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A €150k warning to employers – don’t ask your employees to consent to your privacy policy!

August 23, 2019

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The Greek data protection authority (“DPA”) recently announced a €150,000 fine against a company that required its employees “to provide consent to the processing of their personal data.”[1] According to the DPA, as the “[c]onsent of data subjects in the context of employment relations cannot be regarded as freely given due to the clear imbalance between the parties,”[2] by asking for consent the employer had failed to identify the correct legal basis for processing which in turn caused the employer to issue an incorrect privacy notice to its employees (i.e., the privacy notice identified consent as the basis for processing instead of a basis approved by the DPA).  While the amount of the fine fell well below the 4% of annual turnover maximum penalty theoretically permitted under the GDPR, its size has sent shockwaves through the human resource community as it represents one of the largest fines issued in the context of employment data.  The overall message from the DPA was unmistakable – employers should stop asking their employees to broadly consent to a company’s privacy practices.

While technically the DPA’s holding only applies to data that is subject to Greek labor and employment laws, the DPA’s viewpoint is likely consistent with that of many supervisory authorities in the other Member States.  In terms of understanding the larger context, the GDPR states that a company may process personal data so long as one (or more) of the following six situations applies:[3]

  • A data subject has
  • Brexit: a change of direction on protection of UK worker rights?

    August 22, 2019

    Categories

    The recent appointment of a new UK Prime Minister signals a new approach to Brexit negotiations with the EU. There are suggestions that the new administration has different views on the approach to the protection of employment rights post-Brexit.

    Read more here

    What Employers Need to Know about New York State’s New Discrimination and Harassment Laws: Part 2

    On June 19, 2019, the New York Legislature voted to reform New York discrimination law. See NYS Assembly Bill No. A8421.  Although Governor Andrew Cuomo is expected to sign the bill, as of August 7, 2019, it still has not been delivered to him.

    This post will focus on changes regarding mandatory arbitration and non-disclosure clauses, the Faragher-Ellerth defense and damages awards.  Below is a summary of some of the provisions in the bill including those covered by our prior post on the expansion of the New York State Human Rights Law (“NYSHRL”), and the effective date of each provision.

    When Employee’s Trip to the Beach May NOT Support A Suspicion of FMLA Fraud

    Employers are not obligated to tolerate employee misuse of FMLA leave.  Examples abound in which an employer learns – often through an employee’s social media posts or through information from an employee’s co-workers – that an employee on intermittent FMLA leave has been having a good time while absent from work, such as taking a trip to the beach (or Las Vegas, Cancun, ….), playing golf, going fishing, etc.  In those situations, when an employer takes action to discipline or terminate the employee after conducting a reasonable investigation and reaching an honest belief of FMLA fraud, the employer will often successfully defeat a resulting FMLA retaliation claim (and, often an FMLA interference claim as well).

    The case of Meyer v. Town of Wake Forest, No. 5:16-CV-348-FL, 2018 WL 4689447 (E.D. N.C. Sept. 28, 2018), however, provides an example of when an employee going to the beach during FMLA leave may not provide good grounds for an “honest belief” of FMLA fraud.  In Meyer, the employee was approved for intermittent FMLA leave both to care for his wife who was recovering from childbirth and to bond with his newborn son.  A co-worker reported to the employer that, while on approved FMLA leave, the employee had been to the beach with his family, and that he also planned to go with them to the state fair.  Based on the employee’s subsequent admission that he had engaged in these activities and that he had recorded his time as sick time under the employer’s

    Client alert: the French Supreme Court validates the “Macron Grid” which caps damages awarded to employees in cases of unfair dismissal

    In two opinions dated July 17, 2019, the French Supreme Court confirmed that the so-called “Macron Grid” implemented by the French employment law reforms in September 2017 is compatible with Article 10 of Convention no. 158 of the International Labor Organization (“ILO”).

    Following diverging opinions and judgments from local French labor courts (e.g., Montpellier, Troyes, Lyon) on the validity of the Macron Grid, the French Supreme Court has received a request for its opinion from the Louviers and Toulouse labor courts to determine whether such Macron Grid is compatible with international laws.

    The Macron Grid (codified under Article L. 1235-3 of the French Labor Code) establishes a scale that applies to the determination by French judges of the compensation granted for unfair dismissal. It sets a minimum and a maximum amount based on the employee’s seniority and average gross salary: the minimum amount is one month’s salary for one year of service (0.5 months for companies with less than 11 employees); the maximum is twenty months’ salary for employees who have at least 29 years of service. Note that this grid does not apply if employees claim that their dismissal results from discrimination or harassment and they hence request that their dismissal be declared null and void.

    Certain labor courts have considered that the Macron Grid violates Article 10 of Convention no. 158 of the International Labor Organization (“ILO”) which provides that if judges rule that termination is unjustified, “they shall be empowered to order payment of adequate compensation or such

    Who is responsible for providing National Minimum Wage pay information in the context of a TUPE transfer?

    July 19, 2019

    Categories

    Employers are required, under the National Minimum Wage Act 1998 (“Act”), to maintain pay records and, if requested to do so, to produce such information to their workers.  A failure by an employer to comply with its obligation to produce pay information within 14 days of a request can result in an Employment Tribunal making a declaration and award against the employer of up to 80 times the national minimum wage rate.

    The Act expressly provides that in the event of a cessation of employment, the employee should seek such information from their former employer in respect of pay during that period of employment.

    In a recent decision, the Employment Appeal Tribunal (“EAT”) clarified that because an employee’s employment automatically transfers and does not terminate in the context of a TUPE transfer, where an employee TUPE transfers to a new employer (the transferee), it is that employer which has the obligation to provide pay records, not the employee’s former employer (the transferor).

