Another Blow for Class Arbitration at the Supreme Court

Q.  Can my employees pursue class actions via arbitration?

A.  On April 24, the U.S. Supreme Court issued the latest in its line of recent decisions hostile to class action arbitration. In Lamps Plus, Inc. v. Varela, the Court stated that merely showing ambiguity in an arbitration clause is not enough to create an agreement between the parties to allow for classwide arbitration of their disputes. Instead, the parties’ agreement to arbitrate claims in a class action format must be express. Not silent, not ambiguous — express.

For more information, click here.

The Importance of Clear Floating Holidays and Personal Days Policies

Q:  My company offers floating holidays to employees.  Can we have a “use it or lose it” policy for unused floating holidays?  Do they have to be paid out at termination?  What about personal days?

A.  Like many wage and hour questions, the treatment of floating holidays and personal days is governed by state law. As explained in more detail below, in most states, treatment of floating holidays and personal days is governed by the employer’s policy.  However, in California, treatment is governed by state law.

Many employers offer paid floating holidays and/or paid personal days to give employees flexibility to use them for religious holidays or special events, such as birthdays. Some employers allow employees to use floating holidays/personal days anytime during the year, while others tie their use to a specific event.  For example, some employers provide a floating holiday upon an annual employment anniversary, and require that the holiday be used within a week of the anniversary.  Under most employer policies, personal days can be used at any time during the year, subject to employer approval.

Most states, including New Jersey and Pennsylvania, allow for floating holidays and personal days to be governed by the employer’s written policies. If the employer’s policy states that unused floating holidays/personal days are forfeited at the end of the year, that policy governs.  Likewise, an employer’s policy may provide that floating holidays and personal days will not be paid upon termination.  In many cases, however, the lack of a written policy may be held against the employer, even if the employer’s practice is to require forfeiture and/or refuse payout at termination.  In short, in most jurisdictions, the employer may set the rules for floating holidays, but the employer is well-advised to do so in a clear written policy.

In California, the type of floating holiday/personal day affects its treatment. The California Division of Labor Standards Enforcement has opined that leave time that is provided without condition is presumed to be vacation (and thus treated as wages) no matter what the employer calls the days off.  Thus, floating holidays/personal days that can be used at any time are treated like vacation, which means that under California law, they cannot be forfeited (i.e. must roll over from year to year) and must be paid out upon termination.  Floating holidays/personal days that are tied to a specific date (such as an employment anniversary, a birthday or the selection of one of a number of holidays) and must be used on or near that date, are not treated as vacation and therefore, under California law, they can be forfeited if not used and the employer does not have to pay the employee for the unused time upon termination.

Regardless of where they do business, employers should have clear written policies regarding treatment of floating holidays and personal days. Moreover, in California, employers who do not want floating holidays/personal days to roll over year-to-year or be paid out upon termination should revise their policies so that the time off is tied to a specific event or date, rather than allowing floating holidays or personal days that may be used for any reason.

–Jessica Rothenberg

New Jersey Expands Employee Family and Safe Leave Benefits

Q:        I heard there are some recent changes to New Jersey’s laws regarding employee leave benefits.  Will they affect my company’s employment policies?

A:        On February 19, 2019, New Jersey Governor Phil Murphy signed legislation that amends and expands some of the state’s leave laws, including the Family Leave and SAFE Acts, as well as available benefits under New Jersey Family Leave Insurance.  Some of the changes are effective immediately, while others will take effect at a later date. Below are some of the key changes resulting from the recent amendment.

The New Jersey Family Leave Act

The New Jersey Family Leave Act (NJFLA) currently requires employers with 50 or more employees (counting those employed both in and outside New Jersey) to provide their New Jersey employees with up to 12 weeks of employment-protected leave in a 24-month period to care for a family member (which includes a parent, parent-in-law, minor or disabled child, spouse, or civil union partner) with a serious health condition, or to bond with a newly born or adopted child.

