On Friday, March 5, join us for a panel discussion focused on the new administration and the anticipated impact on employment and immigration laws and regulations. Employers and government contractors will hear key takeaways based on the first signed executive orders (EOs) to the many EOs that are coming.

Topics:

  • Overview of the U.S. House of Representatives Education and Labor Committee agenda
  • Prospective changes at the EEOC
  • Potential changes by the National Labor Relations Board
  • Immigration policies and legislation
  • What to expect from OSHA regarding enforcement

Friday, March 5, 2021

3:30–5:00 p.m. EST

Click here to register.

Speakers:

The Honorable
Bobby Scott
Chair, U.S. House of
Representatives Education
and Labor Committee
Victoria Lipnic
Former Commissioner,
U.S. Equal Employment Opportunity Commission (EEOC)
Mark Pearce
Former Chair, National Labor Relations Board
Jon Baselice
Executive Director of
Immigration Policy

U.S. Chamber of Commerce
Johnine Barnes
Shareholder, Labor & Employment Practice
Greenberg Traurig
Laura Reiff
Co-Chair, Immigration & Compliance Practice
Greenberg Traurig
Jonathan Sulds
Shareholder, Labor & Employment Practice
Greenberg Traurig
Michael Taylor
Chair, OSHA Practice
Greenberg Traurig

CLE credits pending.

Following up on its proposed rule issued in September 2020, on Jan. 6, 2021, the Department of Labor (DOL) issued its final rule on worker classification. The final rule, effective March 8, 2021 (60 days from publication in the Federal Register), changes little from the DOL’s proposed rule but adopts a five-part test that purportedly clarifies, as opposed to alters, the federal landscape with respect to classification of workers as independent contractors not subject to Fair Labor Standards Act’s minimum wage and overtime protections. The final rule runs counter to the current state-level trend of adopting and/or entertaining the enactment of laws and/or regulations that discourage the use of independent contractors. Apart from the DOL’s adoption of a multifactor test, which appears to make it easier for companies to label workers independent contractors, the final rule goes further, expressly indicating companies can offer independent contractors certain employee benefits without impacting their classification status, provided the workers satisfy the multifactor test’s other provisions.

Breaking Down the Test

The DOL’s new five-part test comprises two main factors and three guiding factors, to be evaluated in that order. If the two main factors considered together point to independent-contractor status (or employee status), companies may rely on that determination and need not consider any of the three guiding factors.

The two main factors focus on determining whether the worker in question is her own business, as opposed to a part of the company’s business:

  1. The level of control the individual has over his or her own work; and,
  2. The opportunity for profit or loss due to their own personal investment.

If, and only if, the analysis of the two main factors prove indeterminate, the rule directs companies to weigh three guiding factors, which require evaluation of:

  1. the level of skill of the role involved;
  2. the permanence of the working relationship; and
  3. how the role in question relates to the company’s overall business operation.

To help in this assessment, the DOL has included useful examples of how its test applies to impacted industries, including among others, truck driving, journalism, and household repair.

Employer Provision of Benefits Is Not an Indicator of Employee Status

The DOL’s standardized multifactor test generally adheres to already established federal jurisprudence concerning the employee-or-independent-contractor question while “sharpening” the inquiry into “five distinct factors, instead of the five or more overlapping factors used by most courts and previously the department.” In January 2019, the National Labor Relations Board adopted an independent contractor classification test that, like the DOL’s, identifies an individual’s “entrepreneurial opportunity” for profit or loss as the primary signal of whether s/he is more akin to a small-business operator than an employee. What is new is the DOL’s inclusion in its final rule of language that makes clear that “the offering of health, retirement, and other benefits is not necessarily indicative of employment status.” The DOL apparently included this language in response to concerns that many employers resisted providing benefits to independent contractors because they feared doing so would serve as proof of employee status. Although the DOL did not go so far as to say employers may provide contractors with any and all benefits, and made clear that the offering of certain benefits to employees and contractors alike could still be strong proof of employment status, it nevertheless gave employers a go-ahead to offer contractors certain if not slightly different benefits from those offered to employees, provided the workers still satisfy the factors associated with the new rule. This could prove useful to companies engaged in highly competitive industries, like trucking, where such benefits are a powerful recruiting tool.

Takeaway Lessons

The DOL’s final rule on worker classification, a seemingly pro-employer development, may be short-lived for a variety of reasons. First, state governments are increasingly focused on worker classification disputes; while companies may believe certain workers readily satisfy the DOL’s new multifactor test, they still must evaluate their classifications under applicable state law. In states that adopt the ABC test, compliance with the DOL’s rule may be helpful, but it is not determinative. Moreover, because the final rule does not truly become “final” for 60 days, there is ample opportunity for the incoming Biden administration to withdraw it. Lastly, the Equal Employment Opportunity Commission stated in its five-year strategic enforcement plan that it too may try to provide clarification around employers’ increasing use of independent contractors and similar employment configurations. Accordingly, even if the new administration does not withdraw the DOL’s final rule, other federal agencies could soon undermine the rule’s seemingly pro-employer lean.

