DOL Guidance for the FFCRA
Written by: Susan L. Swatski The U.S. Department of Labor (DOL) issued guidance in the form of a fact sheet for employees, a fact sheet for employers, and a Q&A document addressing critical questions on the paid leave requirements under the federal Families First Coronavirus Response Act (FFCRA). The FFCRA expanded the federal Family and Medical Leave Act (FMLA) to allow partially compensated employee leave for child care purposes related to COVID-19. The FFCRA also provided for employee paid sick leave for specific COVID-19-related reasons. The law included other measures to address the effect of the coronavirus pandemic on workers. The guidance addresses issues such as: Which employers and employees are covered under the FFCRA; How much leave employers are required to grant employees and for what pay; Exemptions from the law; and What tax credits are available to employers to pay for the leave. The Employee Fact Sheet can be found here. The Employer Fact Sheet can be found here. The Q & A, as published, is as follows: 1. What is the effective date of the FFCRA, which includes the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act? The FFCRA’s paid leave provisions are effective on April 1, 2020, and apply to leave taken between April 1, 2020, and December 31, 2020. 2. As an employer, how do I know if my business is under the 500-employee threshold and therefore must provide paid sick leave or expanded family and medical leave? You have fewer than 500 employees if, at the time your employee’s leave is to be taken, you employ fewer than 500 full-time and part-time employees within the United States, which includes any State of the United States, the District of Columbia, or any Territory or possession of the United States. In making this determination, you should include employees on leave; temporary employees who are jointly employed by you and another employer (regardless of whether the jointly-employed employees are maintained on only your or another employer’s payroll); and day laborers supplied by a temporary agency (regardless of whether you are the temporary agency or the client firm if there is a continuing employment relationship). Workers who are independent contractors under the Fair Labor Standards Act (FLSA), rather than employees, are not considered employees for purposes of the 500-employee threshold. Typically, a corporation (including its separate establishments or divisions) is considered to be a single employer and its employees must each be counted towards the 500-employee threshold. Where a corporation has an ownership interest in another corporation, the two corporations are separate employers unless they are joint employers under the FLSA with respect to certain employees. If two entities are found to be joint employers, all of their common employees must be counted in determining whether paid sick leave must be provided under the Emergency Paid Sick Leave Act and expanded family and medical leave must be provided under the Emergency Family and Medical Leave Expansion Act. In general, two or more entities are separate employers unless they meet the integrated employer test under the Family and Medical Leave Act of 1993 (FMLA). If two entities are an integrated employer under the FMLA, then employees of all entities making up the integrated employer will be counted in determining employer coverage for purposes of expanded family...
read moreNew Jersey Enacts Paid Sick Leave Act Effective October 29, 2018
Written by: Susan L. Swatski On May 2, 2018, New Jersey became the tenth state to enact a mandatory paid sick leave law. The law goes into effect on October 29, 2018 and will require all New Jersey employers, regardless of size, to provide up to 40 hours of paid sick leave per year. The Act preempts and moots all municipal ordinances regarding paid sick time. Current employees will begin accruing sick time on October 29, 2018, so employers will need to have their revised leave policies in place in short order. Employees hired after October 29, 2018, will begin accruing sick time on their first day of employment. An employee can use accrued sick time after the 120th day of his/her first day of employment for the following reasons: diagnosis, care or treatment of or recovery from an employee’s own mental or physical illness, including preventive medical care; aid or care for a covered family member during diagnosis, care or treatment of or recovery from the family member’s mental or physical illness, including preventive medical care; circumstances related to an employee’s or his/her family member’s status as a victim of domestic or sexual violence; closure of an employee’s workplace or of a child’s school because of a public official’s order; or, time to attend a meeting required by school staff to discuss a child’s health. Employers may not require an employee to find a replacement to cover the employee’s absence. The payment amount is based on the same rate of pay that the employee earns at the time of the payment, not when the time was accrued. Under the Act, employers must designate any period of 12 consecutive months as a “benefit year.” In each benefit year, an employee may accrue up to 40 hours of sick time at a rate of one hour for every 30 hours worked. An employer may “frontload” the 40 hours of sick time at the beginning of the benefit year, but employers are not required to permit employees to use more than 40 hours of sick leave in a benefit year. Employees are permitted to carry over a maximum of 40 hours of accrued sick time. Employers may, at their discretion, buy out an employee’s unused accrued sick time in the month before the end of the benefit year. An employee has the option to either have the entire amount of unused sick time paid out or 50 percent of the time. The Act does not require the employer to pay employees for unused accrued sick leave upon separation from employment. Employers with existing paid time off, personal days, vacation days and sick-day policies may use those policies to comply with the Act provided employees can use the time off as required by the Act. Employers must post a notification of employees’ rights under the Act and provide employees with a written copy of the notice within 30 days after the Department of Labor has issued a model notice and each time thereafter when an employee is hired. Employers also must retain records documenting paid sick time taken by employees for a period of five years. The Act provides for a private right of action that includes, among other remedies, liquidated damages in an amount equal to the actual damages sustained by the employee. The Act also contains anti-retaliation...
