New Jersey law requires severance pay in mass layoffs

Governor Phil Murphy signed legislation yesterday, January 21, 2020, amending New Jersey’s mini-WARN law, the Millville Dallas Airmotive Plant Job Loss Notification Act (the “Act”). Most notable among the changes is the requirement that companies with 100 or more employees (now including part-time workers) pay severance to employees impacted by a mass layoff. A “mass layoff” is considered any plant closing or transfer resulting in 50 or more employees losing their jobs.

Pursuant to the Act, impacted employees must receive at least one week of pay for every year of service as a severance payment. When calculating the amount of severance pay, the rate of pay must be the greater of the employee’s average rate of compensation during the last three years or the employee’s final rate of pay. If the employee is entitled to a greater amount of severance under any contract, policy, or collective bargaining agreement, the employee must receive the greater amount. The Act classifies the severance payments as “compensation due to an employee” that has been “earned in full,” so that employees who do not receive the required severance have a priority claim if the employer files for bankruptcy.

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EEOC rescinds longstanding policy statement on mandatory binding arbitration

Last month, the U.S. Equal Employment Opportunity Commission (EEOC) surprisingly announced that it was formally rescinding its longstanding “Policy Statement on Mandatory Binding Arbitration of Employment Discrimination Disputes as a Condition of Employment,” which took the position that mandatory arbitration provisions between employers and employees were contrary to federal antidiscrimination laws.

Originally issued in July 1997, the EEOC’s policy statement expressed its position that mandatory arbitration agreements could have “chilling effects” on charge filing because employees (1) may not be aware of their right to nonetheless file an EEOC charge despite such an agreement; or (2) might otherwise be discouraged from coming to the EEOC when they know that they cannot litigate their claim outside of arbitration. The policy statement also identified overall concerns with arbitration, arguing that, by its nature, arbitration does not allow for development of case law, lacks certain constitutional and procedural safeguards afforded by the federal court system, and includes structural biases against discrimination plaintiffs.

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Illinois takes first step to combat bias in hiring decisions with Artificial Intelligence Video Interview Act

As the use of artificial intelligence in employment decisions grows, regulations on the practice will increase as well.  Illinois has kicked off these regulations with the Artificial Intelligence Video Interview Act, which requires employers to disclose and job applicants’ consent before using artificial intelligence on candidate videos when used to assess an individual’s fitness for employment.  To prepare to comply with this law, and additional laws that we expect to follow, employers need to understand how their AI programs work and the underlying data on which it is based.  The argument that AI removes bias from the interview and hiring processes by the use of objective standards is not necessarily true; other arguments suggest that this is not the case because implicit bias may be contained within the underlying data on which AI relies and can, therefore, result in disparate impact discrimination.  For more information about this law, see here.

 

The Board reinstates traditional deferral standard

On December 23, 2019, in United Parcel Service, Inc., 369 NLRB 1 (2019), the National Labor Relations Board (the Board) gave employers one final holiday gift by returning to its traditional standard for post-arbitral deferral. The Board uses this standard to decide whether it should defer to arbitration awards in cases alleging the unlawful discipline or discharge of an employee under the National Labor Relations Act (the Act). Under the re-established traditional standard, the Board defers to the arbitrator’s award if the following four elements are met: (1) the arbitral proceedings appear to have been fair and regular; (2) all parties have agreed to be bound; (3) the arbitrator considered the unfair labor practice issue; and (4) the arbitrator’s decision is not clearly repugnant to the Act.

The Board changed the post-arbitral deferral standard in Babcock & Wilcox Construction Co., 361 NLRB 1127 (2014). Under the 2014 standard, even if the arbitration procedures appeared to have been fair and regular and the parties agreed to be bound by the results of arbitration, the Board would not defer to an arbitral decision unless (1) the arbitrator was explicitly authorized to decide the unfair labor practice issue; (2) the arbitrator was presented with and considered the statutory issue, or was prevented from doing so by the party opposing deferral; and (3) Board law reasonably permitted the award. The burden of proof rested with the party urging deferral. According to the current Board, that change was “a drastic contraction of deferral practices that had existed for decades” and “by disfavoring the peaceful resolution of employment disputes about discharge and discipline issues through collectively bargained grievance arbitration proceedings, [the 2014 standard] disrupted the labor relations stability that the Board is charged by Congress to encourage.”

