7.20 (effective January 1, 2022)
$7.80 (effective January 1, 2023)
$8.40 (effective January 1, 2024)
$9.00 (effective January 1, 2025)Chicago:
Employers with 21 or more total employees:
$8.40 (current)
$9.00 (effective July 1, 2021)Employers with 4-20 total employees:
$8.10 (current)
$8.40 (effective July 1, 2021)
$8.70 (effective July 1, 2022)
$9.00 (effective July 1, 2023)
Maine

$12.00 (current)

$12.15 (effective January 1, 2021)

 

$6.00 (current)

$6.07 (effective January 1, 2021)

 

$6.00 (current)

$6.08 (effective January 1, 2021)

 
Maryland

$11.00 (current)

Employers with 15 or more employees:
$11.75 (effective January 1, 2021)
$12.50 (effective January 1, 2022)
$13.25 (effective January 1, 2023)
$14.00 (effective January 1, 2024)
$15.00 (effective January 1, 2025)

Employers with 14 or fewer employees:
$11.60 (effective January 1, 2021)
$12.20 (effective January 1, 2022)
$12.80 (effective January 1, 2023)
$13.40 (effective January 1, 2024)
$14.00 (effective January 1, 2025)
$14.60 (effective January 1, 2026)
$15.00 (effective July 1, 2026)

Montgomery County:
Employers with 51 or more employees:
$14.00 (current)
$15.00 (effective July 1, 2021)

Employers with 11 – 50 employees:
$13.25 (current)
$14.00 (effective July 1, 2021)
$14.50 (effective July 1, 2022)
$15.00 (effective July 1, 2023)

Employers with 10 or fewer employees:
$13.00 (current)
$13.50 (effective July 1, 2021)
$14.00 (effective July 1, 2022)
$14.50 (effective July 1, 2023)
$15.00 (effective July 1, 2024)

Prince George’s County:

$11.50 (current)*

*State rate will apply effective January 1, 2021.

$7.37 (current)

Employers with 15 or more employees:
$8.12 (effective January 1, 2021)

Employers with 14 or fewer employees:
$7.97 (effective January 1, 2021)

Montgomery County:
Employers with 51 or more employees:
$10.00 (current)
$11.00 (effective July 1, 2021)

Employers with 11-50 employees:
$9.25 (current)
$10.00 (effective July 1, 2021)

Employers with 10 or fewer employees:
$9.00 (current)
$9.50 (effective July 1, 2021)

 

 

 

Prince George’s County:
$7.87 (current)*

*State rate will apply effective January 1, 2021.

 

$3.63 (current) (set cash wage amount)

 

 

 

 

 

 

 

 

 

 Montgomery County:
$4.00 (current) (no change)

 

 

 

Prince George’s County:
$3.63 (current) (no change)
Massachusetts $12.75 (current)
$13.50 (effective January 1, 2021)
$14.25 (effective January 1, 2022)
$15.00 (effective January 1, 2023)		 $7.80 (current)
$7.95 (effective January 1, 2021)
$8.10 (effective January 1, 2022)
$8.25 (effective January 1, 2023)		 $4.95 (current)
$5.55 (effective January 1, 2021)
$6.15 (effective January 1, 2022)
$6.75 (effective January 1, 2023)

Michigan

 

*Scheduled increases are not likely to become effective on January 1, 2021. See note in introduction.

