Compliance Stuff

 New Yorkers utilizing freelance workers or independent contractors for work totaling $800 or more will soon need to comply with New York’s Freelance Isn’t Free Act (“FIFA”). The Act, which was signed into law by Governor Hochul in November 2023, is set to take effect on August 28, 2024. The statute provides new protections and remedies for “freelance workers” (i.e., “independent contractors,” or those whose compensation is typically reported on an IRS Form 1099). FIFA applies to any service arrangement worth $800 or more, whether under a s ingle contract or multiple contracts over a 120-day period. The law expands and builds upon a similar local law New York City enacted in 2016. The statute provides specific requirements regarding contracts, payment, record-keeping and anti-discrimination. Given the breadth of the law and the increasing frequency with which businesses are utilizing freelancers, the implications for compliance are significant. What does FIFA require? Written Con...

With the U.S. Department of Labor’s recent increases to the minimum salary or fee amount for certain exempt employees , many employers are reviewing the exemption status of their employees. In doing so, employers should be mindful of varying state law requirements, which may be higher than even the newly increased federal thresholds. Increased salary thresholds for white-collar exemptions under FLSA In April 2024, the DOL issued final regulations raising the white-collar exemption salary threshold under the Fair Labor Standards Act (FLSA). The first increase under this rule went into effect on July 1, 2024, increasing the minimum salary for the executive, administrative, and professional exemptions to $844 per week (approximately $43,888 per year). Another increase is planned for January 1, 2025—further raising the threshold to $1,128 per week (approximately $58,656 per year)—and automatic increases will commence on July 1, 2027, and every three years thereafter. While some court chall...

California’s Gov. Gavin Newsom signed  Assembly Bill (AB) 2299  on July 15, which r equires the state’s labor commissioner to develop a model list of employee rights and responsibilities under existing whistleblower laws . Employers will be required to post this notice beginning Jan. 1, 202 5 . The notice must be written in a f ont larger than 14 point and contain the telephone number of the whistleblower hotline. Under existing California law, e mployers are required to post certain workplace notices, including a list of employees’ rights and protections under whistleblower laws . However, the current law does not require employers to post a  specific  notice drafted by the labor commissioner outlining employee rights and responsibilities under whistleblower laws. The labor commissioner previously issued  a sample notice  pursuant to the current law which includes the disclaimer that the labor commissioner does not guarantee its posting by employers fulfil...

One of the latest trends in employment law is prohibitions on captive audience meetings in the workplace. These laws are set up to prevent employers from requiring employee attendance at meetings where the purpose of the meeting is to share the employer’s opinion about religious or political matters, including unionization.  What Are Captive Audience Laws? Captive audience laws prohibit employers from requiring employees to attend meetings where the employer discusses its views on religious, political, or union-related matters. These laws are designed to protect employees from being compelled to listen to such opinions as a condition of their employment. The Historical Role of Captive Audience Meetings in Union Election Campaigns Employers have been permitted for decades to hold captive audience meetings during union election campaigns to deliver to employees their views on unionization under the National Labor Relations Board (NLRB) decision in Babcock v. Wilcox Co., 77 NLRB 5...

In November 2023, Alabama enacted a law exempting, from Alabama state income tax, amounts received by full-time hourly wage-paid employees as compensation for overtime worked. On May 17, 2024, Alabama amended the Overtime Exemption Act, changing what overtime pay is exempt from Alabama state income tax. U nder the amendment, starting October 1, 2024, overtime paid in accordance with the Fair Labor Standards Act (FLSA) will be exempt from Alabama state income tax. For employers governed by the National Railway Labor Act, the exemption will be based on overtime compensation as stated in relevant collective bargaining agreements. Quick Hits Under the amendment, the Alabama overtime income tax exemption will be based on overtime paid in accordance with the FLSA. For employers governed by the National Railway Labor Act, the exemption will be based on overtime paid as stated in relevant collective bargaining agreements. The amendment applies from October 1, 2024, until June 30, 2025. As many...

There has been a lot written about the recent Supreme Court decision reversing the 1984 decision in Chevron (Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)) and the Chevron Doctrine that became its legacy, Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024) . Conservative proponents have cheered the collapse of the “administrative state,” while more liberal advocates forecast legal chaos. Much of the public outcry and debate focuses on environmental (including climate change), health care (including drug development and approval), public land management, and many other regulatory schemes.  In the employment law realm, commentary has generally been limited to the potential battles in the wage and hour, OSHA, and other safety regulations. The authors have found little, if anything, with respect to impact on Executive Order 11246, VEVRAA or Section 503 regulations. This short blog provides the authors’ initial thoughts on the potential imp...

