On June 21, 2021, the U.S. Department of Labor (DOL) announced that it will propose new regulations limiting the amount of time that tipped employees, like food servers or bartenders, can perform on non-tipped work before they would be owed a full minimum wage from their employer.  The public will have until August 23, 2021 to comment on the DOL’s proposed regulations.  Under the Fair Labor Standards Act (FLSA), employees engaged in work for which they are regularly and customarily tipped may be paid $2.13 per hour in direct wages, provided they make at least enough in tips to cover the balance of the federal minimum wage of $7.25.  This is commonly referred to as the “tip credit.”  The DOL is now proposing a much stricter standard that could impose onerous and costly obligations on employers whose tipped employees also perform non-tipped sidework.

Under the proposed regulations, if tipped employees spend either more than 20 percent of their workweek or more than 30 uninterrupted minutes, at any time, on non-tipped work, like washing dishes, the employer must pay the entirety of the federal minimum wage for that time.  For purposes of the rules, tipped work would be considered work that produces tips – like waiting tables for a waiter or waitress – as well as work that “directly supports” tip-producing work – like cleaning a table to prepare for customers.  Work that does not directly support tip-earning, such as cleaning bathrooms and food preparation, would be considered non-tipped sidework for which the employer must pay at least the minimum wage directly.

For employers that currently make use of the tip credit and have employees engaged in both tip-producing and non-tip producing work, these regulations have the potential to create new administrative time-tracking requirements and higher labor costs.  These employers should monitor the DOL’s proposed regulations and consider submitting a comment to the Department about how the regulations may impact them.  The DOL included instructions for submitting comments with its announcement of its proposal.

June is Pride Month and the Equal Employment Opportunity Commission has issued timely guidance on the protections extended to LGBTQIA+ workers under Title VII.

In June 2020, the Supreme Court determined that Title VII’s prohibition against discrimination based on sex extended to sexual orientation and gender identity.  Bostock v. Clayton County was a landmark case with immediate import, as fewer than half of the states had laws protecting LGBTQIA+ workers from employment discrimination.

On June 15, 2021, the EEOC issued guidance clarifying the impact of Bostock.

Title VII (and by extension, Bostock) applies to employers with at least fifteen employees, including state and local governments.  It also applies to the federal government, unions, and employment agencies.  Title VII prohibits discrimination throughout an employment– from hiring to termination, promotions to work assignments, and “other terms, conditions and privileges of employment.”

Employers cannot discriminate against anyone – including straight and cisgender employees – on account of their sex.  Employers cannot discriminate based on perceived customer preference, or require employees to dress counter to their gender identity.  Employers may, however, maintain separate bathrooms and locker rooms, so long as they allow employees to use the facility that corresponds with their gender identity.

Employers should take this opportunity to review their handbooks and relevant policies to ensure compliance with Title VII’s expanded protection against sexual orientation and gender identity discrimination.

OSHA’s COVID-19 Emergency Temporary Standard (ETS) has been published in the Federal Register, and becomes effective today. As we reported in detail here, most provisions of the ETS must be met within 14 days of the date of publication (i.e., July 6, 2021), but employers will have until July 21, 2021 (30 days total) to comply with certain provisions that require installation of physical barriers, maintenance of ventilation systems, and training.  Employers in covered healthcare facilities need to be aware of this tight deadline and implement necessary steps to comply with this standard hot off the press.

The Colorado Supreme Court issued its long-awaited decision in Nieto v. Clark’s Market, Inc., ruling that employers must pay employees for any earned but unused vacation upon termination of employment. This decision means that Colorado employers must pay employees for earned but unused vacation pay at the end of their employment.  Employers with Colorado employees must also update their policies that purport to  forfeit an employee’s earned vacation pay for any reason.

The court noted employers are not required to offer paid vacation time to their employees. However, once employees earn vacation (or “PTO”) it becomes “wages” under Colorado law, and  employers are obligated to pay departing employees for the vacation that they earned.  The court reasoned that employers should not be allowed to manipulate contractual language to avoid paying rightful wages to employees, as that contravenes the public policy underlying the Colorado Wage Claim Act.

Critically, this decision does not prohibit employers from limiting their payout liability upon termination of employment by setting caps on how much vacation time an employee can earn or accrue. Under prior decisions, Colorado employers may have written policies that cap employees at one year’s worth of vacation time and provide that employees cannot accrue any additional time above the cap.

In light of this decision, Colorado employers, including employers based in other states who have Colorado employees to whom this decision will apply, should review their employee handbooks and individual employment agreements and remove “use-it-or-lose-it” language. Additionally, Colorado employers should train their human resources personnel on this development, and ensure that all employee departures going forward will be in compliance. Employers who wish to limit their liability should look at their vacation accrual policies, including implementing caps on the amount of time that employees can accrue.

The latest episode of Business Better features a discussion about earned wage access programs. We’ll discuss why the push for on-demand payroll technology has picked-up during the COVID-19 pandemic and outline issues from an employer’s viewpoint as it relates to state wage & hour laws, liabilities, and potential lawsuits.

