Part two of our “Back to School” webinar series will take a look at looming issues for employers as they face an uncertain economic forecast while still dealing with novel challenges created by the COVID-19 pandemic. Despite unemployment rates remaining steady, a changing economy has many employers anticipating the need to reduce their workforce and re-thinking workforce management. This discussion will focus on key considerations for employers when planning a reduction in workforce, including:

  • The process of selection
  • Designing severance packages
  • Litigation risks
  • Reducing the workforce through attrition and related potential issues
  • WARN compliance
  • Union factors

Wednesday, December 14, 2022 | 12:00 – 1:00 PM ET

Register Here

Please join us for an in-depth half day program focused on core issues and developments in labor and employment law and health and welfare with the greatest impact on Utah employers. Topics and panelists to be announced.

For those who can join us in person, a continental breakfast and lunch will be provided, with opportunities to network and share experiences with your colleagues. If you cannot join us in person, we invite you to join us virtually.

Wednesday, November 16, 2022 | 8:00 AM – 2:00 PM MT
Grand America Hotel
555 S Main Street 
Salt Lake City, UT 84111

Register Here

Who Should Attend?
This program will be of interest to in-house counsel, compliance, finance, and human resources.

There is a $35 registration fee to attend. In an effort to go green, conference materials will be distributed electronically.

4.5 CLE credits in CA, NJ, NY, & PA; and 4.5 SHRM credits are pending. CLE credit is pending in the following states: CO, MN, NV, & UT. 4.5 HRCI credits are also pending approval. Uniform Certificates of Attendance will also be provided for the purpose of seeking credit in other jurisdictions.

For more information contact Nikki Benner at bennern@ballardspahr.com.

As COVID lingers and the economy remains uncertain, employers face a host of issues. Recently, a group of Ballard Spahr attorneys hosted part one of a two part webinar series to revisit the basics, as well as novel issues, related to aligning your workforce to your business needs. Many businesses do not have enough workers and are focused on attracting and retaining necessary talent, while others, due to rising costs and stubborn supply chain problems, must consider layoffs and reductions in force.

The conversation covered employment and labor concerns including:

  • Hiring (and sign on & retention bonuses);
  • Work from home expectations;
  • ADA accommodations for those who cannot return to the office;
  • Out of state/remote employees;
  • Layoffs;
  • States’ efforts to increase the minimum wage; and
  • Renewed and re-invigorated union organizing efforts across many industries hardest hit by COVID (such as food service, retail, and warehousing).

Below you’ll find a link to a recording of the webinar and presentation slides. To view the webinar enter in your information, click Yes I will attend, and Register. Information for part two of this series will be available soon.

Click here to view the webinar recording
Click here to open the presentation slides

The National Labor Relations Board (“NLRB”)  has issued a Notice of Proposed Rulemaking (“NPRM”) inviting public comment on a proposed rule that would rescind and replace an April 2020 rule which currently governs: 1) the filing and processing of petitions for a Board-conducted representation election while unfair labor practice charges are pending; and 2) the filing and processing of petitions following an employer’s voluntary recognition of a union as the majority-supported collective bargaining representative. The Board also proposes to rescind a rule governing the filing and processing of petitions for a Board-conducted representation election in the construction industry.

The effect of the proposed rule would be to return the law in the areas above to that which existed prior to the adoption of the April, 2020 rule. This specifically means the following:

  1. Return to the Board’s long-established “blocking charge” policy. Under the policy, Regional Directors may delay the processing of petitions for elections to decertify incumbent unions once they file unfair labor practice charges involving alleged interference with employee free choice in an election.
  2. Eliminate the required notice-and-election procedure triggered by an employer’s voluntary recognition of a union based on a showing of majority support among employees.
  3. Restore Staunton Fuel & Material, 335 NLRB 717 (2001), and a six-month limitations period for election petitions challenging a construction employer’s voluntary recognition of a union under Section 9(a) of the Act.

Ballard Spahr’s Labor and Employment Group regularly advises clients on navigating the shifting landscape of NLRB regulations. We also are available to assist employers in preparing comments on the rule.

