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Employee Benefits & Executive Compensation – Q1 2021 Newsletter

April 1, 2021

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Our colleagues in the Employee Benefits & Executive Compensation group have been busy tracking the many changes to laws affecting comp and benefits. In their Q1 2021 newsletter, they provide an overview of the guidance that emerged during this busy period, including ARPA and CAA as they impact pension and welfare plans, fringe benefits and student loan assistance. They briefly address the guidance and implementation freeze, and provide an overview of other important developments — all with the aim of helping plan sponsors digest and comply with new and often imminent compliance obligations.

To read the newsletter, please click here.

For the New Year, Colorado Makes COVID-19 the Gift That Keeps Giving (Paid Time Off)

On the night before Christmas Eve, the Colorado Department of Labor and Employment (CDLE) issued a surprise opinion that Colorado employers are required to provide still more paid sick leave for COVID-19 in 2021.  In its Interpretive Notice & Formal Opinion #6C (INFO #6C), CDLE opined that all Colorado employers would be required, as of January 1, 2021, to grant employees up to 80 more hours of paid sick leave for COVID-related absences pursuant to the Healthy Families and Workplaces Act (HFWA).  INFO #6C can be found here.

Background:

  • In response to COVID-19, Section 406 of the HFWA required all Colorado employers, in 2020, to provide the Emergency Paid Sick Leave described in the federal Families First Coronavirus Response Act (FFCRA), without regard to the coverage provisions of the FFCRA. As a result, in 2020, Colorado employers of all sizes were required to provide up to 80 hours of paid sick leave for certain COVID-related absences described in the FFCRA.  That requirement under Section 406 expired with 2020.
  • To address possible future pandemics, the Colorado General Assembly also included Section 405 in the HFWA. Under Section 405, “on the date a public health emergency is declared, each employer

REMINDER: Colorado Now Requires Disclosure of Compensation and Benefits with All Job Postings and Advance Notice of Promotional Opportunities

Employers with at least one employee in Colorado should remember that they are now required to comply with the pay transparency and promotion transparency requirements of the Colorado Equal Pay for Equal Work Act, which took effect January 1, 2021.  The governing regulations can be found at 7 CCR 1103-13.  In addition, the Colorado Department of Labor and Employment (“CDLE”) has issued Interpretive Notice & Formal Opinion #9 (“INFO #9”), a non-binding interpretation regarding these requirements (“INFO #9”), which can be found here.

Pay Transparency

All job postings must now include the hourly or salary compensation, or compensation range, for the position and a general description of the benefits and other compensation that will be provided to the successful applicant.  Employers may use electronic links to compensation and benefit information, rather than including that information in the posting itself.

If compensation is stated as a range, that range must represent the lowest and highest pay that the employer in good faith believes it might pay for that particular job.  Relying on stale data regarding the filling of such positions in the past, or using the same blanket “range” for all positions, will

“No Matter Why You’re Angry, You Can’t Say That”: NLRB Finally Reins in Abusive Employee Speech

July 22, 2020

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Yesterday, the National Labor Relations Board freed employers to take disciplinary action against abusive speech by employees targeting managers, supervisors, and co-workers.  In General Motors LLC, the Board swept away years of Obama-era precedents that had permitted employees to engage in profane, abusive, and even racist speech if that speech occurred in the context of exercising rights protected by Section 7 of the National Labor Relations Act – such as challenging disciplinary action in a meeting with company officials, complaining about working conditions in social medial posts, or walking a picket line.  In their place, the Board restored the familiar Wright Line test from 1980, which focuses on whether the employer was lawfully motivated by the employee’s offensive conduct or unlawfully motivated by the employee’s protected activity.

In the Obama-era cases overturned yesterday, the Board had considered abusive conduct in connection with protected activity to be inextricably intertwined with that protected activity and therefore subject to protection under the NLRA.  For example, in cases from 2014-2016, the Board had punished employers for discharging employees who: (1) called the owner of the employer a “f—king mother f—king” and a “f—king crook” while complaining about compensation; (2) attacked a manager on Facebook

THE ACCIDENTAL SUCCESSOR: Asset Buyers Must Take Care to Avoid Unintentionally Becoming a “Perfectly Clear Successor”

October 31, 2019

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Asset Buyers, beware.  If the Seller has union-represented employees, and you intend to hire some or all of those employees and operate the assets as a union-free employer, take care to avoid becoming an accidental successor.

As a recent decision of the D.C. Circuit Court of Appeals reminds us, the terms of the asset purchase agreement (APA) and all communications with Seller’s employees – by both Buyer and Seller – must be carefully managed.  Otherwise, Buyer can accidentally become a “perfectly clear successor” that is required to:

  • initially honor the terms of the existing collective bargaining agreement (CBA),
  • recognize the current labor union as the bargaining representative of the unionized Seller employees whom Buyer hires, and
  • bargain with the union over the terms of a new CBA for those employees going forward.

