On May 6, 2021, the Department of Labor (“DOL”) issued a final rule, effective immediately, withdrawing a pro-business independent contractor rule that would have made it easier for businesses to classify workers as independent contractors, rather than as employees who are entitled to minimum wage and overtime pay under the Fair Labor Standards Act.  Earlier this year, the DOL delayed the effective date of the “Independent Contractor status under the Fair Labor Standards Act” rule published by the DOL two weeks before President Trump left office.  Delaying the rule’s effective date allowed the Biden Administration to re-open the rulemaking process and pave the way for withdrawing the regulation, which would have reduced the long-standing, complex six-factor independent contractor test to just two factors – the nature and degree of the worker’s control over the work, and the worker’s opportunity for profit or loss.  The narrower test was favored by many companies that rely on independent contractors who perform on-demand services, including drivers, delivery services and child care, and are afforded the flexibility to work when, where and how they want.

According to Jessica Looman, the DOL’s principal deputy administrator for the Wage and Hour Division, “Misclassification of employees as independent contractors presents one of the most serious problems facing workers today.”  Labor Secretary Marty Walsh further explained that withdrawal of the rule will help “preserve essential worker rights and stop the erosion of worker protections that would have occurred had the rule gone into effect.”  The final rule issued this week did not include a new interpretation of when workers can function as independent contractors and when they must be classified as employees.  Instead, companies will continue to be judged under the existing multi-factor test known as the “economic reality” test that the DOL and the courts have used for decades, unless and until the DOL issues more stringent regulations.  President Biden campaigned on the promise of creating a federal standard for independent contractor classification, which he indicated would be consistent with the stringent multi-factor “ABC” test used in California for wage and hour and other claims and used in a majority of states for unemployment and workers’ compensation claims.  Ballard Spahr’s Labor and Employment Group is following the latest developments on worker classification rules and regulations, on which we will continue to report.

Recently, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) released its 30th annual “Death on the Job: The Toll of Neglect” report.  Every year, the report highlights the number of states and industries with the most workplace injuries.  Though this year’s report focused on data from 2019, not surprisingly, it highlighted the response to COVID-19 in the workplace.  Recognizing the partisan divide in responding to the pandemic, the report characterizes the Trump Administration as “totally failing to respond to the COVID-19 pandemic in workplaces” while hailing “[t]he recent election of President Biden [as bringing] promise and hope to a nation and world decimated by the COVID-19 pandemic….”  The patchwork of state laws and enforcement mechanisms, the union argues, has resulted in underreporting of COVID-related workplace cases, stating “there remains no comprehensive national surveillance system to collect case information by industry and occupation, and employer reporting of COVID-19 cases still is mandatory only in a few states with specific standards or orders.”

In May 2020, the AFL-CIO petitioned the U.S. Court of Appeals to require OSHA to issue emergency COVID-19 standards, but its efforts were denied.  Despite the failed attempt to utilize the court to force action from OSHA, the union is now hoping for a response from the Biden Administration.  As part of the flurry of Executive Orders signed in his first days in office, President Biden ordered OSHA to “consider whether any emergency temporary standards on COVID-19, including with respect to masks in the workplace, are necessary, and if such standards are determined to be necessary, issue them by March 15, 2021.”  Although the March 15th deadline has come and gone, according to media reports, OSHA’s temporary COVID-19 standard was submitted to the White House’s Office of Management and Budget on April 26, 2021 for review before its release.  As the vaccination rate increases and more states ease their restrictions, including mask mandates, a mandatory standard may lead to additional liability for employers that begin to reduce COVID-19 protections in the workplace.  Currently, OSHA’s enforcement is based on the general duty clause, which is less specific and may be easier for employers to contest.

On May 3, 2021, Governor Murphy announced that New Jersey, along with New York and Connecticut, would lift many COVID-19 pandemic restrictions affecting the region’s businesses, venues, and gatherings over the course of the next several weeks.  Governor Murphy cited the vaccination progress and the decline in the number of COVID-19 cases in the state as supporting factors for easing the restrictions, underscoring that the partnership with neighboring states and steps taken by New Jersey are the results of data-driven decision-making.  The information below is specific to New Jersey, with New York and Connecticut also easing restrictions on similar timelines.  Additionally, Pennsylvania will be relaxing its COVID-19-related safety measures for businesses and individuals in public places (other than mask wearing) on May 31, 2021, though cities and municipalities may continue more restrictive measures.

On May 7, 2021, the following easing of restrictions will take effect in New Jersey:

  • outdoor gathering limits will increase to 500 individuals;
  • indoor room capacities will increase to 50 percent up to 250 individuals for political gatherings, weddings, funerals, memorial services, and performances;
  • dance floors will be reopened at private catered events; and
  • capacities at large outdoor stadiums and venues with more than 1,000 seats will be increased to 50 percent of capacity; and
  • the prohibition on indoor bar-side seating will be lifted.

