IL Supreme Court to Consider Impact of Workers’ Compensation Exclusive Remedy Rule on BIPA Claims

Contributed by Carlos Arévalo and guest author Molly Arranz, January 29, 2021

Back in October 2020, we reported on the McDonald v. Symphony Bronzeville Park LLC decision,where the Illinois Court of Appeals for the First District ruled that the state Workers’ Compensation Act (WCA) and its exclusivity provisions do not bar claims for statutory damages under BIPA. The decision found that while the WCA provides remedies to workers that have sustained an actual injury, BIPA provides statutory, liquidated damages to employees who allege privacy right violations even when there is no injury and as a result, employees could continue to pursue BIPA damages against their employers. We did not believe this outcome should have come as a surprise given past rulings on what employees or consumers needed to show to successfully pursue BIPA claims. In light of the First District’s ruling, the WCA exclusivity defense was no longer viable in relation to BIPA claims.  At the time, we anticipated the case would be appealed to the Illinois Supreme Court.

Indeed, on Wednesday January 27th, the Illinois Supreme Court granted leave to appeal the appellate court ruling that BIPA claims are not the type of injuries falling under the scope of the WCA.  The Supreme Court’s decision later this term ought to provide clarity to class action litigants across the state.  Of course, BIPA claims continue to be filed and employers ought to be mindful and ensure compliance with BIPA requirements by:

  • Analyzing the type of biometric information being collected
  • Evaluating what BIPA compliant disclosures are in place
  • Ensuring that a BIPA policy is in effect and properly applied
  • Staying alert and on top of court decisions and pending regulations

For our part, we will monitor the status of the Symphony Bronzeville Park appeal and ongoing BIPA litigation and will continue to provide updates as needed. 

The EEOC Abruptly Concludes ACT Mediation Pilot But Keeps Some of the Popular Changes

Contributed by Michael J. Faley, January 29, 2021

After the U.S. Equal Employment Opportunity Commission (EEOC) recently announced that it had extended its ACT Mediation pilot program, the EEOC reversed course yesterday and abruptly concluded pilot programs relating to the EEOC’s conciliation and mediation efforts.  The ACT Mediation pilot, which launched on July 6, 2020, expanded the categories of charges eligible for mediation, generally allowed for mediation to take place throughout an investigative process (rather than only before the investigation begins as is traditionally the case outside the pilot), and expanded the use of technology to hold virtual mediations.

Many employers and attorneys view the EEOC mediation program favorably and generally supported the pilot mediation program. Through the EEOC’s mediation program, first implemented agency-wide in 1999, the agency has conducted more than 240,000 mediations and resolved over 170,000 charges. However, new EEOC Chair Charlotte A. Burrows has been a critic of the pilot program. Burrows commented that she “strongly support(s) the prompt and voluntary resolution of discrimination charges whenever doing so is consistent with our mission….The Commission will continue to strengthen its conciliation and mediation programs in accordance with the overarching goal of preventing and remedying discrimination in the workplace.” 

The EEOC plans to retain some of the practices that it found useful during the pilot program, including the use of video technology to hold virtual mediations whenever possible.  The parties will also be able to request mediation at any point during the administrative process.  Despite these improvements, the EEOC will likely return to its old standard operating procedures and permit mediation in only a limited range of charges.

Save the Date! Complimentary Webcast February 4: Stimulus 2.0 – Employer Boot Camp – What You Need to Know Now

Join our labor and employment attorneys Rebecca Dobbs Bush and Kelly Haab-Tallitsch and corporate and banking attorney Andrew Podgorny on Thursday, February 4 from noon to 1:30 PM CT, as they discuss the key provisions of Stimulus 2.0: The Consolidated Appropriations Act, 2021 that your company needs to know now, including:

  • Expansion of Employee Retention Tax Credit – important new information
  • FFCRA voluntary extension and various provisions impacting employee benefit plan administration
  • Changes to the Paycheck Protection Program and Second Draw PPP loans – high level summary

A Q&A will follow. We hope you can join us!

DOL Clarifies that Not All Travel Time is Compensable in the Era of Telework

Contributed by Carlos Arévalo, January 18, 2021

A guy looks at his watch with a train going away in the background.

On the last day of 2020, the US Department of Labor (DOL) issued an opinion letter impacting employers using telework arrangements in light of the COVID-19 pandemic.  While a vaccine is now rolling out and we will hopefully get the pandemic under control in 2021, this opinion letter provides guidance to employers that have had to institute remote and hybrid work policies and/or arrangements with their workforce. 

