The National Law Forum

Data Breach Litigations: 2020 Year in Review

2020 has been a year for the record books, and the area of data breach litigation is no exception. Several key developments, when considered individually or in conjunction, will likely make breach litigation a top of mind data privacy issue going into the next year. So fasten your seatbelts and read on as CPW recaps what you need to know going into 2021.

Overview of Industries Impacted by Data Breach Litigation in 2020

What industries were impacted by data breach litigations in 2020? The short answer: all of them.

Despite the widespread adoption of cybersecurity policies and procedures by organizations to safeguard their proprietary information and the personal information of their clients, consumers, and employees, data breaches are all too common. CPW has covered previously how “[t]echnical cybersecurity safeguards, such as patching, are obviously critical to an effective cybersecurity program. However, many of the most common vulnerabilities can be addressed without complex technical solutions.” Top five practical recommendations to reduce cyber risk can be reviewed here.

In fact, the number of data breaches in 2020 was more than double that of 2019, with industries that were frequent targets including government, healthcare, retail and technology. In this instance, correlation equals causation—as more and more companies experienced crippling security breaches, the number of data breach litigations is also on the rise.

What Has Changed with Data Breach Litigations in 2020?

Besides increasing in frequency, the considerations implicated by data breach litigation have also grown increasingly complex. This is due to several factors.

First, plaintiffs bringing data breach litigations have continued to rely on common law causes of action (negligence and fraud, among others) in addition to asserting new statutory claims (although of course there are exceptions). The reason for this boils down to the fact that while nearly every state has a data breach statute, many do not include a private right of action and are enforced by the state attorneys general. Hence plaintiffs’ reliance on common law and tort based theories. Insofar as statutory causes of action are concerned, the California Consumer Privacy Act (“CCPA”) has only been on the books since the start of this year, but emerged as a focal point for data breach litigations (be sure to check out our CCPA Year-in-Review coverage). The first CCPA class action settlement was announced last month and will likely serve as a benchmark going forward (keep a close eye on organizations agreeing to adopt increased security and data privacy controls, as has been done on the regulatory front).

Second, there was a monumental development in the spring that sent shockwaves through the data breach defense bar. A federal judge ordered production of a forensic report prepared by a cybersecurity firm in the wake of the Capital One data breach. The report was found not protected as attorney work product despite having been prepared at the direction of outside counsel. [Note: A forensic report is usually prepared by a cybersecurity firm following a thorough investigation into a company’s cyberattack. The report will address, among other areas, any vulnerabilities in a company’s IT environment that enabled the cyberattack. Obviously, while these findings can help a company defend itself in subsequent litigation and mitigate risk, the utility of the forensic report can cut both ways. Plaintiffs can also use this information to substantiate their claims.] This ruling reaffirmed several key lessons for companies facing cyber incidents. This includes that to shield a forensic report as work product, a company must demonstrate that the report would not have been created in essentially the same form absent litigation. Notably, this burden is more difficult to meet where the company has a pre-existing relationship with the cybersecurity vendor that prepares the report.

And third, as seen from a high profile case earlier this year, the legal fallout from a data breach can extend to company executives. A company’s former Chief Security Officer (CSO) was charged with obstruction of justice and misprision of felony for allegedly trying to conceal from federal investigators a cyberattack that occurred in 2016, exposing the data of 57 million individuals. Although an outlier, it is a significant reminder for companies and executives to take data breach disclosure obligations seriously—notwithstanding regarding murkiness in the law regarding when these obligations arise.

What Changed With Standing in Data Breach Cases in 2020?

Experienced litigators may be familiar with the classic requirements for standing, but even the most experienced of them are not likely familiar with standing as it applies to data breach litigation. The reason for this discrepancy is simple: although standing case law can be generally straightforward, this case law has not caught up to the unique challenges posted by data breaches. This, when combined with the absence of national-level legislation for data privacy, has created a hodgepodge of circuit splits and differing interpretations.

