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Special thanks to our guest contributors Matthew Gorman and Sandhya Sharma.

Our Global Immigration and Mobility attorneys discuss how travel restrictions are changing under the Biden Administration, and the practical impact of those changes on employers and employees. We present what was the law under the Trump Administration and what is the current legal framework.

Click here to the Mobility Minute on demand.

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Special thanks to guest contributors Alessandra Faso, John Foerster and Matthew Gorman.

In Brief

Now is the time to start preparing H-1B petitions for consideration in the 2021 H-1B lottery. As background, the demand for new H-1Bs always exceeds the limited supply. Since 2014, the quota has been filled within the first week and an H-1B lottery established. In recent years, more than 200,000 petitions were received for the 85,000 H-1B visas available.

Key takeaways

Here are a few key takeaways regarding proposed changes and the likely timing for USCIS’ H-1B Cap protocol:

  • The initial H-1B petition registration period will likely begin in early March, and will close later on in the month. We expect USCIS to issue more specific guidance in the coming weeks. For reference, last year’s registration was open from 1 March to 20 March.
  • Employers (or authorized representatives) must register using an online account. Information regarding how to register will be provided by USCIS on its website.
  • A separate registration request must be made for each individual for whom H-1B status is sought.
  • USCIS will send notices to all registrants with selected registrations who are eligible to file an H-1B Cap Petition. The petitioning employer will then have a 60-day window to submit the H-1B Petition.
  • A pending Trump-era regulation would change the “randomized” nature of the H-1B lottery and replace it with one that selects based on wage level. Under this model, higher “level” wages would receive priority over lower “level” wages. This rule is currently under review by the Biden Administration and it is not clear whether it will be invalidated or delayed.

Actions to take

While there is currently uncertainty regarding whether the new lottery selection criteria will be in effect for the upcoming H-1B Cap season, one thing is clear: all potential H-1B cap beneficiaries should be identified as early as possible to ensure participation in the electronic preregistration lottery. Now is the time to:

  • Identify the potential H-1B beneficiaries within your company.
  • Prepare job descriptions.
  • Organize wage and compensation information.
  • Collect academic documents and, where appropriate, secure translations and evaluations of education/experience.
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We recently published an update to our 50-state Shelter-In-Place / Reopening Tracker.

Please see HERE. This is updated weekly.

For your convenience, here is a summary of the major updates from around the country:

  • President Biden signed a proclamation on January 25, 2021, which restricts and suspends the entry into the United States of noncitizens of the United States who were physically present within the Schengen Area, the United Kingdom (excluding overseas territories outside of Europe), the Republic of Ireland, the Federative Republic of Brazil, and the Republic of South Africa during the 14-day period preceding their entry or attempted entry into the United States
  • The following jurisdictions extended their state-wide orders and/or the duration of the current phase of their reopening plans: Colorado, Connecticut, Georgia, Indiana, New Mexico, South Carolina, Virginia and Washington, D.C.
  • Oregon modified the guidance to its public health framework with respect to indoor activities, while Washington changed the evaluation criteria and timeframe for regions to progress to the next phase of the state’s reopening plan.
  • Nebraska moved to the next phase of its reopening plan, while in Michigan restaurants are now permitted to reopen for in-person dining subject to capacity restrictions, in Maryland bars and restaurants are no longer required to close at 10 p.m., and in Maine businesses are no longer required to close at 9 p.m.

For more information, please contact your Baker McKenzie attorney.

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This webinar recording takes a look back at 2020 and prepares employers for what’s on the horizon in 2021. Our presenters review COVID-19 and its continued impact on the workforce, diversity and inclusion considerations, what to expect under the Biden Administration, and a update on recent New York laws.

Please click here to view this informative recording.

This webinar was in partnership with the New York ACC.

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The DOL’s just-issued final rule on employee vs. independent contractor classifications under the FLSA seems likely to be reversed. On January 20, the White House issued a memorandum to the heads of all executive departments and agencies ordering them to halt all non-emergency rulemaking and regulatory activity issued under the previous administration pending review by the new administration.

Regulatory Freeze Chills the Trump DOL’s Independent Contractor Rules

The memorandum instructs the executive agencies, which include the U.S. Department of Labor, to immediately:

  • Halt the proposal or issuance of any rule until a department or agency head appointed or designated by President Biden reviews and approves the rule;
  • Withdraw any rules already sent to the Office of the Federal Register (OFR) for publication but which have not yet been published; and
  • Consider postponing by 60 days the effective date of any such rules already sent to OFR for publication (or otherwise issued) but which have not yet taken effect, “for the purpose of reviewing any questions of fact, law, and policy the rules may raise.”

Accordingly, the DOL’s final rules issued on January 7, including those regarding independent contractor classification, are effectively withdrawn.