The U.S. Equal Employment Opportunity Commission (EEOC) has published a new “Know Your Rights” workplace poster, which replaces the “EEO is the Law” poster and informs employees of their rights to be free from unlawful workplace harassment and discrimination under federal law.

Like the old poster, the new poster summarizes federal law prohibiting job discrimination based on based on race, color, sex (including pregnancy and related conditions, sexual orientation, or gender identity), national origin, religion, age (40 and older), equal pay, disability or genetic information (including family medical history or genetic tests or services), and retaliation for filing a charge, reasonably opposing discrimination, or participating in a discrimination lawsuit, investigation, or proceeding. The new poster also explains how employees and job applicants can file a complaint if they believe they have experienced prohibited discrimination or retaliation.

Compared to the old poster, the new “Know Your Rights” poster includes the following changes:

  • Uses straightforward language and formatting; 
  • Notes that harassment is a prohibited form of discrimination;
  • Clarifies that sex discrimination includes discrimination based on pregnancy and related conditions, sexual orientation, or gender identity;
  • Adds a QR code for fast digital access to the how to file a charge webpage; and
  • Provides information about equal pay discrimination for federal contractors.

Covered employers required to display the poster are those with 15 or more employees for at least 20 calendar weeks in this year or last. Employers can download and print it from the EEOC’s website and must place it in a conspicuous location in the workplace where posters/notices to applicants and employees are customarily posted. In addition to physically posting, the EEOC encourages covered employers to publish the poster on their websites in a conspicuous location. The EEOC also asserts that, for covered employers with no physical location or for employees who work remotely and do not visit their employer’s physical workplace on a regular basis, posting the “Know Your Rights” poster digitally online “may be the only posting.” The new poster should also be made available in an accessible format, as needed, to persons with disabilities that limit the ability to see or read. Failure to post the “Know Your Rights” poster may result in a fine of $569 per offense.

Ballard Spahr’s Labor and Employment Group regularly advises clients on employment-related workplace postings, both mandatory and recommended, including where these postings should be placed, and are available to assist employers in complying with federal and state law posting requirements.

On October 27, 2022, VDA OC, LLC, (VDA) a Nevada health care staffing company, pleaded guilty to participating in a conspiracy to suppress and eliminate competition for the services of school nurses.  According to the plea, VDA and an unnamed competitor agreed not to recruit or hire each other’s nurses and to refrain from raising wages of the nurses. The United States District Court for the District of Nevada sentenced VDA to pay $134,000, consisting of a $62,000 criminal fine and $72,000 in restitution to nurses impacted by the agreement.  The criminal fine represents a percentage of VDA’s volume of commerce during the approximately 9 months the agreement was in place.  Federal sentencing guidelines provide for a base fine of 20 percent of affected commerce that can be adjusted based on a number of sentencing factors and can be substantial.

This is the DOJ’s first successful criminal prosecution in a labor-focused antitrust case. In 2016, in a joint statement with the Federal Trade Commission, the DOJ announced its intent to criminally prosecute agreements between employers not to poach each other’s employees (no-poach agreements) or fix wages as per se violations of the Sherman Antitrust Act. Prior to that announcement, such agreements were the subject of civil enforcement actions, if at all, which carry no risk of prison time for individuals. As we previously reported here, the DOJ’s first two criminal no-poach trials ended in acquittals of any antitrust crimes for the indicted companies and individuals.

Despite those acquittals, the DOJ has appeared undeterred in investigating no-poach and wage fixing agreements, and the result in this case may well further embolden its criminal enforcement in the labor space. Ballard Spahr’s Antitrust and Labor and Employment Groups are prepared to answer questions regarding antitrust issues in the context of the labor market. Please contact us if we can assist you in understanding your company’s legal requirements and the measures your business should take to remain in compliance with applicable law.

Recently, Ballard Spahr attorneys spoke about the overturning of Roe v. Wade and the impact on employee benefit plans and other issues important to employers. The webinar addressed measures that employers can consider and implement in response to these developments and the legal and practical issues they present.

Below you’ll find a link to a recording of the webinar and presentation slides. To view the webinar enter in your information, click Yes I will attend, and Register.