On May 19, 2021, the following additional restrictions will be eased:

  • general indoor gathering limit will increase to 50 people;
  • outdoor gathering limit will be removed and instead of a hard cap on attendance for outdoor events, Murphy said the state will require that all attendees at any outdoor event keep social distances of at least six feet and current mask requirements will remain in place;
  • indoor and outdoor businesses (such as bars and restaurants) and houses of worship will only be restricted by the space available for patrons to maintain 6 feet social distancing (i.e., a distance-based maximum capacity will be implemented rather than the current business capacities based on percentages of maximum site capacity);
  • capacity at large indoor venues, with a fixed seating capacity of 1,000 or more will increase to 30 percent; and
  • barring an increase in COVID-19 cases, commercial gatherings and gatherings organized and operated by an overseeing entity (e.g. conferences, expositions, meetings of fraternal organizations, job trainings, events hosted by senior centers) will be subject to the 250-person indoor gathering limit that applies to indoor catered events, as long as all attendees can remain six feet apart.

However, as set forth by the New Jersey COVID-19 Information Hub, certain precautions remain in place, which include working from home where feasible, and having clinically high-risk individuals who can stay at home continue to do so.  Finally, all residents and businesses are instructed to follow state and federal safeguarding guidelines which include: washing hands; wearing masks in public; respecting social distancing; minimizing gatherings; disinfecting workplaces and businesses; and avoiding mass gatherings.

On Tuesday, April 27, President Biden signed an executive order requiring federal contractors to pay their employees a minimum of $15 an hour starting on March 30, 2022. After that, the order will continue to index the minimum wage for federal contractors to an inflation measure.

This raise in the pay floor – which was previously increased by President Obama – represents a hike of about $4. This new minimum wage must be reflected in all new contract solicitations by January 2022, and built into actual contracts by March 2022. This will apply, not just to new or renewed federal contracts, but also to existing federal contracts when the parties exercise their option to extend such contracts, which often occurs annually.

The White House stated that this action “will improve the economic security of families and make progress toward reversing decades of income inequality,” and estimated the action would impact “hundreds of thousands,” of workers. However, many businesses oppose the measure, arguing that raising the minimum wage will only further hurt the U.S. economy as it continues to struggle to recover from the COVID-19 pandemic.

Employers should stay tuned, as this executive order may be an indication of what is to come. President Biden campaigned on the promise that he would use his executive authority to make changes in workplace and labor conditions where Congress has failed or refused to enact comprehensive changes to federal labor law. This executive order comes on the heels of an order establishing the Worker Organizing and Empowerment Task Force, which addresses the Administration’s perceived need to mobilize the federal government’s policies, programs, and practices to help empower workers to organize and collectively bargain with their employers. These orders may be the first of many.

On April 26, 2021, President Biden signed an executive order establishing the “White House Task Force on Worker Organizing and Empowerment” (the “Task Force”), which will be dedicated to mobilizing the federal government’s policies, programs, and practices to empower workers to organize and successfully bargain with their employers.

The Task Force will be chaired by Vice President Kamala Harris, and vice-chaired by Secretary of Labor Marty Walsh. In addition, the Task Force will include cabinet members and heads of various federal agencies. By including such a broad coalition of government officials as stakeholders, the Administration is taking a whole-of-government approach to empowering workers across the country.

The Executive Order is frank about its ultimate focus on boosting union organizing, citing the steady decline in union density and a “loss of worker power and voice in the workplaces and communities across the country,” all of which, the Order states have “had a host of negative consequences for American workers and the economy, including weakening and shrinking America’s middle class.”

Specifically, the Task Force is required to make a set of recommendations within 180 days addressing two key issues: First, how can existing policies, programs, and practices be used to promote worker organizing and collective bargaining in the private and public sectors? And, second, are statutory, regulatory or other changes needed to achieve the Administration’s pro-labor goals?

This newly announced Task Force is one of several steps the Biden Administration has taken to strengthen unions and empower workers. For example, in March the Administration endorsed the Protecting the Right to Organize (“PRO”) Act which, if passed by Congress, would dramatically enhance the power of workers to organize and collectively bargain with employers. Ballard Spahr’s Labor and Employment Group is following the latest White House developments and is prepared to advise employers on what changes may lie ahead.

In May of 2020, we reported that the EEOC announced that it would delay collection of 2019 EEO-1 Component 1 data from employers due to the COVID-19 pandemic. The EEOC announced today that collection of 2019 and 2020 EEO-1 data is now open and the data must be submitted by July 19, 2021. 

The filing period has been extended from 10 weeks to 12 weeks in consideration of the continued impact of the pandemic.  The EEOC’s press release, which can be found here, describes the procedures for submitting the required information.

