back to top

Employment Law Blog

Categories: Wage & Hour

Federal Wage and Hour Division Issues Guidance as Schools Prepare to Reopen

September 4, 2020

COVID-19 has redefined the term “back to school” this year. On August 27, 2020, the Department of Labor (“DOL”) Wage and Hour Division updated is Guidance and added FAQs 98-100 to address employer and employee questions as schools implement remote, in-person and combined learning options.

The Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act, part of the Families First Coronavirus Response Act (the “FFCRA”), applies to employers with fewer than 500 employees and to leave taken between April 1, 2020 and December 31, 2020. FFRCA provides eligible employees with both up to two weeks of paid sick leave and up to 12 weeks of expanded family and medical leave (10 of which are paid) if an employee needs to “care for a child whose school or place of care is closed, or whose child care provider is unavailable, due to COVID-19 related reasons.”

According to the DOL, the FAQS “issued” specifically address “qualifying for paid leave when a child attends a school operating on an alternate day basis; a parent chooses remote learning when in-person instruction is available; and a school begins the year with remote learning but may shift to in-person instruction if conditions change.”

Children with Alternating or Hybrid Attendance (FAQ 98)


Employees with a child who attends a school that operates on an alternate-day or other hybrid schedule, may take paid leave under the FFCRA on the days that his/her child “is not permitted to attend school in person” and must participate remotely instead provided that no other suitable person is available to take care of the employee’s child. For the purposes of the FFCRA, the “school is effectively closed” on the days when the employee’s child cannot attend.

Employees Who Choose Remote Learning Over In-Person Attendance (FAQ 99)


If the school provides both in-person and remote learning options at the parent’s election, and the employee chooses the remote option due to COVID-19 concerns, the employee is not entitled to paid FFCRA paid leave. The rationale is that the school is, in fact, open. However, if the child is under a quarantine order or medical directive to self-isolate the employee may be eligible for paid leave if no other adult is available to care for the child.

Children with Remote Learning Option Only but Subject to Change (FAQ 100)


If the school announces that the school year will start out remotely due to COVID-19 concerns, but may open later in the year, the employee may take paid leave under FFCRA while the school remains closed. Later, if the school reevaluates its decision and decides to open, the availability of FFCRA leave “will depend on the particulars of the school’s operations” as discussed in FAQ 98 and 99.   

If, prior to the start of the school year, an employee has already exhausted his/her FFCRA leave, the employee is not entitled to additional leave merely because a new school year is beginning. Finally, as stated above, FFCRA leave obligations remain in effect until December 31, 2020 unless extended by Congress. As such, any “replenishment” of paid leave, whether to address school-related issues or otherwise, is a matter for Congress.

The foregoing information is current as of the date published. For up-to-date information, please be feel free to contact us.

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment
Category: Wage & Hour

DOL Announces FFCRA Regulations

April 2, 2020

Yesteray, the U.S. Department of Labor (“DOL”) announced a “new action” regarding the protections and relief available under the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, both part of the Families First Coronavirus Response Act (“FFCRA”). The Department’s Wage and Hour Division “posted a temporary rule issuing regulations pursuant to the new law, effective April 1, 2020,” available here.

FFCRA requires all private employers with less than 500 employees (subject to exemptions) to provide up to 80 hours (or 10 days) of paid sick leave for a “qualifying reason” related to COVID-19. In exchange, employers will receive a “tax credit” for the cost. According to the DOL, “[t]he legislation will ensure that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus, while at the same time reimbursing businesses.” 

For any questions regarding your obligations under FFCRA, please feel free to contact any member in our Labor and Employment Practice Group.

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment
Category: Paid Sick Leave

COVID-19 Highlights The Importance Of Having Employers' Personnel Policies And Employee Handbooks Reviewed And Updated Now By Counsel

March 26, 2020

As we all continue to struggle with the impact of the coronavirus, the pandemic has highlighted why employers must stay vigilant with regard to updating their personnel policies and employee handbooks.

Those businesses considering furloughs (unpaid leaves of absence), individual terminations and/or downsizings must consider whether those affected have written employment agreements and whether they are covered by any stand-alone personnel policies or policies contained within an employee handbook. This must be done while at the same time analyzing numerous employment statutes and laws. For example, what does an employee’s contract say about the right to terminate with or without cause? What does it provide for vacation and sick pay? Similarly, what does your businesses personnel policies and handbooks say about whether the company must pay paid time off, vacation and/or sick days if an employee is terminated?

Once an employer understands its contractual obligations, an analysis must be done of state paid sick leave laws, wage and hour laws, whether the adverse employment action could result in a discrimination or retaliation claim or implicates the WARN Act, whether it complies with the new Families First Coronavirus Response Act (“FFCRA”), enables those terminated to receive the benefits of the stimulus package that should be approved tomorrow, and on and on.

While it may or may not be too late to change an employers’ employee handbooks now to deal with immediate employment actions that employers are considering, it is important to make certain immediate changes that could protect the company as we continue down the rocky road still ahead of all of us as a result of the pandemic.

Employers who wish to have their personnel policies and employee handbooks reviewed should contact Steven Adler at sadler@lawfirm.ms.

Attorney: Steven Adler
Related Practice: Labor and Employment

U.S. Department of Labor Publishes Guidance on the Sick Leave And Expanded Family and Medical Leave Under The Families First Coronavirus Response Act

March 25, 2020

Today, the U.S. Department of Labor’s Wage and Hour Division announced “its first round of published guidance” to provide information to employees and employers about the protections and relief offered by the Families First Coronavirus Response Act (“FFCRA”) when it takes effect on April 1, 2020.