 $9.65 (current)
$9.87 (effective January 1, 2021)*
$10.10 (effective January 1, 2022)
$10.33 (effective January 1, 2023)
$10.56 (effective January 1, 2024)
$10.80 (effective January 1, 2025)
$11.04 (effective January 1, 2026)
$11.29 (effective January 1, 2027)
$11.54 (effective January 1, 2028)
$11.79 (effective January 1, 2029)
$12.05 (effective January 1, 2030)		 $5.98 (current)
$6.12 (effective January 1, 2021)*		 $3.67 (current)
$3.75 (effective January 1, 2021)*
Minnesota

Large Employers (annual gross revenues of $500,000 or more):
$10.00 (current)
$10.08 (effective January 1, 2021)Small Employers (annual gross revenues of less than $500,000):
$8.15 (current)
$8.21 (effective January 1, 2021)Minneapolis:
Large Employers (101 or more total employees):
$13.25 (current)
$14.25 (effective July 1, 2021)
$15.00 (effective July 1, 2022)Small Employers (100 or fewer total employees):
$11.75 (current)
$12.50 (effective July 1, 2021)
$13.50 (effective July 1, 2022)St. Paul:
Macro Businesses (10,001 or more total employees) + City:
$12.50 (current)
$15.00 (effective July 1, 2022)
Adjusted annually thereafter.

Large Businesses (101 to 10,000 total employees):
$11.50 (current)
$12.50 (effective July 1, 2021)
$13.50 (effective July 1, 2022)
$15.00 (effective July 1, 2023)
Thereafter, rate will match macro businesses/City rate.

Small Businesses (6 to 100 total employees):
$10.00 (current)
$11.00 (effective July 1, 2021)
$12.00 (effective July 1, 2022)
$13.00 (effective July 1, 2023)
$14.00 (effective July 1, 2024)
$15.00 (effective July 1, 2025)
Thereafter, rate will match macro businesses/City rate.

Micro Businesses (5 or fewer employees):
$9.25 (current)
$10.00 (effective July 1, 2021)
$10.75 (effective July 1, 2022)
$11.50 (effective July 1, 2023)
$12.25 (effective July 1, 2024)
$13.25 (effective July 1, 2025)
$14.25 (effective July 1, 2026)
$15.00 (effective July 1, 2027)
Thereafter, rate will match macro businesses/City rate.

 Tip credit not allowed. Tip credit not allowed.
Missouri $9.45 (current)
$10.30 (effective January 1, 2021)
$11.15 (effective January 1, 2022)
$12.00 (effective January 1, 2023) 		 $4.72 (current)
$5.15 (effective January 1, 2021)
$5.57 (effective January 1, 2022)
$6.00 (effective January 1, 2023) 		 $4.73 (current)
$5.15 (effective January 1, 2021)
$5.58 (effective January 1, 2022)
$6.00 (effective January 1, 2023)
Montana

$8.65 (current)

$8.75 (effective January 1, 2021)

 Tip credit not allowed. Tip credit not allowed.
Nevada Employers offering qualified health insurance benefits:
$8.00 (current)
$8.75 (effective July 1, 2021)
$9.50 (effective July 1, 2022)
$10.25 (effective July 1, 2023)
$11.00 (effective July 1, 2024)Employers that do not offer qualified health insurance benefits:
$9.00 (current)
$9.75 (effective July 1, 2021)
$10.50 (effective July 1, 2022)
$11.25 (effective July 1, 2023)
$12.00 (effective July 1, 2024)		 Tip credit not allowed. Tip credit not allowed.
New Jersey

Employers with 6 or more employees:

$11.00 (current)
$12.00 (effective January 1, 2021)
$13.00 (effective January 1, 2022)
$14.00 (effective January 1, 2023)
$15.00 (effective January 1, 2024)

Employers with 5 or fewer employees and seasonal employers:
$10.30 (current)
$11.10 (effective January 1, 2021)
$11.90 (effective January 1, 2022)
$12.70 (effective January 1, 2023)
$13.50 (effective January 1, 2024)
$14.30 (effective January 1, 2025)
$15.00 (effective January 1, 2026)

 Employers with 6 or more employees:
$7.87 (current)$7.87 (effective January 1, 2021)
$7.87 (effective January 1, 2022)
$8.87 (effective January 1, 2023)
$9.87 (effective January 1, 2024)Employers with 5 or fewer employees and seasonal employers:
$7.17 (current)
$6.97 (effective January 1, 2021)
$6.77 (effective January 1, 2022)
$7.57 (effective January 1, 2023)
$8.37 (effective January 1, 2024)		 $3.13 (current)
$4.13 (effective January 1, 2021)
$5.13 (effective January 1, 2022)$5.13 (effective January 1, 2023)
$5.13 (effective January 1, 2024) 
New Mexico

