Legalized Marijuana, Non-Citizens and Immigration Risks

Contributed by Jacqueline Lentini McCullough, August 22, 2019

book with words “immigration law” and glasses.

In May, we reported on Illinois becoming the eleventh state to permit recreational marijuana beginning January 1, 2020. Noncitizens in these eleven states and the District of Columbia may reasonably conclude that using marijuana in accordance with state law will have no bearing on immigration status. Unfortunately, that is a wrong assumption. Federal law controls immigration, and it remains a federal offense to possess marijuana. For the unsuspecting foreign national, this is a legal distinction that many will not understand. Customs and Border Protection (CBP) Officers at the nation’s borders are the first line of defense in preventing illegal importation of narcotics, including marijuana. U.S. federal law prohibits the importation of marijuana and CBP Officers will continue to enforce the law.

For immigrant marijuana users, federal law prohibits the use of federal funds to prosecute state-legal medical cannabis, but allows funds to prosecute state-legal recreational cannabis, thus creating an enforcement distinction. There will also be increased scrutiny relating to travel outside the U.S. for green card and Naturalization applicants.

In some jurisdictions such as Colorado, the U.S. Citizenship and Immigration Service (USCIS) is adding questions to the Adjustment of Status (green card) interview and medical examination process to determine if a foreign national uses marijuana or has in the past.

Naturalization

Naturalization eligibility requires the individual to establish “good moral character,” as defined in the Immigration and Nationality Act. A person who engaged in certain conduct as described in the Act is statutorily barred from establishing good moral character. In states such as Washington and Colorado where marijuana has been legal since 2012, the USCIS is aggressively questioning Naturalization applicants regarding marijuana use. For example, a legal permanent resident (LPR) who is applying for Naturalization, and who is in possession of marijuana is barred under federal law from establishing good moral character. The individual will be found to be inadmissible.

Any arriving foreign national who is determined to be a drug abuser or addict or who is convicted of, or admits to committing acts which constitute the essential elements of a violation of any law or regulation of the U.S relating to a controlled substance, is inadmissible to the U.S. Furthermore, a naturalization applicant who has admitted possessing marijuana to a federal government official must not travel outside the U.S. The person may be found inadmissible upon reentry.

There are several legislative efforts afoot in Congress to resolve the complex issues created by the conflict between federal and state cannabis laws. In the meantime, though, noncitizens should take a very conservative approach.  

Takeaways for noncitizens living in the U.S.:

  • Never discuss conduct regarding marijuana with a government official such as a CBP Officer, USCIS, Embassies/Consulates abroad, et al.;
  • If you live in a state that legalized marijuana consumption, do not use it until you are a U.S. citizen;
  • Do not carry a medical marijuana card, pot related stickers, T-shirts, or paraphernalia, and delete any mention of marijuana on social media; and
  • If you’ve worked in the marijuana industry, obtain legal counsel before leaving the U.S. or applying for Naturalization

Stay tuned for further developments in this growing area of law.

Common FLSA Violations: Mistakes can be Costly

Contributed by Debra Mastrian, August 20, 2019

Clock with money on white background

Under the Fair Labor Standards Act (FLSA), employees must be properly classified as either exempt or nonexempt, and nonexempt employees must be paid overtime (1½ times their regular rate of pay for all hours worked over 40 hours in a workweek). All compensation, including commissions and non-discretionary bonuses, must be included in the regular rate of pay for purposes of calculating overtime, unless the compensation is one of eight specified types of payment (e.g., holiday gift, birthday gift, discretionary bonus, and certain profit sharing payments).

Employees may be classified as exempt if they satisfy one of the specified statutory exemptions, the most common of which are the administrative, executive, and professional exemptions. To satisfy these exemptions, an employee has to meet both a salary basis test (be paid at least the minimum required amount of salary each workweek)and job duties test (have certain job responsibilities).

The title of the position is not relevant. The work that the employee is actually performing on a daily basis is the main inquiry.