As you will recall, Article III standing consists of three elements: (1) an injury-in-fact that is concrete and particularized, as well as actual or imminent; (2) the injury must be fairly traceable to the defendant’s act; and (3) it must be “likely” that a favorable decision will compensate or otherwise rectify the injury.

When a data breach occurs, the penultimate standing question is whether the theft of data may, by itself, constitute a sufficient injury. Is there an injury when leaked personal information is not copied or used to facilitate fraud or another crime? Should an injury occur when only certain types of personal information, such as Social Security numbers, are leaked, or may the disclosure of other types of information, such as credit card numbers or addresses, be sufficient for injury? These questions are the heart of data breach litigation, and 2020 brought us a few notable cases that are worth reflecting on at this time of the year.

Given the absence of uniform causes of action in data breach litigation, plaintiffs often employ a number of strategies when drafting their complaints. One strategy has been to allege a negligence cause of action. This year, this strategy drew increased attention when Wawa, a convenience store chain, moved to dismiss a class action lawsuit filed against it by a group of credit unions regarding an alleged data breach. In In Re: Wawa Inc. Data Security Litigation, No. 2:19-cv-06019 (E.D. Pa.), a group of credit unions alleged that a convenience store chain’s failure to abide by the PCI DSS–the payment card industry’s data security standards–should be the standard of care for determining a negligence claim. In opposition, the plaintiffs argued that Wawa had an independent and common law duty to use reasonable care to safeguard the data used by credit and debit cards for payments. The parties held oral argument in November and a decision remains pending. Our previous coverage provides more information.

While some commentators have reported a trend this year towards viewing standing in data privacy cases to be more permissive towards plaintiffs, at least one court this year paused this trend. In Blahous v. Sarrell Regional Dental Center for Public Health, Inc., No. 2:19-cv-00798 (N.D. Ala.), a group of patients filed suit against a dental provider due to an alleged data breach. After conducting an investigation, the defendant determined that there was no evidence that any breached files were copied, downloaded, or otherwise removed. This factual finding was included in the notice that the defendant sent to its patients.

The court rejected the plaintiff’s argument and granted the defendant’s motion to dismiss. Crucial to the court’s opinion was that there were no allegations that suggested any disclosure of the acquired data, “such as an actual review by a third party,” had occurred. The court stated “the fact that the [b]reach occurred cannot in and of itself be enough, in the absence of any imminent or likely misuse of protected data, to provide Plaintiffs with standing to sue.” The court looked to the notice of the data breach and observed “[t]he [n]otice upon whose basis the Plaintiffs sue, included as exhibits to their own pleading, denies that any personal information was copied, downloaded, or removed from the network, despite Plaintiffs’ mistaken belief to the contrary.”

Perhaps the biggest takeaway of Blahous is that the disclosure of a patient’s Social Security number and health treatment information were not sufficient for standing. This was contrary to other decisions where the absence of a Social Security number in a data breach specifically led a court to conclude there was no injury. See Antman v. Uber Technologies, No. 3:15-cv-01175 (N.D. Cal.) (allegations are not sufficient when the complaint alleged “only the theft of names and driver’s licenses. Without a hack of information such as social security numbers, account numbers, or credit card numbers, there is no obvious, credible risk of identity theft that risks real, immediate injury.”).

Another case highlighted the current circuit split concerning injury in data breaches. In Hartigan v. Macy’s, No. 1:20-cv-10551 (D. Mass.), a Macy’s customer filed a class action lawsuit after his personal information was leaked due to a breach through Macy’s online shopping platform. The court granted Macy’s motion to dismiss, attributing three reasons for its holding: (1) the plaintiff did not allege fraudulent use or attempted use of his personal information to commit identify theft; (2) the stolen information “was not highly sensitive or immutable like social security numbers”; and (3) immediately cancelling a disclosed credit card can eliminate the risk of future fraud.

