Tag: Employment Law

IRS and Treasury Department Release Initial Guidance for Labor Requirements under Inflation Reduction Act

On November 30, 2022, the IRS and the Treasury Department published Notice 2022-61 (the Notice) in the Federal Register. The Notice provides guidance regarding the prevailing wage requirements (the Prevailing Wage Requirements) and the apprenticeship requirements (the Apprenticeship Requirements and, together with the Prevailing Wage Requirements, the Labor Requirements), which a taxpayer must satisfy to be eligible for increased amounts of the following clean energy tax credits under the Internal Revenue Code of 1986 (the Code), as amended by the Inflation Reduction Act of 2022 (the “IRA”):

  • the alternative fuel vehicle refueling property credit under Section 30C of the Code (the Vehicle Refueling PC);
  • the production tax credit under section 45 of the Code (the PTC);
  • the energy efficiency home credit under section 45L of the Code;
  • the carbon sequestration tax credit under section 45Q of the Code (the Section 45Q Credit);
  • the nuclear power production tax credit under section 45U of the Code;
  • the hydrogen production tax credit under section 45V of the Code (the Hydrogen PTC);
  • the clean electricity production tax credit under section 45Y of the Code (the Clean Electricity PTC);
  • the clean fuel production tax credit under section 45Z of the Code;
  • the investment tax credit under section 48 of the Code (the ITC);
  • the advanced energy project tax credit under section 48C of the Code; and
  • the clean electricity production tax credit under section 48E of the Code (the Clean Electricity ITC).[1]

We discussed the IRA, including the Labor Requirements, in a previous update.

Start of Sixty-Day Period

The IRA provides an exemption from the Labor Requirements (the Exemption) for projects and facilities otherwise eligible for the Vehicle Refueling PC, the PTC, the Section 45Q Credit, the Hydrogen PTC, the Clean Electricity PTC, the ITC, and the Clean Electricity ITC, in each case, that begin construction before the sixtieth (60th) day after guidance is released with respect to the Labor Requirements.[2] The Notice provides that it serves as the published guidance that begins such sixty (60)-day period for purposes of the Exemption.

The version of the Notice that was published in the Federal Register on November 30, 2022, provides that the sixtieth (60th) day after the date of publication is January 30, 2023. January 30, 2023, however, is the sixty-first (61st) day after November 30, 2023; January 29, 2023 is the sixtieth (60th) day. Currently, it is unclear whether the Notice erroneously designated January 30, 2023 as the sixtieth (60th) day or whether the additional day to begin construction and qualify for the Exemption was intended, possibly because January 29, 2023 falls on a Sunday. In any event, unless and until clarification is provided, we expect conservative taxpayers planning to rely on the Exemption to start construction on creditable projects and facilities before January 29, 2023, rather than before January 30, 2023.[3]

Beginning Construction for Purposes of the Exemption

The Notice describes the requirements for a project or facility to be deemed to begin construction for purposes of the Exemption. As was widely expected, for purposes of the PTC, the ITC, and the Section 45Q Credit, the Notice adopts the requirements for beginning of construction contained in previous IRS notices (the Prior Notices).[4] Under the Prior Notices, construction of a project or facility is deemed to begin when physical work of a significant nature begins (the Physical Work Test) or, under a safe harbor, when five percent or more of the total cost of the project or facility is incurred under the principles of section 461 of the Code (the Five Percent Safe Harbor). In addition, in order for a project or facility to be deemed to begin construction in a particular year, the taxpayer must demonstrate either continuous construction or continuous efforts until the project or facility is completed (the Continuity Requirement). Under a safe harbor contained in the Prior Notices, projects and facilities that are placed in service no more than four calendar years after the calendar year during which construction of the project or facility began generally are deemed to satisfy the continuous construction or continuous efforts requirement (the Continuity Safe Harbor).[5]

In the case of a project or facility otherwise eligible for the newly-created Vehicle Refueling PC, Hydrogen PTC, Clean Electricity PTC, or Clean Electricity ITC, the Notice provides that:

  • “principles similar to those under Notice 2013-29” will apply for purposes of determining whether the project or facility satisfies the Physical Work Test or the Five Percent Safe Harbor, and a taxpayer satisfying either test will be deemed to have begun construction on the project or facility;
  • “principles similar to those under” the Prior Notices will apply for purposes of determining whether the project or facility satisfies the Continuity Requirement; and
  • “principles similar to those provided under section 3 Notice 2016-31” will apply for purposes of determining whether the project or facility satisfies the Continuity Safe Harbor, with the Notice specifying that the safe harbor period is four (4) years.

