This year, employers will face a number of challenges when it comes to managing, monitoring and maintaining their workforces. From providing paid sick leave and equal opportunity under state and municipal laws, to extending equal rights and benefits to transgendered employees, complying with these new obligations may require a change in the way you operate your business. Not only are these issues daunting, they can be costly for employers in terms of time, money and resources. Add to the mix the upcoming presidential election, and we could be in for some potentially game-changing results.
1. PAID SICK LEAVE
Among the difficult issues the MD General Assembly will tackle in this 2016 legislative session is paid sick leave. Montgomery County recently passed a paid sick leave law which will take effect on October 1, 2016. However, the rest of the state is in catch-up mode.
Currently, four states, the District of Columbia and no fewer than 20 other jurisdictions have passed paid sick-leave laws. These laws generally require employers to provide employees with a fixed number of days of paid-time off that may be used if they or a close family member becomes ill. Currently before the General Assembly is a paid sick leave bill which will require businesses with 10 or more employees to provide one hour of paid sick leave for every 30 hours worked.
The General Assembly must tread lightly as the proposed bill comes at a time when the state is struggling to avoid the perception of being unfriendly and unwelcoming to business interests. Nonetheless, we expect to see the General Assembly pass a paid sick leave bill this session.
2. THE 1099 WORKER
It is becoming increasingly clear that we now live in a “gig economy” – an economy where independent contractors are engaged in a particular task or short-term engagements. While this is the new economic reality, some observers believe companies in the new gig economy are exploiting would-be employees in an attempt to circumvent the employer-employee relationship and any liability that may arise from that. By calling certain staff members “independent contractors” and hiring others through temporary agencies, such employers are freed from many of the financial burdens, but not the benefits, of having employees.
Companies that owe their existence to the gig economy (e.g. Uber), however, are facing an alarming number of legal challenges to the independent contractor model they depend on to thrive. This year should yield important rulings from federal and state agencies on these types of work arrangements. As Congress, state and local lawmakers debate the issue this year, be on the lookout for the creation of a new category of independent worker protected by discrimination and collective bargaining laws.
In the meantime, impending changes and the increasing scrutiny directed toward independent contractors makes clear the importance for employers to carefully re-evaluate whether their independent contractors are properly classified.
3. TRANSGENDER WORKPLACE ISSUES
Transgender-related issues in the workplace took center stage in employment law this year, a phenomenon that will no doubt continue in 2016. Laws addressing practicalities such as which bathroom transgender employees and customers may use, as well as discrimination based upon gender identity will no doubt continue to be implemented throughout the country. In addition, some federal agencies are interpreting long-standing gender discrimination laws as expressly protecting employees who are transgendered.
Employers should ensure that employee policies related to discrimination address transgender employees and attendant issues.
4. OVERTIME PAY EXEMPTIONS
The U.S. Department of Labor (“DOL”) recently delayed until late 2016 the release of its final rule on modifications to the Fair Labor Standards Act’s (“FLSA”) overtime pay exemptions. However, observers expect the DOL to finalize changes to regulations governing mandatory overtime pay under the FLSA sometime in the fall of 2016.
Pro-business advocates are pressuring the DOL to lower the proposed maximum income of $50,440 (which is more than double the current salary threshold of $23,660) for salaried workers to qualify for overtime. They also want to ditch a proposal to index the threshold to the 40th percentile of income. These advocates warn that the proposed rule would drive down full-time employment and act as an incentive against ambitious workers receiving management training, all while costing employers millions.
Whenever the rule change comes, we believe it will come quickly. Accordingly, employers should begin preparing now. Prudent employers will begin thinking now about how they will deal with the final rules once they are published. In some cases it may mean re-classifying employees as non-exempt. In other cases, employers may instead choose to increase salary levels to meet the newly-established minimum. Finally, the new rules may prompt some employers to consider alternatives such as reductions in force, reorganization and consolidation of positions, or outsourcing certain functions to vendors. Whatever the employer’s response to the new rules, advance planning is essential.
5. SOCIAL MEDIA
According to the NLRB, employers cannot ordinarily take action against employees for posting comments or “liking” posts relating to pay, work hours and working conditions. Considering the increased attention being given to the employer-employee relationship vis-a-vis social media use, employers should be cautious when using information from social media in areas like recruiting; such action may be construed as unlawful.
Accordingly, employers should review their social media policies – what they can and cannot do – and whether such restrictions are necessary and lawful.
BONUS: NEW GUIDANCE ON EMPLOYMENT HANDBOOKS
The NLRB has ruled that many historically unchallenged “management rights” policies are now suspect. For example, in spite of employer-imposed prohibitions against employees making offensive or derogatory comments about the employer, its supervisors and/or those with whom it does business, such comments may indeed be a protected employee activity. Likewise, employers may not be able to prevent employees from discussing pay amongst themselves. In light of what we believe will be continued expansion of protected employee activities by the NLRB, employers must look carefully and in many instances, revise employee handbook language to be more specific, so as not to infringe upon employees’ rights to discuss such work-related issues as wages, work hours and workplace conditions.
McMillan Metro attorneys are available to answer inquiries regarding these and other workplace developments in the coming year.