read moreEEOC Issues Fact Sheet Reminding Employers Not to Discriminate Restroom Use Based on Gender
By: Susan L. Swatski, Esq. North Carolina (as well as other states) has become infamous for HB-2, a law that restricts restroom use in government buildings based on the gender listed on an individual’s birth certificate, and which is directed towards transgender individuals. The law additionally prohibits municipalities from enacting anti-discrimination laws of their own. The reaction to HB-2 has been swift and furious. PayPal and Deutsche Bank, among other businesses, are halting planned expansions into the state, and multiple cities and states across the country have implemented travel bans for government employees going to North Carolina. The National Basketball Association (“NBA”) said it will change the location of the 2017 All-Star Game if the law does not change, and a significant number of filming projects and entertainers are refusing to perform in North Carolina, which has led some experts to conclude that North Carolina will lose $77 million in revenue as a result of HB-2. Additionally, the American Civil Liberties Union filed a federal lawsuit challenging the law; the case is captioned, Carcaño v. McCrory and is pending in the U.S. District Court for the Middle District of North Carolina. Also, the United States Department of Justice and the State of North Carolina are currently in litigation over whether HB-2 violates Title VII of the Civil Rights Act and Title IX of the Education Amendments of 1972. In response to HB-2 and similar laws in other states, the Equal Employment Opportunity Commission (“EEOC”) issued a fact sheet to remind employers that discrimination based on transgender status is sexual discrimination under Title VII of the Civil Rights Act. The EEOC’s fact sheet also reminded employers that HB-2, and other similar state laws, is not a defense to any action brought under federal laws. The EEOC’s fact sheet goes on to state, based on multiple rulings: denying an employee equal access to a common restroom corresponding to the employee’s gender identity is sexual discrimination; an employer cannot condition this right on the employee undergoing or providing proof of surgery or any other medical procedure; and, an employer cannot avoid the requirement to provide equal access to a common restroom by restricting a transgender employee to a single-user restroom. In addition, the EEOC fact sheet warns that “gender-based stereotypes, perceptions, or comfort level must not interfere with the ability of any employee to work free from discrimination, including harassment.” While employers everywhere should be mindful of the EEOC’s position on this matter, it is especially important for those in states subject to laws such as HB-2, as contrary state law is not a defense against potential litigation given the federal statutes. Hill Wallack employment law attorneys are available to help navigate issues such as these and how they may affect clients in New Jersey, New York, and...