Hartigan has at least two takeaways. First, the change brought by Blahous may be an anomaly. In Blahous, the court found no standing when a Social Security number was disclosed. The Hartigan court, however, specifically stated that the absence of any disclosed Social Security numbers was a reason why the plaintiff did not suffer an injury. Although issued later in the year, the Hartigan court did not cite Blahous or any opinion from within the Eleventh Circuit.

Second, Hartigan highlighted the current circuit split regarding standing in data breach cases. The court’s analysis was based on First Circuit precedent that was issued prior to the Supreme Court’s decision in Clapper. The court then looked to six other circuits for guidance. It cited opinions in the D.C. and Ninth Circuits that suggested the disclosure of “sensitive personal information,” like Social Security numbers, creates a substantial risk of an injury. It then looked to opinions from the Fourth, Seventh, and Ninth Circuits that suggested post-theft criminal activity created an injury. Finally, it noted that the Third, Fourth, and Eighth Circuits found no standing in the absence of criminal activity allegations, even when Social Security numbers were disclosed.

Finally, no year-in-review would be complete without additional discussion of the CCPA (including in the area of standing). At least one notable standing opinion highlights what may be to come. In Fuentes v. Sunshine Behavioral Health Group, LLC, No. 8:20-cv-00487 (C.D. Cal.), a Pennsylvania resident filed suit against an operator of drug and alcohol rehabilitation treatment centers regarding an alleged data breach. A significant issue was whether the plaintiff, a Pennsylvania resident that stayed in one of the defendant’s California facilities for one month, may be a “consumer” under the CCPA for standing purposes.

The defendant seized on the plaintiff’s residency issues for its motion to compel arbitration, or, in the alternative, to dismiss. The defendant argued that the plaintiff’s one-month at a California treatment facility did not make him a “consumer.” The CCPA defines a “consumer” as “a natural person who is a California resident,” as defined by California regulations. Cal. Civ. Code § 1798.150(h). That part of the California Code of Regulations includes in its definition of “resident”: (1) individuals who are in California for other than a temporary or transitory purpose; or (2) individuals domiciled in California who are outside the state for a temporary or transitory purpose.

Unfortunately, the court did not evaluate this issue because the parties voluntarily dismissed the suit prior to a decision.

Trends in 2021

The nation’s political landscape and the pending circuit split will likely fuel developments in 2021.

With a new Congress arriving shortly, most eyes are watching to see whether the 117th Congress will finally bring about comprehensive federal data privacy legislation. Of the previously introduced federal legislation, one point of difference has been whether there should be a private cause of action. The CCPA, which permits private causes of action for California residents, may be one source of influence. Should federal legislation recognize a private cause of action, cases like Fuentes may foreshadow a standing argument to come.

The change of administration will also likely influence data privacy trends. The Vice President-Elect’s prior experiences with data privacy issues may place her on-point for any federal action. When she was Attorney General of California, the Vice President-Elect had an active interest in data privacy issues. In January 2013, her office oversaw the creation of the privacy Enforcement and Protection Unit of the California Attorney General’s Office, which was created to enforce laws related to data breaches, identity theft, and cyber privacy. The Vice President-Elect also secured several settlements with large companies, some of which required creation of specific privacy-focused offices within settling companies, such as chief privacy officer (mirroring recent trends discussed above).

2021 may also be the year of the Supreme Court. In recent years, the Supreme Court has denied several cert petitions in cases involving data breaches. 2021, however, may be the year when we see the nation’s highest court decide who has standing in a data breach and when an injury occurs. Several high-profile data privacy cases have increased the public’s attention to data issues, such as the recent creation of two MDLs. Additionally, the circuit split referenced in Hartigan may be coming to a head. Finally, the implementation of the CCPA and possibility of federal legislation may make this the year of data privacy.

CPW will be there to cover these developments, as they occur. Stay tuned.

ARTICLE BY Kristin L. Bryan and Christina Lamoureux of Squire Patton Boggs (US) LLP

For more, visit the NLR Corporate & Business Organizations 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.

