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Archive for the ‘Employment Law Blog (US)’ Category

AB5: California’s Controversial Gig-Work Law Took Effect January 1, 2020

Posted on: January 7th, 2020

By:  Margot Parker

As of January 1, 2020, California’s AB5 may require employers to reclassify hundreds of thousands of independent contractors as employees with broad labor law protections.  The new law codifies the “ABC test” adopted by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court of Los Angeles in 2018.  Under the ABC test, a worker may only be classified as an independent contractor if it can be shown that:

A. The worker is free from the control and direction of the hiring entity, both under the contract for the performance of work and in fact;

B. The worker performs work that is outside of the usual course of the hiring entity’s business, and

C. The worker is engaged in independently established trade, occupation, or business that is of the same nature as the work performed for the hiring entity.

This strict three-pronged test now applies to the requirements of the California Labor Code and the California Unemployment Insurance Code.  Beginning July 1, 2020, it will also apply to the California Workers Compensation Code.

While the law provides exemptions for certain occupations and industries (including accountants, architects, dentists, insurance brokers, lawyers, and engineers), the Legislature declined to exempt app-based ride services and food delivery companies, whose workers complain they often earn less than minimum wage.  Uber, Lyft, DoorDash, Postmates and Instacart are mounting a ballot initiative to exempt their workers, while trucking associations, photographers, and freelance journalists have brought other initiatives opposing the law.

Given such controversy, the law’s author intends to introduce additional legislation to clarify AB5 this year.  In the meantime, employers should consult with legal counsel and review independent contractor classifications to ensure proper classification of workers pursuant to the ABC test.

If you have any questions or would like more information, please contact Margot Parker at [email protected].

Federal Court Temporarily Enjoins California’s Ban On Mandatory Arbitration Agreements

Posted on: January 7th, 2020

By: Brad Adler

Employers will recall that California passed a law in October, 2019 (AB 51) that would limit the ability of employers to require mandatory arbitration of certain statutory employment claims as of January 1, 2020.  Specifically, AB 51 provided that employers could no longer require, as a condition of employment, that a job applicant or employee arbitrate any alleged violation of the California Fair Employment and Housing Act or the California Labor Code.  After AB 51 was passed, a coalition of business groups led by the U.S. Chamber of Commerce filed a lawsuit seeking to block AB 51 from taking effect.

On December 30, 2019, Judge Kimberly Mueller of the Eastern District of California granted a temporary restraining order in response to that lawsuit, which effectively blocks AB 51 from going into effect until the Court holds a preliminary injunction hearing on January 10, 2020.  At the January 10 hearing, the Court will decide whether to grant a preliminary injunction that would block implementation of AB 51 until the case is fully resolved.  As a result of the Court’s temporary restraining order, at least as of right now, it still is lawful to continue requiring employees to sign arbitration agreements.  But please be aware that the lawsuit challenging AB 51 is moving quickly so employers with California employees should continue to monitor this lawsuit.

If you have any questions or would like more information, please contact Brad Adler at [email protected].

NLRB Reverses Obama-Era Ruling And Finds That Employers Can Prohibit Use of Company Email for Union Activities

Posted on: January 2nd, 2020

By: Brad Adler

On December 17, 2019, the National Labor Relations Board (NLRB) ruled in Caesars Entertainment that employees have no right under the National Labor Relations Act to use an employer’s email system for union activities, including organizing. This decision reverses a controversial and unprecedented ruling by the NLRB in 2014 (Purple Communications)  that essentially found that employers could not prohibit employees from using the employer’s email system for union activities.

While the scope of any ban on using email for non-work purposes will vary based on the facts of each case, the good news is that the NLRB, as currently constituted, has recognized that an employer fundamentally is in charge of how its equipment, including email system, can be used by employees.  In light of this ruling, we suggest that employers work with their labor and employment counsel to ensure that the language of any current work rules clearly sets out the respective company’s expectations on how work equipment, including email, should be used by employees.

If you have any questions or would like more information, please contact Brad Adler at [email protected].

Holiday Office Parties: Serving Up Both Cheer … and Fear!

