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CALIFORNIA ACTS TO OUTLAW PRE-EMPLOYMENT MANDATORY AGREEMENTS TO ARBITRATE LABOR CODE CLAIMS

“In late August, the California Senate and Assembly passed AB 465, which, if signed by Governor Jerry Brown, will make pre-employment mandatory agreements to arbitrate Labor Code violations against California public policy starting January 1, 2016. AB 465 would create a new statute that prohibits employers from requiring a candidate to “waive any legal right, penalty, remedy, forum, or procedure for a violation of [the Labor Code], as a condition of employment, including the right to file and pursue a civil action or complaint with, or otherwise notify, the Labor Commissioner… or any court or other governmental entity.” The section explicitly covers “an agreement to accept private arbitration.” The bill makes it unlawful to threaten, or retaliate or discriminate against, a person who refuses such a waiver. An employee may recover reasonable attorney’s fees incurred in enforcing rights under the new statute.

Even if the bill becomes law, certain forms of pre-employment arbitration agreements would remain enforceable, even if they cover Labor Code violations. For instance, those agreements that are knowing and truly voluntary—i.e., not made as a condition of employment—would be valid, but the employer would have the burden of proving these facts if challenged. Further, the new statute would not apply to persons registered with a self-regulatory organization under the Securities Exchange Act of 1934 or employees represented by counsel in negotiating the agreement.

AB 465 is principally backed by organized labor, with the California Labor Federation, AFL-CIO sponsoring the bill. A lobbyist for the federation cited an uptick in the instances of low-wage workers being unable to recover unpaid wages before the California Labor Commissioner due to an arbitration agreement they did not understand or know they signed. The bill is opposed by many groups, including the Civil Justice Association of California and the California Chamber of Commerce. The chamber has identified AB 465 as one of the 2015 Job Killers, citing the increased burden on the judicial system and noting likely preemption by the Federal Arbitration Act.

If AB 465 becomes law, the long-term legal impact is unclear. Not only will it prohibit pre-employment, mandatory agreements to arbitrate Labor Code violations, but it may also reach class action waivers, which the California Supreme Court recently upheld in the employment context. The substantive reach of the prohibition is also unclear, expressly covering a “legal right, penalty, forum, or procedure” for a Labor Code violation, but remaining silent on other employment-related statutes such as the Fair Employment and Housing Act (codified in the Government Code). Moreover, the statute will almost certainly be challenged under the Federal Arbitration Act, which reflects a liberal policy favoring arbitration enforceability and pre-empts state rules that disfavor arbitration. The ambiguity in breadth and pre-emption uncertainty leave employers in an unenviable position if the bill becomes law.

AB 465 (and the other employment-related bills described below) remain on Governor Brown’s desk for consideration, and we will continue to monitor and report on developments.”

 

Originally posted by JD Supra. Full article at http://www.jdsupra.com/legalnews/california-legislature-acts-to-outlaw-73929/

SEC CLARIFIES WHISTLE BLOWER PROTECTIONS AGAINST EMPLOYER RETALIATIONS

“The Securities and Exchange Commission has issued an interpretive rule clarifying that whistleblowers are protected by retaliation by employers even if they have not reported their concerns to the SEC first.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 included a section offering incentives and protections to individuals who report possible violations of the federal securities laws, including protections against employer retaliation. The SEC issued rules in 2011 spelling out how the whistleblower protections would work, but there was some ambiguity when the SEC specified how whistleblowers should report a tip to the SEC in order to qualify for a whistleblower award, and those who would be protected from employer retaliation.

In particular, questions arose over whether an employee who first reported the matter internally to their employer, such as a compliance department, would be protected from retaliation from that same employer, or only those who reported directly to the SEC.

“Our interpretation best comports with our overall goals in implementing the whistleblower program,” said the SEC in the rule it issued last week. “Specifically, by providing employment retaliation protections for individuals who report internally first to a supervisor, compliance official, or other person working for the company that has authority to investigate, discover, or terminate misconduct, our interpretive rule avoids a two-tiered structure of employment retaliation protection that might discourage some individuals from first reporting internally in appropriate circumstances and, thus, jeopardize the investor-protection and law-enforcement benefits that can result from internal reporting. Under our interpretation, an individual who reports internally and suffers employment retaliation will be no less protected than an individual who comes immediately to the Commission. Providing equivalent employment retaliation protection for both situations removes a potentially serious disincentive to internal reporting by employees in appropriate circumstances. A contrary interpretation would undermine the other incentives that were put in place through the Commission’s whistleblower rules in order to encourage internal reporting.”