read moreThe District Court of New Jersey Rejects Class Action Certification Under the FLSA
In a recent case in the United States District Court for the District of New Jersey, a plaintiffs’ motion for final certification of a collective action under the Fair Labor Standards Act was denied. At its core, Plaintiff Fred Adami and two remaining Opt-In Plaintiffs alleged that their employer, Cardo Windows, Inc. mischaracterized them as independent contractors, rather than employees, and asserted claims for unpaid overtime. Judge Simandle found that while the Plaintiffs properly alleged common employer practices, they failed to sufficiently demonstrate the similarity between the circumstances of their employment. For example, while Adami was a long-time employee that was at the core of Cardo’s operations, the Opt-In Plaintiffs “worked sporadically and had differing work environments from Adami.” Adami v. Cardo Windows, Inc., No. 12-2804 (JBS/JS), 2016 WL 1241798, at *2 (D.N.J. Mar. 30, 2016). Specifically, Adami and the Opt-In Plaintiffs worked a considerably different number of hours, which changed on an individual basis. Schedules varied based on customer needs, and the Opt-In Plaintiffs could take breaks when they wished. In addition, Defendants noted that the Opt-In Plaintiffs were entitled to hire “helpers” for each project, and were able to choose both the number and how much each were paid, which changed the profit or loss for each Opt-In Plaintiff. Lastly, while Adami worked for Cardo for approximately ten years, the Opt-In Plaintiffs had worked at the company for just a few months. Subsequently, the Court found that while Adami’s employment relationship had been described in significant detail, there was a considerable amount of evidence that showed Adami’s employment was “the exception rather than the rule.” Adami, 2016 WL 1241798, at *6. In so finding, the Court applied the “circumstances of the whole activity” test to determine whether an employment relationship existed and noted that it is the plaintiff’s burden to show by a preponderance of the evidence that “all members of the class are all employees covered by the FLSA.” Id. (emphasis in original). Ultimately, Judge Simandle held that the Opt-In Plaintiffs were closer to independent contractors than employees. As such, the circumstances of each Opt-In Plaintiffs’ employment were too dissimilar for a collective action. Employers should consider the similarity between their employees’ work, and the degree to which the company controls the day-to-day actions of its employees to determine if they are truly employees or independent contractors. Hill Wallack employment law attorneys are available to help navigate these options and how they may affect clients in New Jersey, New York, and...
read moreNew Jersey Senate Fast Tracks Paid Sick Leave Bill
Currently, there is no New Jersey state law requiring private sector employers to provide employees with paid or unpaid sick leave. However, the New Jersey State Senate has fast tracked legislation, Bill 799, to impose a mandatory sick leave requirement on private employers. S-799 stipulates that all companies, regardless of size, would have to provide at least five, and as many as nine, sick days per year to all of their employees – even part-time workers. More specifically, the Senate bill would require employers to grant workers an hour of paid sick leave for every 30 hours worked. Workers at businesses with fewer than 10 employees would be able to accrue up to 40 hours of sick time that could be carried over from one year to the next. Employers with 10 or more workers would be required to allow them to accrue and carry over up to 72 hours of sick leave. At least nine municipalities in New Jersey already require some form of mandatory sick leave. For example, private employers within the city limits of Jersey City with 10 or more employees are required to provide up to 40 hours of paid sick leave per calendar year to eligible employees. This debate in New Jersey is taking place amid a growing interest nationwide for paid sick leave, exemplified by an executive order issued by President Obama on Labor Day that requires federal contractors to provide employees with paid sick leave. Employers should stay abreast of developments on this bill which, if passed, would require employers to rewrite their existing sick leave policies and perhaps rethink their vacation and other leave policies. Employers who operate in multiple states should also follow changes in local and state laws, as other jurisdictions and cities, Philadelphia, for example, have enacted paid sick leave laws which may affect out- of-state employers operating within their jurisdictional limits. Hill Wallack employment law attorneys are available to help navigate paid sick leave laws and how they may affect clients in New Jersey, New York, and...
