- US Federal, State and Local Employment Law Requirements in 2015
- April 22, 2015
- Law Firm: Dentons Canada LLP - Toronto Office
Employment laws are passed or newly interpreted in the United States each year, which make employer compliance with federal, state and local law increasingly more complicated. As 2015 begins, this article addresses some of the most recent of US employment law developments.
Mandatory paid sick leave
Until recently, employers doing business in the United States were not legally required to provide paid sick leave to employees. In 2015, however, employers will have to comply with newly adopted paid sick leave laws covering workers in the states of California, Connecticut and Massachusetts, and in the cities of New York City and San Francisco and Oakland, California, among other jurisdictions. Who is covered by each law, the rate of accrual and the amount that can be earned per year varies from jurisdiction to jurisdiction.
Many employers provide paid sick leave but limit the type of employees eligible for paid sick leave. Often, certain part-time employees are ineligible for paid sick leave under the employer's policy. The new laws require paid sick leave based on the number of hours worked, which means that more part-time workers will have to be provided paid sick leave. Every company employing workers in any of the areas covered by a sick leave law should review its policies in detail to ensure that it is properly providing paid sick leave.
It is common for employers to ask terminated employees to sign release agreements agreeing not to sue the employer in return for severance pay. The United States Equal Employment Opportunity Commission (EEOC) which enforces the non-discrimination provisions of federal law, has been challenging employer severance agreements in court, claiming certain provisions violate employee rights. The EEOC has thus far met with limited success in court. However, to assure the enforceability of their severance agreements and to avoid any later legal challenge, employers should review their release agreements in the context of the EEOC's position. In particular, employers' release agreements should confirm that an employee retains the right to file an administrative charge and participate in an agency investigation but cannot later obtain monetary damages from any such proceeding.
US jurisdictions have statutes allowing an employer to have a policy of "employment at will". The employer's documentation of its at will policy, if confirmed in signed offer letters and employee handbooks, is a defense against a breach of contract claim. However, there are many other types of claims—discrimination, personal injury, wage and hour and violation of public policy, by way of example—which can be made by terminated US employees, and the termination of employees in the United States is a complicated matter which varies by jurisdiction. While the use of release agreements is recommended to enable reaching early and amicable termination arrangements with employees, employers doing business in the United States should consult counsel when terminating an employee about the documentation of termination and the terms of any release agreement.
National anti-discrimination priorities
The EEOC enforces federal laws that make it illegal to discriminate against a job applicant or employee because of the person's race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. Retaliation against workers who oppose discrimination or harassment on any of these protected bases is also federally protected.
In 2012, the EEOC adopted a Strategic Enforcement Plan for 2013 to 2016 which makes protection of lesbian, gay, bisexual and transgender individuals a national priority.
Women and racial minorities continue to be underrepresented in upper management and in technology companies. Pay disparities—higher pay to white males as compared to women, blacks and Hispanics, among others—continue to be prevalent throughout the United States. Because of this disparity, other federal priorities for 2015 and 2016 include requiring employers to change recruitment and hiring practices that discriminate against racial, ethnic and religious groups, older workers, women and people with disabilities and to administer compensation systems and practices to avoid discrimination against women.
Confidential information, social media and non-disparagement policies
The National Labor Relations Board (NLRB) protects the right of non-management employees to engage in "concerted" activity involving wages, hours and working conditions. The NLRB is well known for enforcing the rights of union-represented employees, which it had done throughout the past century. But the NLRB also has jurisdiction over non-union employees, and it has recently been challenging common employer confidentiality, social media and non-disparagement policies and practices, claiming violation of the National Labor Relations Act.
A policy which prohibits all employees from discussing the terms and conditions of their employment is unlawful. More narrow employer confidentiality and non-disparagement policies may also be unlawful, depending upon how they are worded and applied. It is recommended that employers do have policies protecting their confidential and proprietary information and prohibiting the public sharing of certain types of information related to the company. But, as this is an arena in which any employer policy or practice—or discipline of an employee for engaging in conduct which the employer believes to be against its interests—may be subject to legal challenge, the employer should have its policies reviewed for compliance with evolving federal and state laws.
