No More Double the Trouble: DOL Relents on “Automatic” Liquidated Damages

Jason E. Reisman

After enduring a decade or so of the U.S. Department of Labor (“DOL”) “automatically” demanding double the amount of back pay in virtually every settlement of a wage and hour investigation under the Fair Labor Standards Act (“FLSA”), employers around the country can now breathe a heavy sigh of relief. In a Field Assistance Bulletin (“FAB”) dated June 24, 2020, the DOL said it “will no longer pursue pre-litigation liquidated damages as its default policy from employers in addition to any back wages found due in its administratively resolved investigations.”

First, it is somewhat amazing that the DOL admitted that liquidated damages was its “default policy.” While the FLSA clearly allows the recovery of liquidated damages in an amount equal to 100 percent of the back wages due, nowhere does the statute authorize the DOL to impose such damages in an investigation. Though arguably beyond the DOL’s authority in pre-litigation proceedings—that good old ultra vires concept—the lack of explicit statutory authority did not stop the agency from imposing liquidated damages in nearly every case without regard to whether any evidence of bad faith or willfulness existed. Not only did the DOL impose them as a penalty, but it also leveraged the threat of litigation to “persuade” employers to settle and accept the imposition of liquidated damages—remember, it almost never makes sense to fight the government in litigation, as it can outspend just about anyone, while doing so using “your” tax money.

Now, according to the FAB, effective July 1, 2020, the DOL will not assess these double damages if, for example, there is no evidence of bad faith or willfulness or the employer has no previous history of violations or the matter involves complex “white collar” exemption issues. Importantly, seeking pre-litigation damages will require approval from two top DOL officials: the Wage & Hour Division Administrator and the Solicitor of Labor. More hurdles for the DOL—a plus for employers doing their best to comply with a complex, nuanced, and at times tedious statute and regulations.

But, alas, this “practice” change may be short-lived if a new administration takes the White House in 2021. Stay tuned and enjoy it while it lasts!

“Supremes” Validate Title VII Protection for LGBTQ Workers

Jason E. Reisman     

Yesterday, the United States Supreme Court issued a long-awaited, watershed decision confirming that Title VII of the Civil Rights Act of 1964 does protect against discrimination in employment based on gender identity and sexual orientation. It may be the most significant employment-related decision in more than 20 years. The decision addresses a connected trio of separate cases that were argued in the fall before the Court: Bostock v. Clayton County, Georgia (on appeal from the 11th Circuit), Altitude Express, Inc. v. Zarda (on appeal from the 2d Circuit), and R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC (on appeal from the 6th Circuit). For a little background, see our prior blog here.

With a 6-3 majority, the four “liberal” justices joined with two “conservative” justices to reach this momentous decision—in fact, Justice Gorsuch penned the decision. Clearly finding that the word “sex” in Title VII encompasses employment actions based on gender identity or sexual orientation, Justice Gorsuch admitted that the original legislators who drafted Title VII “might not have anticipated their work would lead to this particular result.” The focus on interpreting the text of the law, which was often championed by the late Justice Antonin Scalia, carried the day—leading to “new” protections that will enhance the rights of the LGBTQ worker community throughout the country, especially in numerous states and locales that do not otherwise provide such protection. The decision also ensures that the “paradoxical legal landscape in which a person can be married [to a same sex partner] on Saturday and then fired on Monday for just that act” (raised in 2017, by a panel of the Seventh Circuit Court of Appeals in Hively v. Ivy Tech. Community College) has drifted off into the sunset.

Simply put, the Supreme Court said, “Because discrimination on the basis of homosexuality or transgender status requires an employer to intentionally treat individual employees differently because of their sex, an employer who intentionally penalizes an employee for being homosexual or transgender also violates Title VII.”

