High court finds independent contractor truck drivers excluded from FAA

On Tuesday, January 15, 2019, the U.S. Supreme Court found that truck drivers classified as independent contractors cannot be compelled to arbitrate their claims under the Federal Arbitration Act (FAA). See New Prime, Inc. v. Oliveira, No. 17-340, 2019 WL 189342 (U.S. Jan. 15, 2019).

This decision has significant ramifications for transportation industry companies that previously utilized arbitration agreements with their independent contractor drivers. Given the court’s ruling, those independent contractor drivers can no longer be compelled to arbitrate their claims under the FAA.

The plaintiff, Dominic Oliveira, worked as an independent contractor driver for a trucking company, New Prime Inc. As part of his contract with New Prime, Olivera agreed to arbitrate all disputes. In contradiction to this agreement, Oliveira brought a claim in court against New Prime on behalf of himself and thousands of other independent contractor drivers. Oliveira alleged that he and the other drivers were misclassified as independent contractors, and that they were actually employees of the company.

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Divided D.C. Circuit panel largely upholds the NLRB’s Browning-Ferris decision and challenges the Board’s authority to conduct rulemaking

On December 28, 2018, a divided D.C. Circuit panel affirmed, in part, the National Labor Relations Board’s (NLRB’s or Board’s) Browning-Ferris joint-employer analysis. See Browning-Ferris Indus. of Cal., Inc. v. NLRB, No. 16-1028 (D.C. Cir. Dec. 28, 2018). The D.C. Circuit’s decision marks the latest chapter in the NLRB’s ever-shifting joint-employer standard.

At issue on appeal was the Board’s divided Browning-Ferris decision in 2015 overruling longstanding precedent and relaxing the evidentiary requirement for finding a joint-employer relationship. In December 2017, after the Board’s composition changed with two Trump administration appointments, the new Board majority overruled Browning-Ferris in Hy-Brand Industrial Contractors, Ltd. et al., 362 NLRB 186 (2017). Then, in February 2018, the Board vacated its decision in Hy-Brand, reinstating the earlier Browning-Ferris holding, deciding that one of the new Board members should not have participated in the Hy-Brand decision. With the NLRB’s earlier Browning-Ferris decision reinstated, the D.C. Circuit restored to its docket the Browning-Ferris appeal. Later, in September 2018, the NLRB announced a much-anticipated proposed regulation to establish a rule-driven standard for determining joint-employer status under the National Labor Relations Act (NLRA). With the public comment period on the proposed regulation open through January 14, 2019, the D.C. Circuit issued its decision.

In a 51-page opinion, the D.C. Circuit agreed with the Board’s determination that an employer’s mere right to control and indirect control over terms and conditions of employment are both relevant factors in the joint-employer analysis. The Court, however, faulted the Board for failing to confine its analysis to “indirect control” over essential terms and conditions of employment, rather than extending the analysis to indirect control over “routine parameters of company-to-company contracting,” which it held was inconsistent with common law precedent. Based on that distinction, the court remanded the matter to the NLRB for further consideration on that issue.

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NYC employers must provide lactation rooms effective March 2019

Beginning March 18, 2019, New York City employers with four or more employees will be required to provide lactation rooms to employees upon request. Specifically, under two bills recently passed by New York City Council (Int. No. 879-A and Int. No. 905-A), New York City employers must:

  • Upon request, provide a lactation room and a refrigerator suitable for breast milk storage within reasonable proximity to the employee’s work area
  • Provide a written lactation room policy and notice.

Lactation room requirements

 Employers may not designate a restroom as the lactation room. Rather, the room must be (i) a sanitary place (ii) that can be used to express breast milk, and (iii) is shielded from view and free from intrusion. But the requirements do not end there – the room must also have access to an electrical outlet, a chair and a surface for a breast pump or personal items, as well as nearby access to running water. If employers choose to use a multipurpose room as the lactation room, it must be designated as a lactation room only, while being used as such.