Two of the most common mistakes made by employers involve misclassification of employees (exempt versus nonexempt) or improper calculation of overtime (did not include all hours worked and/or did not use the correct regular rate of pay).  Lawsuits under the FLSA, involving these types of mistakes, have been on the rise the past few years.

Earlier this year, an Indiana automotive service business agreed to pay over $1 million in overtime back wages and liquidated damages after an audit by the Wage and Hour Division  (WHD) of the U.S. Department of Labor found that the company failed to include bonuses, commissions, incentive pay and shift differentials in the regular rate of pay overtime calculations.

On July 1, the WHD issued an opinion letter on the proper calculation of overtime for non-discretionary bonuses (quarterly and annual). A non-discretionary bonus paid, based on the number of straight time hours worked, required the employer to recalculate the regular rate of pay for any period the bonus covered and pay additional overtime. A quarterly bonus paid as a percentage of straight and overtime compensation did not require recalculation of overtime, because the bonus necessarily included all overtime as a matter of arithmetic.

FLSA lawsuits have been on the rise, in part, because employers face “strict liability” for violations, meaning no defense for honest or unintentional mistakes. Good faith can be a defense to avoid certain penalties, such as liquidated damages, but it is not a defense to the underlying wage, back pay and attorneys’ fees awarded under the statute.

A self-initiated, internal wage and hour audit is an important risk management tool that can identify potential issues and resolve compliance concerns before they result in wage claims. The audit should be done in conjunction with legal counsel.

In addition to reviewing the company’s written pay policies, the company should examine whether employees are properly classified as exempt or nonexempt. The company must first decide whether to review all positions or certain job categories of concern. Such an audit would necessarily include monitoring and assessing the employees’ actual job duties, reviewing the job descriptions, making sure that the job descriptions are updated and accurately reflect what the employees are doing, and then determining on a case-by-by case basis whether the employees are properly classified.

In examining pay practices, the company would assess how it calculates and pays wages. For example, are nonexempt employees being paid minimum wage and overtime in compliance with federal and/or state law? Are all applicable payments being included in calculating the regular rate and overtime pay? Are the deductions being made proper?

The company also needs to determine whether all hours worked are being recorded and paid. Questions to ask include:

·         Does the company’s timekeeping system provide for accurate recording of hours worked?

·         Do nonexempt employees record all hours worked, including time reviewing and responding to emails/calls outside of regular working hours, travel time, meeting time, time worked during unpaid lunch and break times?

·         Do the company’s rounding practices comply with applicable law?

Misclassification of employees and miscalculation of overtime can lead to expensive lawsuits or enforcement actions. Taking care to identify and resolve potential FLSA compliance issues before they occur can help to avoid costly mistakes.

State Comptroller Wants to Enforce the Illinois Prevailing Wage Act???

Contributed by Jeffrey A. Risch – August 16, 2019 – www.illinoisprevailingwage.com

“Prevailing Wage” on white paper with pen

On August 13, 2019, Illinois Comptroller, Susana Mendoza, signed an Executive Order (EO) aimed at enforcement of the state’s prevailing wage law (aka mandatory top line union wage/benefits scale) for “construction” projects receiving state money. On the surface, one would say “hey, that’s a pretty good idea.”  But… the EO invites more questions than answers.  More importantly, it encourages organized labor to target contractors that they have disputes with (without any proof or evidence of actual non-compliance with prevailing wage law) and the Comptroller may take whatever action she wants, including withholding funds.

The EO, in relevant part, reads as follows (with questions and comments following each main point of the EO):

  • Grants and Contracts. The Illinois Office of Comptroller shall not accept the submission of any grant, contract, or any other award by the State of Illinois of any type to finance, in whole or in part, public works projects under the Rebuild Illinois program or other public works projects, unless the grant, contract, or other award includes a certification that the contractor of the public works project is in compliance with the Prevailing Wage Act (820 ILCS 130).

BUT… what does “compliance” mean?  Could the Comptroller hold up a contract if a contractor was found to have made a clerical mistake years ago on a prevailing wage project?  What if a contractor merely classified the worker as a laborer vs. an operator and was assessed by the Department of Labor for a few hundred dollars?

