Not surprisingly, summer internships look a bit different this year. Some are cancelled outright, others cut short, and many are virtual. Amidst these changes, we know employers have more than a few questions . . .

Q. If my company is cancelling its planned summer internship, do we have to provide any cash compensation?

A. Not unless there is a contract in place to do so. Nonetheless, we’ve seen a number companies offer to pay a portion of the expected wages (and a few very generous employers have sought to pay the entire amount).

Q. And, if we want to pay our intern some amount for the lost opportunity, do we have to put them on the payroll?

A. Yes. The IRS takes the position that, from a tax perspective, paying any amount, in lieu of wages to a prospective employee who is never actually employed is nonetheless wage income subject to income tax withholding, social taxes, etc. Some employers are a little stumped by how they can set somebody up on the payroll just to make this one lonesome payment. But, it is doable. It requires some administrative tasks like getting the required federal and state withholding forms and setting the person up in the employer’s payroll system. For federal purposes, the required form is the Form W-4 that an employee fills out during onboarding for a new job, which form will require the employee to provide a social security number (or other taxpayer identification number) and other information needed for the payment to be properly reported on Form W-2 and withheld upon.


Continue Reading FAQs About Summer Internships During the Pandemic

On May 20, 2020, Chicago passed the “COVID-19 Anti-Retaliation Ordinance,” making it illegal for employers with employees in the City of Chicago to retaliate against employees who stay home: to follow public health orders related to COVID-19, to quarantine because of COVID-19 symptoms, or to care for an individual ill with COVID-19. Enacted as an amendment to Chicago’s Minimum Wage and Paid Sick Leave Ordinance, the Anti-Retaliation Ordinance prohibits employers from terminating, demoting, or taking other adverse action against employees who are unable to work for reasons related to COVID-19.

What do I need to know?

Under the Ordinance, an employer cannot terminate, demote, or take any other adverse action against an employee for obeying an order issued by Mayor Lightfoot, Governor Pritzker, or the Chicago Department of Public Health (or, in the case of subsections (2) through (4) below, a treating healthcare provider) requiring the employee to:

  1. Stay at home to minimize the transmission of COVID-19;
  2. Remain at home while experiencing COVID-19 symptoms or while being sick with COVID-19;
  3. Obey a quarantine order issued to the employee (to keep an employee who has come into contact with an infected person separate from others);
  4. Obey an isolation order issued to the employee (to separate an employee with COVID-19 from others); or
  5. Obey an order issued by the Commissioner of Health regarding the duties of hospitals and other congregate facilities.

In addition, an employer cannot take adverse action against an employee for caring for an individual subject to subsections (1) through (3) above.

The Ordinance became effective on May 20, 2020, and will expire (unless City Council intervenes) when the Commissioner of Public Health makes a written determination “that the threat to public health posed by COVID-19 has diminished to the point that [the] ordinance can safely be repealed.”


Continue Reading Chicago Employers: Allow Your Employees to Obey COVID-19 Public Health Orders, or Else

We hope you found last week’s video chat series helpful and informative. Due to popular demand, we are continuing this series of quick and bite-sized video chats, where our employment partners team up with practitioners in various areas of law to discuss the most pressing issues for employers navigating the return to work.

This series

Are They Right For You?

As the COVID-19 pandemic continues to wreak havoc on the global economy, United States employers are continuing to examine ways to reduce costs while at the same time both limiting the financial impact on employees and preserving their ability to ramp back up when circumstances allow. State short time compensation programs, also known as work share programs, provide one avenue for cost savings that may be appropriate for some employers.

Where available, these programs provide pro-rated unemployment compensation benefits to groups of workers whose hours are reduced by their employer on a temporary basis in lieu of layoffs. In addition, the recently passed Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) provides a federally-funded $600 per week unemployment compensation supplement to those who participate in such programs through July 31, 2020.

This Alert provides additional details about state short time compensation programs and answers frequently asked questions about the pros and cons of participation.

Where are short time compensation programs available?

Currently, the following 27 jurisdictions have short time compensation programs in place: Arizona, Arkansas, California, Connecticut, District of Columbia, Florida, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Washington and Wisconsin. The CARES Act provided federal funding for other states to enact short time compensation programs, so additional states may do so in the near term.


Continue Reading Short Time Compensation (Work Share) Programs

Unfortunately, the economic fallout of the COVID-19 pandemic is forcing employers to implement a range of cost-cutting measures — furloughs, temporary office and location closings, and layoffs. As employers continue to adjust operations during these extraordinary times, it is essential to remember the notice obligation under the federal Worker Adjustment and Retraining Notification, or WARN,

Predictions about the spread of COVID-19 through significant parts of the population and its effects on American life are staggering. The Centers for Disease Control and Prevention (CDC) reports more than 54,000 confirmed cases in the United States. As countries across the world implement new, extraordinary measures in an attempt to contain the coronavirus, which

Last week, in Kim v. Reins International California, Inc., No. S246911, after more than two years on review and extensive briefing by amicus curiae, the California Supreme Court unanimously resolved an issue of first impression concerning the Private Attorneys General Act (PAGA): whether settlement of individual Labor Code claims extinguishes PAGA standing.

California’s Labor Code contains a number of provisions designed to protect the health, safety, and compensation of workers. Among those laws, PAGA provides a mechanism for employees to enforce the Labor Code as the state’s designated proxy. In particular, PAGA authorizes “aggrieved employees” to pursue civil penalties on behalf of the state. Those penalties differ from statutory damages or other penalties an employee may recover individually for alleged Labor Code violations because relief under PAGA is intended to benefit the general public, not the party bringing the action.


Continue Reading Employee Remains “Aggrieved” Under PAGA Even After Settling Individual Claims

On February 10, 2020, United States District Judge Dolly M. Gee denied a motion for a preliminary injunction to enjoin California from enforcing Assembly Bill 5 (AB 5) against Postmates Inc. and Uber Technologies, Inc. Judge Gee concluded: “Plaintiffs have not shown serious questions going to the merits — the critical factor in determining whether to issue a preliminary injunction — and, though company plaintiffs have shown some measure of likelihood of irreparable harm, the balance of equities and the public interest weigh in favor of permitting the state to enforce this legislation.”

Continue Reading Court Denies Preliminary Injunction To Halt California’s New Statutory “ABC Test” As To Gig Economy Companies And Drivers

Join us on January 28, 2020 for our California Employment Compensation Update in Los Angeles.

We’ll clarify the impact of employment and compensation developments in California, the US and abroad that raise opportunities for the visionary companies that seize them.

We will offer a choice between two sessions:

1. Predictions for the Year Ahead in

Going into 2020, employers should be mindful of several new state laws aimed at limiting the enforceability of noncompete agreements against low-wage employees. Crucially, while protecting low-wage worker job mobility is the key aspect of these new state laws, each has its own unique nuances and one-off requirements, further complicating employer efforts to protect their