If a requested accommodation under this law would impose an undue hardship on an employer (lack of space, lack of resources to convert or create a new room), it must engage in the cooperative dialogue process with the requesting employee, in order to determine whether there is a feasible alternative. Remember – following the cooperative dialogue process, an employer must provide a formal written determination to the requesting employee, granting or denying the request and providing a reason for a denial.

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End of year reminder for NY employers: NYC’s cooperative dialogue law is in effect

On October 15, 2018, the New York City Human Rights Law (CHRL) was amended to require employers to engage in a “cooperative dialogue” with individuals who may be entitled to a reasonable accommodation under the CHRL.

Whereas federal and state laws require an “interactive process” to determine a reasonable accommodation, the CHRL requires that employers go one step further – employers must engage in a good faith written or oral dialogue concerning:

  • The person’s accommodation needs
  • Potential accommodations that may address the person’s accommodation needs, including alternatives to a requested accommodation, and
  • The difficulties that such potential accommodations may pose for the employer.

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NYC may soon require employers to provide paid vacation

New York City is at it again – continuing its quest to be the most employee-friendly jurisdiction in the country. On January 8, 2019, NYC Mayor Bill de Blasio announced proposed legislation that would require private employers to provide employees with mandated paid time off/vacation. If passed by the City Council, the law would be the first of its kind in the nation, requiring employers to provide paid time to use for vacation and other purposes, as opposed to sick leave.

The proposed legislation would apply to all private employers with five or more employees, and would exclude contract employees and freelancers. Under the proposal, paid time off would accrue at a rate of one hour of paid leave for every 30 hours worked, up to a maximum of 10 paid workdays off per year. Employees would become eligible after 120 days of employment. Part-time employees would be eligible for limited paid time off, based on the number of hours worked.

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Illinois mandatory expense reimbursement law now in effect

The new year brought a new concern for Illinois employers: a mandatory expense reimbursement law. As of January 1, 2019, Illinois employers must reimburse all “necessary expenditures” their employees incur in the scope of employment directly related to services performed by the employer.

The amendment to the Illinois Wage Payment Collection Act (IWPCA) defines “necessary expenditures” as “all reasonable expenditures … required of the employee in the discharge of employment duties and that inure to the primary benefit of the employer.” 820 ILCS 115/9.5.

The amended law is applicable where:

  • the employer “authorized or required” the employee to incur the expense; and
  • the expense request, along with appropriate documentation, was submitted within 30 calendar days – unless a longer period is provided for by the employer.

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U.S. Department of Labor issues new opinion letters on overtime compliance with varying average hourly rates and on volunteerism

The Acting Administrator for the U.S. Department of Labor’s Wage and Hour Division (“WHD”) issued two new opinion letters on Friday, December 21, 2018.

The first opines on whether a home health aide service’s compensation plan, which pays an average hourly rate that may vary from workweek to workweek, complies with the Fair Labor Standards Act (FLSA)., The employer stated that its home health aides travel between client locations during the workday and that the employer calculates weekly pay as follows: it multiplies an employee’s time with clients by the employee’s hourly pay rate, then divides the product by the employee’s total hours worked – including both client time and travel time. Using this calculation, the employer stated that a typical standard rate of pay is $10.00 per hour and that it paid overtime based on that same regular rate of $10.00. The WHD opined that, while the employer’s compensation plan complies with the FLSA’s minimum wage requirements, it might not comply with the FLSA’s overtime requirements if the actual regular rate of pay exceeds $10.00 an hour. The WHD emphasized that the regular rate of pay may not be arbitrarily chosen by an employer or employee, but rather is an “actual fact” based on “mathematical computation.” The WHD further explained, however, that the compensation plan would comply with the FLSA’s overtime requirements for employees with an actual regular rate less than $10.00 per hour as an employer may choose to pay an overtime premium in excess of what is required by law.

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California Supreme Court clarifies rules regarding health care employees’ waiver of second meal breaks

In an important decision for California health care employers, the California Supreme Court recently confirmed that certain health care employees are allowed to waive their second meal breaks even if they work more than 12 hours in a shift.