Taxpayers and commentators have observed that the existing guidance in the Prior Notices is not, in all cases, a good fit for the newly-created clean energy tax credits. Additional guidance will likely be required to ensure that the principles of the Prior Notices may be applied efficiently and seamlessly to the newly-created tax credits.

Prevailing Wage Determinations

The Notice provides that, for purposes of the Prevailing Wage Requirements, prevailing wages will vary by the geographic area of the project or facility, the type of construction to be performed, and the classifications of the labor to be performed with respect to the construction, alteration, or repair work. Taxpayers may rely on wage determinations published by the Secretary of Labor on www.sam.gov to establish the relevant prevailing wages for a project or facility. If, however, the Secretary of Labor has not published a prevailing wage determination for a particular geographic area or type of project or facility on www.sam.gov, or one or more types of labor classifications that will be performed on the project or facility is not listed, the Notice provides that the taxpayer must contact the Department of Labor (the “DOL”) Wage and Hour Division via email requesting a wage determination based on various facts and circumstances, including the location of and the type of construction and labor to be performed on the project or facility in question. After review, the DOL will notify the taxpayer as to the labor classifications and wage rates to be used for the geographic area in which the facility is located and the relevant types of work.

Taxpayers and commentators have observed that the Notice provides no insight as to the DOL’s decision-making process. For instance, the Notice does not describe the criteria that the DOL will use to make a prevailing wage determination; it does not offer any type of appeal process; and, it does not indicate the DOL’s anticipated response time to taxpayers. The lack of guidance on these topics has created significant uncertainty around the Prevailing Wage Requirements, particularly given that published wage determinations are lacking for many geographical areas.

Certain Defined Terms under the Prevailing Wage Requirements

The Notice provides definitions for certain key terms that are relevant to the Prevailing Wage Requirements, including:

  • Employ. A taxpayer, contractor, or subcontractor is considered to “employ” an individual if the individual performs services for the taxpayer, contractor, or subcontractor in exchange for remuneration. Individuals otherwise classified as independent contractors for federal income tax purposes are deemed to be employed for this purpose and therefore their compensation generally would be subject to the Prevailing Wage Requirements.
  • Wages. The term “wages” includes both hourly wages and bona fide fringe benefits.
  • Construction, Alteration, or Repair. The term “construction, alteration, or repair” means all types of work (including altering, remodeling, installing, painting, decorating, and manufacturing) done on a particular project or facility. Based on this definition, it appears that off-site work, including off-site work used to satisfy the Physical Work Test or the Five Percent Safe Harbor, should not constitute “construction, alteration, or repair” and therefore should not be subject to the Prevailing Wage Requirements. It is not clear, however, whether “construction, alteration, or repair” should be read to include routine operation and maintenance (“O&M”) work on a project or facility.

The Good Faith Exception to the Apprenticeship Requirements

The IRA provides an exception to the Apprenticeship Requirements for taxpayers that make good faith attempts to satisfy the Apprenticeship Requirements but fail to do so due to certain circumstances outside of their control (the Good Faith Exception). The Notice provides that, for purposes of the Good Faith Exception, a taxpayer will be considered to have made a good faith effort to request qualified apprentices if the taxpayer (1) requests qualified apprentices from a registered apprenticeship program in accordance with usual and customary business practices for registered apprenticeship programs in a particular industry and (2) maintains sufficient books and records establishing the taxpayer’s request of qualified apprentices from a registered apprenticeship program and the program’s denial of the request or lack of response to the request, as applicable.

Certain Defined Terms under the Apprenticeship Requirements

The Notice provides definitions for certain key terms that are relevant to the Apprenticeship Requirements, including:

  • Employ. The Notice provides the same definition for “employ” as under the Prevailing Wage Requirements.
  • Journeyworker. The term “journeyworker” means a worker who has attained a level of skill, abilities, and competencies recognized within an industry as having mastered the skills and competencies required for the relevant occupation.
  • Apprentice-to-Journeyworker Ratio. The term “apprentice-to-journeyworker ratio” means a numeric ratio of apprentices to journeyworkers consistent with proper supervision, training, safety, and continuity of employment, and applicable provisions in collective bargaining agreements, except where the ratios are expressly prohibited by the collective bargaining agreements.
  • Construction, Alteration, or Repair. The Notice provides the same definition for “construction, alteration, or repair” as under the Apprenticeship Requirements. This suggests that, like the Prevailing Wage Requirements, off-site work is not subject to the Apprenticeship Requirements. In addition, the same open question regarding O&M work under the Prevailing Wage Requirements applies for purposes of the Apprenticeship Requirements as well.

