We’ve put together recent changes to HR-related rules and regulations across federal and state governments, plus upcoming deadlines that HR professionals need to know about. This month’s hot topics include: posting the time off to vote poster in California and New York, classifying independent contractors correctly, send Medicare Part D coverage notices by October 14, and more.
Changing Rules and Upcoming Deadlines in the Federal Government
Changing Rules and Upcoming Deadlines in State Governments
Changing Rules and Upcoming Deadlines in the Federal Government
DOL Issues Opinion Letter on Fluctuating Workweek Method of Calculating Overtime
Who: Employers with nonexempt employees who receive a fixed salary and whose hours vary week to week
When: Effective August 31, 2020
What: The U.S. Department of Labor issued an opinion letter in response to a request for clarification of when employers may use the fluctuating workweek method to calculate overtime pay. The opinion applies to the facts and circumstances described in the request for clarification.
The employer queried whether they could use the method if the employee’s hours fluctuate only above 40 hours per week (rather than above and below 40 hours per week). The DOL stated that use of the method is permissible under those circumstances, provided all other requirements of the rule are met:
- Hours fluctuate from week to week;
- Fixed salary does not vary with the number of hours worked;
- Fixed salary satisfies minimum wage requirements;
- Parties “have a clear and mutual understanding” that the fixed salary is compensation for the total hours worked each week regardless of the number of hours; and
- Overtime rate is at least one and one-half times the regular rate of pay.
Employers can use the method to calculate overtime pay as long as the employee’s hours worked fluctuate from week to week.
- Revise your accounting, payroll, and employee-facing documentation as necessary to include a revised explanation of how you compute overtime.
- Train supervisors and HR and payroll personnel on how to correctly calculate overtime pay.
- Ensure that covered employees are adequately tracking their time, in order to justify the case for fluctuating hours.
DOL Proposes New Rule for Classifying Independent Contracts
Who: All employers and independent contractors
When: Open to comment through October 26, 2020
What: The U.S. Department of Labor proposed a new rule in the federal register on September 25, 2020 that uses an “economic reality” test to determine a worker’s status as employee or independent contractor under the Fair Labor Standards Act (FLSA). The organization intends to make the classification more clear-cut and thereby reduce litigation.
The rule examines whether the worker is economically dependent on the employer for work and is therefore an employee, or whether the worker is considered in business for himself or herself and is therefore an independent contractor. The agency proposes giving more weight to two major factors when making this determination: 1) nature and degree of control over the work, and 2) the worker’s opportunity to generate a profit or loss based on personal initiative or investment.
- Public comment is allowed for 30 days. Submit comments on the proposed rule via http://www.regulations.gov or to the mailing address provided.
- Monitor the U.S. DOL site to determine if the rule becomes final or not.
Federal Court Voids Critical Portions of Joint Employer Rule
Who: All vertical joint employers
When: Ruling issued September 8, 2020
What: A New York federal judge struck down parts of the Labor Department’s joint employer rule, which went into effect on March 16, 2020. The rule contains a four-part test that joint employers can use to determine whether they are equally liable for obligations under the FLSA, including minimum wage and overtime compensation.
The judge stated that the rule was in conflict with the Fair Labor Standards Act, specifically regarding “vertical” employment relationships—where workers for one company are contracted to work with another entity, such as is the case with staffing companies. The judge found the Labor Department had failed to justify why it departed so significantly from the prior rule without adequate explanation.
The judge gave several detailed reasons why the rule was invalid for such employment situations. The most important reason was that the rule inappropriately and without reason narrowed the definition of “employer.” The ruling, if it stands, could significantly increase the liability for vertical joint employers.
- Review the changes you made to your HR protocols and documentation as a result of the documentation (if applicable). Plan for potential future revisions.
- Work with your attorney to understand how this decision applies to your company and your jurisdiction.
Medicare Part D COverage Notice Due October 14, 2020
Who: Employers with group health plans that provide prescription drug coverage to Medicare-eligible individuals
When: Due October 14, 2020
What: Covered employers must disclose the creditable or non-creditable status of drug coverage to Medicare-eligible individuals for the 2021 calendar year before the Medicare open enrollment period. Creditable coverage means that the prescription drug coverage that is equal to or greater than the prescription drug coverage under Medicare Part D. Non-creditable coverage is less than coverage under Medicare Part D.
The Centers for Medicare & Medicaid Services offers model notices. Employers do not have to use the model notices, but their notices must include similar information.