For employers across the country, the uniformity created by this decision will impact millions of workers in states where there was no similar protection for such discrimination—which is more than 50 percent of the states. There is much to consider. For example, if an employer employs 15 or more employees and does not have a policy prohibiting gender identity and sexual orientation discrimination, it is time for a handbook update…as the immediate first step, with a corresponding move to update and implement new workforce training. As important, employers should take this valuable opportunity to engage with all employees. Be mindful of, and creative in, bringing positive and productive communication and, where needed, change to the workplace—culture emanates from the top and cannot be overestimated as to its impact on the effectiveness and health of the workforce.

It is inevitable that there will be additional questions as this decision filters out into the workplace and the lower courts interpret it. Cases down the line will likely force the courts to address issues relating to the interplay of this decision with the exercise of religious freedom.  Also, as the dissent from Justice Alito noted, the ruling could have unforeseen consequences, leaving courts to address its implications in athletics, bathroom and locker room access, university housing, and other contexts. Though undoubtedly putting to bed one of the most substantive issues in employment law in the 21st century so far, as with all significant decisions of the highest court, the ripple effects will engender further battles and be felt for decades to come.

Empire State Requires All Employers to Provide Sick Leave

Mara B. Levin, Anthony A. Mingione, and Jacob W.E. Kearney

Late last month, Governor Cuomo signed into law the State Budget (S7506B), which includes new paid and unpaid sick leave requirements for employers in New York State. The law requires that all employers provide workers with job-protected sick leave, with the amount of leave dependent upon the employer’s size, number of employees, and net income. The law goes into effect September 30, 2020, but employers can prohibit the use of sick leave accrued under the law until January 1, 2021.

The law requires:

  • Employers with 100 or more employees must provide at least 56 hours of paid sick leave each calendar year;
  • Employers with between five and 99 employees must provide at least 40 hours of paid sick leave each calendar year;
  • Employers with fewer than five employees but having a net income greater than one million dollars in the previous tax year must provide at least 40 hours of paid sick leave each calendar year; and
  • Employers with fewer than five employees but having a net income less than one million dollars in the previous tax year must provide at least 40 hours of unpaid sick leave each calendar year.

Employers can fulfill their obligations by either providing the sick leave in a lump sum at the beginning of the calendar year (i.e., frontloading it) or by allowing employees to accrue sick leave at a rate of not less than one hour for every 30 hours worked, beginning at the later of September 30, 2020, or the commencement of  employment. While current employees will begin accruing sick leave in 2020, employers are not required to permit usage of that accrued time until January 2021. Employees must be allowed to carry unused sick leave over to the next calendar year, but employers can restrict the use of sick leave to the maximum hours guaranteed under the law (either 40 or 56). The carryover of hours is intended to allow employees to maintain continuity and a bank of sick leave, which avoids accruals starting from zero every year; and the cap is meant to keep the total usage in a given year from being problematic for employers. Employers are not, however, required by the law to pay an employee for unused sick leave upon the employee’s termination, resignation, retirement, or other separation from employment.

The law’s requirements act as a floor, and employers can provide employees with additional benefits and sick leave in excess of the law’s requirements.  Significantly, the sick leave requirements in S7506B are not limited to the COVID-19 pandemic but rather are permanent.

Another Round for the Garden State! New Jersey Again Changes Leave and Disability Benefits for COVID-19 Impacted Employees

Thomas J. Szymanski

New Jersey Governor Phil Murphy recently signed S2374 into law, expanding the New Jersey Family Leave Act (“NJFLA”) and New Jersey Temporary Disability Benefits Law (“NJTDBL”) and providing additional employee protections during the coronavirus COVID-19 pandemic and future epidemics, including (1) the expansion of reasons for leave; (2) certification changes; (3) intermittent use of such leave; (4) changes related to highly compensated employees; and (5) the expansion of the scope of compensable leave under NJTDBL. These changes are effective immediately and apply retroactively to March 25, 2020.