Record-Keeping Requirements

The Notice requires that taxpayers maintain and preserve sufficient records in accordance with the general recordkeeping requirements under section 6001 of the Code and the accompanying Treasury Regulations to establish that the Prevailing Wage Requirements and Apprenticeship Requirements have been satisfied. This includes books of account or records for work performed by contractors or subcontractors of the taxpayer.

Other Relevant Resources

The DOL has published a series of Frequently Asked Questions with respect to the Labor Requirements on its website. In addition, the DOL has published additional resources with respect to the Apprenticeship Requirements, including Frequently Asked Questions, on its Apprenticeship USA platform. It is generally understood that, in the case of any conflict between the information on these websites and the information in the Notice, the Notice should control.

[1] The Labor Requirements also are applicable to the energy-efficient commercial buildings deduction under section 179D of the Code.

[2] The IRA provides a separate exemption from the Labor Requirements projects or facilities otherwise eligible for the ITC or the PTC with a maximum net output of less than one megawatt.

[3] Interestingly, the DOL online resources described below observe that projects and facilities that begin construction on or after January 29, 2023 are not eligible for the Exemption, which appears to recognize that January 29, 2023, and not January 30, 2023, is the sixtieth (60th) after publication of the Notice.

[4] Notice 2013-29, 2013-20 I.R.B. 1085; Notice 2013-60, 2013-44 I.R.B. 431; Notice 2014-46, 2014-36 I.R.B. 541; Notice 2015-25, 2015-13 I.R.B. 814; Notice 2016-31, 2016-23 I.R.B. 1025; Notice 2017-04, 2017-4 I.R.B. 541; Notice 2018-59, 2018-28 I.R.B. 196; Notice 2019-43, 2019-31 I.R.B. 487; Notice 2020-41, 2020-25 I.R.B. 954; Notice 2021-5, 2021-3 I.R.B. 479; and Notice 2021-41, 2021-29 I.R.B. 17.

[5] In response to procurement, construction, and similar delays attributable to the COVID-19 pandemic, the length of the safe harbor period was extended beyond four (4) years for projects or facilities for which construction began in 2016, 2017, 2018, 2019, or 2020, which we discussed in a previous update.

Article By Elizabeth L. McGinley, Steven J. Lorch, Don J. Lonczak, and Michael A. Recchia of Bracewell LLP

For more labor and employment legal news, click here to visit the National Law Review.

© 2022 Bracewell LLP

Mexico’s Minimum Wage Set to Increase on January 1, 2023

On December 1, 2022, Mexican President Andrés Manuel Lopez Obrador announced that, unanimously, the business and labor sectors, as well as the government, had agreed to increase the minimum wage by 20 percent for 2023, which will be applicable in the Free Zone of the Northern Border (Zona Libre de la Frontera Norte or ZLFN), as well as the wage applicable in the rest of the country. The increase will become official when it is published in the Official Gazette of the Federation (Diario Oficial de la Federación).

Before the increase was determined, the Mexican National Commission on Minimum Wages (Comisión Nacional de los Salarios Mínimos, or CONASAMI) applied an independent recovery amount (Monto Independiente de Recuperación or MIR) in accordance with the following:

  • MIR for the ZLFN: MXN $23.68
  • MIR for the rest of the country: MXN $15.72

On top of the MIR, the CONASAMI approved a 10 percent increase from the 2022 rate to the daily minimum wage applicable to the ZLFN and the rest of the country, resulting in MXN $312.41 (approximately USD $16.11) for the ZLFN and MXN $207.44 (approximately USD $10.69) for the rest of the country. The new rates would be effective as of January 1, 2023.

The MIR and the 10 percent increase—combined—would represent a 20 percent increase in the daily minimum wage rate which translates to more than MXN $30 per day.

Finally, Secretary of Labor Luisa Maria Alcalde stated that the above increases would directly benefit 6.4 million workers in Mexico.

Article By Pietro Straulino-Rodriguez, Nora M. Villalpando Badillo, and Ana Paula Delsol Espada of Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

For more labor and employment legal news, click here to visit the National Law Review.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

Congress Votes to Impose Bargaining Agreement to Avoid Nationwide Railroad Strike

Both the House and Senate have passed legislation under the Railway Labor Act to avoid a railroad strike by imposing the bargaining agreement brokered by President Joe Biden in September 2022.

The House already voted in favor of the legislation. (For details of the bill, see our article, President Biden Calls on Congress to Avoid Mass Railroad Strike.) With the Senate also voting to pass the main bill, by an 80-15 vote, the threat of a strike has been averted. The legislation moves to the president for his signature. Biden has indicated he will sign the bill.

While the House voted in favor of the separate, additional piece of legislation that would have added seven paid sick leave days annually for the rail workers, the Senate did not have enough votes to pass that bill. President Biden vowed in a separate statement to seek paid leave in the future not just for rail workers, but for all workers.