  • Duty to Pre-audit. The Illinois Office of Comptroller shall have the duty to pre-audit or cause to be pre-audited each grant, contract, or other award under the Rebuild Illinois program and other public works projects.

Who is going to conduct the audit? What do they know about prevailing wage? What will they be searching for? 

  • Publication. The Illinois Office of Comptroller’s official website shall provide information on grants, contracts, and other public works project awards and shall provide a Prevailing Wage Inquiry Form that allows localities, contractors, labor organizations, and other interested parties to submit inquires to the Office.

Okay… so, this function seems fairly benign.  It allows the public to view what projects are in the works. But… couple this function with the “Receipt of Inquiries” order and chaos can ensue.

  •  Receipt of Inquiries. The Illinois State Comptroller’s Prevailing Wage Enforcement Officer is designated to receive inquiries from labor organizations or other interested parties regarding the status of a public works contract or grant on file with the Illinois Office of Comptroller and compliance with the Prevailing Wage Act.

Here’s where we can see efforts by organized labor to target certain contractors that they have problems with.  Again, what does “compliance” mean?  What’s stopping anyone from making an inquiry about a contractor with absolutely no proof or evidence that there’s any non-compliance issue to begin with?  This third party inquiry piece will invite unintended (or, perhaps intended) consequences that could impede progress on a much needed construction project.

  • Review. The Illinois Office of Comptroller, through the Prevailing Wage Enforcement Officer, shall work in collaboration with the Department of Labor and other public works agencies to address inquires that require further review for potential violations of the Prevailing Wage Act.

Will the Comptroller’s Office tell the Illinois Department of Labor what to do or who to target for investigation or audit even without any proof of any non-compliance issue?  

  • Other Necessary Action. The Illinois Office of Comptroller shall undertake the appropriate action to inform all state agencies of the requirements promulgated hereunder and shall undertake all necessary action to implement and effectuate this Executive Order.

What action will the Comptroller take?  Withhold funds?  Delay progress?

Of course, time will tell what the actual impact of this EO will be on contractors and construction projects on a state level in Illinois. But, there are certainly many questions and concerns that anyone working in the construction industry should have with this type of order. Undoubtedly, if anyone is securing, financing, performing or managing public “construction” work in Illinois, an intimate understanding of all things prevailing wage is a must.

Facebook Facing Massive Class Action Trial: Ninth Circuit Rules BIPA Class Action Can Proceed

By Carlos Arévalo and Molly Arranz, August 12, 2019

Social media design, vector illustration.

In January 2019, we reported on the Illinois Supreme Court’s decision, Rosenbach v. Six Flags Entertainment Corp., where the highest court in Illinois unanimously found that an individual need not allege (or show) an actual injury to qualify as an “aggrieved” person under the Illinois’s Biometric Information Privacy Act (BIPA). This decision opened up the floodgates for additional, class action litigation under this Illinois statute.

Then, last week, in Patel v. Facebook, (a case that was originally filed in Illinois but later transferred to the Northern District of California where Facebook is headquartered), the Ninth Circuit ruled that an Illinois class of Facebook users can proceed in their class action lawsuit against Facebook over its use of facial recognition technology. Specifically, the Ninth Circuit panel answered in the affirmative the question of whether the mere collection of an individual’s biometric data in violation of BIPA was sufficient to establish standing in federal courts. In order to have standing, a plaintiff need only show she has suffered an invasion of a “legally protected interest that is concrete and actual or imminent, not conjectural or hypothetical.”   

No actual damages from a company’s failure to comply with BIPA? The Ninth Circuit confirmed that is no hurdle to proceeding in a class action trial. Like the plaintiff in Rosenbach, the plaintiff contended that violation of the requirements of obtaining written consent and establishing a compliant retention schedule resulted in an actual injury. On the other hand, Facebook advanced that these were only procedural violations and did not amount to “an injury of a concrete interest.” 