read moreThe U.S. Department of Labor Provides New Guidance to Determine When Workers May be Classified as “Independent Contractors”
By: Susan Swatski, Esq. (sswatski@hillwallack.com) and Jessica Seiden, Summer Associate As workplaces take on organizational restructuring, many employees become misclassified as independent contractors. This misclassification has significant impact on workers, particularly in low wage industries. When employees are wrongly characterized as independent contractors, they do not receive labor protection rights, such as minimum wage, overtime, unemployment, and worker’s compensation. The U.S. Department of Labor’s Wage and Hour Division recently provided additional guidance to aid employers in determining how to classify their workers. An agreement between an employer and a worker designating the worker as an independent contractor is not indicative of the relationship and is not relevant to the status. The Fair Labor Standards Act (“FLSA”) applies a multi-factor “economic realities test” to determine whether a worker is an employee or an independent contractor. A worker who is dependent upon finding employment in the business of others is considered an “employee,” whereas a worker in business for him or herself is considered an “independent contractor.” The Administrator’s application of the “economic realities” test considers six independent factors, and no factor alone is sufficient to determine if a worker is “economically dependent” on the employer; all of the factors must be considered in each case. The first factor to be considered is whether the work done is an “integral part of the employer’s business.” If the work performed is integral to the employer’s business, it is more likely the worker is economically dependent. Work can be integral even if it is performed away from the employer’s premises. The second factor is whether the “worker’s managerial skill affects the worker’s opportunity for profit or loss.” A worker in business for his or herself will typically have such an opportunity for profit. The focus is whether the worker exercises managerial skills and whether those skills affect the worker’s opportunity for both profit and loss. The third factor to be considered is “how the worker’s relative investment compares to the employer’s investment.” An independent contractor makes investments that support a business beyond one particular job. These investments must be significant to indicate the worker’s independence. Investing in tools and equipment is not necessarily a business investment or capital expenditure that indicates the worker is an independent contractor, because they may simply be required to perform the necessary work for the employer. The fourth factor is whether “the work performed requires special skill and initiative.” Business skills, judgment, and initiative are more indicative of independent contractor status than technical skills that are used to perform the work. Even specialized skills do not indicate that workers are in the business for themselves. The fifth factor employers should consider is whether the “relationship between the worker and employer is permanent or indefinite.” Permanency suggests employment status, while working on a single project that is not continuous or repeating is more akin to an independent contractor. A lack of permanence with an employer is indicative of independent contractor status if it results from the worker’s own independent business initiative, rather than the operational characteristics of the industry. The sixth and final factor to be considered is the “nature and degree of the employer’s control.” A worker must maintain and exercise meaningful control of his or her work to be considered an independent contractor. Under the FLSA’s broad definition...
read moreEMPLOYEE “SELF-HELP” REMOVAL OF CONFIDENTIAL DOCUMENTS TO SUPPORT A DISCRIMINATION CLAIM
By: Susan L. Swatski, Esq. (sswatski@hillwallack.com) and Bryan A. Coe, Summer Associate (bcoe@hillwallack.com) Employees seeking to support their employment discrimination litigation by removing confidential documents from their place of work should think again. That conduct, commonly referred to as “self-help” was recently dealt a blow in State v. Saavedra. Previously, in Quinlan v. Curtiss–Wright Corp., the New Jersey Supreme Court established a “totality of the circumstances” test for balancing an employee’s right to access and use documents during workplace discrimination litigation against an employer’s interest in protecting confidential documents. The New Jersey Supreme Court recently revisited the issue in State v. Saavedra, in which the court addressed whether an employee could face criminal charges for engaging in self-help to obtain confidential documents during civil litigation. In State v. Saavedra, the employee removed documents from her employer, the North Bergen Board of Education, to assist in her employment discrimination claim. In response to a request from the employer to produce all confidential