EEO-1 Reports are required to be filed by (1) employers who are subject to Title VII of the Civil Rights Act of 1964 and have 100 or more employees (either individually or inclusive with corporate parents and affiliates) and (2) federal government prime or first-tier subcontractors who have 50 or more employees and contract for $50,000 or more. As part of the EEO-1 Component 1 report, covered employers must provide the race, ethnicity, and sex data of its employees by job category.

Employers with questions about eligibility for reporting or specific reporting requirements should reach out to counsel for assistance. Ballard Spahr’s Labor and Employment Group advises employers on compliance with EEO-1 reporting. The Group also routinely advises employers on all aspects of employee relations, including monitoring changes in the law and assisting clients in navigating and preparing for compliance with new regulations.

The United States Department of Labor (DOL) Wage and Hour Division just launched a new initiative called “Essential Workers, Essential Protections” that provides workers with information about the wage and hour laws that apply to them, including instructions on how to contact the DOL with questions or complaints.

In conjunction with this new initiative, the DOL released a set of FAQs regarding pay, hours worked, and job-protected leave during the pandemic. Specifically, the FAQs include questions and answers about the application of the Fair Labor Standards Act, including clarifying that time spent completing health screenings during the workday, or while teleworking, is compensable. The FAQs also address the Family Medical Leave Act (FMLA), and explain who is eligible for FMLA leave and the qualifying reasons for such leave, particularly in light of the COVID-19 pandemic. Additionally, the DOL updated its “Worker’s Rights” webpage, and published a new slate of webinars to educate essential workers on the laws that protect them.

“Essential Workers, Essential Protections” represents yet another initiative by the federal government to contend with the ongoing effects of the COVID-19 pandemic. Currently, a majority of the essential work in the US is performed by low wage workers who are largely immigrants, women and people of color. According to the DOL’s blog, this new initiative seeks to “ensur[e] that essential workers get paid every penny of the wages they have earned during the pandemic,” by increasing awareness of, and compliance with, federal labor laws.

With the announcement of this new initiative, employers should be prepared for increased scrutiny by the DOL, including audits and penalties for non-compliance.

On April 7, 2021, the Eleventh Circuit Court of Appeals ruled that Winn-Dixie Stores’ websites are not “public accommodations” and therefore are not subject to the accessibility requirements of Title III of the Americans with Disabilities Act (“ADA”).  The decision reversed a 2017 federal district court opinion – in what may be the only website accessibility case to ever go to trial – that required the grocery store chain to make its website accessible to individuals with visual disabilities.  The case now appears headed to the U.S. Supreme Court to resolve a long-standing circuit split.

Title III of the ADA prohibits discrimination against individuals with disabilities by private entities and requires that “places of public accommodation” provide individuals with disabilities with full and equal access to their goods, services, facilities, privileges and advantages.  The statute defines places of public accommodation to include certain brick-and-mortar businesses, including grocery stores.  Although Title III of the ADA does not reference websites, the U.S. Department of Justice (“DOJ”), which is responsible for administering the ADA, has interpreted Title III since 1996 to require websites to be made accessible to individuals with disabilities.  To date, however, the DOJ has not issued a uniform technical standard for accessibility, despite attempts to do so through two putative rulemakings during the period 2010-2016.

At the trial court level, the plaintiff, Juan Carlos Gil, alleged that the Winn-Dixie website was inaccessible to him and other blind individuals.  At the time he filed the complaint in 2016, the grocery store’s website did not sell goods.  Instead, it contained information and features such as digital coupons, a store locator tool, and the ability to refill existing pharmacy prescriptions online.  The plaintiff alleged that the inaccessibility of the website prevented him from accessing and enjoying these features.  Notably, for years he had used Winn-Dixie as his primary pharmacy by obtaining the assistance of store employees who could help locate what he needed.  Once he learned of the website, however, he wished to use it instead.  He alleged that, because the site was not compatible with screen-reader software he used to access the internet, he was unable to do so and, therefore, the resulting barrier to Winn-Dixie’s services violated the ADA.  Before the district court, he argued both that the website itself was an entity covered by Title III and, alternatively, that it had a direct nexus with the brick-and-mortar store sufficient to fall within the statute’s ambit.

The district court agreed.  It reasoned that Winn-Dixie’s sites were “heavily integrated” with its physical stores, and therefore covered by Title III of the ADA, despite the fact that the grocery chain did not sell its products online.  As a result, it held that the plaintiff was denied the full and equal enjoyment of Winn Dixie’s goods and services and ordered Winn-Dixie to remediate its website to comply with the voluntary, international Web Content Accessibility Guidelines 2.0 (known as the “WCAG 2.0”).  The decision opened the door to a flood of lawsuits against businesses alleging inaccessibility of their websites.

