Tag: Employment Law

FTC Approves Non-Compete Ban

On Tuesday afternoon, April 23, the Federal Trade Commission (FTC) voted 3-2 along party lines to approve its new rule on non-competes. The new rule, which will take effect in 120 days, essentially bans non-competes for all workers, finding them “an unfair method of competition – and therefore a violation of Section 5 of the FTC Act.”

Notably, a non-complete clause is broadly defined as a “contractual term or workplace policy that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment or operating a business in the United States after the conclusion of the employment.”

The new rule applies retroactively to prior agreements, other than those for senior executives earning more than $151,164 a year in a “policy-making position.” Employers must provide notice to other workers subject to non-compete agreements that they are no longer enforceable.

Not limited to employees, the non-compete ban extends to independent contractors, externs, interns, volunteers, apprentices, and sole proprietors who provide a service to a person. It does not include non-competes entered into pursuant to a bona fide sale of a business entity or in a franchisor-franchisee relationship.

While the rule is final, expect legal challenges to follow. For example, the U.S. Chamber of Commerce, the nation’s largest business lobby, told reporters it plans to sue over the rule, claiming the FTC is not authorized to make this rule, that non-competes are not categorically unfair, and the rule is arbitrary. The Chamber’s thoughts were echoed by the opposing Republican FTC voters, who cited concerns about the FTC’s authority (as compared to the merits of such a rule).

While employers’ protectable interests are often a concern, it is important to note that this rule does not ban non-disclosure and confidentiality agreements.

“…it is an unfair method of competition – and therefore a violation of Section 5 of the FTC Act – for employers to enter into noncompetes with workers after the effective date.”
© 2024 BARNES & THORNBURG LLP
by: Christopher Rubey of Barnes & Thornburg LLP
For more news on FTC’s noncompete ban, visit the NLR Labor & Employment section.

Final Rule Raises Salary Threshold to $58,656 for Employee Overtime Exemptions

The U.S. Department of Labor (DOL) has released a final rule that increases the salary threshold for the white collar overtime exemptions from the current $35,568 yearly minimum to $43,888 on July 1, 2024, and then to $58,656 on January 1, 2025. This means that, beginning January 1, 2025, most employees making less than $58,656 must receive overtime pay—time and a half their regular hourly rate—for any time worked more than 40 hours in one workweek. The changes also raise the salary requirement for what is known as the “highly compensated individual exemption” from the current $107,432 per year to $132,964 on July 1, 2024, and then to $151,164 on January 1, 2025. Notably, the DOL final rule requires automatic updates to the salary threshold every three years.

The DOL initially proposed to raise the overtime exemption to $55,068 and the salary requirement for the “highly compensated individual exemption” to $143,988. The final rule modifies those numbers and now involves incremental increases in a two-step process.

The DOL estimates that this impacts almost 4 million workers who are currently salaried. Employers must face the decision to either increase salaries for many exempt workers to the proposed minimum of $43,888 by July 1, 2024 and then $58,656 by January 1, 2025, or convert those exempt employees falling under the minimum salary to non-exempt hourly workers.

This rule will likely be challenged in the courts. However, it is uncertain whether these challenges will be successful. Therefore, businesses should take steps now to prepare:

  1. Review current exempt employees who earn between $35,568 and $55,656 per year. You can track employees’ actual hours worked now to learn the potential impact of converting them to overtime pay.
  2. Review current compliance. Although the proposed rule changes the salary threshold but not the other factors for an employee to be eligible for the “white collar” federal overtime exemption, the rule may cause employees to scrutinize their exempt classification. Employers should ensure that their exempt employees meet the three exception requirements: (1) paid on a salary basis; (2) paid at least the designated minimum salary; and (3) perform certain duties (which vary based on the exemption.)
  3. Plan to give advance notice to employees and provide training to managers and those workers impacted. If converted to non-exempt status, employees will need to be trained in record keeping requirements, timekeeping procedures, overtime approval policies, and other specifics that may vary from business to business.
© 2007-2024 Hill Ward Henderson, All Rights Reserved
by: Carmen M. Cato, S. Gordon Hill, Jeffrey J. Wilcox of Hill Ward Henderson
For more news on the DOL’s Overtime Salary Threshold, visit the NLR Labor & Employment section.

Pregnant Workers Fairness Act Final Regulations Released

The Equal Employment Opportunity Commission (EEOC) released the text of the final regulations and interpretative guidance implementing the Pregnant Workers Fairness Act (PWFA) on April 15, 2024. The final regulations are expected to be formally published in the April 19, 2024, Federal Register and will be effective 60 days later.

The EEOC received more than 100,000 public comments, including comments from Jackson Lewis, in response to the Commission’s notice of the proposed regulations issued on Aug. 11, 2023. Although largely unchanged from the proposed regulations, the final regulations provide important clarifications and insights into how the EEOC will enforce the law. Discussed below are some key points employers need to know about the final regulations.

Key PWFA Requirements

The PWFA, which went into effect on June 27, 2023, requires employers with at least 15 employees and other covered entities to provide reasonable accommodations to a qualified employee’s or applicant’s known limitations related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions, unless the accommodation will cause undue hardship on the operation of the employer’s business.

Qualified Employee

Under the PWFA, an employee has two ways to establish they are a “qualified employee”:

  1. Like under the Americans With Disabilities Act (ADA), “an employee or applicant who, with or without reasonable accommodation, can perform the essential functions of the employment position” is qualified.
  2. If an employee (or applicant) cannot perform all essential job functions even with reasonable accommodation, the employee can be qualified for accommodations under the PWFA if: (a) the inability to perform an essential job function is for a temporary period; (b) the essential job function(s) could be performed in the near future; and (c) the inability to perform the essential function(s) can be reasonably accommodated. The Act, however, does not define “temporary” or “in the near future.” Several commentors raised concerns about the EEOC’s definition of these terms in the proposed regulations.