History of the Gerard litigation

In 2015, the California Court of Appeal shocked health care employers throughout California by invalidating section 11(D) of Wage Order 5, which permits many health care employees (for example, nurses involved in patient care, pharmacists, etc.) to waive second meal breaks even when their shift exceeds 12 hours, Gerard v. Orange Coast Mem’l Med. Ctr., 234 Cal. App. 4th 285 (2015) (Gerard I). The Court concluded that section 11(D) was inconsistent with Labor Code section 512, which only permits a second meal period waiver “if the total hours worked is no more than 12 hours.” Lab. Code § 512(a). The same court reversed itself in 2017 after the California Supreme Court instructed it to reconsider Gerard I in light of subsequent legislative enactments seeking to nullify the decision and clarify existing law, Gerard v. Orange Coast Mem’l Med. Ctr., 9 Cal. App. 5th 1204 (2017) (Gerard II).

On December 10, 2018, after a decade of litigation, the California Supreme Court affirmed Gerard II, concluding that section 11(D) is not inconsistent with the Labor Code, Gerard v. Orange Coast Mem’l Med. Ctr., 2018 WL 6442036 (Cal. Dec. 10, 2018). Thus, health care employees can waive their second meal breaks even on workdays when their shift exceeds 12 hours.

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Here’s a tip for you: DOL offers new tip credit guidance rescinding 80/20 rule

On November 8, 2018, the U.S. Department of Labor (DOL) re-issued an opinion letter rescinding the “80/20 Rule,” which prohibited employers from taking a tip credit if a tipped employee spent more than 20% of his or her working time on non-tipped work. The DOL’s new guidance provides restaurant and hospitality employers with clarity and a more practical approach regarding when a tip credit can be taken.

Under the Fair Labor Standards Act (FLSA), the tip credit allows employers to pay tipped employees not less than $2.13 per hour and to take a tip credit equal to the difference between that amount and the federal minimum wage. So, before an employer can take the tip credit, it must determine whether the employee is working in a tipped job.

If an employee works in separate jobs, one of which is tipped and the other of which is not, the employee has “dual jobs,” and the employer can only take the tip credit when the employee is working in the tipped job. For example, if an employee works at times as a waiter and at other times as a maintenance worker, the employer can take the tip credit only for the time the employee spends working as a waiter and must pay the full minimum wage for the time the employee spends working as a maintenance worker.

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New Jersey Employers: The State Paid Sick Leave Law Is Now In Effect – Are You Ready?

The New Jersey Paid Sick Leave Act takes effect today, October 29, 2018. Just in time for flu season.

If you are a New Jersey employer or an employer with employees in New Jersey, regardless of size or employee number, you are now required by law to provide one hour of sick leave for every 30 hours worked – up to 40 hours in a benefit year – to all employees (including part-time and seasonal) with the minor exceptions of: (i) per diem health care employees, (ii) construction workers employed under a collective bargaining agreement (who will later begin to accrue sick leave under the law on the date the agreement expires), and (iii) public employees previously entitled to sick leave benefits under state law.

Sick leave under the law begins to accrue on the law’s effective date (October 29th), or upon an employee’s later date of hire, and may begin to be used 120 days after an employee’s start of employment (or upon such earlier date that an employer permits).  Leave granted under the law may be advanced in whole, or be subject to accrual.

The state law preempts the various municipal laws previously in effect.  Employers who provide paid time off (PTO) banks are compliant with the Act provided the PTO may be used for the purposes and in the manner set forth under the state law and is accrued at a rate equal to or greater than the rate provided by the law.

An employer may choose the increments in which an employee may use earned sick leave, provided that the largest increment required does not exceed the number of hours an employee is scheduled to work for that shift (including any overtime). Acceptable reasons for using paid sick leave include: (i) for preventative care or the diagnosis, care, treatment or recovery of an employee’s own mental or physical illness, injury or health condition, or that of their family member; (ii) treatment, counseling or preparation for legal proceedings necessary following domestic or sexual violence to an employee or their family member; (iii) an employee’s need to attend school-related conferences, meetings or events regarding their child’s education, or to attend a school-related meeting concerning their child’s health; or (iv) an employee’s time off upon the employer’s closing, or the closing of their child’s school or child care provider, due to a public health emergency. Continue Reading

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