The FFCRA requires private businesses with fewer than 500 employees to provide eligible employees with paid leave under its two component parts, the Emergency Paid Sick Leave Act and the Family and Medical Leave Expansion Act, in exchange for which employers will receive tax credit. The legislation is intended to support employees during the pandemic while offsetting employers for the cost of the new benefits.

The guidance includes:
A Fact Sheet for Employees
A Fact Sheet for Employers
A Questions and Answers (FAQ) that addresses specific questions relevant to both employers and employees

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment

NYC Fair Workweek Law Withstands Industry Challenge

March 9, 2020

New York City's Fair Workweek Law requiring predictable scheduling for retail and fast-food workers, adopted in November 2017, withstood its most serious challenge last month from several business groups. 

The Fair Workweek Law, enforced by the Department of Consumer Affairs, provides that fast-food workers (including those who provide food and drink preparation, cooking, off-site delivery, security, stocking, cleaning, etc.) are entitled to estimated schedules, two weeks’ advance notice of work schedules, employees’ written consent to shift changes generally along with premium pay, priority to work shifts before hiring a new employee, and consent plus a $100 premium for opening the store within eleven hours of having closed it (“clopening”).

Several industry groups, including the NY State Restaurant Association, challenged the Fair Workweek Law by arguing that it was invalid because it sought to preempt the New York Labor Law. In a short three-page opinion, Justice Arthur F. Engoron found that New York City’s Fair Workweek Law “interferes with the freedom of contract and distorts capitalism,” and is “problematically enforceable” but concluded it was narrowly tailored and does not infringe on the state’s ability to regulate employment. He, therefore, dismissed the lawsuit.

We will follow any appeal filed by the industry groups as well as multiple bills currently pending before the New York City Council seeking to expand the law. 

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Employee Benefits, Wage & Hour

Behind the Curtain: New NJ Arbitration Organization Regulation Lifts the Veil

January 30, 2020

On January 21, 2020, New Jersey Governor Phil Murphy signed into law what appears to be first of its kind state legislation regulating arbitration organizations, such as the American Arbitration Association (AAA) and JAMS. On its face, the Act (S1490) is directed at “consumer arbitration,” meaning an arbitration involving consumer disputes involving goods and services, wherein arbitration is compelled by what is essentially a contract of adhesion.  Indeed, the first three sections of the Act clearly seek to level the playing field for consumers, including a prohibition on financial conflicts of interest and fee-shifting, and fee waivers for indigent consumers.  Yet, it is Section 4 of the Act mandating publication of data that may have the most wide-ranging, long-term impact on arbitration not just in New Jersey, but across the country.

The Mandate of Section 4

Section 4 of the Act requires that an arbitration organization that administers fifty or more consumer arbitrations each year publish quarterly and make publicly available certain information “regarding each consumer arbitration within the preceding five years.”  That information required to be publicly available includes, but is not limited to:

  • The name of the business that is a party to the arbitration;
  • The type of dispute including, but not limited to “goods, banking, insurance, health care, or employment,” and “in the case of an arbitration involving employment,” the range of the employee’s annual wages (below $100,000, between $100,000 and $250,000, and more than $250,000);
  • Whether the consumer was the prevailing party;
  • The type of disposition of the dispute, if known; and
  • The amount of the claim, award, and any other relief granted.

Section 4 further requires publication of data showing whether the consumer had legal counsel, the name of the arbitrator and fee collected in the arbitration, and how many times the business was previously a party to arbitration or mediation administered by the arbitration organizations.  This Section is also notable for what it does not require: publication of the consumer’s identity.

The Implications of Section 4

Section 4 has several implications and, at the same time, gives rise to several questions. 

Organizations like AAA and JAMS now must publish the above information for “each consumer arbitration.” Based on the Act’s definitions, a “consumer arbitration” encompasses disputes between a business and consumer who signed a standard contract written solely by the business to obtain “any goods and services primarily for personal, family, or household purposes,” including financial and healthcare services and real property.  That definition is expansive, but is largely in line with the definition of consumer arbitration in AAA Consumer Arbitration Rule 1. 

Notably, the Act would seem to require publication of the listed information not solely for consumer arbitrations that occurred in New Jersey or involved New Jersey-based parties.  Instead, the Act appears to force arbitration organizations operating in New Jersey to publish the information for each “consumer arbitration” no matter where the arbitration was conducted or who was involved.  Thus, the Act appears to have the effect of requiring arbitration organizations to collect and publish the required information for consumer arbitrations across the country, potentially numbering in the thousands.  It is not hard to imagine a future challenge to the facial scope of the Act.

Perhaps most conspicuous is the Act’s de facto prohibition on confidentiality concerning the disposition of consumer arbitrations.  The public will now be entitled to see several material aspects of each and every arbitration, most notably the name of the business, and nature and amount of the award or relief granted.  While each consumer’s name will not be published, the Act clearly lifts the veil of confidentiality often associated with private arbitration.  In fact, JAMS Rule 26 requires JAMS and the arbitrator to “maintain the confidential nature of the Arbitration proceeding and the Award,” except as “otherwise required by law.”  Certainly, the Act now requires non-confidentiality of the award (at least the amount and relief).  While AAA Consumer Arbitration Rule 43(c) does allow AAA to publish awards, it requires redaction of the parties’ names absent party consent.  Under the Act, of course, the name of the business party will be known.

In this same vein, Section 4’s publication requirements would seem to nullify any attempt by the parties to agree to the confidentiality of, for example, the arbitration award.  Suffice it to say, the Act largely wipes away confidentiality associated with consumer arbitration dispositions—at least as far as businesses are concerned.

