Welcome to the latest edition of AlphaStaff's Monthly Compliance Updates!
We are pleased to provide you with national and state legal updates and highlight resources provided by some of AlphaStaff’s trusted legal partners to guide and help keep you in compliance.
National Updates
Automatic Extension of Work Authorization for Certain Renewal Applicants
The Department of Homeland Security (DHS) has reintroduced a 540-day automatic extension for Employment Authorization Document (EAD) renewals for eligible applicants, addressing delays in processing these applications. Previously, up to 800,000 employees risked employment gaps due to slow processing times. Now, individuals who have timely applied to renew their EADs on or after October 27, 2023, and whose applications are pending as of April 8, 2024, can benefit from this extension until September 30, 2025.
To qualify, applicants must renew in the same EAD category, except for Temporary Protected Status (TPS) holders, who may renew under categories A12 or C19. Eligibility for the automatic extension extends to those with EADs based on Adjustment of Status applications, asylees, refugees, and individuals in H-4, E, and L-2 dependent statuses— who must also have a valid I-94 form. For I-9 employment verification, affected individuals should present a receipt notice indicating the 540-day rule. Individuals who timely filed for their renewal after October 27, 2023, and before April 8, 2024, will not receive an updated notice reflecting the 540-day rule. However, USCIS will update its webpage to reflect the change from the 180-day rule to the 540-day rule.
While the US Citizenship and Immigration Services (USCIS) updates its processes, employers should take appropriate steps to ensure I-9 compliance, given that fast-paced policy shifts further complicate the I-9 verification requirements. Improperly denying employment to authorized workers could trigger investigations and penalties from the Department of Justice’s Immigrant and Employee Rights Division. Employers should review their I-9 compliance strategies and educate their HR teams about these changes to avoid legal complications and ensure smooth employment verification processes.
Click here for more details from our partner, Jackson Lewis.
Federal Ban on Non-Compete Agreements
As highlighted in several previous editions of the AlphaAdvisor, many states have enacted a wide range of legislation impacting an employer’s ability to enforce non-compete agreements. Currently, California, Minnesota, North Dakota, and Oklahoma have banned them entirely. Meanwhile, nine states and the District of Columbia only permit non-compete agreements when an employee’s salary exceeds a certain threshold.
On April 23, 2024, the Federal Trade Commission (FTC) enacted a new rule that drastically expands the prohibition on non-competes to all employers. Effective August 22, 2024, the rule prohibits most employers from entering into and enforcing non-compete clauses, except for a limited group of senior executives in policymaking positions earning over $151,164. Although employers are not required to rescind existing non-competes, they must provide explicit notice to current and former employees that such agreements are unenforceable.
While the rule is subject to several legal challenges, including significant opposition from business groups and ongoing lawsuits, employers should take this opportunity to review how this rule and existing state laws might affect existing agreements with current and former employees. Employers should be proactive in managing their legal obligations and evaluate the need to comply with the rule against the possibility of it being overturned. AlphaStaff will continue to monitor and update you on developments regarding this rule and the pending legal challenges.
Our legal partners at Fisher Phillips have detailed several vital steps employers can implement before the August 2024 effective date. Click here to read more.
New Federal Overtime Rule is Here
As discussed in the January 2024 edition of the AlphaAdvisor, the U.S. Department of Labor (DOL) has announced a significant update to the salary thresholds for "white-collar" exemptions. Starting July 1, 2024, the threshold will increase from $35,568 to $43,888 annually and will further increase to $58,656 at the beginning of 2025. Under the new rule, the non-exempt salary threshold would be updated every three years based on current wage data. This change will expand overtime protections to an estimated four million additional workers.
Employers should review their current payroll to determine which employees fall between the new salary ranges and decide whether to increase salaries to maintain exemptions or, if appropriate, reclassify employees as non-exempt.
Given the likelihood of legal challenges to these new rules, AlphaStaff will continue to monitor the litigation developments on this rule and keep you updated. Nevertheless, employers should take this opportunity to review how these federal changes interact with state law, as some states have higher salary requirements or other exemptions. Click this link to review the current salary thresholds for the applicable states.
Click here to read the Fisher Phillips article detailing the proposed new rule.
DOJ's New Whistleblower Program Will Lead More Employees to Report Corporate Misconduct
The Department of Justice (DOJ) has launched the Pilot Program on Voluntary Self-Disclosures for Individuals, which incentivizes employee whistleblowers to report illegal corporate activities. This initiative is part of several recent moves to enhance corporate compliance. Under this program, employees who disclose their involvement and the full scope of criminal misconduct voluntarily and directly to the DOJ may qualify for non-prosecution agreements subject to specific criteria, including disclosing original, truthful information about significant violations like fraud, money laundering, or bribery, among others, without prior DOJ inquiries or obligations. Full cooperation with the DOJ investigation and forfeiture of profits derived from the misconduct are also mandatory.
