The last year, at least regarding workplace law, has seemed like a late-night Ronco commercial; “If you think this last year has been challenging, just wait, there’s more!”
With the policy priorities of the Biden administration, changes in Washington after the most recent elections, inflation, labor shortages and other challenges in this post-pandemic economy, lawmakers and regulators from coast to coast have been busy with all manner of proposed and new workplace laws, regulations and enforcement activities. More are on the horizon.
USDOL Inspections on the Rise
Last year, the U.S. Department of Labor (USDOL) announced that it planned to hire at least 100 new wage and hour investigators as the agency increased its post-pandemic presence. Over the last year, employers in NH experienced more USDOL and NH Department of Labor (NHDOL) investigations than in previous years and with that, many have received notices with proposed civil money penalties and wage adjustments. These violations include a range of issues: failure to provide wage notices upon hire, the absence of I-9 support documentation, youth employment violations, improper wage withholdings, failure to pay overtime and more. Employers should be prepared for more inspections this year.
You Need to be This Tall to Ride
With labor shortages and wage inflation over the last two years, many employers expanded their hiring pool to include hiring younger workers, sometimes in jobs or workplaces where they traditionally didn’t fill those roles. As a result, employers, especially those who weren’t familiar with federal and state youth employment laws, are now facing USDOL and NHDOL fines for violations such as allowing youth to engage in or be exposed to hazardous work, insufficient parental paperwork and excessive hours of work.
Out of Sight, Out of Mind
Up to as many as 60% of American employees worked remotely for much of the last two to three years. Many employees will remain remote or work hybrid arrangements for the foreseeable future. This presents many logistical and cultural challenges for employers. One challenge is keeping track of communication and managing performance. Another challenge is timekeeping for nonexempt employees. Failure to track all hours worked for remote non-exempt employees has been and may continue to be a source of potential liability (including unpaid wages and overtime) for employers. Also looming are state tax and benefit issues when remote employees work in other states.
New Overtime Rule
Last year, USDOL indicated it would issue a new federal regulation by April 2022 that would transform the Fair Labor Standards Act (FLSA) overtime exemption rule. While that didn’t happen, it is still on the horizon and on a “to-do” list for this administration. Under the current FLSA exemption standard, only salaried employees who earn more than $35,568 in salary (and meet certain job criteria) are exempt from overtime pay. If, and likely when, USDOL rolls out the new rule, it is expected to not only significantly raise the minimum salary (rumored to be close to the $47,000 rate proposed by the Obama USDOL or as high as $82,000 by 2026) but also to include a mechanism calling for automatic updates every few years.
What to do With Drug Policies?
Within the last year, President Biden announced the proposed pardoning of individuals convicted of federal drug law charges related to marijuana possession. He encouraged governors to follow suit. He also directed Health and Human Services to review the reclassification of marijuana from a Schedule One narcotic under federal law. Currently, 39 states have legalized marijuana in one form or another (22 states, plus DC and Guam for recreational and medical use). In 2022 Rhode Island, Maryland and Missouri legalized the sale of recreational marijuana to adults over age 21. This means in 2023 and beyond, employers will need to revisit their drug and alcohol policies and testing procedures.
We are Family
In recent years, several states, including NH, have adopted various forms of paid family leave laws. From the very generous provisions in California to the much smaller, voluntary, and employee-funded program in the Granite State, employers have come to see the recruitment and retention benefits of these programs. Recently, in his $6.8 trillion budget plan for FY 2024, President Biden included $325 billion to fund a federal paid family and medical leave program. While that measure is unlikely to pass Congress, in the meantime, the Biden administration has adopted additional protections for pregnant employees: The Pregnant Workers Fairness Act (PWFA) and the PUMP Act.
The PWPA requires covered employers to provide “reasonable accommodations” to pregnant employees with known limitations related to pregnancy, childbirth or related medical conditions, unless, of course, the accommodation will cause the employer an “undue hardship.” The PWFA goes into effect on June 27, 2023, and the U.S. Equal Employment Opportunity Commission (EEOC) has been directed to issue regulations to carry out the law.
The PUMP for Nursing Mothers Act (“PUMP Act”), like the changes to federal wage and hour law part of the Affordable Care Act, amends and expands workplace protections for employees with a need to express breast milk. Specifically, the PUMP Act expands protections to cover salaried employees and other employees not covered under existing law. In addition, under the PUMP Act, time spent to express breast milk must be considered hours worked. As of this writing, regulations and guidance were expected to come before the PUMP Act went into effect in late April.
Workplace Bills in NH
We are approaching the mid-point in the NH legislative session. Below is a list of a few of the workplace bills in the House and Senate as of March 21:
• Establishing a committee to study student loan forgiveness in NH.
• Prohibiting collective bargaining agreements that require an employee to join a labor union.
• Job protection for employees who use medical marijuana.
• Increasing maximum work hours during the school year for youth.
• Employment restrictions for registered sex offenders.
• Legalizing cannabis for retail sale.
• Payment for an employee’s unused earned time.
• Changes to tip pooling/tip sharing law.
• Revising complaint processing at the Human Rights Commission.
Bills Pending Before Congress
The following is a sample of workplace bills before Congress also as of March 21. This is not an exhaustive list, but it gives some sense of the priorities of this administration. A change in the majority party in the House has resulted in an expected change in the focus, priority, and trajectory of these and other workplace bills.
• Restoring Workers’ Rights Act of 2022 (Banning noncompetes for lower wage earners.)
• Workforce Mobility Act of 2023 (Banning noncompetes in general as an unfair trade practice.)
• Ending Secrecy About Workplace Harassment Act (Requiring reports to EEOC on discrimination settlements.)
• Child and Elder Care Solutions Act (Tax benefits to workplace child and dependent care.)
• Fair Warning Act of 2022 (Amend WARN Act to provide more notice to employees.)
• Accountability for Workplace Misconduct Act (To limit the use of NDAs in discrimination cases.)
• Worker Flexibility and Choice Act (To increase flexibility of independent contractor arrangements.)
• Portable Benefits for Independent Workers Pilot Program Act (Pilot program for portable benefits.)
• Part-Time Worker Bill of Rights Act (Providing part-time employees access to FMLA.)
• Be HEARD in the Workplace Act (Expands discrimination protections for employees and limits nondisparagement and nondisclosure agreements.)
More Enforcement Activities
EEOC has also announced its concerns about the use of artificial intelligence (AI) by employers, especially involving the recruitment and screening of applicants. EEOC has suggested that the use of automated systems, including AI or machine learning and screening tools, could disproportionately effect workers in protected classifications. EEOC promises more to come on this issue.
The Federal Trade Commission (FTC) has proposed a rule that could prohibit noncompetition and other restrictive employment agreements. This would be at odds with many state laws, as well as the legitimate business interests of many employers, and could be subject to legal challenges.
A few months ago, the National Labor Relations Board (NLRB) also issued an opinion that caused many employers to consider revising their separation agreements. The NLRB focused on nondisparagement, nondisclosure and confidentiality provisions that might run afoul of the National Labor Relations Act. Like the FTC rule, it is unclear whether the NLRB’s ruling will have widespread application. But employers should still be aware of these developments and review them with their legal counsel.
Attorney Jim Reidy is a shareholder at Sheehan Phinney where he is the co-chair of the firm’s Labor and Employment practice group. For more information, visit sheehan.com.
Current Issue - May 2024