Compliance

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Special thanks to co-presenters Luis C. Carbajo, Adriana Ibarra-Fernandez, Luis Adrián Jiménez Robles, Jose M. Larroque, Ma. Rosario Lombera González, Manuel Padrón-Castillo, Salvador Pasquel-Villegas, Javiera Medina-Reza, and Reynaldo Vizcarra-Mendez.

This year the Mexican government intends to raise an astonishing amount in revenue from large taxpayers and employers (Grandes Contribuyentes) without increasing tax rates or creating new taxes. To increase revenue, the federal government will significantly increase the number of audits and inspections touching on the areas of tax, customs and employment; accordingly, multinationals operating in Mexico need to prepare now for more intensive audits and inspections. 

This special emphasis on inspections and audits will significantly impact the human and financial resources of Mexican subsidiaries of multinationals. 

We are delighted to come together live in Mexico City with our Tax, Employment and Trade & Customs specialists to share experiences and offer comprehensive advice on this tough environment dealing with Mexican authorities. Our team has deep expertise and strong relationships with the authorities in Mexico and thus can share best practices and advice based on years of experience.

Among other topics, we will cover:Continue Reading Join Us! Preparing for the Significant Increase in 2023 Audits and Inspections from the Mexican Government

California has required all employers to provide lactation breaks (unless they can show that to do so would “seriously disrupt” their operations) since 2020. The federal government caught up late last year with the Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act).

PUMP Act — The Basics

Effective December 29, 2022, the PUMP Act expands workplace protections for employees with a need to express breast milk. The Pump Act amends the Fair Labor Standards Act (FLSA), which required employers to provide lactating non-exempt employees with reasonable break time and a private location to express milk for one year following the birth of a child.

The previous law excluded most salaried employees, and the PUMP Act expands this right to cover all employees whether exempt or non-exempt. Now employers must provide all employees a reasonable break to express milk each time the employee has a need to express milk for one year after the child’s birth.Continue Reading ICYMI: New Federal Obligations for Employers to Provide Breaks for Nursing Mothers and Reasonable Accommodations for Pregnant Women

Special thanks to co-presenter, Marredia Crawford.

It’s common practice for companies to collect diversity data and use it to assist in analyzing the concrete benefits of current inclusion, diversity and equity (ID&E) efforts in the workplace, and for recalibrating ID&E goals. However, collecting and managing diversity data can be fraught with risk.

In this …

California legislators met on April 11, 2023 to discuss a proposed overhaul of employment-related criminal background checks. Simply put, if the Fair Chance Act of 2023 (SB 809) is passed into law, California will have the most restrictive criminal background check law in the country, and will significantly limit the way California employers can vet applicants for employment. Under existing state law, California employers may conduct a criminal background check for most positions only after making an initial offer of employment, and they may make adverse employment decisions based on criminal history only after conducting an individualized assessment that considers the nature of the offense and the duties of the job. While these existing restrictions are significant in their own right, the proposed new law will effectively eliminate criminal history consideration in most circumstances, allowing legislators to further reduce barriers to employment for people with criminal histories.

The Fair Chance Act will, among other things, “make it an unlawful employment practice to take adverse action against an employee or discriminate against an employee in the terms, conditions, or privileges of their employment based on their arrest or conviction history.” SB 809. In essence, the proposed law will all but ban employment-related criminal background checks, except for positions for which such checks are authorized or required by statute. And in the limited circumstances where criminal history checks are permitted, the Fair Chance Act will require employers to post a clear and conspicuous notice informing applicants and employees of their rights. The new law also will impose on employers additional document and data retention obligations for completed background checks.Continue Reading California Seeks to Ban Most Criminal Background Checks

Special thanks to Jose (Pepe) Larroque, Carlos Martin del Campo and Javiera Medina-Reza.

The Mexico Ministry of Labor and Social Welfare (STPS) has announced that it will carry out an estimated 42,000 inspections in 2023. The inspections carry the possibility of significant fines and penalties issued per violation, per employee. It is imperative for…

Special thanks to Geoff Martin and Maria Piontkovska.

On March 3, 2023, the Criminal Division of the United States Department of Justice (“DOJ”) published details of a three year Pilot Program Regarding Compensation Incentives and Clawbacks (the “Compensation Pilot Program”). The Compensation Pilot Program is effective March 15, 2023 and from that date it will be applicable to all corporate criminal matters handled by the DOJ Criminal Division. At the same time, DOJ also updated its Evaluation of Corporate Compliance Programs guidance document to reflect the criteria introduced by the Compensation Pilot Program, among other updates.
 
Background and Objectives of the Compensation Pilot Program

The concept of incentivizing corporate compliance by structuring compensation programs to reward compliant behaviors and punish non-compliant ones, is nothing new. For example, prior editions of the Evaluation of Corporate Compliance Programs addressed appropriate incentives for company management and executives to promote good governance and compliance, and expectations about the consistent application of discipline against employees found to be involved in misconduct.

However, in a September 2022 memo to DOJ prosecutors titled: “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group“, Deputy Attorney General Lisa Monaco indicated that DOJ intended to go further on this particular topic. In the memo, Monaco indicated that DOJ would expect companies to design compensation structures not only to incentivize and reward good compliance practices, but also to financially penalize individual employees found to have been engaged in misconduct, including by clawing back compensation after the fact.

