The gig economy continues to prosper, fueled by some recent legal wins, which have been delivered at a crucial juncture for businesses reliant on the flexibility and cost efficiencies that come with classifying workers as independent contractors. These victories are not merely legal milestones — they are critical indicators of how companies can strategically navigate the complex area of worker classification to sustain their competitive edge amidst ongoing regulatory pressures and an anticipated paradigm shift due to the incoming Trump administration.
Duties Not Dollars: Texas Court Invalidates DOL’s Overtime Rule Before Anticipated January 1, 2025 Salary Level Increase
Posted in Employment Counseling & Workplace Claims Prevention, Non-Compete & Trade Secret Litigation, Wage & HourWith the upcoming change in administration, we expected that the U.S. Department of Labor’s (DOL) 2024 Overtime Rule ultimately would be cast aside, but the timing of the January 1, 2025 salary level increase before Inauguration Day was slated to be a potential headache for employers. A federal court in Texas has just invalidated the rule, sparing employers across the country the logistical challenge of being caught in the disequilibrium. In striking down the DOL Overtime Rule, the court found that the rule improperly focuses on “dollars” not “duties,” in contravention to Congressional intent and authority relegated to the DOL under the Fair Labor Standards Act (FLSA). The court’s ruling sets aside the DOL’s Overtime Rule on a nationwide basis, with its impact reverberating well beyond the parties involved in that litigation. With the 2024 Overtime Rule vacated and remanded to the DOL, the agency will have to start over. This legal development will render unnecessary the reclassification of exempt workers to nonexempt status for nearly three million workers, which was expected by the new year.
NYC’s Pet-Pawsitive Proposal: Paid Sick Leave for Pets Could Be Coming Soon
Posted in Employee Benefits, Employment Counseling & Workplace Claims Prevention, Medical & Other LeavesIn recent years, there has been a growing shift in mindset for pet owners that consider animals to be essential to their well-being and integral to their home life. In fact, one ASPCA survey reported that, in the early stages of lockdowns and quarantines during the COVID-19 crisis, nearly 1 in 5 households acquired a cat or dog, and the American Pet Products Association reported that pet industry expenditure in the United States reached over $147 billion in 2023. As this trend grows, workers are starting to seek employment benefits, like continued hybrid and remote working, to allow for the flexibility to take care of these new family members in their home. One of the most significant reflections of this policy shift is a newly proposed bill in New York City that would require employers to provide paid sick leave for workers who need to care for their sick pets. Here’s what employers need to understand about this proposed change and how it could impact their workplace policies.
Navigating Immigration Challenges Under the Second Trump Administration: What Employers Need to Know
Posted in Immigration Planning & ComplianceAs President-elect Trump’s administration prepares for a second term, employers should anticipate intensified changes to U.S. immigration policies and procedures. These changes are expected to significantly impact various immigration categories, including nonimmigrant and immigrant employment-based processes, hiring practices, and compliance responsibilities. The administration is likely to push forward with stricter enforcement, increased procedural challenges, and policies aimed at reducing foreign labor reliance. Employers should begin preparing now for these imminent changes, particularly in areas such as: E-Verify and I-9 compliance, H-1B, TN, EB-1-EB-5, F-1, H-4 EAD, DACA, TPS, and other nonimmigrant and immigrant visas and work authorization processes.
A Tip for Employers With Tipped Employees — Stay on Top of the Ever-Changing Guidance on the 80/20 Rule!
Posted in Employment Counseling & Workplace Claims Prevention, Wage & HourEmployers with tipped employees are constantly trying to keep up with the ever-changing and evolving tip credit rules promulgated by the United States Department of Labor (DOL) — specifically, what is known as the 80/20 rule. However, a recent federal appeals court has given the 80/20 rule the pink slip, and it may not be returning anytime soon, in light of an incoming Trump Administration. The 80/20 rule, which attempts to impose restrictions on when and how employers can take advantage of the tip credit for tipped employees, just might be cast aside for the foreseeable future.