What was passed by Congress in its joint resolution was short and succinct. The three-page joint resolution stated that all tentative agreements entered into by the rail carriers and the unions were considered in effect as if they had been ratified. The exact terms of each collective bargaining agreement vary by union and were not part of the bill that was passed. This is a result of the special powers given to Congress under the Railway Labor Act.

All contracts contained generous wage increases: roughly 24 percent over four to five years with one extra day of leave. However, the other detailed terms will vary across the dozen national craft unions.

Article By Jonathan J. Spitz, Richard F. Vitarelli, James M. Stone, and James Verdi of Jackson Lewis P.C.

For for labor and employment legal news, click here to visit the National Law Review.

Jackson Lewis P.C. © 2022

Employment Tip of the Month – December 2022

Q:  As an employer, am I legally required to allow employees to bring marijuana to an office holiday party?

A:  No.  While adult recreational use of marijuana is now legal in 21 states and the District of Columbia, the use of marijuana remains illegal under federal law and employers with drug-free and smoke-free workplace policies can prohibit marijuana consumption in the workplace and during employer-sponsored events. Employers who wish to prohibit use of recreational marijuana at the office holiday party should remind employees of the policies and ensure that they understand the policies apply at all employer-sponsored events – even if the event is held after work hours and off company premises.

Laws surrounding the recreational use of marijuana differ from one state to another and evolve quickly.  Before taking adverse action against an employee for marijuana use, an employer should consult the specific laws governing their jurisdiction.

Article By Laura Stutz of Wilson Elser Moskowitz Edelman & Dicker LLP

For more labor and employment law legal news, click here to visit the National Law Review.

© 2022 Wilson Elser

U.S. Supreme Court Refuses Review of Case Involving Technical Issue With Plaintiff’s EEOC Charge

Refusing to weigh in on the impact of a plaintiff’s failure to verify her discrimination charge filed with the Equal Employment Opportunity Commission (EEOC), the U.S. Supreme Court lets stand the lower court’s conclusion that the plaintiff’s failure to verify her charge barred her from filing a lawsuit. Mosby v. City of Byron, No. 21-10377, 2022 U.S. App. LEXIS 10436 (11th Cir. Apr. 18, 2022), cert. denied, No. 22-283 (U.S. Nov. 7, 2022).

Background

Rachel Mosby served as the fire chief of Byron, Georgia, for 11 years. One month after she came out as transgender, the city fired her.

Mosby filed a charge of discrimination with the EEOC, alleging violations of Title VII of the Civil Rights Act and the Americans with Disabilities Act (ADA). Title VII states that charges filed “shall be in writing under oath or affirmation and shall contain such information and be in such form as the Commission requires.” 42 U.S.C. § 2000e-5. This process is called “verification.” The parties did not dispute that Mosby did not properly verify her charge.

The City of Byron submitted a position statement with the EEOC on the merits of Mosby’s claim, but it did not raise the fact that Mosby failed to verify her charge. Mosby never amended her charge to meet the verification requirement.

After receiving a “right to sue” letter from the EEOC, Mosby sued the City of Byron. Before answering Mosby’s complaint, the City of Byron moved to dismiss because Mosby failed to verify her charge, requiring dismissal as a matter of law. After converting the City’s motion to dismiss to a motion for summary judgment, the district court held the failure to verify the charge barred Mosby’s Title VII and ADA claims.

Jurisdictional or Procedural?

Whether EEOC’s charge filing requirements are prerequisite to filing a lawsuit is jurisdictional or procedural remains in dispute. While procedural requirements can be waived or cured, jurisdictional requirements cannot. In 2019, the Supreme Court provided guidance in Fort Bend City v. Davis, 139 S. Ct. 1843, in which it held that a charge’s lack of verification does not strip the federal courts of jurisdiction to consider in a subsequent federal lawsuit. Unlike a jurisdictional issue, the Court reasoned, the lack of verification can be waived or forfeited by the parties. Accordingly, the Court held that an employer forfeited the issue of verification when it failed to raise it promptly at the outset of litigation.

Eleventh Circuit’s Reasoning

In appealing the dismissal of her claims to the U.S. Court of Appeals for the Eleventh Circuit (which has jurisdiction over Alabama, Florida, and Georgia), Mosby argued that Fort Bend required a finding that the City of Byron waived its verification defense because it did not raise the defense in its position statement submitted with the EEOC. The Eleventh Circuit disagreed. In the Supreme Court decision, the Eleventh Circuit said, Fort Bend City did not raise the verification defense until four years and “an entire round of appeals all the way to the Supreme Court” had passed. By contrast, the City of Byron raised the defense in a pre-answer motion to dismiss before causing “a waste of adjudicatory resources.”

