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As forecasted in our recent blog Illinois Employer Midsummer “Roundup”: Eight to Know and Two to Watch, our two bills “to watch” are now law. On August 4, Governor Pritzker signed HB 2862 into law, effective immediately, imposing new obligations on employers who use temporary employees, including providing information on their regular employees’ compensation to staffing companies and documenting and keeping records of training provided to the staffing company employee.

And on August 11, Governor Pritzker signed HB 3129 into law, meaning Illinois employers with 15 or more employees have to include the “pay scale and benefits” in any job posting starting January 1, 2025.

We highlight a few key points of each new law below, and for more details, check out our Illinois Midsummer “Roundup” blog.

Continue Reading Illinois Employers: Two Bills We Told You to Watch Are Now Law
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New York may soon restrict employers and employment agencies from using fully-automated decision making tools to screen job candidates or make other employment decisions that impact the compensation, benefits, work schedule, performance evaluations, or other terms of employment of employees or independent contractors. Draft Senate Bill 7623, introduced August 4, aims to limit the use of such tools and requires human oversight of certain final decisions regarding hiring, promotion, termination, disciplinary, or compensation decisions. Senate Bill 7623 also significantly regulates the use of certain workplace monitoring technologies, going beyond the notice requirements for workplace monitoring operative in New York since May 2022 and introducing data minimization and proportionality requirements that are becoming increasingly common in US state privacy laws.

While there is not yet a federal law focused on AI (the Biden administration and federal agencies have issued guidance documents on AI use and are actively studying the issue), a number of cities and states have introduced bills or resolutions relating to AI in the workplace. These state and local efforts are all at different stages of the legislative process, with some paving the path for others. For example, New York City’s Local Law 144 took effect on July 5, prohibiting employers and employment agencies from using certain automated employment decision tools unless the tools have undergone a bias audit within one year of the use of the tools, information about the bias audit is publicly available, and certain notices have been provided to employees or job candidates (read more here).

If enacted, Senate Bill 7623 would take things much further. Here are some of the most significant implications of the draft legislation:

Continue Reading Check Yourself Before You Wreck Yourself: New York and Other States Have Big Plans For Employer Use of AI and Other Workplace Monitoring Tools
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It’s one of the hottest summers on record across the US and around the world, and things may be heating up for Illinois employers as well–with pending legislation that, if signed into law, would require employers to include pay scales in job postings and to meet new health and safety-related requirements when using temporary employees. Illinois employers need to be aware of other changes, including possible liability under amendments to the Illinois Gender Violence Act, changes to the Chicago and Cook County minimum wage and new obligations for employers to meet Equal Pay Registration Certificate requirements under the Illinois Equal Pay Act of 2003.

In this blog, we “round up” eight important changes to know and two bills Illinois employers should keep on their radar as we start to round down the summer.

Eight to Know

1. Employers can now face liability under amendments to Illinois Gender Violence Act

On July 28, Governor Pritzker signed HB 1363 into law, which amends the Illinois Gender Violence Act (GVA) effective January 1, 2024 to impose employer liability in certain circumstances where individuals are victims of gender-related violence. Under the GVA, a person who has been the victim of gender-related violence can sue the person who committed the act of violence and seek damages. Now, not only do perpetrators of gender-related violence face liability under the Act–employers can be liable, too.  

