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The EEOC just announced an updated filing deadline for US employers to submit their demographic data. The EEO-1 Component 1 data collection for 2022 begins October 31 and the deadline to file is December 5. The federal agency posted instructions and other information (here), and will post the data file specifications on September 13.

By way of reminder, all private employers that have at least 100 employees are required to file the EEO-1 form annually, detailing the racial, ethnic and gender composition of their workforce by specific job categories. Likewise, federal government contractors and first-tier subcontractors with 50 or more employees and at least $50,000 in contracts must file EEO-1 reports. The form does not currently include pay data, though some states (like California) have added that requirement.

For support with your filing obligations, please contact a member of our team.

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The National Labor Relations Board has continued its recent spate of employee-friendly decisions with a new one that will require employers to think through work rules, policies and handbook provisions to determine whether they could–hypothetically, from an employee’s perspective–restrict an employee’s Section 7 rights. 

On August 2, 2023, the National Labor Relations Board (“NLRB” or “the Board”) issued a 3-1 split decision in Stericycle, Inc., bringing back and modifying a prior standard for assessing whether an employer’s facially neutral work rules and policies unlawfully “chill” an employee’s Section 7 rights. Under the new standard, the NLRB will peer through the lens of a “reasonable employee” (more on that below) to determine whether an employer’s work rules and policies have a tendency to restrict Section 7 rights. For employers, this means a complete reassessment of their workplace rules and policies–and the handbooks that those rules and policies are housed in.

The new standard: reasonable tendency to “chill” Section 7 rights, from the employee’s perspective

The new standard (which is the Board’s prior Lutheran Heritage standard, brought back to life and modified) requires the NLRB General Counsel to prove that a challenged work rule has a reasonable tendency to “chill” employees from exercising their Section 7 rights. (Quick reminder: Section 8(a)(1) of the National Labor Relations Act (NLRA) makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the Act, including the right to form, join or assist labor unions, to bargain collectively and to engage in other concerted activities for the purpose of collective bargaining.)

How is this done? That’s the rub for employers.

As an initial matter, the Board will interpret the challenged work rule from the perspective of an employee who is (i) subject to the rule, (ii) economically dependent on the employer, and (iii) also contemplates engaging in a protected concerted activity.

In addition:

  • The employer’s intent in maintaining the rule in question is immaterial. (So even if the employer had no  intent to restrict an employee’s Section 7 rights when developing the work rule or policy–which we suspect will usually be the case–it isn’t material.)
  • The General Counsel will carry her burden if an employee (that same employee described above) could reasonably interpret the rule to have a coercive meaning–even if a contrary, non-coercive interpretation of the rule is also reasonable. All emphasis is ours here, to highlight that the General Counsel’s burden is extraordinarily low. If the General Counsel carries her burden, the challenged work rule is presumptively unlawful.
  • BUT, employers have a chance at rebutting the presumption. The presumption can be rebutted if the employer can prove that the rule advances a legitimate and substantial business interest and that the employer cannot advance that interest with a more narrowly tailored rule. If the employer proves this, the work rule will be found lawful.

What does this mean for employers?

The Stericycle standard has the potential to render a multitude of employment policies and workplace rules unlawful, and will be applied retroactively. Employers should review existing (or new) employee work rules, policies, and handbook provisions to ensure:

  • They are tailored as narrowly as possible to advance the employer’s interest, and to refrain from restricting an employee’s Section 7 rights
  • They explicitly state employees have the right to engage in concerted activities under Section 7
  • Where necessary, they provide an explanation of how the rule or policy does not preclude employees from exercising their Section 7 rights
  • Where possible, they include a list of specific rights the employer is not intending to restrict. Talk to us for recommended language.
Continue Reading Handbook Review Takes on a New Meaning: NLRB Adopts “Employee-Friendly” Standard for Evaluating Workplace Rules
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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.