$9.00 (current)
$10.50 (effective January 1, 2021)
$11.50 (effective January 1, 2022)
$12.00 (effective January 1, 2023)Albuquerque (city):
Employers not providing healthcare and/or childcare benefits of at least $2,500:
$9.35 (current)
$10.50 (effective January 1, 2021) Employers providing healthcare and/or childcare benefits of at least $2,500 (annualized):
$8.35 (current)
$9.50 (effective January 1, 2021)* *Higher state rate of $10.50 applies effective January 1, 2021.

Bernalillo County (unincorporated area only):
$9.20 (current)
$9.35 (effective January 1, 2021)**Higher state rate of $10.50 applies effective January 1, 2021.

Santa Fe (city):
$12.10 (current)*

*March 2021 increase expected.

Santa Fe (county – unincorporated area only):
$12.10 (current)*

*March 2021 increase expected.

 

$6.65 (current)
$7.95 (effective January 1, 2021)
$8.70 (effective January 1, 2022)
$9.00 (effective January 1, 2023)Albuquerque (city):
Employers not providing healthcare and/or childcare benefits of at least $2,500:
$3.75 (current)
$4.20 (effective January 1, 2021) Employers providing healthcare and/or childcare benefits of at least $2,500 (annualized):
$2.75 (current)
$4.20 (effective January 1, 2021) (due to state minimum wage increase)

Bernalillo County (unincorporated area only):
$7.07 (current)
$7.95 (effective January 1, 2021) (due to state minimum wage and minimum cash wage increases)

Santa Fe (city):
$9.75 (current)
$9.55 (effective January 1, 2021) (due to state minimum cash wage increase)

Santa Fe (county – unincorporated area only):
$8.48 (current)

$2.35 (current)
$2.55 (effective January 1, 2021)
$2.80 (effective January 1, 2022)
$3.00 (effective January 1, 2023)Albuquerque (city):$5.60 (current)$6.30 (effective January 1, 2021)

Bernalillo County (unincorporated area only):
$2.13 (federal) (current)
$2.55 (state rate) (effective January 1, 2021)

 Santa Fe (city):
$2.35 (current)
$2.55 (state rate) (effective January 1, 2021)

Santa Fe (county – unincorporated area only):

$3.62 (current)
New York

Statewide (outside NYC and counties below):

$11.80 (current)
$12.50 (effective December 31, 2020)

Fast Food Workers (non-NYC):
$13.75 (current)
$14.50 (effective December 31, 2020)
$15.00 (effective July 1, 2021)

Nassau, Suffolk, and Westchester Counties:
$13.00 (current)
$14.00 (effective December 31, 2020)
$15.00 (effective December 31, 2021)

Hospitality Industry Only*

Statewide (outside NYC and counties below):

TIPPED SERVICE EMPLOYEES:
$1.95 (current)

$2.10 (effective December 31, 2020)

TIPPED FOOD SERVICE WORKERS:
$3.95 (current)
$4.15 (effective December 31, 2020)

Nassau, Suffolk, and Westchester Counties:
TIPPED SERVICE EMPLOYEES:
$2.15 (current)
$2.35 (effective December 31, 2020)
$2.50 (effective December 31, 2021)

TIPPED FOOD SERVICE WORKERS:
$4.35 (current)
$4.65 (effective December 31, 2020)
$5.00 (effective December 31, 2021)

*Employees must meet tip thresholds for employer to claim tip credit.

