The federal guidance on whether to classify a worker as an employee or an independent contractor continues to shift, as the U.S. Department of Labor (DOL) issued a new proposed rule favorable for companies. If finalized, the rule may provide businesses with greater latitude to engage independent contractors.

Continue Reading New DOL Proposed Rule Makes It Easier For Companies to Engage Independent Contractors

California’s latest move on the COVID-19 front is an attempt to fill the gap left by the federal Families First Coronavirus Response Act (FFCRA) – and requires larger employers to act immediately. The FFCRA – which mandates paid sick and FMLA leave for designated COVID-19 reasons – does not apply to employers with 500 or more employees. The FFCRA also allows employers of certain health care workers and emergency responders to exclude those employees from its coverage.

On September 10, 2020, Governor Newsom closed these FFCRA loopholes for California-based employees by signing A.B. 1867 into law. The new statute takes effect immediately, and by September 20, 2020, requires employers to provide up to 80 hours of “COVID-19 supplemental paid sick leave” to the following “covered workers”:

  • California-based employees of larger employers (500 or more employees in the U.S.);
  • Specified “food sector workers” (A.B. 1867 effectively codifies Governor’s Newsom’s existing Executive Order already granting paid COVID-19 paid sick leave to these workers); and
  • Health care workers and emergency responders who were excluded from FFCRA by their employers.

A.B. 1867 does two other things:

  • It requires employers to allow employees who work in food facilities, as defined in Section 113789 of the Health and Safety Code, to wash their hands every 30 minutes and additionally as needed, and
  • It creates a new mediation pilot program under which small employers (5 to 19 employees) may request mediation through the Department of Fair Employment and Housing (DFEH) within 30 days of receiving a right to sue notice for alleged violations of the California Family Rights Act (CFRA), the state law equivalent of the FMLA.

Interestingly, nothing in A.B. 1867 expressly limits the new COVID-19 sick leave benefit to California-based employees, but California’s ability to regulate employment relationships generally stops at its borders.

A.B. 1867’s requirements are detailed below.


Continue Reading Larger Employers Must Act Quickly To Address California’s New Supplemental Paid Sick Leave Law, Including Making Changes to Paystubs Within 10 Days

On August 8, 2020, a New York federal district judge struck down a significant portion of the DOL’s “joint employer” rule, meaning certain employers may be more likely to be deemed “joint employers” and exposed to liability for employee wage and hour violations under the FLSA. The “joint employer” final rule, which was issued by the DOL in January 2020, imposed a four-factor test for deciding whether employers in “vertical” employment relationships (i.e., when workers for a staffing company or other intermediary are contracted to another entity) are joint employers under the FLSA.

Continue Reading Are You A Joint Employer Now? Part of DOL’s “Joint Employer” Final Rule Struck Down

As predicted, on Friday, California Governor Newsom signed AB 2257 into law. The most significant changes are expanding the exemptions to AB 5’s coverage, that is, widening the range of occupations that will be held to an earlier standard for determining employment status. The new law takes effect immediately. For our coverage of AB 2257,

Employers must pay for all hours they know or “have reason to believe” employees worked. But can employers simply rely on teleworking employees to report all of their hours worked, or must they instead investigate whether their employees have accurately reported their work time? With the huge increase in teleworking since the start of the COVID-19 pandemic, this question should be top-of-mind for employers.

On August 24, 2020, the US Department of Labor issued Field Assistance Bulletin No. 2020-5 (FAB) to clarify an employer’s obligations in determining whether teleworking employees have accurately reported their work time. In short, the employer is not required to comb through every cell phone or computer login record to look for unreported work time that the employer neither knew of nor had reason to believe had been worked. As long as the employer provides employees with reasonable time-reporting procedures and does not otherwise impede or discourage reporting, its failure to compensate employees for unreported and unknown hours of work is not an FLSA violation. The FAB and some key takeaways for employers are summarized below.


Continue Reading A “Reason to Believe”: DOL Says the Obligation to Determine Remote Employees’ Hours of Work is “Not Boundless”

A potential amendment to California’s AB 5 law is sitting on Governor Newsom’s desk. If enacted, the amendment will allow certain professions to be classified as independent contractors rather than employees, notwithstanding AB 5’s presumption of employment status. On August 31, the California legislature sent AB 2257 to Governor Newsom for his review and signature. Supporters of the bill expect Newsom to sign it into law next month, especially given AB 5’s perceived negative impact on the “gig” economy during the pandemic. If signed by the governor, the law will take effect immediately.

