President Signs Executive Order on the Affordable Care Act

Contributed by Kelly Haab-Tallitsch, January 23, 2017

56033703 - words affordable care act  aca written on a paper.Shortly following his inauguration on Friday, President Trump signed an Executive Order affirming his intent to eliminate the Affordable Care Act (ACA). The executive order is not a repeal of the ACA and does not make any changes to the law or regulations thereunder, but rather addresses the actions of federal agencies in enforcing the existing law. The executive order directs the agencies responsible for overseeing ACA enforcement (Health and Human Services, Treasury Department, and Department of Labor) to, “take all actions consistent with the law to minimize the unwarranted economic and regulatory burden of the act” and “prepare to afford the States more flexibility and control to create a more open healthcare market.”

Specifically, the executive order directs the agencies to exercise the maximum discretion and authority available to them under the law to waive, defer, grant exemptions from or delay implementation of any provision of the ACA that imposes a cost, fee, tax or penalty.  It is unclear exactly how much discretion the agencies have with respect to many ACA provisions; however, this is a clear message that they have been instructed to identify ways to lessen the law’s impact during the interim period as lawmakers work towards an appeal.

What Does This Mean for Employers?

It’s too early to tell how or when employers will be impacted. The executive order did not actually change anything, but rather signaled the intent to make changes. Until further guidance is issued by the federal agencies, employers should continue compliance with all applicable ACA provisions. While the Trump administration appears committed to swift action on the ACA, we would not expect further information until the new heads of Health and Human Services, Treasury Department and the Department of Labor are in place.

We will continue to monitor developments on the ACA and provide additional information as it becomes available.

2017 Compliance Check Up

Contributed by Sara Zorich, January 19, 2017

We are now almost three weeks into the New Year and while it might be tempting to ease into 2017, the time is now to ensure that the required compliance updates have been made to your payroll and Form I-9 procedure to comply with the 2017 changes.

Minimum Wage

The following 21 states have updates to their minimum wage that affect your payroll for 2017:

  1. Alaska (Effective 1/1/17) – minimum wage increases from $9.75 to $9.80.
  2. Arizona (Effective 1/1/17) – minimum wage increases from $8.05 to $10.00.
  3. Arkansas (Effective 1/1/17) – minimum wage increases from $8.00 to $8.50.
  4. California (Effective 1/1/17) – minimum wage increases from $10.00 to $10.50.
  5. Colorado (Effective 1/1/17) – minimum wage increases from $8.31 to $9.30.
  6. Connecticut (Effective 1/1/17) – minimum wage increases from $9.60 to $10.10.
  7. Florida (Effective 1/1/17) – minimum wage increases from $8.05 to $8.10.
  8. Hawaii (Effective 1/1/17) – minimum wage increases from $8.50 to $9.25.
  9. Maine (Effective 1/1/17) – minimum wage increases from $7.50 to $9.00.
  10. Massachusetts (Effective 1/1/17) – minimum wage increases from $10.00 to $11.00.
  11. Maryland (Effective July 1, 2017) – minimum wage increases from $8.75 to $9.25.
  12. Michigan (Effective 1/1/17) – minimum wage increases from $8.50 to $8.90.
  13. Missouri (Effective 1/1/17) – minimum wage increases from $7.65 to $7.70.
  14. Montana (Effective 1/1/17) – minimum wage increases from $8.05 to $8.15.
  15. New Jersey (Effective 1/1/17) – minimum wage increases from $8.38 to $8.44.
  16. New York (Effective 12/31/16) –minimum wage increases from $9 to $9.70.
  17. Ohio (Effective 1/1/17) – minimum wage increases from $8.10 to $8.15.
  18. Oregon (Effective July 1, 2017) – statewide minimum wage increases from $9.75 to $10.25 (Portland Metro minimum wage increase from $9.75 to $11.25).
  19. South Dakota (Effective 1/1/17) – minimum wage increases from $8.55 to $8.65.
  20. Vermont (Effective 1/1/17) – minimum wage increases from $9.60 to $10.00.
  21. Washington (Effective 1/1/17) –minimum wage increase from $9.47 to $11.00.