The Government Accountability Project, a whistleblower protection advocacy organization, and Labaton Sucharow LLP, a law firm that specializes in securities class-action lawsuits, wrote a letter Tuesday to SEC chair Mary Jo White thanking her for the interpretive rule, but also asked for further protections.

They pointed out that the new rule clarifies that any disclosure protected by the Sarbanes Oxley Act is shielded from retaliation under its Whistleblower Program. In effect, according to them, protection extends to disclosures within a corporation, to other law enforcement audiences, or to the public. Protection also extends to any violation of federal law, not just those enforced by the SEC. However, they cautioned that the SEC should take additional measures to address the remaining vulnerabilities they identified in a petition last summer to the SEC.

“Our July 2014 petition emphasized that new and creative forms of corporate prior restraint are preventing disclosures from happening at all, making academic the issue of subsequent retaliation,” wrote GAP legal director Tom Devine and Labaton Sucharow partner Jordan Thomas. “Merely presenting employees with nondisclosure agreements creates a chilling effect, and there are no rights for refusing to agree—only for violating one with protected speech. Further, corporations regularly file breach of contract lawsuits, theft of corporate records actions, and other litigation attacks outside the employment context. Realistically, to prevent a chilling effect on the flow of evidence necessary for SEC oversight, it is necessary to go beyond interpretations that restrict harassment of incumbent employees.” ”

Article posted by Accounting Today. Original article at http://www.accountingtoday.com/news/audit-accounting/sec-clarifies-whistleblower-protections-employer-retaliation-75468-1.html

California Adds Over 30 New Labor Laws

“More than 30 state employment laws take effect this year, according to an annual list put out by the California Chamber of Commerce.

The most significant by far is the paid sick leave law, which has received a lot of publicity here and elsewhere. AB1522 requires employers to provide paid sick leave to any employee who worked in California for 30 or more days within a year of hire. The accrual rate is at least one hour of sick leave for every 30 hours worked.

Employers can limit an employee’s use of paid sick leave to 24 hours or three days in each year of employment and can stop employees from accumulating more paid leave when they have 48 hours (six days) in their sick-leave bank. There is no exemption for small employers.

Accrual begins on the first day of employment or July 1, whichever is later, according to the California Department of Industrial Relations website (see its FAQ at www.dir.ca.gov/dlse/Paid_Sick_Leave.htm).

Here are some of the other 2015 laws that employment lawyers think will have the biggest impact. For the full list, see http://bit.ly/1BV9uQc. These laws took effect Jan. 1:

•AB1660 makes it illegal under the state Fair Employment and Housing Act to discriminate against workers because they have a driver’s license issued to undocumented persons who can submit proof of identity and California residency. The state began issuing these licenses, often referred to as “AB60 driver’s licenses” after the name of the bill that created them, on Jan. 1.

“The availability of driver’s licenses for undocumented workers is really going to be life changing for a lot of the workers that we serve,” said Diane Webb, an attorney with the Legal Aid Society Employment Law Center. “This takes the fear out of doing the normal things like dropping kids off at school, commuting to and from work and obtaining car insurance.”

AB60 does not give undocumented immigrants a right to work, only to drive. Under federal law, employers still must require employees to submit proof of their identity and authorization to work in the United States.

A driver’s license is typically on the list of documents an employee could provide, along with a passport, birth certificate, Social Security card or green card.

The new law “makes it clear you cannot demand a driver’s license from an applicant or employee unless it is required by law or the demands of the job,” said Amy Jensen, partner at Hinshaw & Culbertson who represents employers.

When the job requires driving, the new law “is going to put employers in a real catch-22 situation,” Jensen said. State law says employers cannot discriminate because they have this form of identification, but what happens if the employer hires a person who has one?

Felicia Reid, an attorney with Hirschfeld Kraemer who represents employers, said her “immigration folks” say if an employee submits an AB60 driver’s license and another document that “appears valid on its face” and establishes the person’s right to…”

 

 

 

Originally posted  by SF Gate. Full article at : http://www.sfgate.com/business/networth/article/State-adds-more-than-30-employment-laws-6010610.php

National Labor Relations Board and Courts Disagree about ‘Joint Employer’ Ruling

“A divide may be forming between courts and the National Labor Relations Board over the “joint employer” ruling.

In a statement issued to The Daily Caller News Foundation Friday, the International Franchise Association argued, “A ruling by a federal judge this week yet again affirmed the definition of ‘joint employer’ as it relates to franchise businesses, in direct contrast to recent moves by the National Labor Relations Board to scrap the definition and make individually-owned, small-business franchisees one and the same with their corporate franchisors.”