Last, but certainly not least, despite purporting only to target defined “consumer arbitration,” Section 4 contains curious language invoking employment disputes.  Subsection 2 requires publication of the type of dispute involved, including “employment.”  Indeed, it goes on to specify that in an “arbitration involving employment,” the published data must specify employees’ annual wage range.  It is difficult, if not impossible, to envision a scenario in which a “consumer arbitration” as defined is simultaneously an employment dispute.  This begs the question of whether—wittingly or unwittingly—Subsection 2 roped employment arbitration into the publication requirement, thereby similarly eliminating certain confidentiality.  However, given the structure of Section 4, wherein qualification as a “consumer arbitration” is a condition precedent to requiring publication of information, arbitration organizations likely will confine publication of information strictly to consumer arbitrations.

Going Forward

            The Act takes effect May 1, 2020, and applies only to consumer arbitrations commenced thereafter.  Therefore, we likely will not see the full implications of the Act, including Section 4, until much farther into the future.  Nonetheless, qualifying businesses that utilize arbitration or are contemplating utilizing arbitration in their form contracts with consumers should now begin considering the impact of, among other things, the publication of arbitration results mandated by Section 4.  Relatedly, it remains to be seen which option for dissemination each arbitration organization selects: a searchable online database or hard copy.  Based on arbitration organization’s larger business interests, it seems likely that non-electronic publications will be preferred. 

One final, but no less important consideration for businesses is the elimination of fee-shifting by Section 3(a) of the Act.  That section prohibits a consumer from being saddled with attorneys’ fees and costs incurred if the business prevails.  No such prohibition would be encountered in court, where a contractual fee-shifting provision would most likely be enforced.

Attorney: Brian Block
Related Practice: Labor and Employment

New Laws Concerning Worker Misclassification

January 24, 2020

On January 20, 2020, Governor Phil Murphy signed into law a legislative package concerning worker misclassification and exploitation. The law cracks down on employee misclassification by allowing stop-work orders against employers who violate state wage, benefits and tax laws. The new law provides for penalties and requires employers to post a notice for their employees regarding misclassification.

From his first day in office, Governor Murphy has focused on the problems caused by worker misclassification. By misclassifying workers as independent contractors rather than employees, businesses avoid minimum wage and overtime laws, family and medical leave laws, tax withholdings and unemployment insurance contributions. This results in workers being exploited and the State not receiving its fair share of payroll taxes.

Under the new law, employers face an administrative “misclassification penalty” up to $250 per misclassified employee for a first offense and up to $1,000 per employee for each subsequent violation. It also provides for a penalty of not more than five percent (5%) of a worker’s gross earnings over the past twelve (12) months. An amendment also makes an owner, director, officer or manager of the employer liable for violations of the State’s wage and hour laws and employer tax laws.

The take-away: promptly have labor law counsel review your pay practices to ensure your business is not misclassifying workers. Ignoring these obligations exposes companies and executives to penalties and personal liability.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Wage & Hour

Challenges Will Continue To Mount For Employers In 2020

January 20, 2020

Remember Johnny Carson’s soothsaying alter-ego Carnac the Magnificent? No? Fine. Instead, settle in for some prognostication from me, the Fearless Forecaster. Once again I will gaze (not Adam Gase who, by the way, I predict will be back next year as the Jets head coach) into my crystal ball and predict what employment laws companies need to be most concerned about in 2020.

Just as the Fearless Forecaster predicted last year, sexual harassment will continue to haunt employers in 2020. My prescient comments a few years ago also will hold true in 2020, that as long as men retain positions of power, and men and women work together in the workplace, there will be work for employment lawyers. New Jersey’s new law, S-477, which just became effective on Dec. 1, 2019, and which permits victims of sexual assault and abuse a new two-year window to bring claims that were previously time-barred, will also provide some additional work for employment lawyers in 2020. New York recently passed a similar law, the Child Victims Act, extending the time for those type of claims.

Employers have other claims to worry about as we enter 2020. New Jersey adopted one of the strongest wage theft laws in the country in 2019. The Wage Theft Act (WTA) significantly enhances penalties should employers not pay workers what they are owed. The WTA provides in appropriate cases for treble damages and there is a six year statute of limitations, exposing employers to much larger claims. It also makes it far more likely that a successor entity will have liability for the sins of the predecessor, so corporate transactional lawyers need to be cognizant of this change when handling sales of businesses.

There also is personal liability under the WTA. The Fearless Forecaster predicts a huge uptick in wage and hour litigation over the next few years as a result. This will also include wage and hour class actions. Finally, just in case the above predictions are not enough to cause lost sleep, employers need to worry about another type of litigation that could prove extremely costly. In 2018 New Jersey adopted the Diane B. Allen Equal Pay Act, requiring pay equality across all protected categories, not just gender. Therefore, if a company pays people of color, for example, less on average than white employees, beware.

Employers can defend these claims if the pay differential is based on a seniority, a merit system or other bona fide factors such as education, experience and training. However, this law lends itself to class-action treatment. A six-year statute of limitations also ups the ante.

The Fearless Forecaster is more confident than ever before concerning his predictions. Let’s see this time next year whether he had 20/20 vision in 2020.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Harassment, Equal Pay Act

Employers Need To Protect Themselves From Expected Next Wave Of Employment Claims

September 30, 2019

While not a new issue, the next wave of employment claims will likely be led by state and federal departments of labor pursuing claims against employers for misclassifying as independent contractors workers who meet the test for being employees.

By classifying employees as independent contractors employers are able to avoid paying various benefits to these workers, ignore the minimum wage and overtime laws, deprive them of state and federal Family Leave laws and social security, and avoid unemployment claims. Misclassification denies states and the federal government many millions of dollars in revenues each year.  States and the federal government have attempted to crack down on these abuses in the past, but now, with so much revenue at stake, their efforts are likely to take hold to many employers’ financial detriment.