Like the proposed regulations, the final regulations state that “temporary” means “lasting for a limited time, not permanent, and may extend beyond ‘in the near future.’” Unlike the proposed regulations, however, the final regulations state that assessing whether all essential job functions can be performed in the near future depends on the circumstances:

  • For a current pregnancy, “in the near future” is generally defined as 40 weeks from the start of the temporary suspension of an essential function.
  • For conditions other than a current pregnancy, “in the near future” is not defined as any particular length of time. However, the preamble to the final regulations explains that an employee who needs indefinite leave cannot perform essential job functions “in the near future.”

The final regulations explain that employers should consider whether an employee will be able to perform the essential functions “in the near future” each time an employee asks for an accommodation that requires suspension of an essential job function.

Ultimately, whether an employee is “qualified” involves a fact-sensitive evaluation whether the temporary suspension of essential job functions can be reasonably accommodated by the employer. This is significantly different from the ADA reasonable accommodation obligation and may involve, as the final regulations state, removing essential job functions and other arrangements including, but not limited to, requiring the employee perform the remaining job functions and other functions assigned by the employer, temporarily transferring the employee to another job or assigning the employee to light or modified duty, or allowing the employee to participate in an employer’s light or modified duty program.

Accommodations Only Required for Individual With Limitation

The EEOC explains that the regulations do not require employers to provide accommodations to an employee when an employee’s partner, spouse, or family member — not the employee themselves — has a physical or mental condition related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions. For clarity, the EEOC revised the final regulations’ definition of “limited” to state the limitation must be the specific employee.

Known Limitations

Employers are only obligated under the PWFA to accommodate an individual’s “known limitation.”

A “limitation” is defined as a “physical or mental condition related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions, of the specific employee in question.” The condition may be “modest, minor, and/or episodic, and does not need to meet the definition of “disability” under the ADA.

It becomes “known” to the employer when the employee or the employee’s representative has communicated the limitation to the employer. An employee’s representative may include a family member, friend, healthcare provider, union representative, or other representative.

The limitation may be communicated to a supervisor, a manager, someone who has supervisory authority for the employee or who regularly directs the employee’s tasks (or the equivalent in the case of an applicant), human resources personnel, or other appropriate official or by following the steps in the employer’s policy to request an accommodation.

This communication need not be in any specific format and may also be oral.

Pregnancy, Childbirth, Related Medical Conditions

Although the EEOC acknowledged receiving many comments on the scope of the proposed definition of “pregnancy, childbirth or related medical conditions,” it made no substantive changes to the definition in the final regulations.

“Pregnancy” and “childbirth” are still defined as including current pregnancy, past pregnancy, potential or intended pregnancy (which can include infertility, fertility treatments and the use of contraception), labor, and childbirth (including vaginal and cesarean delivery).

The term “related medical conditions” continues to be defined as conditions that are “related to, are affected by, or arise out of pregnancy or childbirth.” The regulations provide the following non-exhaustive list of examples: termination of pregnancy, including by miscarriage, stillbirth, or abortion; lactation and conditions related to lactation; menstruation; postpartum depression, anxiety or psychosis; vaginal bleeding; preeclampsia; pelvic prolapse; preterm labor; ectopic pregnancy; gestational diabetes; cesarean or perineal wound infection; maternal cardiometabolic disease; endometriosis; changes in hormone levels; and many other conditions.

The final regulations also reference related medical conditions that are not unique to pregnancy or childbirth, such as chronic migraine headaches, nausea or vomiting, high blood pressure, incontinence, carpal tunnel syndrome, and many other medical conditions. These conditions are covered by the PWFA only if the condition relates to pregnancy or childbirth or are exacerbated by pregnancy or childbirth, although the ADA or other civil rights statutes may apply.

Documentation

The final PWFA regulations continue to provide for a “reasonableness” standard in evaluating the circumstances under which an employer may request documentation from an employee. The final regulations, however, modify the definition of “reasonable documentation.” An employer may only request the “minimum documentation” necessary to confirm the employee has a physical or mental condition related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions (a limitation) and describe the adjustment or change at work due to the limitation.

In addition to stating when an employer can ask for documentation, the PWFA regulations add a paragraph regarding an employee’s self-confirmation of their pregnancy status. It provides that an employer must accept as sufficient an employee’s self-confirmation when: (1) the pregnancy is obvious; or (2) an employee seeks one of the “predictable assessment” accommodation requests set forth in the regulations (discussed below).

The final PWFA regulations make clear the circumstances where it is not reasonable to seek supporting documentation. These circumstances include when: (1) the limitation and adjustment or change needed is obvious and the employee provides self-confirmation; (2) the employer has sufficient information to determine whether the employee has a qualifying limitation and needs an adjustment or change due to the limitation; (3) when the employee is pregnant a “predictable assessment”; (4) the reasonable accommodation relates to a time and/or place to pump or to nurse during work hours, and the employee provides self-confirmation; or (5) the requested accommodation is available to employees without known limitations under the PWFA pursuant to a policy or practice without submitting supporting documentation.

Importantly, the same prohibitions on disability-related inquiries and medical examinations as well as the protection of medical information enforced under the ADA apply with equal force to documentation collected under the PWFA. Employers should ensure they continue to limit inquiries to only those that are job-related and consistent with business necessity. Employers should also treat all documentation relating to a PWFA accommodation request like they treat ADA documentation — maintain it confidentially and separate from an employee’s personnel file.

