Category: Strategic counseling

DOL Proposes New Joint Employer Rule Under the FLSA, FMLA, and MSPA

Nikki D. Kessling ●

The U.S. Department of Labor’s (“DOL”) Wage and Hour Division announced a proposed rule on April 22, 2026, to address how “joint employer” status is determined under the Fair Labor Standards Act (“FLSA”), Family and Medical Leave Act (“FMLA”), and Migrant and Seasonal Agricultural Worker Protection Act (“MSPA”). The DOL’s previous attempt at a joint employer rule, issued in 2020, was rescinded in 2021 following its partial invalidation in New York federal court. The proposed rule was published in the Federal Register on April 23.

The DOL’s new proposal—which appears to be a practical effort at clarification rather than an attempt to blaze new trails—would set a unified standard across the FLSA, FMLA, and MSPA for when two or more entities share responsibility for the same workers. Companies using staffing agencies, subcontractors, franchise models, or other multi-employer arrangements should take note.

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What Does IBM’s $17 Million FCA Settlement Portend for Government Contractors Wrestling with Compliance?

Jennifer A. Short, Dominique L. Casimir, Brooke T. Iley ●

On Friday, April 10, 2026, the Department of Justice (“DOJ”) announced a $17 million False Claims Act (“FCA”) settlement with International Business Machines (“IBM”), based on the company’s alleged violations of federal anti-discrimination laws. The settlement is the first under the DOJ’s Civil Rights Fraud Initiative, created last May with the objective of investigating and prosecuting “illegal DEI” practices, primarily through an FCA lens. Coupled with a new Executive Order—issued on March 26—that imposes contract prohibitions on “racially discriminatory DEI activities” in federal government contracts and subcontracts, the IBM settlement signals an escalation in the government’s focus on DEI programs and employment policies.

The DOJ Press Release and Settlement Agreement

The Alleged “Covered Conduct” Identifies Specific Problematic Practices. 

DOJ alleged that IBM improperly made employment decisions based on protected characteristics through specific programs and actions, described as the “Covered Conduct” for purposes of the settlement agreement:

  • Compensation Incentives: A “diversity modifier” linking bonus compensation to demographic targets
  • Hiring and Promotion Criteria: Basing interview eligibility or prioritization on race, sex, or national origin
  • Demographic Goals for Business Units: Developing race and gender targets tied to employment decisions
  • Limited-Access Programs: Limiting training, mentoring, and leadership development to employees meeting specific demographic criteria, such as minorities.

To read the full alert, please visit our website.

California’s AB 692 Reins in “Stay or Pay” Provisions in California Employment Agreements

Taylor C. Morosco ●

Taylor C. Morosco's headshot photo

California’s Assembly Bill (“AB”) 692 took effect on January 1, 2026, significantly limiting the use of commonplace “stay-or-pay” clauses in offer letters and agreements, which require employees or prospective employees to repay certain costs if their employment ends.

AB 692 underscores California’s commitment to limit the use of contractual provisions restricting or disincentivizing workforce mobility. Although the new law does not apply retroactively (essentially grandfathering in “stay-or-pay” clauses entered into before January 1, 2026), employers must audit agreements and practices, and plan for compliance to avoid significant potential liability going forward.

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New Jersey Steps Into Fray, Bans Mandatory Employee Meetings

David G. Rodriguez and Derek E. Schultz ●

New Jersey Governor Phil Murphy signed into law significant amendments to the New Jersey Employer Political Communication Restrictions Act (the “Act”) on September 3, 2025. These amendments, which take effect on December 2, 2025, make New Jersey one of 12 states in the nation to prohibit employers from holding captive audience meetings to discuss unionization with employees.

KEY PROVISIONS

The Act Will Prohibit Employers from Holding Mandatory Meetings on Unionization

Employers and their agents will be prohibited from requiring employees to attend meetings or participate in communications where the purpose is to convey the employer’s opinion about unionization. This restriction will apply to all employers in New Jersey, including those in both the private and public sectors.

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Ding! Dong! U.S. DOL Assessment of Liquidated Damages Is Dead!

Jason E. Reisman ●

The United States Department of Labor (“DOL”) issued a Field Assistance Bulletin (“FAB”) on June 27, 2025, putting to bed, hopefully once and for all, the DOL’s unauthorized practice of requiring employers to pay liquidated damages in pre-litigation wage and hour matters. For years, during administrative investigations, the DOL would seek to impose, and/or threaten litigation over the imposition of, liquidated damages when it found violations of the Fair Labor Standards Act (“FLSA”). Not anymore.