The Eleventh Circuit affirmed the lower court, holding that “a charge neither filed under oath or affirmation nor subsequently cured by amendment fails to satisfy the statutory requirement that an employee submit [her] charge to the Commission.” The Fifth Circuit reached a similar conclusion in 2021, making these the only two circuits that have addressed the issue. See Ernst v. Methodist Hosp. Sys., 1 F.4th 333.

Takeaway for Employers

An employer responding to a charge of discrimination filed with the EEOC should evaluate whether the claimant properly verified the charge. If not, preserve the defense by raising it as soon as practicable at the EEOC charge stage and in any ensuing litigation.

Article By Stephanie L. Adler-Paindiris and Stephanie E. Satterfield of Jackson Lewis P.C.

For more litigation and Supreme Court legal news, click here to visit the National Law Review.

Jackson Lewis P.C. © 2022

Upcoming Proposed Changes to DOL’s Independent Contractor and Overtime Rules

The Department of Labor’s Wage and Hour Division is expected to propose new rules on independent contractor classification and overtime entitlement requirements in the coming weeks.  The proposals would alter the qualifications for certain employees to receive overtime payments under the Fair Labor Standards Act when they work in excess of 40 hours in one week.

The Fair Labor Standards Act (“FLSA”) grants the Department of Labor authority regarding overtime eligibility under the statute.  Currently and among other considerations, employees are non-exempt under the FLSA when they earn less than a guaranteed $684 per week or $35,568 per year.  If the DOL raises this salary threshold, as it is considering, an even larger swath of the workforce could be entitled to overtime payments.

The proposals follow President Biden’s withdrawal of former President Trump’s independent contractor rule in May 2021, which had not yet taken effect when President Biden took office.  However, United States District Judge Marcia A. Crone held in March 2022 that the DOL had not properly followed the requirements for withdrawal as set forth in the Administrative Procedure Act.  In so holding, Judge Crone gave the Trump administration’s independent contractor rule the effect of law as if it had gone into effect in March 2021, as scheduled. The Biden administration’s proposed changes to the existing rule will likely affect the salary basis and exemption requirements of the employee versus independent contractor misclassification analysis under the FLSA.  Employers should prepare for these upcoming changes by reviewing their employee job descriptions and time record procedures.  Employers should also engage counsel to re-examine their employee classifications at large to ensure their exempt employees are truly exempt under the current rules and that they understand that changes may need to be implemented when the new rules take effect.

Article By Holly H. Williamson and Savannah R. Gibbs of Hunton Andrews Kurth

For more government contractor legal news, click here to visit the National Law Review.

Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.

Employers, It’s Time to Replace Your Mandatory EEOC Poster

On October 20, 2022, the U.S. Equal Employment Opportunity Commission (EEOC) released an updated version of its mandatory workplace poster that informs employees of their rights and protections.

Employers must post this new version of the poster in their office spaces as soon as practicable.

The latest “Know Your Rights” flyer, which replaces the previous “EEO is Law” poster, must be displayed in all workplaces covered by the agency’s jurisdiction. This includes private sector businesses with 15 or more employees, as well as state and local government agencies, educational institutions, unions, and staffing agencies.

What’s Changed?

The new poster includes several updates from the older version. Some of the main changes are:

  • Clarification that sex discrimination includes discrimination based on pregnancy and related conditions, sexual orientation, or gender identity;
  • Identifies harassment as a prohibited form of discrimination;
  • Provides information about equal pay discrimination for federal contractors; and
  • Uses more straightforward language and formatting.

The poster also includes a QR code for employees with a smartphone or other compatible devices to quickly access the EEOC’s website on how to file a charge of employment discrimination.

What’s Remained the Same?

While the poster has been updated, some of the information included remains the same. The bulletin still outlines the types of discrimination that are prohibited by federal law, such as:

  • Race, color, sex (including pregnancy and related conditions, sexual orientation, or gender identity), national origin, religion,
  • Age (40 and older),
  • Equal pay,
  • Disability,
  • Genetic information (including family medical history or genetic tests or services), and includes
  • Retaliation for filing a charge, reasonably opposing discrimination, or participating in a discrimination lawsuit, investigation, or proceeding.

Actions Employers Should Take

Employers who fail to post the new Know Your Rights poster could face noncompliance penalties from the EEOC. Therefore, businesses must take the time to update their posters as soon as possible.

On October 25, 2022, the EEOC distributed an FAQ stating that employers should remove the old poster and display the new one “within a reasonable amount of time” but did not provide a specific deadline.

