NYC Fast Food Employers Beware – Strict “Fair Workweek” Laws Are Coming December 1st

On May 30, 2017, New York City Mayor Bill de Blasio signed a bill enacting four laws, together called the Fair Workweek legislation package, aimed at creating more predictable work schedules for NYC’s fast food workers.  The laws go into effect on December 1, 2017.

The first law requires that the fast food employer provide written notice to the fast food employee of the employee’s work schedule, including regular and on-call shifts, 14 days before the worker’s first day of the new schedule.  The written notice must be posted in a conspicuous place at the workplace that is readily accessible and visible to all employees and transmitted to each employee, including via e-mail, if e-mail is regularly used to communicate scheduling information. Modification to the employee’s work schedule within 14 days of the first day the schedule begins will result in employer penalties ranging from $10 to $75 depending on the nature and timing of the modification. The penalty is paid directly to the affected employee.

The second law mandates a minimum amount of time between a fast food worker’s shifts.  A fast food employer will no longer be permitted to schedule a worker for two shifts with fewer than 11 hours between the end of the first shift and the beginning of the second shift when the first shift ends the prior calendar day or spans two calendar days. However, the worker may request or consent in writing to working back-to-back shifts with fewer than 11 hours between. Absent such request or consent, the employer will be subject to a $100 penalty each time the employee works such back-to-back shifts.

The third law prohibits the fast food employer from hiring new employees, including subcontractors, to work regular or on-call shifts before exhausting its current workforce. Under the new law, when shifts become available, the fast food employer must post a notice in a conspicuous and accessible location for at least three calendar days, and transmit the notice directly to each employee that states, among other things, the number of shifts offered, the schedule of the shifts, whether the shifts will occur at the same time each week, the length of time required for coverage, and the number of workers required for coverage. Assuming these conditions are met, the employer may look to outside employment only if none of the current fast food employees accept the open shift.

Finally, the fourth law allows a fast food employee to authorize the employer to deduct voluntary contributions from the employee’s paycheck and to remit the payment directly to the employee’s designated non-profit organization. The deduction must be at least $6.00 and only once per pay period.

New York City follows San Francisco and Seattle as the third major city to enact Fair Work Week legislation. To understand how the Fair Workweek legislation package affects your fast food business and your employees, please contact Nicole L. Leitner, Esq., a member of the Wage & Hour Compliance Practice Group, at (973) 387-7897 or nleitner@nullnullgenovaburns.com, or John Vreeland, Esq., Chair of the Wage & Hour Compliance Practice Group and a Partner in the Labor Law Practice Group, at (973) 535-7118 or jvreeland@nullnullgenovaburns.com.

Third Circuit Stymies Employer’s Attempt to Force FLSA Overtime and Meal Break Pay Claims into Collectively Bargained Arbitration

Earlier this month, in a 2-1 decision, the Third Circuit Court of Appeals held that certified nursing assistants covered by a collective bargaining agreement are not required to arbitrate their FLSA claims before seeking court relief despite a mandatory arbitration clause in their labor agreement. The assistants claimed that their shift differentials should be included in the calculation of their overtime pay and challenged the deductions from their pay for meal breaks they did not take. The Third Circuit held that resolution of the assistants’ FLSA claims did not depend on an interpretation of language in the labor agreement and, therefore, the assistants were not required to arbitrate their claims. Jones v. SCO Silver Care Operations LLC (May 18, 2017).

The Court of Appeals explained that a court may compel arbitration of an FLSA claim when (1) the arbitration provision clearly and unmistakably waives the employee’s ability to vindicate federal statutory rights in court; and (2) the statute does not exclude arbitration as an appropriate forum. Here, the labor agreement’s grievance-arbitration provision did not expressly refer to FLSA or wage-hour claims, so there was no effective waiver of the right to go to court. Nonetheless, the Third Circuit recognized that even where a labor agreement’s arbitration clause fails to refer to the FLSA, the FLSA claimant may be forced to arbitrate disputes over an interpretation of a labor agreement if the FLSA claims are “inevitably intertwined with the interpretation or application” of the labor agreement.

On the issue of shift differentials, SCO Silver Care argued that the FLSA claim alleging miscalculation of the overtime rate consisted of a dispute over an implicit term of the labor agreement and whether shift differentials already include an overtime pay component. The Court rejected this argument and held that the overtime claim was governed by the FLSA, no analysis of the labor agreement’s treatment of shift differentials was required, and the Court should determine only whether the shift differentials at issue are remuneration that the FLSA requires to be included in the calculation of an employee’s regular hourly pay rate.