The Eleventh Circuit’s reversal of that decision has the potential to stem the tide.  According to the appeals court, analysis under Title III of the ADA is “straightforward,” owing to the clear and specific language of the statute and DOJ regulations.  Because websites are not among the twelve categories of entities listed in Title III, they cannot, on their own, be considered public accommodations.  The Eleventh Circuit also disagreed that inaccessible websites may be barriers to the services of associated entities listed in the statute.  In an earlier case, the court had reasoned that a contest conducted over the telephone, without any arrangement for those with auditory or mobile disabilities, violated the ADA.  Here, by contrast, Gil was not entirely prevented from accessing Winn-Dixie’s points of sale; in fact, he had accessed them for years without using the grocery chain’s website.

This caveat is an important point for the reach of the Eleventh Circuit’s decision and likely to be relevant to future cases.  Even if the Winn-Dixie website is not a place of public accommodation under Title III of the ADA, other intangible barriers, including web-based barriers, which prevent an individual with disabilities from enjoying goods and services provided by a store or another place of accommodation may still violate the ADA.  Thus, the court emphasized the “limited functionality” of the site, which did not prevent full and equal access to “the goods, services, facilities, privileges, advantages, or accommodations of” a Winn-Dixie store.

Although it only applies to cases arising in Alabama, Florida, and Georgia, the Eleventh Circuit’s reversal of the Winn-Dixie case furthers a split among the federal courts of appeal.  While it is consistent with website accessibility cases decided by the Third, Sixth, and Ninth Circuits, the First and Seventh Circuits, by contrast, have found that Title III of the ADA is not limited to physical locations.

Plaintiff Gil’s attorneys have publicly vowed to fight on and have already requested a rehearing en banc.  Should that route prove unsuccessful, Gil’s attorneys are expected to file a petition for certiorari with the U.S. Supreme Court.

Unless and until the U.S. Supreme Court resolves the circuit split, plaintiffs’ attorneys will continue to file these types of lawsuits against businesses.  In addition, we expect to see renewed interest from the DOJ in enforcing Title III of the ADA under the Biden administration, so regulatory risk will likely increase over the next four years.  Therefore, businesses that wish to mitigate both litigation and regulatory risk should make their websites and mobile applications fully accessible to individuals with disabilities.

Website and mobile application accessibility is likely to remain a highly evolving area of the law.  As we previously reported, federal legislative efforts to provide clarity in this area of the law and a potential safe harbor from liability for businesses continue, including the recent reintroduction of the Online Accessibility Act (H.R. 1100).

On April 21, 2021, the National Labor Relations Board (“Board” or “NLRB”) voted to keep in place its long standing rule limiting when workers can try to remove an existing union from the workplace or bring in another – the so-called “contract bar” doctrine.

In June of last year, the Board invited public comment on the contract bar issue and received briefs from unions, employer advocates, lawmakers, and others on the subject.  This week, in a divided ruling, the NLRB concluded that “a sufficiently compelling case has not been made for any particular proposed modification.”

As it continues to stand, the contract bar prohibits the processing of petitions seeking union elections while a collective bargaining agreement is in effect, for up to a maximum of three years. The rule does allow for a window during the 30- to 60-day period prior to contract expiration for the filing of a representation or decertification petition.

The signal that the Board was considering a change to the rule came during the Trump Administration, under then-NLRB Chairman John Ring, with the request for comment.  Since then, President Biden fired NLRB General Counsel Peter Robb and installed Peter Sung Ohr as Acting General Counsel.  AGC Ohr withdrew a brief filed by former GC Robb advocating for a substantial narrowing of the contract bar doctrine.

The case arose from a dispute between a United Food and Commercial Workers Union affiliate and a worker at a Delaware poultry processing plant who sought to decertify the approximately 800-member union at the plant.  The worker is represented by the National Right to Work Foundation, which called the decision “appalling.”

Current NLRB Chairman Lauren McFerran tweeted that the Board’s decision was “essential to serve the [National Labor Relations Act’s] goal of promoting stability in labor relations.”  Board member Ring dissented.

The latest episode of Ballard Spahr’s Business Better Podcast features a discussion of the new whistleblower provisions in the Anti-Money Laundering Act of 2020. We’ll discuss the types of businesses covered, who can be a whistleblower under the Act, the increased incentives now provided, new protections against retaliation, the impact of a whistleblower being involved in the conduct, and practical advice for affected institutions. Leading the discussion is Peter Hardy, co-practice leader of the firm’s Anti-Money Laundering Team. Peter is joined by Ballard Spahr attorneys Meredith Dante and Diana Joskowicz.

The Anti-Money Laundering Team discusses the podcast in greater detail on their blog Money Laundering Watch, you can read their post here