NJFLA—Expanded Reasons for Leave

During a state of emergency declared by the Governor, or when indicated to be needed by the Commissioner of Health or other public health authority, due to “an epidemic of a communicable disease, a known or suspected exposure to the communicable disease, or efforts to prevent spread of a communicable disease,” an employee may use NJFLA leave for the following new reasons:

    1. Childcare—to care for a child due to a school or daycare closure;
    2. Mandatory quarantine— to care for a family member subject to mandatory quarantine; and
    3. Voluntary self-quarantine—to care for a family member whose doctor recommends a voluntary self-quarantine.

Continue reading “Another Round for the Garden State! New Jersey Again Changes Leave and Disability Benefits for COVID-19 Impacted Employees”

City of LA Publishes Rules and Regulations Clarifying COVID-19 Supplemental Paid Sick Leave Order

Caitlin I. Sanders

As we previously reported, on April 7, 2020, Los Angeles City Mayor Garcetti issued an emergency order calling for supplemental paid sick leave for City employees who are not covered by the federal Families First Coronavirus Response Act and who must miss work for reasons related to COVID-19. On April 11, 2020, the Los Angeles Office of Wage Standards (“OWS”) issued rules and regulations clarifying Mayor Garcetti’s supplemental paid sick leave order. The rules and regulations can be found on the OWS website here.

The OWS anticipates updating these rules and regulations, and we will continue to monitor the OWS for the latest guidance.

For the latest updates, please visit Blank Rome’s Coronavirus (“COVID-19”) Task Force page.

Understanding Paid Sick Leave and Family Leave in New York Following the Enactment of Families First Coronavirus Response Act

Christopher Cody Wilcoxson, Anthony A. Mingione, and Mark Blondman

On Wednesday, March 18, 2020, Governor Cuomo signed Senate Bill 8091 (the “NY Act”) providing coronavirus COVID-19 relief for affected employees. Blank Rome’s Coronavirus Task Force covered the immediate enactment on our Blank Rome Workplace Blog. The NY Act provides sick leave and benefits that are in excess of those provided by the Families First Coronavirus Response Act (“FFCRA”), which President Donald Trump signed into law on the same day. Blank Rome’s Coronavirus Task Force detailed the FFCRA when it was enacted; and provided updated guidance on March 25, 2020.

Employers in New York are required to comply with both the NY Act and the FFCRA and must determine whether any benefits in excess of those provided by FFCRA are required. This update summarizes several of the key differences between the New York and federal benefits.

What Employers Are Covered?

NY ACT: All employers are subject to the NY Act; however, benefits vary based on the size and net income of the employer.

FFCRA: Only businesses with fewer than 500 employees within the United States are subject to the FFCRA. Continue reading “Understanding Paid Sick Leave and Family Leave in New York Following the Enactment of Families First Coronavirus Response Act”

Emergency COVID-19 Order Issued in City of Los Angeles: Additional Paid Sick Leave Requirements for Large LA Employers

Caitlin I. Sanders

On April 7, 2020, Los Angeles City Mayor Eric Garcetti issued an Emergency Order requiring certain employers to provide up to 80 hours of supplemental paid sick leave to employees who are not covered by the federal Families First Coronavirus Response Act for reasons related to COVID-19. The Emergency Order can be found on Mayor Garcetti’s website here.

Here are the basic provisions of Mayor Garcetti’s COVID-19 Supplemental Paid Leave Order (“Order”):

Who Is Covered by the Supplemental Paid Sick Leave Order?

Employers with 500 or more employees within the City of Los Angeles or 2,000 or more employees nationally may be required to provide supplemental paid sick leave to employees who are unable to work or telework if they meet the following criteria: (i) they have worked for the same employer from February 3, 2020, through March 4, 2020, and (ii) they perform work in the City of Los Angeles.

Emergency and health services, parcel delivery services, and government agency employees are expressly exempt from the Order. Continue reading “Emergency COVID-19 Order Issued in City of Los Angeles: Additional Paid Sick Leave Requirements for Large LA Employers”

COVID-19 Workplace Exposures: But What Do We Do When Employees Come Back?