Reasonable Accommodations

The PFWA requires employers to provide reasonable accommodations, which the final regulations define to be generally consistently with the ADA except for temporarily excusing or eliminating the performance of an essential job function. Otherwise, the rule provides that a reasonable accommodation is a modification or adjustment that is “reasonable on its face, i.e., ordinarily or in the run of cases” if it appears to be “feasible” or “plausible.” An accommodation also must be effective in meeting the qualified employee’s needs to remove a work-related barrier and provide an employee with equal employment opportunity to benefit from all privileges of employment.

The final regulations include examples of requests that may be reasonable. These include schedule changes due to morning sickness or to treat medical issues following delivery, adjustments to accommodate restrictions for lifting or requests for light duty, time and/or space to pump or nurse during work hours, or time off to recover from childbirth.

Lactation Accommodations

The EEOC’s final regulations require reasonable accommodation for lactation beyond what may be required under the Providing Urgent Maternal Protection for Nursing Mothers Act (PUMP Act). The PUMP Act generally requires reasonable break time and space shielded from view and free from intrusion for a nursing mother to express breast milk. The final PWFA regulations provide a non-exhaustive list of examples of accommodations relating to lactation, including space for pumping that is in reasonable proximity to a sink, running water, and refrigeration for storing milk.

The final regulations add nursing during working hours (as distinct from pumping) to the list of potentially reasonable accommodations. In the comments explaining this addition, the EEOC cautioned that accommodations for nursing mothers during work hours address situations where the employee and child are in close proximity in the normal course of business, such as where the employee works from home or where the employer offers on-site daycare. The EEOC stated this is not intended to create a right to proximity to nurse because of an employee’s preference.

Predictable Assessments

Like the proposed regulations, the final regulations recognize four “predictable assessments” that will not impose an undue hardship in “virtually all cases”:

  1. Allowing an employee to carry or keep water near to enable them to drink;
  2. Permitting an employee to take additional restroom breaks as needed;
  3. Allowing an employee whose work requires standing to sit and whose work requires sitting to stand as needed; and
  4. Allowing an employee to take breaks to eat and drink as needed.

Despite stating the predictable assessments above will not “in virtually all cases” impose an undue hardship, the EEOC clarified this does not mean such requests are reasonable per se. The EEOC recognized that in certain industries, these predictable assessments may cause an undue hardship. Accordingly, employers may still conduct an individualized assessment of a predictable assessment accommodation request. However, the final regulations make clear that any such individualized assessment should be particularly simple and straightforward.

Many individuals and organizations that submitted comments on the proposed regulations suggested the addition of other types of predictable assessment accommodations, including dress code modifications, minor workstation modifications, proximity to a restroom, permitting eating and drinking at a workstation, rest breaks, and personal protective equipment. Although noting agreement with the commenters and stating that employers should be able to provide such requests with “little difficulty,” the EEOC declined to expand the list of predictable assessments beyond the four originally listed that in “virtually all cases” will be considered reasonable and will not pose an undue hardship. In response to comments objecting to predictable assessments based on different challenges by industry, the EEOC guidance recognizes that an employer in certain industries may assert an accommodation request otherwise deemed to be a predictable assessment causes the employer an undue hardship and may deny the request.

Undue Hardship

The EEOC adopted the same standard for undue hardship in the final regulations as was in the proposed regulations. When an employee can perform all their essential job functions, the EEOC stated that undue hardship has the same meaning as under the ADA and generally means significant difficulty or expense for the employer’s operation. If an employee cannot perform all essential functions and the accommodation is temporary suspension of an essential job function, the employer needs to consider the ADA definition of undue hardship and the following relevant factors: (1) the length of time the employee or applicant will be unable to perform the essential function(s); (2) whether there is work for the employee to accomplish by allowing the employee to perform all the other functions of the job, transferring the employee to a different position, or otherwise; (3) the nature of the essential function, including its frequency; (4) whether the covered entity has temporarily suspended the performance of essential job functions for other employees in similar positions; (5) whether there are other employees, temporary employees, or third parties who can perform or be temporarily hired to perform the essential function(s); and (6) whether the essential function(s) can be postponed or remain unperformed for any length of time and for how long.

EEOC Interpretative Guidance

The EEOC’s final regulations include an appendix entitled “Appendix A to Part 1636—Interpretative Guidance on the Pregnant Workers Fairness Act” (Interpretative Guidance). The Interpretative Guidance, which becomes part of the final regulations, has the same force and effect as the final regulations.

The Interpretative Guidance addresses the major provisions of the PWFA and its regulations and explains the main concepts pertaining to an employer’s legal requirements under the PWFA to make reasonable accommodations for known limitations (physical or mental conditions related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions). It represents the EEOC’s interpretation of the PWFA and, as stated in comments to the final regulations, the EEOC will be guided by the Interpretive Guidance when enforcing the PWFA. The Interpretative Guidance includes many examples and other practical guidance illustrating common workplace scenarios and how the PWFA applies.

Remedies, Enforcement

The final regulations’ remedies and enforcement are the same as proposed. Remedies under the PWFA mirror those under Title VII of the Civil Rights Act and include injunctive and other equitable relief, compensatory and punitive damages, and attorney’s fees. Employers that demonstrate good faith efforts to work with employees to identify and make reasonable accommodations have an affirmative defense to money damages.

