Compliance Stuff

 The Occupational Safety and Health Administration (OSHA) has moved a step closer to a final rule for “Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings.” OSHA sent the yet-to-be-unveiled rule to the Office of Management and Budget for an interagency review of up to 90 days, after which OSHA will publish the rule in the Federal Register to give it effect. While the final rule has not been published, the potential regulatory framework OSHA proposed in 2023 on the topic offers clues to how to prepare. Under the proposal, employers would be required to create and maintain a written Heat Injury and Illness Prevention Program (HIPP) . Small employers with up to 10 employees would be exempted from the HIPP requirement. Further, outdoor and indoor work in any or all General Industry, Construction, Maritime, and Agriculture sectors where OSHA has jurisdiction would be covered. Other potential requirements under the proposed standard call for employers to identify heat ...

 The Massachusetts Appeals Court just rendered a decision that significantly broadens when one entity may be found to be a “joint employer” of another entity’s employees under state wage laws. The June 13 decision, coupled with guidance from an earlier decision by the Massachusetts Supreme Judicial Court, establishes a comprehensive framework you can follow to determine whether you might face joint employment trouble. What does your business need to know about the increasing likelihood you could be considered a joint employer – and what are six best practices you can follow to minimize your risk? How Did We Get Here? In Tran v. Jennings Road Management Corp., the Massachusetts Appeals Court agreed that Jennings Road Management Corp. (JRM) was a joint employer of the plaintiff, Sakiroh Tran, a parts advisor at a Boston-area car dealership. The court’s June 13 opinion applied the totality of the circumstances test from a 2021 Supreme Judicial Court opinion that we covered here, which...

When an employee is on an extended leave of absence, there is often confusion regarding whether and to what extent the employer must continue to provide coverage to the employee under the employer-provided health plan.  To determine whether coverage is required, the employer should consider the terms of the plan, COBRA requirements, and whether the leave is covered by FMLA.  The Plan Terms.    Employer-provided health plans include continuing service requirements for continuing eligibility.  For example, it is common for a health plan to require employees to perform an average of at least 30 hours of service per week to be eligible for coverage under the plan.  When an employee goes out on a leave of absence, and the employee’s average hours of service typically fall below the minimum coverage requirement, the employee may no longer be eligible for coverage under the plan.     FMLA Leave.   Suppose an employer is subject to the Family and Med...

 Rates Up, Dude – Surfing the Wave of U.S. Minimum Wage, Tipped, and Exempt Employee Pay Increases that Will Occur on July 1, 2024 While some across the United States are working on their tans, many employers are working on managing their labor budgets so they don’t get burned by increases in minimum pay standards for non-exempt, tipped, and certain overtime-exempt employees that will take effect on July 1, 2024. Before lathering up for summer rates, however, we briefly highlight some notable rate-related developments that occurred in the preceding seasons. Of course, employers should watch out for sneaker waves – pending or future legislation – that could wipe out (change) other rates in 2024, and consider checking in with the lifeguard on duty (knowledgeable employment counsel) before diving headfirst into the compensation waters to confirm your pay practices are, like the sun’s rays, golden. Selected Rate-Related Highlights Occurring After January 1, 2024 Federal Increased Minim...

What is now considered as the “abusive use of partnerships,” and why would this matter to the IRS? The agency recently released IR-2024-166 , which is intended to provide “new guidance to stop partnerships from using sophisticated tax-free transactions that lack economic substance” to avoid paying taxes.  The IRS continues to focus on and analyze the actions, behaviors, and strategies of high-income U.S. taxpayers to avoid paying the taxes they should owe each year. The IRS was the beneficiary of $80 billion in new funding from the Inflation Reduction Act (2022). Some of those new funds have been used to establish a new internal IRS team that will focus specifically on closing apparent “tax loopholes” while establishing new guidelines for high-income U.S. taxpayers. IRS audit teams have been focused on a multi-billion dollar scheme and the use of deductions generated through sophisticated partnership transactions. The agency’s publication referred to a new focus on “Basis shifting”...

  Cutting ties with business partners is a delicate and often complex process. Whether driven by irreconcilable differences, strategic shifts, or personal reasons, disengaging from business partners requires careful consideration of legal obligations and procedural requirements. In this article, we explore some of the key steps involved in terminating a relationship with business partners who are co-members of a limited liability company (LLC). 1. Review the Operating Agreement The Operating Agreement of an LLC serves as the blueprint for the LLC's operations, outlining the rights, responsibilities, and procedures governing the company and its members. Before initiating any steps towards dissolution, review the Operating Agreement and seek legal counsel to ensure you understand the provisions related to member withdrawal, sales of member interest, and dispute resolution.  If there are multiple members of an LLC, you definitely should spend the time up front to negotiate the te...