- Determine whether your plans’ prescription drug coverage is creditable or not for calendar year 2021.
- Include the required notice with your health plan notices if open enrollment starts on October 15, 2020. Place the notice on the first page of your materials or refer to it there per the rule’s specifications.
- Send a separate notice if your open enrollment starts after October 15, 2020.
Trump Administration Releases Executive Order on Race and Sex Stereotyping
Who: Federal contractors and subcontractors and federal grant recipients
When: Effective September 22, 2020
What: The Executive Order on Combating Race and Sex Stereotyping sets limits on the type of diversity and inclusion and sexual harassment training covered employers may provide to their employees. Training may not include “Divisive Concepts,” which are defined as:
- One race or sex is inherently superior to another race or sex;
- The United States is fundamentally racist or sexist;
- An individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;
- An individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex;
- Members of one race or sex cannot and should not attempt to treat others without respect to race or sex;
- An individual’s moral character is necessarily determined by his or her race or sex;
- An individual, by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex;
- Any individual should feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race or sex;
- Meritocracy or traits such as a hard work ethic are racist or sexist, or were created by a particular race to oppress another race; and
- Any other form of race or sex stereotyping or any other form of race or sex scapegoating.
Federal government contractors must include a contract clause indicating that they will not teach such concepts to their employees in new or amended contracts they enter into after November 22, 2020. Contractors must also notify labor leaders in charge of their employees’ unions. Contracts exempted from coverage by Executive Order 11246 are not subject to these requirements.
Federal grant recipients must certify that they will not use federal funds to promote Divisive Concepts.
The Office of Federal Contract Compliance Programs is responsible for enforcing the new rules and will request copies of covered employers’ training materials and other information related to the training. Violations of the rule may lead to contract suspension or termination, and suspension or termination as a federal contractor.
- Determine if any of your training materials regarding race, sex, diversity, and inclusion are in violation of the Executive Order and modify them as necessary.
- Provide training for your managers and supervisors regarding Divisive Concepts as defined by the Executive Order.
Post the California Time Off to Vote Poster by October 24, 2020
Who: California employers
When: By October 24, 2020
What: Employers must post a notice notifying employees of their ability to take paid leave in order to vote in statewide elections at least 10 days before the election. The state provides a sample Time Off to Vote notice.
- Post the required Time Off to Vote notice where employees can see it when they enter or exit their place of work at least 10 days before each statewide election.
California Time Off to Vote Notices (in multiple languages)
California Changes Independent Contract Status for Some Workers
Who: California employers and independent contractors
When: Effective September 4, 2020
What: Governor Newsom signed Assembly Bill No. 2257 on September 4, 2020, amending Assembly Bill (AB) 5. This amendment creates significant changes and new exemptions to AB 5.
Below is a very brief summary of the substantial changes made. KPA strongly recommends businesses consult with additional experts and legal counsel regarding the impact of this new legislation on their business and relationships with independent contractors.
Assembly Bill No. 2257 exempts certain types of workers/relationships from the ABC test (we covered more on this last year). The test is used to determine whether a worker is an employee or an independent contractor. AB 2257 provides substantial details on who is exempt from the test, but in general those groups include:
- Business-to-business: The ABC test will not apply to a bonafide business-to-business contracting relationship if certain conditions and criteria are met under this new law.
- Single-engagement business-to-business: when two individuals, acting as sole-proprietorships or separate business entities, contract for services at the “location of a single-engagement event.” There are additional conditions that must be met and businesses should refer back to AB 2257 for more detail.
- Referral agency: When a sole proprietor or business entity (i.e., a service provider) provides services to a client through a referral agency. For example, and not limited to, youth athletics coaching, wedding and event vendor services, or interpretative services.
- Professional services: This definition is much expanded from AB 5’s previous definition and businesses should refer back to AB 2257 for further details.
- Music industry and performers: Anyone involved in the creating, marketing, promoting, or distributing of sound recordings or musical compositions.
- Miscellaneous exemptions: This category includes groups like manufactured housing sales, construction industry subcontractors, international exchange visitor programs, competition judges like umpires and referees.
These groups of exempted workers are generally subject to a different and broader test in comparison to the ABC test. Both tests are referenced in AB 2257.
- Determine if you currently engage the services of any of the workers referenced in the legislation.
- Seek legal counsel for help with understanding exemption definitions, interpretations, and to review any actions.