Employers should ensure that these required changes have been conveyed to your payroll manager and payroll provider and perform an audit to ensure that the change was made effective in your payroll system.

Form I-9

As we reported on November 17, 2016, U.S. Citizenship and Immigration Services (USCIS) released the new version of the Form I-9 on November 14, 2016. NO LATER THAN January 22, 2017, employers MUST use the revised form (dated 11/14/2016 N) for all new hires and any employee that requires reverification of employment eligibility.

Employers should review their Form I-9 practices, ensure they are complying by using the new form by the deadline, and train employees responsible for completing the form regarding the new form requirements.

U.S. Supreme Court to Address Legality of Class Action Waivers in Arbitrations Agreements

Contributed by Suzanne Newcomb, January 17, 2017

16306823 - 3d illustration of scales of justice and gavel on orange background

16306823 – 3d illustration of scales of justice and gavel on orange background

The U.S. Supreme Court announced Friday, January 13, 2017 that it will hear a trio of cases concerning the right of employers to include class action waivers in employment-related arbitration agreements. Arbitration agreements are contracts through which an employee and an employer agree to resolve potential future disputes through binding arbitration rather than through the courts. Class action waivers are provisions in arbitration agreements that prohibit employees from joining together to arbitrate multiple related claims in a class or collective action. If such a waiver is enforced, employees are required instead to arbitrate each employee’s dispute separately.

The general counsel for the National Labor Relations Board (NLRB) has long argued, with varying degrees of success, that the right to engage in collective legal action is itself “concerted activity” protected by Section 7 of the National Labor Relations Act, and therefore, it is unlawful to ask employees to waive that right.

As we reported here, the Federal Court of Appeals for the Fifth Circuit (Louisiana, Mississippi and Texas) rejected the general counsel’s argument back in 2013 and upheld an employer’s right to include a class action waiver in an employment arbitration agreement. Other circuits agreed. However, the NLRB continued to challenge these provisions, and as a result, many employers remained wary.

In May 2016, the Federal Court of Appeals for the Seventh Circuit (Illinois, Indiana, and Wisconsin) sided with the NLRB’s general counsel. The seventh circuit struck down a class action waiver concluding it was an impermissible restraint of employees’ right to engage in “protected concerted activities.” Later in the year the ninth circuit followed suit. This split between the circuits further clouded the issue, leaving employers with no clear answer.

It is this difference of opinion between the federal courts of appeal that prompted the Supreme Court to agree to hear the issue. While a definitive ruling is not guaranteed, the fact that the Supreme Court granted certiorari (i.e. agreed to hear) three cases on the issue (consolidating them for purposes of oral argument) suggests the Court intends to issue a definitive ruling. Resolution on this issue will provide employers with welcome clarity and certainty regardless of how the Court ultimately rules on the legality of class action waivers in employment arbitration agreements.

For now, employers should stay the course. We will continue to monitor the issue and report on significant developments as they arise.

Save the Date! February 16th Webinar – The New Administration: Impact on the Workplace Examined

How do your company’s policies and procedures comply with the views of our new administration? Please join us as we discuss how you can best prepare for any likely impacts on your business.

Join us for the next installment of our quarterly labor and employment series on Thursday, February 16 at 12:00PM CT to learn about what workplace changes you can expect under the new administration.

Topics to be discussed include:

  • The Affordable Care Act
  • Minimum Wage
  • National Labor Relations Board developments
  • Department of Labor changes
  • Executive Orders
  • Supreme Court and other judicial vacancies

This program is available via webinar. You can register here.