PWFA’s Relationship to Other Federal, State, Local Laws

The final regulations provide that the PWFA does not invalidate or limit the powers, remedies, or procedures available under any federal, state, or local law that provides greater or equal protection for individuals affected by pregnancy, childbirth, or related medical conditions. About 40 states and cities have laws protecting employees and applicants from discrimination due to pregnancy, childbirth, and related medical conditions. Accordingly, employers should evaluate whether state and/or local law may provide greater rights and obligations than the PWFA. To the extent such laws provide greater obligations, the PWFA final regulations require employers to comply with both the PWFA and analogous state and local law.

Jackson Lewis P.C. © 2024
For more news on the PWFA, visit the NLR Labor & Employment section.

Fee Hikes Give U.S. Employers Chance to Rethink Immigration Strategies

The cost of running an immigration program at a U.S. company just went up — a lot.

On Jan. 31, U.S. Citizenship and Immigration Services published a final regulation to raise immigration filing fees — and high-skilled categories saw some of the biggest increases. On April 1, the fee for an H-1B petition increased from $460 to $780 (70%), and the fee for an L-1 intracompany transfer petition increased from $460 to $1,385 (201%). All of that is before a new $600 Asylum Program Fee ($300 for small employers) is added on for each employment-based nonimmigrant or immigrant filing. Analysis from the BAL Government Strategies team shows that a typical small- or medium-sized company may see the amount they spend on filing fees more than double.

None of this is good news.

At the same time, the fee increases present an opportunity for companies to take stock of their immigration programs and reassess whether they are doing everything they can to take advantage of policy improvements that the Biden administration has made.

The fee increases are the first since 2016, and USCIS has said it will put the additional revenue to good use — not only by helping them meet the challenge of expanded humanitarian programs but also by improving processing times and reducing backlogs for employment-based filings. While the business community was clear that it would have liked to see USCIS implement additional efficiencies before raising fees, the administration has shown good faith by working to streamline programs with its current funding level. Consider:

  • Improvements to the H-1B program: Just days after it published the regulation to raise fees, USCIS published a separate regulation to overhaul the H-1B registration and selection process. The big change is a switch from a petitioner- to a beneficiary-centric lottery, so that each H-1B beneficiary may be selected only once, no matter how many registrations are submitted on his or her behalf. This change is designed to eliminate incentives for bad actors to submit multiple H-1B registrations for the same individual — and has the potential to reduce the overall number of registrations and boost the H-1B selection rate. The change enjoys broad support in the business community. So do the introduction of online H-1B filings and a new pilot program that allows some H-1B holders to renew their visas in the U.S. without going abroad.
  • Extended employment authorization: In September 2023, USCIS increased the maximum validity of Employment Authorization Documents (along with Advance Parole travel documents) to five years for employees with pending green card applications. This change did not draw as much attention as the H-1B overhaul but has proved to be a boon to employers. Previously, green card applicants had to renew their employment authorization every two years. The longer validity saves not only time and money but also adds predictability. Improved EAD processing times are an additional benefit.
  • Flexibility in the green card process: With the labor certification process (PERM) becoming increasingly difficult, employers continue to turn toward national interest waivers as a green card strategy. This trend is due in part to the increased difficulty of the PERM process when employers have had layoffs. The administration published new guidance on national interest waivers for EB-2 visas in January 2022 and made EB-2 visas a priority in an executive order on intelligence published last fall. The Department of Labor has also asked for public input on whether to revise its list of Schedule A job classifications that do not require labor certification. This list has not been updated since 2004.
  • Improved visa processing abroad: The U.S. State Department issued more than 10.4 million nonimmigrant visas in the last fiscal year. This figure was nearly a record and the highest total since 2015. It also highlights a marked turnaround in visa processing efficiency at U.S. embassies in consulates following years of reduced staffing and delayed wait times. State Department fees also went up last spring. And while the State Department and USCIS are different agencies with different challenges, the success in improving visa processing abroad is consistent with the Biden administration’s broader overall efforts to improve immigration services.

Understandably, we have heard plenty at BAL from employers frustrated with how dramatically fees increased. What we have not heard, however, is that employers plan on dramatically cutting back their immigration programs. This is good news — and not only because it means companies will continue to recruit top workers to help keep them competitive.

Despite higher fees, there is ample evidence that it is a good idea to invest in foreign workers now, at a time of generally favorable policies. Take the H-1B program as one example. The H-1B registration fee has increased from $10 to $215 for next year’s cap registration, which gave employers an incentive to put eligible employees in the lottery this year if they were able to do so. On top of that, for beneficiaries that were not selected, employers have more favorable options for H-1B alternatives now than they previously did. The administration has added new qualifying fields of study to its STEM Designated Degree Program List, making more recent graduates eligible for extended Optional Practical Training. Officials also provided clarifying guidance on O-1 “extraordinary ability” visa criteria, making this category an increasingly common option.

None of the administration’s immigration programs are ensured to continue under future administrations. In the current political environment, there is no telling how long they will last.

Donald Trump has emerged as the Republican Party’s presumptive nominee for president. Whatever you think of Trump’s politics, it is plainly true that when he was in office, it was harder to recruit and retain high-skilled foreign workers. H-1B denial rates skyrocketed and processing backlogs ballooned at understaffed agencies. COVID-19 only made the problems worse.

Nobody knows what Trump may do if he wins this year’s election, but it certainly seems unlikely he would decrease immigration fees. Employers could be stuck with higher rates for reduced services.

The adage “never let a crisis go to waste” is instructive as employers face higher costs and uncertainty about the future of favorable immigration policies. While no one enjoys paying higher fees, employers should review their immigration strategies to take advantage of easier processes now before it’s too late.