Specifically, the opinion letter addressed two general scenarios: 

  1. Employee has a parent-teacher conference in the middle of the day and works from the office, attends the conference and then goes home to finish her workday in her “home office”; and
  2. Employee has doctor’s appointment scheduled for mid-morning.  She works a couple of hours from home, goes to her appointment and then travels to her office for the rest of the day.  At the end of the day, she returns home.

So is the employee’s travel time compensable?  The opinion letter concludes it is not.  Travel time under either scenario is deemed “off duty” or normal commuting time.  Even if travel time occurs during the regular work or “office hours,” the employee is interrupting her work time to attend to personal matters.  The time is off-duty and the employee “is free to use her time effectively and for her own purposes before resuming work.” 

The opinion letter also finds that the travel time at issue is not compensable pursuant to the worksite-to-worksite travel or continuous workday doctrine.  First, for the worksite-to-worksite travel analysis to apply travel must be part of the employee’s principal activity – here the employee is not being required to travel as part of her job so it is not compensable. Second, while regulations “contemplate that the period between an employee’s first and last principal activities will ‘in general’ be compensable,” this will not be the case when the employee uses the time for her own purposes.  To support its opinion, the DOL examines a number of court decisions that emphasize the employee’s flexibility and freedom to use time for their own purposes.  As may be appropriate, employers should consult with competent counsel to ensure that these policies and arrangements comply with relevant law.

In light of the “new normal” that has emerged in response to the COVID-19 pandemic, employers are encouraged to examine policies and/or telework arrangement to make sure that despite the flexibility such documents are intended to provide, it is clear to employees that time “effectively used for their own purposes” during their workday will not be compensable. 

Telemedicine Appointments Can Be Used To Establish Serious Health Conditions Under the FMLA

Contributed by Steven Jados, January 14, 2021

FMLA family medical leave act ,FMLA

Recent guidance from the U.S. Department of Labor (DOL) reiterates that the DOL will allow telemedicine visits—generally speaking, health care appointments held via video conference—to qualify as in-person visits to a health care provider under certain circumstances.

As our readers know, the FMLA provides certain employees up to 12 workweeks of leave for, among other things, a “serious health condition.”  An employee can show the existence of a serious health condition by several methods that include establishing that the employee has an illness or injury that involves “continuing treatment by a health care provider.”  Under federal regulations, “treatment by a health care provider” means actually visiting a health care provider in-person.  That regulation was added in 2008 to make clear that phone calls, letters, emails, and text messages exchanged with a doctor are not “treatment.”

However, in response to the COVID-19 pandemic, the DOL issued guidance in July 2020 that was confirmed and extended by a more recent DOL Wage and Hour Division Field Assistance Bulletin, which states that telemedicine, which “typically involves face-to-face examinations or treatment of patients by remote video conference via computers or mobile devices” will be considered an “in-person” visit, provided the visit meets these three criteria:

  • It is an examination, evaluation, or treatment by a health care provider;
  • it is permitted and accepted by state licensing authorities; and,
  • it generally should be performed by video conference.

That said, the Field Assistance Bulletin also made clear that “a simple telephone call, letter, email, or text message” remains “insufficient, by themselves” to satisfy the in-person requirement.

Bearing all of that in mind, employers evaluating the adequacy of FMLA certification documents must, at least for the duration of the ongoing pandemic, consider telemedicine appointments to be “treatment” for purposes of the FMLA provided the three criteria above are satisfied.  And as always, questions regarding the application of this and any other COVID-19-related employment law issues should be directed to experienced counsel.

What Will the Biden Administration Bring for Employers?

Contributed by Beverly Alfon, January 12, 2021

They say that the only constant in life is change.  Here is a quick overview of the shift that we expect to see in the realm of labor and employment after President-elect Joe Biden takes office.  

National Labor Relations Board (NLRB)

The NLRB is expected to have a Democratic majority as early as August 2021.  The five-member Board currently has three Republican members, one Democrat, and one vacancy.  The expectation is that the Biden administration will move quickly to fill the vacancy.  In addition, the term of William Emmanuel, a Trump appointee, will expire in August 2021 – opening the door to a third Democrat.

The current NLRB General Counsel, Peter Robb – who has pushed a strong pro-employer stance in his role as prosecutor of unfair labor practice charges – will see his term expire in November 2021.  There is some speculation that due to pressures from organized labor, President-elect Biden will find a way to terminate Robb’s terms prior to that.

As with prior administration changes, the expectation is that a Democratic Board majority and new General Counsel will lead the Board’s policy and enforcement priorities will go back to a pro-labor agenda. With this expected change will likely come easier roads to organizing, broadening of joint-employer liability, a return to post-contract continuation of union dues, and stricter restrictions on an employer’s ability to exercise discretion even when contract language provides for it. Not all changes will be immediate, of course, as case precedents established by President Trump’s appointees are not subject to reversal until cases presenting the relevant issues come before the Board.

