Implications of Brexit for UK employment law

2021 marks the start of a new era for the UK, the Brexit transition period having ended at 11pm on 31 December 2020. After endless rounds of negotiation, the parties reached a last-minute agreement over the ongoing relationship between the UK and EU, and the European Union (Future Relationship) Act 2020 (which gives legal effect in the UK to the agreements reached) received royal assent on 30 December 2020. But what impact does this have on UK employment rights derived from the EU?

The short answer is that while Brexit provides the UK with some freedom to deviate from EU derived employment law, we should not expect to see any radical changes to UK employment laws or employment rights.

The Trade and Cooperation Agreement reached between the UK and EU incorporates level playing field commitments that seek to prevent either the UK or the EU gaining a competitive advantage in a variety of contexts. These include rights at work, namely fair working conditions, employment standards (including in respect of workplace health and safety), information and consultation rights and the restructuring of undertakings. The commitments given by both the UK and EU are intended to ensure that neither will weaken or reduce labour or social rights and standards below the levels in place at the end of the transition period where this affects trade or investment between the UK and EU, including by way of a failure to enforce those laws and standards. Continue Reading

Virginia set to enact permanent COVID-19 workplace safety standard

On January 13, 2021, the Virginia Department of Labor and Industry’s (DOLI’s) Safety and Health Codes Board voted 9-4 to approve a permanent COVID-19 workplace safety standard, setting the stage for Virginia to become the first state in the nation to do so. In July 2020, DOLI’s Virginia Occupational Safety and Health Program (VOSH) adopted temporary emergency COVID-19 workplace safety regulations, which are currently set to expire January 27, 2021.

The Board conducted virtual meetings on January 12-13, 2021 to consider the final language of the permanent COVID-19 standard in light of a flood of public comment. The proposed permanent regulations now go to Governor Ralph Northam for review and possible revision, which would require further consideration by the Board. The final standard will take effect upon publication in a newspaper of general circulation in Richmond, VA.

Overall, these workplace safety regulations are intended to supplement and enhance existing state and federal occupational safety and health requirements. Failure to comply with the VOSH standards may result in potential criminal penalties as well as civil penalties ranging from approximately $13,000 per violation to more than $130,000 per violation if willful and/or repeated. As of December 30, 2020, VOSH indicated it had conducted nearly 100 workplace COVID-19 inspections and expects to pursue more enforcement actions after the permanent standard goes into effect.

Upon final publication, Virginia employers should immediately review these regulations to determine how their operations may be impacted. If you have any questions on these requirements, need assistance developing policies and procedures to comply with these regulations, or have other questions regarding your workforce related to COVID-19, please contact Betty Graumlich at bgraumlich@reedsmith.com, Mark Passero at mpassero@reedsmith.com, Noah Oberlander at noberlander@reedsmith.com, or the Reed Smith lawyer with whom you normally work.

U.S. Department of Labor finalizes rule creating a new “reality” for classifying independent contractors

As we previously reported, this past September the U.S. Department of Labor (DOL) proposed a new rule that would create a uniform approach to the way companies classify workers as independent contractors or employees under the Fair Labor Standards Act (FLSA). More specifically, in the proposed rule, the DOL adopted the “economic reality” test, which uses five main factors to determine whether workers are in business for themselves (as an independent contractor), or whether they are economically dependent on a potential employer (as an employee).

On January 6, the DOL announced the final rule (anticipated to be published on January 7), which further clarifies these new standards. The final rule reaffirms the use of the “economic reality test” to distinguish between independent contractors and employees and cements the previous proposal to place a greater probative weight on two of the five factors considered in a traditional “economic reality” analysis. The remaining three factors will serve as guideposts, in the event that the two core factors lead to differing classification determinations.