 Last year, the NLRB issued a controversial decision that made franchisors ”joint employers” with the individual franchisees they contract out to. The decision has the potential to dramatically overturn decades of established laws and greatly affect the franchise model for restaurants and other small businesses that contract with a larger brand name.

On Tuesday, a judge ruled in Vann v. Massage Envy Franchising LLC that the franchisor was not the employer of the individual businesses they contract out to.

“In a case involving a massage therapist who alleged violations of minimum wage laws, Judge Roger T. Benitez of the U.S. District Court for the Southern District of California ruled on January 6 that Massage Envy, a corporate franchisor, was not the employer of therapists in its franchisees’ California stores,” IFA noted.

They added, “Judge Benitez found that although the national company set standards, procedures and rules for local store operators, the individual alleging violations failed to show that Massage Envy was a joint employer with its franchisees.”

“The ruling is the second major judgment in recent months which upheld a decades-old understanding of the meaning of joint employer,” The IFA concluded. “In late August, 2014, the California Supreme Court declined to hold franchisor Domino’s Pizza LLC liable in a sexual harassment case.”

Matt Haller, senior vice president of Media Relations and Public Affairs, told TheDCNF, “It’s pretty clear, again, that the NLRB continues to ignore established law.”

“Clearly, franchisors are not joint employers with their franchisees,” Haller said.

 The NLRB has defended their ‘joint employer’ decision by stating…”
Originally posted by The Daily Caller. Full article at http://dailycaller.com/2015/01/10/courts-and-nlrb-disagree-on-joint-employer-ruling/

Business Leaders and White House Clash Over Current and Upcoming Regulation

“With the White House taking a more aggressive role in setting labor standards, industry groups are beginning to fight back — lashing out at the executive branch for pursuing “a partisan agenda.”

A coalition of five national industry groups — including the U.S. Chamber of Commerce — filed a complaint in federal court earlier this week to block a change to the way the National Labor Relations Board (NLRB) administers unionization elections. The new regulatory framework, which the Chamber and other industry groups derisively refer to as the “ambush election” rule, makes it easier for workers to quickly call an ballot by allowing for electronic filing of documents and preventing employers from slowing the process through pre-election litigation.

In a statement announcing the complaint, the industry groups behind the challenge accused the NLRB of being a partisan, activist institution.

“The NLRB has thrown objectivity and fairness out the window in its single-minded pursuit of Big Labor’s union-organizing goals,” said David French, senior vice president of the National Retail Federation, one of the groups behind the suit.

Linda Kelly, general counsel and senior vice president for the National Association of Manufacturers, said that with the introduction of the new NLRB rule, the Obama administration “has made it clear that it plans to pursue a partisan agenda to overturn longstanding and effective labor policy.”

The White House has made little effort to conceal its intentions in that regard. In recent weeks, the NLRB has come down on the side of organized labor in a number of other significant, precedent-setting decisions.

On Dec. 19, for example, the labor board’s general counsel determined that fast-food chain McDonald’s can be held responsible for labor law violations committed by owners of its franchised locations. McDonald’s has vowed to resist that decision in court.

The Labor Department has also been keeping busy. The department’s Wage and Hour division has stepped up its enforcement of wage and hour violations such as unpaid overtime or wage theft, and Labor Secretary Thomas Perez is expected to announce soon new rules expanding the number of workers who are legally entitled to overtime pay.

During a Wednesday speech to the National Summit on Raising Wages — a Washington, D.C. event sponsored by AFL-CIO, America’s biggest labor federation — Perez stressed what he said was the essential partnership between the labor movement and President Barack Obama.

“He is here in spirit,” he said. “He is here in his values.”

Organized labor and the White House have not…”

 

Originally posted by Aljazeera America. Full article at http://america.aljazeera.com/articles/2015/1/7/showdown-loomingbetweenwhitehouseandbusinessoverlaborrules.html

The Health Care Mandate Kicks In THIS WEEK!

“On Thursday, the long-anticipated “employer mandate” kicks in, meaning businesses with 50 or more employees need to start offering their workers health insurance plans, if they’re not doing so already.

Well, for the most part. Nothing is ever simple when it comes to health reform, especially in the group market. Employers with between 50 and 100 full-time workers may be able to postpone the mandate if they meet certain criteria.

