Last week, a unanimous US Supreme Court held that an employee need only show “some harm” from a change in the terms and conditions of employment, rather than a “significant” employment disadvantage, to assert a claim for discrimination under Title VII. The decision resolves a circuit split over the showing required for discrimination claims based on changes less drastic than demotions, terminations, or pay reductions, and underscores the continued importance of taking a thoughtful approach to any change in the terms and conditions of an employee’s employment.Continue Reading Less is More: SCOTUS Shifts Title VII Threshold to “Some” Harm (Though Plaintiffs Must Still Show Discriminatory Intent)

Pay transparency issues have been on the radar for some time, with employers navigating the patchwork of jurisdictions across the US demanding the disclosure of salary and wage ranges in job ads. So what’s new? Enforcement of these laws is on the rise, and employers have already been hit with fines and citations.

In this

The Department of Labor’s “new” rule for classifying workers as employees or independent contractors under the Fair Labor Standards Act took effect March 11, 2024. The DOL’s Final Rule returns employers to a familiar pre-Trump administration totality of the circumstances test that focuses on the “economic realities” of the worker’s situation. The practical impact is that it is now harder for businesses to classify workers as independent contractors, and it will likely increase federal wage and hour claims.

There are mounting legal challenges to the Final Rule contesting the DOL’s rulemaking authority. However, to date, none of the suits have been successful at blocking implementation of the Final Rule. So, for now, it stands.

Practice pointer: different legal tests for different laws

Employers new to the US are often baffled to learn that no single test exists to evaluate independent contractor status for all purposes. This means compliance is complicated since different tests may apply depending on the context. And yes, this also means that it’s feasible for a worker to be an independent contractor for some purposes and an employee for others (such as under state and federal law, for example). Continue reading for a summary of the key tests that come up most often for US multinationals.Continue Reading New DOL Rule Makes it Harder to Classify Workers as Independent Contractors (Plus a Quick Recap of the Key Misclassification Standards Across the US)

You’re not alone in wondering where the Equal Employment Opportunity Commission’s final regulations to implement the Pregnant Workers Fairness Act are. In fact, they are well past their due date.

How it started

The PWFA became effective on June 27, 2023. In August 2023, the EEOC published proposed regulations to implement the PWFA. (We outlined the proposed regulations in our blog here, and about the PWFA here). The public comment period for the proposed regulations closed October 10, 2023, and the proposed regulations were delivered to the Office of Information and Regulatory Affairs (“OIRA”) on December 27, 2023 for review.

How it is going

However, to date, no final regulations have been issued, despite the PWFA’s requirement that the EEOC issue regulations by December 29, 2023. The regulations, once finalized, will provide clarity for employers implementing policies and practices to comply with the PWFA. For instance, the proposed regulations outline a nonexhaustive list of what the EEOC considers potential accommodations under the PWFA, including job restructuring and part-time or modified work schedules.

However, even without final regulations in place, employers are required to meet the PWFA’s mandates. The proposed regulations can still be used to offer insight into how the EEOC believes the PWFA should be interpreted.Continue Reading Pregnant Pause: The EEOC’s Delay In Issuing Final Regs For The PWFA Should Not Delay Compliance

We may be on the verge of pay equity and transparency requirements for federal contractors and subcontractors. On January 30, 2024 the Federal Acquisition Regulatory Council (FAR Council) issued proposed rulemaking that would, if finalized in its current form, require a significant change in recruiting and hiring practices for some contractors.

The FAR Council’s rule would:

  1. Require covered contractors to implement new compensation disclosure requirements in job announcements for certain positions, and
  2. Prohibit covered contractors from requesting or considering applicants’ compensation history when making employment decisions.

The public has until April 1, 2024 to submit comments. We will be tracking this proposed rule as it continues to develop. 

This is just the most recent development in the nationwide wave of state (e.g. California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, New Jersey, New York, Ohio, Rhode Island and Washington) and local (e.g. Cincinnati, Jersey City, New York City and others) pay transparency regulation our team has chronicled on our blog–see our most recent update on the District of Columbia’s new legislation here. Recently, there has also been litigation in various jurisdictions (e.g. Washington and New York City) seeking to enforce pay transparency regulations that are already on the books. 