What to know

  • Under the new law, employers can be liable for gender-related violence committed in the workplace by an employer or agent of the employer (including independent contractors), but only when the interaction giving rise to the gender-related violence arises out of and in the course of employment with the employer–which is undefined and vague, so we’re hoping for guidance on what this means.
    • Note that “workplace” is defined, and includes the employer’s premises (including any building, real property, and parking area under the control of the employer), and any location used by the employee while performing job duties for the employer, as well as activities occurring off-premises at employer-sponsored events where an employee is not performing the employee’s job duties (think holiday parties).
  • For liability to extend to an employer, the gender-related violence must occur (i) while the employee is directly performing the employee’s job duties and the gender-related violence was the proximate cause of (i.e. substantial factor in causing) the injury, or (ii) while the agent of the employer was directly involved in the performance of the contracted work and the gender-related violence was the proximate cause of the injury. In addition, an employer must also act “in a manner inconsistent with how a reasonable person would act under similar circumstances” to be liable.
  • Notwithstanding the above, in order to be liable, employers must:
    • Fail to supervise, train or monitor the employee who engaged in the gender-related violence–but an employer who provides sexual harassment prevention training pursuant to Section 2-109 of the Illinois Human Rights Act (IHRA) has an affirmative defense that adequate training was provided to the employee; or
    • Fail to investigate complaints or reports directly provided to a supervisor, manager, or owner (or another person designated by the employer) of similar conduct by an employee or the employer’s agent–and fail to take remedial measures in response to the complaints or reports.
  • The statute of limitations for an alleged victim of gender-related violence to sue the employer is four years, or within four years of a victim turning 18 if the victim is a minor at the time the cause of action accrues.
  • The amendments also clarify that the Act does not preclude a victim of gender-related violence from pursuing any other right or cause of action created by statute or common law.

Employers should train HR and managers on the new law, and make sure employees receive appropriate sexual harassment prevention training under Section 2-109 of the IHRA to at least have the affirmative defense available should they face employee claims under the new law.

Continue Reading Illinois Employer Midsummer “Roundup”: Eight to Know and Two to Watch
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New guidance from USCIS provides a new alternative, starting August 1, 2023, allowing employers that participate in E-Verify to inspect documents presented for I-9 completion remotely. This update will free qualifying employers from the burden of performing a physical verification.

To qualify, employers must be in good standing with E-Verify. This significant change in USCIS policy provide a pragmatic solution for qualifying employers, particularly those with large remote-working populations. The new guidance is also timely – as it is effective the day after USCIS’ COVID-19 flexible guidance is set to expire.

Continue Reading Update: USCIS Modernizes I-9 Verification Process Allowing for Virtual Verification
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New York in the summer: warm days, Shakespeare in the Park, visits to the beach, and the end of the New York State legislative session–which often means a few surprises for New York employers. This summer, not only do employers have to contend with New York’s amended WARN Act regulations and the enforcement of New York City’s Automated Employment Decision Tool law (both now effective), they also have to keep a close eye on four New York State bills that have cleared both houses of the state legislature and could be signed by Governor Hochul–including one that would arguably be the nation’s broadest ban on employee noncompete agreements. We highlight two changes–and four that could be coming down the pike–New York employers should pay close attention to this summer.

Two to know

1. Amendments to New York’s WARN Act regulations now in effect.

New York State’s proposed amendments to its Worker Adjustment and Retraining Notification (WARN) Act regulations were adopted on June 21 and are now in effect. The definition of a covered employer has been expanded, remote employees must now be included in the threshold count, certain notices must include more information or be provided electronically, and exceptions for providing notice have changed (among other modifications). In addition, there’s a new York State Department of Labor WARN portal for employers to use for “a more streamlined user experience.” Want the details on the WARN Act regulation changes and some helpful tips for employers? See our prior blog here.

2. Enforcement of New York City’s Automated Employment Decision Tool law began July 5.

New York City’s Local Law 144 prohibits employers and employment agencies from using an automated employment decision tool to substantially assist certain employment decisions unless the tool has been subject to a bias audit within one year of the use of the tool, information about the bias audit is publicly available, and certain notices have been provided to employees or job candidates. Violations of the provisions of the law are subject to a civil penalty. Enforcement of the law began July 5, and employers need to be diligent. For those who haven’t done so yet, the first (and immediate) step is to take inventory of HR tech tools. Legal should partner with HR and IT to determine whether the company uses automated employment decision tools to make any employment decisions in a manner that triggers the law. See our prior blog here for additional steps to take, as well as further details on the law, penalties, and some practical tips for employers.

