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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 other compensation and benefits received, and (b) for salaried employees, the total of all compensation and benefits received.  Given the remedial purpose of the statute – to eliminate pay gaps based on gender and race – it is likely that courts will construe the statute broadly in favor of employees

Medium and large businesses getting ready for private sector off-payroll working rules in the UK

Despite calls for the start date to be delayed, it appears that the extension of the off-payroll working rules to private sector engagements will go ahead in April 2020.

Under the draft legislation, 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, with the burden of operating PAYE and collecting National Insurance Contributions (“NICs”) falling on the relevant “fee payer” in the work supply chain. More detail about the requirements under the draft legislation can be found in our earlier blog.

As they prepare for the changes, many medium and large businesses are taking the opportunity to review their use of consultants and the terms of their contractor services more widely, in some cases leading to a major shake-up in engagement models. In addition to reviewing the terms which apply where a business contracts directly with a PSC, it is also important to consider the terms on which employment agencies provide contractor services.  With only six months to go until the changes go live, businesses which have not started the review process should act now.

Holiday pay; non-party access to court documents

September 20, 2019

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Our September update considers recent key developments in UK employment law, including a case on calculating holiday pay for irregular workers and a Supreme Court decision on non-party access to court documents. We also outline other points of note, including developments relating to non-disclosure agreements and gender pay gap reporting.

Read more here

 

Preparation and Training Critical as Illinois Employers Face New Legal Landscape

Illinois employers must begin preparing now for the host of new legal requirements impacting the workplace beginning in 2020.  With legal changes on topics ranging from hiring practices and pay equity to drug testing and severance agreements, employers should not only review and revise their policies, practices and expectations, but also ensure that their Human Resources and management personnel receive training to ensure compliance.

Amendments to the Illinois Human Rights Act (“IHRA”)

Under new amendments to the IHRA, more employers are now subject to the IHRA, more protections are now provided to employees (and others), sexual harassment training is now a requirement, and employers now have reporting obligations to the Illinois Department of Human Rights (“IDHR”) regarding adverse judgments, administrative rulings, and settlements.  Specifically:

  • Beginning July 1, 2020, rather than applying only to employers with 15 or more employees, the IHRA applies to all employers with one or more employees in Illinois during 20 or more calendar weeks. Newly covered employers should ensure that HR personnel and managers are aware of the areas in which the IHRA is broader than federal anti-discrimination laws, including but not limited to: (1) pregnancy accommodation requirements; (2) prohibition of discrimination based on sexual orientation, gender identity, military status, marital status, and order-of-protection status; and (3) the potential for individual liability of harassers.
  • Beginning January 1, 2020, the scope of protection provided by the IHRA will expand. HR personnel and managers must be aware of the new protections so that they appropriately recognize and respond to concerns. 

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 employer.   The Court in Nieto expressly declined to address this issue because neither party had raised it.  While individual vacation agreements with each employee would be unwieldy and impractical in most cases, employers should at least consider ensuring that all employees have received a copy of the vacation policy –

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.

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

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

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

In 2018, in response to the #MeToo and #TimesUp movements, New York State enacted laws to provide stronger protections against workplace sexual harassment, including mandating that New York employers have a complaint and investigation process and a sexual harassment policy, and provide their employees with training.

On June 19, 2019, the New York Legislature voted to further reform New York law and to extend protections under the New York State Human Rights Law (“NYSHRL”) to employees of all protected categories from all forms of discriminatory harassment in the workplace.  See NYS Assembly Bill No. A8421.  The bill is expected to be signed by Governor Andrew Cuomo, who supported the measure.

Once enacted, some provisions will take immediate effect while others will be phased in over the course of one year.  Here is the timeline for some of the provisions:

California Employers Have Less Than Six Months To Complete Sexual Harassment and Abusive Conduct Training

In September 2018, California passed SB 1343, which expanded the sexual harassment training requirements for California employers.  Previously, employers with 50 or more employees were required to provide at least two hours of sexual harassment training to all supervisory employees within six months of their assumption of a supervisory position and once every two years thereafter.

SB 1343 expands the training requirement in two key ways.  First, it requires employers who employ five or more employees to provide sexual harassment training.  Second, in addition to training supervisors, employers must now provide at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and once every two years thereafter.  As a result, all employees will need to be retrained by January 1, 2022.

The good news for employers is that the California Department of Fair Employment and Housing (“DFEH”) is required to develop online training courses that employers can use to satisfy their obligation to provide sexual harassment training.  The bad news is that the DFEH still has not done so and there is no date certain by which the online training courses will be available.  However, the DFEH has posted a sexual harassment and abusive conduct prevention toolkit, which includes a sample sexual harassment and abusive conduct prevention training.  It is available here: https://www.dfeh.ca.gov/wp-content/uploads/sites/32/2018/12/SexualHarassmentandAbusiveConductPreventionTrainingToolkit.pdf.  However, unlike the online training courses that will be available, the toolkit is intended to be used in conjunction with a qualified trainer.

With only six months until the end

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