Importantly, the final rule provides additional guidance with respect to the two core factors, which are the nature and degree of the worker’s control over the work (the “control factor”) and the worker’s opportunity for profit or loss (the “profit and loss factor”). First, the final text explains that an analysis of the control factor must examine both the control exerted by the individual worker as well as by the potential employer. Second, the DOL explains that an individual worker’s “meaningful capital investments” and a worker’s initiative (such as managerial skill and business acumen or judgment) should be considered as part of the profit and loss factor, whereas a comparison of the relative investments of the individual worker to the potential employer should not.

Finally, the final rule reiterates that this test should maintain a focus on the actual practices of both parties, as opposed to any theoretical or contractual agreements.

The effective date of the final rule is March 8, 2021.

The DOL’s final rule has important consequences for employers when classifying their workers under FLSA. If you have any questions or concerns about the new rule, or how it affects your company, Reed Smith’s experienced Labor & Employment Group is ready to speak with you.

Pandemic or not, employers must still comply with notice-posting requirements under federal law

Federal law, as well as many state and local laws, require employers to display notices and posters in the workplace advising employees of their rights.  With many employers operating remotely due to COVID-19, however, questions regarding these statutory posting requirements have arisen.  In response, on December 29, 2020, the United States Department of Labor released guidance addressing the permissibility of providing the required postings through electronic means.

By way of background, no less than 15 federal laws, including the Fair Labor Standards Act, the Family and Medical Leave Act, and the Employee Polygraph Protection Act, require employers to display notices or posters in the workplace advising workers of their rights under such laws.  Generally speaking, the notices or posters must be physically displayed in a conspicuous location that can be easily accessed by all employees (break rooms and cafeterias, for instance, are common locations for this). Continue Reading

EEOC releases updated and expanded COVID-19 guidance

On December 16, 2020, the U.S. Equal Employment Opportunity Commission (EEOC) released updated and expanded guidance addressing questions related to the COVID-19 pandemic that arise under the Federal Equal Employment Opportunity Laws.  The publication, “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws,” includes new guidance on the implications of the forthcoming COVID-19 vaccines on a number of federal laws.

The EEOC guidance provides a high-level overview of some of the basic concerns confronting employers as they attempt to navigate the intersection of vaccine necessity and the Americans with Disabilities Act (ADA), the Genetic Information and Nondiscrimination Act (GINA), and Title VII.  While the EEOC asserts that “[t]he EEO laws do not interfere with or prevent employers from following CDC or other federal, state, and local public health authorities’ guidelines and suggestions,” it also makes clear that employers will have to undertake careful efforts to comply with these statutes as they also seek to comply with public health authority instruction.

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Virginia governor issues updated COVID-19 restrictions amidst DOLI’s proposed permanent workplace safety regulations

On December 10, 2020, Virginia Governor Ralph Northam and State Health Commissioner Norman Oliver issued Executive Order 72 and Order of Public Health Emergency 9, a new 19-page Order imposing modified stay at home requirements, tightened business restrictions, and enhanced face covering requirements.  Beyond tightening restrictions, the Order also outlines a wide-range of enhanced enforcement mechanisms and penalties.  The Order becomes effective December 14, 2020 and is set to expire on January 31, 2021 (This new Order replaces earlier Executive Order 63/Public Health Order 5 and Executive Order 67/Public Health Order 7, both which will now expire December 13).

The same day, the Department of Labor and Industry (DOLI) announced a revised draft Permanent Standard for Infectious Disease Prevention with public comment open from December 10, 2020 to January 9, 2021.  The current DOLI regulations issued in July 2020 are set to expire January 27, 2021. Continue Reading

Employers with Pittsburgh-based employees face new requirements to provide COVID-19-related paid sick leave

The City of Pittsburgh is expected to enact the new Temporary COVID-19 Emergency Paid Sick Ordinance (the “Ordinance”), which provides Pittsburgh employees with a new entitlement of up to two weeks of paid time off for qualifying absences related to COVID-19. While this legislation may be well intended, it presents potentially significant challenges for employers with Pittsburgh-based workforces that have spent the past several months adapting to what seems like an ever-evolving carousel of federal, state, and local laws enacted in response to the pandemic.

