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

Complying with the Department of Labor’s Proposed Overtime Regulations

Q.  I heard that the United States Department of Labor is planning to raise the salary threshold for exempt status again. What is the new rule and when does my company have to comply?

A.  On March 7, the U.S. Department of Labor issued its long-anticipated proposed rule that would expand overtime eligibility under the Fair Labor Standards Act (FLSA) to include a significant number of additional workers. The proposal will be open to public comment for 60 days, with the final rule set to take effect around January 1, 2020.

Under current regulations, in effect since 2004, employees with a salary below $455 per week, or $23,660 annually, are nonexempt and must receive overtime pay for hours worked over 40 hours per week, regardless of whether their duties fall within one of the FLSA exemptions. The new rule would raise the salary threshold from $455 to $679 per week, or $35,308 per year, meaning that employees who earn less than those thresholds will be automatically nonexempt and eligible for overtime on the effective date. Employees earning salaries in excess of either threshold may still be nonexempt and eligible for overtime based on their job duties.

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Hair Styles May Be Protected Under Discrimination Laws

Q: Is it lawful to require employees or applicants to style their hair in a certain manner?

A: As with most employment-related questions, the answer is it depends.  While employers are generally allowed to adopt basic grooming policies, employers should seek to adopt policies that do not have a disparate impact on minorities and other persons protected by anti-discrimination laws.

In February 2019, the New York City Commission on Human Rights (“Commission”) generated headlines by releasing a legal enforcement guidance on race discrimination on the basis of hair.  The guidelines are designed to prohibit workplace grooming policies that may discriminate against Black people.  The Commission defines the term “Black people” to “include those who identify as African, African American, Afro-Caribbean, Afro-Latin-x/a/o or otherwise having African or Black ancestry.”  Per the Commission: “Bans or restrictions on natural hair or hairstyles associated with Black people are often rooted in white standards of appearance and perpetuate racist stereotypes that Black hairstyles are unprofessional.”  The Commission takes the position that the New York City Human Rights Law (“NYCHRL”) protects the right of Black people to maintain their natural hairstyle, which “includes the right to maintain natural hair, treated or untreated hairstyles such as locs, cornrows, twists, braids, Bantu knots, fades, Afros, and/or the right to keep hair in an uncut or untrimmed state.”

According to the Commission, grooming or appearance policies that ban, limit, or prohibit natural hair and hairstyles often associated with Black people violate the NYCHRL anti-discrimination provisions, including the section prohibiting discrimination in employment. Employers prohibiting employees from wearing their hair in cornrows, Afros, and other hairstyles associated with Black people risk facing liability under the NYCHRL.  The Commission stated: “Black hairstyles are protected racial characteristics under the NYCHRL because they are an inherent part of Black identity.”  Under the NYCHRL, it is therefore discriminatory to refuse to hire a Black applicant with cornrows because the hairstyle does not project the “image” that a Company is trying to represent—and companies may not use customer preference or health and safety concerns as an excuse for a prejudiced policy.

The Commission noted in a footnote of its legal enforcement guidance that grooming or appearance policies that “generally target communities of color, religious minorities, or other communities protected under the NYCHRL are also unlawful.” The Commission gave as examples: (i) a Sikh applicant being denied employment because of his religiously-maintained uncut hair and turban, (ii) an Orthodox Jewish employee ordered to shave his beard and cut his payot (sidelocks and sideburns), (iii) a salesperson being required to shave his beard despite a medical condition that makes it painful to do so, (iv) an older employee with gray hair being threatened that she will lose her job if she does not color her hair, and (v) a male server being ordered to cut his ponytail where similar grooming policies are not imposed on female servers.

This is not the first time a government agency has attempted to remedy employment discrimination related to Black hairstyles. In 2013, the United States Equal Employment Opportunity Commission (“EEOC”) unsuccessfully brought suit against an Alabama insurance claims company because the insurance company allegedly violated Title VII of the Civil Rights Act by discriminating against a Black applicant because she wore dreadlocks. See EEOC v. Catastrophe Mgmt. Sols., 852 F.3d 1018 (11th Cir. 2016).  In that case, Plaintiff Chastity Jones was offered a position as a customer service representative.  Prior to her start date, Ms. Jones was advised that the company did not permit dreadlocks and that she needed to cut them.  When Ms. Jones refused to cut her hair, her job offer was rescinded.  Although recognizing that dreadlocks were a common hairstyle worn by Black people, the Eleventh Circuit Court of Appeals (covering employers in Alabama, Florida, and Georgia) ultimately concluded that dreadlocks were not an immutable characteristic, and that the EEOC could not state a claim for intentional race discrimination against a company seeking to enforce its “race-neutral” grooming policy.  The United States Supreme Court declined to hear Ms. Jones’ appeal.