A common issue that employers, regardless of size or industry, face is responding to employee complaints. If, for example, an employee reports that they are being sexually harassed at work or that another employee is violating a company policy, t he way employers respond to and investigate employee complaints is critical to protect the employer from or assist in its defense of an employment-related lawsuit . This article will discuss four common mistakes employers make when conducting internal workplace investigations and what can be done to avoid them.   1. Delayed Investigation Employers often improperly delay internal workplace investigations. As soon as an employer receives an employee complaint, they should immediately begin to evaluate and investigate that complaint. Regardless of whether an employee makes a complaint directly or in passing or whether it’s in person, in writing, or telephonically, it should trigger swift action by the employer. From a practical standpo...

 In our post-COVID world, it is common for employers to hire fully remote employees who work out of state. One of the challenges many employers face in this remote-work world is how to address complicated HR issues such as leaves of absence for those remote employees, including whether such employees are eligible for medical leave under the federal Family and Medical Leave Act (FMLA).  (Note: this blog post addresses issues only under the federal FMLA, not under any state FMLA.) As most employers already know, managing FMLA leaves of absence is often a complicated and frustrating process. To be eligible for leave under the federal FMLA, an employee must (1) have worked for the employer for at least 12 months, (2) have at least 1,250 hours of service for the employer during the 12-month period immediately preceding the leave, and (3) work at a worksite where the employer has at least 50 employees within 75 miles. The question is: where is the remote worker’s “worksite”?  I...

  A Fifth Circuit panel heard oral argument on Wednesday, August 7, on whether Department of Labor (DOL) regulations imposing a salary requirement to satisfy the executive, administrative and professional exemptions is valid. The case on appeal,  Mayfield v U.S. Department of Labor , does not address the minimum salary level increase that took effect July 1, 2024 . Rather, the appeals court is considering an ongoing challenge to the DOL’s  previous  regulation implemented during the Trump administration that increased the salary level to $35,568 . The lawsuit challenges the DOL’s authority to require  any  salary level. The plaintiff argues the statute, the Fair Labor Standards Act (FLSA), does not impose a salary requirement for the executive, administrative, and professional (EAP) exemptions, and that the DOL regulation imposing such a requirement is inconsistent with the statute . A federal district court in Texas previously upheld the Trump DOL rule. (S...

A rash of recent natural disasters, from hurricanes to earthquakes to wildfires, serves as a timely reminder to employers of the potential for natural disasters to disrupt their operations and cause imminent hazards in the workplace. Quick Hits Natural disasters may be unpredictable and devastating, but employers can take steps to mitigate the impact of natural disasters on their businesses and workforces. Employers may want to brush off and review their disaster-response plans and consider other legal implications for responding to natural disasters. Tropical Storm Debby has reportedly caused at least six deaths since making landfall in Florida as a Category 1 hurricane on August 5, 2024 . The storm is now progressing up the East Coast, dropping heavy rains and spawning tornadoes. Meanwhile, on August 6, a 5.2-magnitude earthquake struck Southern California, sparking fears of another devastating major earthquake. B oth come as wildfires continue to ravage the Pacific Northwest and Can...

  At present, the   Federal Trade Commission’s (FTC) final rule on non-competes   (the “Rule”) is set to go into effect on September 4, 2024 for virtually every for-profit employer in the United States. Though legal challenges  remain pending , there is uncertainty as to whether any nationwide injunction will be entered prior to September 4. Given the existing uncertainty, employers should consider preparing for compliance . At the very least, employers should focus on the potential implications of non-compliance. The Final Rule: Scope and Required, Individual Notice As a reminder, subject to limited exceptions discussed below, the Rule invalidates existing non-competes and prohibits future non-competes, regardless of industry and regardless of whether a worker is an employee or an independent contractor . The Rule bans all non-competes nationwide, including  de facto  non-competes , with narrow exceptions for (1) existing non-competes with “senior executiv...

  The Internal Revenue Service (IRS) recently issued a   news release   identifying five new signs that a business’s Employee Retention Tax Credit (ERC) may be incorrect. It has also begun issuing a third round of letters denying ERC claims. New compliance initiatives are coming and criminal investigations of ERC claims are on the rise, with the government winning cases that go to trial. For background, the ERC is a legitimate, refundable tax credit designed to help businesses that continued to pay employees while they were shut down due to the COVID-19 pandemic or that experienced a significant decline in gross receipts in 2020 and 2021. While Congress designed the ERC with the laudable goal of helping businesses survive the pandemic by encouraging them to keep employees on their payrolls, ERC fraud has run rampant and unscrupulous promoters have pushed businesses that do not qualify for the credit to file improper ERC claims . For over two years, the IRS has engaged in...