documents in her possession, the employee produced the documents which she removed from her employer. Upon learning of this, the employer notified the County Prosecutor, and the employee was indicted for third-degree theft by unlawful taking of public documents. The employee argued that taking documents was allowed under the Quinlan “totality of the circumstances” test. In deciding the Saavedra case, the New Jersey Supreme Court, in a 6-1 decision, found that “nothing in Quinlan states or implies that the anti-discrimination policy of the Law Against Discrimination immunizes from prosecution an employee who takes his or her employer’s documents in use in a discrimination case.” However, the employee would be able to assert, during her criminal prosecution, that her intent was to use the documents in her discrimination litigation. The Supreme Court then articulated the following five factors for a jury to use when determining if an employee has a “claim of right” to use employer documents: (1) the contents of the documents; (2) the presence or absence of a confidentiality policy; (3) the privacy interest at stake; (4) the extent to which the employee disclosed the documents; and, (5) the employee’s reason for taking the documents instead of seeking them through discovery. This “claim of right” providesa defense to criminal charges, and the jury would weigh these factors to determine whether it was appropriate to remove the documents. In the wake of the Saavedra decision, employers should make sure employees who handle confidential information sign a confidentiality or non-disclosure agreement. Having this signed agreement will weigh in an employer’s favor if an employee attempts to establish a “claim of right” during a civil proceeding. Additionally, the employee handbook should list how confidential documents should be handled and what the consequences of mishandling those documents are, including potential criminal prosecution. If you are an employer, who regularly deals with confidential information, you should seek legal advice to determine whether your employment policies accurately protect you from an employee taking those documents from your possession to use in employment litigation....
read moreSECOND CIRCUIT INSTITUTES A NEW STANDARD FOR UNPAID INTERNSHIPS
By: Susan L. Swatski, Esq. (sswatski@hillwallack.com) and Bryan A. Coe, Summer Associate (bcoe@hillwallack.com) An unpaid internship can be beneficial to both interns and employers. Interns can gain valuable experience in their field while employers can help educate people who one day may work for their companies. However, confusion exists as to what type of experience must be provided to an intern for the experience to replace a paycheck. By providing an unpaid internship instead of a paid position, employers put themselves at risk of legal action, which can result in fines and back pay to the intern. A recent decision from the United States Court of Appeals for the Second Circuit provides employers with much needed guidance to craft their internship programs. In most states, employers must conform to the United States Department of Labor’s Intern Fact Sheet when deciding if an internship qualifies to be unpaid. The DOL’s requirements are: (1) the internship should be similar to training that would be provided in school; (2) the experience should be for the student’s benefit; (3) the intern should not be a replacement for a regular employee, but instead, should be under the supervision of a regular employee; (4) the employer must provide training and not derive an immediate advantage from the intern’s activities; (5) the intern is not entitled to a job at the end of the internship; and (6) both the employer and the intern have an agreement that the intern will not receive payment for work performed. According to the Department of Labor, all six items must be present for an internship to qualify as unpaid. In Glatt v. Fox Searchlight Pictures, Inc., the United States Court of Appeals for the Second Circuit determined that the proper question to ask is whether the intern or the employer is the “primary beneficiary” from the relationship. The Court of Appeals replaced the Department of Labor’s six factor Intern Fact Sheet with the following seven non-exhaustive factors to aid in answering whether an internship can be unpaid: (1) the extent to which the intern and the employer understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa; (2) the extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions; (3) the extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit; (4) the extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar; (5) the extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning; (6) the extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern; and, (7) the extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship. When deciding if a person should be classified as an employee, employers should balance these factors. No one factor is dispositive to conclude the intern should...