Click here to view the webinar recording
Click here to open the presentation slides

Earlier this week, New Jersey state senators tabled the vote on Bill S511, landmark legislation dubbed the NJ temporary worker “Bill of Rights.” Governor Phil Murphy conditionally vetoed the proposed legislation last month, and advocates expected the bill to pass following the state Assembly’s approval of Gov. Murphy’s revisions. But ultimately, state senators pulled the bill due to insufficient support to pass the revised version, leaving employers with the current state of flexibility to work with temporary agencies to fill gaps in their workforce.

This surprising turn of events has caused advocates of the legislation significant concern. Labor activists had lauded the proposed legislation as a solution to what they perceive as discriminatory practices impacting temporary workers, and to promote pay equity in the workplace. Employer and temporary agency representatives criticized the bill and argued it would create an administrative nightmare and an undue burden on businesses by requiring that temporary employees receive the same compensation and benefits as other employees, including benefits such as health, disability and life insurance coverage, and 401(k) matches.

Other bill provisions included a bar to certain fees charged to temporary workers, and wage floor protections. A practical application of these restrictions would eliminate transportation fees charged by temporary agencies, and require employers to guarantee temporary workers at least minimum wage after any permissible fee deductions – i.e., meals and equipment – by temporary agencies. Bill S511 would also allow temporary workers to sue both the temporary agency and its employer client for violations of the statute, including new anti-retaliation rights, which could protect workers who speak out regarding underpayment or mistreatment. Staffing industry spokespersons warned that the legislation could drive staffing agencies out of business in NJ and create a shortage of temporary workers.

While state senators have tabled the bill for now, Senate President Nicholas Scutari told reporters he believes the bill will come back. The Senate will hold its next voting session on November 21, 2022. Because there is no deadline to concur with Gov. Murphy’s conditional veto, employers and temporary agencies should pay close attention to any action on Bill S511 and prepare to adhere to the bill’s provisions should it be signed into law. Ballard Spahr’s Labor and Employment Group regularly advises clients on working and having legally compliant contracts with staffing agencies and on employing temporary workers in NJ and other states.

On October 11, 2022, the Department of Homeland Security (DHS), U.S. Immigration and Customs Enforcement (ICE), citing continued safety precautions related to COVID-19, extended through July 2023 the flexibility rule for the Form I-9 Employment Eligibility Verification, which has been in place since March 2020.

Employers are required to inspect employees I-9 identify and corresponding eligibility documentation in-person for those employees who “who physically report to work at a company location on any regular, consistent, or predictable basis.”  Those employers are required to examine physically the identification documents of each employee when completing Section 2 of the Form I-9.

But, if an employee is working exclusively in a remote setting due to COVID-19 precautions, then that employee’s documents  are temporarily exempt from the traditional physical inspection requirements, “until they undertake non-remote employment on a regular, consistent, or predictable basis, or the extension of the flexibilities related to such requirements is terminated, whichever is earlier.”

Read more about the remote Form I-9 Verification process here.

Employers should ensure that human resource personnel are trained in Form I-9 compliance and continue to monitor additional DHS Form I-9 guidance. The DHS notice of extension and the prior guidance from DHS are available at the ICE website.  Ballard Spahr regularly advises our clients on compliance with I-9, e-verify and other employment eligibility requirements.

On October, 11, 2022, the U.S. Department of Labor (DOL) released a proposed rule to update the test for determining whether a worker is an employee under the Fair Labor Standards Act (FLSA) or an independent contractor.  The proposal would significantly broaden the classification of workers as employees under the FLSA. 

Traditionally, to determine whether a worker is an employee or contractor, the DOL and courts have analyzed whether the worker is economically dependent on the employer for work or is in business for themselves.  Under this so-called “economic realities” test, the DOL analyzes the totality of the circumstances under several factors including: (1) the opportunity for profit or loss, (2) investment by the worker (3) permanency of the relationship, (4) the degree of control by the employer over the worker, (5) whether the work is an integral part of the employer’s business, and (6) skill and initiative.  This test has been developed through informal guidance and court decisions, but was not codified in regulations issued by the DOL.

2021 Rule.  In January 2021, the DOL issued a rule titled “Independent Contractor Status Under the Fair Labor Standards Act” (2021 IC Rule), which designated two factors – the nature and degree of control over the work and the worker’s opportunity for profit or loss – as “core factors” that carry greater weight in the analysis and was aimed at narrowing the scope of who would be considered an employee. 

