Employment policies and procedures Archives - Page 3 of 19

Deadlines Are Fast Approaching for Chicago and Illinois Employers

Several deadlines are on the horizon for Chicago and Illinois employers. Businesses should be aware of what they need to do to comply, or they may face significant daily penalties.

Employers Must Conduct Required New Sexual Harassment and Bystander Intervention Trainings for All Employees by June 30, 2023. The City of Chicago amended its Human Rights Ordinance last year to require all employers with employees in Chicago to provide the following annual training by June 30, 2023 (and annually thereafter):

1. 1. One hour of sexual harassment prevention training to all employees (with an additional hour of sexual harassment prevention training for all supervisors and managers, for a total of two hours); and
  2. One hour of bystander intervention training to all employees.

Template sexual harassment and bystander intervention trainings and other materials are available on the City of Chicago website. Employers must keep written records of the trainings for the longer of five years or the duration of any claim, action, or pending investigation. Employers that do not comply with the training and record-keeping requirements may be fined significant penalties for each day that the employer is not in compliance.

Illinois Adverse Judgments or Rulings Reports Are Due by July 1, 2023. By each July 1, every employer that had an adverse judgment or administrative ruling against it in the preceding year must disclose to the Illinois Department of Human Rights the following:

1. 1. The total number of adverse judgments or administrative rulings during the preceding year;
  2. Whether equitable relief was ordered; and
  3. The number of adverse judgments or administrative rulings entered against the employer within specific categories outlined in Section 2-108(B) of the Illinois Human Rights Act.

An “adverse judgment or administrative ruling” means any final and non-appealable judgment that finds sexual harassment or unlawful discrimination with the ruling in the employee’s favor and against the employer. This includes reporting adverse rulings outside of Illinois jurisdiction. The disclosure report form may be found here: Form IDHR 2-108.

For more information, contact any member of Blank Rome’s Labor & Employment practice group.

A Tall Order: NYC Prohibits Height and Weight Discrimination in Employment

Anthony A. Mingione ●

On May 26, 2023, New York City Mayor Eric Adams signed a bill that will prohibit discrimination based on an applicant or employee’s actual or perceived height or weight. This bill amends the New York City Human Rights Law by specifically adding “height” and “weight” to its list of protected classes. These additions will become effective on November 22, 2023.

There are several exemptions, including where height or weight restrictions are:

- - Required by a federal, state, or local law or regulation;
  - Permitted by any regulation adopted by the City Commission on Human Rights that identifies certain jobs or job categories for which height or weight could prevent the person from performing the essential requirements of the job, and for which the Commission finds that no other reasonable alternative is available that would allow the person to perform the essential requirements of the job; or
  - Permitted by any regulation adopted by the Commission that identifies particular categories of jobs for which the use of height or weight as a criteria is reasonably necessary for the normal operations of the business.

NLRB GC Declares (Virtually) All Non-Compete Agreements Illegal

Jason E. Reisman ●

Snapshot Summary

Yes, the National Labor Relations Board (“NLRB”) General Counsel (“GC”) says virtually all non-compete agreements are illegal. However, although this is the GC’s strong personal view, she does not directly make the law or establish precedent—NLRB action is still required to start that process. Even if the NLRB acts, the National Labor Relations Act (“NLRA”) only covers non-supervisory employees. This is something to monitor, but not something that should cause you to automatically refrain from strategic and reasonable use of non-compete agreements. And, yes, it coincidentally aligns with the proposed rule from the Federal Trade Commission (see our prior alert here).

Background

Though employers uniformly do not enjoy listening to the ruminations of NLRB GC Jennifer Abruzzo, it is clear that all employers need to pay very close attention to what she says and how she says it. The latest off-the-wall proclamation came in a May 30 memorandum, where she asserted her position that non-compete provisions contained in employment contracts and severance agreements nearly always violate federal labor law by preventing former employees from working for competitors. Notably, she previewed this position in March when she issued another memo providing “guidance” on severance agreement provisions in the wake of the NLRB’s McLaren Macomb decision (see our prior blog post here).

U.S DOL Offers Some Good News for Smaller Businesses with 401(K) Plans

Daniel L. Morgan ●

It’s not often that business owners get good news from the government, but small and even some medium-sized businesses with 401(k) plans got a helping hand from the U.S. Department of Labor (“DOL”) earlier this year when the DOL eased the rules for identifying which 401(k) plans are required to have audited financial statements.