On the question whether the assistants’ meal breaks must be treated as hours worked, the employer argued that resolution of this issue depends on determining various meal break practices that occurred while the labor agreement was in effect and that this determination should be made by an arbitrator. The Court rejected this argument as well and found that the alleged meal break practices raised factual issues as to what work was performed during meal breaks and did not require a review of language in the labor agreement. The Court stated that the employer could not “transform these factual disputes inherent to any FLSA claim into disputes over provisions of the CBA subject to arbitration.”

If you would like to discuss how the Third Circuit’s decision affects your pay policies, arbitration clauses, wage and hour compliance program, and your business, please contact Patrick W. McGovern, Esq., Partner in the Firm’s Wage and Hour Compliance Practice Group at 973-535-7129 or at pmcgovern@nullgenovaburns.com.

 

 

 

Virginia Federal Judge Upholds Trump Immigration Executive Order Signalling Possible Split in Circuits

On March 24 President Trump’s revised immigration ban which took effect March 16, 2017 (March Order) was found to be enforceable for the first time. U.S. District Judge Anthony J. Trenga in Alexandria, Va., denied an emergency request for a temporary restraining order (“TRO”) to suspend enforcement of the March Order. Judge Trenga diverged from his counterparts in Hawaii and Maryland who granted temporary restraints against the March Order. On March 15 U.S. District Court Judge Derrick Watson in Honolulu issued a TRO pending further order of the Court and blocked core provisions of the March Order on the basis that the Order is an unconstitutional establishment of religion and inflicts immediate harm on Hawaii’s economy, education and tourism; this order is on appeal to the Ninth Circuit. Specifically, Judge Watson blocked the 90-day ban on entry of foreign nationals from the six Muslim-majority countries (Iran, Syria, Libya, Sudan, Yemen and Somalia) and the 120-day ban on U.S. entry by all refugees. The next day U.S. District Court Judge Theodore D. Chuang in Greenbelt, Maryland issued a nationwide preliminary injunction blocking the part of the March Order that suspended the issuance of visas to citizens of the six banned countries; Judge Chuang’s decision is on appeal to the Fourth Circuit which will hear arguments on May 8. Judge Chuang and Judge Watson both found that the March Order was intended to discriminate against Muslims. On March 29, Judge Watson converted the TRO into a nationwide preliminary injunction blocking provisions of the March Order indefinitely.

The Virginia lawsuit was brought by Linda Sarsour, national co-chair of the Women’s March on Washington and a Muslim activist. Ms. Sarsour relied on Trump’s public remarks and argued that the “long and unbroken stream of anti-Muslim statements made by both candidate Trump and President Trump, as well as his close advisors, which, taken together, makes clear that [Trump’s January and March Orders] are nothing more than subterfuges for religious discrimination against Muslims.” In deciding not to enjoin the March Order, Judge Trenga reasoned that the March Order was “explicitly revised in response to judicial decisions that identified problematic aspects of EO-1 [Trump’s January Order]…” and cited that part of the March Order that “expressly excludes from the suspensions categories of aliens that have prompted judicial concerns and which clarifies or refines the approach to certain other issues or categories of affected aliens.” Judge Trenga found no violation of the Establishment Clause on the grounds that the March Order “clearly has a stated secular purpose: the ‘protect[ion of United States] citizens from terrorist attacks, including those committed by foreign nationals.’” Judge Trenga also concluded that the substantive revisions reflected in the March Order precluded findings that the predominant purpose of the March Order is religious discrimination against Muslims and that the March Order is a pretext for this purpose. Judge Trenga wrote that to proceed otherwise required his “extending [the] Establishment Clause jurisprudence to national security judgments in an unprecedented way.”

Judge Trenga’s March 24 decision is not immediately appealable; Sansour’s court challenge will proceed and the Administration must answer the complaint. If Judge Trenga dismisses the complaint, an appeal to the Fourth Circuit Court of Appeals is expected and may then be consolidated with the pending appeal of Judge Chuang’s preliminary injunction. Given the increased likelihood of a split in the Circuits, the March Order may ultimately be reviewed by a fully constituted Supreme Court. Meanwhile, Judge Watson’s national injunction remains in effect and the attorneys general for California, Maryland, Massachusetts, New York and Oregon have joined Washington in filing another complaint challenging both the January and the March Orders.

If you would like to discuss how the March Executive Order or these court decisions affect your employees and your business, please contact Patrick W. McGovern, Esq., Partner in the Firm’s Immigration Law Practice at 973-535-7129 or at pmcgovern@nullgenovaburns.com.