Proposed Rule.  Shortly after President Biden was inaugurated, the DOL stayed implementation of the 2021 IC Rule and rescinded it in Spring 2021, leaving the DOL’s prior economic realities test in effect.  A coalition of business groups challenged that fact, leading to a federal court in Texas finding the May 2021 rescission improper.

The newly-proposed rule would rescind the 2021 rule once again and analyze the totality of the circumstances under the following factors, which would now be codified through formal rulemaking, rather than being subject to the vagaries of differing guidance issued by the DOL based on the views of different administrators.

Opportunity for Profit or Loss Depending on Managerial Skill

The DOL’s proposed rule focuses the opportunity for profit or loss factor on whether the worker exercises managerial skill that affects the worker’s economic success or failure.  

The proposed rule offers a list of factors relevant to assessing the degree to which the worker’s managerial skill affects the worker’s economic success or failure in performing the work.  These include: whether the worker determines, or at least negotiates, their compensation for the work; whether the worker accepts or declines jobs or can meaningfully negotiate the schedule in which the jobs are performed; whether the worker engages in marketing, advertising, or other efforts to secure more work; and whether the worker makes decisions to hire others, purchase materials and equipment, or rent space. 

The proposed rule also directs consideration of whether the worker actually has an opportunity for loss, and states that a worker having no opportunity for loss indicates employee status. 

Investments by the Worker and the Employer

In contrast to the 2021 Rule, the proposed rule would treat investment as a standalone factor in the economic reality analysis, instead of considering investment within the profit or loss factor.  To indicate independent contractor status, a worker’s investment must be “entrepreneurial in nature.”  This means that the investments support an independent business and serve a business-like function, such as capital investments in expensive equipment, marketing, and office space.  Notably, under the proposed rule, costs borne by the worker simply to perform their job, like basic tools, are not evidence of capital or entrepreneurial investment. 

Degree of Permanence of the Work Relationship

This factor analyzes whether a work relationship is indefinite in duration or continuous.  A fixed term of employment is common for independent contractors, whereas employees usually only work for one employer, and such relationship is continuous and of indefinite duration. 

Nature and Degree of Control

This factor considers the employer’s control over the performance of the work and the economic aspects of the working relationship.  In contrast to the 2021 Rule, the proposed rule would not make this a “core” factor in the test.  The DOL reasoned that issues related to scheduling, supervision, and a worker’s ability to work for others are relevant considerations, but that the factor itself should not be weighted more heavily than any other factor. 

Extent to Which the Work Performed is an Integral Part of the Employer’s Business

 Unlike the 2021 Rule, the proposed rule would return to framing this factor as whether the worker’s work is an “integral part” of the employer’s business.  This factor asks whether the work is “critical, necessary, or central to the employer’s business,” as compared to being merely peripheral.  The DOL offers the example of a tomato growing business where tomato pickers are deemed integral, while an accountant providing non-payroll accounting support is merely peripheral.

Skill and Initiative

This factor considers the amount of skill required for the work.  If the work at issue requires specialized training or skill that the employer does not provide, then the employee is more likely to be an independent contractor.  If the work requires no specialized training or the worker is dependent upon the employer for training, then the worker is more likely to be an employee. 

Finally, the proposed rule provides that the DOL may consider additional factors if they are relevant to whether workers are economically dependent on the employer for work or in business for themselves.  

Next Steps for Employers.  The proposed rule was published in the Federal Register on October 13, 2022. Initially, the DOL provided the public with 45 days to comment; however, in a notice published in the Federal Register on October 26, 2022, the DOL extended the comment period by an additional 15 days, or until December 13, 2022.  It is likely that a legal challenge to the rule will ensue based on what has happened in the past when the DOL has tried to expand its view of who should be so considered an employee.

Ballard Spahr’s Labor and Employment Group regularly advises clients on navigating the FLSA and worker classification issues, including overtime exemption classifications and independent contractor classifications.  The Labor & Employment Group also assists employers by conducting classification audits. We also are available to assist employers in preparing comments on the rule.