Supreme Court Upholds Validity of Employee Class Action Waivers

Q.  Can my company require its employees to sign an arbitration agreement mandating that they arbitrate all employment disputes, and limiting their ability to participate in a class action against the company?

A.  On May 21, in a 5-4 opinion, the U.S. Supreme Court ruled that arbitration agreements in which an employee waives the right to pursue his or her employment claims in a class or collective action are enforceable under the Federal Arbitration Act (FAA). The holding in Epic Systems Corp. v. Lewis, No. 16-285, resolves a circuit court split on whether class action waivers in arbitration agreements violate the National Labor Relations Act (NLRA). Justice Gorsuch delivered the opinion of the Court, rejecting three primary arguments made by employees to undermine the validity of class action waivers under the FAA.

For more information about this case, please click here.

-Tracey E. Diamond

 

California Adopts Stricter Test for Independent Contractor Status

Q.  What is the standard for determining if an individual is an employee or an independent contractor in California?

A.  On April 30, the California Supreme Court adopted a new and more onerous test (the ABC test) for determining whether individuals are employees or independent contractors. In its decision in Dynamex Operations West, Inc. v. Los Angeles County Superior Court, 2018 Cal. LEXIS 3152 (Cal. 2018), the court abandoned the test that it had applied since 1989 from S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal. 3d 341 (1989). Although the Dynamex case arose from claims under California wage orders — which govern, among other things, the duty to pay the minimum wage and to compensate for overtime hours worked — the decision has broader implications.

For more information, please click here.

-Susan K. Lessack

Employees Should Not Be Working While on FMLA Leave

Q: Can I require an employee to do work while the employee is on FMLA leave?  What if the employee volunteers to work while on leave?

A: Under most circumstances, employees should not be required or permitted to perform work while on leave.  The Family and Medical Leave Act (FMLA) provides eligible employees a maximum of twelve weeks unpaid, job-protected leave for specified family and personal medical reasons in a twelve month period.  During that time, employers are prohibited from interfering with, restraining, or denying the exercise of or the attempt to exercise, any rights provided under the FMLA.

This does not mean that an employee must be left alone completely. While an employee is on leave, employers are permitted to inquire about the location of documents, the status of an assignment, and pass on institutional knowledge.  However, employers should keep communication with employees on leave to a minimum.  It is recommended that when communicating with an employee on leave, the employer should make it clear that it is not requiring or requesting the employee to work.

Some ways that employers may be found to have interfered with an employee’s leave include forcing an employee to complete an assignment, and denying or discouraging an employee from taking leave. Although interference is determined on a case-by-case basis, employers should be mindful that allowing an employee to work on leave may constitute impermissible interference.

Employers who pay for FMLA leave but allow or require employees to perform work while on paid leave also put themselves at risk of a claim for interference with leave. Although the employee is being paid, the basis for the leave is a medical necessity.  Thus, the employee would be entitled to the protections provided under the FMLA even though he or she is being paid.

As a general practice, employees on leave should not be asked or allowed to work on any assignments. If an employee does perform work while on FMLA leave, any hours spent completing assignments should not count towards the protected twelve week period.  To ensure compliance with the FMLA, employers should include a section in their personnel policies that discusses what conduct is appropriate while an employee is on leave.

Renee C. Manson

 

New Jersey Becomes Tenth State to Enact Paid Sick Leave

Q.  Do I need to provide paid sick leave to employees in New Jersey?

A.  Last week, New Jersey Governor Phil Murphy signed into law the New Jersey Paid Sick Leave Act, mandating paid sick leave for full and part-time workers in the Garden State. Similar to the laws in other states, the New Jersey law provides for employees to earn one hour of paid sick leave for every 30 hours worked. Employees may use up to 40 hours of earned sick leave in a benefit year.  They may also carry over up to 40 hours of earned sick leave from one year to the next.  Earned sick leave is not paid upon termination, unless a company policy or collective bargaining agreement provides otherwise.

Employees begin to accrue sick leave on their hire date, and are eligible to use them beginning on the 120th calendar day of employment. The employee may subsequently use earned sick leave as soon as it is accrued.  Employees must be paid for earned sick leave at the same rate of pay with the same benefits as the employee normally earns, so long as the pay rate is at least minimum wage.

Earned sick leave may be used for the employee’s own health condition and time off for preventative medical care, and to take care of or coordinate preventative medical care for family members. The term “family member” is defined broadly to include the employee’s child, grandchild, sibling, spouse, domestic or civil union partner, parent, grandparent, in-law, grandparent or sibling of the employee’s spouse, domestic or civil union partner, and “any other individual related by blood to the employee or whose close association with the employee is equivalent of a family relationship.”

Employees also may use earned sick leave for absences as a result of the employee or a family member being the victim of domestic or sexual violence.  In addition, employers must allow employees to use earned sick leave for school closures and to attend school conferences.  Employees may not be subject to discipline for using earned sick leave.

If the need to use earned sick leave is foreseeable, an employer may require up to seven days of advance notice before the leave is taken. Employers must make a reasonable effort to schedule the use of earned sick leave in a manner that does not unduly disrupt the company’s operations.  If the employee uses earned sick leave for three or more consecutive days, the employer may require a doctor’s note supporting the need for leave.

Companies may not require employees to find replacements as a condition of using earned sick leave. While the employer and the employee may mutually agree to allow the employee to work additional hours or shifts to make up the missed time, employees are not required to do so.

What Employers Should Do

The Paid Sick Leave Act goes into effect on November 2, 2018, and preempts all existing city and county sick leave laws in the state. To get ready for the new Act, employers should analyze their current paid time off policies or draft a new earned sick leave policy to ensure that time off is accrued and may be used in the manner provided by the Act.  New Jersey employers also should review their record-keeping policies to make sure that they retain records documenting hours worked and earned sick leave taken by employees for at least five years.

Tracey E. Diamond

Portion of Philadelphia Salary History Ban Ruled Unconstitutional

Q.  Am I permitted to ask about an applicant’s salary history in Philadelphia?

A.  In a ruling that could provide a roadmap for challenging salary history bans in other jurisdictions, a Philadelphia federal judge issued an opinion on April 30 invalidating a major element of the Philadelphia salary history ordinance enacted by the city in January 2017. Judge Mitchell S. Goldberg held that the portion of the ordinance prohibiting an employer from inquiring about a prospective employee’s wage history is unconstitutional because it violates the First Amendment’s free speech clause. However, Judge Goldberg also held that the portion of the law prohibiting employers from relying on wage history to determine a salary for an employee did not implicate constitutional concerns. Philadelphia employers now find themselves in a difficult position: They are permitted to ask about an applicant’s salary history but cannot rely on that information.

For more information, please click here.

Tracey E. Diamond and Lee E. Tankle