Governor Gavin Newsom signed S.B. 525 into law adding new minimum wage requirements to Sections 1182.14 and 1182.15 of the California Labor Code. These new sections establish five comprehensive minimum wage schedules for “covered health care employees”, which includes contracted and subcontracted employees. Effective June 1, 2024, “covered health care facilities” will be required to implement the applicable minimum wage schedule, depending on the nature of the employer, as set forth by the law. In general, the law preempts any local ordinances setting wages for healthcare workers. To determine the law’s applicability, health care providers across California must consider (1) whether they meet the definition of a “covered health care facility” and, if so, (2) who within their workforce meets the definition of a “covered health care employee”.Continue Reading California enacts increase in the minimum wage for covered health care employees
In May 2023 we reported how the UK government made a series of announcements in respect of proposed reforms to two areas of law derived from the EU – the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) and the Working Time Regulations 1998 (WTR) – and launched consultations on its proposals. The government has now published a response to those consultations and the reforms it intends will go ahead, and which ones will not.
This blog explores the changes which will take effect, and which are expected to be in force from 1 January 2024.Continue Reading An update – Changes to post-Brexit UK employment law: What is next for working time and TUPE
We previously alerted employers to California employment law bills that were still alive toward the end of the most recent legislative session. That session ended on September 14, 2023 and Governor Newsom had until October 14, 2023 to either sign, approve without signing, or veto the bills that survived. Below is an update on the fate of these employment law bills so employers will know which ones are slated to become law. The Governor vetoed several noteworthy bills that would have expanded the state’s protected classes, employee work-from-home rights and CalWARN notice requirements. On the other hand, the Governor signed multiple significant employment law bills into law, including those creating increased paid sick leave requirements, expanded re-hiring rights, a new reproductive loss leave, and a new requirement that employers establish a workplace violence prevention plan. Unless otherwise noted, the approved bills will take effect January 1, 2024.Continue Reading California employment law legislative update: bills that will become law in 2024 and beyond
As detailed in part one and part two of our multipart series, artificial intelligence (AI) and generative artificial intelligence (GAI) have had a sweeping impact on the U.S. workplace. However, as we will detail in this third and final installment, there are potentially material risks and pitfalls associated with using AI and GAI to assist with various aspects of the employment relationship. We will discuss several of these below.Continue Reading How artificial intelligence is impacting the U.S. workplace (Part III)
As detailed in the first installment of our multipart series, artificial intelligence (AI) and generative artificial intelligence (GAI) have had a sweeping impact on the U.S. workplace. As we will detail in this second installment, employers have implemented AI and GAI measures to assist with various aspects of the employment relationship, from recruiting through separation of employment. While these measures have assisted employers with efficiency and streamlining of certain HR operations, as discussed below, they potentially come with some pitfalls as well.Continue Reading How artificial intelligence is impacting the U.S. workplace (Part II)
On October 26, 2023, the National Labor Relations Board issued a final rule to replace and essentially reverse the joint employer test issued under the Trump Administration. The new test drastically lowers the standard for companies to qualify as joint employers, making them responsible for labor violations and saddling them with obligations with respect to union negotiations. The final rule, which rescinds and replaces the prior regulation, is set to take effect on December 26, 2023, on a prospective basis only.
The 2020 rule required that a company have “substantial direct and immediate control” over the “essential terms or conditions” of a worker’s employment in order to be held liable as a joint employer. In a major “about face”, the new rule provides that even reserved, unexercised, or indirect control, such as through an intermediary, over one or more terms or conditions of employment is sufficient to establish joint employment. The Board published an “exhaustive list” of seven categories of terms or conditions that it will consider “essential” for purposes of the joint employer inquiry:
- Wages, benefits, and other compensation;
- Hours of work and scheduling;
- Assignment of duties to be performed;
- Supervision of the performed duties;
- Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
- Tenure of the employment, including hiring and discharge; and
- Working conditions related to the safety and health of employees.
It is indisputable that artificial intelligence (AI) has generated enormous buzz over the past several years. AI has had a substantial impact on various industries and facets of society – with no signs of slowing – and its potential to disrupt longstanding business mechanisms cannot be overstated.
Among the areas most impacted by AI is the workplace. Indeed, AI and generative artificial intelligence (GAI) are readily used – and, as will be discussed, sometimes misused – every day by millions of U.S. employees. Companies utilize these sophisticated tools for a myriad of reasons, including to boost development, increase productivity, and stay ahead of the proverbial curve.
In this multipart series, we will address a host of issues associated with the interplay between AI and GAI, on the one hand, and the U.S. workplace, on the other hand. And in this particular article, we will break down what we specifically mean when referring to AI and GAI and, also, how federal, state, and local legislatures are responding to the rise in workplace-related AI issues. Future articles will address how AI and GAI are impacting the workplace as well as challenges employers face with the adoption of AI and GAI tools in the workplace.Continue Reading How artificial intelligence is impacting the U.S. workplace (Part I)
How has the Bill changed?
The House of Commons have approved the Worker Protection (Amendment of Equality Act 2010) Bill (the Bill), albeit in a form that is significantly less onerous than had been originally proposed.
As originally proposed, the Bill would have:
- imposed liabilities on employers for failure to take “all reasonable steps” to protect their staff from third party harassment (essentially seeking to re-create protections that previously existed under the Equality Act 2010, which were removed by the Enterprise and Regulatory Reform Act 2003); and
- created a new legal duty for employers to take “all reasonable steps” to prevent sexual harassment of staff during the course of employment. This duty was stated to be enforceable by the Equalities and Human Rights Commission.