We will be keeping an eye out for components of (or the entirety of) the Protecting the Right to Organize Act (PRO Act), which passed in the House in early 2020 with a vote of 224 to 194, largely along party lines.  The legislation went nowhere in the Senate in 2020, but it is 2021. The results of the Georgia runoff elections have changed the political landscape.  Among other things, the PRO Act was aimed at giving workers more equal footing during disputes at work, prohibiting employers from permanently replacing economic strikers, creating a private cause of action for unfair labor practices, authorizing the NLRB to add penalties for employers who retaliate against workers who organize, and allowing for secondary boycotts.  President-elect Biden is a strong supporter of the PRO Act provisions, making clear that significant, pro-labor changes will be made through and within the NLRB.

Equal Employment Opportunity Commission (EEOC)

The EEOC enforces federal laws that prohibit employment discrimination, such as the Americans with Disabilities Act, the Age Discrimination in Employment Act and Title VII of the Civil Rights Act of 1964.  The EEOC will have a Republican majority until July 2022.  The EEOC’s current Strategic Enforcement Plan, which establishes the EEOC’s enforcement priorities, will also be in place until 2022.  Therefore, changes to the agency initiatives will be even less immediate than at the NLRB, but the expectation is that the EEOC will return to its aggressive enforcement of these federal employment laws against employers, likely focused on workplace harassment, equal pay, and LGBT discrimination/harassment claims (especially in light of the June 2020 U.S. Supreme Court decision in Bostock, which holds that an employer who fires an individual merely for being gay or transgender violates Title VII).

U.S. Department of Labor

President-Elect Joe Biden has formally nominated Boston Mayor, Marty Walsh for Secretary of Labor.  In response to the announcement of his nomination, Walsh tweeted, “Working people, labor unions, and those fighting every day for their shot at the middle class are the backbone of our economy and of this country. As Secretary of Labor, I’ll work just as hard for you as you do for your families and livelihoods.”  Some media outlets are reporting that Walsh, like Biden, is more moderate than meets the eye, willing to reach across the aisle in order to make things happen.  However, there is no question that unions expect robust support from Walsh due to his strong ties to organized labor, including a role as head of the Boston Building and Construction Trades Council.   If confirmed by the Senate (which is very likely in light of the results of the Georgia runoff elections), Walsh would be the first union member to serve in this role in almost 50 years.

With Walsh at the helm, we expect that federal minimum wage and paid sick leave benefits will be top priorities.  Walsh was a strong supporter of the state-wide Massachusetts law requiring paid family and medical leave benefits, and the forthcoming state minimum wage requirement of $15 an hour.  We also anticipate that the DOL will revisit overtime standards, rules dealing with pay entitlement for off-the-clock work (especially in this time of widespread remote work), and the joint employer standard. It is also very likely that the DOL’s recently issued independent contractor classification regulations will be rescinded or superseded by new regulations that would be more worker-friendly.  Enforcement will likely be aggressive, especially in industries like food manufacturing, fast food, and construction, which are priorities for organized labor, especially in terms of wages and workplace safety (especially, COVID-19-related complaints). Indeed, there is some expectation that this DOL will be even more aggressive and progressive than that of the Obama administration.

Bottom line:  Employers must be focused on compliance.  While we cannot specifically predict what will come over the next few months and years, it is imperative for employers to anticipate the pendulum swing and assume stricter enforcement of rules and regulations against employers, sooner rather than later. 

Be Cautious When Using Conviction Records to Make Employment-Related Decisions for Wisconsin Employees

Contributed by Peter Hansen, January 5, 2021

employer at desk on white background

A Wisconsin state court recently issued a helpful reminder to employers operating in Wisconsin – and employers with employees working outside of their home state:  always check local and state conviction records laws before using them in making any employment-related decision.

In Cree, Inc. v. LIRC, the employer rescinded a job offer to Derrick Palmer after discovering that he had multiple convictions for “domestic incidents,” including “2012 convictions for strangulation/suffocation, fourth-degree sexual assault, battery, and criminal damage to property related to a domestic incident with a live-in girlfriend.”  If hired, Palmer would have been an Applications Specialist working “with more than 1100 employees, including about 500 women.”  Seems reasonable to rescind the offer, right?  Well, no – not in Wisconsin, which prohibits discrimination on the basis of a conviction record, unless the employee or applicant has “been convicted of any felony, misdemeanor or other offense the circumstances of which substantially relate to the circumstances of the particular job.”

