July 2017 Regulatory Updates

by Kathryn Carlson on July 19, 2017

National Updates

Misclassification of Workers and Joint Employment

In 2015, the Department of Labor (DOL) provided an interpretation about misclassifying employees and independent contractors. The DOL’s guidance at the time was to use the six multi-factor test to determine a worker’s classification and that no one factor alone determines the classification. The DOL’s original interpretation wanted employers to deeply evaluate the work relationship and focus on the dependency of the employee and employer vs. the independency of two businesses working together.

Not only had the DOL expanded guidance on misclassification, but it also provided an interpretation on joint employment that would increase employer liability for wage-hour penalties. The 2016 Administrator’s Interpretation on joint employment was focused on the DOL’s guidance that tests should be focused on economic realities rather than the long-standing control test.

As of June 2017, the DOL withdrew its interpretation on misclassified workers from its resources.

What to do now? The potential for joint employer liability still exists for employers. It’s still important to assess risks for joint employer liability.

 

EEO-1 Report Changes

Last year, the Equal Employment Opportunity Commission (EEOC) announced a new reporting requirement to include pay data with the annual EEO-1 Reports. The EEOC has provided a guide on definitions, pay ranges, and upload instructions for employers. Originally, the reports were to include pay information and be uploaded by September 2017. The EEOC will be providing employers with a new cycle for collecting data and uploading their reports. Beginning 2017, the reporting deadline will be March 31, 2018.

With this change comes additional cautions. President Trump is proposing to merge the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) into the EEOC by the end of July 2018. The House Subcommittee is also critical of the EEOC’s decision to include pay with the EEO-1 report and there is a request to the White house Office of Management and Budget (OMB) to review and possibly reject the revisions to the EEO-1 form.

Bottom line: More to come …

 

State Updates

Paid Sick Leave

Arizona – July 1, 2017 marks the first day of Arizona’s paid sick leave law. Employers with 15+ employees must provide at least 40 hours of paid sick time per employee, per year. Employees will accrue 1 hour of paid sick leave per every 30 hours worked. Accrual of time off will begin upon hire but employees can’t access their bank of hours until they have completed 90 days with the employer. Anyone rehired within 9 months will be reinstated with their unused bank.

Chicago and Cook County (IL) – Beginning July 1, 2017, the City of Chicago and Cook County are implementing the Paid Sick Leave Ordinance. However, 93 municipalities in Cook County have opted out of the ordinance so far; 134 municipalities are participating. The ordinance requires employers of all sizes to provide a maximum of 40 hours per 12-month period.

Georgia – Effective July 1, 2017 Georgia’s Family Care Act requires employers to let employees use up to 5 days of their existing paid sick leave to care for immediate family members. This change only impacts employers with 25+ employees and only those employers with an existing paid sick leave or ones that intend to provide paid sick leave in the future.

Maryland – On March 16, 2017, the Maryland Senate passed the Maryland Healthy Working Families Act which includes a paid sick leave bill. Maryland has proposed an effective date of January 1, 2018. Employers with 15+ employees must provide at least 1 hour of paid sick leave for every 30 hours worked. Employees must be at least 18 years old and work 12+ hours per week. Stay tuned for more updates.

City of Minneapolis and City of Saint Paul (MN) – Beginning July 1, 2017, employers physically located in Minneapolis or Saint Paul, must uphold the Minnesota Sick and Safe Time Ordinance. This ordinance requires employers to provide paid sick leave and safe time leave. Employers with 6+ employees in Minneapolis must provide 1 hour of sick and safe time for every 30 hours worked. Accrual can be capped at 80 hours. All employers in Saint Paul must provide 1 hour of sick and safe time for every 30 hours worked. Employers may cap the accrual at 48 hours per year.

New York City (NY) – July 1, 2017, New York employers may begin withholding from employee pay to fund the New York Paid Family Leave Law, which goes into effect January 1, 2018. The leave law is meant to be fully funded by employee deductions rather than employer contributions. The max contribution is $1.65 per week. All employees who work a minimum of 20 hours per week for 175 days are eligible to participate.

Washington – Starting January 1, 2018, the state of Washington will implement a paid sick leave law for the state. The state will require employees accrue 1 hour of paid sick leave for every 40 hours worked. Employees may rollover up to 40 hours of unused sick leave into the next benefit year. This will require Seattle, Spokane, and Tacoma employers to ensure their sick leave policies match at both state and city levels in order to be compliant.

 

Predictive Work Schedules

Predictive scheduling laws require employers to provide employees a certain amount of notice about upcoming schedules and changes based on previously communicated schedules. Schedule changes may include shift reductions, on-call adjustments, and other situations requiring the employer to change an employee’s schedule. This type of law was first successfully introduced in San Francisco in 2014.

New York City (NY) – November 2017, New York will introduce its own predictive scheduling laws for the retail industry, requiring employers with 20+ employees to post staff schedules at least 14 days in advance and to pay a premium if the schedule changes with less than 14 days’ notice.

Employers ARE NOT ALLOWED to:

  • Schedule a retail employee for an on-call shift
  • Cancel any regular shift within 72 hours of the scheduled start
  • Require an employee to work with fewer than 72 hours’ notice
  • Require an employee to contact another employee to confirm they will report for a regular shift fewer than 72 hours prior to the start of the shift

 

Seattle (WA) – Effective July 1, 2017, Seattle’s Secure Scheduling Ordinance requires employers with 500+ employees worldwide to establish a predictable work schedule. The ordinance requires employers to include employees’ input on their work schedules, including the right to request to not be scheduled during certain times or at certain locations and provide preferences for the shift hours and locations of work.

Employers are to provide written good faith estimates of work schedules 14 days prior to the first scheduled shift. A good faith estimate includes an average of the hours an employee can expect to work and whether the employee can expect to work on-call shifts. Employers cannot schedule or require an employee to work less than 10 hours after the end of the previous shift. However, the employee can consent to work less than 10 hours and will be paid at time-and-a-half for the shift. If the employer adds hours to an employee’s schedule after it’s been posted, the employer must pay an additional hour of “predictable pay.” If an employer sends an employee home before the end of the scheduled shift, the employer must pay for ½ of the hours not worked.

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Kathryn CarlsonJuly 2017 Regulatory Updates