CLOSE X
RSS Feed LinkedIn Instagram Twitter Facebook
Search:
FMG Law Blog Line

Archive for the ‘Employment Law Blog – MA’ Category

Employers Watch Out: New DOL Rule May Limit Joint Employer Liability

Posted on: January 27th, 2020

By: Janet Barringer

New Rule

A new rule goes into effect March 16, 2020, per the Department of Labor (DOL), as to when a “joint employer” is equally liable under federal wage and hour laws.  This new rule is an attempt to limit “joint employer” liability.  The determination as to whether a scenario is one of joint employment turns on a new four-factor test.

The test asks DOES THE BUSINESS IN QUESTION:

  1. Hire or terminate the employee, which is not to be confused with the “power” to hire or fire the employee;
  2. Supervise and control the employee’s schedule or conditions of employment to a substantial degree;
  3. Determine the employee’s rates and methods of payment; and
  4. Maintain the employee’s personnel/employment records.

According to the DOL, no single factor is dispositive in determining joint-employer status.  Instead, the weight given to each of the four factors depends on the circumstances at hand.  Most likely, Courts will decide the balancing test among these four factors, as the DOL has provided little guidance on how to do so.

Beware of Catch-all Provision

Employers should be aware there is an alternative “catch-all” provision in the DOL rule which states factors not specifically included in the four-part test may be considered in the determination of whether a joint employment relationship exists.  However, this catch-all provision only applies if the potential joint employer exercises “significant control” over the terms and conditions of the employee’s work.  The practical application of this catch-all provision remains to be seen, and will likely depend on Courts’ interpretation.

Employers Excluded under New Rule

The DOL helpfully included in its guidance several common business arrangements not factored into its analysis of a potential joint employment relationship.  These include the following factors:

  1. Existence of a franchisee/franchisor relationship, including entering into a brand and supply agreement;
  2. An unexercised right to control the employee’s terms and conditions of employment. Standard contractual language reserving a right to act will not be enough to establish a joint employment arrangement under the four-factor test;
  3. The employee’s economic dependence on the potential joint employer, including whether the employee is in a specialized position or has the opportunity to make a profit or incur a loss based on performance;
  4. A potential joint employer’s contractual agreements requiring the employer to comply with specific legal obligations or meet certain standards to protect the health and safety of its employees, i.e., compliance with wage and hour laws or maintenance of sexual harassment policies;
  5. Management of quality control standards implemented by the potential joint employer, such as standards ensuring the consistent quality of products;
  6. Whether the potential joint employer provides standardized human resources forms, including employee handbook templates;
  7. A potential joint employer’s offer of health or retirement plans to the employer or participation in such plans with the employer; or
  8. Joint participation in an apprenticeship program with the employer.

Safeguards for Employers to Take Before March 16, 2020

Before the new rule for joint employer goes into effect on March 16, 2020, businesses should take account of their procedures to confirm they are protected under the rule’s four-factor test. Employers should also consider working with their counsel to determine, and create, if necessary, business changes to maximize their ability in taking advantage of the new joint employment standard.  The updated rule may provide more flexibility and certainty when it comes to employers’ wage and hour responsibilities.

If you have any questions or would like more information, please contact Janet Barringer in the National Labor & Employment Practice Section at [email protected].

Massachusetts Paid Family and Medical Leave Law: Planning Ahead and Important Deadlines

Posted on: July 2nd, 2019

By: Jennifer Markowski and Zinnia Khan

The Massachusetts Department of Family and Medical Leave (“DFML”) recently extended certain deadlines for the Paid Family and Medical Leave Law (“PFML”), giving employers additional time to prepare for the changes ahead. The statute is anticipated to become fully effective in 2021, but the following interim deadlines are coming up this year:

  • September 30, 2019: Notice of the statute must be distributed to employees and employees must be given the opportunity to either acknowledge or decline to acknowledge receipt of the notice. Although employers may create their own, the DFML has published a template notice.
  • October 1, 2019: Employer contributions begin. Employers must begin withholding PFML contributions from employee qualifying earnings and begin making employer contributions (if applicable).
  • December 20, 2019: Employers seeking an exemption that will excuse them from all contributions must submit their private plan exemption by this date. This exemption is available to employers that offer leave benefits that are at least as generous as PFML.

Although similar in scope to the Family Medical Leave Act (“FMLA”), the PMFL provides more extensive benefits including paid leave and more leave time. It also provides for payments to eligible former employees whose employment ended within 26 weeks of the start of their leave as well as to independent contractors if they make up more than fifty percent of an employer’s staff. Moreover, the definition of a “family member” under PMLA is more expansive than under the FMLA. Leave under PFML is allowed to run concurrently with leave under FMLA.

Some of the key provisions of PFML are as follows:

  • Applies to employers of all sizes.
  • Municipalities, districts or political subdivisions may opt out.
  • Employers that already offer paid leave may also opt out, so long as the benefits they offer meet or exceed those under PFML.
  • Employees are eligible for up to 20 weeks of paid medical leave if they or a family member has a serious illness or injury, 12 weeks of paid leave to care for and bond with a new child, or 26 weeks of leave to care for an injured family servicemember.
  • Employees are permitted a maximum of 26 weeks leave per calendar year.
  • Leave under the new law will be paid based on a sliding scale of an employee’s income up to the maximum of $850 a week (which is the current cap of 64% of the average state weekly wage).
  • The first seven days of an employee’s leave are not paid, though they can be covered by sick or vacation time.
  • After returning from leave, an employee must be restored to the same or equivalent position that he or she previously held.
  • Employers with fewer than 25 workers will not have to contribute, but employees will still have to pay their portion of the tax.

In the coming months, employers should take steps to ensure timely compliance with PMFL. This is a good time to finalize the required notice form and create a plan for distribution. Also, employers should consider whether existing plans exempt them from PFML and, if so, prepare to submit a timely exemption request. Employers should speak with their payroll providers and confirm that the providers are prepared for the upcoming changes and ready to implement the required deductions. This is also a good time for employers to review their policies and handbooks to ensure that they are up to date and perhaps consider a training on responding to leave requests as they are likely to increase when the law goes into effect.

If you have any questions about this article or any other employment matter, please do not hesitate to call or email Jennifer Markowski at (617) 807-8962 [email protected] or any other attorney in Freeman Mathis & Gary, LLP’s Labor and Employment group: https://www.fmglaw.com/labor_employment_law.php