THE ASSET BUYER’S OPTIONS

Under the National Labor Relations Act, if an asset Seller has union-represented employees, and Buyer wishes to hire some or all of them and operate the assets, Buyer has three basic options:

  • Assume the CBA. Buyer will be bound by the terms of the CBA from the Closing Date and will be obligated to recognize the union as the bargaining representative

Want to Protect Your Trade Secrets? Update Your Employment Agreements!

October 11, 2019

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Since 2016, the Defend Trade Secrets Act (DTSA) has provided employers with a federal cause of action against employees, former employees and other bad actors who misappropriate trade secrets.  In addition to injunctive relief, DTSA remedies include civil seizure, compensatory damages, punitive damages and attorney fees.  However, in order to preserve the right to seek punitive damages and attorney fees from an employee or former employee, the employer must have provided notice of the whistleblower-protection provisions of the Act.  Those provisions protect employees and former employees from criminal or civil liability for disclosure of trade secrets made (a) in confidence to a government official or an attorney for the purpose of reporting or investigating a suspected violation of law, or (b) under seal in a judicial proceeding.

Notice of the whistle-blower protection provisions must be included “in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.”  This would commonly include, for example, employment agreements, confidentiality or nondisclosure agreements, noncompetition agreements, and separation agreements.  The notice requirement applies to all such contracts entered into or revised after May 11, 2016.

The notice may be provided by including the whistleblower-protection provision in

Asset Purchasers: Beware Bans on Salary History Inquiries

When one employer purchases the assets of another and intends to employ some or all of the seller’s employees, it is very common for the asset purchase agreement to require the seller to disclose certain personnel information regarding those employees.  Often this disclosure includes such items as name, title, hire date, current salary, and other compensation and benefit information.  However, such provisions may violate state and local bans on salary history inquiries.

To date, fourteen states and Puerto Rico have prohibited or restricted private sector employers from seeking information about a prospective employee’s past compensation.  In some of those states, employers are permitted to ask about compensation history only at a certain point in the hiring process.  But in most, employers are never allowed to seek this information.  Many local governments have also enacted their own bans.

Colorado’s new statute is typical.  Effective January 1, 2021, it will be unlawful for employers to “seek the wage rate history of a prospective employee or rely on the wage rate history of a prospective employee to determine a wage rate.”  The statute defines “wage rate” broadly to mean (a) for hourly employees, the hourly rate plus the value per hour of all

New Overtime Rule More Employer-Friendly Than Last Attempt

Today, the U.S. Department of Labor finally announced its long-awaited changes to the regulations regarding overtime compensation. Effective January 1, 2020, the minimum salary required for most exemptions under the Fair Labor Standards Act will rise from $455 per week to $684 per week (or from $23,660 to $35,568 annualized). The minimum salary for the “highly compensated employee” exemption will rise from $100,000 to $107,432 per year.

Additionally, employers will be permitted to use nondiscretionary bonuses and other incentive payments (including commissions) to satisfy up to ten percent (10%) of the required minimum salary, as long as that compensation is paid at least annually. And if an employee fails to earn sufficient incentive compensation in a 52-week period to maintain “exempt” status, the employer may make up the shortfall (up to 10% of the minimum required salary) in a one-time payment in the first pay period after the end of the 52-week period.

The “final rule” announced today is more employer-friendly than the Department’s last attempt to update the overtime regulations, which was enjoined by a federal court in 2016 before the changes could take effect. The final rule issued in 2016 would have raised the minimum salaries for exemption

Colorado Employees Lose it Over Use-It-Or-Lose-It Vacation Policies

Colorado employees are pushing back against the recent decision allowing use-it-or-lose vacation policies in Colorado.

In Nieto v. Clark’s Market, Inc., 2019 COA 98 (Colo. App. June 27, 2019), a division of the Colorado Court of Appeals held that the Colorado Wage Claim Act does not prohibit employers from imposing conditions on the right to be paid for accrued but unused vacation upon termination.   In that case, the employer’s policy provided that terminating employees would not be paid for accrued but unused vacation if they were discharged or if they resigned with less than two weeks’ notice.  The Court held that the Wage Claim Act only requires payment of vacation that has been “earned in accordance with the terms of any agreement” and that employers and employees may agree to impose conditions on payment for accrued but unused vacation.  Therefore, under Nieto, use-it-or-lose-it vacation polices are now permissible in Colorado.

Not surprisingly, employees (and their lawyers) are pushing back, focusing on two unanswered questions in the Nieto decision.

Seizing upon the word “agreement” in the statute, some employees contend that Nieto applies only to actual contracts between the employer and the employee and not to policies unilaterally imposed by the

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.

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