The court held that although Palmer’s criminal record demonstrated a tendency and inclination “to be physically abusive toward women in a live-in boyfriend/girlfriend relationship,” it did not substantially relate to the Applications Specialist job that Palmer applied for – which would not require “performing his services in private homes or other isolated settings” or otherwise “meeting one-on-one with clients in private settings.”  As a result, the employer unlawfully discriminated against Palmer when it rescinded the job offer because of his prior convictions.

To summarize, all employers must check state and local laws before making any employment-related decision on the basis of a conviction record.  Many states prohibit conviction record discrimination in addition to Wisconsin, including California, Hawaii, New York, and Pennsylvania.  Local laws could also prohibit conviction record discrimination, or even provide additional protection.  For example, sticking with Wisconsin, the City of Madison prohibits employers from considering conviction records that “substantially relate to the circumstances of the particular job” if more than three years have passed since the employee was placed on probation, paroled, released from incarceration, or paid a fine relating to the conviction.

New Rules for Tipped Employees to Take Effect in February 2021

Contributed by Suzanne Newcomb, December 28, 2020

On December 22 the Federal Department of Labor (DOL) published a Final Rule changing the FLSA regulations for tipped employees. The Final Rule takes effect 60 days after publication. A caveat before we dig into the Final Rule; the change affects only federal law. As with all things wage-and-hour-related, many states, and some local governments, enforce more stringent requirements. Some jurisdictions prohibit tip credits entirely. This post focuses on the federal standard only. Employers must adhere to the requirements applicable to their particular business in each location in which they operate.

The FLSA has long allowed a “tip credit” to cover a portion of the minimum wage an employer would otherwise be required to pay certain employees who regularly receive gratuities. One requirement is that the tipped employees retain all of their tips with the exception of a qualified tip pool. The regulations surrounding tip pools have changed over the years due to a range of court rulings, legislative action, and agency rule making. The Final Rule is the latest iteration of regulations surrounding the “tip credit provision” [29 USC § 203(m)(2)(A) often referred to as simply “section 3(m)”].

Under the newly published Final Rule:

  • Employers may continue to enforce mandatory tip pooling arrangements;
  • If the tip credit is taken, the employer may not include employees who do not routinely receive tips (i.e. kitchen staff) in a mandatory tip pool;
  • Employers that do not take the tip credit (i.e. those that pay tipped employees a set hourly wage that is at or above the applicable minimum wage for non-tipped employees) may include employees who do not routinely receive tips in mandatory tip pools;
  • Managers and supervisors (as determined based on the duties portion of the test for the FLSA’s executive exemption) are prohibited from participating in tip pools (regardless of whether a tip credit is taken);
  • Tip pool funds must be paid out at least as frequently as the employer pays out base hourly wages; and
  • Finally, employers may take a tip credit for time spent performing tasks that do not generate tips (i.e. cleaning, stocking, rolling silverware, etc.) as long as the non-tip generating duties relate to the tipped occupation and are performed contemporaneously with, or immediately before or after, the duties for which the employee does receive tips. The Rule expressly rejects the 80/20 rule referenced in some opinion letters and court decisions. 

A final reminder that is particularly relevant in light of the massive sustained blow the service industry has taken of late; the tip credit cannot exceed the amount of tips the employee actually receives. Also, if an employee’s base hourly rate, plus the tips actually received, adds up to less than the applicable minimum wage for any particular shift, the employer must make up the difference.

STIMULUS 2.0: The Consolidated Appropriations Act 2021 – Key Provisions for Employers

Contributed by Rebecca Dobbs Bush, December 22, 2020

While it has not yet been fully passed and enacted into law, the full text of the Consolidated Appropriations Act, 2021 was released days ago and announced as having bipartisan support. Within the over 5,500-page Act, are several provisions designed to assist smaller businesses and those hardest hit by the economic challenges presented by the COVID-19 pandemic. As is common with legislation, the Act essentially presents only an outline of Congress’ intent and leaves relevant agencies to fill in the details of that outline. Pursuant to mandates in the Act, most agencies, such as the IRS, are directed to publish clarification within weeks of enactment.