What distinguishes an independent contractor from an employee?  Courts and the government had looked at whether the workers’ services are an integral part of the business, the permanency of the parties’ relationship, the contractor’s investment in facilities and equipment, the degree of control exercised over the worker, whether the worker has an opportunity for profits and losses, whether the worker exercises judgement and initiative and whether the party providing the services does so through an independent business organization or operation.  New Jersey now applies the ABC test.  For an employer to establish that a worker is an independent contractor it must satisfy all three prongs, namely (A) that the worker is free from control or direction from the employer, (B) that the worker is providing a service outside the usual course of the employer’s business or is performing that work outside of all places of that business and (C) that the individual is customarily engaged in an independent trade, occupation or business.

In 2017 legislation was proposed entitled the Payroll Fraud Prevention Act.  It was to amend the Fair Labor Standards Act (“FLSA”) and make it unlawful for any person to (1) discharge or discriminate against any employee who files a complaint with respect to his or her employment classification or (2) wrongfully classify employees as non-employees.  The legislation sought to impose double the amount of liquidated damages already provided for under the FLSA.  The legislation was never passed.  However, shortly after New Jersey Governor Murphy took office he created a task force on the subject, which issued a report and recommendations in July of this year.  The report recommends legislative action to increase fines for misclassification, assess employers the costs of any investigation and hold business owners personally liable.  The New Jersey Department of Labor (“NJDOL”) also entered into a Memorandum of Understanding with the United States Department of Labor (“USDOL”) to work together to go after employers who misclassify their workforce.

There has also been a steady increase in civil litigation dealing with worker misclassification.  These suits often are brought as class actions and the damages can be large.  Damages can include the failure to pay overtime, employment tax contributions (for example, social security contributions) and unemployment.  Employers should have experienced counsel review their relationship with contractors and review any written agreements that may be in place, prior to getting the proverbial knock on the door by the NJDOL or the USDOL.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Wage & Hour, Employee Benefits

Employers Face Exposure Under New FLSA Overtime Rule

September 26, 2019

This past Tuesday, the U.S. Department of Labor (“DOL”) issued its final rule updating the commonly referred to “white collar” exemptions to the Fair Labor Standard Act’s (“FLSA”) overtime requirements. These updates include a long-anticipated second attempt at raising the “standard salary level” threshold for the exemptions. A similar increase was published in 2016, however, it was ultimately invalidated by a District Court in Texas. Now, three years later, the DOL is issuing a broader final rule with four key provisions that will require employers to take immediate action to have their current workforce assessed for possible reclassification.

The “standard salary level” provision previously mentioned raises the threshold weekly salary from $455 (or $23,660 per year) to $684 (or $35,568 per year). In other words, for a worker to qualify for the existing “Executive, Administrative, or Professional Employee” (“EAPE”) exemption, they must receive a weekly salary no less than $684. Similarly, a second provision adjusts the annual compensation requirement to classify employees as exempt as “Highly Compensated Employees” (“HCE”). Now, in addition to satisfying the traditional HCE test, employees must receive a total annual compensation of $107,432 (up from $100,000) to be exempt from the FLSA’s overtime requirements.

Of note, but likely less of a concern, the third provision supplants the new “standard salary level” for workers in the U.S. Territories and/or in the motion picture producing industry, who will instead be subject to “special salary levels” (e.g., $380/week for American Samoa; $455/week for Puerto Rico, Virgin Islands, Guam, and Northern Mariana Islands; and $1,043/week for motion picture industry workers).

Due to these significant changes, employers face legal exposure if they fail to reassess their employees’ status for the possibility of reclassification. Where a previously exempt employee no longer meets the thresholds, employers will need to weigh the costs and benefits of adjusting the employee’s weekly and annual compensation (which may be significant compared to the expected overtime worked by the employee). However, this is where the fourth and final key provision becomes critically important.   In recognition of “evolving pay practices,” the DOL will allow employers to consider “nondiscretionary bonuses and incentive payments” to satisfy up to ten (10%) percent of the standard salary level. Obviously, this may be the make-or-break factor in some reassessments.

These new provisions become effective on January 1, 2020. Employers are encouraged to take the next three months to assess their current workforce for possible reclassifications. As part of the process, employers would be wise to seek legal consultation to ensure that the non-salary requirements of the exemption are understood and well-established for each exempt employee, in order to avoid the costly results of misclassification under the FLSA.

Attorney: Philip Portantino
Related Practice: Labor and Employment
Category: Wage & Hour

New Jersey Strives to Become a National Leader in Advancing Employment Rights

August 27, 2019

This summer has been a very active regulatory period for employers in New Jersey. On July 1, 2019, the minimum wage was increased by $.50. Beginning with January 1, 2020, the minimum wage will increase each January 1st by $1.00 per hour until reaching $15.00 per hour in 2024. After 2024, the wage rate will continue to increase based on increases in the federal consumer price index for all urban wage earners and clerical workers.

In July, New Jersey passed another new law that prohibits employers from asking job applicants about past wages or salaries or screening applicants on the basis of wage history unless such information is voluntarily offered by the applicant. The law is intended to curb workplace discrimination and wage inequality for women and minorities.

On August 6, 2019, the Anti-Wage Theft bill was passed, creating one of the strongest wage protection laws in the country. Under this new law, employers who violate New Jersey’s wage and hour laws could be sued to recover back wages, treble damages and attorneys’ fees. The law aims to protect employees whose pay may not properly reflect all hours worked, minimum wage, overtime or other wage payments as required by law. The law also extends the timeframe for employees to file a claim from two years to six years.