By way of brief reminder, AB 5 established a 3-part test, known as the “ABC” test, that is used to determine if workers are employees or independent contractors for purposes of the Labor Code, the Unemployment Insurance Code, and the wage orders of the Industrial Welfare Commission. Under the ABC test, a person providing labor or services for remuneration is considered an employee rather than an independent contractor unless the hiring entity demonstrates that the person is free from the control and direction of the hiring entity in connection with the performance of the work, the person performs work that is outside the usual course of the hiring entity’s business, and the person is customarily engaged in an independently established trade, occupation, or business. This broad test places most workers in the employee classification. AB 5, however, enumerated a few limited exemptions for specified occupations and business relationships from the application of the ABC test, providing that the exempt relationships are governed by the pre-AB 5 multi-factor test set out in S. G. Borello & Sons, Inc. v. Department of Industrial Relations. (For more detail on AB 5, click here.)

AB 2257 will modify some of the current exceptions to AB 5, and create new exceptions to AB 5’s presumption that workers are employees. A close read of the bill’s text is necessary given the proposed amendments’ nuances and sometimes conflicting detail.  We outline below some of the major changes contemplated by AB 2257, but if your business potentially falls into one of the enumerated exceptions, we strongly recommend consulting with employment counsel given the complexities involved.

New Exceptions

If enacted into law, AB 2257 will allow the following professionals to be classified as independent contractors in California if they satisfy the Borello standard.


Continue Reading Big Changes Coming To California’s Landmark Independent Contractor Law? Sort of.

Many schools across the US are not welcoming students back for full-time in-person learning in the fall. On August 5, 2020, after Chicago Public Schools announced it would begin the academic year remotely in September, New York City became the last remaining major school system in the country to even try to offer in-person classes this fall. Proposed plans for schools that aren’t fully reopening range from full remote learning to hybrid models, where students are in school only half a day or several days a week coupled with a remote learning component from home. Either way, employers are likely to find themselves inundated with requests from parents of school-age children for continued work from home arrangements or other work-schedule flexibility. In our Q&A below, we have highlighted issues employers may want to keep in mind as employees with school-age children try to navigate a school year with its own “novel” aspects.

1.  Are employers legally obligated to provide any sort of leave for employees who have to stay home with their children if schools don’t fully reopen?

It depends. If the employer is a “covered employer” under the federal Families First Coronavirus Response Act (FFCRA), employees may be eligible for paid leave under the FFCRA. The FFCRA was enacted to provide employees with COVID-19 related paid leave. Covered employers under the FFCRA (generally, private sector employers who have fewer than 500 employees at the time the leave request is made) are required to provide eligible employees with partially paid child care leave for certain COVID-19-related reasons, including if the child’s school, place of care or child care provider is closed or unavailable for reasons related to COVID-19.

Does virtual learning count as a “closed or unavailable” school for purposes of the FFCRA? Though the DOL guidance and FFCRA regulations have not spoken directly on this topic, the DOL’s early Q&A guidance on the FFCRA indicates that a school is “closed” for purposes of EPSLA or EFMLEA leave when the “physical location where [the] child received instruction or care is now closed.” The focus on “physical location” signals that if the school building is closed to students and students are required to learn remotely, the school is “closed” for purposes of the FFCRA.

The FFCRA imposes two federal leave obligations on employers – the Emergency Paid Sick Leave Act (EPSLA) and the Emergency Family Medical Leave Expansion Act (EFMLEA).

  • Under the EPSLA:
    • An eligible employee may take up to two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay where the employee is unable to work or telework for reasons including to care for a child whose school, place of care or child care provider is closed or unavailable for reasons related to COVID-19. Pay is capped at $200 per day and $2,000 in the aggregate.
  • Under the EFMLEA:
    • An eligible employee may take up to twelve weeks of “expanded” FMLA leave when unable to work or telework due to a need for leave to care for a child whose school, place of care or child care provider is closed or unavailable for reasons related to COVID-19.
    • The first two weeks of EFMLEA leave are unpaid. An eligible employee may use paid sick leave under the EPSLA or other accrued paid leave under the employer’s leave policies to receive pay for those two weeks.
    • An eligible employee may take up to an additional 10 weeks of paid EFMLEA leave at two-thirds the employee’s regular rate of pay, based on the number of hours the employee would be normally scheduled to work those days. Pay is capped at $200 per day and $10,000 in the aggregate.

In addition, state and local leave laws may apply, many of which either provide additional leave or state that providing care for a child whose school is closed or unavailable for COVID-19 reasons is a protected reason for an employee to take leave.


Continue Reading Back to School or Back to Home? Handling Leave Requests from Employees with School-Age Children

On July 20, 2020, the Wage and Hour Division of the US Department of Labor (DOL) published additional COVID-19 guidance in the form of a Q&A addressing Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Families First Coronavirus Relief Act (FFCRA) issues arising when employers and employees return to work.

A few days before, on July 17, the DOL published streamlined optional-use forms for employer and employee notification and certification obligations under the FMLA and separately asked the public to comment on the FMLA and its regulations in a Request for Information (RFI). The additional guidance and forms should help employers navigate FMLA leave and employee wage and hour issues during COVID-19. And employers now have the opportunity to share their thoughts on the FMLA and its implementing regulations with the DOL. We provide more insight into the DOL’s recent activity below.