DOJ’s objective in this initiative is to encourage companies to redistribute some of the cost and penalties associated with individuals’ criminal conduct away from the company (and its shareholders) and onto the individuals themselves. Because misconduct is often discovered after the fact, measures that enable retroactive discipline and clawback of compensation already paid, are of particular importance to DOJ. These measures also reinforce DOJ’s continued focus on individual accountability which has been another of DOJ’s recent areas of focus in addressing corporate criminal matters.

Six months after Monaco’s memo, the Compensation Pilot Program now puts concrete DOJ policy in place to implement those objectives. At the end of the three year pilot period, DOJ will determine whether the Compensation Pilot Program will be extended or modified. If it is deemed a success, we can expect the Compensation Pilot Program to be fully adopted by DOJ. Continue Reading Practical Considerations When Addressing New DOJ Compensation Incentives and Clawbacks Program

Together we navigated operational challenges caused by the pandemic, and together we will weather this. What follows is information and practical advice for employers concerned with satisfying their payroll obligations in the near term in the face of their bank falling into receivership.

  • Identify the “universe” of employment-related expenses. This will include payroll, benefits, bonus and commission comp, insurance, and severance obligations.
  • Understand that liability for unpaid wages can be significant. For example, liability in California includes:
    • Back payment of any unpaid wage amounts that employees prove they were legally entitled to.
    • Interest of up to 10% of the unpaid wages.
    • Penalties for late payment of wages equal to: (i) $100 for the first violation; and (ii) for each subsequent violation, $200 plus 25% of the amount unlawfully withheld. Penalties may apply for each pay period that wages remain unpaid.
    • If any employees leave the company after the payday date, the company can be liable for waiting time penalties for late payment of final wages. Waiting time penalties are equal to 1 day’s wages for each day an employee’s final wages are unpaid, up to a maximum penalty of 30 days’ wages.
    • Companies may be required to pay employees’ attorney’s fees if the employees prevail in litigation.
    • Criminal liability for wage theft if the act is “intentional.” Felony cases are punishable by up to 3 years in prison.  

Continue Reading Navigating Fallout From a Bank Receivership | Practical Tips for US Employers

Implementation status and background to the directive 

The European Whistleblowing Directive (WBD) was supposed to be implemented by the European Union’s 27 member states by no later than December 17, 2021, impacting employers with operations in those jurisdictions.

One year on from this deadline, despite the European Commission (EC) commencing infringement procedures against those countries…

Special thanks to Bradford Newman and Nandu Machiraju.

Employers have been keeping a close watch for rulemaking and action by the Federal Trade Commission (FTC) restricting non-competes. Earlier this month, the FTC answered the Executive Order’s call with enforcement activities and a proposed rule signaling a considerable effort to prioritize employer-employee non-compete covenants as…

In less than two months, on January 1, 2023, the California Consumer Privacy Act (CCPA) as revised by the California Privacy Rights Act (CPRA) will take effect fully in the job applicant and employment context.

And with respect to job applicants and personnel, businesses subject to the CCPA will be required to (i) issue further revised privacy notices, (ii) be ready to respond to data subject requests, (iii) have determined if they sell or share for cross context behavioral advertising personal information about them, and (iv) have determined if they use or disclose sensitive personal information about them outside of specific purposes. If employers sell, share for cross-context behavioral advertising, or use or disclose sensitive personal information outside of limited purposes, numerous additional compliance obligations apply. See also our related previous post: Employers Must Prepare Now for New California Employee Privacy Rights.

Here are some key recommendations on what employers should do now:

1. Review contracts with parties to whom you disclose personal information about applicants and personnel. The CCPA prescribes certain types of clauses that have to appear in agreements between parties exchanging personal information, and you will have to include certain data processing clauses if you do not want to be considered to be “selling” (which the CCPA defines to mean disclosing in exchange for monetary or valuable consideration) or “sharing” (which the CCPA defines to mean disclosing for the purposes of cross-context behavioral advertising) personal information and offer related opt-out processes. It is not practical for employers to offer opt-out rights in most scenarios, due to the CCPA’s non -discrimination requirements. The CCPA regulations, which are currently being revised by the California Privacy Protection Agency (latest draft as of this publication is available here), include additional requirements. Businesses should continue to update such contracts with parties it discloses personal information to.

2. Prepare/revise notices at collection and include HR data in your online CCPA Privacy Policy. At collection notices in the employment context have been required under the CCPA since 2020, but new specific disclosure requirements apply from January 1, 2023. Your comprehensive online CCPA privacy policy will also have to reflect your processing of HR data. You should consider updating/preparing a privacy notice at collection that is specific to the CCPA and separate from any privacy notice you might use to address privacy laws in other jurisdictions, since California laws establish increasingly unique requirements and use unique terms that may be difficult to reconcile with those of other jurisdictions (from January 1, 2023, businesses must use specific terms from the CCPA to describe categories of personal information in all notices at collection). At the same time, you have to be mindful of setting or negating privacy expectations. If you issue privacy notices to job applicants and personnel that merely address CCPA disclosure requirements, the recipients of such notices may develop privacy expectations that could later hinder you in conducting investigations or deploying monitoring technologies intended to protect data security, co-workers, trade secrets and compliance objectives.Continue Reading California Privacy Law Action Items for Employers