Employers should understand that the law makes no distinction between documented and undocumented employees. Any attempt to avoid the minimum requirements of the wage & hour law will be punished without regard to the employee’s immigration law status. The law also holds employers and labor contractors jointly and severally liable for any violations, meaning an employer will be held liable for wage theft violations perpetrated by the labor contractor it hires. The law defines an employee as “any person suffered or permitted to work by an employer” thereby seeking that the law applies to every person working in the state.

Employees now have a rebuttable presumption in their favor if their employer fails to keep records of all hours worked in accordance who the New Jersey State Wage and Hour Laws. Additionally, an employer cannot escape liability from present or past employees by forming a new entity if the facts prove it to be a successor entity.

Business owners must become fully aware of these new employment requirements. It is important to confirm your employees’ classifications (i.e. exempt, non-exempt, independent contractor), ensure that complete records are being kept in accordance with state law requirements, update all Federal and State postings and employee notices and ensure that the company’s hiring practices, wage payment and sick leave policies are in full compliance.

With the passage of these laws, it is clear that New Jersey legislators are aiming to be leaders in advancing employee rights. Please speak to an Employment Lawyer at Mandelbaum Salsburg to be sure that your company is now doing what these new laws require.

Attorney: Gary Young
Related Practice: Labor and Employment
Category: Wage & Hour, Employment Litigation

New Jersey Bill A1094 Limits What Employers Can Ask Job Applicants About Past Wage Or Salary

August 9, 2019

On July 25th, New Jersey Bill A1094 was signed into law and will be effective on January 1, 2020. The new law prohibits employers from asking job applicants about past wages or salaries or to screen applicants based upon wage or salary history unless such information is voluntarily offered by the applicant. The law is intended to curb workplace discrimination and wage inequality for women and minorities. It is recognized that women make roughly $10,000 less per year than men. The act of acquiring knowledge of past wages has been found to taint the hiring process by perpetuating prior discrimination. Violations of the new law carry heavy consequences: $1,000 for a first violation, $5,000 for the second and $10,000 per violation after that. Such violations are also violations of the New Jersey Law Against Discrimination and expose employers to lawsuits.

How does this prohibition change the dynamic of the interview process for New Jersey employers? Employers must be cautious about the information that they request. Even oblique wage inquiries can be illegal. Questions on the application such as “applicant’s desired salary” or “applicant’s desired hourly rate” may seem to be directed at the employee’s desire but now might be found to be prohibited as pre-employment offer questions.

Employers may consider salary history in determining salary, benefits, and other compensation, and may verify an applicant’s salary history, if the applicant voluntarily, without employer prompting or coercion, provides salary history. Employers may also, after making an offer of employment which includes an explanation of the overall compensation package to the applicant, request the applicant to provide a written authorization to confirm salary history. However, the applicant may refuse to provide such information without adverse consequence.

Questions regarding wages, salaries, or benefits must be deferred until after the offer of employment has been accepted. These prohibitions do not apply to applications for internal transfer or promotion or knowledge obtained from prior employment with that employer. The prohibition also does not apply to employers acting pursuant to any federal law or regulation expressly requiring disclosure or verification of salary history for employment purposes. Employers may verify disclosures of non-salary information when conducting a background check provided the employer stipulates that salary information is not to be disclosed. Where the application is for a position involving incentive or commission plans, an applicant’s previous experience with incentive and commission plans and the terms and conditions of those plans may be solicited, provided there is no disclosure of the applicant’s prior earnings.

Business owners should now begin preparations for 2020 compliance by reviewing their hiring process, including application forms and questions to be asked during a job interview. This would be an excellent opportunity to critically review the hiring process and to weed out all illegal inquiries that may have remained due to inertia or other forms of inaction. Asking the wrong things, including past wage history, is dangerous and can be costly.

Attorney: Gary Young
Related Practice: Labor and Employment
Category: Equal Pay Act, Wage & Hour, Discrimination

New York's New Paid Time Off to Vote Election Law

June 17, 2019

Remember the long lines at polling sites last midterm? New York State has mitigated one obstacle to exercising the right to vote – unavoidably impacting employers.

On April 1, 2019, New York amended Election Law §3-110, effective immediately, and now requires employers to permit employees to “take off so much working time as will enable him or her to vote at any election”, including up to three-hours of paid leave.

What are the rules?

Although the law limits the paid portion of “voting leave” to three hours, it is silent on whether any portion of the leave may be charged against an employee’s general paid time off (“PTO”) bank.

Other rules include:

  1. Employees must provide at least two (2) days advance notice and be registered to vote. (The law is silent on whether written, advance notice is required, or whether an employer may require proof of voter registration).

  2. The time off must be taken “at the beginning or end” of the employee’s “working shift, as the employer may designate,” unless the employer and employee “otherwise mutually agree.”

  3. As under the prior version of §3-110, at least “ten working days before every election,” employers must post notice of the law in a “conspicuous place” until “the close of the polls on election day.”

The current posting requirement is available here.

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment
Category: Wage & Hour

U.S. Women's Soccer Team Sues for Equal Pay

March 11, 2019

We have written a number of times in this blog about recent changes in New Jersey to the New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 et seq. (“NJLAD”) relating to equal pay. See our blog from November 21, 2018 concerning the passage of the Diane B. Allen Equal Pay Act amending the NJLAD. See also our February 4, 2019 article on conducting Pay Equity Studies. We also predicted in other publications that lawsuits involving gender equality in terms of pay and working conditions would become more prevalent. Our prediction was prescient.

On March 8, 2019 the U.S. Women’s Soccer Team filed a class action lawsuit in federal court in California under the federal Equal Pay Act (“EPA”) and under Title VII of the Civil Rights Act of 1964 for gender discrimination. It follows a wage discrimination charge of discrimination filed with the United States Equal Employment Opportunity Commission (“EEOC”) in 2016 by five of the U.S. players. In February, the EEOC issued the players a right-to-sue letter.

In the lawsuit, the women complain about unequal pay and disparate treatment from the US Men’s Team in terms of travel arrangements and being required to play on turf fields. This suit is on the heels of a number of suits filed by the US Women’s Hockey Team and Norway’s women’s team‘s successful suit to be paid equally to its men’s counterpart.

The US women allege better results and higher TV ratings than the US Men’s team. However, there are some complicating factors at play here. The US Women’s Team and the US Men’s Team have different collective bargaining agreements. While the men receive higher game bonuses, they are paid only if they make the team, while the women receive guaranteed salaries supplemented by smaller match bonuses. Additionally, FIFA (soccer’s world governing body) pays men’s teams significantly more than women’s teams. In any event, stay tuned. We expect other, similar suits alleging discrimination in pay and working conditions.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Equal Pay Act, Discrimination

USDOL Issues Notice Of Proposed Rulemaking Concerning Changes to the Overtime Law

March 11, 2019

The federal Fair Labor Standards Act (“FLSA”) requires employers to pay at least minimum wage for all hours worked and overtime at one and one-half times employees’ regular hourly rates of pay for all hours over forty (40) in a workweek. However, Section 13(a)(1) of the FLSA provides an exemption from both the minimum wage and overtime for employees employed in bona fide executive, administrative, professional (the “white collar exemptions”) and outside sales positions. Sections 13(a)(1) and 13(a)(17) also exempts certain computer employees. Certain “Highly Compensated Employees” earning $100,000 or more per year also are deemed exempt.

On March 7, 2019, the United States Department of Labor (“USDOL”) issued a Notice of Proposed Rulemaking (“NPRM”) that would make more than one million more workers eligible for overtime pay. Previously, employees coming under the white collar exemptions also needed to earn $455/week ($23,660/year) to be exempt. The NPRM proposes increasing the amount to $679/week ($35,308), which would result in employers needing to pay more employees overtime. The proposal does not call for automatically updating of the salary threshold. In addition, the USDOL proposal would raise the bar for Highly Compensated Employees from $100,000 to $147,414. Finally, for the first time, it is proposed that employers be allowed to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to ten percent (10%) of the standard salary level.

The federal and state wage and hour laws are some of the most misunderstood and misapplied employment statutes. If your Company has questions concerning any employee’s eligibility for overtime or whether your workers are independent contractors or employees, we are here to help.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Wage & Hour

The Importance of Engaging in a Pay Equity Study

February 4, 2019

Background on the Need for a Pay Equity Study
The recent passage of the Diane B. Allen Equal Pay Act (the “Act”) amended the New Jersey Law Against Discrimination (“LAD”) to strengthen protections against employment discrimination and to promote equal pay for women and employees in other protected categories. The Act became effective on July 1, 2018. Being proactive under these new strict protections is of the utmost importance. As such, If you are a New Jersey employer, we urge you to engage in a “pay equity study.” The goal of which would be to develop an understanding of the Company’s current pay structures, and to either explain differences in pay among comparable employees or to correct pay differences that cannot be justified. Mandelbaum Salsburg's employment law attorneys stand ready to assist in this capacity.

It is now an unlawful employment practice under the LAD for an employer to pay any employee who is a member of a protected class less than the rate paid to other employees not members of that protected class for “substantially similar work when viewed as a composite of skill, effort and responsibility.” The Act does much more than just advocating gender pay equity. It expands equal pay on the basis of membership in the protected classes of the LAD, to include race, creed, color, national origin, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, pregnancy or breastfeeding, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or liability for service in the armed forces.

Limited Exceptions
There are very limited exceptions where an employer may pay a different rate of compensation to members of the protected class, including where a pay differential is due to seniority or a merit system. In all pay discrepancies, the employer must demonstrate each of the following:

  1. That the differential is based on one or more legitimate, bona fide factors other than the characteristics of members of the protected class, such as training, education or experience, or the quantity or quality of production;
  2. That the factor or factors are not, and do not perpetuate differential in compensation, based on sex or any other characteristic of members of a protected class;
  3. That each of the factors is applied reasonably;
  4. That one or more of the factors account for the entire wage differential; and
  5. That the factors are job-related with respect to the position in question and based on a legitimate business necessity.

What Exactly is Unlawful?
The Act provides that an unlawful employment practice occurs each time pay practices discriminate against an employee, and the employee can seek back pay for up to six (6) years. In this way the Act substantially lengthens the statute of limitations for claims based on pay equity to beyond the LAD’s normal, two (2) year statute of limitations.

If an employer is found guilty of violating the equal pay practices required by the Act, a judge or jury can award treble damages for the violation. Treble damages are also available to an employee who proves that the employer retaliated against her/him for requesting, discussing, or disclosing to (i) any other employee or former employee of the employer, (ii) a lawyer from whom the employee seeks legal advice, or (iii) any government agency, information regarding employee compensation/pay practices. Likewise, treble damages are available to an employee or prospective employee who is asked by the employer to sign a waiver regarding discussing or disclosing pay practices or rates.

A successful claimant will also be entitled to attorneys’ fees in a practice called “fee shifting.”

For all of these reasons, it is necessary to carefully review Company hiring and compensation practices to insure there is pay equity for employees who perform “substantially similar work” –the so-called pay equity study.

Advantages of a Pay Equity Study
A pay equity study will help your company reduce its potential liability by addressing three questions:

  • Which pay differences are at issue?
  • Whose pay should be compared?
  • What are the factors that explain differences in pay?
Specific and complete answers to the last question are critical. Absent being able to provide valid justifications and cogent explanations, your Company is potentially at great risk. The key challenge in finding these answers comes with the realization that the Company’s historic pay decisions were made one at a time, over an extended period of time and depended upon a variety of factors specific to the time at which they were made. Ultimately, the Company must able to explain and justify the cumulative results of all past pay decisions; a potentially difficult task.

Most companies keep a close eye on some of their pay decisions, such as the grant of merit raises and the starting pay of their positions. Unfortunately, tracking individual decisions are not enough. Although the Act refers specifically to pay decisions, in many cases the inability to reach into the past for data means that differences in existing levels of pay likely will be used to support a prima facie discrimination claim. The Act and other such laws refer directly to equal pay for the same work. Thus, how employees are paid today—not just the pay decisions of yesterday or yesteryear—must be examined and understood fully.

How the Process Works
The pay equity review process begins with comparing the pay of employees who are “similarly situated.” But individuals who are comparable today were not always thus. Given that pay today equals pay at hire plus all subsequent changes in pay, including those that emanate from promotion or transfer, employees that today perform similar work, in the not-so-distant past, may have worked in different jobs, different grades, different units, different locations or even different companies. Knowing this history may lead to better understanding, but this alone will do nothing to protect the Company from sustainable claims.

Differences in knowledge, skill, ability, effort or responsibility provide a legitimate basis for differences in pay among employees doing the same work. However, there are few, if any, direct measures of these factors available, and pay equity studies typically rely on the “usual suspects” to explain pay differences. These include:
  • Responsibility for people.
  • Knowledge.
  • Communication skills.
  • Physical demands.
  • Emotional demands.
  • Mental skills.
  • Initiative.
  • Length of time in job or grade.
  • Part-time status.
  • Physical/geographic location.
  • Company service time.
  • Education.
  • Prior experience (as measured by age or time between leaving school and hire).

Ultimately, Employers will need in-depth information to effectively explain and defend pay differences. Information that can be collected and analyzed through a pay equity study and maintained at the ready include:

  • Work activities: collect information about each job’s actual work activities and responsibilities; this may also include how, why and when the workers perform such activities.
  • Human Behavior: this can include the degree of perception exercised by the employee and other human behaviors such as communicating, judgment and writing and speaking skills.
  • Skilled (or not) use of Machines, Tools, Equipment and Other Work Aids: this could factor in computer use and literacy, knowledge dealt with or applied and services rendered.
  • Job Context: should include such considerations as physical working conditions, work schedule and social factors.
  • Human Requirements: this could include job-related knowledge or skills, education, training and/or work experience, and required personal attributes such as aptitude, physical characteristics, personality and interests.

Two caveats: first, the above factors must be dealt with as objectively as possible and, if capable of measurement, must not be tainted by cognitive bias; second, the law specifically does not permit the perpetuation of past discrimination. Thus, basing a hiring pay offer on previous pay, where such previous pay could be tainted, would only propel discrimination into the future. Employees must be placed into the pay scale in a manner that is rational and disciplined.

Ultimately, the adoption and maintenance of job descriptions is an integral part of a transparent, fair pay system. Having accurate job descriptions makes it much easier to evaluate and grade different jobs – and ensure that employees doing equal work receive equal pay. Job descriptions should follow job evaluation scheme factors. This will make jobs easier to evaluate and help avoid aspects of jobs more commonly performed by women being omitted or undervalued in the evaluation process, compared to those of jobs more commonly carried out by men. To the extent that current job descriptions exist, they should be reviewed as part of the preliminary review.

In addition to job descriptions, the second part of this comprehensive analysis involves the development of Salary Guides for all identified positions. One of the required Affirmative Action Plan reports, the Workforce Analysis, requests that the Company sort the jobs in each Department by wage or salary. Salary Guides are used by many businesses to help managers manage the compensation of new employees and to establish appropriate pay increases for existing employees while maintaining equity among the jobs in the company. Salary Guides provide a structure and logic for fairly compensating employees and managing the Company’s payroll costs.

Mandelbaum Salsburg’s Employment Law Practice can provide assistance and advice and help companies conduct this important survey. Involvement of legal counsel will provide you with necessary expertise and the protection of attorney-client privilege. If engaged, we would be prepared to work with one or more Company executives to review personnel information and compensation data. While it is clear that this process is no easy task; to do nothing (our usual default option) can lead to some very serious consequences. If you wish to learn more or to engage in this process, please contact Gary S. Young at gyoung@lawfirm.ms.

Attorney: Gary Young
Category: Equal Pay Act

Tis the Season to be Careful, Fa-la-la-la-la, la-la-la-la

December 7, 2018

Company holiday parties are often great for camaraderie and employee morale but are fraught with danger, whether it be harassment, religious discrimination or drinking and driving.

We don’t want to be accused of being the Grinch that stole Christmas. We are all in favor of holiday parties, so long as they are done right. Here are our top ten (10) tips:

  1. Remind employees in advance of the Company's anti-harassment policy;

  2. No mistletoe;

  3. Limit alcohol;

    1. Consider no alcohol or using drink tickets

    2. Designate a member of management to monitor employees

    3. Have rides home available or remind employees to consider Uber/Lyft, etc.

    4. Consider day-time parties

  4. No slow dancing;

  5. No unsupervised speeches or skits;

  6. Avoid religious symbols and religious music;

  7. If during off hours, do not require attendance or there may be exposure to wage and hour claims;

  8. If exchanging gifts, instruct employees as to what is appropriate and no gag-gifts;

  9. When selecting a menu, make sure it is inclusive to accommodate religious needs, i.e. Kosher meals; and

  10. If all else fails, promptly investigate any claims!

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Harassment

New Jersey Sick Leave Law

June 13, 2018

New Jersey’s Sick Leave Law (the “Law”) takes effect on October 29, 2018. It establishes a uniform, state-wide law that pre-empts all municipal sick leave laws and prohibits the passage of similar, local laws.  