9th Circuit Refuses to Stay Nationwide Injunction Against Enforcement of Trump Immigration Order While Government Appeals

On February 9, 2017, the Court of Appeals for the Ninth Circuit affirmed the U.S. District Court’s Temporary Restraining Order prohibiting nationwide enforcement of key portions of the immigration Executive Order issued on January 27. A unanimous three-judge panel, consisting of two Democratic appointees and one Republican appointee, in a per curiam opinion, ruled that “the Government has not shown a likelihood of success on the merits of its appeal, nor has it shown that failure to enter a stay would cause irreparable injury, and we therefore deny its emergency motion for a stay.” As a result, the TRO stands and aliens from the seven listed countries (Iraq, Iran, Syria, Somalia, Sudan, Libya and Yemen), including those with immigrant and non-immigrant visas, may continue normal processes for entry into the U.S. and refugees from the seven countries, including Syria, may resume their proceedings to relocate to the U.S. State of Washington v. Trump, (February 9, 2017).

Washington State and Minnesota argued that the Executive Order violated the Establishment and Equal Protection Clauses because it disfavored Muslims and that the TRO merely returned the nation temporarily to the status quo in effect for many years. The Government submitted no evidence to rebut the States’ arguments. The Government, the judges observed, was hard pressed to point to a single recent example of an entrant from one of the seven listed countries who was arrested for terrorist activities. Regarding the argument that the Executive Order violates the Establishment Clause, the court withheld judgment for the time being, pending a decision on the merits, explaining, “The States’ claims raise serious allegations and present significant constitutional questions.”

The Ninth Circuit decision to maintain the nationwide TRO of the Trump immigration Order is immediately appealable to the Supreme Court. The President’s immediate tweet — “See You In Court, The Security Of Our Nation Is At Stake!” – anticipates that the Supreme Court will ultimately review the constitutionality of the Executive Order.

If you have any questions or would like to discuss how the Executive Order affects your employees and your business, please contact  Patrick W. McGovern, Esq., Partner in the Firm’s Immigration Law Practice at 973-535-7129 or at pmcgovern@nullgenovaburns.com.

New York State Launches Aggressive Campaign to Enforce The New Minimum Wage Law

On December 31, 2016, the new minimum wage law in New York State took effect.  New York’s minimum wage law is among the most complicated in the country. The minimum wage will gradually increase to $15.00 in the coming years, with annual increases to take effect on December 31st. However, how quickly the minimum wage reaches $15.00 depends on where your company is located, the type of business you are in, and whether you are a small or a large employer. For example, the minimum wage in NYC will increase as follows:

New York City 10 or fewer employees 11 or more employees
December 31, 2016 $10.50 $11.00
December 31, 2017 $12.00 $13.00
December 31, 2018 $13.50 $15.00
December 31, 2019 $15.00

For Nassau, Suffolk and Westchester counties, the increments began December 31, 2016 and will conclude on December 31, 2021, with the following increases annually on December 31 no matter the size of the workforce: $10.00, $11.00, $12.00, $13.00, $14.00 and $15.00.  For the rest of New York State, the increments began December 31, 2016 and will conclude on December 31, 2020, with the following increases annually on December 31 no matter the size of the workforce: $9.70, $10.40, $11.10, $11.80, $12.50 and $15.00.

There is a special carve out for fast food companies.  By December 31, 2018, fast food companies in NYC will reach the $15.00 and by July 1, 2021 the rest of NY State’s fast food companies will reach $15.00.

The New York Department of Labor (NYDOL) plans to aggressively enforce the new law and has created a 200-investigator unit to ensure employers are appropriately increasing employee pay to at least the minimum wage. The newly formed State Minimum Wage Enforcement and Outreach Unit’s mission is to inform workers of the new minimum wage law and to ensure they are properly paid.  The State has also established a hotline for workers to report violations of the new minimum wage law. Hotline calls will initiate a NYDOL compliance audit.  If violations are found, a company is subject to a $3.00 fine for each hour the company failed to pay the required minimum wage to an employee plus back wages and liquidated damages.

If you have any questions or would like to discuss the new NYS minimum wage law and its effect on your business, please contact John Vreeland, Esq., Chair of the Wage & Hour Compliance Practice Group and a Partner in the Labor Law Practice Group at (973) 535-7118 or jvreeland@nullgenovaburns.com, or Nicole L. Leitner, Esq., a member of the Wage & Hour Compliance and Labor Law Practice Groups at (973) 387-7897 or nleitner@nullgenovaburns.com.

Key 2017 Legal Changes that Employers and Federal Contractors Must Know About

Ready or not, 2017 is upon us and with it come many regulatory changes and important deadlines for employers and individuals. Make sure your New Year’s resolutions include compliance with the following changes and deadlines pertinent to employers and federal contractors.