The discussion features Meredith Dante, a partner who regularly advises clients in a broad variety of employment law matters including whistleblower complaints and retaliation and James Kim, a partner in the firm’s Consumer Financial Practices Group and co-leader of the firm’s Fintech and Payments Team, who advises clients on earned wages access programs. Joining Meredith and James is Anu Thomas, an associate that focuses on counseling employers on labor and employment issues.

Fulfilling a promise made early in the Biden Administration, on June 10, 2021, the Occupational Health and Safety Administration (OSHA) issued an Emergency Temporary Standard (ETS) related to COVID-19.  However, the ETS applies only to healthcare and healthcare support service workers in settings where people with COVID-19 are reasonably expected to be present.  Although this ETS applies only to specific healthcare settings, OSHA also has released an updated version of its COVID-19 guidance to employers, which is applicable to other covered workplaces.

The ETS now provides regulatory requirements that covered health care employers must meet, and OSHA no longer has to rely on existing safety standards or informal guidance to find COVID-19-related health and safety violations by such employers.  The general industry guidance, on the other hand, is not mandatory; it is advisory only.

For more detailed information on employer obligations under the ETS, and OSHA’s updated guidance, see our full Legal Alert.

On June 9, 2021, in Professional Transportation Inc., the National Labor Relations Board held that a party’s offer to collect an employee’s mail ballot constitutes misconduct that may serve as the basis to set aside the election. 370 NLRB No. 132.

The Board has previously held that a party engages in objectionable conduct when it handles or collects a mail-in ballot. See Fessler & Bowman, Inc., 341 NLRB 932, 933 (2004).  The NLRB’s recent decision in Professional Transportation, Inc. expands that holding to apply to the act of offering to collect ballots, because it impugns the integrity of the election.  The Board found such offers of assistance incompatible with its mail-ballot instructions, which tell voters not to permit any party to handle, collect, or mail their ballots.  The Board also concluded that the solicitation of employees’ mail ballots casts doubt on the secrecy of those ballots and creates the improper impression that the soliciting party is officially involved in running the election.

However, the Board also concluded that this type of objectionable conduct will only serve as the basis for setting aside the election results if the evidence shows that the conduct affected a determinative number of voters.  Because the Board found that two voters, at most, were affected by the union’s phone calls to employees offering to collect and mail their ballots, and the union had won the election by at least ten votes, the union’s misconduct did not meet the threshold for setting aside the election results.

The decision in Professional Transportation, Inc. serves as a cautionary tale during a time in which representation elections continue to employ mail ballots due to the pandemic.  Simply put, offering to help employees to return their ballots in any manner may land a party in hot water.

In April 2020, an executive assistant at a Staten Island health care provider was allegedly terminated for raising COVID-19 related safety concerns about an in-person meeting.  In what may be a sign of litigation to come, the Department of Labor has filed suit against the employee’s former employer alleging violation of the whistleblower provisions of the Occupational Safety and Health Act.  This appears to be the first such case filed by DOL related to COVID-19 safety complaints.

The complaint in Walsh v. Community Health Center of Richmond, Inc. and Henry Thompson alleges that Qiana Nuñez, the executive assistant to the company’s Chief Executive Officer, sought to convert a March 17 in-person executive committee meeting to a teleconference.  Shortly thereafter, the CEO directed her to keep the meeting in-person, which she did.  However, because of concerns over COVID-19 transmission in a crowded conference room, Nuñez stayed at her desk and performed other work.

After Nuñez was terminated, she filed a complaint with the Occupational Safety and Health Administration (“OSHA”).  OSHA investigated the complaint and determined that the discipline imposed on Nuñez violated 29 U.S.C. § 660(c)(1), which prohibits discrimination against or termination of an employee who makes a protected health and safety complaint.

This case serves as a reminder to employers to take employee safety complaints seriously, and act with care when imposing discipline or other adverse actions against employees who have raised safety concerns.  When disciplinary action is imposed, employers should preserve all documentation concerning the decision making process, as the increase in retaliation claims under OSHA and other laws is likely to continue for some time.

With California set to lift nearly all masking and social distancing requirements on June 15, the California Occupational Safety and Health Standards Board (“Cal/OSHA”) has placed the burden on employers with unvaccinated workers to continue to have them masked.  On Thursday June 3, Cal/OSHA approved a rule (effective June 15th) that allows workers to go maskless only if everyone in the room is fully vaccinated. Cal/OSHA approved this rule as an interim measure while a subcommittee considers further easing of pandemic restrictions over the coming weeks and months. There is no deadline by which new rules must be published, so employees must continue to mask up if any of their coworkers are unvaccinated for the foreseeable future.

Employers must enforce this masking requirement or risk citations and/or monetary sanctions from Cal/OSHA. Due to the difficulty in tracking vaccination status and monitoring gatherings, some employers may find it administratively easier to continue enforcing masks for all California employees, and those workers traveling to California on business, regardless of their individual vaccination status.  Employers should also refresh their COVID19 policies as CDC and state and local guidance continues to evolve.

Please join us on June 10, 2021 for Ballard Spahr’s annual in-depth program highlighting key issues and developments in labor and employment law from 2020 and 2021. This year’s virtual program will cover the latest state and national legal developments, hot topics related to HR compliance including vaccination challenges, and how HR can be prepared to have a place at the table and make key contributions related to environmental, social, and governance (“ESG”) issue.  You can find more information and register here.