As interest rates rise and the threat of a recession looms, many employers are beginning to struggle with balancing the cost of maintaining their workforce with an expected decrease in profits. The frequent result of such a balancing act is a mass layoff. While a reduction in workforce may be inevitable, below are options that employers can consider to try to avoid that outcome. For all of these alternatives, employers should apply any changes consistently across the workforce to avoid claims of inequity or discrimination.
Lindsay Burke co-chairs the firm’s employment practice group and regularly advises U.S., international, and multinational employers on employee management issues and international HR compliance. Her practice includes advice pertaining to harassment, discrimination, leave, whistleblower, wage and hour, trade secret, and reduction-in-force issues arising under federal and state laws, and she frequently partners with white collar colleagues to conduct internal investigations of executive misconduct and workplace culture assessments in the wake of the #MeToo movement. Recently, Lindsay has provided critical advice and guidance to employers grappling with COVID-19-related employment issues.
Lindsay guides employers through the process of hiring and terminating employees and managing their performance, including the drafting and review of employment agreements, restrictive covenant agreements, separation agreements, performance plans, and key employee policies and handbooks. She provides practical advice against the backdrop of the web of state and federal employment laws, such as Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Equal Pay Act, the Family and Medical Leave Act, the Fair Labor Standards Act, and the False Claims Act, with the objective of minimizing the risk of employee litigation. When litigation looms, Lindsay relies on her experience as an employment litigator to offer employers strategic advice and assistance in responding to demand letters and agency charges.
Lindsay works frequently with the firm’s privacy, employee benefits and executive compensation, corporate, government contracts, and cybersecurity practice groups to ensure that all potential employment issues are addressed in matters handled by these groups. She also regularly provides U.S. employment law training, support, and assistance to start-ups, non-profits, and foreign parent companies opening affiliates in the U.S.
New Law Ends Mandatory Arbitration for Sexual Assault and Sexual Harassment Claims
A new law signed by President Biden brings significant changes to employers’ ability to require arbitration of certain disputes with employees and could lead to an increase in sexual assault and sexual harassment claims against employers in court. On March 3, 2022, President Biden signed into law the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” (the “Act”). The Act amends the Federal Arbitration Act (“FAA”) to provide that predispute arbitration agreements and predispute joint-action waivers relating to sexual assault and sexual harassment disputes are unenforceable at the election of the person or class representative alleging the conduct. The Act took effect immediately upon signing.
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New York City Announces Workplace COVID-19 Vaccination Requirement
Pursuant to a new Order issued by New York City’s Commissioner of Health and Mental Hygiene, beginning December 27 workers in New York City who perform in-person work or interact with the public in the course of their work must provide proof of at least one dose of a COVID-19 vaccination before entering the workplace. Workers then have 45 days to show proof of their second dose if they received either the Pfizer or Moderna vaccine. The Order requires employers to exclude from the workplace any worker who has not provided proof of vaccination or been granted a religious or medical accommodation to the vaccine mandate, as well as workers who do not provide proof of a second Pfizer or Moderna dose within 45 days of submitting proof of the first dose.
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New York Employers Now Required to Provide Paid Leave to Take COVID-19 Vaccine
Effective March 12, 2021, all public and private employers in New York must provide each employee with up to four hours of paid leave to obtain a COVID-19 vaccine injection. The new law, which took effect immediately after being signed by Governor Cuomo, adds a new Section 196-c to the New York Labor Law and Section 159-c to the New York Civil Service Law.
Employees are entitled to paid leave, at their regular rate of pay, for a “sufficient period of time, not to exceed four hours per vaccine injection,” unless the employee is entitled to receive a greater number of hours under an existing employer policy or collective bargaining agreement. Accordingly, employees who must take two doses of a COVID-19 vaccine are entitled to take up to eight hours (i.e., four hours per injection) of leave. The paid leave provision expires on December 31, 2022.…
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New York Employees May Begin Using New Paid Sick Leave Benefits on January 1, 2021
New York State’s new paid sick leave law (“NYSSL”) took effect on September 30, 2020, requiring employers to allow employees to begin accruing paid sick leave benefits immediately. Employees may use their accrued leave under the NYSSL starting January 1, 2021. In response to its state law counterpart, New York City Mayor Bill de Blasio has signed into law certain amendments to the existing NYC Paid Safe and Sick Leave Law (“NYCPSL”), also known as the Earned Sick and Safe Time Act, to align the NYCPSL with the NYSSL.