Background

The Employee Retirement Income Security Act of 1974 (“ERISA”), everyone’s favorite federal law, has a dual reporting structure for 401(k) plans depending on the number of participants in the plan. Plans with 100 or more participants at the beginning of the year—so-called large plans—are required to prepare audited financial statements and file them with the plan’s Form 5500, Annual Return/Report of Employee Benefit Plan. Plans with fewer than 100 participants escape the audit requirement and, in most instances, can file a Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan.

NLRB’s General Counsel Foreshadows More Expansive Restrictions on Separation Agreements Following the Board’s McLaren Macomb Decision

Andrew I. Herman, Garrett P. Buttrey, and Jason E. Reisman

Overview: On February 21, 2023, the National Labor Relations Board (“NLRB” or Board) found two routinely standard separation agreement provisions—confidentiality as to the agreement and non-disparagement—to be unlawful when included in an agreement offered to an employee. McLaren Macomb, 372 NLRB No. 58 (2023). This week NLRB General Counsel Jennifer Abruzzo issued guidance in an effort to clarify the scope and impact of that decision. The General Counsel’s guidance takes an expansive view of McLaren Macomb, foreshadowing more restrictions on separation agreement and other employment agreements.

In McLaren Macomb, the NLRB held that employers violate the National Labor Relations Act (“NLRA”) when they offer severance agreements with provisions that would restrict employees in the exercise of their NLRA rights. The Board explained that, where an agreement “unlawfully conditions receipt of severance benefits on the forfeiture of statutory rights, the mere proffer of the agreement itself violates the [NLRA] because it has a reasonable tendency to interfere with or restrain the exercise” of NLRA rights.

NLRB General Counsel Takes an Expansive View of McLaren Macomb

The guidance from General Counsel Abruzzo—the chief investigator and prosecutor of violations of the NLRA—is a warning to employers about her expansive views of the reach of the McLaren Macomb decision. In her memorandum, the General Counsel provides the following insight about McLaren Macomb’s broader implications:

The DOJ’s Newest Pilot Program on Compensation and Clawbacks: Executives and Employees Should Reap What They Sow

Jennifer L. Achilles, Brooke T. Iley, Anthony A. Mingione, Shawn M. Wright, and Amelia Clegg

Employers will not be able to take full advantage of the DOJ’s new program if their compensation systems do not permit clawbacks from wrongdoer employees. Companies should review their existing compensation systems and consider updating them before problems arise, so that they will be in a position to take full advantage of the DOJ program should it become necessary to do so. In updating compensation systems to permit clawbacks, or expand the scope of existing clawback provisions, employers must also take appropriate steps to maintain compliance with the wage and hour laws in the jurisdictions in which they operate. Navigating these sensitive issues will be complicated and will require more coordination between employment counsel and white-collar counsel than ever before.

The Roman lawyer and orator Cicero phrased personal responsibility thus in his De Oratore: “ut sementem feceris, ita metes”—“just as you sow, so you shall reap”. This turned out to be particularly fitting for Cicero himself–after his death at the hands of Mark Antony, Antony’s wife Fulvia took Cicero’s severed head and stabbed his tongue repeatedly with her hairpin to exact revenge for his barbed attacks on her and her husband. It appears that the Department of Justice (“DOJ”) has taken Cicero’s advice to heart when drafting the revised corporate compliance policies unveiled last week at the ABA White Collar Crime Conference in Miami. The revisions reflect an ethos that corporate employees who engage in misconduct, as well as the supervisors who enable such conduct, should suffer the consequences of their misdeeds. Accordingly, the DOJ will now reward corporations for clawing back compensation from both corporate wrongdoers and their supervisors.

On March 2, Deputy Attorney General Lisa Monaco both cemented the DOJ’s recent amendments to its corporate self-disclosure program (for more detail, please see here) and announced the launch of a novel pilot program on compensation incentives and clawbacks.

Under the pilot program:

- - Every corporate resolution involving the Criminal Division will now include a requirement that the resolving company develop compliance-promoting criteria within its compensation and bonus system. Companies subject to a resolution will need to revise their performance and bonus metrics to include compliance-related components. Companies may implement a system whereby executives and employees are required to forfeit their bonuses if they fail to meet certain compliance-related objectives.
  - The Criminal Division will reduce fines for companies who seek to claw back compensation from corporate wrongdoers. Companies that pursue clawbacks in good faith, but are unsuccessful, may receive a fine reduction of up to 25 percent of the amount of compensation sought.