Those involved in violent crimes, high-ranking officials such as CEOs or CFOs, leaders of the misconduct, government officials, or individuals previously convicted of felony or fraud-related crimes are ineligible from the program.
Given the launch of this pilot, employers should take appropriate steps to adapt and fortify existing compliance programs to ensure they include effective monitoring, training, and an environment that discourages wrongdoing and supports ethical practices.
Click here to read more from our partner, Fisher Phillips.
EEOC Publishes Final Rule for the Pregnant Worker Fairness Act
As highlighted in the August 2023 edition of the AlphaAdvisor, the EEOC has finalized the Pregnant Worker Fairness Act (PWFA) regulations, which became effective in June 2023. Under the PWFA, employees were granted the right to a broad range of accommodations regarding pregnancy, childbirth, and related conditions, including abortion.
Key aspects of the final rule include the following:
- Broad Coverage: The PWFA covers a wide array of conditions related to pregnancy and childbirth, explicitly including abortion and related medical needs such as recovery time and accommodations for appointments.
- Qualification Broadened: Employees are considered "qualified" for accommodations not just based on their current ability to perform job functions but also if their inability is temporary and expected to change in the near future.
- Inclusive Definitions: The act broadly defines "limitations," meaning that even minor or temporary pregnancy-related conditions can qualify for accommodations.
- Accommodations Defined: Employers must consider various accommodations, such as job restructuring, schedule changes, and telework.
- Documentation Standards: Employers may request documentation for accommodations but must adhere to an interactive process similar to the ADA's standards, focusing on reasonableness and necessity.
- Undue Hardship Clause: Accommodations can be denied only if they impose an undue hardship on business operations, with factors like the nature and duration of the needed accommodation considered.
- Compliance with Other Laws: The PWFA does not supersede more protective state or local laws, so employers should consider those when making accommodation decisions.
The rule was published in the Federal Register on April 19, 2024, and will become effective on June 18, 2024. However, attorneys general from 17 states filed a lawsuit on April 25, 2024, challenging the new rule. Although the final rule's effective date could be subject to delays as a result of this and potentially other court challenges, employers should take steps to ensure compliance with the PWFA. Our legal partners, Fisher Phillips and Littler Mendelson, will be hosting webinars on the final rule.
Click here to RSVP for the webinar by Fisher Phillips on May 1,2024.
Click here to RSVP for the webinar by Littler On May 21, 2024.
Follow this link for more information.
SCOTUS Says Forced Lateral Job Transfers Can Support Discrimination Claims in Some Circumstances
The Supreme Court has ruled that employees claiming discrimination in mandatory job transfers, such as lateral moves without pay or benefits changes, only need to demonstrate some level of harm to an identifiable employment condition, though not necessarily a significant one. The High Court's decision came from a sex discrimination suit involving Sergeant Muldrow, who argued her transfer was less prestigious and significantly altered her working conditions. Although the transfer was a lateral move where she retained the same salary, rank, and benefits, she argued that the transfer was an adverse employment action because the new position was more administrative and less prestigious than the prior role. Most notably, she lost the opportunity to work in plain clothes, routinely work Monday through Friday, and access to an unmarked FBI vehicle.
The ruling clarifies that while such transfers need not have drastically negative effects, they must still show some adverse impact to sustain a Title VII claim. It is important to note that the Court did not elaborate on the degree of harm necessary to constitute an "adverse employment action."
Although this ruling provides some clarity, it leaves the door wide open for further legal litigation and developments regarding what constitutes harm under Title VII, underscoring the importance of proactive employer compliance and training strategies.
Click here to read more from our partner, Fisher Phillips.
Employers May Face More Liability for Unlawful Work Rules Under NLRB General Counsel's New Memo
On the heels of the Stericylce, Inc. decision, the General Counsel of the National Labor Relations Board (NLRB) recently released a memorandum directing Regional Offices to seek full remedies for all employees impacted by an unlawful rule or contract term, even if they weren't identified during the investigation. As discussed in the August 2023 AlphaAdvisor, this NLRB decision introduced a more stringent standard for judging the validity of an employer’s work rules under the National Labor Relations Act.
Workplace policies that establish workplace civility rules, loitering rules, prohibitions on unlawful strikes, work stoppages, slowdowns, and restrictions on video or cell phone recording will most likely be deemed unlawful. This decision has since led to the invalidation of numerous standard workplace policies by administrative law judges, including rules on confidentiality, moonlighting, and decorum. Employers now face heightened risks as the new memo advocates comprehensive remedies, including backpay and erasing disciplinary records, which could dramatically expand employer liability.