As discussed below, the NYSSL and NYCPSL impose similar paid sick leave requirements on employers, though the amendments to the NYCPSL expand employers’ obligations and strengthen New York City’s enforcement mechanisms.…
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DOL Revises FFCRA Regulations in Response to Federal Court Decision Invalidating Parts of the FFCRA
On September 11, 2020, the U.S. Department of Labor (“DOL”) issued revised regulations to clarify certain rights and employer responsibilities under the paid sick leave and expanded family and medical leave provisions of the Families First Coronavirus Response Act (“FFCRA”). The revisions were made in response to a recent decision of the U.S. District Court for the Southern District of New York (“SDNY”), which invalidated certain provisions of the FFCRA regulations.
The FFCRA, which we discussed here, requires employers with fewer than 500 employees to provide emergency paid sick leave (“EPSL”) and emergency Family and Medical Leave Act leave (“EFMLA”) to employees who meet certain COVID-19-related conditions. DOL issued regulations implementing the FFCRA on April 1, 2020.…
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Federal District Court Strikes Down DOL Joint Employer Rule
A New York federal district court judge has struck down significant portions of the U.S. Department of Labor’s (“DOL”) joint employer rule, which went into effect earlier this year. As a result of this ruling, certain companies may be more likely to be deemed joint employers and exposed to liability for wage and hour violations under the Fair Labor Standards Act (“FLSA”).
As we described here, in March 2020, a final rule issued by DOL went into effect implementing a four-factor test for determining whether more than one entity may be considered an individual’s employer under the FLSA. The new test shifted the existing rule’s focus on the “economic realities” of the alleged employer/employee relationship to a narrower inquiry regarding whether the alleged employer actually exercised control over the alleged employment relationship.
The District Court for the Southern District of New York has now held that DOL’s final joint employer rule violated the Administrative Procedures Act for two reasons. First, the court found that the rule contradicted the text of the FLSA because it ignored relevant concepts defined in the statute, such as the definitions of “employ” and “employee,” and that DOL had erroneously applied different standards for “primary” and “joint” employment when no such distinction exists in the FLSA itself. Second, the court found that DOL’s reasoning for the rule change was arbitrary, capricious, and not supported by adequate evidence.…
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Ten Ways to Avoid Layoffs During the COVID-19 Pandemic
As the COVID-19 public health crisis continues, businesses are dealing with unprecedented disruptions to operations and workforce stability. Most employers undoubtedly want to assist their employees during this uncertain time, but they are struggling to balance the cost of maintaining their workforce with shrinking profits. The frequent result of such a balancing act is a mass layoff. While such a reduction in workforce may be inevitable, below are options that employers can consider to try to avoid that outcome. For all of these alternatives, employers should be careful to apply any changes consistently across the workforce to avoid claims of inequity or discrimination.
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DOL Issues Final “Joint Employer” Rule
The U.S. Department of Labor (“DOL”) has published a final rule, which takes effect on March 16, 2020, outlining the new four-factor approach DOL will use to determine whether, under the Fair Labor Standards Act (“FLSA”), a business is a “joint employer” of another company’s employees and thus jointly and severally liable for wage and hour obligations. The new rule comes as good news for employers because it establishes a concrete and narrow standard for determining joint employer status and is expected to provide clearer guidance to federal courts making joint employer determinations.
The final rule represents the first time in 60 years that DOL has issued a joint employer rule, although over the decades it has issued guidance both expanding and contracting the scope of the definition and potential liability. Furthermore, the rule is consistent with a series of actions that DOL, under the Trump administration, has taken to rescind the previously broader definition of “joint employer” under the Obama administration (including its June 7, 2017 withdrawal of employee-friendly Administrator’s Interpretation guidance documents from 2015 and 2016).…
DOL Publishes Final Rule Expanding Overtime Protections
The U.S. Department of Labor (DOL) has announced a final rule that will increase access to overtime pay under the Fair Labor Standards Act (FLSA) for approximately 1.3 million workers. The final rule, which comes six months after DOL published a proposed rule in March, is the latest development in a years-long process by DOL, spanning the Obama Administration and the Trump Administration, to modify FLSA overtime regulations. The new rule takes effect on January 1, 2020, giving employers just a narrow window to assess the rule’s impact on their operations. The final rule is available here. DOL has also published a fact sheet that provides an overview of the final rule, available here.
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