Continue Reading New Q&As, New Streamlined Forms, and an RFI: the Department of Labor Publishes More COVID-19 Guidance and Seeks Public Comment on the FMLA

With a surge in COVID-19 cases in parts of the US (and some states taking or considering taking a step backwards into a prior reopening phase), employers are trying to figure out the best ways to keep the virus from spreading in their reopened worksites. We have answered some frequently asked questions below to help employers implement or modify their screening protocol to make it the best fit for their physical workspace, their budget, and their workforce.

1.  Can I check my employees’ temperatures before they enter the  workplace? If my employees have a fever, can I send them home (or tell them not to come to work)?

Yes, employers can check their employees’ temperatures before they enter the workplace. In fact, some states and localities require employers to do daily or weekly checks, so check your local requirements.

A temperature check is a medical examination under the ADA, and in ordinary times, employers generally cannot require employees to submit to a temperature check. However, given COVID-19’s rise to the level of pandemic, and the CDC and state and local health authorities’ acknowledgment of the community spread of COVID-19 and issuance of precautions, EEOC guidance allows employers to check employees’ temperatures before they enter the workplace. Temperature checks are only permitted while the virus is severe, so as the level of community spread diminishes in your locality make sure that temperature checks are still permitted before you administer them.

In addition, employers can send employees home (or tell them not to come to work) if they have a fever or any of the other symptoms of COVID-19. See EEOC guidance and CDC guidance, “Separate Sick Employees.” The CDC defines a fever as 100.4 F or 38 C or above. States may have different guidance regarding what qualifies as a “fever,” with some states defining a “fever” as a flat 100 F, and employers can set lower temperature thresholds if they prefer.


Continue Reading Employee Testing for COVID-19: What Works Now for Your Worksite?

Employers in the US are more than a little fearful of COVID-19 related class and collective action lawsuits coming their way, and with good reason. Since shelter-in-place orders were imposed in March, US employers have faced class action lawsuits for a variety of COVID-19 related reasons, including the alleged failure to implement proper workplace safety measures or provide appropriate paid sick leave. To keep workers safe from contracting the virus at work, many employers have allowed employees to continue to work from home indefinitely, which likely decreases the odds that an employer will be sued in class action litigation for failing to provide appropriate PPE in the workplace. However, managing employees working from home can create other issues worthy of class-action litigation, including reimbursing those employees for work-related expenses.

What can employers do to ensure they meet reimbursement requirements to steer clear of expense reimbursement class action lawsuits in the US? Go through the four considerations, below.

  1. Know the rules that apply in your jurisdiction

Several jurisdictions have specific rules regarding employee expense reimbursements, so you’ll need to check your local law. In California, an employer must reimburse an employee for all “necessary expenditures or losses incurred by the employee in direct consequence or discharge of his or her duties.” Cal. Lab. Code § 2802. Similarly, Illinois requires reimbursement of all “necessary expenditures or losses” an employee incurs within the scope of employment that are “directly related to services performed for the employer,” unless the employer has a written reimbursement expense policy and the employee fails to comply with that policy. 820 ILCS 115/9.5. And in the District of Columbia, employers must pay the cost of purchasing and maintaining any tools that the employer requires to perform the employer’s business. D.C. Mun. Reg. tit. 7, § 910.1. If you have operations in several jurisdictions, make sure that you know and follow each applicable jurisdiction’s rules.

In addition, the Fair Labor Standards Act (FLSA) may apply. Though the FLSA does not require employers to reimburse their employees, under the FLSA “kickback” rule, employees cannot be required to directly pay business-related expenses or reimburse their employer for such expenses if doing so would cause the employee’s wage rate to fall below the required minimum wage or overtime compensation thresholds. See 29 C.F.R. § 531.35. Remote workers typically earn well-above the federal minimum wage ($7.25 per hour), so employers don’t need to be as concerned about business expenses causing those employees’ wages to dip below the federal minimum wage. However, employers should be on the lookout for these situations, which require more attention:

  • Where employees are subject to overtime for working more than 40 hours in a workweek;
  • Where a particular pay threshold (whether under federal or state law) must be met for the employee to meet an exemption from overtime (in which case the employee will become nonexempt and must be paid overtime for any work over 40 hours in a workweek); or
  • Where state or local minimum wages are higher (such as Chicago’s $14 per hour or California’s $12 per hour), making it more likely that an employee’s payment of business-related expenses would cause their wages to dip below the minimum wage.

A violation of the FLSA occurs in any workweek in which the cost of the business-related expenses borne by the employee cuts into the minimum or overtime wages required to be paid to the employee. Therefore, employers can more easily run afoul of the FLSA in these scenarios, especially if the business-related expenses paid in any given workweek happen to be hefty.


Continue Reading Want to Avoid Employee Reimbursement Class Actions for Remote Work? Take These Four Steps