ARTICLE BY Lindsay M. Burley and Bryan R. Cokeley of Steptoe & Johnson PLLC

For more, visit the NLR Coronavirus News section.

Can’t Hold Macklemore and Ryan Lewis Liable for Copyright Infringement Says Fifth Circuit

In 2017, a New Orleans Jazz Musician, Paul Batiste’s (“Batiste”), sued the world-renowned duo Macklemore and Ryan Lewis (“Macklemore”) alleging the duo copied eleven of his songs. Batiste v. Lewis, 2019 U.S. Dist. LEXIS 69130, 2019 WL 1790454 (E.D. La., Apr. 23, 2019). Batiste claimed Macklemore had, without permission, digitally sampled Batiste’s songs, and as a result, Macklemore’s hits, “Can’t Hold Us,” “Thrift Shop,” “Neon Cathedral,” “Same Love,” and “Need to Know” were based on or derivatives of Batiste’s copyrighted musical works. The district court disagreed after finding Batiste failed to sufficiently prove Macklemore had “access” to Batiste’s music and that Macklemore’s songs were strikingly similar to Batiste’s. Additionally, the district court held Batiste liable to pay Macklemore’s attorney fees pursuant to 17 U.S.C. § 505.

Batiste appealed and on September 22, 2020, the Fifth Circuit affirmed the lower court’s decision. See Batiste v. Lewis, Nos. 19-30400, 19-30889, 2020 U.S. App. LEXIS 30346 (5th Cir. Sep. 22, 2020). The Fifth Circuit agreed Batiste did not sufficiently prove Macklemore had access to Batiste’s works and failed to show substantial similarity between the competing works. Furthermore, the Fifth Circuit upheld the attorneys’ fees award, to the tune of $125,000, in favor of Macklemore.

Batiste argued Macklemore must have had access as a result of Batiste’s songs being “widely disseminated” through radio stations, record stores, and live performances at local nightclubs. Citing to evidence of “meager sales in only a handful of local stores” and “sparse” streaming and downloads, the court disagreed with Batiste and found the dissemination of his music was “quite limited.” The court further noted that Batiste’s songs did not become available to stream until after Macklemore had released most of their hit songs. Because Batiste failed to prove Macklemore had actual or constructive access, he was then tasked with proving “strikingly similarity” in order to prevail on his infringement claim since a “probative similarity can make up for a lesser showing of access.” In that regard, the Court found Batiste fell flat and did not “even try to meet the striking-similarity standard.”

Considering the objective unreasonableness of Batiste’s claims, his history of litigation misconduct, and his pattern of filing pugnacious copyright infringement actions, the court upheld the district court’s award of attorneys’ fees to Macklemore.

Accordingly, copyright infringement plaintiffs should think twice before filing suit capriciously and without first objectively evaluating the strength of their “access” and “similarity” proofs. The more access a defendant had to plaintiff’s copyrighted works the less similarity is required for a finding of infringement, and vice-versa, however, proof of both is ideal.

ARTICLE BY Gene Markin of Stark & Stark

For more, visit the NLR Intellectual Property section.

To Require or Encourage COVID-19 Vaccine. . . That is the Question

I am pleased to join as one of the regular contributors to the Manufacturing Law Blog. I am a labor and employment lawyer and I will be providing insights from that vantage point, which Matt Miklave has so ably contributed over the past several years. Matt is retiring from Robinson+Cole and we wish him well as he opens his own firm.

After months of countless updates on the status of the COVID-19 vaccine weaving its way through the regulatory approval process, the vaccine has arrived! Now many employers are grappling with a key question – what type of vaccination program can employers implement?

According to guidance issued by the Equal Employment Opportunity Commission (EEOC) on December 16, 2020, employers may implement a mandatory COVID-19 vaccine program for vaccines that have been authorized or approved by the Food and Drug Administration (FDA). As part of that program, employers may inquire as to whether an employee has been vaccinated and request proof of vaccination. That being said, according to the guidance, employers should review requests for reasonable accommodation from employees seeking an exemption from vaccination based on a disability or a religious reason. In reviewing such requests, employers would then determine if an unvaccinated employee would pose a “direct threat” to the health or safety of individuals in the workplace that cannot be reduced to an acceptable level by conducting a case-by-case analysis and taking an approach that is meant to limit potential risks.

