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Archive for the ‘Employment Law Blog – PA and NJ’ Category

PA Supreme Court Rules Uber Drivers Entitled to Unemployment Benefits

Posted on: August 7th, 2020

By: Erin Lamb

In Lowman v. Unemployment Compensation Board of Review, the Pennsylvania Supreme Court has ruled 5-2 that Uber drivers are not engaged in independently owned businesses when driving for Uber and are therefore eligible for unemployment benefits. The ruling is expected to open the gates for more “gig economy” workers to not only claim unemployment benefits, but also bring workers’ compensation claims.

The Uber driver had lost his job as a behavioral health specialist and applied for unemployment benefits. While awaiting that determination, he began working as an Uber driver. A month later, the Unemployment Compensation Service Center determined he was ineligible for benefits because of his agreement with Uber. The Commonwealth Court, which is the appellate court for certain cases in Pennsylvania that largely arising out of actions of the government, reversed the decision. However, in upholding that decision the Supreme Court went further in its analysis. The Commonwealth Court decision had still focused on the driver’s own actions and whether they were taken to further self-employment.

The Supreme Court decision, authored by Justice Donohue, eschewed that traditional analysis and instead focused on the company’s relationship with the drivers. The opinion focused on factors that showed that the company controlled the driver and found them dispositive when compared to the factors that indicated the drivers could operate independently. Uber argued that its contract with the driver referred to him as an independent contractor and he used his own car and cellphone, showing that the driver controlled his own employment. Justice Donohue found that the mere fact that drivers use their own cellphones and vehicle was immaterial when the “fundamental tool” necessary to provide driving services is the Uber Driver App and only Uber provides the app. Without it, drivers can provide no service. It is the sole method that drivers can use to connect, meet, and/or interface with passengers. To receive the Driver’s App, the driver must apply to Uber through Uber’s own application process. Drivers also have no control over the customer base, and was prohibited from subcontracting out his account to another driver. Justice Donohue also noted that Uber monitors, reviews, and supervises the drivers’ performance, and that Uber sets the pay structure.

Chief Justice Saylor dissented, with Justice Mundy joining.

If you have questions or would like more information, please contact Erin Lamb at [email protected].

Pennsylvania Offers Certain Employers Help with Hazard Pay

Posted on: July 23rd, 2020

By: Justin Boron

Last week, the governor made $50 million available to businesses, health care non-profits, public transit agencies, and certain economic development organizations to cover hazard pay for ‘front line’ employees exposed in life-sustaining industries exposed to COVID-19 risks. The payments must go toward paying employees in certain industries, including healthcare, food manufacturing, food retail, childcare, janitorial, transit, and security services.

The hazard pay is a $3/hour raise on the employee’s regular pay rate paid during the ten-week period from August 16, 2020 to October 24, 2020. It also must be used to supplement—rather than supplant—any eligible overtime, benefits, existing employer-paid, hazard pay, or any scheduled increases to current compensation. The funding also may be used only to pay direct, full-time and part-time employees earning less than $20/hour, excluding fringe benefits and overtime.

Eligible businesses must apply online with the Department of Community and Economic Development.  The amount of funding is limited to $1,200 per full-time equivalent employee for up to 500 employees per location.

Employers relying on this program will need to be careful to assimilate the hazard pay correctly into their pay system to ensure compliance with wage-and-hour regulations. One question left unanswered is whether the adjusted regular rate that includes hazard pay should be used for calculating the overtime rate. It’s likely that additional guidance will be issued, so employers using a hazard pay grant will need to track updates.

If you have questions or would like more information, please contact Justin Boron at [email protected].

Additional Information:

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

New Jersey and COVID-19: What Businesses Need To Know About Reopening Plans

Posted on: July 13th, 2020

By: Ashley Hobson

New Jersey has been one of the most proactive and reactive states amidst the COVID-19 pandemic. As of the publication of this Blog, the State has only entered into the second stage of its reopening, which still excludes indoor dining and attendance at bars, indoor exercise at gyms and other fitness studios, and attendance at nightclubs.

As the state continues to slowly reopen its doors, employers must be keenly aware of the many regulations imposed on newly reopened facilities. Not only are New Jersey businesses advised to follow CDC and OSHA Guidelines in reopening their businesses, they must follow guidelines imposed by the state.  Despite the initial closure of many retail operations, on April 15, 2020, Executive Order No. 122 provided a short, but comprehensive list of cleaning requirements for business that remained open and those that would eventually reopen. The guidelines include, but are not limited to, routine cleaning and disinfecting of highly touched areas, maintaining routine cleaning procedures in areas that are not highly touched, and ensuring there are enough workers to implement the cleaning protocols.

As employees remain cautious about a return to work, many employees across the state, however, remain unable to return to their positions because their employers can only reopen as a part of the 3rd stage of Governor Phil Murphy’s plan.  As a result, the current employment rate increased to 15.2% in May 2020, which represents a drastic increase from 3.3% in the prior year.

To continue to prepare for the growing number of the unemployed, on July 1, 2020, New Jersey’s Department of Labor expanded the number of eligible weeks for a claimant by 20 weeks. The additional 20 weeks will begin after the claimant has exhausted the initial 26 weeks of the state’s unemployment and the 13 weeks of the federal Pandemic Emergency Unemployment Compensation (“PEUC”).