While we await further guidance and clarification, the below list highlights those provisions, not specific to particular industries, that businesses should be aware of:

  • Paycheck Protection Program (PPP)
    • Borrowers now have the green light to claim deductions for any and all expenses paid with loan proceeds, regardless of whether or not they obtain forgiveness of their loan amount.
    • Employers are permitted to cover additional categories of non-payroll costs with PPP loan proceeds, such as:
      • “covered operations expenditures” which means “payment for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses”
      • “covered property damage costs” which means “a cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation”
      • “covered supplier costs” which means payment to a supplier of goods for goods that are “essential to the operations of the entity at the time at which the expenditure is made; and is made pursuant to contract, order, or purchase order…”
      • “covered worker protection expenditures” which means an “operating or a capital expenditure to facilitate the adaptation of the business activities of an entity” to comply with guidance issued by HHS, CDC, OSHA or any equivalent requirements issued by state or local government since March 1, 2020. This may include expenses to create a drive-through window facility, an indoor, outdoor or combined air or air pressure ventilation or filtration system, a physical barrier such as a sneeze guard, an expansion of indoor or outdoor business space, or onsite or offsite health screening capability.
    • Clarification that “payroll costs” for purposes of PPP loans, includes group life, disability, vision or dental insurance benefit costs.
    • Simplified forgiveness application process for PPP loans up to $150,000.
    • “Second Draw Loans” for the Paycheck Protection Program
      • Eligible entities:
        • includes those employing less than 300 employees (now including nonprofit organizations) AND
        • Those that had “gross receipts” in a quarter during 2020 that represents a 25% reduction from gross receipts of the entity during the corresponding quarter in 2019.
      • Maximum loan amounts are 2.5 times the average monthly payroll costs up to $2 million (NAICS 72 entities can obtain 3.5 times the average monthly payroll costs up to $2 million).
      • An entity that returned all or part of a prior PPP loan has an opportunity to reapply.
      • Entities that did not obtain the maximum amount of PPP loan available to them based upon the regulations in place at the time of their initial application, may request a modification to previous loan amount.
  • Expansion of the Employee Retention Tax Credit
    • Expanded eligibility:
      • Participation in the Paycheck Protection Program does not lead to disqualification where the payroll at issue is not funded by PPP loan proceeds.
      • Gross receipts for the calendar quarter are less than 80% of the gross receipts for the employer in the same calendar quarter during 2019 (was previously required to be less than 50%).
      • Previously, those with more than 100 employees could only take the credit in regard to wages paid to an employee that was not providing services.  Those at or under 100 employees could take the credit in regard to wages paid to any employee. This threshold was increased from 100 to 500 employees.
    • Extension of the program through July 1, 2021
    • 50% credit for qualifying wages increased to 70%
    • Instead of “qualifying wages” capped at $10,000 per employee, revised to $10,000 per employee per calendar quarter.
  • Unemployment Insurance benefits
    • An additional $300 per week for all receiving unemployment benefits through March 14, 2021.

Be assured that we will be providing more insight as more developments unfold to our contacts and clients in the days and weeks to come. 

COVID-19 Relief Bill: FFCRA Leave Mandate Not Extended; Tax Credits Available for Voluntary Leave

Contributed by Kelly Haab-Tallitsch, December, 22, 2020

A $900 billion COVID-19 relief bill passed by Congress late last night is expected to be signed into law by President Trump later today. In addition to an assortment of aid for individuals and businesses, the bill extends several provisions of the CARES Act passed in March, including the tax credit for employers providing paid leave under the Families First Coronavirus Response Act (FFCRA). However, the bill does not extend the mandate for employers to provide paid leave, set to expire December 31, 2020.

What Does This Mean?

Employers are not required to provide paid sick leave or paid family leave for coronavirus-related reasons under the FFCRA after December 31, 2020. But the COVID-relief bill allows employers with less than 500 employees to voluntarily provide this leave and take the tax credit associated with the leave through March 31, 2021. Tax credits are available for qualifying wages (up to a cap) paid while an employee is on leave if (1) the leave would have been required under the FFCRA had the FFCRA been extended through March 31, 2021, and (2) all requirements related to leave under the FFCRA are met.

The bill does not change the maximum amount of paid leave subject to the tax credit for an individual employee. This means that if an employee took 80 hours of paid sick leave to quarantine in 2020, and the employer claimed the tax credit on wages paid during that leave, the employer cannot claim an additional tax credit on wages paid to that same employee for additional paid sick leave in 2021.  

Next Steps

Employers should decide as soon as possible if they will provide voluntary paid FFCRA leave during the first quarter of 2021 – and commit to that decision.  Additionally, employers should administer the leave on a consistent basis and maintain all documentation required to substantiate the leave.

Of course, local and state leave mandates (paid and unpaid), as well as disability-related accommodation and traditional FMLA leave are all still in play. Employers need to continue to carefully navigate the waters of COVID-19 related leaves regardless of the FFCRA.

Click here for a summary of the FFCRA Paid Leave Requirements.