The classification rules issued under the Trump DOL took a business-friendly approach. They focused on whether workers are economically dependent on another business–making them more likely to be an employee of that business, and entitled to the minimum wage and overtime under the Fair Labor Standards Act (FLSA)–or are economically independent, making them true independent contractors. (For more on the January 7 final rules, click here.) By adopting an “economic reality” test, the January 7 rules effectively simplified the classification test used  by the DOL to determine whether a worker is an independent contractor or an employee to two “core factors”—the nature and degree of control over the work and the worker’s opportunity for profit or loss based on initiative and/or investment. DOL’s January 7 final rule was widely viewed as including more workers in the independent contractor side of the equation.

A Federal ABC Test?

However, this reversal comes as no surprise given Biden’s stated priorities to protect workers in the gig economy. In his “Plan for Strengthening Worker Organizing, Collective Bargaining and Unions,” Biden promises to “work with Congress to establish a federal standard modeled on the ABC test for all labor, employment, and tax laws.” The ABC test (used in California and several other states, more here) is a more rigid test for determining worker status. Under the ABC test, a worker is presumed to be an employee unless a hiring entity can establish all three of the following conditions:

  1. That the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
  2. That the worker performs work that is outside the usual course of the hiring entity’s business; and
  3. That the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

It’s safe to say we will see more worker-protective interpretations of employee status during the Biden era (see more here). As such, we recommend working with counsel to perform a classification audit to review service provider agreements and ensure compliance.

 

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President Biden did not waste any time after taking office on January 20, 2021. Shortly after the Presidential Oath of Office was administered, Biden signed 17 executive actions, which either impact the workplace or provide insight into what may be forthcoming under the new administration for employers.

A Flurry of Executive Orders on Day One

Biden issued a memorandum to agencies to freeze all last-minute regulations put in motion by the prior administration as President Trump was leaving office. Notably, these regulatory “freeze memos” are not uncommon for incoming administrations to issue. This pause on the prior administration’s last-minute regulations will give the Biden administration the opportunity to evaluate the so-called “midnight regulations” and determine if they will become final, be amended, or rescinded altogether.

He also issued an Executive Order reinforcing that Title VII prohibits the federal government from discriminating on the basis of sexual orientation or gender identity. The Order references the recent Supreme Court case of Bostock v. Clayton County (blogged about here). Specifically, the Order states “[i]t is the policy of my Administration to prevent and combat discrimination on the basis of gender identity or sexual orientation, and to fully enforce Title VII and other laws that prohibit discrimination on the basis of gender identity or sexual orientation.” The Order notes that laws that prohibit sex discrimination (specifically referencing Title IX, the Fair Housing Act, and section 412 of the Immigration and Nationality Act) also prohibit discrimination on the basis of gender identity or sexual orientation.

Continue Reading Biden and the Workplace: Early Days, Major Changes

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In his first day in office, President Joe Biden signaled that his administration will take a different approach to D&I in the workplace than the previous administration. Corporate leaders should continue investing in D&I work, implementing policies that create equity and foster inclusion for underrepresented minorities, such as enforcing zero-tolerance rules for discrimination, harassment and retaliation. Biden’s diversity policies are more likely to align with corporate America’s recent push to respond to investor and worker demands for employment equity.

Controversial Diversity Training Order Revoked

In one of his first executive actions, Biden reversed a controversial executive order barring government contractors from certain types of racial sensitivity training in the workplace.

The September 2020 Executive Order Combating Race and Sex Stereotyping followed a White House memorandum criticizing federal agencies for having “divisive, un-American” training sessions on “critical race theory,” “white privilege,” and other teachings promoting the concept that any race or ethnicity is inherently racist. The White House memorandum instructed federal agencies to cease funding such training. The Executive Order then brought federal contractors into the fold, prohibiting them from using any workplace training during the performance of a government contract that inculcates in their employees certain “divisive concepts,” and requiring them to carry those imperatives down to their subcontractors and vendors. (For more detail on the order, click here.)

Many employers found the previous administration’s Order inherently confusing and difficult to follow, among others things, and will welcome the reversal. Biden’s action are in line with his administration’s diversity and inclusion priorities, many of which are outlined below.

“Whole-of-Government” Initiative to Advance Racial Equity

Biden’s revocation of the Combating Race and Sex Stereotyping Order was included in a wider executive order directing agencies to “[advance] racial equity” by identifying and fixing issues in their policies and programs that prevent all races from being given the same “consistent and systematic fair, just, and impartial treatment.” The January 20 Executive Order On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government includes the following measures:

  • Requires all federal agencies to review equity within their ranks and deliver an action plan within 200 days to address unequal barriers to opportunity found within agency policies and programs;
  • Ensures that the federal government interprets Title VII of the Civil Rights Act of 1964 as prohibiting workplace discrimination on the basis of sexual orientation and gender identity. This order will also direct agencies to take all lawful steps to make sure that federal anti-discrimination statutes that cover sex discrimination prohibit discrimination on the basis of sexual orientation and gender identity, protecting the rights of LGBTQ individuals.
  • Requires the Director of the Office of Management and Budget (OMB) , in partnership with the heads of agencies, to study new methods for assessing whether agency policies and actions advance equity.