Posted on: December 3rd, 2019

By: Melissa Whitehead

There is no doubt that the Holiday Season is in full swing – and that means workplace holiday parties! While these festive events are great for increasing workplace camaraderie and celebrating achievements of the year, they are more well known for the high risk of inappropriate behavior. Somehow, companies that spend all year working to create a positive, healthy and respectful workplace find themselves on a Monday morning in December, calling counsel to ask for guidance in addressing some incident that happened at the office holiday party over the weekend. Here are some tips and things to think about, in hopes that your company can avoid making that dreaded call to counsel that begins with, “So, we had our office holiday party on Friday and…”

To Serve Alcohol or Not to Serve? Alcohol consumption at office parties creates a number of risks for the employer. First, if an employee consumes too much alcohol at the party and makes the poor choice to drive home and gets in an accident, the employer in many states (including California) can be found liable for any damage caused by that employee (including injury to others). Further, and more common, alcohol lowers inhibitions and can make employees feel more comfortable saying and doing things that they would otherwise never do or say in the workplace. This is why holiday parties are a common ground for #MeToo moments and similar issues.

That said, the reality is that most workplaces will serve alcohol at their office parties. Some tips for reducing the risks that come with serving alcohol include: (1) have a bartender or server serving drinks (as opposed to an open bar); (2)  enforce a 2-drink limit per attendee (e.g., drink tickets); (3) pay for transportation home from the party or overnight accommodations; and (4) designate an executive or HR professional to “cut off” attendees that appear over-served. It is also a good idea to send a notice to employees in advance of the party, reminding them that the company’s anti-discrimination, anti-harassment, and rules against hostile work environment are all still in full force and effect during the office party.

To Pay or Not to Pay? Another common question is whether employees must be paid for their time at the holiday party. This generally boils down to whether attendance is mandatory. If an employee is required to attend the party, in most states it will likely be considered “time worked” and subject to minimum wage and overtime rules. This issue can be addressed by holding the party during normal working hours and paying employees for their time as with any other workday. Alternatively, employers should make clear that attendance is optional.

Of course, this blog does not raise or address all risks that come with the workplace holiday party, but following these helpful tips will help you avoid becoming the next viral sensation of the holiday season! Happy holidays!

If you have any questions or would like more information, please contact Melissa Whitehead at [email protected].

Florida Legislature is One Among Several Pushing for Mandatory Use of “E-Verify”

Posted on: November 8th, 2019

By: Melissa Santalone

A Florida State Senator has filed a bill that would require, beginning January 1, 2021, all Florida businesses to use the “E-Verify” system to check whether each newly hired employee is authorized to work in the U.S.  The “E-Verify” system is a web-based system operated by the Department of Homeland Security (DHS) that compares information supplied by the user, presumably first obtained from the new employee, with data held by DHS and the Social Security Administration.  The bill does not limit its application to businesses of a certain size and, therefore, even the smallest of Florida businesses would be required to comply.  Any businesses failing to register with “E-Verify” after the effective date of the bill, if signed into law, would be subject to suspension of all or any state licenses they hold.  If an employer is found to have committed a second violation of knowingly employing an “unauthorized alien” within a 2-year period, the bill would subject the employer to a 30-day suspension of its business licenses.  Governor Ron DeSantis has previously come out in favor of mandatory use of “E-Verify” and would likely sign the bill into law if it were to pass both houses of the Legislature.

By introducing this bill, the Florida legislature joins the legislatures of other states, including Pennsylvania, and the United States Congress in considering similar mandatory use of “E-Verify” in 2019.  Earlier this year, legislators in North Carolina proposed a bill that would increase the number of businesses subject to its mandatory use of “E-Verify” by including businesses with 5 or more employees, down from 25 or more.  Currently 9 states require all or most employers to use “E-Verify” and numerous others require some employers to use it.

Interestingly, the Florida bill would also create a private cause of action against an employer by an employee who is a U.S. citizen or resident alien that is discharged by the employer while the employer knowingly employs an “unauthorized alien” at the same job site or in the same job classification elsewhere in Florida.  In such an action, the employee could be entitled to reinstatement or the recovery of back pay, court costs, and attorney’s fees.

We will be watching to see if this bill becomes law.  If you have questions about Florida law surrounding the use of “E-Verify” or other labor and employment-related questions, please contact Melissa A. Santalone at [email protected].  If you need assistance in other states where Freeman Mathis & Gary can assist you, please contact a member of our Labor & Employment practice group.