Who is Covered?
The Law applies to all NJ employees (full and part-time) and any business with NJ-based employees (regardless of size). The only exclusion are construction industry employees covered by a collective bargaining agreement, per diem healthcare workers, and public employees who already receive this benefit.

How is Time Accrued?
Employees accrue one (1) hour of paid sick leave for every thirty (30) hours worked, up to forty (40) hours (five days) in a benefit year. Alternatively, an employer may "frontload" the entire forty (40) hours on the first day of a benefit year (as well as implement a more generous program).

A “benefit year” is any 12 consecutive months designated by the employer. Once established, an employer may only change the “benefit year” by first notifying the NJ DOL.

Sick leave benefits begin to accrue for:

  • Current employees, who have not already accrued sick leave under an existing policy or law, on October 29, 2018 (the effective date of the Law).
  • Employees hired after October 29, 2018 on the first date of employment. New employees may be required to wait 120 days after hire before “using” earned sick leave.

Carry Over?
Employers must either (a) allow up to 40 hours to carry over from one benefit year to the next or (b) pay employees for that time. It is the employee’s choice which alternative to accept.

Existing Policy?
Employers may comply with the Law if they already offer employees paid sick leave or paid time off (“PTO”) that accrues at a rate equal to or greater than one (1) hour of leave per 30 hours worked, and the policy is otherwise consistent with the Law.

“Sick Leave” Uses?
Earned sick leave may be used for:

  • Diagnosis, care or treatment of, recovery from and/or preventative care for an employee's own, or his/her family member’s, mental or physical illness or injury.
  • Absence due to a public health emergency that caused the closure of the employee’s workplace or the school or childcare facility of the employee’s child, or that requires a member of the employee’s family to seek care.
  • Absence to obtain medical treatment, legal services or to relocate related to an employee's or his/her family member's status as a victim of domestic or sexual violence.
  • To attend any school conferences requested or required by school staff to discuss a child's health condition or disability.

“Family members” is broadly defined to include an employee’s child, spouse, domestic partner, civil union partner, parent (including adoptive, foster or step-parent, or legal guardian), sibling (including foster or adoptive siblings), grandparent or grandchild, and the parent, grandparent or sibling of the employee’s spouse, domestic partner or civil union partner. Indeed, an employee may also use their sick leave for the care of a non-related individual whose close association with the employee is the “equivalent” of a family relationship.

What May Employers Do?

  • Require up to seven (7) days advance notice if an absence is “foreseeable,” and limit the use of “foreseeable” sick leave to certain dates.
  • Request notice “as soon as practicable” if an absence is “unforeseeable,” and the employee is aware of this requirement.
  • Request documentation to substantiate sick leave, but only if an employee is absent for 3 or more consecutive days.

Employer Obligations?
Employers must:

  • Notify current employees of their rights under the Law (by posting and distributing a notice) and new employees at the time of hire.
  • Maintain records of hours worked, and used, earned sick leave for 5 years.  (Failure to do so will result in a rebuttable assumption that the employer failed to allow employees to accrue time)

Employers are subject to private claims, and the penalties and remedies contained in the New Jersey Wage and Hour Law, including fines and possible imprisonment.

Recommendations?
Employers with NJ-based employees should review and adjust their current paid time off policies to ensure compliance with the New Jersey Sick Leave Law prior to October 29, 2018. 

Attorney: Lauren Topelsohn
Related Practice: Labor and Employment
Category: Paid Sick Leave

Executive Order to Review Worker Misclassification in NJ

May 7, 2018

On May 3rd Governor Phil Murphy continued his efforts to protect workers in New Jersey by signing an Executive Order establishing a Task Force on Employee Misclassification. The Executive Order estimates that misclassification of workers may deprive New Jersey of over $500 million annually in tax revenue and deprive workers of employment related benefits and protections.

Employers have a duty to withhold social security, Medicare and unemployment taxes from employees’ paychecks.  Failing to do so could result in significant liability, including penalties and interest. 

Courts in New Jersey now apply the ABC Test when deciding whether workers are independent contractors under the New Jersey Wage Payment Law and the Wage and Hour Law.  Employers must show each of the following:

  1. That the worker is free from the Company’s control in performing the services;
  2. That the worker performs those services outside the usual course of the Company’s business or outside the Company’s place of business; and
  3. That the worker is engaged in an independently established business.

Similarly, the Internal Revenue Service now uses an eleven factor test that is a refinement of its previous twenty (20) factor test.  Its test looks at the extent of behavioral and financial control over the worker as well as the type of relationship (including whether benefits are provided and the permanency of the relationship.)

The Take-away for Employers:  Promptly review your relationship with all consultants and workers you treat as independent contractors using these stringent tests.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Wage & Hour

Governor Phil Murphy's first act as governor was to sign an executive order promoting equal pay for equal work by prohibiting state agencies from asking job applicants about their salary history

April 23, 2018

The Governor is now about to sign legislation amending the New Jersey Law Against Discrimination (“NJLAD”) that will ban employers from paying women and other employees in a protected category less for “substantially similar work.” Rather than a two year statute of limitations, like other types of discrimination, this amendment provides for a six year statute of limitations for these pay disparity claims.  It also calls for treble (triple) damages.  The law also provides that employers cannot preclude employees from discussing their compensation.  Finally, it precludes employers from requiring employees to agree to a shorter statute of limitations for any claims under the NJLAD or to waive any other protections provided by that law.  A copy of the Bill is attached here.

Attorney: Steven Adler
Related Practice: Labor and Employment
Category: Wage & Hour

×

Visit our COVID-19 resource page for incisive legal and business insights.