What’s Next

Biden has a 26-page plan on how he will combat racial inequity during his administration, and an equally robust Agenda for Women. According to his Build Back Better Agenda, Biden promises to “promote diversity and accountability in leadership across key positions in all federal agencies.” Based on these plans and campaign commitments, here are some key areas where we expect change under the Biden administration:

  • A push for pay transparency and enhanced litigation efforts. We predict the return of pay data collection at the federal level as part of government efforts to close the gender and race pay gap. The new administration is most likely to quickly reintroduce the EEOC’s pay data reporting requirement and refocus on systemic pay discrimination litigation as neither require Congressional action. This makes conducting regular, privileged pay equity audits with counsel all the more essential.
  • Reintroduction of the Paycheck Fairness Act. Among Biden’s gender-equality priorities is support for the proposed Paycheck Fairness Act. The bill has been introduced in Congress ten times since 1997, most recently on Jan. 30, 2019. The Democrat-controlled House passed it but it did not come up for a vote in the Republican-controlled Senate. With the recent shift in power in Congress however, passage is more likely. Under the proposed legislation, only “a bona fide factor other than sex, such as education, training or experience” can justify a pay difference between men and women who perform substantially equal jobs and work at the same establishment. Pay adjustments based on subjective criteria, including managers’ subjective evaluations of job performance, could be challenged or provide a basis for class-action litigation.
  • Enhanced protection for pregnant and nursing mothers. Biden promises to follow the lead of more than two dozen states and support the Pregnant Workers Fairness Act, which would make it a requirement for employers with 15 or more employees to provide reasonable accommodations to workers based on pregnancy, childbirth or related medical conditions, unless such an accommodation places an undue hardship on the employer. It also requires companies to engage in an interactive process with employees seeking pregnancy accommodations and prohibits them from retaliating or otherwise interfering with a pregnant worker’s right to seek a reasonable accommodation.
  • Passage of paid leave legislation. COVID-19 highlights the importance of paid leave for workers. Federal coronavirus-related paid-leave benefits expired at the end of last year; Biden wants to reinstate and expand these benefits. (Read more here.)
  • Increased enforcement actions. Since Biden has been clear in his commitment to ensuring that the equal employment opportunity laws, including laws prohibiting discrimination in pay, are vigorously enforced, we are likely to see expanded funding to the three federal civil rights enforcement agencies, DOJ, EEOC and OFCCP to support hiring additional lawyers and litigation expenses.

For help with your Diversity & Inclusion initiatives and equal pay audits, please contact your Baker McKenzie employment lawyer.

 

 

 

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Companies are facing critical business challenges in regard to their most important asset – their people. While workforce transformation is not a new concept for global organizations, the pandemic has forced us to rapidly adapt our standard ways of working and how we engage with employees to ensure the long-term viability of the business. We have a new understanding of what’s possible – from remote working to flexible employment models – and an opportunity to shape organizations for the future. There has never been a more critical time to innovate and revolutionize working practices.

Join Baker McKenzie for a virtual conversation series where, together with leaders from some of the most innovative companies in the world, we analyze how global employers can embrace the large-scale trends changing the nature of work itself amid disruptive global events.

The series consists of the following sessions:

  • Building a New Workforce Reality A Keynote Conversation with Dr. Margaret Heffernan
  • Integrating Resilience into the Workforce Strategy
  • Workforce Wellbeing, Psychological Health and Pandemic Times
  • The Future is Diverse: Harnessing the Power of Inclusion
  • Reconceptualizing the Importance of Place
  • Leading the Digital Workforce A Conversation with Erica Dhawan

Click here to view the invitation.

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We recently published an update to our 50-state Shelter-In-Place / Reopening Tracker.

Please see HERE. This is updated weekly.

For your convenience, here is a summary of the major updates from around the country:

    • The following jurisdictions extended their state-wide orders and/or the duration of the current phase of their reopening plans:  Georgia, Louisiana, Oklahoma, Massachusetts, Mississippi, New Hampshire and Vermont.
    • Oregon announced updates to its county risk levels, which places a majority of the state’s counties at the extreme risk level.  On the other hand, North Dakota rescinded all capacity limitations and other restrictions imposed by the previous order on bars and restaurants, while certain regions of Illinois have been moved to lesser mitigations, which allows, among other things, casinos to re-open at reduced capacity.

For more information, please contact your Baker McKenzie attorney.

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With special thanks to Bradford Newman for this post. 