Hospitality Industry Only*

Statewide (outside NYC and counties below):

TIPPED SERVICE EMPLOYEES:
$9.85 (current)
$10.40 (effective December 31, 2020)

TIPPED FOOD SERVICE WORKERS:
$7.85 (current)
$8.35 (effective December 31, 2020)

Nassau, Suffolk, and Westchester Counties:
TIPPED SERVICE EMPLOYEES:
$10.85 (current)
$11.65 (effective December 31, 2020)
$12.50 (effective December 31, 2021)

TIPPED FOOD SERVICE WORKERS:
$8.65 (current)
$9.35 (effective December 31, 2020)
$10.00 (effective December 31, 2021)

*Employees must meet tip thresholds for employer to claim tip credit.
Ohio

$8.70 (current)

$8.80 (effective January 1, 2021)

Small Employers (annual gross receipts of less than $319,000* per year):
$7.25 (current)

*Small employer threshold increases to $323,000 effective January 1, 2021.

$4.35 (current)

$4.40 (effective January 1, 2021)

$4.35 (current)

$4.40 (effective January 1, 2021)
Oregon Standard Minimum Wage Rate:
$12.00 (current)$12.75 (effective July 1, 2021)$13.50 (effective July 1, 2022)Portland Metro Employers (i.e., employers located within the “urban growth boundary of a metropolitan service district”):
$13.25 (current)$14.00 (effective July 1, 2021)$14.75 (effective July 1, 2022)Employers in Nonurban Counties (as defined by the law):
$11.50 (current)$12.00 (effective July 1, 2021)$12.50 (effective July 1, 2022)		 Tip credit not allowed. Tip credit not allowed.
South Dakota

$9.30 (current)

$9.45 (effective January 1, 2021)

$4.65 (current)

$4.72 (effective January 1, 2021)

 $4.65 (current)
$4.73 (effective January 1, 2021)
Vermont

$10.96 (current)

$11.75 (effective January 1, 2021)

$12.55 (effective January 1, 2022)

$5.48 (current)

$5.87 (effective January 1, 2021)

$6.27 (effective January 1, 2022)

$5.48 (current)

$5.88 (effective January 1, 2021)

$6.28 (effective January 1, 2022)
Virginia

$7.25 (current)

$9.50 (effective May 1, 2021)

$11.00 (effective January 1, 2022)

$12.00 (effective January 1, 2023)

$13.50 (effective January 1, 2025)*

$15.00 (effective January 1, 2026)*

*If reenacted by General Assembly before July 1, 2024.

$5.12 (current)

$7.37 (effective May 1, 2021)

 $2.13 (current) (no change)
Washington $13.50 (current)
$13.69 (effective January 1, 2021)Seattle:
Large Employers (more than 500 employees worldwide):
$16.39 (current)
$16.69 (effective January 1, 2021)Small Employers (500 or fewer employees worldwide) who do not contribute towards an individual employee’s medical benefits:
$15.75 (current)
$16.69 (effective January 1, 2021)Small Employers (500 or fewer employees worldwide) who do pay at least $1.69 per hour toward an individual employee’s medical benefits or in tips:
$13.50 (current)
$15.00 (effective January 1, 2021)		 Tip credit not allowed. Tip credit not allowed.
© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more articles on the minimum wage, visit the National Law Review Labor & Employment section.

Congress Seeks to Extend Many CARES Act Unemployment Benefits in Pandemic Relief Package

Facing a government shutdown and the expiration of many of the relief programs included in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted in March 2020, on December 21, 2020, Congress passed a $900 billion pandemic relief package as part of a broader $1.4 trillion government funding bill.  Along with other relief measures, the new legislation includes additional funding for unemployment benefit programs that had previously been funded in the CARES Act.