    This decision highlights the need (particularly in the context of an outsourcing) for contractual obligations on a transferor to provide the transferee with all necessary information in relation to the transferring employees.

    Colorado Employers Face New Employment Laws

    With Colorado’s return to one-party control, Colorado employers face a spate of new employment laws. Employers in Colorado should review their practices, policies, and procedures to ensure that they are in compliance with these new laws.

    Colorado Chance to Compete Act—“Ban the Box” Legislation: Under the new law, an employer may not state in an advertisement or application that a person with a criminal history may not apply to the position. The employer also may not inquire about or require the disclosure of an applicant’s criminal history in an initial application. The law takes effect on September 1, 2019, for employers with 11 or more employees, and September 1, 2021 for employers with fewer than 11 employees.

    Equal Pay for Equal Work Act: The law prohibits an employer from discriminating between employees on the basis of sex by paying an employee of one sex a wage rate less than the rate paid to an employee of a different sex for substantially similar work, regardless of job title. The law also prohibits an employer from seeking or relying on a prospective employee’s wage rate history to determine a wage rate. Finally, employers may not prohibit employees from discussing their wage rates. The law takes effect January 1, 2021.

    Criminal Penalties for Wage Violations:  Employers who willfully refuse to pay a wage claim or falsely deny the validity of a wage claim over $2,000 may be liable for felony theft. The penalty for theft ranges from $50 to $1,000,000 depending upon the

    EEOC Publishes Much Anticipated EEO-1 Component 2 Guidance in Advance of Employers’ September 30th Filing Deadline

    On July 1, 2019, the Equal Employment Opportunity Commission (“EEOC”) published its much anticipated guidance on the collection and submission of Component 2 data of the EEO-1 report.  As a reminder, covered employers are required to submit Component 2 data (which covers certain pay data and hours worked data) for report years 2017 and 2018 by September 30, 2019.  The EEOC intends to use Component 2 data to identify potentially unlawful pay disparities based on race/ethnicity and sex.

    The guidance, which is published on the EEOC’s web-based portal, includes a variety of information, including a sample EEO-1 Component 2 report form, a Fact Sheet, and a Frequently Asked Questions section (“FAQ”).

    Much of the new guidance aligns with that which the EEOC published in 2016, before the White House’s Office and Management and Budget stayed the collection of Component 2 data in August 2017.  Below are a few important highlights from the new guidance:

    • Workforce Snapshot Period
      • Employers need only submit Component 2 data for employees employed during the “workforce snapshot period” for each of the relevant reporting years.
      • The “workforce snapshot period” is an employer-selected pay period between October 1 and December 31 of the reporting year.
      • The “workforce snapshot period” does not need to be the same for 2017 and 2018, nor does it need to align with the pay period used for submitting Component 1 data.
    • Pay Data
      • Employers will submit Component 2’s pay data by

    Off-Payroll Working Rules

    From April 2020 the responsibility for determining whether engagements with individuals who provide their services through an intermediary (typically a “PSC”) are within the off-payroll working rules shifts to the client for engagements in the Private Sector, with the burden of  operating PAYE and collecting National Insurance Contributions (“NICs”) falling on the relevant “fee payer” in the work supply chain.

    Although it is encouraging that HMRC have reconfirmed that it does not intend to carry out targeted campaigns into previous years when individuals start paying employment taxes following the reforms, we expect that HMRC will take a robust approach to the enforcement of the new rules.

    There is an enormous amount of work to be done across the private sector to ensure that medium/large businesses who are dependent on a flexible workforce are ready in time for the changes in April 2020.

    Status determination and communications

    When clients have determined an individual’s status for the off-payroll working rules, the client will be required to pass the determination to the party they directly contract with, as well as the individual worker.  Significantly, clients will also need to provide reasons for the determination.

    It is hoped this will be an incentive to clients to take care in making determinations – reducing the risk of “blanket” assessments and limiting status disputes.

    Businesses must therefore adopt internal policies to make proper status determinations for engagements and communicate these to individuals and their contract counterparties effectively.

    HMRC promise plenty of guidance, targeted communications as well

    The CCPA: Employee Data Requirements May Be Delayed, But Do Not Appear to be Going Away

    July 12, 2019

    Categories

    Action is currently underway to amend the California Consumer Privacy Act (“CCPA”) to provide employers an additional year to comply with the CCPA with respect to employee data of California-based employees.

    The California Senate Judiciary Committee has passed AB-25, an amendment to the CCPA that would delay most of the compliance obligations for employee data until January 1, 2021. Specifically, the amendment provides that employees are not “consumers” for most purposes of the statute until January 1, 2021.

    If the legislature passes the bill, the CCPA will still apply to employers with California-based employees in the following ways, effective January 1, 2020:

    • Employees will be able to sue employers for a data breach involving their unencrypted data
    • Employers must provide a notice to employees describing the categories of employee information collected, used and disclosed by the employer.

    While there have been many predictions that the CCPA would be amended to remove employee data from the requirements of the statute altogether, if the California state legislature approves the bill amending the CCPA, the effect will be to simply delay the compliance obligations for employers for a year.

    For now the bill is with the Senate Appropriations Committee for hearing and another round of voting.  Assuming Appropriations votes to pass the bill, it will go to the Floor for a vote.  The Appropriations Committee has until August 30th to vote on bills.

    BCLP offers a complete compliance program for employers that includes a formal gap assessment and tailored policies, procedures, and protocols

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