The U.S. Equal Employment Opportunity Commission (EEOC) issued a bulletin this morning advising that Field Offices have temporarily stopped conducting in-person intake interviews due to the current health situation. Before closing its doors, though, the U.S. Equal Employment Opportunity Commission (EEOC) confirmed in a short online article, What You Should Know About the ADA, the Rehabilitation Act, and COVID-19, that the anti-discrimination laws it enforces do not interfere with or prevent employers from following U.S. Centers for Disease Control and Prevention (CDC) guidelines related to planning, preparing for, and responding to Coronavirus Disease 2019 (COVID-19). The EEOC provided a link to EEOC guidance issued in 2009 regarding the H1N1 pandemic, guidance that provides timely and helpful information applicable to today’s COVID-19 pandemic. This GT Alert summarizes the EEOC guidance on pandemic preparedness in the workplace.

The guidance focuses on legal restrictions on disability-related inquiries and medical examinations. The Americans with Disabilities Act (ADA) generally prohibits them, subject to two major exceptions. Employers can make disability-related inquiries and conduct medical examinations if the inquiries and examinations are job-related and consistent with business necessity – that is, if there is objective evidence that (a) an employee’s ability to perform essential job functions will be impaired by a medical condition, or (b) an employee will pose a direct threat due to a medical condition.

Click here to read the full GT Alert, “EEOC Coronavirus Disease 2019 Guidance to Employers.”

In the span of five weeks, a coalition of plaintiffs representing national and state business organizations and employers, including the U.S. Chamber of Commerce and the California Chamber of Commerce, have gone two for two in challenging AB 51 to restore the previous status quo permitting the use of arbitration agreements with their employees. The case is Chamber of Commerce of the U.S.A., et al. v. Xavier Becerra, in his official capacity as the Attorney General of the State of California, et al, United States District Court, Eastern District of California, Case No. 2:19-cv-02456-KJM-DB.

AB 51, signed into law by Gov. Gavin Newsom on Oct. 10, 2019, prohibits California employers from requiring prospective and current employees to “waive any right, forum, or procedure” for a violation of the state’s equal employment opportunity law – the Fair Employment and Housing Act – and Labor Codes. On Dec. 30, 2019, just before it was set to take effect, AB 51 was temporarily restrained from enforcement pending a hearing on the plaintiffs’ preliminary injunction. Then, on Jan. 31, 2020, the chief district court judge of the Eastern District of California granted plaintiff’s preliminary injunction.

In her 36-page ruling granting the preliminary injunction, Chief Judge Kimberly Mueller concluded the plaintiffs met their burden of showing AB 51 is likely preempted by the Federal Arbitration Act. The court initially determined it had jurisdiction over the case before moving to the merits of plaintiffs’ argument. Subsequently, the court acknowledged that with AB 51, the state of California’s primary target is arbitration agreements, which subjects them to unequal footing as compared to other contracts, and places “uncommon barriers on employers” who include mandatory arbitration provisions in their employment agreements. Because AB 51 also imposes civil and criminal penalties, including a misdemeanor punishable by imprisonment and/or fine, that interfere with the Federal Arbitration Act, the court found the federal law preempted it. Finally, the court agreed with plaintiffs that employers would likely be irreparably harmed if AB 51 took effect because they would be forced to choose between risking civil or criminal penalties based on the law’s uncertainties, and not using arbitration agreements to avoid penalties.

The plaintiffs now have substantial momentum in their effort to permanently enjoin the state of California from enforcing AB 51.

On July 14, 2016, the Equal Employment Opportunity Commission (EEOC) published a revised proposal to collect data on employees’ compensation and hours worked through the EEO-1 reports that larger employers are required to submit annually. Notwithstanding numerous public comments stressing the burdens that this reporting requirement would impose on employers and the limited statistical utility that the information may offer, the EEOC is pressing forward with only modest revisions to its original proposal.

The revised rule will apply to employers subject to Title VII of the Civil Rights Act with 100 or more employees.  The EEOC rejected comments urging a higher workforce threshold, stating, “exempting employers with fewer than 500 employees, or even fewer than 250…would result in losing data for a large number of employers who employ millions of workers, and thus would significantly reduce the utility of the pay data collection.”

Continue Reading.

In an important “win” for employers that has potentially widespread implications, the Sixth Circuit Court of Appeals, sitting en banc, reinstated summary judgment dismissing claims asserted by the Equal Employment Opportunity Commission (EEOC) that Ford Motor Company failed to accommodate a former employee’s request under the Americans with Disabilities Act (ADA) to telecommute up to four days per week. The Court reaffirmed the “general rule that, with few exceptions, ‘an employee who does not come to work cannot perform any of his job functions, essential or otherwise.’” Notably, the Court observed: “The [ADA] requires employers to reasonably accommodate their disabled employees; it does not endow all disabled persons with a job – or job schedule – of their choosing.”

The plaintiff in EEOC v. Ford Motor Company, Jane Harris, worked as a resale steel buyer, a position which “required teamwork, meetings with suppliers and stampers, and on site ‘availability to participate in face-to-face interactions,’ [which] necessitate[d]… regular and predictable attendance.” The Court stressed the position was “highly interactive” and required “good, old-fashioned interpersonal skills.”