Unemployment Benefits under the CARES Act

The CARES Act expanded unemployment insurance benefits available to workers, including through the following three programs: (1) Federal Pandemic Unemployment Compensation (“FPUC”); (2) Pandemic Emergency Unemployment Compensation (“PEUC”); and (3) Pandemic Unemployment Assistance (“PUA”).  In short:

  • FPUC provided an extra $600 weekly benefit for all weeks of unemployment between April 5, 2020 and July 31, 2020, in addition to the benefit amount an individual would otherwise be entitled to receive under state law.
  • PEUC provided for an additional 13 weeks of unemployment benefits for individuals who had exhausted unemployment benefits otherwise available under state law.
  • PUA extended unemployment benefits to certain workers traditionally not eligible for unemployment benefits under state law, such as those who self-employed workers, independent contractors, or workers who have a limited work history.

These expanded benefits were all 100% federally funded under the CARES Act.  The CARES Act also provided additional funds and incentives for states to promote short-time compensation (“STC”) or work share programs, which provide employers with an alternative to layoffs.  (For more information about these programs, see our previous post, here: “CARES Act Expands Unemployment Insurance Benefits”).

The Expiration of CARES Act Funding of Unemployment Insurance Benefits

The PEUC and PUA benefit programs were slated to end on (or in many states, shortly before) December 31, which mean that these payments would soon expire without any gradual diminution or replacement benefit.

In addition, the $600 weekly supplement benefit payment under FPUC expired at the end of July.  Although the President signed into law a lesser benefit called Lost Wage Assistance earlier this year, such benefits were only available for a limited time and there has otherwise been no replacement for the weekly supplemental payments.

CARES Act Unemployment Programs under the New Bill

  • FPUC: The bill revives FPUC, but reduces the supplemental weekly benefit by half. As a result, individuals who are unemployed and receiving any unemployment benefits will now be entitled to an additional $300 in benefits for each week of unemployment between December 26, 2020 and March 14, 2021.
  • PEUC: The bill extends PEUC by providing for up to 24 weeks of additional unemployment benefits to eligible individuals who have exhausted the unemployment benefits available under state law. Before the CARES Act, many states capped their benefits at 26 weeks.  The CARES Act provided an additional 13 weeks of PEUC benefits.  With the newest extension to 24 weeks, eligible recipients in many states can now can now receive up to 50 weeks benefits between state programs and PEUC.  These extended benefits are also available through March 14, 2021.  After March 14, 2021, new PEUC claimants will not be eligible for the extra weeks of benefits, but individuals who had been receiving PEUC benefits as of March 14, 2021 will be eligible to continue to receive benefit payments through April 4, 2021.
  • PUA: As with PEUC, the bill extends PUA benefits until March 14, 2021. After March 14, 2021, new claimants will no longer be permitted to apply for PUA benefits, but eligible individuals who were receiving PUA benefits as of that date will continue to receive benefits until April 5, 2021.  Also like PEUC, the duration of PUA benefits for eligible individuals has been extended from 39 weeks (under the CARES Act) to a total of up to 50 weeks.

The bill also extends other CARES Act unemployment provisions to March 14, 2021, including benefits made available to non-profit organizations, incentives for states to waive any one-week waiting periods, and encouraging the use of state STC programs.

New Unemployment Provisions in the New Bill

  • Fraud Provisions: When the CARES Act went into effect, states were faced with processing significant numbers of claims through unemployment systems that in many cases had been underfunded for years, resulting in outdated technology, understaffed offices, and byzantine application processes. In particular, PUA presented a number of challenges because the program required a new application, was separate from any existing benefits, and was available to individuals who otherwise would not have been covered under unemployment programs.  As a result, it was widely reported that PUA benefits were not being properly processed and paid, either due to fraud or confusion on part of both the states and applicants as to who was eligible for certain benefits and how to apply.

In an apparent effort to address these issues, the new bill describes in detail the documentation required to apply for PUA benefits.  As of January 31, 2021, new applicants will have 21 days to submit documentation substantiating their employment, self-employment, or planned commencement of employment/self-employment.  Individuals already receiving PUA benefits prior to January 31, 2021 must provide documentation within 90 days of January 31.  In addition to the new documentation requirement, states now must have procedures in place to validate the identity of claimants and to ensure timely payments.  The federal government will cover costs of these procedures.