Anthony A. Mingione

Employers have been reeling over the past few weeks. As the coronavirus has spread, it has touched on all aspects of the employer-employee relationship. Stay-at-home orders; essential business designations; facility closures; reductions in staffing needs; and a myriad of federal, state, and local enactments and directives have radically changed the way businesses interact with their workers. Most of the changes have focused on how to allow individuals the necessary time off to recover from COVID-19, care for loved ones, and comply with stay-at-home orders, all while keeping businesses going.

The dust has certainly not settled on a lot of those issues, but another issue has begun to arise—as people recover from infection and quarantines expire, how do businesses safely reintroduce them into the workplace? The Centers for Disease Control and Prevention has guidelines (which it has already updated more than once), now many states do as well, and even some localities are getting involved. The rules of the road for the post-coronavirus workplace are beginning to take shape. Temperature scans, deep cleaning, social distancing, and out-of-work conduct are just some of the topics these regulations and different pieces of guidance consider.

The labor and employment members of the Blank Rome Coronavirus (“COVID-19”) Task Force are ready to assist businesses in navigating these new rules every step of the way. When your employees are ready come back, we’ll be there to help.

For the latest updates, please visit Blank Rome’s Coronavirus (“COVID-19”) Task Force page.

UPDATE: DOL Issues Families First Coronavirus Response Act Guidance on Employer Coverage and Obligations to Provide Paid Sick and Family and Medical Leave

Jason E. Reisman and Taylor C. Morosco

Yesterday evening, the U.S. Department of Labor (“DOL”) published its first round of guidance on the Families First Coronavirus Response Act (“FFCRA”), which takes effect on April 1, 2020.[1]

The guidance—provided in a Fact Sheet for Employees, a Fact Sheet for Employers, and Questions and Answers—answered some of the high-level questions employers have been asking. This update summarizes several of those important answers. However, more guidance is needed and expected in the coming days.

What is the FFCRA?

COVID-19 legislation that contains two key paid leave acts—the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act.

In a nutshell, the Emergency Paid Sick Leave Act entitles employees to paid sick leave when they cannot work or telework due certain COVID-19-related circumstances affecting the employee or someone for whom the employee is caring.[2] The Emergency Family and Medical Leave Expansion Act provides paid leave for employees caring for a child due to school or childcare provider closures related to COVID-19. For an overview of both Acts, check out Blank Rome’s Update.

When is a business covered by FFCRA?

When a business employs fewer than 500 employees within the United States. Continue reading “UPDATE: DOL Issues Families First Coronavirus Response Act Guidance on Employer Coverage and Obligations to Provide Paid Sick and Family and Medical Leave”

How Work Sharing Saves Labor Costs and Confronts Uncertainty

Emery Gullickson Richards

“Work sharing” allows employers to reduce employee wages or hours instead of doing a layoff or furlough by reducing the hours of retained employees subject to a specific plan created by the employer. Work sharing enables employees to keep their jobs while simultaneously receiving unemployment benefits to supplement the lost income. At present, 27 states have enacted work sharing programs (oui.doleta.gov/unemploy/docs/stc_fact_sheet.pdf), though the requirements and benefits vary from state to state.

What is work sharing? Work sharing, also called “short-term compensation,” should not be confused with job sharing, which allows two part-time employees to share one full-time job. Instead, “work sharing” refers to cutting workers’ hours to avoid cutting workers’ jobs, effectively sharing the burden across employees when an employer has to scale back labor costs due to financial pressures, such as those presented by the coronavirus COVID-19 pandemic. Reducing hours instead of reducing headcount saves money, saves morale, and saves the maximum number of employees for when business levels later return to pre-emergency levels. Continue reading “How Work Sharing Saves Labor Costs and Confronts Uncertainty”