In terms of administering the vaccine, the current EEOC guidance suggests that if an employer uses a third-party, such as a pharmacy or health care provider, with which it does not have a contract, to administer the vaccine, then the third party can engage in relevant pre-screening inquiries of the employees (e.g., why haven’t you had the vaccine, are you taking any medications, etc.). While unlikely to occur at this stage, if an employer administers the vaccine itself or uses a contractor, according to the guidance, the employer would have to ensure that such inquiries are “job related and consistent with business necessity,” consistent with the Americans with Disabilities Act.

While the EEOC’s guidance provides some clarity surrounding this issue, there remain significant legal risks in implementing vaccination programs which are heightened if the employer’s program is mandatory. Arguably the most significant risk would occur if an employee suffers harm after taking the vaccine; in that case, employees may file suit against the employer, arguing that the vaccine was not safe since it was authorized under an “emergency use authorization,” rather than approved by the FDA, among other safety-related arguments; there may be support for this position in a number of agency regulations including the FDA, EEOC, OSHA, and various laws. For unionized employers, there is an additional consideration as a mandatory vaccination program may be considered a mandatory subject of bargaining, meaning that prior to implementation, the employer would typically have to provide the union with notice and an opportunity to bargain or establish that the collective bargaining agreement permits implementation.

As manufacturers review this issue, it is important to consider whether to implement a voluntary or mandatory program or to simply encourage employees to be vaccinated, what documentation may be required to implement such a program (e.g., waiver, accommodation request form, etc.), what employee communication would be appropriate, among other considerations.

As additional guidance is published, we will keep you updated on this issue.

ARTICLE BY Abby M. Warren of Robinson & Cole LLP

For more, visit the NLR Labor & Employment section.

Much A-Brew About Nothing: Court Dismisses False Ad Suit Against Starbucks

Judge Alison Nathan of the U.S. District Court for the Southern District of New York recently dismissed with prejudice a putative class action alleging Starbucks misrepresented itself as a “premium” coffee retailer. In doing so, the Court found that plaintiffs failed to allege Starbucks made any statements likely to mislead reasonable consumers, and that nearly all of the challenged statements were just puffery. George v. Starbucks, (S.D.N.Y. Nov. 19, 2020).

Plaintiffs alleged Starbucks marketed itself as a high-end coffee brand, including claims that it serves “the finest whole bean coffees”; has a reputation for “quality” products; provides a “PERFECT” coffee experience; offers the “Best Coffee for the Best You”; brags that “It’s Not Just Coffee. It’s Starbucks;” and touts its warm welcoming environment. According to plaintiffs, this was false and misleading because many New York Starbucks locations allegedly are infested with pests and use noxious pesticides to abate these pests. Plaintiffs alleged violations of Sections 349 and 350 of the New York General Business Law, this statute’s unfair competition and false advertising provisions.

In dismissing plaintiffs’ claims, Judge Nathan found that “[n]early all of the language the customers object to consists of obvious ‘puffery’” that no reasonably buyer would take at face value. Plaintiffs argued that the whole of Starbucks’s brand messaging was “more than the sum of its parts,” pointing to two cases in which courts allowed advertising suits to proceed even where a defendant’s ads were not literally false when taken in isolation. However, the court noted that in both those cases, the plaintiffs claimed that defendants’ advertising campaign “implied specific, falsifiable facts.” By contrast, plaintiffs here did not allege Starbucks’s advertising communicated—even indirectly—any specific details about its products. Instead, plaintiffs argued the advertising was misleading because it portrayed Starbucks as providing “premium products made with the best ingredients.” However, as Judge Nathan found, claims that a seller’s products are “premium” or “the best” cannot support a cause of action for deceptive practices, whether made once or across all of the company’s brand messaging.