EEOC’s Tweet Reminds Employers of its Stated Interest in Protecting Gig Economy Workers

Contributed by Allison Sues, January 10, 2017

15198483 - employment contract document form with penOn January 6, 2017, the United States Equal Employment Opportunity Commission’s (EEOC) twitter account confirmed the federal agency’s interest in “gig economy” workers. “Gig economy” workers refer to individuals working in modern, flexible employment structures that contract with an employer for a short-term project or on a job-by-job basis, rather than working in traditional, long-term relationships with a single employer. For example, gig economy workers generally reference temporary workers, freelancers, independent contractors, and staffing agency workers.

The EEOC’s January 6, 2017 tweet referenced a recent legal decision from across the pond regarding gig economy workers. In that case, a British woman working as a bicycle courier for a large courier firm claimed she should be classified as an employee of the firm rather than as self-employed, a distinction that under British law would entitle her to employee work benefits, including holiday pay, sick pay and payment at or above the minimum wage. After considering the degree of control the firm exercised over its bicycle couriers, the British tribunal ruled in the bicycle courier’s favor, finding her to be an employee.

The EEOC’s tweet echoes the EEOC’s Strategic Enforcement Plan (SEP), which was released in October 2016 and was previously covered on this blog on January 3, 2017. The EEOC’s SEP specifically identified the following as a priority for the agency: “[c]larifying the employment relationship and the application of workplace civil rights protections in light of the increasing complexity of employment relationships and structures, including temporary workers, staffing agencies, independent contractor relationships and the on-demand economy.” The EEOC has repeatedly made it clear that it intends to scrutinize and target the gig economy workforce to ensure those workers are not improperly overlooked when it comes to fair employment practices, including compliance with federal anti-discrimination, harassment, retaliation and wage laws.

Employers utilizing any sort of short-term or “gig economy” workers should be aware of the EEOC’s priority and not automatically assume the protections afforded under Title VII, the Americans with Disabilities Act, and the Age Discrimination in Employment Act do not extend to on-demand or short-term workers. Employers must also ensure they are properly classifying workers under the Fair Labor Standards Act in light of the recent surge of lawsuits in the United States alleging that gig economy workers have been improperly classified as independent contractors rather than employees. Employers should consider a variety of factors put forth by the U.S. Department of Labor and courts in determining appropriate classifications, including, but not limited to, whether the worker operates or works for an independent business, the worker’s degree of control and independence over his or her work, the permanency of the work relationship, the worker’s investment in work resources, the dependency of the worker’s business on the relationship and the extent to which the work performed is an integral part of the employer’s business. Finally, remember that classifying a worker as an independent contractor based on “industry standard,” is not a defense to a misclassification claim.

EEOC Quietly Updates Strategic Enforcement Plan for 2017-2021

Contributed by Noah A. Frank, January 3, 2017

The EEOC’s new Strategic Enforcement Plan (SEP) highlights its enforcement priorities and alerts employers to areas most likely to attract the EEOC’s investigative eye, including the types of charges the EEOC is most likely to litigate on a complainant’s behalf.

The EEOC recognizes that employment law is continuously developing and that related practices are continuously evolving.  As a result, this SEP is intended to reflect current issues. This new four year SEP (which remains in effect until superseded, modified or withdrawn by vote of a majority of members of the Commission) emphasizes:

  1. 41191023_sEliminating Barriers in Recruitment and Hiring.  As with the prior SEP, this priority includes exclusionary policies and practices such as “channeling or steering” persons into particular positions due to a protected trait, restrictive application processes, and screening tools for employment.
  1. Protecting Vulnerable Workers – Including Immigrant or Migrant Workers, and Underserved Communities from Discrimination. The focus is on discriminatory policies including job segregation, unequal pay, and harassment. The shift here is to underserved communities.
  1. Addressing Emerging and Developing Issues. Despite many courts’ attempts to rein in the EEOC, the agency recognizes the following developing issues worthy of particular scrutiny: age and religious discrimination; coverage of LGBT persons under Title VII; disability discrimination, including qualification standards, inflexible leave policies, and temporary workers; accommodating pregnancy-related limitations; issues related to workers engaged on-demand (gig economy), including through staffing agencies, and  independent contractor relationships; and “backlash discrimination” against Muslim/Sikh/Arab/Middle Eastern/South Asian communities.
  1. Enforcing Equal Pay Laws.  Previously focused on gender-based discrimination, the EEOC expanded this priority to all protected classes.  In light of this, employers may see claims of willful protected class discrimination added to wage and hour disputes.
  1. Preserving the Exercise of Rights under the Law. The EEOC is targeting policies and practices that discourage or prohibit individuals from exercising their rights or disrupt investigative or enforcement efforts. This includes vague and overbroad waivers and provisions in settlement agreements that prohibit filing EEOC charges or assisting in the investigation or prosecution of claims. Unlike the prior SEP, this SEP removes “retaliatory actions” due to the EEOC’s inconsistent application, shifting the focus to “Significant Retaliatory Practices” that effectively dissuade others from exercising rights (e.g., terminating the HR Manager for investigating a complaint to send a message to other employees to not complain in the first place).
  1. Preventing Systemic Harassment. The EEOC’s focus includes prevention programs (training and outreach) to deter future violations.

Starting 2017 on the Right Foot

Because state and local administrative agencies (e.g., city and county civil rights departments) often follow the EEOC’s lead, all employers, regardless of size, should take note of the EEOC’s stated priorities. An audit of human resources practices and policies should be part of your 2017 New Year’s (legal) resolutions.

Do You Need to Download a Software Update for Your Data Retention & Email Policies?

Contributed by Rebecca Dobbs Bush, December 15, 2016

Almost as certain as death and taxes is the fact that technology is constantly changing. You regularly download windows updates and security patches. You regularly download operating system updates for your mobile phone and tablets. But, how often do you review your company’s data retention and email policies?

36148606 - newsletter illustration with laptop isolated on blueRecord retention policies are incredibly specific to each business. A template policy seldom, if ever, does the job. Many businesses are subject to industry-specific record keeping obligations and, even with a single business, various departments have different considerations that need to be taken into account. Rarely is it appropriate for one company to store and maintain its data in a method that is identical to that of another company.

Furthermore, as technology evolves, so do the methods by which we store and use data. For example, consider the challenges with just mobile phones. More and more businesses are utilizing BYOD policies, often at the request of employees who don’t want to carry multiple phones or who have a preference for a specific type of phone. In many cases, this can create just as much, if not more, exposure as allowing employees to utilize their personal laptops for work. Think about what is stored on most mobile devices: company email and webmail, text messages, geographical location info and GPS history, documents and files copied from computers or received as attachments, internet and social media history, call logs and contacts, online banking transactions, calendar entries, “To-Do” lists and other tasks, photos and videos and more. Furthermore, photos and videos taken with mobile devices contain metadata that often details the time, date and location when they were taken. And this data does not reside on the phone alone.  All of this data could possibly be stored on a SIM card, internal memory on the phone, and/or other devices and computers that the mobile device connects to or uses for storing backup files.

In most cases, it takes multiple individuals working together to create a policy that properly addresses both business needs and legal obligations. Such a policy typically requires the help of an attorney knowledgeable of the legal obligations at play within your industry as well as those issues that can arise in defending litigation. Additionally, crafting a proper and useful policy also requires detailed input from the person (or people) with the most knowledge of how data is used and stored within your business.

All too often, the problem of a lacking or outdated policy is not discovered until one of two instances occurs: 1) a company is facing the exorbitant expense of responding to electronic discovery requests in the course of  litigation; or 2) an employee (or former employee) has misappropriated confidential and proprietary business information. Don’t wait until your operating system is infected with one of these viruses. Update your record retention and data policies annually.