Although the NYCHRL only covers employers with four or more employees in New York City, employers nationwide should pay close attention to the Commission’s guidance as it could influence courts and other government agencies throughout the country. Before implementing any grooming policies—including those that could adversely impact individuals in a protected category of employment—Human Resources professionals should consult with qualified legal counsel to adopt lawful policies that do not create a “hairy” situation.

–Lee Tankle

Pros and Cons of Mandatory Arbitration Policies for Employment Disputes

Q.  Our company has a policy providing for mandatory arbitration of employment claims. I heard recently that some companies are moving away from these types of policies.  What are the pros and cons of requiring all employees to submit their employment claims to arbitration?

A.  There are a number of issues to consider regarding whether a company should require its employees to submit all employment claims to arbitration. These types of policies have been in favor since the 2018 United States Supreme Court opinion in Epic Systems Corp. v. Lewis, which endorsed mandatory arbitration agreements even where they resulted in employees waiving their rights to pursue claims in a class or collective action.

In light of the #MeToo movement, however, federal and state legislatures have taken steps to ban private resolution of sexual harassment claims. For example, New York State recently passed a law prohibiting not only the use of mandatory arbitration for sexual harassment claims, but also non-disclosure agreements relating to settlement of those claims.  Similar laws were passed in Washington and Tennessee in 2018, and comparable legislation has been introduced in several more states.  At the federal level, Congress currently is considering a bill called the Forced Arbitration Injustice Repeal (FAIR) Act, which would ban mandatory arbitration in employment and consumer agreements.

In addition, some companies have scaled back their mandatory arbitration policies in the face of employee resistance. In November 2018, for example, about 20,000 Google employees made their case against mandatory arbitration in a very public way when they walked off the job in protest of the company’s arbitration policy, which required employees to bring all claims for sexual harassment to arbitration.  Google waived the policy with respect to those claims only, but the employees pressed the company to abandon the policy for all employment-related claims, and Google eventually acquiesced.  On February 21, 2019, Google announced not only that it would end the mandatory arbitration policy altogether, but also that it would no longer require agreements that deny employees the right to bring class actions against the company.

Since that time, Facebook, Airbnb and eBay followed suit by modifying their policies to allow employees to bring sexual misconduct and harassment claims in court. Twitter also made a announcement touting that it has never required employees to submit employment claims to arbitration.

In the face of these developments, should companies compel their employees to submit all employment claims to arbitration?

There are certain advantages to arbitration as a process for resolving employment claims. First, in light of the Epic Systems decision, companies can require employees to bring their claims individually in arbitration, rather than banding together to pursue claims as a class or collective action.  Second, arbitration is a private proceeding and therefore provides an advantage to employers who would rather avoid the public embarrassment of what sometimes can be salacious allegations.  Third, the arbitration proceeding is a way to avoid having disputes heard by a jury, which may be more willing to award substantial sums to sympathetic plaintiff-employees.  Fourth, when compared with traditional litigation, the arbitration process is at least supposed to be a faster resolution of the dispute at a reduced cost.

However, companies are finding that, in practice, arbitration proceedings sometimes can be as lengthy and costly as court proceedings, particularly since the employer usually is responsible for the arbitrator’s fees on top of its own legal fees and expenses. In addition, arbitrators rarely grant summary judgment and are often more likely to split a decision down the middle, rather than rule completely in the employer’s favor.

With this in mind, your company should consider carefully whether mandatory arbitration is appropriate, giving thought to the company’s culture, industry standards and the evolving legal framework. If the company does decide to put a mandatory arbitration policy in place, it is important that it is drafted carefully with the assistance of counsel, taking into consideration state laws of your jurisdiction, to ensure that the provision will be found fair and enforceable.

Rogers Stevens

NLRB Provides Updated Guidance on Employer Policies and Handbooks

Q:        How does the current National Labor Relations Board view employee handbook policies?