Four to watch

1. New York could become the fifth state to ban employee noncompetes.

On June 21, the New York State Assembly passed S3100 (already passed by the New York State Senate), which will be the most restrictive state-level ban on employers’ use of noncompetes to date if signed into law by Governor Hochul.

Under the bill, every contract that restrains anyone from engaging in a lawful profession, trade or business of any kind is void to the extent of such restraint.

The ban: The bill does not permit employers (or their agents) to “seek, require, demand, or accept a non-compete agreement” from a “covered individual.”

  • A “non-compete agreement” is any agreement (or clause in an agreement) between an employer and a “covered individual” that prohibits or restricts the individual from obtaining employment after the conclusion of employment with the employer. 
  • A “covered individual” is “any other person” who performs work or services for another person on such terms and conditions that puts them in a position of economic dependence on and under an obligation to perform duties for that other person–regardless of whether they are employed under a contract of employment.
Continue Reading New York Employer Summer Roundup: Two to Know and Four to Watch
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We are pleased to share a recent LegalDive article, “Why companies should review noncompetes in equity award agreements,” with quotes from Barbara Klementz.

Given increased government scrutiny, employers need to be mindful of the time periods noncompetes cover and review state-specific requirements.

In the light of the sharp focus the federal government and a growing number of states have placed on noncompetes, many employers have reexamined their use of that type of contractual clause in employment agreements.

Barbara, chair of Baker McKenzie’s North American Compensation Practice, is advising businesses to also scrutinize the noncompetes that they include in employees’ equity award agreements. Her recommendation comes amid a pending Federal Trade Commission proposal to ban noncompetes, though Barbara said it would be premature for companies to stop using the contractual clauses altogether.

Tailor agreements

Noncompetes in equity award agreements are often seen in the finance and pharmaceutical industries, among others, and they can be another tool for ensuring employee compliance with such clauses.

Barbara’s top piece of advice for companies is to make sure they don’t take an “overbroad” approach to imposing noncompetes on employees in the equity award context.

Click here to view the article.

This article was originally published in Legal Dive.

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Today, California Attorney General Bonta announced an “investigative sweep” through inquiry letters sent to California employers. In the letters, information on California Consumer Privacy Act (CCPA) compliance is requested specifically with respect to the personal information of employees and job applicants.

The Attorney General noted “we are sending inquiry letters to learn how employers are complying with their legal obligations. We look forward to their timely response.”

Recall that as of July 1, 2023, the California Privacy Protection Agency has the power to bring immediate administrative enforcement actions to enforce the CCPA as revised by the California Privacy Rights Act and the August 2020 operative CCPA regulations (see our posts California Employers Should Carry On with CCPA Compliance and California Privacy Law Action Items for Employers). While some may have hoped that the employment context would not be a focus of enforcement activity, the sweep announced today makes it clear that full CCPA compliance by employers is expected.

Our Top 5 Recommendations Are:

  1. Implement / update contracts with service providers, affiliates and other parties to whom the company discloses personal information about applicants and personnel, to avoid triggering or violating opt-out rights of employees (and implement an opt-out program if required);
  2. Issue / update privacy notices to job applicants and employees and addressing applicant and HR data in the company’s online CCPA Privacy Policy;
  3. Update the company’s data subject request program and train HR professionals;
  4. Revisit data deletion and retention policies given broad access rights for employees and associated compliance costs and risks; and
  5. Prepare assessments concerning the use of “sensitive personal information” to support reliance on exceptions or offer opt-out rights to employees.

For more, please see our California Privacy Law blog and resource page here or contact a member of our team.

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Since July 1, 2023, the California Privacy Protection Agency has the power to bring administrative enforcement actions under the California Consumer Privacy Act (CCPA) (see our post on California Privacy Law Action Items for Employers).

While a June 30, 2023 ruling by the Sacramento County Superior Court stays enforcement of the March 29, 2023 CCPA regulations until March 29, 2024, employers should carry on with their CCPA compliance efforts. It is not time to hit the snooze button!