Additionally, states must have a process in place for employers to report to the state agency instances in which a former employee refuses to return to work or refuses to accept an offer of suitable work without good cause (which renders the individual ineligible for unemployment benefits).

  • Mixed Earner Unemployment Compensation: Individuals who receive at least $5,000 a year in self-employment income now will receive an additional $100 weekly benefit, in addition to the benefit amounts they otherwise would be entitled to receive from traditional employment under state law.  Previously, such individuals were not eligible for PUA benefits if they received some regular state unemployment benefits for traditional employment, and regular state law benefits did not consider self-employment in calculating the benefit amounts. The new federally-funded “mixed earner” benefit is in addition to the $300 supplemental weekly benefit under FPUC, and also expires on March 14, 2021.

Because the bill was not passed until the final week of the CARES Act programs, it is possible that the extensions and new benefits may not be implemented immediately.   If the CARES Act rollout is any indication, it is likely that there will be additional federal guidance released to address the implementation of these unemployment provisions and answer certain questions the states may have.  Employers and claimants should monitor state websites for any applicable unemployment programs and up-to-date guidance.  Additionally, we will continue to monitor these development and inform our readers of any new guidance in this area.

© 2020 Proskauer Rose LLP.
For more articles on the CARES Act, visit the National Law Review Coronavirus News section.

Work from Anywhere? Telecommuting and Tax Obligations for Employers: Practical Considerations and Tips for Human Resources and Management

As a result of the COVID-19 pandemic, there has been a sudden, widespread shift towards remote work arrangements. This shift has provided many benefits, including an increase in the employee talent pool and the ability to recruit without borders, cost savings, and a more flexible employee workday. In response, a number of employees have moved away, or plan to move away, from city centers or to a different state to find a better location in terms of cost of living and personal preference. However, this shift creates concerns for employers regarding labor and employment law compliance, tax compliance, and other business considerations when employees choose to permanently work remotely in a new location. Employers may not be aware of these considerations or even the fact that the employee has moved. It is important to understand these concerns and how they may affect the “workplace” as more businesses prepare for long-term policies on working remotely.

Labor & Employment Considerations

Wage and Hour Laws

 Different jurisdictions impose different wage and hour requirements, such as minimum wage, paid sick leave, overtime, exemptions, pay frequency, and pay statements. Multi-jurisdictional employers must understand these variations to make sure that they are complying with the various wage and hour laws in the states and localities where employees are working. For example, non-exempt employees working from home are still required to be paid based on actual hours worked, and are entitled to overtime. If an employer employs an employee who moves to a state where overtime must be paid for any work over eight hours per day instead of being paid for all hours worked over 40 in a work week, the employer would need to update its payroll system to ensure compliance.

Tracking Hours Worked

With remote work, employees’ actual hours worked can be difficult to track because of variable schedules necessitated by the competing demands of working from home. On August 24, 2020, the U.S. Department of Labor’s Wage and Hour Division (WHD) recognized this issue and published a field assistance bulletin that reminds employers of their obligation to track all hours worked by employees who are working remotely, including addressing authorized versus non-authorized hours of work, hours that the employer knows are being worked, and reminds employers that their processes and policies cannot prevent or discourage the reporting of hours worked.

Workers’ Compensation Insurance

Most employers are generally required to obtain workers’ compensation insurance in the states in which they employ workers. An injury that arises out of or in the course of employment will generally be covered by workers’ compensation insurance. This includes injuries that occur suddenly or over time as well as injuries that may occur when working remotely. For example, due to the COVID-19 pandemic, many employees are conducting business from home-office setups where they may sustain various injuries. Depending on the applicable state law, this may be deemed a work-related injury eligible for coverage under workers’ compensation insurance. An employer that does not abide by a state’s laws requiring workers’ compensation insurance may be liable for noncompliance, resulting in potential fines and penalties.