In the version of the Bill that was approved, item one above was removed in its entirety. Item two was recast to require the employer to take “reasonable steps”, rather than “all reasonable steps” to prevent the sexual harassment of their staff.
The net result is that rather than establishing a duty for employers to protect their employees against third party harassment on the basis of any protected characteristic, the Bill now only establishes a duty in relation to “sexual harassment”, as defined under the Equality Act 2010.
What are the next steps and how can employers prepare?
The Bill will become law once it receives royal assent and is expected to be the ninth main new law to come into force in 2024.
As such, employers should be preparing themselves now, so that they can achieve seamless compliance with the new law. Some practical steps employers could take include:
- Carrying out reviews of current harassment, bullying, equal opportunity and other relevant policies. It is recommended that these are updated to include situational training and examples of harassment, including that by third parties and to offer support and guidance on how to safely intervene and support victims.
- Establish clear reporting lines so that employees can confidently and safely report incidences of harassment in the workplace.
- Identify harassment risks in respect of workplace roles and circumstances, with specific protective measures. For instance, it would be advisable to carry out assessments on which roles frequently interact with third parties, in what ways and in what environments, so that tailored steps can be taken to reduce risk. It may also be beneficial to consult with employees/employee representatives on their experiences and what measures they think would make a practicable difference.
- Create or update registers for reporting incidents of harassment (taking into account all data protection and storage requirements).
Effective March 13, 2024, the salary threshold for certain exemptions under Article 6 of the New York Labor Law (NYLL) will increase from $900 to $1,300 per week. By way of background, Article 6 of the NYLL sets forth employer obligations with respect to pay practices in New York, many of which afford certain wage protections to employees. Currently, employers are exempt from the following requirements with respect to individuals employed in a bona fide executive, administrative, or professional capacity whose earnings exceed $900 per week:
- Paying clerical or other workers “not less frequently than semi-monthly” (NYLL §191(d)).
- Obtaining the advance, written consent of employees before paying wages via direct deposit (NYLL § 192).
- The employer being guilty of a misdemeanor if it fails to provide benefits or wage supplements within 30 days after they are due (NYLL § 198-c).
Therefore, beginning March 13, 2024, employers will be exempt from the above requirements with respect to individuals employed in a bona fide executive, administrative, or professional capacity whose earnings exceed $1,300 per week.
It is critical to note that the modified salary threshold for the above wage protections is separate and distinct from those pertaining to minimum wage and overtime exemptions under the NYLL, which remain at their current levels, i.e., $1,125 per week in New York City, Nassau, Suffolk, and Westchester, and $1,064.25 per week in the rest of the state.
Employers should review their current payroll practices and make any necessary updates to account for these changes (e.g., increase employee compensation to meet the new threshold or ensure that employees below the threshold are no longer exempt from the above-detailed employer obligations).
In a series of press releases throughout September 2023, the Securities and Exchange Commission (SEC) announced enforcement orders against three separate companies for using employment agreements and separation agreements that violated the SEC’s whistleblower protection rule. The orders reflect the SEC’s increased scrutiny of employment agreements and separation agreements under the whistleblower protection rule.
New level of scrutiny
Under its new level of scrutiny, the SEC is increasingly focused on the language used in employment agreements and separation agreements. The SEC takes issue with language that raises impediments to employee whistleblowing in violation of Rule 21F-17(a) of the Securities Exchange Act of 1943, which prohibits taking any action to impede an individual from communicating directly with the SEC staff about a possible securities law violation.
Specifically, the September orders show that the SEC now takes issue with the following categories of language in employment agreements and separation agreements:
Category 1. Language that prohibits disclosure of confidential corporate information to third parties without an exception for potential SEC whistleblowers. The SEC also noted that an overly broad definition of “confidential information” was problematic. The definition extended to any information gained in the course of employment that could be reasonably expected to be damaging to the company if disclosed to third parties. The SEC found the definition far-reaching and, consequently, impermissibly restrictive of an employee’s ability to report to the SEC.
Category 2. Language that requires employees to sign a release in which employees attest that they have not filed a complaint against their employer with any federal agency or government agency in order to receive separation pay or deferred compensation.
Category 3. Language that requires certain departing employees to waive their rights to monetary whistleblower awards in connection with filing claims with or participating in investigations by government agencies.
The penalties imposed on the three companies for violating the whistleblower rule under the SEC’s new level of scrutiny included cease-and-desist orders, fines ranging from $225,000 to $10 million, and other sanctions.
In two cases, the companies took remedial actions. The SEC noted that it considered the two companies’ cooperation and remedial actions in determining the terms of settlement. The remedial actions included revising all versions of domestic releases and similar agreements for compliance with the whistleblower protection rule and communicating with employees who had signed the agreement at issue to clarify the protections afforded to employees by the rule, including their right to report directly to the SEC. In the two cases where remedial efforts were considered, the civil penalties amounted to $225,000 and $375,000 respectively. In the case where remedial efforts were not considered, the civil penalty amounted to $10 million.
Best practices for employers going forward
Employers should ensure that their employment agreements and separation agreements do not contain language that could be construed as raising impediments to employee whistleblowing. Put differently, employers should make certain that the language in their agreements cannot be interpreted as discouraging or disincentivizing employee reporting to the SEC.
Considering the September orders, primary checklist items for employers are:
- Confidentiality clauses and other such restrictions should explicitly provide exceptions for communications with the SEC. Definitions of “confidential information” should do the same.
- Provisions concerning separation pay or deferred compensation should include no contingencies relating to the filing of an employee complaint with government officials.
- Agreements should not include restraints upon employees’ receipt of whistleblower awards.