The agency recommends that employers post the new flyer in a conspicuous place where employees will see it, such as in a break room or near the time clock.  Covered employers should also consider posting an online notice on their website for remote or hybrid workers.

You can download a copy of the poster here.

Article By Emily G. Massey and Ward and Smith, P.A.

For more labor and employment legal news, click here to visit the National Law Review.

© 2022 Ward and Smith, P.A.. All Rights Reserved.

Love and Basketball … and Romantic Workplace Relationships? Key Takeaways for Employers from the Boston Celtics’ Recent Suspension of its Head Coach

The Boston Celtics recently suspended its head coach Ime Udoka for the entire 2022-2023 season and although the team did not disclose whether the suspension will be paid or unpaid, it noted that he will be subject to a “significant financial penalty” as a result of multiple unspecified violations of the organization’s policies stemming from Udoka’s conduct towards a female member of the organization.

Originally believed to have been a consensual relationship, it was subsequently reported that the female staff member accused Udoka of making unwanted advances, including inappropriate comments towards the staff member.  In response, the Celtics organization acted quickly and launched an internal investigation, which found “a volume of violations” of various policies.  Please note, it is unknown as to whether the Celtics had a consensual relationship policy in place for employees.

The Celtics scandal comes at a time when workplace harassment claims (as reported by the EEOC) are on the rise, yet consensual office romantic relationships remain fairly common.  While most employees do not want their employers placing limits on whom they may seek as a romantic partner, from an employer’s viewpoint, the risks of such romances are clear, as they can easily cause real issues in the workplace: interoffice gossip, lack of productivity, reduced moral, allegations of favoritism, or worse, claims of sexual harassment.

Fortunately, employers have several options available to minimize risk. Employers can rely on various types of anti-fraternization policies (also known as workplace romance or consensual relationship policies) and/or love contracts.  Separate, but related, employers should also implement robust anti-harassment policies and training for all employees (including management).

Relationship Policies

Some employers choose to implement a policy banning all romantic relationships between employees regardless of position or authority.  These policies discourage personal and romantic workplace relationships and threaten discipline against employees who violate the policy. Other employers opt for a more flexible policy, which only prohibits romantic relationships where one individual has the ability to affect the terms and conditions of the other’s employment, including but not limited to, compensation, assignments, and promotions. This latter policy is more common as it is often less intrusive and aimed at preventing favoritism or claims of sexual harassment or retaliation.

Regardless of the policy used, most employers also include a disclosure requirement, which then allows the employer to determine the best course of action forward (e.g. eliminating the reporting relationship)..

Further still, some employers, in addition to their relationship policy, have used “love contracts” that couples sign to confirm their consensual relationship status, affirm their awareness of the company’s sexual-harassment and workplace conduct policies and other expectations related to conducting themselves in the workplace, indicate that they understand the consequences if they fall short of the company’s expectations.

Employer Actions After A Relationship Disclosure

Such policies and related documents allow employees to come forward as early as possible so employers can proactively address a situation.  For example, it allows employers to remove any supervisory oversight or doubt that such a relationship is consensual, while also setting expectations with both employees about their conduct in the workplace during the relationship, and if and after the relationship ends.  As part of this expectation setting discussion, even in the absence of a reporting relationship, employers should make sure to provide a copy of its anti-harassment policy to the dating employees and have them reaffirm they will comply with its terms and conditions.  Employers should also confirm with each employee that they will immediately disclose when the relationship ends or is otherwise no longer consensual.

Anti-Harassment Policies & Training

Ultimately, and regardless of what policy an employer adopts, all employers should have a clear anti-harassment policy that, among other things, defines and clearly prohibits sexual harassment and requires all employees to report sexual harassment, including any unwanted advances or comments.

Such policies should include a complaint procedure that is readily accessible to employees and provides multiple avenues for raising complaints.  It should confirm that the company will promptly and thoroughly investigate all complaints and will not retaliate against any individual who reports or participates in an investigation of harassment (including sexual harassment).

It is crucial that employers think about responding in a fashion similar to the Celtics’ in promptly investigating and addressing alleged misconduct.  For example, the Celtics quickly engaged independent outside counsel to conduct a thorough investigation, which positioned the Celtics well to determine its appropriate next steps.  Critically, the Celtics did not appear to allow the employee’s status within the organization to interfere or impact its decision to enforce its policies and impose serious penalties.  By following the Celtics’ lead, employers can, among other things, create an environment where employees feel safe to complain and further eliminate the possibility of misconduct in the workplace, while also enhancing any legal defense in the event a lawsuit follows.