read moreEMPLOYER RIGHTS IN THE EVER CHANGING LANDSCAPE OF MEDICAL MARIJUANA USE
By: Susan L. Swatski, Esq. (sswatski@hillwallack.com) and Bryan A. Coe, Summer Associate (bcoe@hillwallack.com) The legal landscape surrounding marijuana laws has drastically changed over the last decade. Currently, 23 states, including New Jersey and New York, allow the use of medical marijuana despite the federal government’s classification of marijuana as a schedule 1 illegal drug. Pennsylvania currently has legislation pending to legalize the use of medical marijuana. The conflict between state and federal law leaves employers in states that protect against retaliation for an employee’s lawful activities guessing whether they can test for, and prohibit, the use of medical marijuana. A recent Colorado Supreme Court unanimous decision may help to alleviate some of this guesswork. In Coats v. Dish Network, the court considered whether medical marijuana use was a “lawful activity” under Colorado’s Lawful Activities statute. This statute made it illegal for an employer to terminate an employee for engaging in a lawful activity, off the premises, during non-working hours. The plaintiff in the case, is a registered medical marijuana patient, who brought suit against his former employer for wrongful termination after he was fired for using medical marijuana outside of work hours. In determining the meaning of a “lawful activity”, the court rejected the argument that the Colorado State Assembly intended “lawful” to mean lawful under Colorado law. The court found that a “lawful activity” is an activity which complies with state and federal law. As a result, the court found that because the plaintiff’s medical marijuana use was illegal under federal law, the use was not protected by Colorado’s Lawful Activities statute. New Jersey’s medical marijuana law has a provision where employers are not required to “accommodate the medical use of marijuana in any workplace.” New York’s medical marijuana law classifies patients as “disabled” making it illegal for employers to discriminate against medical marijuana users. New York’s law precludes an employer from taking disciplinary action against certified medical marijuana users for failing a drug test. Further, employers may need to make a reasonable accommodation for an employee who uses medical marijuana, although this second point is still contentious and unsettled. Pennsylvania’s pending legislation is similar to New York’s in that an employer could not consider a positive drug test for marijuana when making an employment decision unless that employee was impaired by or possessed marijuana while on the employers premises or during working hours. The Dish Network decision follows decisions from courts in California, Oregon, and Washington – each of these states permit the use of medical marijuana – that employers can fire an employee for medical marijuana use. The legal landscape surrounding the medical use of marijuana remains dynamic, particularly as support grows for the federal government lightening its stance on medical marijuana’s drug classification. All businesses that have drug testing policies should be aware of this changing legal landscape. Employers should seek legal counsel to accurately assess their drug testing policies to confirm compliance with all applicable laws. If you feel this is an area of concern for your business, seek legal counsel from one of our skilled employment law attorneys. We are ready to...
read moreMedical Marijuana Use or Employer Rights – Which Comes First?
By: Susan L. Swatski, Esq. (sswatski@hillwallack.com) On September 30, 2014, the Colorado Supreme Court is set to hear argument in Coats v. Dish Network, L.L.C., about an employee’s right to use medical marijuana during non-work hours, and the employer’s right to test for the drug and discipline users. At issue is the right of an employee to use medically prescribed marijuana to help with painful spasms when he/she is not at work. Dish Network contends that it should not have to retain employees whose marijuana use violates federal law and whose performance as a result of their marijuana use could be an issue. In New Jersey, a similar battle is being fought at Princeton University. Don DeZarn, a veteran of the U.S. Navy and senior operations manager of campus dining, was put on paid medical leave at the end of the summer as he and the University worked to decide what accommodations could be made for his medical marijuana use. DeZarn, a self-described marijuana “activist”, uses marijuana to relieve post-traumatic stress disorder and inflammatory bowel disease. He argues that he should be able to “medicate” himself while on campus. The University contends he could pose a potential safety risk if he were high while performing his job. In New Jersey, unlike in Colorado, marijuana is illegal. In 2010, then-Governor Jon Corzine signed the New Jersey Compassionate Use Medical Marijuana Act, permitting the use of medical marijuana for those with illnesses serious enough that a doctor would be willing to prescribe it. However, the law carves out an exception for employers that employers are not required to “accommodate the medical use of marijuana in any workplace.” Obviously, many employers, including Dish Network and Princeton University, are concerned about the ability of employees to perform their work in a competent manner while under the influence of marijuana. Although it remains to be seen what happens to Brandon Coats and Dish Network in Colorado, it appears that New Jersey has already made its position clear, firmly siding with employers on this issue. If you have questions about marijuana use and drug testing in the workplace, seek legal counsel from one of our skilled employment law attorneys. We are ready to...
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