With the federal Families First Coronavirus Response Act (FFCRA) set to expire on December 31, 2020, absent an extension by the federal government, the Ordinance appears to be the City’s effort to provide paid leave rights for qualifying reasons relating to COVID-19.

However, the Ordinance considerably exceeds the FFCRA in the scope of covered employers.  All Pittsburgh employers with 50 or more employees (including employers whose employees normally work in the City of Pittsburgh but are now teleworking from other locations as a result of the pandemic) are covered by the Temporary COVID-19 Emergency Paid Sick Ordinance.  By contrast, the FFCRA’s coverage was limited to only employers with fewer than 500 employees. As such, many larger employers with a workforce in Pittsburgh that were excluded from the FFCRA’s coverage will now immediately have to take steps necessary to provide for the requisite paid leave benefits. Further, even if an employer was subject to the FFCRA and previously took actions to provide for COVID-related paid leave, those employers should immediately update previously established policies to ensure compliance with the Ordinance. Continue Reading

New bill would require virtually all New Yorkers to receive COVID-19 vaccination

With two COVID-19 vaccines pending approval by the U.S. Food and Drug Administration (FDA), employer-mandated COVID-19 vaccination policies are a hot topic at the employment law water cooler these days.  While there is currently no concrete guidance on this issue at the federal, state, or city level, on December 4, New York State lawmakers introduced a bill that could have a substantial impact on such policies.

Specifically, State Assembly Bill A11179 would mandate the vaccination of all individuals or groups of individuals who, as shown by clinical data, are proven to be safe to receive a COVID-19 vaccine. This mandate would only take effect, however, after a vaccine is approved and its promotion and distributions plans have commenced, and if public health officials determine that residents of the state are not developing sufficient immunity from COVID-19.  Notably, the Bill includes an exception to the vaccination requirement for “[a]ny individual who has received a medical exemption from a licensed medical professional.” Continue Reading

CDC updates guidance to allow for reduced quarantine times

On December 2, 2020, the CDC updated its guidance on COVID-19 quarantines. Previously, the CDC advised that asymptomatic individuals should quarantine for 14 days after their last exposure to someone who has COVID-19. The CDC’s prior guidance did not allow for the reduction of that 14-day period based on the receipt of a negative COVID-19 test. It also did not address quarantine periods following travel absent an exposure event. In its most recent guidance, the CDC now recommends two options for how long quarantine should last following exposure. Additionally, in related statements, the CDC has also stated that the same protocols should extend to all general travel activity.

Under the new CDC guidance, the recommended quarantine period after last exposure or general travel activity is now 10 days for asymptomatic individuals. An individual can shorten that period to 7 days if they test negative for COVID-19 during the period 3-5 days after exposure or travel.  Importantly, the optimal timing for testing remains unsettled. The recent CDC guidance allows for either molecular (regular) or antigen (rapid) testing to be used to end quarantine. The travel portion of the CDC’s new guidance extends to all travel activity, though it is anticipated that it will be better defined by the CDC in coming weeks.

This announcement may directly impact several significant employer COVID-19 policies, including policies concerning screening; contact tracing; inquiries into employees’ COVID-19 test results; return-to-work; and employee travel. For example:

  • When contract tracing, employers should consider revising policies to ask who an infected employee had contact with in the past 10 days rather than the last 14 days.
  • Policies that only allow inquiries into whether an employee had a positive test result can be revised to inquire about negative results when an asymptomatic employee has travelled or been designated for quarantine. Importantly, Employers must treat negative test results like confidential medical information.
  • Absent any state or local law restrictions, employers can revise their return-to-work policies consistent with the new CDC guidance to allow employees to terminate quarantine using the shorter periods.
  • To date, employees traveling for personal or business reasons have not been required to quarantine automatically upon their return in states that do not have COVID-19 travel restrictions in place. In those less regulated jurisdictions, employers must now consider whether to create policies requiring quarantine after travel consistent with the CDC guidelines.