Having written policies is key, but it is equally important that employees, particularly supervisors or managers, are thoroughly trained on how to recognize potentially problematic situations, including when employees are dating, and how to respond to and further report potential policy violations.  Some jurisdictions even make training a statutory requirement.

Key Takeaways for Employers

The reality is that romantic relationships in the workplace occur and those employers that are proactive in anticipating such relationships and responding to them when they occur will be best positioned to limit potential liability.  Employers should consider taking the following actions:

  • Adopting a consensual relationship policy that is best suited for the company;
  • Ensure the use of a robust anti-harassment policy;
  • Periodically conduct anti-harassment training; and
  • Be prepared to monitor and respond upon learning of a relationship between your employees.

Article By Delaney M. Busch of Mintz

For more labor and employment legal news, click here to visit the National Law Review.

©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Five New Employment Laws that Every California Employer Should Know

A new year brings new employment laws for California employers.  California employers will want to begin revising employee policies and handbooks now, so that they are prepared to comply with these new laws when the majority of them go into effect on January 1, 2023.  Here are five new employment laws that every California employer should know:

AB 1041 (Expanded Definition of “Family Member” for Medical and Sick Leave)

Through AB 1041, the California legislature amended Government Code section 12945.2 and Labor Code section 245.5 to expand the definition of “designated person” for purposes of employee medical leave.  Section 12945.2 provides qualifying employees with up to 12 workweeks in any 12-month period for unpaid family care and medical leave.  Section 245.5 relates to California paid sick leave.  Both sections permit an employee to take protected leave to care for a “family member,” which is currently defined as a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner.  With the passage of AB 1041, the Legislature added a “designated person” to this list of “family members” for whom an employee may take protected leave.  A “designated person” is defined as “any individual related by blood or whose association with the employee is the equivalent of a family relationship.”  In light of this broad definition, employers should be prepared to provide employees with leave to care for a wider range of persons.  An employee may identify his or her designated person at the time of requesting protected leave.  However, an employer may limit an employee to one designated person per 12-month period.

AB 1949 (Bereavement Leave)

AB 1949 adds section 12945.7 to the Government Code, in order to provide employees with protected leave for bereavement.  Under this new law, eligible employees may request up to five days of bereavement leave upon the death of a qualifying family member.  Family member is defined as a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent in law.  Although the employee must complete bereavement leave within three months of the family member’s death, the employer may not require that the five days be used consecutively.  Statutory bereavement leave is unpaid, but the employer must allow the employee to use any accrued and unused paid vacation, personal leave, sick leave, or other paid time off for this purpose.  Section 12945.7 prohibits discrimination, interference or retaliation against an employee for taking bereavement leave; also, the employer must maintain confidentiality when an employee takes bereavement leave. Finally, section 12945.7 does not apply to certain union employees, with an existing agreement regarding bereavement leave.

SB 1162 (Posting Pay Ranges and EEO Reporting Requirements)

SB 1162 modifies Government Code section 12999 and Labor Code section 432.3 to require employers to provide candidates with salary ranges on job postings, report employee compensation and demographic information to the California Civil Rights Department (formerly the DFEH) on an annual basis, and retain relevant records.  For job postings (including those posted by third parties), employers with 15 or more employees will be required to include a pay range, which is defined as the salary or hourly wage range that the employer reasonably expects to pay for the position.  In addition to the current requirement that, upon request, the employer must provide a candidate a pay range, the employer must now also provide existing employees with a pay range, when requested.  Failure to comply with the pay range disclosure or record retention requirements can result in penalties of up to $10,000 per violation.

The new reporting requirement concerns annual employer pay data reports.  Employers must now report the median and mean hourly rate by each combination of race, ethnicity, and sex, within each job category, with the first report due on May 10, 2023, based on 2022 pay data.  Employers with 100 or more employees hired through labor contractors must now produce data on pay, hours worked, race/ethnicity, and gender information in a separate report.  Employers who fail to timely file these required reports face civil penalties of up to $200 per employee.

Finally, employers must retain records of job titles and wage rate histories for each employee for the duration of the employee’s employment and three years after termination.  Failure to comply with these retention requirements can result in penalties of up to $10,000 per violation.

AB 2188 (Off the Job Cannabis Use Protection)

Effective January 1, 2024, AB 2188 adds section 12954 to the Government Code, which prohibits employers from discriminating against a person because of cannabis use while off the job, with some exceptions.  Employers may take action against a person who fails a pre-employment drug test, or other employer-required drug test, that does “not screen for non-psychoactive cannabis metabolites.”  This is because, according to the California Legislature, cannabis “matabolites do not indicate impairment, only that the individual has consumed cannabis in the last few weeks.”  The employer may administer a performance-based impairment test, and terminate any employee who is found to be impaired in the workplace.  This new law does not apply to employees in the building or construction industry, or in positions requiring a federal background investigation or clearance, and does not preempt state or federal laws that require employees to be tested for controlled substances.