The court found one statement cited in the amended complaint could, if false, be actionable—that Starbucks baked goods contain “no artificial dyes or flavors.” However, the court noted the pesticide mentioned in the complaint was not an “artificial dye or flavor,” and no reasonable consumer would understand this statement to convey information about the company’s use of pesticides in its stores.

In their amended complaint, plaintiffs alleged that the pesticides Starbucks supposedly uses have manufacturer warnings against use in food service establishments, and the CDC warns that exposure to these pesticides can have serious health effects. However, none of the plaintiffs claimed to have gotten sick. Nor did plaintiffs allege that Starbucks advertised that it did not use these (or any other) pesticides. This case serves as yet another reminder that absent an actionably false or misleading statement, false advertising claims cannot be used to remedy other consumer complaints, and consumer assumptions not grounded in the text of advertising are ripe for dismissal. Watch this space for further development.

ARTICLE BY Lawrence I Weinstein, Jeffrey H Warshafsky, and Brooke G. Gottlieb of Proskauer Rose LLP

For more, visit the NLR Litigation / Trial Practice section.

7 Year-End Tips for Your Law Firm

If you’re like us you’re probably asking yourself: how is it already mid-December? For a year that was filled with unprecedented challenges, it seemed at times like the year moved both incredibly fast and also at a snail’s pace. 2020 has been a strange year indeed, and it seems the passing of time this calendar year was no exception.

So, you procrastinated. November was a blur and now you find yourself with a long to do list to finish before the end of the year. Not to worry, you’re in good company. Even though there are only 8 working days left this year, there is still time to utilize time management best practices and some efficiency hacks. We’ve broken down some of our favorite ideas that can help you feel super productive by December 31st and set you up for unprecedented success in the new year.

Now Is The Time: Get Your Time Entered ASAP

This may sound like common knowledge, but if you have post-its piling up and ambiguous notes you emailed yourself with time entries for December, get those entered into your time and billing system as soon as possible. Even if you’re caught up as of the end of November, there is no time like the present to start tracking your time contemporaneously for the rest of the month.

Want to set up even better habits for next year? Studies show that lawyers that enter their time monthly lose up to 55% to 70% of their time while those that enter their time weekly lose only 25% – 30% of their billable hours. There is no denying that the best practice to make sure you’re capturing your time as efficiently as possible is to track time contemporaneously, or at least enter it into your cloud-based system daily. It may seem like a difficult habit to set in the new year, but anything less is downright wasteful.

Get Clarity On All Outstanding AR & Collect, Now

Even if you’ve got a handle on your outstanding bills for December, what about the rest of 2020? It’s crucial to run a report on all outstanding accounts receivable earned over 2020 thus far so you leave nothing on the table to write-off. Once you’ve got a report on all outstanding AR you should plan to tackle uncollected bills methodically and systematically.

Before you start making collection calls, make sure that you gave your clients adequate payment options when you sent the initial invoice. Try resending all outstanding invoices with an electronic payment option with a “Pay Now” button directly in the email and invoice itself and offer clients a payment plan to pay down their invoice over time.

Make sure to customize the corresponding email to let clients know that you need to collect on the invoice in full before the end of the year to avoid negative tax consequences for your firm. Doing so sends clients a friendly reminder that they have a balance due and also gives them the flexibility of credit card and eCheck options for convenient and fast payment.

You should plan to resend outstanding invoices with an online payment option as soon as possible to attempt to receive payment in full without offering proactive discount. Doing so now ensures you still have an opportunity to send the client a final payment request the last week of the year with a discount for payment in full to avoid end of year write offs.

Utilize EOY Accounting Best Practices & Client Ledger Reconciliation

As an attorney, client trust accounting best practices are paramount. At the end of the year you should reconcile all trust account balances to make sure that your trust funds balance properly compared to your bank statements.