In light of these significant changes, employers are strongly encouraged to take this latest development as an opportunity to review their larger COVID-19 policy framework to ensure it is fully compliant with this change the long the list of other changes that emerged in recent weeks.

If you have any questions about the CDC’s new quarantine protocol or how it affects your company, Reed Smith’s experienced Labor & Employment Group is ready to speak with you.

UK Employment Law update – December 2020

Welcome to our monthly newsletter, with a summary of the latest news and developments in UK employment law. A PDF version of this newsletter can be accessed here.

This issue will provide recent case law updates, law reform and legislative developments, COVID-19 updates and any other news over recent weeks.

Case law updates

Collective redundancy consultation: The European Court of Justice (ECJ) has ruled on the reference period and threshold numbers required for the Collective Redundancies Directive, and has concluded that where the threshold number of dismissals is met at any point across the relevant reference period, then dismissals occurring both before and after that point are subject to collective consultation rules. This raises questions as to whether section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), which applies the Directive in the UK (and which excludes the need to count employees whose proposed dismissal consultation has started) is compatible with the Directive. In the absence of amendments to TULRCA to clarify the situation, employers planning redundancies will need to have this case in mind, with an understanding of past redundancies as well as anticipated ones, when assessing whether the relevant thresholds for collective consultation are met. [UQ v. Marclean Technologies – NB: no English transcript is currently available]

Discrimination: The Court of Appeal has upheld the ‘cost plus’ basis for seeking to justify indirect discrimination, i.e., cost savings alone cannot be a legitimate aim and will rarely succeed as a defence, although it may be a factor where there is ‘something else’ (including where an employer is subject to financial constraints and is required to reduce its costs). Although not changing established principles, this case acts as a reminder that cost in itself should not be relied upon to rationalise potentially discriminatory practices. Incidentally the court also said that the phrase ‘cost plus’ should be avoided as inelegant. [Heskett v. Secretary of State for Justice]

Health and safety detriments: Following a judicial review, the High Court has held that the UK failed to properly implement the EU Health and Safety Framework Directive in the Employment Rights Act 1996 when only providing protection against detriment on health and safety grounds to employees and not also to workers. The Independent Workers’ Union of Great Britain, which initiated the proceedings, is calling for the government to urgently amend UK legislation to reflect this decision, which would significantly expand the scope of protection at a time when health and safety is particularly pertinent. [HC: IWUGB v. DWP]

Settlement agreement – COT3: Where arguments are being made to set aside a COT3 settlement due to misrepresentation, it is permissible for the tribunal to consider without prejudice communications. [Cole v. Elders Voice]

Summary termination: A firm was entitled to rely on a self-employed stockbroker’s repudiatory breach of contract to summarily terminate their relationship, notwithstanding the firm also having committed a repudiatory breach. [HC: Palmeri v. Charles Stanley & Co]

Tribunal hearings: An appeal against a decision to hold a merits hearing in person rather than remotely during the pandemic has been dismissed, reiterating the strong case management discretion held by judges. [Omooba v. Michael Garrett Associates]

Tribunal procedure – applications to amend pleadings: The Employment Appeals Tribunal has provided detailed guidance on the procedure to be followed when considering applications to amend, including how arguments in support of such an application should be approached, the matters to consider before such an application is made, and the importance of showing the consequences of the amendment being refused. This also reminds us that the tribunal has wide case management powers, and the appellant courts will seldom interfere. [Vaughan v. Modality Partnership]

Whistleblowing: The Court of Appeal has upheld the principle that multiple separate communications taken together could amount to a protected disclosure even if none of them, taken separately, would do so. Whether it is appropriate to take this approach is a matter of common sense and fact dependent, and it is not necessarily an error for the tribunal to fail to consider the composite approach. In the present case, the claimant failed to clarify which of his 37 communications should be grouped together, and the specific protected disclosure which arose from that combination. [Simpson v. Cantor Fitzgerald Europe]
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