The COVID-19 pandemic has already caused severe disruption to many businesses across the country. Employers will be required to continue to monitor developments and adjust to changing circumstances in the coming weeks and possibly months. We provide the following recommendations for employers in dealing with the many employment-related issues that will inevitably arise.
On February 26, 2020, the National Labor Relations Board issued its final rule regarding the standard for determining joint employer status. The final rule overturns the standard articulated in the Board’s 2015 Browning-Ferris decision and returns to the pre-Browning-Ferris “direct control” standard. The final rule also provides greater clarity regarding the application of the standard. The purpose of the rule is to increase predictability and consistency with respect to the Board’s determination of joint employer status under the National Labor Relations Act. The final rule will go into effect on April 27, 2020.
On February 6, 2020, Governor Andrew Cuomo signed an amendment to New York Labor Law § 592 that reduces the period of time that striking workers must wait before receiving unemployment insurance benefits. The amendment took effect immediately.
On January 16, 2020, the Wage and Hour Division of the United States Department of Labor (“DOL”) published its final rule to revise and update its regulations regarding joint employer status. The final rule largely adopts the proposed rule the DOL published in April of 2019, which we wrote about here. The final regulations become effective March 16, 2020, and mark the first significant revision since they were enacted in 1958. Employers should take note of these new regulations because if an employee is found to be jointly employed by two employers, both employers are jointly and severally liable for all wages owed to that employee, including overtime wages.
The U.S. Department of Labor ("DOL") recently issued updated regulations which clarify what types of compensation provided by employers can properly be excluded from the regular rate for overtime computation purposes. The DOL's stated purpose in updating its regular rate regulations (which had not been significantly revised in more than 50 years) is to better reflect the 21st century workplace and to encourage employers to provide additional and innovative benefits to employees without fear that those forms of compensation might result in additional overtime obligations. The updated regulations became effective on January 15, 2020.
The New York State Department of Labor, after holding multiple hearings across the state regarding the impact of tip credits for employees covered by the Minimum Wage Order for Miscellaneous Industries and Occupations, issued a report recommending the elimination of the tip credit for all miscellaneous industry workers. Governor Cuomo recently announced that this recommendation will be implemented in two phases. Effective June 30, 2020, the tip credit will be cut in half. Effective December 31, 2020, the tip credit will be eliminated entirely. This will affect an estimated 70,000 employees, in occupations such as car wash attendants, nail and hair salon workers, tow truck drivers, dog groomers, wedding planners, tour guides, and valet parking attendants. This will not affect employees covered by the Hospitality Industry Wage Order, such as service employees and food service workers in hotels and restaurants.
On December 23, the National Labor Relations Board reversed its 2014 decision in Babcock & Wilcox Construction Co, Inc., and reinstated the legal standard for deferring to the arbitration process that had existed prior to the Babcock decision. The Babcock decision created an extremely stringent standard for deferral which made it more likely that an employee who had been disciplined or discharged would be able to litigate an unfair labor practice charge even after losing an arbitration proceeding. In United Parcel Service, Inc., the NLRB held that the arbitration process collectively bargained by the parties should be accorded more deference in unfair labor practice cases in which an employee alleges that discipline or discharge violated Sections 8(a)(3) and 8(a)(1) of the National Labor Relations Act.
Employers in New York will be required to comply with the new state minimum wage rates and the new state salary thresholds to qualify for the executive and administrative exemptions, effective December 31, 2019.
On December 16, 2019, the National Labor Relations Board issued a trio of rulings that reversed decisions issued during the Obama administration. Each case was decided by a 3-1 majority, with Member Lauren McFerran dissenting.
On December 18, 2019, the National Labor Relations Board published a final rule in the Federal Register amending its union representation election procedures to eliminate several aspects of the "quickie" election rule that became effective on April 14, 2015. The "quickie" election rule provided unions with a significant advantage in the representation process by, among other things, shortening the time period between the filing of a petition and the scheduling of an election and limiting the issues that may be litigated by employers in a pre-election hearing. The final rule will become effective on April 16, 2020.
On November 8, 2019, Governor Cuomo signed legislation that provides certain protections for employees based on “reproductive health decision making.” Under the new legislation, which is codified in New York Labor Law Section 203-e, “reproductive health decision making” includes, but is not limited to, “the decision to use or access a particular drug, device or medical service" related to reproductive health. Simply put, employers in New York cannot take adverse employment actions against employees based on decisions such as obtaining fertility-related medical procedures, using birth control drugs or contraceptive devices, or having an abortion.
On November 5, the U.S. Department of Labor published a proposed rule in the Federal Register to provide some clarity for employers that seek to use the fluctuating workweek method of overtime compensation under the Fair Labor Standards Act. The proposed amendment lists each of the five requirements for using the fluctuating workweek method separately, instead of including all of the requirements in paragraph form as the current regulation does. The proposed amendment also includes additional language not currently contained in the regulation, explicitly stating that bonuses, premium payments, and other additional payments of any kind are not incompatible with the use of the fluctuating workweek method of computing overtime.