©2024 Berry Appleman & Leiden. All Rights Reserved.
For more news on Employment Immigration Programs, visit the NLR Immigration section.

Best Practices for Associate Compensation

Welcome back to our in-depth exploration of compensation within law firms. In our previous post , we emphasized the significance of establishing a robust compensation system to attract and retain top talent and keep them motivated. In this post, we’ll discuss the crucial components needed to make an effective compensation plan for associates within the firm.

Compensating associates is a multifaceted task that law firms tackle annually to attract and maintain a talented workforce. Unfortunately, numerous small to mid-sized firms lack a robust structure that anticipates market trends and internal changes, and they also often need a simplified process for determining raises and bonuses.

Key Considerations for Developing Compensation Plans for Associates:

Associate compensation programs should incorporate the following elements:

  • Market Competitiveness: How does the firm’s associate compensation compare with market standards and rival firms?
  • Progression: Does the firm have a consistent and progressive structure for raises and bonuses that aligns with its associates’ experience and performance progress?
  • Incentive Alignment: Does the firm incentivize behaviors aligned with its vision and priorities?
  • Transparency: Does the firm clearly communicate with associates about their earning potential over time and at specific experience and performance levels?
  • Feedback: Are associates given enough performance feedback to understand the relationship between their salaries, raises, bonuses, and performance?

Capacity and Performance Expectations

Establishing a compensation structure begins with assessing attorneys’ current and future economic and qualitative potential. Firms should project the expected performance and contributions over the first eight to ten years of an attorney’s career in the firm.

  • Production Capacity – How much work will the attorney handle, and what is the value of that work? Production metrics may include billable hours or caseload, expected billings and collections, and, by extension, rates and realization.
  • Qualitative Performance – Which skills does the attorney need to succeed in the position/ to create value? Consider legal skills, case management, business development contributions, compliance/ interpersonal skills, recruiting support, etc.
  • Profitability – How much economic value should the attorney create beyond their cost? (Expected profit or profit margin)

The qualitative increases in value and objective contributions to revenue and profit indicated in the table below provide an example of the most common factors. Contributions should be considered in the context of increasing long-term value and offering short-term profits.

 

INCREASES IN VALUEInvestment_Icon

Profitability_icon-1CONTRIBUTIONS TO PROFIT
  Quality of professional work Personal Productivity
   Work ethic

(consistency of quality and quantity)

 Profitability of others

(supervision and training)
  Client relations and service Originations
  Personal development and accountability Recruiting profitable lawyers
   Business development contributions

(networking, publishing, speaking, etc.)

 Business hygiene

(timekeeping, billing, collections)
  Cultural support
  Firm building

(recruiting, training, process development, etc.)
  Adding to the reputation of the firm

The table below indicates an example of expectations by experience level.

PERFORMANCE EXPECTATIONS

KEY

  Consistent 

  Approaching consistent 

  Optional

 Not expected at the experience level 

 

ECONOMIC FACTORS

EXPERIENCE (YR)

Productivity

Realization

Training Supervision

 Profit Threshold

Billing Management

 Origination

1

2

3

4

5

6

7

8

9

10

 

A firm may combine all economic scores and consider the aggregate result as a qualitative factor. As long as the selected system is consistently applied, room exists for customization.

 

QUALITATIVE FACTORS – WEALTH CREATION

EXPERIENCE (YR)

Work Ethic

Work Quality

Bar, Professional Civic

Content Publishing Speaking 

Business Development Competence

Recruiting Contributions

Client Relations and Service

Pro Bono

1

2

3

4

5

6

7

8

9

10

 

Designing a rewarding compensation strategy is essential for maximizing the value from your law firm’s legal team. This involves careful deliberation over economic and qualitative criteria. Balancing these factors and customizing your approach enables your firm to attract and retain top lawyers while nurturing a consistent organizational culture.

  1. Start by clearly defining the skill set that brings long-term value to your firm and reward attorneys accordingly to ensure retention of the most compatible talent.
  2. Employ strategies to recognize and financially reward lawyers who consistently excel in high-value areas such as work ethic, quality, and client service, thus motivating them to sustain their high performance.
  3. For firms with top lawyers nearing retirement, devise a compensation plan that encourages emerging talents to take on leadership roles, guaranteeing a smooth transition and enduring success.
  4. Recognize and remunerate specialized expertise appropriately, for instance, by providing incentives to skilled litigators in a trial-focused litigation firm.
  5. Acknowledge and reward qualitative achievements, like the publication of influential content, encouraging lawyers to align with the firm’s broader objectives.

It is also necessary to acknowledge the value of specialized expertise and reward it accordingly. For example, if trial experience is highly valued in your litigation firm, compensating successful litigators who excel in this area is an excellent strategy. Finally, recognizing qualitative accomplishments, such as publishing high-quality content, can motivate your lawyers to contribute to the firm’s mission.

A compensation strategy that considers both qualitative and economic performance is vital for motivating and retaining the best-fit individuals for your law firm. By extending recognition beyond mere base salary increments to contributions that exceed expectations, you uphold the fairness and prosperity of your organization.

Join us as we continue to explore compensation best practices for law firms. Stay tuned for upcoming articles that will provide in-depth insights and actionable guidance on creating compensation systems that not only draw in and retain top legal talent but also bolster the firm’s long-lasting prosperity and cultural ethos.

©2024 PerformLaw
For more news on Compensation Strategies for Law Firms, visit the NLR Law Office Management section.