The NinthCircuit was not persuaded by the defendant’s argument. The three-judge panel concluded that since BIPA provisions were established to protect the plaintiffs’ privacy rights, which “encompassed an individual’s control of information concerning his or her person,” Facebook’s development of a face template using facial recognition technology without consent served as an invasion of private affairs and affected concrete interests. Plaintiffs had advanced injury to their substantive privacy rights, not just complained about procedural failures.

Because BIPA provides for fines between $1,000 and $5,000 per violation, the ruling exposes Facebook to a potentially massive class action judgment. It is reasonable to expect that Facebook will seek an en banc review of this decision—and that this is not the last petition for review of this holding.

For other companies, like Rosenbach, the Ninth Circuit decision serves as yet another reminder that BIPA impacts every company that uses, controls or collects biometric data. For employers, this means reviewing, auditing and updating practices regarding the use of your employees’ biometric data. All companies with an Illinois presence should be reviewing policies and protocols regarding the use of biometric data. We continue to recommend the following:

  1. Establish and make public (for example, post on the company’s website) a written policy that addresses the purpose(s) of biometric data use, how it will be collected, and how it will be stored.
  2. Be prepared to address any requests for reasonable accommodations based on disability, religious, or other reasons.
  3. If biometric data might leave a closed system, ensure that proper safeguards are in place, including contractual liability shifting.
  4. Ensure that employees whose biometric data is used acknowledge the policy, and authorize its use and collection in writing.
  5. Train supervisors on the company’s policies and practices to ensure consistency.
  6. Have biometric data systems audited to ensure that data is not open to the public or a systems breach.
  7. Consult with competent counsel to ensure that policies and practices comply with relevant law.

SB 75: NEW Anti-Harassment Law – A Serious Game Changer for Illinois Employers

Contributed by Jeffrey A. Risch and Julie A. Proscia, August 9, 2019

MAJOR CHANGES TO ILLINOIS EMPLOYMENT LAWS:  NEW MANDATORY SEXUAL HARASSMENT TRAINING, REPORTING AND DISCLOSURE REQUIREMENTS, RESTRICTIONS ON EMPLOYMENT AGREEMENTS, & SEVERAL OTHER MANDATES

ATTENTION Illinois employers of ALL sizes… Are you ready?  Today (August 9, 2019), Governor Pritzker signed Senate Bill 75 – the Workplace Transparency Act – into law.  Effective January 1, 2020, major new changes will forever alter how Illinois employers manage harassment and discrimination issues as well as other workplace controversies.

In fact, the changes will require ALL employers to update their training practices, key policies, personnel forms, severance agreements and arbitration agreements.  The changes will also impact how (and IF) employers will voluntarily resolve employment disputes or litigate such disputes not only in Illinois but anywhere in the United States.

MAJOR changes coming to Illinois include:

  • Limits the use of employment policies or other agreements intended to prevent an employee from reporting sexual harassment, such as non-disclosure agreements, arbitration clauses, and non-disparagement clauses for cases involving harassment, discrimination and retaliation. No such agreement can prevent an applicant, employee or former employee from reporting unlawful or criminal conduct to a government agency. Also, a mandatory arbitration provision is void if it’s a compulsory, unilateral condition of employment or continued employment.  Finally, strict confidentiality in any settlement or severance agreement is only valid IF: the provision is expressly preferred by the individual; expressly allows the individual to have the document reviewed by an attorney of their choosing; valid consideration is provided; there is no waiver of claims following the effective date; and it provides 21 days to the individual to consider the agreement and 7 days to revoke signature after execution (regardless of age).
  • Makes harassment and discrimination against bona fide independent contract workers illegal under the IL Human Rights Act.
  • Clarifies that it is illegal to discriminate against an employee if they are perceived to be part of a protected class (i.e. gender, sexual orientation, ethnicity), even if they are not.
  • Expands the Victims Economic Security & Safety Act (VESSA) to allow victims of gender violence to take unpaid leave from work to seek medical help, legal assistance, counseling, safety planning and other assistance.  Therefore, workplace harassment could, in theory, trigger VESSA rights in ways not contemplated before.
  • Prevents a union representative from representing both a victim of sexual harassment and the alleged harasser in a disciplinary proceeding.
  • Requires ALL employers, labor organizations and units of local government to disclose the number of final, non-appealable adverse administrative or judicial decisions of sexual harassment and discrimination against them (entered anywhere in the U.S.) to the Illinois Department of Human Rights beginning July 1, 2020 and each July 1 thereafter.
  • Requires ALL employers, labor organizations and units of local government to disclose the number of private settlements that involve sexual harassment and discrimination claims, entered anywhere in the U.S. in the previous 5 years, to the Illinois Department of Human Rights if requested to do so.
  • Requires ALL employers to annually train their employees on preventing sexual harassment. The Department of Human Rights is required to make a model sexual harassment training program available for employers to provide to their employees. Training shall include:  an explanation of sexual harassment; examples of conduct that constitutes unlawful sexual harassment; a summary of relevant federal and state statutory provisions concerning sexual harassment, including remedies available to victims of sexual harassment; and a summary of responsibilities of employers in the prevention, investigation, and corrective measures of sexual harassment.
  • Creates mandatory anti-harassment and discrimination policy distribution to ALL employees of restaurants and bars (NOTE: “restaurants” and “bars” are broadly defined) within the first week of starting employment, as well as, anti-harassment training. The anti-harassment training that restaurants and bars must conduct differs from that of other sectors and must include sections on conduct, activities, and/or videos related specifically to the restaurant and bar industries; an explanation of manager liability and responsibility under the law; and be available in both English and Spanish.
  • Creates the Hotel and Casino Employee Safety Act which will require ALL hotels and casinos to adopt anti-sexual harassment policies and make safety devices aka panic buttons available to certain employees by July 1, 2020. The anti-sexual harassment policies must have specific language and provisions that include language, amongst other items, that the complaining employee is permitted to cease work and leave the immediate area if he/she perceives danger until hotel or casino personnel or the police arrive to provide assistance, as well as, provisions that give the employee  paid time off  to file a police report or criminal complaint against the offending guest and/or testify as a witness against the offending guest.

SB 75 is a BIG game changer for employers in Illinois and requires a review and revision of employment contracts, arbitration, severance and settlement agreements, employee handbooks and training programs. It is imperative that companies and HR professionals work with their legal team to develop policies, procedures and strategies to ensure compliance.  Also, litigation risk tolerance and one’s general appetite to resolve controversies should be evaluated closely as well in light of the new disclosure and reporting obligations.

Supreme Court Rules Title VII’s Charge Filing Requirement Is Not Jurisdictional…but is Still a Required Rule

Contributed by Carlos Arévalo, August 8, 2019

Supreme Court building

This past February we reported that the Supreme Court agreed to review the Fifth Circuit’s ruling in Fort Bend County v. Davis on the viability of claims brought in federal courts where the claimant had not first filed her claim with the Equal Employment Opportunity Commission (EEOC). On June 3, 2019, the Supreme Court issued its decision holding that Title VII’s charge-filing requirement is a non-jurisdictional claim-processing rule that may be forfeited if not timely asserted. 

Under Title VII of the Civil Rights Act of 1964, an employee is required to first bring his claims of employment discrimination with the EEOC prior to filing suit in federal court. Known as the “exhaustion requirement,” courts have noted that its purpose is to give the EEOC the opportunity to investigate and resolve credible claims of discrimination, and also to provide employers fair notice and a chance to remedy complaints prior to litigation.

In Fort Bend County, the employee initially filed a charge with the EEOC asserting Title VII sexual harassment and retaliation claims. Later, she attempted to add a charge for religious discrimination, but failed to update the formal charge. She filed suit. After years of litigation, only the religious discrimination claim remained. The employer then argued for the first time that the religious discrimination claim should be dismissed because the employee failed to properly file a charge with the EEOC before suing.

Prior to this decision, appellate courts were split on the meaning of the exhaustion requirement. On the one hand, the majority of circuits maintained that the exhaustion requirement was merely a prerequisite to bringing suit, and therefore subject to defenses of waiver and estoppel. On the other, three circuits had ruled that the exhaustion requirement implicated subject matter jurisdiction and could not be waived.