Affordable Care Act

Employer Reporting. In November, the IRS extended the deadline for employers to meet their ACA reporting requirements. Employers required to furnish employees with Forms 1095 now have until March 2, 2017 to do so. The deadline to submit the Forms to the IRS remains February 28, 2017 for paper returns or March 31, 2017 for electronically-filed returns.

Marketplace Insurance. The deadline for individuals to obtain marketplace insurance coverage beginning January 1, 2017 expired on December 15, 2016. Individuals who want to enroll in marketplace insurance coverage for the balance of 2017 must do so by January 31, 2017. After the January 31 deadline, individuals may enroll in marketplace coverage only if they qualify for a Special Enrollment Period.

Required Contribution Percentages. For tax years and plan years beginning on and after January 1, 2017, the IRS increased to 9.69% of employee household income the maximum cost of coverage the employer can charge the employee for purposes of the employer mandate penalty. The IRS also increased to 8.16% of the employee’s household income the maximum cost of coverage the employer can charge the employee for purposes of determining whether the employee is eligible for an affordability exemption from the individual mandate.

IRS 2017 Contribution Limits for Retirement Plans and IRAs

The following are the IRS contribution limits for 2017:

  • 401(k) and 403(b) employee contribution limit: $18,000.
  • 401(k) and 403(b) catch-up contribution limit: $6,000.
  • IRA employee contribution limit: $5,500.
  • IRA employee catch-up contribution limit: $1,000.
  • 401(a)(17) compensation limit: $270,000.

Benefit Plan Changes

In May, the HHS Office of Civil Rights issued final rules implementing Section 1557 of ACA. Health programs must comply with these nondiscrimination rules effective January 1, 2017. Additionally, in May, the EEOC issued rules implementing Title I of the ADA and Title II of GINA as they relate to employer wellness programs. Employers must conform their wellness programs with these rules effective January 1, 2017. Plan sponsors that made material modifications to their benefit plans in the past plan year must provide participants with a Summary of Material Modifications within 210 days after the end of the plan year of the modification. For plan years ending on December 31, 2016, the SMM must be provided by July 30, 2017.

New York Minimum Wage and Overtime Salary Exemption Increase

Effective December 31, 2016, the N.Y. minimum wage and salary threshold exemption for time-and-a-half overtime pay increase based on the employer’s size and region as follows:

Minimum Wage Increase

  • New York City: Large Employer (11 or more employees): $11.00 per hour.
  • New York City: Small Employer (10 or fewer employees): $10.50 per hour.
  • Nassau, Suffolk and Westchester Counties: $10.00 per hour.
  • Remainder of New York: $9.70 per hour.

Overtime Salary Exemption Increase

  • New York City: Large Employer (11 or more employees): $825.00 per week.
  • New York City: Small Employer (10 or fewer employees): $787.50 per week.
  • Nassau, Suffolk and Westchester Counties: $750.00 per week.
  • Remainder of New York: $727.50 per week.

New Jersey Minimum Wage Increase

Effective January 1, 2017, the New Jersey minimum wage increases to $8.44 per hour.

EEO-1 Report

During 2017, no federal contractor or subcontractor is required to file an EEO-1 Report with the EEOC or DOL Office of Federal Contract Compliance Programs. The next filing date is March 31, 2018. For the March 31, 2018 filing and all future filings, EEOC and DOL will not accept paper filings. All filings must be done online. Finally, the snapshot pay period for the EEO-1 Report due on March 31, 2018 will be from October 1 to December 31, 2017 instead of July 1 to September 30.

Pay Transparency

Beginning January 1, 2017, pursuant to E.O. 13673 and the DOL Final Rule, a federal contractor or subcontractor must furnish a wage statement to each individual performing work under the federal contract if the individual is subject to the wage requirements of the FLSA, the Davis Bacon Act or the Service Contract Act. The wage statement must be provided each pay period and must include 1) the number of straight time hours worked; 2) the number of overtime hours worked; 3) the rate of pay; 4) gross pay; and 5) itemized additions to or deductions from gross pay. The federal contractor or subcontractor must inform an overtime-exempt individual in writing of the exempt status. For individuals treated as independent contractors, the federal contractor or subcontractor must provide a written notice that the individual is classified as an independent contractor.

Paid Sick Leave

Beginning January 1, 2017, pursuant to E.O. 13706 and the DOL Final Rule, a federal contractor or subcontractor must provide an employee with at least 56 hours per year of paid sick leave or permit an employee to accrue not less than one hour of paid sick leave for every 30 hours worked under a covered federal contract.

If you have any questions or would like to discuss how these changes and dates affect you or your business, please contact Patrick W. McGovern, Esq. at 973-535-7129 or pmcgovern@nullgenovaburns.com, or Nicole L. Leitner, Esq. at 973-387-7897 or nleitner@nullgenovaburns.com.