On August 1, 2016, Massachusetts Governor Charles Barker signed the Act to Establish Pay Equity. The Act, which makes several important changes to Massachusetts wage laws, will go into effect on July 1, 2018.
On July 22, 2015, Governor Brown signed AB 2535 that clarifies which employees for whom an employer must track hours worked and record those hours on their wage statements. The bill will become effective January 1, 2017.
Prior to this amendment, Labor Code section 226 required that an employee’s paystub include hours worked for all employees except individuals who are paid “solely” by salary and are “exempt from payment of overtime” under Labor Code section 515(a) or the governing wage order. As written, this seemed to require hours on the paystub for exempt outside sales people and executives who are not paid solely by salary but receive bonuses and stock options even though these employees do not record hours worked and hours worked is not a relevant figure when calculating their wages. In fact, in Garnett v. ADT, LLC, 139 F. Supp. 3d 1121 (2015), the district court held that exemption in Labor Code section 226 did not apply to exempt outside salespersons since they were paid solely by commission (and not salary) and, therefore, had to have their total hours worked included on their paystubs. The Garnett court noted in its decision that, “[w]hile the usefulness of reporting total hours worked for employees paid solely by commission is not entirely clear, it is nonetheless required by Labor Code Section 226 (a).”
On July 11, 2016, the National Labor Relations Board (the “NLRB” or “the Board”) upended more than a decade of precedent and held that a single bargaining unit may be comprised of an employer’s direct hires and the temporary workers provided by a “joint employer” without prior consent from either employer. In the case, Miller & Anderson, Inc. (364 NLRB 39), the Board expressly rejected standing precedent and prescribed the return to a standard that makes it easier for unions to organize employees working for joint employers into a single bargaining unit. The Miller & Anderson decision reflects the NLRB’s increased commitment to expand the joint employer doctrine. Employers who provide or use temporary workers and/or are in engaged in joint employer relationships should take note.
Governor Brown recently approved Senate Bill No. 836, which amends the Private Attorneys General Act (“PAGA”) in a few minor technical ways, including new filing and notice requirements. Although employers had hoped for substantive changes following the Governor’s initial budget proposal which expressly acknowledged that “employers are being sued and incurring substantial costs defending against technical or frivolous claims,” the enacted amendments fail to deliver any major gains for employers. SB 836 amends PAGA in four main ways:
On March 24, 2016, the U.S. Department of Labor’s (“USDOL”) Office of Labor-Management Standards (“OLMS”) published its highly controversial “persuader” regulation, which requires employers and labor relations consultants, including legal counsel, to publicly disclose relationships that have traditionally been permitted to remain confidential under the Labor-Management Reporting and Disclosure Act (“LMRDA”). Although the new persuader regulations took effect on April 25, 2016, the new rule will not apply to agreements entered into before July 1, 2016. This presents an invaluable opportunity for employers and their labor consultants to be “grandfathered” out of much of the required reporting under the new regulations.
The cities of Los Angeles and San Diego recently approved minimum wage and sick leave ordinances that will apply to all employees who work within those cities’ geographical limits. Employers with employees who work in these cities will need to comply with those new ordinances, as well as the California state law requirements that already exist.
On May 26, 2016, in the matter of Lewis v. Epic Systems Corporation, the U.S. Court of Appeals for the Seventh Circuit held that an arbitration agreement, which required employees to submit to individual arbitration for any wage and hour claims against the company, violates the National Labor Relations Act (“NLRA”) and is unenforceable under the Federal Arbitration Act (“FAA”). In issuing this decision, the Seventh Circuit gave credence to the National Labor Relations Board’s (“NLRB”) decision in D. R. Horton and, in doing so, has created a split amongst U.S. Circuit Courts of Appeal regarding the enforceability of arbitration agreements that preclude class actions.
In March 2014, President Obama signed an executive order directing the Department of Labor to revise its aging rules governing overtime pay for white collar employees. The Department solicited comments from the public on an earlier draft in July 2015. Yesterday, the Department of Labor released the final version of the new rules. The new version includes a number of changes—some expected, but others less so.
In Luis Castro-Ramirez v. Dependable Highway Express, the California Court of Appeal held that California’s Fair Employment and Housing Act (“FEHA”) – which requires employers to reasonably accommodate employees with disabilities – now requires employers to reasonably accommodate employees who are associated with a disabled person. This is an unprecedented decision and will likely to be appealed. Until that time, employers should train supervisors to seek assistance from human resources when making accommodations decisions, and to treat any such decisions on a case-by-case basis.
The Defend Trade Secrets Act (the “DTSA”), the first of its kind at the federal level, has been passed in both the Senate and the House of Representatives. Now, the DTSA merely awaits President Obama’s expected signature to become law. The DTSA has the potential to transform trade secret litigation and create more uniform case law nationwide.