On September 29, 2016, the Department of Labor (“DOL”) issued regulations (the “final rule”) implementing Executive Order 13706, which requires federal contractors to provide paid sick leave to their employees. According to the DOL, federal contractors employ 1.15 million individuals—594,000 of whom do not receive paid sick leave. Thus, for contractors who do not currently provide paid sick leave to their employees, the final rule imposes significant administrative and financial burdens. However, given the nuanced requirements of the final rule, even contractors who currently provide some form of paid sick leave to employees may find the final rule burdensome to comply with. Contractors should act now to either develop paid sick leave policies or determine what changes need to be made to their current paid leave policies to ensure that they are in compliance with the final rule once it becomes effective.
Last month, the National Labor Relations Board (the “NLRB” or “the Board”) reversed standing precedent and held that student assistants at private universities, including both graduate and undergraduate teaching and research assistants, qualify as “employees” under the National Labor Relations Act (“NLRA”) and may accordingly join unions to collectively bargain with their employers. The case, Columbia University, 364 NLRB 90 (2016), offers yet another indication of the strength of the Board’s commitment to maintaining and expanding its presence in a rapidly changing employment environment – and its willingness to overrule itself to do so
At the end August, the National Labor Relations Board released an advice memorandum, originally drafted in December 2015, concluding that a group of drivers who worked for a drayage company called Pacific 9 Transportation were misclassified as independent contractors and that this misclassification constituted a violation of the National Labor Relations Act. This advice memorandum comes on the heels of a handful of Board decisions, which have reached similar conclusions following the Board’s new and expansive definition of who constitutes a statutory employee under the Act, in FedEx Home Delivery & Teamsters, Local 671. 361 NLRB No. 55 (2014).
On August 31, 2016 the Department of Homeland Security (DHS) proposed an “International Entrepreneur” (I.E.) rule that would allow qualifying foreign investors to develop and grow their start-up companies in the United States. DHS already has the authority to temporarily parole individuals into the United States without a visa for urgent humanitarian reasons or for a significant public benefit. The proposed rule would invoke this authority and allow foreign investors to enter the country for the purpose of enhancing entrepreneurship, innovation, and job creation. However, the rule comes with its own set of strict qualifying criteria.
On August 19, 2016, Governor Bruce Rauner officially signed into law the Illinois Freedom to Work Act (the “Act”), with an effective date of January 1, 2017. The Act, while short and to the point, will have a significant impact on private sector employers who routinely require all employees, regardless of job level or wage, to enter into non-competition agreements.
On August 25, 2016, the United States Department of Labor (“DOL”) and Federal Acquisition Regulatory (“FAR”) Council published “Guidance for Executive Order 13673, ‘Fair Pay and Safe Workplaces’” (“final rule”). Also referred to as the “blacklisting” rule, it imposes strict disclosure guidelines and requires that both prospective and existing contractors – as well as subcontractors – disclose violations of federal labor laws that resulted in administrative merits determinations, civil judgments, or arbitral awards or decisions. The final rule also requires that contractors and subcontractors disclose specific information to workers each pay period regarding their wages and prohibits contractors from requiring that their workers sign arbitration agreements that encompass Title VII violations and claims of sexual assault or harassment.
On August 22, 2016, the Ninth Circuit joined the Seventh Circuit in the split amongst U.S. Circuit Courts of Appeal on the issue of enforceability of employment arbitration agreements precluding class actions.
The Ninth Circuit, similar to the Seventh Circuit in Lewis v. Epic Sys. Corp., held in 2-1 decision that an employer violates the National Labor Relations Act (NLRA) when it requires employees to sign an agreement precluding them from pursuing, in any forum, wage-and-hour claims against the employer on a collective basis. To the contrary, the Fifth Circuit has upheld such arbitration agreements in D.R. Horton, Inc. v. NLRB and Murphy Oil USA, Inc. v. NLRB, finding that class action waivers do not violate the NLRA.
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.