Also, the “pay or play” mandate won’t begin on Jan. 1, 2016 for mid-size employers with non-calendar year-based plans, said Sarah Friend, consultant at The Partners Group. They won’t be subject to the mandate until the first day of the plan year in 2016.
The employer mandate was originally schedule to go into effect in January 2014, but it was pushed back a year, after business groups raised a hue and cry over the complexity of the requirements.
Now the deadline is looming. Employers with 100 or more workers must start providing health benefits to at least 70 percent of their full-time employees starting Jan. 1 (and 95 percent in 2016) to avoid a “sledgehammer penalty.”
However, they may still be at risk of “tack hammer” penalties if they don’t offer affordable minimum essential coverage to all their full-timers if an employee subsequently gets federally subsidized insurance on the public exchange.
Employers who don’t offer insurance will be …”

 

Originally poster by Biz Journal. Full article can be found at http://www.bizjournals.com/portland/blog/health-care-inc/2014/12/remember-that-employer-mandate-it-kicks-in-this.html

Congress Passes the “Small Business Efficiency Act”

“Legislation creating a voluntary certification program for professional employer organizations within the IRS received approval from the US Senate last night, the National Association of Professional Employer Organizations announced. It passed the House two weeks ago.

The legislation, the Small Business Efficiency Act, was part of a tax extenders bill passed by the Senate, according to NAPEO.

“This is truly a historic moment for the PEO industry,” said NAPEO Chairman Brent Tilson, president and CEO of Tilson HR in Greenwood, Ind. “We urge the president to sign the extenders bill and we look forward to working with the administration on the regulations so we can get the necessary framework in place to broaden our reach within the small business community.”

Under the legislation…”

 

Originally posted by Staffing Industry Analysts. Full article can be found at http://www.staffingindustry.com/Research-Publications/Daily-News/Senate-approves-PEO-certification-bill-buyers-would-get-tax-assurance-32562

 

Telecommuting and Overtime – What You Need to Know

“In today’s ever-increasing digital world, more employers than ever are turning to telecommuting to help reduce overheard and increase morale of employees. Importantly, however, state and federal laws apply equally to employers and employees, regardless of whether they work on-site or remotely. Among the most common issues and missteps which affect employers with telecommuting employees are wage and hour laws and, more specifically, overtime laws.

All non-exempt employees must be paid for all time worked, regardless of whether the work was performed on-site or remotely. Importantly, this rule typically applies regardless of whether the employer authorized the performance of the work or not. If, for instance, an employee works more than 40 hours per week at home, the employer must…”

 

Originally published by The National Law Review. Full article can be found at http://www.natlawreview.com/article/telecommuting-employees-and-unauthorized-overtime-must-employer-pay

Obama’s Immigration Executive Order and What It Could Mean for You

“President Obama’s November 20 executive orders could allow as many as five million undocumented immigrants to remain in the US if they meet certain conditions. Employers should note that the order also extends the stay of foreign graduates of US colleges with high-tech skills.

What the order does not do is grant undocumented workers citizenship or the right to remain in the US permanently. However, it does enable individuals to request work permits and deportation relief for three years at a time provided they meet the following conditions:

  • Have been in the US for at least five years;
  • Have children who are citizens or legal residents;
  • Pass a criminal background check; and
  • Are willing to pay their fair share of taxes.

President Obama’s plan aims to increase the number of…”

 

Originally posted by XpertHR. Full article can be found at http://www.xperthr.com/news/immigration-executive-order-what-it-means-for-employers/16388/

NEVADA JOINS NINE OTHER STATES IN PROHIBITING USE OF CONSUMER CREDIT REPORTS FOR EMPLOYMENT

On October 1, 2013, Nevada will be the tenth state to prohibit the use of credit information for employment purposes.

This new law was introduced by Senator Parks on February 18, 2013.  This bill was intended to “prohibit employers from conditioning employment on a consumer credit report or other credit information.”

Nevada Governor Brian Sandoval signed the bill into law on May 25, 2013 and it goes into effect on October 1, 2013.

 

The only exceptions under this new law are the following:

  • “The employer is required or authorized, pursuant to state or federal law, to use a consumer credit report or other credit information for that purpose;
  • The employer reasonably believes that the employee or prospective employee has engaged in specific activity which may constitute a violation of state or federal law; or
  • The information contained in the consumer credit report or other credit information is “job related” or reasonably related to the position for which the employee or prospective employee is being evaluated for employment, promotion, reassignment or retention as an employee.”

 

Job Relatedness is defined as a position which involves:

(a) responsibility for financial assets or employment with a financial institution;

(b) access to confidential information;

(c) managerial or supervisory responsibility;

(d) direct exercise of law enforcement authority;

(e) responsibility for or access to another person’s financial information; and

(f) employment with a licensed gaming establishment.

 

To read more click http://www.seyfarth.com/publications/MA052813LE