Governor Signs Bill to Exempt Certain Businesses from Fast Food Minimum Wage

On March 26, 2024, Governor Newsom signed Assembly Bill (AB) 610, which amends the definition of “fast food restaurant” to exempt restaurants in airports, hotels, event centers, theme parks, museums, and certain other locations from the requirements set forth under the Fast Food Council requirements.

Last year, Newsom signed AB 1228, which repeals the FAST Recovery Act but establishes a modified version of the Fast Food Council (Council) until January 1, 2029. The bill also sets forth the minimum wage increases for fast food workers, with an increase to $20.00 effective April 1, 2024.

The bill includes an urgency clause which means it takes effect immediately. As such the exempted businesses will not need to comply with the minimum wage requirements past in 2023.

Jackson Lewis P.C. © 2024
For more news on Fast Food Minimum Wage Laws, visit the NLR Labor & Employment section.

News Alert: USCIS Fees Will Increase Starting Apr. 1, 2024

The U.S. Citizenship and Immigration Services (USCIS) and Department of Homeland Security (DHS) released their final rule on Jan. 31, 2024, adjusting the price for certain immigration and naturalization fees. Every two years, the USCIS conducts a fee review. In the most recent biennial review, they determined that the “fees do not recover the full cost of providing adjudication and naturalization services.” In tandem with USCIS, DHS adjusted their fee schedule to also recover costs and maintain their services.

The fee increase will be established on all benefit requests postmarked Apr. 1, 2024, and after.

What Are the Fees Used for and Are There Exceptions?

Benefit request fees make up the primary source of funding for USCIS services. The fees fund benefit requests for “refuges, asylum [seekers], and certain other applicants and petitioners.” Most of the fees adjusted in 2024 have not been increased since 2016, so they now reflect inflation costs from the past 8 years.

The USCIS hopes this increased revenue will help slash processing times and address application backlogs that were affected by increased application volume and the COVID-19 pandemic. However, achieving this will depend on staffing and continued volume of applications.

Acknowledging that some applicants will not be financially able to meet fee requirements, the USCIS determined that an applicant with “an annual gross household income at or below 125 percent of the Federal Poverty Guidelines” meets the requirements for a fee waiver. These household income numbers will continue to update along with the U.S. Department of Health and Human Services’ Federal Register. Applicants seeking a waiver will need to provide documentation of their income including:

  • Form 1040,
  • IRS Form W-2,
  • Pay stubs, or
  • Support/benefits statements or affidavits from organizations sending financial aid.

A USCIS Deputy Director has the authority to grant a fee exemption required by 8 CFR 106.2. According to USCIS Fee Schedule, to be granted a waiver, the Deputy Director “must determine that such action would be in the public interest, the action is consistent with the applicable law, and the exemption is related to one of the following:”

  • Asylees;
  • Refugees;
  • National security;
  • Emergencies or major disasters declared in accordance with 44 CFR part 206, subpart B;
  • An agreement between the U.S. government and another nation or nations; or
  • USCIS error.

USCIS Fee Increases

Please note that the above chart does not reflect all fee increases. For the full list of adjusted fees, please visit USCIS’s Filing Fee FAQs page with the entire breakdown.

Fee increases range from anywhere between $10 to ~$30,000 and affect individual, entrepreneurial, and employment related forms. For reference, the I-956F Application for Approval of an Investment in a Commercial Enterprise is increasing $29,900 while the USCIS Immigration Fee is increasing only $15. For some forms, especially those that consider biometric services, the fees are decreasing or are completely free.

For applicants who are still in the visa process and worried about the fee increase, getting in all materials PRIOR to Apr. 1, 2024, may ensure that the current fee is charged.

©2024 Norris McLaughlin P.A., All Rights Reserved
For more news on USCIS Fee Increases, visit the NLR Immigration section.

Dartmouth Basketball Players Vote to Be First College Athletes Represented by a Union

On March 5, 2024, players on the Dartmouth College men’s basketball team voted to unionize, making the group the first college sports team to do so in the United States. Dartmouth College has already filed an appeal with the National Labor Relations Board (NLRB), setting up a legal challenge that will have significant implications for the status of college athletes and the future of college sports in the United States.

Quick Hits

  • The Dartmouth men’s basketball team voted to unionize in what would be the first union to represent college athletes.
  • Dartmouth has filed an appeal with the NLRB that could determine whether college athletes are employees within the meaning of the NLRA.
  • The union vote could have significant implications for the future of college sports in the United States.

In a representation election overseen by the NLRB, the Dartmouth men’s basketball players reportedly voted 13-2 to be represented by the Service Employees International Union Local 560. The Trustees of Dartmouth College immediately filed a request for a review of the regional director’s decision and direction of election that had allowed the unprecedented election to proceed despite serious implications for college sports.

The election comes after an NLRB regional director in Boston, Massachusetts, ruled on February 5, 2024, that the men’s basketball players at Dartmouth—who compete in the National Collegiate Athletic Association (NCAA) Division I, the highest level of college athletics—are “employees” within the meaning of the National Labor Relations Act (NLRA) and have the right to a union election.

Dartmouth argued in its request for review that the players cannot be considered employees under the NLRA because they are amateur students who are provided with financial aid and academic resources, not compensation, and do not provide any service to the school.

Dartmouth, which is a private institution in New Hampshire and part of the all-private Ivy League collegiate athletic conference, called the regional director’s decision an “unprecedented, unwarranted, and unsupported departure” from applicable legal standards that creates a “new definition of ‘employee’” and “promises to have significant negative labor and public policy implications.”