Here are five (5) questions that are fairly simple but revealing as to whether a company’s Sanctions Compliance Program (“SCP”) is effective.  This is not an exhaustive list but it is my top 5. Question 1 — Does the Company conduct annual sanctions compliance training for relevant employees? I have written about this and reminder everyone since 2019 about the importance of conducting sanctions training.  OFAC’s Sanctions Compliance Guidance issued in 2019 mandates, at a minimum, that companies provide annual sanctions compliance training.  Notwithstanding this directive, which is reinforced by compliance professionals (including me), most companies are not offering annual sanctions compliance training.  I cannot understand why companies are ignoring this requirement.  Several States require annual training on sexual harassment and other topics.  Companies are able to meet this requirement, but when it comes to sanctions compliance, companies lack the commi...

SIM-swapping attacks targeting executives are on the rise. In 2023, the FBI investigated 1,075 SIM-swapping attacks, which resulted in nearly $50 million in losses. SIM swapping has become so pervasive that it has prompted the Federal Communications Commission to consider strengthening regulatory actions for protecting consumers and businesses as it relates to this attack vector.  Criminals increasingly target senior-level executives in an attack that can impact their corporate and home office environments and even extend to family members. In this article, we will cover the mechanics of SIM-swapping and what executives need to know to mitigate this risk.  What Is a SIM Card? SIM is an acronym for a subscriber identity module, which is smart card or a unique identifying number (e-SIM) and acts as the key to a user's cellular network. It stores information like the unique identification number, the users contacts, and other data, and activates calling, texting, and data serv...

Several state and local minimum wage rates will soon increase, beginning on July 1, 2024. This article provides the state and major locality minimum wage increases for mid-2024 only, along with related changes in the minimum cash wage for tipped employees where applicable. The new rates are in bold text. NOTE: Jurisdictions that will not have—or have not announced—upcoming midyear increases in their minimum wage rates are not included below. This list includes the major localities with minimum wage rates that will increase in mid-2024. It is not exhaustive of all localities nationwide that have a minimum wage rate that may differ from the federal or state rate. Additionally, if a jurisdiction’s minimum cash wage for tipped workers is changing in mid-2024, it is included in the list below. MID-2024 MINIMUM WAGE INCREASES (State and Major Locality) *All the increases shown below will be effective on JULY 1, 2024, unless noted otherwise. CALIFORNIA Berkeley $18.07 to $18.67 Emeryville $18...

On the eve of the effective date of the Equal Employment Opportunity Commission’s (EEOC’s) final Pregnant Workers Fairness Act (PWFA) regulations (Final Rule), a federal court in Louisiana postponed the effective date of what the court describes as the “Final Rule’s requirement that covered entities provide accommodation for the elective abortions of employees that are not necessary to treat a medical condition related to pregnancy” until final judgment is entered in pending litigation. State of Louisiana v. EEOC, et al., No 2:24-cv-00629 (W.D. La. June 17, 2024), and U.S. Conference of Catholic Bishops v. EEOC, et al., No. 2:24-cv-00691 (W.D. La. June 17, 2024). The order may impact employers with employees in Louisiana and Mississippi. PWFA The PWFA was permanent legislation included in the Consolidated Appropriations Act of 2023 signed by President Joe Biden on Dec. 29, 2022, and went into effect on June 27, 2023 . The law requires employers (including state government employers) w...

Plan sponsors are required to file their Form 5500 series returns for 2023 calendar year plans by July 31, 2024 . File a Form 5558 , Application for Extension of Time to File Certain Employee Plan Returns, if you need more time to file your Form 5500 series return, or Form 8955-SSA. A one-participant plan or a foreign plan required to file an annual return must file Form 5500-EZ: Electronically using the Department of Labor’s EFAST2 filing system , or  On paper with the IRS. If you’re required to file at least 250 returns of any type with the IRS, you must file your 2023 Form 5500-EZ and 2023 Form 8955-SSA electronically. See the Form 5500 Corner for more filing information. All plan sponsors are encouraged to file their 2023 Form 5500-EZ electronically. It’s safe, easy to complete and you have an immediate record that the return was filed. Plans Retroactively Adopted After the End of the Plan Year If an employer adopts a plan during the employer’s 2024 taxable year (but not lat...

This week, Senator Patty Murray (D-WA) and Representatives Bobby Scott (D-VA) and Jerrold Nadler (D-NY) reintroduced the Restoring Justice for Workers Act (S. 4502 / H.R. 8691). The bill would prohibit pre-dispute agreements to arbitrate workplace claims, overturn the Supreme Court’s 2018 decision in Epic Systems by banning class action waivers, and establish certain notice and waiting period requirements for post-dispute arbitration agreements. The bill is yet another effort to prohibit or limit the arbitration of workplace disputes. At this time, however, the bill does not appear to enjoy the bipartisan popularity of the Protecting Older Americans Act of 2023 (S. 1979). Source(s) : Ogletree Deakins , received on June 17, 2024; senate.gov , accessed on June 20, 2024; Ogletree Deakins , accessed on June 20, 2024; congress.gov , accessed on June 20, 2024.