Unemployment Insurance

Similarly, employers are generally required to pay premiums for state unemployment insurance when at least one of their employees conducts business in the state. Employers must generally register for an account with the state unemployment agency within the states in which they have employees working. A failure to pay these premiums may create liability for the employer, including penalties for noncompliance.

Discrimination Laws

 As a general tenet, the federal and state employment discrimination laws in a particular state apply to employees working in that state and they apply to “workplace,” which includes remote work arrangement, online forums, etc. Employers must be prepared to comply with various local and state employment laws, keeping in mind that localities and states might include different protected characteristics in their laws. Employers also will need to be in compliance with state and federal disability discrimination laws, as employees are entitled to reasonable accommodations even when working remotely. Employers may wish to review and, if appropriate, update employee handbooks to ensure that their procedures for internal reporting are accessible and are reasonable as they relate to remote employees.

Posting Requirements

Employers may be required to display in the workplace posters that discuss employees’ employment rights, such as those granted under the federal Occupational Safety and Health Act (OSHA) or the federal Family and Medical Leave Act (FMLA), as well as under other local, state, and federal laws. If employees are working remotely, employers may be required to send out the postings by mail or email or display the postings on an employee information website, depending on the applicable law. Employers may want to consider providing a manner for employees to acknowledge receipt of the posted information to ensure they are fulfilling their obligations.

State Tax & Registration Implications

The unplanned and exponential increase in the number of remote workers due to the COVID-19 pandemic has raised state tax and registration questions for employers with employees now working in one or more states separate from the states(s) in which the employer normally conducts business. Generally speaking, the presence of an employee in a state may trigger a requirement that the employer register as an entity transacting business, establish nexus for income/franchise taxes and sales and use taxes, and require registration as an employer for purposes of state and local income tax withholding.

This analysis is further complicated by the lack of uniformity in guidance issued by state authorities. A number of state tax authorities have been noticeably silent, suggesting that pre-pandemic rules continue to apply to out-of-state employers. Even with regard to the states that have issued COVID-19 related guidance, that guidance varies, as some states provide relief (generally temporarily waiving registration and reporting issues relating to remote workers created as a result of the pandemic) while others have simply confirmed that their laws are not impacted by the pandemic. The state guidance may also draw a distinction between previously assigned remote workers and those forced to work from home due to the pandemic.

Business Registration

Employers may wish to consider whether the presence of these new remote workers creates a duty to obtain a certificate of authority in order to transact business in states in which employers previously did not have any employees or operations. Failure to comply with these rules can result in significant penalties.

Business Taxes

If an employee performs services in his/her state of residency, this may create substantial nexus between the employer and this state. As a result, employers may be obligated to pay state and local franchise, income, or other applicable business tax in such states solely as a result of their remote workers. For retailers, it would trigger a duty to collect, remit, and report state and local sales and use taxes.

Income Tax Withholding

In the majority of jurisdictions, employers attribute an employee’s wages for income tax withholding purposes to the state in which the employee performs services. These rules would require employers to register with state and local tax agencies and withhold the income taxes according to the laws of those jurisdictions. With regard to other states that utilize a “convenience of the employer” sourcing rule, employers are faced with unique and complex challenges in the current pandemic environment. Generally, in such states, wages are considered earned by a nonresident employee and are allocated to the office location the employee is assigned to, unless the employee performs work that, out of necessity and not convenience, requires the employee to perform work from another location other than their assigned office. Historically, what is considered to be at the “convenience of the employer” has been defined broadly with narrow exceptions, and it remains unclear whether alternative remote working arrangements due to the pandemic would constitute work conducted offsite for the “convenience of the employer.” This situation is further complicated by additional states (most notably Massachusetts) temporarily adopting “convenience of the employer” rules under the guise of limiting disruption to employers.

In many cases, employers are left without clear direction and have no choice other than to review state specific guidance as it applies to their remote workers, including those who may have relocated temporarily or have relocated without any advance notice to their employer. While enforcement activity may be limited at the current time, employers should consider whether states will look to enforcement of these tax rules against nonresident employers in order to balance state budgets deeply impacted by the pandemic.