Connecticut Extends Deadline for Sexual Harassment Prevention Training
Who: Connecticut employers
When: By January 1, 2021
What: Connecticut’s Time’s Up Act requires all Connecticut employers to complete sexual harassment training for supervisors, and also for employees when the employer has three or more employees. With Executive Order 9A, the Connecticut Commission on Human Rights and Opportunities extended the deadline for the training by 90 days, from October 1, 2020 to January 1, 2021, due to COVID-19. Executive Order 9A amends Executive Order 7DDD. Employers do not need to submit a request for the extension.
Employers are required to provide training to covered employees within six months of their hire date, and that time window applies even if that deadline falls after January 1, 2021.
- Provide the required training by January 1, 2021.
- Contact [email protected] if you have questions.
D.C. Requires Notification of Employee Rights, Sexual-Harassment Prevention Training for Tipped Workers, and Creation of a Sexual Harassment Reporting Policy
Who: D.C. employers; employers with tipped workers
When: Effective October 30, 2020
What: The District of Columbia passed the Fiscal Year 2021 Budget Support Act, which requires employers to post a universal notice in every break room and at every time clock that summarizes employees’ rights under 11 statutes. The mayor’s office will create a model poster. Using this poster exempts employers from the notification requirements under nine other separate acts. Employers must also create a binder with printed information that mirrors the D.C. employment laws website and update it at least monthly.
Employers with tipped employees must provide mandatory sexual-harassment prevention training to those employees within 90 days of hire unless they received training in the preceding two years. Employees hired before the Act’s effective date have two years to complete the sexual harassment training online or in person. Owners and managers of businesses must receive the sexual-harassment prevention training at least once every two years, and managers’ training must be in person. Employers must certify to the D.C. Office of Human Rights that each employee has completed the sexual-harassment prevention training within 30 business days of completion.
Employers of tipped workers must create a sexual-harassment reporting policy and submit it to the Office of Human Rights. The policy must describe how employees can report sexual harassment to management and the D.C. government. Employers must document reported instances of sexual harassment, including whether the reported harasser was a non-managerial employee, managerial employee, owner, or operator. Employers must report annually to the D.C. Office of Human Rights certain information: the number of instances of reported sexual harassment reported and the total number of reported harassers who were non-managerial employees, managerial employees, owners, or operators.
- Post the required universal poster, once it’s released by the Mayor’s office. The universal poster is to be posted by October 30, 2020.
- Create a protocol for sexual-harassment prevention training that addresses which employees must receive the training, frequency, mode of delivery (in-person, online, or either), and reporting completion to the Office of Human Rights. Update your HR manual and employee-facing documentation.
- Plan to provide the training by choosing the government-provided training or from a list of government-approved, certified providers, as applicable.
- Create a sexual-harassment reporting policy that addresses the requirements of the Act. Update your HR manual and employee-facing documentation. Post it in a conspicuous place accessible to all employees. Submit the policy to the Office of Human Rights by October 30, 2020.
Hawaii Amends and Strengthens Its “Ban the Box” Law to Protect Applicants with Criminal Records
Who: Employers with operations in Hawaii
When: September 15, 2020
What: Hawaii’s Governor Ige signed into law State Bill 2193, which addresses the need for people with criminal records to find gainful employment “to achieve economic stability for themselves and their families” and because employment is “significantly correlated with lower recidivism rates.” The Act amends Hawaii’s original “Ban the Box” law, which was passed in 1998. The law encourages employers to consider applicants based on their skills and experience first, rather than their conviction history.
The new amendment limits which convictions the employer may use when making employment decisions. Per Hawaii statute, those decisions must reflect “a rational relationship to the duties and responsibilities of the position.” Under the original law, employers could consider any conviction in the most recent ten years. Now, the employer may refer only to felony convictions that occurred in the most recent seven years and misdemeanor convictions that occurred in the most recent five years.
- Review and update your pre-employment and post-offer forms that ask applicants to disclose prior felony or misdemeanor convictions.
- Review and update your policies and procedures to account for the new limitations on inquiries into felony or misdemeanor convictions.
- Provide training for HR personnel, managers, and supervisors, especially those that administer criminal background checks.
Maine Adopts Final Rules RElated to Earned Paid Leave Law
Who: Private Maine employers with 10 or more employees
When: Final rules issued September 14, 2020; law effective January 1, 2021
What: Maine adopted final rules governing its Earned Paid Leave Law. Covered employers must permit employees to accrue earned paid leave for any reason at the rate of one hour for every 40 hours worked, up to 40 hours in one year of employment. The rate of pay is the regular base rate of pay, including bonuses and commissions, for the week prior to the leave. Service-industry workers who use the tip credit must be paid leave at the current minimum hourly wage.