Even with the stay, employers could now be subject to immediate enforcement of the CCPA as revised by the California Privacy Rights Act and the August 2020 operative CCPA regulations.

Homework! Here are our top 5 action items for CA employers

  1. Implement / update contracts with service providers, affiliates and other parties to whom you disclose personal information about applicants and personnel, to avoid triggering or violating opt-out rights of employees (and implement an opt-out program if required);
  2. Issue / update privacy notices to job applicants and employees and addressing applicant and HR data in your online CCPA Privacy Policy;
  3. Update the company’s data subject request program and train HR professionals;
  4. Revisit data deletion and retention policies given broad access rights for employees and associated compliance costs and risks; and
  5. Prepare assessments concerning the use of “sensitive personal information” to support reliance on exceptions or offer opt-out rights to employees.

For extra credit

Register now for our upcoming California Privacy Law Series webinar focused on CCPA Requirements, Regulations and Enforcement taking place on Wednesday, July 19 at 12 p.m. PT.

For more information, please see our California Privacy Law blog and resource page.

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While the US Supreme Court’s June 27 decision striking down race-conscious admissions programs at Harvard and the University of North Carolina does not directly apply to private employers, the decision will reverberate and impact corporate ID&E programs as a practical matter.

The Decision Ends Systematic Consideration of Race in the Admissions Process

Striking down the affirmative action programs at Harvard and UNC, the Court ruled that both programs violate the Equal Protection Clause of the Fourteenth Amendment. In so doing, the Court effectively overturned the 2003 ruling in Grutter v. Bollinger, in which it said race could be considered as a factor in the admissions process because universities had a compelling interest in maintaining diverse campuses.

In his concurring opinion, Justice Clarence Thomas called the programs “rudderless, race-based preferences designed to ensure a particular racial mix in the entering classes.” Both policies “fly in the face of our colorblind Constitution and our nation’s equality ideal,” he added.

In a dissenting opinion, Justice Ketanji Brown Jackson, the Court’s first Black female justice, said: “With let-them-eat-cake obliviousness, today, the majority pulls the ripcord and announces ‘colorblindness for all’ by legal fiat. But deeming race irrelevant in law does not make it so in life.”

Continue Reading ID&E in the Workplace After the Supreme Court Guts Affirmative Action in Higher Education
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Splitting the baby on 50 years of precedent, the U.S. Supreme Court (SCOTUS) has clarified that employers must grant a religious accommodation request under Title VII of the Civil Rights Act of 1964 (Title VII) unless the accommodation would result in “substantial increased costs in relation to the conduct of [their] particular business.” On June 29, SCOTUS issued its unanimous decision in Groff v. DeJoy, upending decades of lower court precedent that authorized employers to reject religious accommodations which imposed “more than a de minimis cost” or expense on company operations.

Though the Groff decision clarifies the burden faced by employers when denying religious accommodation requests, there is good news for employers in the Groff case: SCOTUS expressly declined to adopt the more onerous undue hardship standard under the Americans with Disabilities Act (ADA), which requires employers to prove that an accommodation would pose a “significant difficulty or expense.” 

What’s this about?

Gerald Groff is an Evangelical Christian who, for religious reasons, believes that Sunday should be devoted to worship and rest. In 2012 he became a rural carrier associate with the United States Postal Service (USPS), a position that generally did not involve Sunday work. But when USPS started facilitating Sunday deliveries for Amazon, Groff and other mail carriers were required to work Sundays on a rotating basis. To avoid this, Groff transferred to a rural USPS station that did not make Sunday deliveries, but Sunday Amazon deliveries soon started there as well. Because Groff refused to work Sundays, USPS was forced to redistribute Groff’s Sunday deliveries to other staff. USPS also issued Groff “progressive discipline” for failing to work on Sundays, and Groff eventually resigned. Groff sued under Title VII, asserting that USPS could have accommodated his Sunday religious practice “without undue hardship on the conduct of [USPS’s] business.”

