AB 5, Codifying Dynamex and Broadening the ABC Test’s Application, Passes California Legislature

Executive Summary: After months of debate and negotiations, the California State Legislature passed the controversial AB 5 on Wednesday, September 11, 2019, bringing it one step closer to being law. If passed, the new law is expected to impact and clarify the use of independent contractors throughout the state. It is now on Governor Newsom’s desk. If signed, it will go into effect on January 1, 2020. Continue reading

Employers Should be Prepared for the Challenges of the 2019 Hurricane Season

Executive Summary: As Hurricane Dorian, the first hurricane of the 2019 Atlantic season, bears down on Florida, the approaching storm serves as a reminder that employers should be prepared to address storm-related issues if they are required to close their businesses and as they prepare to resume normal operations. For example, employers need to determine whether closing the office means having to pay workers who stay home, being on the hook for unemployment compensation, and whether workers’ compensation applies to weather-related injuries. Continue reading

New Jersey Passes the Broadest Wage Theft Law in Country With Dire Consequences for Employers

Introduction: On the heels of the broadest Pay Equity law in the country, New Jersey has just passed the broadest wage theft law in the country, which is certain to lead to increased litigation. Unwary employers may not only be facing insurmountable fines and penalties, but potentially jail time for even minor violations of the new law. The new law establishes treble damages and criminal penalties for non-payment of wages to New Jersey employees. More importantly, there is a presumption of retaliation for any adverse employment action that occurs for months after an employee complains about their wages. The presumption is rebuttable, but only if the employer produces clear and convincing evidence. The law further extends the statute of limitations to six years and allows for reinstatement of employees. Continue reading

Chicago Passes Ordinance Requiring Employers to Provide Predictive Scheduling for Certain Industries

In the most expansive predictive scheduling law in the country to date, Chicago City officials passed the “Fair Workweek Ordinance” on July 24, 2019, and Mayor Lori Lightfoot has indicated she would quickly sign the Ordinance. The Ordinance provides extensive protection for certain employees with regard to advance scheduling of work. Although employers have some time to get used to the idea, by July 1, 2020, they will need to have a firm plan in place to address this new Ordinance. Continue reading

DOL Pivots, Providing Guidance Likely To Mitigate Recent Blitz of Minimum Wage Class Actions Related to Sleep Time And Off Duty Time Spent In Vehicles

Executive Summary: Almost all long-haul drivers are exempt from overtime under the motor carrier exemption to the Fair Labor Standards Act (FLSA). However, these same drivers are not exempt from the FLSA’s minimum wage requirements. Due to the ongoing driver shortage, drivers’ rates far exceed the minimum wage, especially when considering the Motor Carrier Safety Act limits on-duty hours to 60 per week. So it’s no surprise that many motor carriers were caught off guard when federal courts found them liable for not paying minimum wage because they failed to count the time drivers spent sleeping as hours worked. In guidance issued July 22, 2019 the United States Department of Labor (DOL) addressed the circumstances when time in the sleeper berth is compensable and shifted the burden to drivers to prove they were performing compensable work in the berth, providing “straightforward” guidance for the motor carrier industry and a defense to the minimum wage claims. Continue reading

Alabama Passes State Equal Pay Act

On June 11, 2019, Alabama Governor Kay Ivey signed into law the Clark-Figures Equal Pay Act (the “Alabama EPA”). The Alabama EPA provides that it shall be unlawful for an employer to “pay any of its employees at wage rates less than those paid to employees of another sex or race for equal work within the same establishment on jobs the performance of which requires equal skill, effort, and responsibility, and performance under similar working conditions.” The Alabama EPA takes effect September 1, 2019. Previously, employers and employees in Alabama were subject to the federal Equal Pay Act (the “EPA”). Similar to the EPA, no discriminatory intent has to be proven under the Alabama EPA, and an employee can recover the wage differential plus interest. In contrast to the EPA, the Alabama EPA does not permit recovery of liquidated damages (double the amount of the wage differential) or attorneys’ fees. Also in contrast to the EPA, the Alabama EPA requires parity in wages based on race as well as sex. The Alabama EPA specifically permits wage differentials resulting from a merit system, a seniority system, or a system that measures earnings by quantity or quality of production. An employer also may raise a defense that the wage differential was based on a factor other than sex or race, although the final version of the Alabama EPA does not provide any examples of such factors. Continue reading

Ninth Circuit Applies Dynamex Retroactively

Executive Summary: In 2018, the California Supreme Court adopted the “ABC test” for determining whether workers are independent contractors under California wage orders (the Dynamex decision). For a discussion of that decision, please see our May 3, 2018 Alert. The ABC test makes it more difficult in many cases for companies to classify a worker as an independent contractor than under the prior generally-applied common law test. As such, the adoption of the ABC test increases many California employers’ exposure for minimum wage, overtime, meal and rest periods, and other benefits owed to employees but not to independent contractors. On May 2, 2019, in Vasquez v. Jan-Pro Franchising International, Inc., the Ninth Circuit concluded that the ABC test should be applied retroactively to situations that arose before the Dynamex decision came out. Continue reading