 The U.S Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) enforces the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended (VEVRAA). Under VEVRAA, federal contractors and subcontractors are prohibited from engaging in discrimination in employment practices against veterans and required to provide equal employment opportunity in recruiting, hiring, promoting, and retaining protected veterans.    OFCCP continues to release new resources to help contractors understand their obligations under VEVRAA. Published today is a new example illustrating the use of the VEVRAA national benchmark, which is a yardstick contractors use to measure their progress toward achieving equal employment opportunity for protected veterans. OFCCP also published an updated VEVRAA Affirmative Action Program (AAP) sample . The update includes additional information for contractors on how to use the hiring benchmark effectively to monitor their veteran hiri...

Beginning July 1, 2024, Cook County’s minimum wage increases to $14.05 per hour for non-tipped workers while the base wage for tipped workers remains at $8.40 per hour.   Background on Cook County’s Minimum Wage Ordinance The Cook County Board of Commissioners originally passed the Cook County Minimum Wage Ordinance ( MWO ) on Oct. 26, 2016.  The MWO first raised the minimum wage to $10.00 per hour on July 1, 2017. Then, the minimum wage incrementally increased every year until it reached $13.00 on July 1, 2020. In the years since, Cook County’s wage requirements continue to adjust annually in proportion to the increase in the Consumer Price Index for All Urban Consumers, capped at 2.5%.   The Cook County Commission on Human Rights is required to issue a notice by June 1st announcing the updated wage rates that will take effect the next month. Accordingly, on May 30, 2024, Cook County announced the minimum wage update on July 1, 2024, to $14.05 for non-tipped w...

 On June 2, 2024, cloud service provider Snowflake reported increased cyber threat activity targeting some of its customers' accounts. Snowflake recommended that customers review unusual activity to detect and prevent unauthorized user access. The Cybersecurity and Infrastructure Agency (CISA) then sent an alert on June 3, 2024, recommending that Snowflake customers “hunt for malicious activity, report positive findings to CISA, and review the Snowflake notice” on steps to take.   On June 10, 2024, Mandiant provided additional information about the incident. If you are a Snowflake user, the Mandiant Alert is a mandatory read. According to Mandiant, it identified a campaign by threat actor UNC5537, targeting “Snowflake database instances with the intent of data theft and extortion.” The threat actor is suspected of having stolen records from Snowflake customers using stolen customer credentials and subsequently advertised the sale of customer data attempting to extort Snow...

Puerto Rico’s minimum wage will increase to $10.50 per hour from $9.50 per hour effective July 1, 2024. This increase was finally approved by the Minimum Wage Review Commission on June 13, 2024 . With limited exceptions, the increase will apply to all non-exempt employees covered by the Fair Labor Standards Act. This increase was adopted by Act No. 47-2021 as an automatic increase unless the Commission provided otherwise. The Commission’s approval was supported by an economic report issued by Abexus Analytics on June 7, 2024. The report included an analysis based on the data collected in the quarterly returns of the Department of Labor of Puerto Rico, the Quarterly Census of Employment and Wages (ES-202), the aggregated data from the corporate income returns from the Department of the Treasury of Puerto Rico, and the inflation rate, among other factors. An evaluation of the report moved the Minimum Wage Review Commission to approve, with a majority of votes, the minimum wage increase ...

 The U.S. Supreme Court issued a decision directing district courts to use the traditional four-part test when evaluating whether a preliminary injunction should issue at the request of the National Labor Relations Board pending litigation of a complaint under the  National Labor Relations Act. No. 23-367 (June 13, 2024). The decision settles the split among the federal circuit courts over the standard that should be applied when the Board files a motion for a “10(j)” injunction, named for the section of the Act that authorizes the Board to seek injunctive relief. Circuit courts were split on which test should apply: the traditional four-part test, a more lenient two-part test, or a hybrid of the two. The Court’s decision raises the bar for the Board, requiring it to meet each prong of the four-part test for a court to grant an injunction . In particular, it will be more difficult for the Board to establish it is “likely to succeed on the merits,” as opposed to the more leni...

Washington state law just changed in a way that might have made your company’s non-solicitation agreements unenforceable and illegal. Recent amendments to the state non-compete statute took effect on June 6 and significantly changed both the statute and existing case law when it comes to which non-solicitation agreements can be enforced by employers. The new law also broadens the definition of prohibited non-compete agreements. You will need to re-visit your employment agreements to ensure they are compliant with the amended statute. Quick Background on the Washington Statute Washington’s non-compete statute has been in effect since 2020. To be valid and enforceable under the law, such an agreement must: Disclose the terms of the agreement before employment begins, or else be accompanied by independent consideration; Allow for adjudication of disputes in Washington (choice of law provisions for other states render the agreement void); and Involve an employee earning overcompensation fl...