Continue Reading Sixth Circuit Rejects Telecommuting Demand from Employee

Written by Dorothé Smits and Johan Nijmeijer.

According to Eurostat, during the last decade, the population that is overweight in the European Union (EU) Member States has increased significantly, which has resulted in more than half of the EU population being overweight or obese. Last year the European Court of Justice (ECJ) was asked in a preliminary ruling in a Danish case – for the first time – which provisions of EU law, if any, apply to discrimination based on obesity. The Advocate General has recently delivered his opinion and the ECJ is now expected to render a ruling any time soon. In this Alert, the authors highlight the most relevant aspects of the Danish case and related EU case-law as it currently stands. It is likely that some of the issues will seem surprising to readers in the United States, inasmuch as, since the 2008 amendments to the Americans with Disabilities Act, the Equal Employment Opportunity Commission and the courts have already begun to rule that severe or morbid obesity is a disability regardless of the cause.

Continue Reading

On May 15, 2013, the Equal Employment Opportunity Commission (“EEOC”) issued revised guidance for employers with respect to employees with epilepsy, cancer, diabetes, and intellectual disabilities. The guidance is contained in the EEOC publication “Disability Discrimination: The Questions and Answers Series,” and is posted on the EEOC’s website,  http://www.eeoc.gov/laws/types/disability.cfm. The recommendations address the expanded definitions of disability under the ADA Amendments Act, that “make it easier to conclude that individuals with a wide range of impairments, including cancer, diabetes, epilepsy, and intellectual disabilities, are protected by the ADA.”

Among other things, the Q&A document offers examples of accommodations that may be appropriate for these conditions. For example:

  • An employee with cancer may need to leave work for doctors’ appointments or treatment and recovery; to take periodic breaks or a private area to rest or take medication; to modify office temperature; or to use their work telephone to call medical professionals.
  • An employee with diabetes may need a private area to test blood sugar or administer insulin injections; a place to rest to normalize blood sugar; breaks to eat, drink, take medication or test blood sugar; and to take leave for treatment, recuperation, or training on managing diabetes.
  • An employee with epilepsy may include breaks to take medication; a private area to rest after a seizure; a rubber mat or carpet to cushion a fall; and/or to rely on other workers for rides to meetings and other work related events.
  • An employee with an intellectual disability may need assistance during the application process, such as having someone read or interpret application materials; training or detailed instructions to do the job; the ability to listen to tape recorded instructions or use detailed schedules for competing tasks; and use of a job coach.

As with other disabilities, all the above disabilities also may require accommodations such as permission to work from home; modified work schedules; reallocation of marginal tasks to another employee; or possible reassignment to a vacant position if the employee is no longer able to perform her current job due to the disability.

Chair of the EEOC, Jacqueline A. Barren, explained that the new guidelines are meant to assist employers in understanding the ADA’s application to cancer, diabetes, epilepsy, and intellectual disabilities, because “nearly 34 million Americans have been diagnosed with cancer, diabetes, or epilepsy, and more than 2 million have an intellectual disability,” and many of those individuals are seeking employment or are already in the workplace. Employers should be aware of this guidance, and prepared to treat employees with these conditions as they treat other individuals protected by the ADA.

 

Most companies require background checks of their applicants and employees.  These background checks are designed to ensure the accuracy of the information that the applicant or employee supplies the employer.  As part of their background checks, employers often conduct credit checks by obtaining consumer reports from outside credit reporting agencies.  Employers legitimately obtain and utilize such information to reduce or prevent theft or liability for negligent hiring.  Employers conducting such background checks should be mindful that federal agencies, including the Equal Employment Opportunity Commission and the Federal Trade Commission (“FTC”) are taking a heightened approach to screening employers’ screening processes.  See EEOC’s E-Race Initiative, http://www.eeoc.gov/eeoc/initiatives/e-race/goals.cfm; see also Employment Background Screening Company to Pay $2.6 Million Penalty for Multiple Violations of the Fair Credit Reporting Act, http://www.ftc.gov/opa/2012/08/hireright.shtm.

 

 Employers obtaining and utilizing such information must be alert to the requirements of the Fair Credit Reporting Act (“FCRA”).  Section 604(b) of the FCRA requires an employer who intends to obtain a consumer report for employment purposes to disclose this to the applicant or employee and to obtain the applicant’s or employee’s written permission.  The FTC, charged with enforcing the FCRA, allows employers to combine a disclosure and authorization.  In its authorization for a credit check, an employer may include language that the applicant or employee gives the company the right to conduct a background investigation and that such individual releases from “all liability all persons, companies, schools and corporations supplying such information.”

 

 An employer may not, however, ask the applicant or employee to waive his or her FCRA rights.  Inclusion of such a waiver is in and of itself a violation of the FCRA.  So, if an employer uses an application with an authorization and also includes a waiver of any rights or claims the applicant may have for releasing background information, the entire authorization is invalid under the FCRA.

 

 If you have any concerns as to whether your background check authorization complies with the FCRA, please contact one of our Greenberg Traurig Labor & Employment attorneys.  We will continue to monitor and report any developments.