Employers should review and possibly amend handbooks to ensure compliance with the new standard given the directive of the recent memo.
Click here to learn more.
State Updates
California Supreme Court Clarifies Scope of "Hours Worked"
In the recent Huerta v. CSI Electrical Contractors case, the California Supreme Court clarified what qualifies as "hours worked" under the California Labor Code. Responding to questions from the U.S. Court of Appeals for the Ninth Circuit, the Court considered whether several scenarios met the criteria for compensable time:
- Time spent in personal vehicles on the employer's premises waiting to undergo security checks—including scanning an ID badge and a security guard inspection—was determined to be compensable as "hours worked."
- Time spent driving between the security gate and employee parking lots, while following employer's rules, should be considered "hours worked" and compensable.
- Time spent on the employer’s premises during unpaid meal breaks, where employees are prohibited from leaving but not required to perform work, should count as "hours worked" and are also compensable time.
Employers should review and possibly adjust their policies concerning security wait times, employee movement within premises, and unpaid meal breaks to ensure compliance with the clarified definitions of "hours worked."
Please follow this link to learn more from our partner, Littler.
California Determined to Take lead on AI Regulation
California is poised to become a leader in regulating artificial intelligence (AI), by introducing over thirty legislative bills that include a measure to curb algorithmic discrimination in employment and requiring employers to alert individuals when automated systems are used for significant decisions. Civil penalties could reach up to $25,000 per violation if these systems result in unfair treatment.
AlphaStaff will continue to monitor AI-related legislative developments in California and inform you of their potential impact on your operations.
Please follow this link to learn more from our partner, Fisher Phillips.
Connecticut Employers Can Terminate Employees Impaired by Medical Marijuana While Working
In a landmark case, the Connecticut Appellate Court ruled in favor of an employer's decision to terminate a teaching assistant who was impaired at work due to medical marijuana use, setting a precedent for handling similar cases under Connecticut's Palliative Use of Marijuana Act (PUMA). Bartolotta v. Human Resources of New Britain, Inc. marks a significant interpretation of PUMA since private lawsuits under this act were recognized in 2018.
The court emphasized that employers retain the right to enforce drug-free workplace policies, even when employees are legally prescribed medical marijuana. In this instance, the plaintiff was unable to prove that her termination was solely due to her status as a medical marijuana patient. Instead, it was her admission of being under the influence at work and thereby compromising child safety that led to her dismissal.
Furthermore, the court clarified the "reasonable suspicion" standard required for employers to conduct drug tests legally. Employers must have specific, articulable facts that would lead a reasonable person to suspect impairment. In this case, observations of the employee's behavior combined with her admissions provided sufficient grounds for the drug test despite its negative result a week later.
This decision is a crucial guide for employers in maintaining workplace safety and compliance. It highlights the need for clear policies and thorough documentation when implementing reasonable suspicion drug testing. Employers are advised to review their drug testing practices, ensuring they align with this clarified standard.
To read more on this topic, click here.
Massachusetts Latest State Expected to Restrict Access to Credit Reports for Employment Purposes
The Massachusetts legislature has passed a bill titled "An Act Reducing Barriers to Employment Through Credit Discrimination," which is expected to be one of the most restrictive laws in the United States regarding an employer’s use of credit reports for employment decisions. Effective January 1, 2025, employers will be prohibited from using credit reports to determine eligibility for employment, promotions, reassignments, or retention, except for specific exemptions such as positions requiring national security clearance or those regulated by federal mandates on credit checks.
Under this new Massachusetts Consumer Protection law provision, employers will also be forbidden from asking candidates about their credit history or using such information in any employment-related decisions. This measure strengthens employee privacy and reduces potential discrimination based on credit status.
The Act provides clear guidelines for legal recourse, deeming any violation an unfair trade practice under Chapter 93A, which could result in penalties including attorney's fees, costs, and double damages if the violation is intentional.
Employers in Massachusetts need to reassess their use of credit reports and adjust their screening processes accordingly.
Click here to read more from Littler.
Key Updates for Employers in New York State
New York's 2024-2025 state budget, approved on April 20, 2024, brings significant updates for employers. The following new laws were passed:
- Prenatal Leave: Starting January 1, 2025, employers must offer 20 hours of paid prenatal leave annually, usable for pregnancy-related medical needs. This is in addition to the state-mandated paid sick leave and must be compensated at the employee's regular pay rate.
- Paid Nursing Leave: Effective June 19, 2024, nursing mothers are entitled to paid 30-minute breaks to express breast milk during work, a shift from the current unpaid break requirement. Employers may count any breaks longer than 30 minutes against other paid breaks or meal times.
- End of COVID-19 Sick Leave: The budget phases out the COVID-19 sick leave mandate by July 31, 2025, extending the current requirement, which was set to expire in July 2024.