College Athletes’ Employment Status

NLRB Region 1 Director Laura Sacks found that the Dartmouth men’s basketball players were employees in large part because the school “exercises significant control” over their participation on the team, including determining when players practice and play, review film, engage with alumni, and take part in other team-related activities. During travel, the school controls when and where the players travel, eat, and sleep, the regional director found.

Further, the regional director found that despite questions about the revenue generated, the players generate publicity for the school, and do so to receive various economic benefits, including equipment and apparel, tickets to games, lodging, meals, and other specialized academic and career development support.

The Dartmouth appeal tees up for the NLRB the issue of whether college athletes at private schools are employees after the NLRB punted on a similar issue in a 2015 case involving college football players at Northwestern University that left open the issue of whether college athletes at private universities may be considered employees under the NLRA.

In the Northwestern case, the full Board later declined to assert jurisdiction over the case, finding it “would not serve to promote stability in labor relations,” largely because the majority of schools that compete in college football at the highest level are public institutions not subject to the NLRA.

The regional director in Dartmouth reached her conclusion despite the significant differences in the economics of college basketball and football that distinguished the Dartmouth case from the Northwestern case, where the players received athletic scholarships in a sport—football—that generated more revenue. Further, unlike the highest level of college football, which is comprised mostly of public universities, Dartmouth is a member of a collegiate athletic conference made up entirely of private universities that do not provide athletic scholarships.

Looking Ahead

If the Board agrees that the Dartmouth basketball players are employees and allows the union election to stand, it could have a ripple effect, with college athletes at private universities across the country seeking to organize.

Yet the Dartmouth basketball players’ unionization vote is only the latest in a string of legal developments related to whether college athletes may be considered employees or parties entitled to receive compensation under various legal standards, including under the NLRA and Fair Labor Standards Act (FLSA). On February 23, 2023, the U.S. District Court for the Eastern District of Tennessee issued a preliminary injunction blocking the NCAA from enforcing new rules on athletes’ compensation derived from name, image, and likeness (NIL) rights—specifically, rules restricting the ability of so-called school “boosters” to negotiate with NCAA athletes during the recruiting and transfer processes.

© 2024, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
For more news on College Athletes Unionizing, visit the NLR Labor & Employment section.

DHS and DOJ Announce Joint Guidance on Electronic Form I-9 Processing

The Department of Homeland Security (DHS) and Department of Justice (DOJ) recently issued a fact sheet to guide employers on electronically completing, modifying, or retaining Form I-9. The joint guidance applies to employers using private sector commercial or proprietary I-9 software programs to complete Form I-9 or participate in E-Verify.

Requirements for Employers Using Electronic Form I-9 Software Programs

DHS permits completing Form I-9 electronically provided that the I-9 software complies with I-9 and E-Verify requirements. The DHS/DOJ fact sheet confirms that employers, rather than the software vendor, are responsible for ensuring compliance with these requirements. It provides the following key requirements and states that an I-9 software must:

  • Provide employees with access to the current acceptable version of Form I-9, I-9 instructions, and list of acceptable documents.
  • Allow employees to leave optional fields blank and accommodate employees with only one name.
  • Meet integrity, accuracy, security, and reliability requirements designed to prevent and detect unauthorized or accidental creation, alteration, or deletion of stored I-9s.
  • Comply with standards for electronic I-9 signatures.
  • Comply with general requirements applicable to I-9 documentation, retention, and audit trail requirements.
  • Ensure the electronic generation or storage of Form I-9 is inspected and monitored periodically.
  • Ensure the I-9 forms and all information fields on electronically retained I-9s are fully and readily accessible in the event of a government audit.

Specifically related to modifying and retaining Forms I-9 electronically, the fact sheet states that I-9 software must provide employees, employers, and preparers/ translators the option to make and record corrections to a previously completed I-9 form. Further, the software must uniquely identify each person who accesses, corrects, or changes an I-9 form. Modifications to stored I-9 forms must be properly annotated to include the date of access, the identity of the person making the change, and the nature of the change. Commercial or proprietary I-9 software may lack the functionality to comply with these guidelines regarding providing an audit trail and permitting corrections to completed I-9 records, so these are specific considerations employers should be aware of when assessing potential I-9 software for compliance.

Requirements for Employers Using Electronic Form I-9 Software Programs to Create E-Verify Cases

The DHS/DOJ fact sheet notes that employers who participate in E-Verify and access E-Verify through a software must:

  • Confirm that the software’s functionality allows employers to follow the requirements detailed in the E-Verify Memorandum of Understanding and DHS’s E-Verify guidance.
  • Refrain from creating new E-Verify cases due to corrections made to the previously completed I-9 if the employee received a prior “employment authorized” result. Depending on functionality, commercial or proprietary I-9 software may require completing a new I-9 instead of allowing a correction to the previously completed form.
  • Be able to delay creating E-Verify cases as instructed by E-Verify rules. For example, E-Verify instructs employers to postpone creating E-Verify cases for employees who have not yet received their Social Security numbers and for employees who show certain acceptable receipts for the Form I-9. The software’s functionality should permit employers to delay creating the E-Verify case in these scenarios.