State law developments
"Banning the box" which asks about criminal convictions
Another new legal trend in the United States is the passage of state and local laws limiting when applicants may legally be asked about criminal convictions ("ban the box" legislation, referring to the box on an application form asking whether an applicant has been convicted of a crime). The most recent of these laws, effective in Illinois for 2015, prohibits employers with 15 or more employees from inquiring about, considering or requiring disclosure of an applicant's criminal history until the employer has decided the employee is qualified and notified the employee of selection for an interview or, if there is no interview, until a conditional job offer has been made. There are only very limited exceptions, such as positions where the employer must exclude applicants with certain criminal convictions.
An employer with a practice of inquiring about applicants' criminal histories, a common practice in the past, must now investigate the applicable law in each jurisdiction in which it hires employees and determine when and whether a criminal history inquiry is allowable. The effect of these new laws may, in the end, lead national employers to refrain from inquiring about criminal records, except for positions in which a criminal record is disqualifying under other applicable law.
California law developments
California is a national trendsetter in employment law, and employment laws passed in California often later spread across the country. The California employment laws passed in 2014 include:
Statewide mandatory paid sick leave
The Healthy Workplaces, Healthy Families Act of 2014 requires paid sick leave for an employee who works at least 30 days within a year in California, including part-time, per diem and temporary employees. Starting July 1, 2015, California employees will earn at least one hour of paid leave for every 30 hours worked. For statewide purposes, employers can limit the amount of paid leave an employee can take in one year to 24 hours and cap the accrual of paid sick leave at 48 hours or six days. However, the cities of San Francisco and Oakland have more stringent paid sick leave requirements. For example, San Francisco provides for the accrual of up to 72 hours of paid sick leave. An employer with employees in San Francisco and/or Oakland must abide by both the state and local requirements. All three of these laws provide that the employee may use paid sick leave for a family member's health condition as well as for the employee's own health condition.
Many employers have a paid time off policy, which is intended to cover both vacation and sick leave, and others have a "use it or lose it" vacation policy. California prohibits a "use it or lose it" vacation policy, but other language, providing for a cap on earned vacation, is allowable. The rules on vacation and sick leave in California are complex and, like California's unique overtime pay requirements, these rules are unlike those of any other state. Any employer operating in California who is unfamiliar with these rules should have its vacation and sick leave or paid time off policies reviewed by counsel.
Of course, employers must also comply with the federal Family and Medical Leave Act and California Family Rights Act and, under the Americans with Disabilities Act and companion state and local laws, reasonably accommodate disabled workers needing extended leaves of absence, as applicable. The arena of employee and family member illness and disability is extremely complicated. Sophisticated advice should be obtained when dealing with illness and disability of an employee or an employee's family member to avoid claims of discrimination, harassment and/or retaliation which may lead to the recovery of very substantial damages against the employer.
Mandatory anti-bullying training for supervisory employees
California requires employers with 50 or more employees to provide at least two hours of sexual harassment training to supervisory employees every two years. Effective January 1, 2015, employers are also required to train supervisory employees on the prevention of "abusive conduct", defined as conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive and unrelated to an employer's legitimate business interests. Presently, "abusive conduct" or "bullying" is not unlawful, and no claim can be made in court based on "bullying" alone. An employee would have to allege discrimination or harassment based on a legally protected category, such as race, sex, national origin, age or disability. But one can assume that, some years from now, the requirement for training involving "bullying" in the employment setting may be transformed into an outright legal prohibition of "bullying". A worst case scenario for employers would be a law prohibiting "bullying", which is inherently a broad and vague concept, and providing for the damages recoverable for other types of harassment, such as lost wages, emotional distress damages, punitive damages and recovery by the employee of his or her attorneys' fees, all in the context of a jury trial.
The laws and regulations imposed upon employers doing business in the United States will continue to become more and more complex. The sophisticated employer will need to be aware of the new laws as they are passed and bring its policies and practices into compliance with those laws.