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Shining a Light on Pay: Understanding New Jersey’s New Transparency Mandate for Employers

Gabrielle I. Weiss ●

On June 1, 2025, New Jersey’s Pay and Benefit Transparency Act (“the Act”) took effect, ushering in a new era of openness around pay and benefits for job applicants and employees. This law is part of a growing national movement toward pay transparency, but it introduces several unique requirements and has a broad reach. Employers operating in or hiring employees from New Jersey must act quickly to ensure compliance.

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Philadelphia Enacts POWERful New Worker Protection Ordinance

Julia C. Riskowitz

On May 27, 2025, Mayor Cherelle Parker signed the Protect Our Workers, Enforce Rights (“POWER”) Act into law, which expands the Philadelphia Department of Labor’s enforcement options for violations of the City’s expanding roster of worker protection laws. Under this new ordinance, which is now in effect, workers in Philadelphia have expanded protection against labor infractions; and employers face a host of new and enhanced compliance requirements.

Key provisions of the new legislation include:

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Court Temporarily Hits the Brakes on EO 14173 Ending Illegal Discrimination: What Employers Should Know

 Anthony B. Haller, Brooke T. Iley, and Theresa A. Topping ●


Big Picture

On February 21, 2025, a federal judge in the District Court of Maryland granted a temporary injunction blocking portions of President Trump’s Executive Orders “Ending Illegal Discrimination and Restoring Merit Based Opportunity” (“14173”) and “Ending Radical and Wasteful Government DEI Programs” (“14151”) (collectively the “EOs”). To learn more about each EO’s directives read Blank Rome’s previous coverage on 14173 here and 14151 here. This is a temporary nationwide ban on certain portions of the EOs.

After pointing out that the Trump Administration has declared “DEI to be henceforth illegal”, the Court found the EOs do not “define any of the operative terms” such as “illegal DEI”, “equity-related”, “promoting DEI”, or “illegal discrimination or preferences”. This vagueness fails to provide companies and organizations with proper notice as to what types of programs are prohibited. Further, the Court found that the EOs likely violate the First Amendment by expressly threatening “the expression of views supportive of equity, diversity and inclusion.” This is a nationwide ban.

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Employers Are Extra Grateful This Thanksgiving After Federal Court Sets Aside DOL’s Salary Threshold Increase

Theresa A. Topping ●

Salary threshold. . .$35,568.00. . .the Eastern District of Texas. . .not the classic answers you expect to hear from your loved ones around the Thanksgiving table when you ask, “Hey guys, what are you most thankful for?” While family, friends, food, and a roof over your head are all great, the fact that the United States District Court for the Eastern District of Texas shot down the Department of Labor’s (“DOL”) attempt at increasing the overtime salary threshold to $58,656.00 is right up there for employers.

The DOL’s Not-So-Final “Final Rule”

Back on April 23, 2024, the DOL announced their “final rule,” which entailed a multi-phase increase of the “white-collar exemption” (the executive, administrative, and professional employees (“EAP”)) salary threshold from $35,568.00 to $43,888.00, starting on July 1, 2024, and then up to $58,656.00, starting on January 1, 2025 (with increases automatically occurring every three years thereafter). Notably absent were any changes to the DOL’s “duties” test, which must be analyzed in conjunction with a salary when determining whether an EAP employee is exempt from overtime. At the time of its announcement, the DOL projected their final rule would make four million workers newly eligible for overtime payments and cost employers nationwide roughly $1.4 billion in the first year alone. Being thankful for a $35,568.00 threshold is looking more and more understandable now, isn’t it?

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California’s New Workplace Violence Prevention Law: July 1, 2024, Compliance Deadline—Are You Ready?

Caroline Powell Donelan ●

The effective date of California’s Senate Bill 553 is fast approaching, and the law covers nearly every employer and every employment facility in California with the exception of healthcare facilities and other facilities governed by different legal standards, most remote workers, and businesses with fewer than 10 employees.

Whether you are based in California or operate a worksite in the state with more than 10 employees, compliance is mandatory. The requirements, set forth in SB 553, are detailed and complex, establishing rules for planning, logging, and record-keeping, as well as worker training, which will all be overseen and enforced by the California Occupational Safety and Health Act (“Cal/OSHA”).

Specifically, California employers must meet four broad categories of obligations that go into effect July 1, 2024, including:

  1. The creation of a workplace violence prevention plan.
  2. The creation of a workplace violence incident log.
  3. Training requirements.
  4. Recordkeeping requirements.
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