Notably, the following proposed legislation did not pass:
- Proposals to limit liquidated damages for late wage payments and to allow the seizure of employer assets for wage violations.
- Increased protections and benefits under disability laws.
Employers should review their current policies and implement revisions to ensure compliance with the new obligations of these laws.
To read more on this topic, click here.
Clock is Ticking for NYC Employers: You Must Distribute Workers’ Bill of Rights By July 1
By July 1, 2024, New York City employers must distribute the newly published Workers’ Bill of Rights to all current employees and include it in onboarding materials for new hires. This Bill of Rights outlines federal, state, and local protections such as minimum wage, sick leave, anti-discrimination laws, and the right to unionize.
Employers are required to post this notice prominently at the workplace and on any business platforms used regularly for employee communication. The Bill of Rights must be provided not only in English but also in any language spoken by at least 5% of the workforce, once the translations are made available by the City.
Failure to comply with these requirements could result in a $500 fine, although first-time violators will have an opportunity to correct the issue. The Bill of Rights can be accessed by following this link.
Click here to read more from Fisher Phillips.
New York City Lawmakers Consider Broad Non-Compete Ban
New York City legislators are currently considering a comprehensive set of proposals aimed at banning non-compete agreements, which if enacted, would significantly change the employment landscape in the city. The primary bill under review seeks to universally prohibit non-compete clauses for all employees and independent contractors, mandating the rescission of all such existing agreements. This measure is radical in its approach as it makes no exceptions for non-compete clauses tied to the sale of a business or for high-income earners.
This movement at the city level mirrors broader national and state trends where there is increasing scrutiny and regulation of non- compete agreements. AlphaStaff will continue to monitor the development of these proposed measures and keep you informed.
For more information on this topic, please click here.
New York Lawmakers Aim to Close Loopholes in NYC’s AI Bias Audit Law and Add Teeth to Workplace Protections
New York State legislators are advancing proposals (S7623 and A9315) to address perceived inadequacies in NYC’s AI bias audit law. These bills aim to ensure employers who use AI in hiring and employment decisions are subject to stricter bias audits and increased transparency. They would require employers to publish annual bias audit reports and notify applicants and employees when AI tools influence employment decisions. Furthermore, the proposed laws would expand legal recourse, allowing lawsuits against both employers and AI tool developers for noncompliance.
The existing NYC law, Local Law 144, applies when AI predominantly influences hiring decisions. The new state proposals intend to close this loophole, stipulating that any AI involvement, regardless of human managerial oversight, would require compliance.
If passed, employers would be forced to implement significant revisions to AI policies. However, it is very early in the legislative process and these bills could be modified significantly before they become law.
Click here to read more from our partner, Fisher Phillips.
Oregon Family, Paid Leave Changes Effective July 1, 2024
On March 21, 2024, Oregon governor Tina Kotek signed Senate Bill 1515 into law, bringing clarity and enhancement to the state's overlapping leave laws. The Oregon Family Leave Act (OFLA) and Paid Leave Oregon (PLO) have created confusion given that they operate concurrently alongside the federal Family Medical Leave Act (FMLA). Effective July 1, 2024, the new law distinguishes leave types more clearly, ensuring they are not taken concurrently and simplifying compliance while also expanding available leave under certain conditions.
Key changes under the new law include:
- OFLA Revisions: OFLA leave now exclusively covers pregnancy disability, leave related to a child's illness, and bereavement, cutting back on redundancies with PLO.
- PLO Modifications: There's no longer a cap on PLO leave. Employees can use full OFLA and PLO benefits without the previous overlap reducing total available leave.
Employers should review their leave policies to ensure compliance with the new law. As further guidance is issued by Oregon’s Bureau of Labor and Industries (BOLI), AlphaStaff will be sure to provide you with the necessary updates.
Click here to read more from Jackson Lewis, and here for more information by Fisher Phillips.
Puerto Rico Special Paid Leave Activated for Dengue Fever State of Emergency
The Puerto Rico Secretary of Health has declared a public health emergency due to a significant outbreak of dengue fever, activating Administrative Order No. 2024-589 as of March 25, 2024. This order, set to expire on June 23, 2024, mandates that employers provide five days of special paid leave to eligible non- exempt employees who are sick or suspected of being sick with dengue fever, under the provisions of Law No. 37-2020.
Under this law, affected employees must first utilize all other available paid leave options, such as accrued sick leave. Once these are depleted, they can access up to five additional days of paid leave specifically for this emergency. Employers should be proactive in managing this situation by ensuring they are compliant with these requirements and communicating clearly with their employees about their rights and the procedures to claim this leave.
Click here to read more from our partner, Jackson Lewis.