A:        Under the Trump administration, the National Labor Relations Board (“Board”) has shifted in a more employer-friendly direction, including with respect to workplace policies.  In a December 2017 decision, the NLRB reassessed the standard for evaluating when neutral workplace rules violate the National Labor Relations Act (NLRA). In that decision, the Board defined three categories of employer handbook rules and policies: (1) rules that are generally lawful; (2) rules that warrant individualized scrutiny; and (3) rules that are plainly unlawful.

Those three categories were expanded in June 6, 2018, when the Board’s General Counsel issued a new Guidance Memorandum (18-04), providing updated guidance on how regional NLRB offices should investigate unfair labor practice charges involving employer handbook language and rules.

Category 1 Rules:  The Board has determined that employee handbook policies in this category generally are lawful, either because the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights, or because the potential adverse impact on protected rights is outweighed by the business justification associated with employer policy.  The examples provided in the Guidance Memorandum of the types of rules that fall into this category include:

  • Civility rules prohibiting “disparaging, or offensive language”;
  • No-photography and no-recording rules;
  • Rules against insubordination, non-cooperation, or on-the-job conduct that adversely affects operations;
  • Disruptive behavior rules (for example, prohibiting conduct that creates a disturbance on company premises or creates discord with clients or fellow employees);
  • Rules protecting confidential, proprietary, and customer information or documents;
  • Rules against defamation or misrepresentation;
  • Rules against using employer logos or intellectual property;
  • Rules requiring authorization to speak for the company; and
  • Rules banning disloyalty, nepotism, or self-enrichment.

Category 2 Rules:   The Board has concluded that Category 2 rules are not “obviously lawful or unlawful, and must be evaluated on a case-by-case basis to determine whether the rule would interfere with rights guaranteed by the NLRA, and if so, whether any adverse impact on those rights is outweighed by legitimate justifications.” The Guidance Memorandum provides examples of rules that fall into this category, including the following:

  • Broad conflict-of-interest rules that do not specifically target fraud and self-enrichment and do not restrict membership in, or voting for, a union;
  • Confidentiality rules broadly encompassing “employer business” or “employee information” (as opposed to confidentiality rules regarding customer or proprietary information, which would be considered lawful, or confidentiality rules more specifically directed at employee wages, terms of employment, or working conditions, which is prohibited);
  • Rules regarding disparagement or criticism of the employer (as opposed to civility rules regarding disparagement of employees, which is considered a lawful Category One rule);
  • Rules regulating use of the employer’s name (as opposed to rules regulating use of the employer’s logo/trademark, which is allowed as a Category One rule);
  • Rules generally restricting speaking to the media or third parties (as opposed to rules restricting speaking to the media on the employer’s behalf, which is a lawful Category One rule );
  • Rules banning off-duty conduct that might harm the employer (as opposed to a rule banning insubordinate or disruptive conduct at work, which is a permitted Category One rule, or a rule specifically banning participation in outside organizations, which is an unlawful Category Three rule); and
  • Rules against making false or inaccurate statements (as opposed to lawful rules against making defamatory statements).

Category 3 Rules: The Board has found that rules in this category are generally unlawful because they would prohibit or limit NLRA-protected conduct, and the adverse impact on the rights guaranteed by the NLRA outweighs any justifications associated with the rule. The examples provided in the Guidance Memorandum of the types of rules that fall into this category include:

  • Confidentiality rules specifically regarding wages, benefits, or working conditions (such as a rule prohibiting employees from disclosing salaries and contents of employment contracts); and
  • Rules against joining outside organizations or voting on matters concerning the employer.

The Memorandum also advises the regional NLRB offices that they should no longer find unlawful any rule that could be interpreted as covering Section 7 activity and should now focus on whether the rule in question would actually be interpreted to cover Section 7 activity. The Memorandum instructs regional offices that “ambiguities in rules are no longer interpreted against the drafter, and generalized provisions should not be interpreted as banning all activity that could conceivably be included.”

Takeaways

The Board has moved significantly in the direction of limiting its influence over employer handbook policies. Whether a particular employer rule is lawful, however, may rest on subtle differences in policy language. Moreover, the Guidance Memorandum does not provide an exhaustive list of all lawful and unlawful handbook policies. For assistance in ensuring that your handbook rules do not impinge on employee rights to engage in concerted activity, we recommend consulting with labor and employment counsel.

Leigh McMonigle