While the NJFLA currently applies to employers with 50 or more employees, the recent amendment reduces the employer size threshold to 30 employees. Therefore, beginning on June 30, 2019, employers with 30 or more employees (counting those employed both in and outside New Jersey) are required to provide those employees working in New Jersey with 12 weeks of employment-protected family leave during each 24-month period.

There are other new provisions to the NJFLA, which went into effect immediately:

  • In addition to the previously identified family members (parent, parent-in-law, minor or disabled child, spouse, or civil union partner), employees may now take leave to care for: a child regardless of age; a sibling; a grandparent; a grandchild; a parent-in-law; a foster parent; any individual related by blood; or any other individual with a close association equivalent to a family relationship.
  • Employees are permitted to take leave for bonding with a newborn child conceived through a gestational carrier agreement, or with a newly placed foster child.
  • Employees are permitted to take leave for bonding on an intermittent basis without employer consent.
  • Leave may be taken intermittently over a period of 12 consecutive months (up from 24 consecutive weeks).
  • Except for continuous bonding leave (which still requires 30 days advance notice), leave may be taken on only 15 days of advance notice.

Note that the changes to the NJFLA did not broaden the law to provide for leave for an employee’s own serious health condition. Employees who are eligible for federal Family and Medical leave may take leave for their own serious health condition. In the case of pregnancy, the interplay of the two laws often results in up to 12 weeks of leave for the employee’s own serious health condition due to pregnancy and childbirth, followed by an additional leave up to 12 weeks under the NJFLA for bonding with the newborn baby.

Family Leave Insurance Benefits

New Jersey Family Leave Insurance (“NJFLI”) provides partial wage replacement benefits to employees on family leave through New Jersey’s temporary disability leave benefits program.

NJFLI now includes an expansive anti-retaliation provision that prohibits an employer from discharging or otherwise discriminating or retaliating against an employee because the employee requested or took temporary disability benefits or family temporary disability leave benefits, including “retaliation by refusing to restore the employee following a period of leave.” The amendment provides a private right of action to the employee, which includes various remedies, such as monetary damages, attorneys’ fees and costs, and injunctive relief and reinstatement to his or her former position. Thus, the NJFLI in effect works as a job-protection statute by requiring employers to restore the employee to his or her job at the end of temporary disability leave.

Beginning on July 1, 2020, a number of additional changes will become effective:

  • The amendment raises the amount of the weekly benefit total from two-thirds (currently capped at $650 per week) to 85% percent of an employee’s weekly salary (to a maximum of $860).
  • The benefit period will be increased from 6 weeks to 12 weeks during a 12-month period.
  • The amount of intermittent paid leave benefits will also increase from 42 to 56 days during a 12-month period.

The NJ SAFE Act

The New Jersey Security and Financial Empowerment (“SAFE”) Act provides leave for employees who are victims of domestic violence or sexual assault, or have a family member who is a victim.

Effective July 1, 2020, employees taking leave under the SAFE Act will be eligible for wage replacement benefits from the state, just like employees who take NJFLA leave. Employees can elect to use accrued paid leave, including paid sick leave, or NJFLI benefits while on SAFE Act leave, and such leave would run concurrently with SAFE Act leave. In addition, employers can no longer require employees to use existing paid time off, vacation, or other similar employer-paid benefits for SAFE Act purposes.

The amendment also expands the definition of “family member” under the SAFE Act to mirror the definition under the NJFLA. Eligible “family members” now includes a “parent-in-law,” “sibling,” “grandparent,” and “any other individual related by blood to the employee, and any other individual that the employee shows to have a close association with the employee which is the equivalent of a family relationship.”

Implications

Many of the amendment provisions are effective immediately or within the next few months. Consequently, covered employers should review their policies to ensure compliance with the amendments. Once issued by the New Jersey Department of Labor and Workforce Development, covered employers should update their NJFLA and NJFLI posters and notices. In addition, it is important to train your human resources staff and inform and update the appropriate management employees about the new legal provisions.

For assistance in ensuring that your policies comply with these amendments, we recommend consulting with labor and employment counsel.

–Leigh McMonigle