Depending on the rule of your state bar, you may be required to reconcile trust funds monthly, but doing so annually should be considered an absolute must regardless of the rules of your specific state. Take an extremely close look at your trust account balances and your firm’s ledger to ensure there are no discrepancies each and every year.

Maintaining a healthy trust ledger is important for a variety of reasons, but it can also help you make sure you’ve been paid for all outstanding work that can be billed against existing client trust balances. Run a report of all existing trust funds and compare against outstanding accounts receivables. If you’ve completed work for a client that has an existing trust balance you can invoice yourself and transfer the funds from your trust to your operating account to collect before year end.

Year In Review: How Profitable Was Your Firm?

Let’s not forget: law firms are businesses. One of the most important things you can do at the end of the year is measure your firm’s profitability. It sounds simple, but for many law firms it’s an intimidating idea. It actually breaks downs quite simply: measure your hard and soft costs against the amount you earned on average across your client list. In short, you want to measure your total costs versus your total revenue.

First, track and analyze your firm’s hard expenses, such as marketing. The more granular you can get the better. Can you measure what you spent to obtain clients in a specific practice area versus the amount you collected for that specific practice area? Doing so may help you identify valuable patterns like practice areas that may be performing better than others or particular billers that have a higher collection rate than others.

Next you should analyze your soft costs and overhead expenses. Are there areas where you can cut costs? One of the most underlooked areas is what your firm is paying in total software costs. Monthly SaaS fees for multiple pieces of software can add up. Choosing an all-in-one practice management solution could streamline your tools and lower your costs significantly.

Once you’ve got the data you need, you should assess whether your rates are adequate to cover your costs or if you should consider a rate increase. You may feel guilty or anxious at the thought of contacting clients if you decide to raise your rates, but doing so every few years is necessary to keep up with inflation and make sure that your firm continues to grow profitability.

Show Gratitude: Clients, Referral Sources, Vendors

There is no time like the present to let your most valued partners know how much you appreciate them, and doing so can go a long way. In today’s competitive landscape it’s important to remind clients that you’re grateful for their business and look forward to continued success in the new year.

If your firm relies on referrals or specific marketing channels or vendors for new or repeat business, let them know you care. It may be as easy as sending a heartfelt email or picking up the phone to check in. Even without a budget in place, something as simply as a handwritten note is enough. If you have a budget to allocate it’s always a great idea to send clients or partners personalized firm swag. If you didn’t give yourself enough time to get some company swag made and delivered, don’t worry. Show your gratitude by sending a bottle of wine or a basket of treats. Think of the cost as a 2021 marketing expense.

Planning Ahead: New Hire Roadmap & Marketing Planning

Last but not least, it’s time to plan for growth. If you’ve already looked at your firm’s profitability and found practice areas or referral partner patterns, the rest is easy.

Make a marketing plan to double down on channels and referral sources that are working and look for new marketing opportunities. It may be time to upgrade your firm’s digital presence with a new website or join a new referral group or chapter of your local bar.

You should also make a plan to handle the increased scale when your marketing efforts come to fruition: what is your next critical hire? Do you want to optimize for a specific profile of billable attorney or maybe you should bring on a new partner to open up opportunities in a profitable practice area. 2021 has endless possibilities and you should plan accordingly.

Bringing It All Together

As we close the books on another year (literally and figuratively) it’s all about taking stock of where you’re at, making up for any deficits as quickly as possible, looking for quick wins to close out strong, and setting yourself up for the successful year ahead. By following these seven tips, you can close out your year better than ever and help your firm get set up for healthy habits and increased profitability in the new year.

ARTICLE BY Sarah Schaaf of PracticePanther

For more, visit the NLR Law Office Management section.

Why Is The WSJ Attacking A Dead Bill?

Last Friday, The Wall Street Journal published an alarming Op-Ed piece concerning a California Bill, AB 2088, that would impose a wealth tax on any person who spends more than 60 days inside the state’s borders in a single year. The idea of a transient wealth tax is a very bad idea, but why is the WSJ spilling ink on the bill now?