Justice Ruth Bader Ginsburg, in a unanimous decision, settled the question on the side of the majority of circuits and wrote that the charge-filing requirements “do not speak” to a court’s authority or refer in any way to the district court’s jurisdiction, but rather “speak to a party’s procedural obligation…[requiring] complainants to submit information to the EEOC and to wait a specified period before commencing a civil action.” 

What does this mean for employers? It means that while there is still a rule that employees must file a charge and exhaust their administrative remedies before filing a lawsuit, failing to do so will not automatically deprive the court of jurisdiction over the employee’s claim. However, it also means that employees are still required to comply with the rule and may not simply file a lawsuit without first filing a charge of discrimination and exhausting their administrative remedies. More importantly though for employers, it reminds us that if you do not assert failure to exhaust as a defense, it can be inadvertently waived or forfeited by “waiting too long” to raise it. To surely minimize this impact, employers should review the administrative history of pending lawsuits to ensure that an otherwise viable “exhaustion requirement” defense is not inadvertently waived or forfeited by “waiting too long” to raise it.

Following a National Trend, Illinois’ Equal Pay Act Now Bars Employers from Asking Job Applicants about Their Salary History

Contributed by Michael Faley, August 5, 2019

33186296 – wage gap concept with blue figure symbolizing men and red pawn women

With much fanfare, Illinois Governor J.B. Pritzker signed into law major amendments to the Illinois Equal Pay Act (IEPA) that now bar Illinois employers from asking job applicants or their prior employers about salary, wages or benefits history. On average, women in Illinois are paid only 79% of what men receive, according to information recently released from Gov. Pritzker’s office. Gov. Pritzker and Illinois legislators hope that the IEPA amendments will help correct the disparity. Gov. Pritzker told a crowd at the recent signing ceremony that “[w]e are declaring that one’s history should not dictate one’s future, that no person should be held back from earning their true value because of how much money they were paid in a previous job.” The new measure takes effect on September 29, 2019.

Since 2017, laws that prohibit questions about salary history have quickly spread nationwide. Variations on the ban are now or soon will be in effect in 17 states and 18 major municipalities, including California, New York, Colorado, Alabama, Washington, Cincinnati, Louisville, San Francisco, and New York City among others. In comparison, Wisconsin and Michigan have gone in the other direction and banned the ban, so to speak, by restricting the ability of local governments to impose rules that would otherwise limit an employer’s right to ask about compensation history.           

Parting ways with its neighbors, Illinois will prohibit employers from asking job applicants or their current/former employers about salary, wages or benefits history. Also, employees cannot be compelled to sign a contract or waiver that would prohibit the employee from disclosing or discussing information about their salary, wage or benefits. Employers violating the law could face a lawsuit that permits the employee to recover any damages incurred, “special damages” up to $10,000, injunctive relief, as well as costs and attorney’s fees. The law further contains a looming risk of separately imposed civil penalties up to “$5,000 for each violation for each employee affected.”

Employers are certainly free to provide salary and benefit information about a position and discuss salary expectations with job candidates. Job candidates can also voluntarily provide salary history, but the employer cannot take it into account in making employment or compensation decisions.  

In yet another significant change found in the recent IEPA amendments, the law now prohibits sex-based discrimination on pay (or, pay disparity due to being African American) where employees are performing substantially similar work on jobs requiring “substantially similar skill, effort, and responsibility.” The old version applied to comparable jobs that required “equal skill, effort and responsibility.” As such, the standards for bringing a claim have loosened to a degree. At the same time, the amendments have further tightened the exceptions that permit pay differences in some limited circumstances.

In light of the IEPA amendments, employers should carefully review their payroll data.  Remember, under the IEPA, pay disparity is analyzed on a county level and not based on the facility, site or office the employee is primarily assigned.  Hiring forms and policies should also be reviewed.  Recruiting and interviewing practices need to be examined as well.  Of course, it’s always advisable to consult with your legal counsel to help get “it” right.