In other words, companies will be able to reduce criminal fines by clawing back, or attempting in good faith to claw back, compensation from wrongdoers and their supervisors, and the companies will be able to keep any recovered funds.

To read the full client alert, please visit our website.

NIST Issues Guidance to Help Companies and Organizations Operationalize AI Risk Management

Brian Wm. Higgins ●

The U.S. Department of Commerce’s National Institute of Standards and Technology (“NIST”) last week released an Artificial Intelligence Risk Management Framework (“AI RMF 1.0”). Calling it a guidance document for voluntary use by organizations in designing, developing, deploying, or using AI systems, the framework can be used to contextualize and manage the potential risks of harm posed by AI systems, technologies, and practices in all areas where they may be used.

AI-related risk management is an increasingly important issue. Documented harms traceable to AI technologies have been widely reported and threaten to undermine people’s trust in AI. Companies that make AI systems, and those that use AI to automate decisions across their organizations or enterprises, may have policies and procedures for evaluating general corporate risks from AI. But with several states and localities implementing laws requiring data-centric risk assessments, data privacy impact assessments, and bias audits around data-based technologies like AI (including New York City’s Law No. 144 that requires audits by those who use automated employment decision tools), and with Congress poised to consider national data privacy legislation containing economy-wide risk provisions, it is important for companies and organizations that make or use AI to review to ensure their approaches to risk management around AI are comprehensive and comply with applicable laws and regulations.

NYC Employers Using AI For Screening Beware

Anthony A. Mingione, Mara B. Levin, and Amelia Clegg

Starting January 1, 2023, New York City employers that utilize artificial intelligence (“AI”) decision-making tools in their hiring practices will need to provide notice to applicants of the technology and conduct independent bias audits to ensure that these tools do not have a discriminatory impact on candidates. This new law, which is aimed at eliminating bias in automated employment decisions, is the first of its type in the United States.

The New York City Department of Consumer and Worker Protection (“DCWP”) has issued proposed regulations in connection with the law, and the DCWP will be holding a public forum to discuss the proposed regulations on October 24, 2022.

Employers and employment agencies should not wait until the regulations are finalized to develop a catalog of AI-driven tools they use for assisting in hiring and promotion decisions and working with vendors and technology stakeholders to develop the means for independent audits that are sufficiently linked to the jobs and job classes for which the organization anticipates hiring.

To read the full client alert, please visit our website.

New D.C. Noncompete Law to (Finally) Take Effect October 1

Kevin M. Passerini and Daniel L. Morgan ●

The Ban on Non-Compete Agreements Amendment Act of 2020 (the “Act”) passed by the D.C. Council over the summer will take effect on October 1, 2022, imposing new substantive and procedural restrictions on D.C. employers’ use of noncompetes, new compensation thresholds below which such noncompetes are now banned, and creating new administrative and civil enforcement measures, including administrative penalties for noncompliance.

The New Law in a Nutshell

The Act defines “noncompete provision” as “a provision in a written agreement or a workplace policy that prohibits an employee from performing work for another for pay or from operating the employee’s own business.” Consequently, the law covers both agreements containing noncompetes and workplace policies restricting employee’s competitive or outside activities, subject to several exceptions summarized below.

Most notably, the Act imposes two new income thresholds for “noncompete provisions” with “highly compensated employees”—those who earn at least $150,000—and “medical specialists”—licensed physicians earning at least $250,000. Both thresholds are subject to adjustments in accordance with increases in the Consumer Price Index beginning in 2024, and any “noncompete provisions” with employees below those levels are effectively banned by the Act.

The Act clarifies that wages, salary, bonuses or other cash incentives, commissions, overtime premiums, vested stock and restricted stock units, and other payments provided on a regular or irregular basis may all be included in determining who qualifies as a “highly compensated employee.” The Act excludes the value of noncash fringe benefits, but because it does not define “fringe benefits,” there is uncertainty as to what noncash benefits may constitute “other payments provided on a regular or irregular basis.”

To read the full client alert, please visit our website.

CA Update: Pay Data Reporting Law Signed!

Caroline Powell Donelan ●

Gov. Newsom signs California’s newest and broadest pay transparency law, SB 1162, requiring California companies to disclose pay data starting next year.

As always, Blank Rome’s employment team stands by ready to assist.

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this: