Publications

Avid readers of Stokes Wagner’s legal updates may be familiar with California’s Assembly Bill 51, a law that, until very recently, prohibited California employers from requiring employees or job applicants to sign arbitration agreements as a condition of employment or employment-related benefits. On Wednesday, a panel of judges of the U.S. Ninth Circuit Court of Appeals held in a 2 to 1 decision that AB 51 is unenforceable, as it is preempted by the Federal Arbitration Act. California employers are once again free to require their employees to sign arbitration agreements.

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Illinois Governor is expected to sign the “Paid Leave for All Workers Act” (SB-208), a statewide law that requires most Illinois employers to provide employees with 40 hours of paid leave per year that an employee may use for any reason. Once the Bill is signed, the law will go into effect on January 1, 2024.

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The SECURE 2.0 Act was signed into law on December 29, 2022, and contains several provisions that dictate how employers must offer and administer retirement plans. While Secure 2.0’s provisions are expansive and have different effective dates ranging into 2025, there are some major changes that are worth considering:

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On December 29, 2022, President Biden signed the Pregnant Workers Fairness Act (PWFA) and the Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP Act) into law.

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Over the past several years a growing number of cities, counties and states have enacted some form of pay transparency laws covering a wide range of issues. Most of these laws aim to prevent pay discrimination and provide employees with the ability to freely discuss their salaries. More states are passing or amending existing laws to require *salary disclosure *as part of their pay transparency laws. A brief summary of these laws is included below.

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The Federal Trade Commission issued a proposed rule on January 5, 2023, that would ban the use of so-called “non-compete” agreements, which are often used in certain industries to protect intellectual property and the companies’ investment in training their employees. According to the FTC, approximately 30 million employees are bound by such agreements, and because they decrease competition for workers, they lower wages across the board. “Non-compete clauses also prevent new businesses from forming, stifling entrepreneurship, and prevent novel innovation which would otherwise occur when workers are able to broadly share their ideas.” The FTC estimates that its proposed rule would increase American workers’ earnings “between $250 billion and $296 billion per year.”

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Passed in 2018, the District of Columbia’s Tipped Wage Workers Fairness Amendment Act’s (TWWFA) mandatory sexual harassment training provisions are now in effect. Employers with workers for whom an employer takes a tip credit must take several steps related to sexual harassment policies and training. Employers must ensure that they:

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On October 24, 2022, the Sixth District issued a decision in in Camp v. Home Depot, handing employees a major win in the wage and hour arena by holding that Home Depot’s practice of rounding hourly employees’ total daily worktime to the nearest quarter hour, rather than using the actual worktime recorded by Home Depot’s timekeeping system “Kronos.” The Court found the rounding resulted in the failure to pay employees for all time worked. Plaintiffs Camp and Correa filed a putative class action for unpaid wages and unfair competition, and Home Depot moved for summary judgment on the basis that the rounding policy was neutral on its face, neutral as applied, and lawful under See’s Candy Shops, Inc. v. Superior Court *(2012) 210 Cal.App.4th 889 (See’s). For the past ten years, *See’s has been cited in support of the rule that rounding is permissible if it “is neutral on its face and is used in such a manner that it will not result, over a period of time, in failure to compensate employees properly for all the time they have actually worked.” Granting summary judgment, the trial court reasoned that it could not disregard the binding appellate authority of See’s.

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The Department of Labor recently issued a new proposed rule distinguishing between employees, who are covered by the Fair Labor Standards Act, and independent contractors, who are not. This follows on the heels of a rule issued by the previous administration on the same topic, which has now been repealed. The previous rule elevated two factors (control and opportunity for profit or loss) as “core” factors above other factors in determining workers’ economic dependence on their employer, and slightly favored a finding of independent contractor status. The current proposed rule returns to a balanced review of factors, and is more geared to finding employee status, as the DOL expressly wants to ensure that workers are not deprived of their rights under the FLSA.

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1. Pay Transparency Law [SB 1162]

Starting on January 1, 2023, employers are required to do the following:

• Include the pay scale for a position in any job posting, whether the posting is internal or external (only for employers with 15+ employees).

• Upon an employee’s request, provide the pay scale for the position in which the employee is currently employed.

• Maintain records of each employee’s job title and wage rate history for the duration of an employee’s employment and three years after the end of the employment. These records shall be open to inspection by the Labor Commissioner.

• Provide pay scale data to any third-party who announce, post, publish, or otherwise make known a job posting to applicants.

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