Training for Employer Personnel Administering I-9 Software on Behalf of the Employer

The DHS/DOJ fact sheet also reminds employers to properly train personnel completing electronic Forms I-9 on the employer’s behalf. Key points include the following:

  • Employer personnel should be familiar with the employer’s procedures to complete Form I-9 or create an E-Verify case outside of the Form I-9 software program if, for example, the person completing the I-9 cannot use the I-9 software program or there is a software outage.
  • Employers should not pre-populate fields on electronic I-9 forms with employee information. An I-9 software may be part of the employer’s other HR-related systems and the system may initiate the I-9 verification process through impermissibility pre-populating the employee’s information on the electronic I-9.
  • The employer must not use auto-correct, use predictive text, or post-date an I-9 when completing an I-9 with an I-9 software.
  • The employer should not complete the I-9 on an employee’s behalf and must not change or update the employee’s citizenship or immigration status attestation. For corrections to Section 1, the process is the same as when completing a paper I-9 and changes or corrections to Section 1 must be made by the employee. The I-9 software must have the functionality to allow the employee to make corrections to a previously completed I-9 form.
  • The employer must not remove or add fields to Form I-9. An I-9 software that adds additional questions seeking information that is not requested by the I-9 form may violate this guidance.
  • Employers must permit preparers or translators to assist an employee in completing an electronic I-9.
  • Employers must permit employees to present any valid and acceptable documentation to establish identity and employment authorization, including acceptable receipts, and should not suggest specific documents for this purpose. Thus, an I-9 software should not notify the employer to, for example, request documentation to reverify an employee’s identity document or reverify a permanent resident card.
  • The fact sheet reminds employers to not impose unnecessary obstacles that make it more challenging for employees to start work or get paid, such as by requiring a Social Security number to onboard or by not paying an employee who can complete the Form I-9 but is still waiting for a Social Security number.

Given the significant penalties for non-compliance, employers should exercise thorough due diligence when evaluating I-9 software, considering compliance with DHS regulations alongside factors like cost, functionality, and interoperability with its other systems. Although government guidance has been minimal, the fact sheet provides some insight into the government’s stance on regulatory requirements for electronic I-9s and may be helpful to employers when selecting an I-9 software.

©2024 Greenberg Traurig, LLP. All rights reserved.
For more news on Electronic Form I-9 Processing, visit the NLR Labor & Employment section.

It’s Protected: NLRB Finds “Black Lives Matter” Insignia on Employee Uniform Constitutes Protected Activity Under Circumstances

The National Labor Relations Board (“NLRB”), in a 3-1 decision, held that an employee’s display on their work uniform of “BLM,” an acronym for Black Lives Matter, constituted protected concerted activity under Section 7 of the National Labor Relations Act (“Act”). Accordingly, the NLRB reversed an Administrative Law Judge (“ALJ”) decision, and found that the employer (Home Depot) violated Section 8(a)(1) of the Act by directing the employee to remove the BLM insignia because it violated the company’s uniform policy. The employee resigned instead of removing the insignia from their uniform.

Procedural History

In June 2022, an ALJ found that the employer did not violate the Act by requiring the employee to remove the BLM messaging, because the insignia lacked “an objective, and sufficiently direct, relationship to terms and conditions of employment.” The ALJ concluded that the BLM messaging was “primarily used, and generally understood, to address the unjustified killings of Black individuals by law enforcement and vigilantes … [and] while a matter of profound societal importance, is not directly relevant to the terms, conditions, or lot of Home Depot’s employees as employees.” (emphasis in original).

Further, the ALJ determined that the employee’s motivation for displaying the BLM message (i.e., their dissatisfaction with their treatment as employees) was not relevant. The petitioner sought review before the NLRB.

NLRB Finds Wearing BLM Insignia at Work Constitutes Protected Activity

On review, the NLRB concluded that the employee’s refusal to remove the BLM insignia was protected concerted activity under Section 7 of the Act because the activity was for “mutual aid or protection,” as it was a “logical outgrowth” of the employee’s and other employees’ complaints about race discrimination in the workplace that allegedly occurred over the preceding months.

According to the NLRB, an individual employee’s actions are a “logical outgrowth” of the concerns expressed by the group where “the record shows the existence of a group complaint,” even though “the employees acted individually and without coordination.” In this case, the fact that the group complaints post-dated the employee’s initial display of the BLM insignia was not dispositive. Instead, and contrary to the ALJ’s conclusion, the NLRB focused on whether the employee’s subsequent refusal to remove the BLM insignia was a “logical outgrowth” of the prior protected concerted activity.

Additionally, the NLRB found that no special circumstances existed, such that there was a sufficient justification for the company to preclude their employees from wearing such insignia. For instance, this was not a situation where display of the insignia might jeopardize employee safety, exacerbate employee dissention, or unreasonably interfere with the company’s public image. In this regard, the NLRB concluded that the company’s public image was not at issue because it encourages employees to customize their uniforms. Likewise, the NLRB held that the company failed to put forth evidence of any non-speculative imminent risks to employee safety from the public and/or any violent or disruptive acts or threats thereof by other employees connected to the BLM insignia.

The NLRB ordered the employer to, among other things, (1) cease and desist from prohibiting employees from taking part in “protected concerted activities,” such as displaying “Black Lives Matter” insignia on their uniform aprons; (2) reinstate the employee without prejudice and compensate him for lost back pay and any adverse tax consequences; and (3) post notice of the decision for 60 days at the store where the dispute arose. The company may still appeal the Board’s decision to a federal appeals court.

Significantly, the NLRB declined to adopt a broader objective advanced by the NLRB General Counsel that protesting civil rights issues on the job is “inherently concerted” activity that is protected by Section 7 of the Act. The fact-intensive reasoning behind the NLRB’s decision here reflects that the underlying circumstances in each situation will play a significant role in the legal outcome as to whether the conduct at issue is protected, and it is not advisable to adopt a broad, one-size fits all rule from this decision.

© 2024 Proskauer Rose LLP.
For more news on Protected Concerted Activity under the NLRA, visit the NLR Labor & Employment section.