AB 152 (COVID-19 Supplemental Paid Sick Leave Extension)

AB 152 modified Labor Code section 248.6 and 248.7 in order to extend COVID-19 Supplemental Paid Sick Leave (SPSL), previously blogged about here, which was expected to expire on September 30, 2022.  This new modification allows California employees to use any remaining SPSL through December 31, 2022.  It does not provide employees with new or additional SPSL.  In a departure from the original version of the law, when an employer requires an employee to take a COVID-19 test five days or later after a positive test result, the employer is now permitted to require the employee to submit to a second diagnostic test within no less than 24 hours.  If the employee refuses, the employer may decline to provide additional SPSL.  The employer obligation to cover the cost of any employee COVID-19 tests remains in effect.

Article By Kate Gold and Wesley C. Shelton of Proskauer Rose LLP

For more employment law legal news, click here to visit the National Law Review.

© 2022 Proskauer Rose LLP.

‘Work From the Ballpark’—Is the Latest Remote Work Promotion a Foul Ball?

Some professional baseball teams are beginning to promote “Work From the Ballpark” days, encouraging fans to bring their laptops to a weekday afternoon game and work remotely from their seats. Under such promotions, fans can purchase tickets for a special section of the ballpark with access to WiFi, tables, and food so that they could stay logged on at work while enjoying the sights and sounds of the game. Employers are likely accustomed to dealing with employees who play hooky to attend an afternoon baseball game. But with the rise of remote work—and promotions such as these—should employers be concerned with employees logging into work from the ballpark?

While such a promotion might be cheeky marketing to increase attendance for midweek games, it highlights an ongoing concern for employers with remote employees—that instead of diligently working in home offices, employees are working, or attempting to appear to be working, while distracted or in a potentially problematic environment. Indeed, working from a sports stadium could put confidential work communications and information at risk with laptop screens in easy view of onlookers and lead to network security issues with public WiFi.

Employers may want to dust off their remote work policies and evaluate whether they provide clarity around appropriate locations to perform work.

What Can Employers Do About Nontraditional Remote Work Environments?

  1. Clear Remote Work Policies

Employers may want to review their policies to ensure there are clear provisions or guidelines governing what locations are appropriate for working remotely. As an additional element of security and visibility, employers may further want to require that employees performing certain kinds of sensitive work obtain consent to work from a secure location other than home when necessary.

  1. Employee Work Locations

In certain workplaces, employers may want to consider how they monitor employees and their productivity. Many technology tools enable employers to track employees’ online activities or the physical locations of company devices. Of course, employers may want to evaluate employee relations considerations tied to any monitoring program as well as the increasing and myriad state and local laws addressing employer monitoring programs.

  1. Network and Information Security Software

Employers mandating that employees perform any work on employer-provided hardware (e.g., employer-provided laptops) may want to ensure those devices have network and information security and location monitoring software installed and that the technology is up-to-date and sufficient for employees to perform their jobs. Employers that do allow employees to use their own devices (BYOD) may want to require the installation of similar remote work software on those devices. Employers may also want to consider providing employees with internet hotspots for times when employers know employees will be working in public locations to avoid having employees working from shared or open networks. At the same time, employers may want to beware of the risk that such hardware will be lost or stolen.

  1. Security Measures

In addition to hardware requirements, employers may want to consider implementing policies that require employees to take basic security measures on their own while working from a public location. Employers may consider requiring employees to take work phone calls in secure places, require the use of privacy screens over laptop monitors, warn against leaving laptops and other hardware unattended, and mandate other actions to address basic privacy and proprietary information concerns.

  1. Compensation for Time

If an employer does become aware that an employee has performed work at the ballpark or in another location where distractions may have been present, the employer may question whether it must pay the employee for the time the employee logged that day. There are a myriad of federal and state wage-and-hour laws that employers can consult (as well as a review of the employer’s policies) that will answer this question. Usually, however, if employees report that they performed work, the employer may decide to compensate them for their time and evaluate whether there is a separate counseling or disciplinary issue that relates to policy or rule violations to consider.

Key Takeaways

Employees working from home or remotely, at least part of the time, appears to be the future for many workplaces across the United States as technology has made it easier for employees to stay connected with work and complete work tasks. The “Work From the Ballpark” promotion may serve as a reminder for employers that they may want to consider ways to ensure employees are working from appropriate locations to maintain productivity and information security with a remote workforce.

For more Employment Law news, click here to visit the National Law Review.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.