Understanding the Pregnant Workers Fairness Act: What Employers Need to Know
Posted in Employment Counseling & Workplace Claims Prevention, Medical & Other LeavesThe Pregnant Workers Fairness Act (PWFA) is growing up very quickly, and the EEOC has been working fervently, through a combination of guidance and enforcement measures, to ensure it thrives. Specifically, just shy of the PWFA’s first birthday, the EEOC’s final rule and interpretive guidance has taken effect, amplifying employer obligations regarding pregnancy-related accommodations in the workplace. Of late, the EEOC has initiated a string of lawsuits against employers under the PWFA. Given these recent developments, employers should review their pregnancy-related accommodations policies and procedures to make sure they comport with the latest agency guidance.
U.S. Supreme Court to Review Reverse Discrimination Standard
Posted in Employment Counseling & Workplace Claims Prevention, Employment Discrimination Harassment & RetaliationShould an employee’s burden to plead and prove workplace discrimination differ depending upon whether they are considered in a “majority” or “minority” group? The U.S. Supreme Court is now set to decide whether an arguably “heightened” standard of proof should apply in such “reverse discrimination” cases. If the Supreme Court strikes down what has come to be known as the “background circumstances” test, employers in jurisdictions where that analysis is currently applied might expect an increase in claims from members of such majority groups, or an increase in the success of claims brought by such “majority” plaintiffs.
DOL Promotes “AI & Inclusive Hiring Framework” Collab to Help Employers Avoid AI Discrimination in Hiring
Posted in Employment Counseling & Workplace Claims Prevention, Employment Discrimination Harassment & RetaliationCompanies are increasingly turning to artificial intelligence (AI) to assist with employment related tasks, such as recruiting and hiring. AI tools are useful to increase efficiency, streamline the recruiting process, and eliminate human bias. However, these tools can pose a risk of inadvertent discrimination against job applicants. We recently published an Employer’s Guide to Outsmarting Artificial Intelligence Liability in the Workplace, outlining ways employers can take advantage of AI tools while minimizing legal risks associated with this technology. As an additional resource, the U.S. Department of Labor (DOL) recently promoted a new AI & Inclusive Hiring Framework, which “offers guidance for employers, job seekers, and workers to maximize benefits and better manage risks when obtaining and using AI hiring technology.” DOL promoted the framework in alignment with the Biden Administration’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.
An Employer’s Guide to Outsmarting Artificial Intelligence Liability in the Workplace
Posted in Employment Discrimination Harassment & Retaliation, Employment LitigationEmployers need to be smarter than ever about how they use artificial intelligence (AI) in the workplace. Laws attempting to regulate the use of AI in the workplace have seemingly kept pace with advancements in the technology itself. Originally intended to streamline employment processes, AI may have unintended consequences that need to be mitigated. There is nothing artificial about the risk employers may face if they are not transparent and careful about how they use AI to make employment decisions. Employers must review their vendor agreements and AI protocols carefully, and conduct regular audits of AI’s processes, to minimize liability and avoid misuse or discriminatory outcomes, while maximizing the benefit of greater efficiencies in the workplace which properly used AI tools may deliver.
Ban on the Run: Federal Court Blocks the FTC’s Non-Compete Ban Nationwide
Posted in Employment Counseling & Workplace Claims Prevention, Non-Compete & Trade Secret LitigationA Federal Court has blocked the Federal Trade Commission’s Final Rule (the “Rule”) that was set to broadly ban nearly all forms of non-compete agreements.
On August 20, 2024, Judge Ada Brown of the Northern District of Texas permanently enjoined the Rule, ordering that it “shall not be enforced or otherwise take effect” on its originally intended effective date of September 4, 2024, “or thereafter.” Though the FTC may appeal Judge Brown’s decision, and has articulated a likely intention to do so, the Rule now faces an extremely difficult path to ultimate enforcement.