Localized Compensation

Many employees who plan to work remotely on a permanent basis are moving to more affordable cities to reduce costs or for other personal reasons. Some employers have responded by adjusting pay for employees based on localized factors, including income tax rates and the cost of labor in the employee’s new location. Some of these employers have made pay adjustments based on a case-by-case basis, while others have implemented a set pay cut when an employee moves away from large city centers, such as New York or San Francisco. While companies have pointed out that it is standard practice for an employee’s location to be a factor considered in determining pay, there has been some push back by remote workers related to this decision.

Conclusion

Due to the legal risks associated with employees relocating while working remotely, employers may wish to consult with legal counsel for guidance on navigating applicable law.

Copyright © 2020 Robinson & Cole LLP. All rights reserved.
For more articles on remote working, visit the NLR Labor & Employment section.

What Were the Three Biggest Labor Law Developments In 2020?

With the year end in sight, employers are looking back on a tumultuous 2020 and preparing for more labor law changes in 2021. This year at the National Labor Relations Board (NLRB), companies saw a lot of positive change from a management perspective. Election rule changes gave employers some breathing room on the union avoidance front, and the NLRB exercised restraint in relaxing its enforcement standards against employers during the pandemic. But as the new year approaches, a union-friendly administration waits in the wings, presenting a real possibility that the positive change for employers may be coming to an end.

Employer-Friendly Election Rules

2020 saw the NLRB’s much maligned ambush election rules scrapped, in part, and replaced with employer-friendly rules. The ambush election rules had resulted in truncated campaign periods that left employers at a disadvantage. The new rules, while not without their own challenges, extend the period of time between the filing of a representation petition and the election. Employers can look forward to 2021 knowing the new rules will give them more time to combat a union organizing drive.

NLRB’s COVID-19 Response and Guidance

The NLRB’s guidance related to COVID-19 was at times slow and presented a mixed bag to employers.

On one hand, the NLRB’s election-related guidance gave Regional Directors wide discretion on how to conduct elections during the pandemic. This led to a large increase in mail-ballot elections, normally the less-preferred method of conducting elections. Ultimately, this did not change the overall union win rate, which remained around 70 percent.

On the other hand, the NLRB demonstrated a willingness to give employers leeway during the pandemic. Faced with an emergent situation without a true parallel in case precedent, employers were forced with situations where they had to make immediate unilateral changes to terms and conditions of employment, for example requiring temperature screenings or PPE, changing staffing levels, or shutting down facilities. Normally, making unilateral changes to terms and conditions of employment without first bargaining with the union will result in an unfair labor practice charge. But starting in July, the NLRB began issuing informal advice email memos instructing Regional Directors to dismiss several complaints where employers were forced to make these unilateral changes because of the emergency posed by COVID -19. The NLRB general counsel’s position was that if the unilateral change was reasonably related to the emergent pandemic, employers were justified in carrying out the change unilaterally so long as they bargained with the union within a reasonable time thereafter.

New Presidential Administration Coming in 2021

In November, employers learned that Joe Biden had been elected as the new President of the United States. Set to take office on Jan. 20, 2021, President-elect Biden described himself as “the strongest labor president you have ever had” – setting the tone for what could be big changes on the horizon. Any labor law changes supported by the new Biden administration would likely have to wait until the composition of the NLRB’s five-member Board changes. At the earliest, that would be August 2021. Further, Biden will not be able to appoint his own NLRB general counsel – the official in charge of all NLRB Regional Offices – until November 2021. While wholesale changes are not likely until late 2021 at the earliest, employers should brace for a pro-union shift, which could take the form of precedent-changing decisions, rulemaking, or even substantive pro-union legislation.

What a year – we’ll see what 2021 has in store. Stay tuned.

© 2020 BARNES & THORNBURG LLP
For more articles on labor law, visit the National Law Review Labor & Employment section.