The United States District Court for the Eastern District of Pennsylvania granted summary judgment to USPS, and the Third Circuit affirmed based on SCOTUS’ decision in Trans World Airlines, Inc. v. Hardison, 432 U.S. 63 (1977).  The Third Circuit—like the majority of federal courts across the country—interpreted Hardison to mean that requiring an employer “to bear more than a de minimis cost” to provide a religious accommodation is an undue hardship. The Third Circuit held that USPS met the de minimis cost standard because exempting Groff from Sunday work “imposed on his coworkers, disrupted the workplace and workflow, and diminished employee morale.”

SCOTUS granted certiorari, and held that the correct reading of Hardison (based on its text) is that “undue hardship” is shown when a burden is substantial in the overall context of an employer’s business—not when an employer merely bears “more than a de minimis cost.” In other words, according to SCOTUS, courts and agencies have been reading Hardison incorrectly for years.

The clarified standard means a focus on the facts

What is the practical impact of this clarified “undue hardship” standard? As with most things, it depends on the specifics. SCOTUS said it understood Hardison to mean that “undue hardship” is shown when a burden is substantial in the overall context of an employer’s business, which is a fact-specific inquiry that comports both with the text of Hardison and the meaning of “undue hardship” in ordinary speech.

The Court did not provide examples, and declined to elaborate on the definition of “substantial increased costs.” Instead, SCOTUS chose to “leave the context-specific application” of its clarified standard to the lower courts. The Court said lower courts should resolve whether a hardship would be substantial in the context of an employer’s business in the “commonsense manner” that courts would use in applying any such test, taking into account all relevant factors of the case at hand—including the particular accommodations at issue and their practical impact in light of the nature, size and operating cost of an employer.

SCOTUS also provided clarification on several “recurring issues” in religious accommodation cases:

  • The Court emphasized that Title VII requires an assessment of a possible accommodation’s effect on “the conduct of the employer’s business,” and that impacts on coworkers are relevant only to the extent those impacts affect the conduct of the business. A hardship attributable to employee animosity to a particular religion, to religion in general, or to the very notion of accommodating religious practice cannot be considered “undue.”
  • The Court also stressed that Title VII requires an employer to reasonably accommodate an employee’s practice of religion, not just to assess the reasonableness of a particular accommodation. Faced with an accommodation request like Groff’s, an employer would need to consider other possible accommodations (such as voluntary shift swapping) instead of simply concluding that forcing other employees to work overtime would constitute an undue hardship.

Employer takeaways

  • Though SCOTUS found the lower courts’ reading of Hardison to mean “more than a de minimis cost” too lax (because, according to SCOTUS, it permits employers to deny almost any accommodation request), SCOTUS specifically declined to borrow the phrase “significant difficulty or expense” from the ADA or draw upon ADA case law as the new “undue hardship” standard, saying that doing so goes too far. Employers should not look to the ADA standard or case law for what the new “undue hardship” standard under Title VII means.
  • SCOTUS also declined to opine on whether the EEOC’s construction of Hardison has been correct. But the Court did state it had “no reservations” in saying that a “good deal” of the EEOC’s guidance in this area will likely be unaffected by the decision—noting that much of the EEOC’s guidance has focused on what should be accommodated. It appears that the EEOC’s guidance in this area can still be relied upon. That said, employers should keep an eye out for possible changes to EEOC guidance as a result of this ruling, and consult with counsel for help if uncertain about whether denying a specific religious accommodation request meets the new standard.
  • Employers should pay attention to SCOTUS’ clarification of “recurring issues.” Employers who receive religious accommodation requests should make sure the Groff standard is met (and any denial is not solely based on impact to coworkers). Employers also must consider if alternative accommodations that won’t cause an “undue hardship” are available before denying requests for a specific accommodation. One way to do this: encourage employees to propose alternative accommodations when submitting their requests for an accommodation, while making clear that the company is not obligated to accept any specific accommodation proposed by the employee.