In addition to the additional state benefits, the Department of Labor and Workforce Development announced that eligible workers will be able to receive a larger percentage of their wages under the Temporary Disability Insurance and Family Leave Insurance programs. The changes to the legislation will provide:

  • Workers with up to 12 consecutive weeks of Family Leave Insurance or 56 days of intermittent days and
  • Increase of the maximum benefit amount to 85% of the employee’s average weekly wage with a maximum of $881 per week.

The increased benefit amount and time adds to the growing list of protections under New Jersey’s ever-expanding protections for the employed and unemployed. It will remain to be seen if additional expansions will be announced after the expiration of the additional 20 weeks of unemployment compensation and if the state will also increase the benefit amount as the unemployment rate continues to hover in the double digits.

All of these new changes remind employers that they must remain vigilant in understanding their obligations during these very unusual times.  Of course, if you have any questions, please contact one of our New Jersey Labor & Employment team members.

Additional Information:

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients.  Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments.  For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER:  The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19.  The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement.  We can only give legal advice to clients.  Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG.  An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest.  As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such.  We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

U.S. Department of Education Announces Temporary Halting of Wage Garnishments

Posted on: March 30th, 2020

By: Jeffrey A. Hord

On March 25, 2020, the Department of Education (DOE) announced that it will temporarily halt seizing wages and/or withholding tax refunds from borrowers who have defaulted on their student loans held by the federal government.  As part of the Trump Administration’s multifaceted response to the COVID-19 national emergency, the DOE has suspended any wage garnishments and stopped all requests to the U.S. Treasury Department to withhold money from defaulted borrowers.  The directive is retroactive to March 13, 2020, and will last for a period of at least sixty (60) days.  The DOE also instructed private collection agencies to stop all “proactive collection activities,” including making phone calls to borrowers and issuing collection letters and billing statements.

Employers who are responsible for properly processing wage garnishments should take note of this announcement.  In its official press release, the DOE emphasized that, while borrowers whose paychecks were being garnished will now be entitled to their full wage, it is the responsibility of the employer to make the necessary change to the employee’s paycheck:

“The Department must rely on employers to make the change to borrowers’ paychecks, so it will monitor employers’ compliance with the request to stop wage garnishment. Borrowers whose wages continue to be garnished after March 13 should contact their employers’ human resources department.”

While the directive unambiguously prohibits “new” wage garnishments, Social Security offsets, and collection actions, the DOE’s announcement leaves some room for doubt as to whether garnishments and offsets put into effect prior to March 13, 2020 are similarly impacted.  However, in a contemporaneous set of FAQ published on the DOE’s official Federal Student Aid website, the Department seemed to clearly signal its intent:

If your wages continue to be garnished after the president’s March 13, 2020, announcement, you should contact your employer’s human resources department. If DOE receives funds from your paycheck that should have been stopped as a result of the March 13 announcement, we will refund your garnished wages.

The good news for employers who make payments towards their employees’ outstanding student loans as a benefit of employment is that they can now do so tax-free until January 1, 2021, for up to $5,250 annually.

Additional Information:

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues on a regular basis.  On April 2, we will discuss the impact of Coronavirus on law enforcement.  Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the Coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER: The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19. The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement. We can only give legal advice to clients. Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG. An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest. As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce education content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such. We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.**

PA Supreme Court Elevates State Pay Standards Above the FLSA on Fluctuating Work Week

Posted on: February 12th, 2020

By: Justin Boron

Going forward, Pennsylvania employers should be wary of relying on federal rules for their pay policies.

As a general principle, courts and regulators interpret Pennsylvania’s wage and hour laws consistently with the Fair Labor Standards Act.  But the Pennsylvania Supreme Court called this principle into question when it held that the fluctuating workweek method of calculating pay—which federal regulations expressly authorize—is not permitted under the Pennsylvania Minimum Wage Act.  See Chevalier v. Gen. Nutrition Ctrs., Inc., 220 A.3d 1038 (Pa. 2019).

The fluctuating workweek allows employers to meet their overtime obligations to nonexempt employees—under certain conditions—by paying the employee a fixed salary for fluctuating hours and paying a rate of at least one-half of the regular rate of pay for the hours worked each workweek in excess of 40.  See 29 C.F.R. 778.114(a).  But because the Pennsylvania wage law is silent on this issue, the Pennsylvania Supreme Court concluded that this method of pay calculation was not available.

The ruling itself is not breaking new ground.  Several Pennsylvania federal courts had previously held that the fluctuating workweek was not available under Pennsylvania law.  But it sounds a note of caution to Pennsylvania employers and their advisors about assuming that Pennsylvania wage law will agree with the FLSA and the regulations interpreting it.

It also could be a harbinger for shifts in interpretation of state wage laws in light of the DOL’s new proposed wage rules or rollbacks.  In fact, the Chevalier ruling came just weeks after the DOL proposed a revised version of the fluctuating workweek aimed at clarifying its application and potentially expanding its use under federal law.[1]

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

[1] https://www.dol.gov/agencies/whd/overtime/fww .