Webinar: What Employers Should Know About Class Waivers After Epic Systems Decision

Join LeClairRyan on Thursday, August 23 starting at 1 pm ET for this upcoming event.

In a decisive 5-4 opinion, the Supreme Court held in Epic Systems Corp. v. Lewis that class action waivers in employment arbitration agreements must be enforced under the Federal Arbitration Act (FAA), and neither the FAA’s saving clause nor the National Labor Relations Act (NLRA) suggest otherwise. This case reaffirms longstanding federal policy favoring arbitration.

This complimentary one hour webinar will discuss the Court’s findings, its potential impact on both employers and employees, the pros and cons of employment arbitration agreements, and best practices designed to maximize the enforceability of employment arbitration agreements.

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What Will Janus Mean for Employers?

In recent decades unions have faced several challenges.  First, union membership continues to decline.  As of 2017, 14.8 million workers in America (10.7% of the workforce) were represented by a union, which is down from 17.7 million in 1983 (20.1% of the workforce).1  Second, more than half the states have passed “right-to-work” legislation, which prohibits employees from being required to join a union or pay an agency fee as a condition of employment.2  With Kentucky and Missouri enacting legislation in 2017, 28 states are now “right-to-work” states.

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States Continue To Pass Equal Pay Legislation

While the Federal Equal Pay Act, which mandates employers to pay men and women the same pay for the same work, has been the law for 55 years, salary surveys continue to show that women are paid less than men.  In an effort to address this pay gap, states around the country are passing their own legislation.  Some of the states have enacted similar provisions, while a few have enacted unique provisions.

Ban On Salary History Inquiries

Studies have shown that one factor contributing to ongoing pay discrepancies is that an employee’s starting salary with an employer is often based upon the individual’s salary with their previous employer.  Consequently, discriminatory pay discrepancies may follow an individual through his or her career.  In an effort to address this issue, a growing number of states have banned employers from inquiring into an applicant’s salary or compensation history during the hiring process.  These states include:

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So You Think You’ve Got Independent Contractors? Well, Think Again

Virginia law requires most employers to carry workers’ compensation insurance in order to provide specific benefits to workers injured during the course of their work and to provide employers with protection from civil suits for those work-related injuries. Generally, an employer with more than three employees is required to carry workers’ compensation coverage. However, in the last decade especially, employers have more frequently misclassified employees as independent contractors in an effort to keep the number of employees below three and to avoid purchasing workers’ compensation coverage.

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The Tip Income Protection Act — Changes to Tip Pooling

The Tip Income Protection Act of 2018 (“the Act”) was signed into law on March 23, 2018 as part of the omnibus spending bill. The Act, buried in the 2,323 pages of the bill, amends the Fair Labor Standards Act (FLSA) and rolls back the Department of Labor’s 2011 regulation on tip pools.

The Act allows for employees who do not customarily receive tips to participate in tip pools, where the employer does not take a tip credit. The “employees” referred to in this act also include the back of the house employees like busboys, chefs, line cooks, and janitors. The Act makes it very clear that tips belong to the employees, and not employers, stating:

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SCOTUS Update: DOL Rule Reversal to Impact “Narrowly Construed” FLSA Class Exemptions

In a 5-4 decision, the Supreme Court ruled on Monday that automobile service advisors are exempt from the overtime requirements of the Fair Labor Standards Act. While the decision would appear to apply only to a narrow class of employers (automobile dealers), the majority opinion rejected the principle that exemptions to the FLSA should be construed narrowly, which has the potential for much broader impact.

Encino Motorcars v Navarro involved an exemption under the FLSA which provides that that statute’s overtime-pay requirement does not apply to “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles . . . if he is employed by a nonmanufacturing establishment primarily engaged in the business of selling such vehicles or implements to ultimate purchasers.” §213(b)(10)(A). For many years, this exemption was understood to exempt automobile service advisors (i.e., the folks who interact with customers at counters). 

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New Tax Law Affects Executive Compensation

The final tax reform bill signed by President Trump on December 21, 2017 makes substantial changes to executive compensation paid by private and public companies and non-profit organizations.  But it could have been worse.  Significant restrictions on nonqualified deferred compensation plans were removed from the final bill.  This article briefly summarizes the major changes:

Private Companies:  Employee Deferral of Stock Option Gains

The law adds a new Section 83(i) to the Tax Code that, subject to a number of conditions, allows employees to elect to defer the inclusion of income arising from the exercise of stock options and the payment of restricted stock units (RSUs) in stock for up to five years.  Key conditions and requirements include the following:

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DOL Announces PAID – the Pros and Cons of the Wage and Hour Self-Audit

Double (liquidated) damages and attorneys’ fees are often the tail that wags the settlement dog in government audits and wage and hour litigation.  Employers now have another strategy for dealing with unintentional wage and hour pay errors – but only on a trial basis.

On March 6, 2018, the United States Department of Labor Wage and Hour Division (WHD) announced a national pilot program for employer self-audit of wage and hour violations under the Fair Labor Standards Act (FLSA). The FLSA is the federal statute that governs payment of minimum wage and overtime pay for nonexempt employees.  The program, aptly named Payroll Audit Independent Determination or “PAID” for short, is intended to facilitate resolution of potential overtime and minimum wage violations under FLSA.  Expected to begin in April 2018, the WHD will implement this pilot program nationwide for approximately six months.

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NLRB Rules on Google’s Firing of Outspoken Engineer

A recently released NLRB memo has concluded that Google did not break any labor laws when they fired James Damore.  Damore, a senior software engineer, was fired in August after writing and circulating an internal memo that disclosed Google’s diversity initiatives.  His memo, titled “Google’s Ideological Echo Chamber,” alleged that women are underrepresented in technology because of innate, biological differences such as being prone to anxiety, having lower stress tolerances and looking for more work-life balance.

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A New ADA on the Horizon? The House Says Yes.

On February 15, the House in a 225 to 192 vote passed legislation to amend the Americans with Disabilities Act.  The ADA Education and Reform Act (H.R.620) would require plaintiffs hoping to sue businesses in federal court to first deliver written notice to that business, specifically detailing the illegal barrier to access.  The business would then have 60 days to develop a plan to address the complaint and outline improvements to remove the barrier.  Finally, the business will have an additional 60 days to remove the barrier, or in the very least make substantial progress in doing so.  

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