Ten U.S. senators sent a joint letter to Janet Dhillon, the chair of the Equal Employment Opportunity Commission, on Dec. 8, 2020, urging the EEOC to use its powers under Title VII of the Civil Rights Act of 1964 to “investigate and/or enforce against discrimination related to the use of” AI hiring technologies.

The senators’ letter demanded the EEOC answer the question of whether under Section 705(g)(5) of Title VII, the commission possesses the authority to conduct a technical study and investigation into “the development, design, use and impacts” of AI hiring technologies “absent an individual charge of discrimination,” and to explain “why or why not.”

The senators proactively posed three telling questions:

  1. Can the EEOC request access to “hiring assessment tools, algorithms, and applicant data from employers or hiring assessment vendors and conduct tests to determine whether the assessment tools may produce disparate impacts?”
  2. If the EEOC were to conduct such a study, could it publish its findings in a public report? and
  3. What additional authority and resources would the EEOC need to proactively study and investigate these AI hiring assessment technologies?

Sounding an Alarm

These questions, posed by 10 influential senators to a powerful federal agency, should set off a cacophony of alarm bells.

It is no accident that the letter frames the urgency of the questions posed in the context of businesses beginning to quickly reopen and rapidly hire according to Covid-19 guidelines.

The letter also presents the matter as one requiring deliberate and proactive work by the commission to combat systemic discrimination that job applicants “alone cannot effectively learn about and challenge.”

While the senators note “hiring technologies can sometimes reduce the role of the individual hiring managers’ biases,” they conclude by opining that “they can also reproduce and deepen systemic patterns of discrimination reflected in today’s workforce data.”

Citing a June 2, 2020, Bureau of Labor Statistics population survey and a July 2, 2020, Reuters article, the senators call out that “today, Black and Latino workers are experiencing significantly higher unemployment than their white counterparts and the unemployment gap between Black and white workers is the highest it’s been in five years.”

They posit that “effective oversight of hiring technologies requires proactively investigating and auditing their effects on protected classes” and “enforcing against discriminatory hiring assessment or processes.”

Noting that “far too little is known” about the “design, use, and effects of hiring technologies,” the senators assert it is “essential” that these hiring processes “advance equity in hiring, rather than erect artificial and discriminatory barriers to employment.”

A Clear Message to Investigate and Enforce

The regulatory handwriting on the proverbial wall is clear. These 10 senators want the EEOC to utilize its power and resources to launch investigations and enforcement actions against vendors who create hiring algorithms and companies that utilize them.

They encourage the EEOC to compel production not just of the proprietary algorithms, but the data sets used to train them, and the applicant data from individual employers reflecting the impact of the algorithmic output.

They believe vendors and companies should supply this information so the EEOC can “conduct tests” to determine whether the algorithms produce disparate impacts on the hiring of protected individuals. Finally, they suggest the EEOC publicly publish its findings.

Companies who create this machine-learning based hiring technology and the businesses that use them should prepare now for government inquiries and enforcement actions.

How to Prepare for What’s to Come

Here is what to understand and the steps to take.

First, while there are many proposals under consideration, actual legislation restricting the use of AI in hiring tools does not seem imminent.

Second, under the Biden administration, the EEOC will likely step up its enforcement efforts in the area of AI and machine-learning driven hiring tools.

Third, in response to requests from the EEOC to produce algorithms, training data sets and related information, there will be serious and legitimate trade secret and confidentiality considerations for the innovators who have invested substantial time and resources developing these products.

Innovators should assess their current trade secret protection measures and implement additional steps specifically designed to ensure all reasonable actions are employed to safeguard the valuable nature of competitively valuable information before any government inquiries are received.

Fourth, based on either the EEOC’s stated intent to publicly disclose investigations of this private-sector technology or its refusal to commit to maintaining its confidentiality, it is imperative that companies evaluate challenges to the agency’s process and obligations regarding safeguarding and disclosure of specific information.

Fifth, AI vendors should prepare for plaintiff class action lawsuits by continually testing their algorithms to ensure there is no implicit or unintended bias.

Finally, companies who purchase these AI hiring tools should ensure that at the time it negotiates the initial vendor contract, the vendor supplies clear representations as to the product’s fairness, and that indemnification provisions are negotiated with a future government investigation in mind.

The industry of AI hiring tools is growing exponentially based largely on the promise of efficiency and the more elusive hope that algorithms will lead to less, not more, bias by hiring manages. The senators’ letter serves as an important reminder that any disconnect between the promise and reality of these tools can lead to substantial liability.

When designing, purchasing, and utilizing these tools, innovators and business-side consumers are well-advised to view these products, the related sales and license agreements, and internal communications and studies regarding output accordingly. For the immediate future, the operating assumption must be that all internal and third-party audits, and related data and communications, will be scrutinized by the government and potentially by the public at large.

This article was originally published in Bloomberg Law.