Potentially broad application

In its current form, the proposed rule would have broad application, covering both prime contractors and subcontractors performing a government contract or subcontract within the United States (including its outlying areas). The FAR Council states that it contemplated limiting application of the requirements to certain contracts but ultimately did not go that way since “[t]he benefits of the pay equity and transparency requirements in this proposed rule are equally impactful in commercial and noncommercial settings as well as to large or small dollar contracts.”

The proposal defines “work on or in connection with the [government] contract” as “work called for by the contract or work activities necessary to the performance of the contract but not specifically called for by the contract.” The Council “encourages” contractors to apply its provisions “to other positions, including to the recruitment and hiring for any position that the Contractor reasonably believes could eventually perform work on or in connection with the contract.”

Both requirements apply only to “applicants,” defined as a “prospective employee or current employee applying for a position to perform work on or in connection with the [government] contract.”Continue Reading Federal Contractors May Soon Be Required To Disclose Salary Ranges in Job Postings, And Prohibited From Seeking Applicant Salary History

The US Supreme Court’s SFFA decision ending affirmative action in higher education continues to have ramifications for corporate America. Attacks to workplace DEI are gaining momentum with targeted challenges from a variety of angles, not the least of which are those coming from conservative advocacy groups filing lawsuits, requesting agency investigations and pursuing other complaints. Just last week, as many prepared to watch Taylor Swift’s boyfriend perform in the Super Bowl, America First Legal (a nonprofit founded by a former adviser to Donald Trump) filed an EEOC complaint against the NFL challenging the Rooney Rule, a widely used hiring practice that emanated in the NFL and is followed across corporate America. For in-house counsel, this just further emphasizes the need to continue to diligently monitor the changing DEI landscape for signals warranting targeted audits or adjustments to workplace DEI programming.

When should in-house counsel take action? Let’s start to answer that question by looking at where we are now and the escalation of events in the past 7 months.

Timeline of Recent Material Attacks on Workplace ID&E

July 2023 | Letter to Employers from 13 State AGs

Thirteen attorneys general used SFFA to support their opposition to corporate DEI programs (see letter to Fortune 100 CEOs here). In response, attorneys general from other states wrote to the same CEOs stating that SFFA “does not prohibit, or even impose new limits on, the ability of private employers to pursue diversity, equity, and inclusion.”Continue Reading Is The Risk Calculus Related To Workplace DEI Shifting For US Employers This Election Year?

Combining the views of 600 senior in-house lawyers at multinational companies across four continents with the insights of Baker McKenzie experts in tax, employment and antitrust, the 7th Edition of our Global Disputes Forecast helps in-house counsel see around corners as they prepare for 2024. The forecast includes detailed predictions for disputes involving ESG, cybersecurity

Special thanks to co-presenters Maria Cecilia Reyes, Victor Estanislao Marina and Katherine Ninanya.

Many employers have made getting their arms around their remote work populations a new year’s resolution for 2024. Simultaneously, a growing number of jurisdictions are offering Digital Nomad Visas to attract foreign nationals — and some countries are actually shifting

Tracking and complying with federal, state, and local wage and hour requirements has long been top of mind for employer as wage and hour liability continues to be one of the most expense employment law risks. Indeed, in 2022, the 10 largest reported settlements for wage and hour actions totaled $574 million.

Currently, in

Special thanks to co-authors Glenn Fox and Paul DePasquale.

One of the biggest sleeper issues (in my opinion) for US companies when granting equity awards to non-US employees or other service providers is the fact that their heirs may be assessed with US estate tax and be required to file an estate tax return in the US if the individual dies while holding equity awards or shares.

US Estate Tax Exemptions

Individual US taxpayers (i.e., US citizens and non-US citizens who are domiciled in the US) can currently benefit from a significant estate tax exemption: no estate tax is due unless the value of the estate exceeds US$13,610,000 (this is the inflation-adjusted amount for 2024), reduced for taxable lifetime gifts, but doubled for married couples if both spouses’ estates qualify for the exemption. Accordingly, relatively few US estates currently are subject to estate tax. In any event, US employees and their heirs will most likely be well aware of possible estate tax consequences for their assets, including equity awards and shares acquired under a company share plan.Continue Reading A Cautionary Tale: US Estate Tax May be Due on Equity Awards/Shares Held by Non-US Residents