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DOL makes historic, pro-business changes to FLSA joint employer test

On January 12, 2020, the U.S. Department of Labor (DOL) issued its final rule updating and revising its interpretation of joint employer status under the Fair Labor Standards Act (FLSA). The new rule simplifies the FLSA joint employer analysis with a four-factor test for determining whether workers are jointly employed by associated businesses or persons. The DOL’s changes are the first meaningful revisions since the department’s interpretive regulation was issued 60 years ago. According to the department, the purpose of the rule is “to promote certainty for employer and employees, reduce litigation, promote greater uniformity among court decisions and encourage innovation in the economy.” Although application of this final rule is limited to FLSA wage and hour issues, the National Labor Relations Board and the Equal Employment Opportunity Commission are expected to similarly revisit the joint employer analysis in their respective contexts.

History

The new DOL rule replaces an interpretation that had broadened liability for joint employment under the FLSA. In 2016, former head of the Wage and Hour Division David Weil issued guidance that increased scrutiny of situations in which multiple companies might employ workers jointly. In 2017, the DOL rescinded Weil’s interpretation and in April 2019, provided a “Notice of Proposed Rule Making” relating to the joint employer test.   The final rule adopted on January 12, 2020, makes certain changes to and clarifications of the April 2019 proposed version. The rule takes effect on March 16, 2020.

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New year, new changes to New York state’s minimum wage and tip credit rules

New York state rang in 2020 with a sweeping change to its minimum wage and tip credit rules that is expected to impact roughly 70,000 workers. On December 31, 2019, the New York State Department of Labor (the NYSDOL) recommended to Governor Andrew Cuomo that the state eliminate the tip credit for all miscellaneous industry workers (don’t worry, we will explain what that means). Governor Cuomo has announced that he will implement the recommendation, which will go into effect later this year.

By way of background, both federal and New York state laws generally require that employers pay non-exempt – i.e., hourly – employees at least the applicable minimum wage rate. Both laws, however, contain an exception that permits employers to pay tipped employees less than the minimum wage, provided that the employees’ direct wages plus tips equal or exceed the minimum wage rate or overtime rate, as applicable. The difference between the minimum wage rate – which presently varies between $12.50 and $15 per hour in New York (depending on location within the state) – and the reduced wage for tipped employees is known as a “tip credit.” In practical terms, the tip credit means that certain employers are permitted to pay employees at a rate lower than the minimum wage so long as the employees receive sufficient tips in the course of their work.

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Illinois requires single-occupancy restrooms to be gender neutral

As a reminder to Illinois employers, on January 1, 2020 “The Equitable Restrooms Act” took effect, requiring all single-occupancy (or one-person) restrooms in a place of public accommodation or public building to be identified as all-gender and designated for use by no more than one person at a time, or for family, or assisted use.  This means that any commonly used signage representing “women” or “men” must be removed and replaced with gender-neutral signage.

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Year in review: 2019 employment law changes in New Jersey

For employers in the Garden State, 2019 brought a barrage of legal changes and new requirements. As 2019 comes to a close, we recap some of the most significant changes to the employment landscape in New Jersey.

Minimum wage

In July 2019, the New Jersey minimum wage increased to $10 per hour. This number will increase again effective January 1, 2020 to $11 per hour, with few exceptions. This number will continue to increase every January 1 through 2024 when the minimum wage will hit $15 per hour.

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NLRB gives employers back the right to restrict employee use of work email

On Tuesday, December 17, 2019, in Caesars Entertainment d/b/a Rio All-Suites Hotel and Casino, 368 NLRB No. 143, the National Labor Relations Board (the Board or NLRB) held that an employer may restrict the use of its email system if it does so on a non-discriminatory basis, effectively reinstating the holding of Register Guard, 351 NLRB 1110 (2007). This is one of several employer-friendly decisions issued by the Board this week.

Five years ago in Purple Communications, Inc., 361 NLRB 1050 (2014), the Board held that employees who have been given access to their employer’s email system for work-related purposes have a presumptive right to use that system, on non-working time, for communications protected by Section 7 of the National Labor Relations Act (the Act). This ruling severely restricted employers’ ability to prevent employees from using their email systems for non-work related purposes, including for unionization purposes.

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The City of Pittsburgh publishes new information regarding the Paid Sick Days Act

The City of Pittsburgh has provided much needed clarity regarding several lingering questions concerning the Paid Sick Days Act (the Act), which requires all private employers of full- or part-time employees within the City of Pittsburgh to provide paid sick leave benefits.

In July 2019, the Pennsylvania Supreme Court upheld the Act following a nearly four-year long legal battle. At that time, the effective date of the Act and the status of prior guidelines issued by the City was unsettled. This week, the City addressed some of those unsettled issues.

First, the City announced that the Act will take effect on March 15, 2020.

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