AB 2088 started its brief life in February of this year as a bill to amend, of all things, the Education Code. In March, it became a bill that would amend the Elections Code. It was not until August 13, that the bill was gutted and amended to impose a wealth tax on sojourners to the Golden State. The bill, however, never made it out of the house of origin. When the session ended, the bill died. The current legislative biennium began earlier this month and it is possible that the authors will resurrect the wealth tax idea in a new bill. The bill introduction deadline is not until February 19, 2021 and we may have to wait until then to see if a reincarnated bill is introduced. Even if after that deadline, it is possible that the legislature will gut and amend another bill to implement the tax.

The WSJ’s attack on a dead bill reminds me of a story about Charles V, the Holy Roman Emperor. After defeating the Lutheran princes in the First Smalkaldic War, he entered the university town of Wittenberg where Martin Luther was buried. Encouraged to desecrate Luther’s remains, Charles reportedly proclaimed “Let [Luther’s bones] rest until Judgment Day . . . I don’t make war on the dead . . .”.

ARTICLE BY Keith Paul Bishop of Allen Matkins Leck Gamble Mallory & Natsis LLP

For more, visit the NLR Corporate & Business Organizations section.

Phishing Attack Messaging Targets COVID-19 Vaccine

In April of this year, which seems far longer than eight months ago, we posted about an alert from federal agencies warning that cyber threat actors were exploiting the coronavirus pandemic to fuel phishing and other attacks. Those efforts have continued throughout the year with attackers now retooling their messaging around the COVID-19 vaccine. Criminal threat actors know millions are clamoring for information about the vaccine and are working to meet that demand with false information, largely through phishing attacks.

According to an alert from the New Jersey Cybersecurity & Communications Integration Cell (NJCCIC):

COVID-19 vaccine-themed phishing emails may include subject lines that make reference to vaccine registration, information about vaccine coverage, locations to receive the vaccine, ways to reserve a vaccine, and vaccine requirements.

For business and/or personal reasons, millions are clamoring for vaccination information and may let their guard down when they see it. In the process, they may divulge sensitive or financial information, or open malicious links or attachments. Phishing campaigns may employ brand spoofing and impersonate well-known and trusted entities, such as government agencies playing a central and critical role in the response to COVID-19 and the vaccination rollout. Messages such as the one below, for example, can lure an individual to want to participate and provide helpful information.

Other forms of attack target individuals who want a vaccine with advertisements for supposed “legitimate” vaccines, but which are nothing of the sort. Organizations such as New Jersey’s Office of Homeland Security and Preparedness are working to get accurate information about COVID-19 to the public, such as through its Rumor Control and Disinformation web page. However, having accurate information available may not do enough to foil these attacks.

Organizations may not be able to prevent all attacks, but there are steps they could take to minimize the chance and impact of a successful attack, and to be prepared to respond. Among those steps is the critical need to maintain a level of security awareness, in addition to training. Annual trainings are a start, but may not be enough to keep up with nimble threat actors who deftly reshape their messaging and methods to improve their chances of success. They take in developments around the world and adapting on a far more frequent basis than annually.

Employees should be trained to recognize phishing attacks and dangerous sites, and instructed not to reveal personal, financial or other confidential information about themselves, other employees, customers, and the company. However, ongoing reminders about the morphing nature of these kinds of attacks can be instrumental in preventing them. Considering the past year and the more recent rise in COVID-19 cases, it is easy to understand how compelling information about a vaccine can be, so much so that it may be easy to forget the warnings given during that annual training on an early Monday morning in February.

ARTICLE BY Joseph J. Lazzarotti of Jackson Lewis P.C.

For more articles on phishing, visit the NLR Communications, Media & Internet 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.

ARTICLE BY Charles E. McDonald, III of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

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.

ARTICLE BY Evandro C Gigante, Harris M Mufson, Allison Lynn Martin, and Jacob P. Tucker of Proskauer Rose LLP

For more articles on the CARES Act, visit the National Law Review Coronavirus News section.

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