The employee begins earning paid leave at the start of employment. Employees must be allowed to roll over accrued and unused hours of earned paid leave from the previous year of employment to the current year, up to a maximum of 40 hours.
Employees may use the leave for reasons other than illness, but employers may require up to four weeks’ notice for non-emergency leave. Employers may not require a medical note or documentation for leave unless the leave is longer than three consecutive days. Employers may choose not to allow the use of the leave before the employee has been employed for 120 days during a one-year period.
Seasonal workers, employees subject to collective bargaining agreements, and employees who work fewer than 120 days in any calendar year are excluded.
- Update your budget and operations plan as needed to account for the potential need for additional workers or overtime expenses to cover employees’ work when they take paid leave.
- Update your paid-leave policy and corresponding sections of your HR manual and employee-facing documentation.
- Implement time-tracking systems as needed to ensure you have the data required to calculate base rates of pay and accrued hours.
- Provide training for managers and supervisors regarding your protocols for handling time reporting and requests for leave.
- Post an updated Maine Regulation of Employment notification poster.
Post the New York Time Off to Vote Poster by October 20, 2020
Who: New York employers
When: By October 20, 2020
What: Employers must notify employees of their right to vote in statewide elections at least 10 days before statewide elections. – Employers must keep the notice posted until the close of polls on election days. The state provides a mandatory poster.
- Post the required Time Off to Vote notice 10 days before statewide elections.
Oregon Requires Non-discrimination and Anti-harassment Prevention Policy by October 1, 2020
Who: Oregon employers
When: By October 1, 2020
What: In accordance with State Bill 726, the “Workplace Fairness Act,” employers must create, implement, and distribute their new or updated non-discrimination and anti-harassment policy to all employees by October 1, 2020. The content of the policy must meet the Act’s requirements. Employers must make the final policy available to employees, provide a copy to all new hires, and give a copy to any employee at the time s/he reports prohibited conduct.
The state provides a model policy, which employers may use or adapt as needed. The policy must include:
- The process to report actual or suspected prohibited conduct (i.e., discrimination, harassment, sexual assault, or retaliation);
- Identification of an individual and an alternate to whom the employee can report said conduct;
- Notification that employees have five years from the date of the prohibited conduct to bring a claim;
- A statement that an employer may not require or coerce an employee to agree to a nondisclosure or non-disparagement agreement (with a definition of those terms);
- An explanation that an employee claiming to be aggrieved may choose to voluntarily request to enter into a settlement agreement that contains non-disclosure, non-disparagement, or no-rehire clauses, with a seven-day revocation period; and
- A statement advising employers and employees to document all incidents of alleged prohibited conduct.
Employers cannot require an employee to enter into a settlement agreement with a no-rehire, nondisclosure, or non-disparagement clause if its intent is to prevent the employee from disclosing conduct prohibited by the policy. The employee may voluntarily enter into such an agreement, as long as the employee has seven days to revoke the agreement and the agreement isn’t effective until such revocation period has expired.
If a manager violates the policy in such a way that the violation was a substantial factor in separation from employment, the employer may choose to void the severance agreement of that manager.
- Update your non-discrimination and anti-harassment policy so that it addresses the requirements of the Act. If you plan to use the model policy, consult with legal counsel to determine if it is suitable for your organization.
- Update your HR manual and employee-facing documentation and distribute to employees by October 1, 2020.
- Provide training to HR personnel, managers, and supervisors regarding the new policy and how to handle employees’ reports of discrimination and sexual harassment.
Tennessee Pregnant Workers Fairness Act Effective October 1, 2020
Who: Tennessee employers with 15 or more employees
When: Effective October 1, 2020
What: Tennessee State Bill 2520 was amended to change the effective date of the Pregnant Workers Fairness Act from July 1, 2020 to October 1, 2020. The Act requires employers to make reasonable accommodation for employees’ and applicants’ medical needs arising from pregnancy, childbirth, or related medical conditions. Employers are not allowed to take adverse action against an employee that requests a reasonable accommodation.
Refer to Section 50-10-102 (3) of SB 2520 for details on what constitutes reasonable accommodation.
- Update your policies as needed to address the requirements of the Act.
- Update your HR manual and employee-facing documentation.
- Provide training to HR personnel, managers, and supervisors regarding the new policy and how to handle employees’ requests for accommodation under the Act.