Legal Updates

MAY 2017 LEGAL UPDATE

UPCOMING COMPLIANCE DATES

JULY 1, 2017: OSHA Form 300 A Accident Summary Due
Employers with at least 250 employees (including part-time, seasonal, or temporary workers) in industries covered by the recordkeeping regulation must submit information from their 2016 Form 300A by July 1, 2017. Employers with at least 20 employees, but fewer than 250, in certain high-hazard industries must submit information from their 2016 Form 300A. Click here for OSHA instructions and forms.

JULY 31, 2017: PCORI Fee Due for Self-Insured Plans
Employers who sponsor self-funded plans are responsible for submitting the Patient Centered Outcomes Research Institute (“PCORI”) fee and accompanying paperwork to the IRS no later than July 31, 2017.

The amount of the PCORI fee is equal to the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount for the year. PCORI fee for plan years ending on or after October 1, 2016 and before October 1, 2017 is $2.26 per each person covered. Click here for IRS FORM 720.

STATE-BY-STATE COMPLIANCE
ARIZONA
Paid Sick Leave

Effective July 1, 2017, businesses with 15 or more employees must provide workers with up to 40 hours of accrued annual paid sick leave. Businesses with fewer than 15 employees will have to provide 24 hours. Employees will accrue the time at a rate of one hour per 30 hours worked until they reach the cap.

Most private employers with full-time, part-time and temporary employees will be eligible to accrue the paid sick leave. State and federal employees will not be covered, however, and there are some exceptions for employees who are subject to collective bargaining agreements.

The time off will be available for employees to address their own – or a family member’s – medical care, or for a public health emergency, or for domestic violence issues. Employers cannot discipline employees who take accrued leave in accordance with the law or retaliate against employees who report alleged violations of the law.

Mandated Coverage of Health Care Services
Effective for plans issued, delivered, or renewed on or after July 1, 2017, House Bill 2306 requires health plans to provide coverage for lawful health care services performed by health care providers for plan participants regardless of whether health care providers are related to plan participants if services are covered if performed for plan participants who are not related to their health care providers.

CALIFORNIA
Employment Protections for Victims of Domestic Violence, Sexual Assault, or Stalking
Starting July 1, 2017, employers with 25 or more employees must provide specific information in writing to new employees upon hire and to other employees upon request of their rights to take leave under Labor Code Section 230.1 which relates to victims of domestic violence, sexual assault, or stalking. This Bill also requires that, on or before July 1, 2017, the Labor Commissioner develops a form that employers may elect to use to comply with these provisions and to post it on the Labor Commissioner’s website. Employers are not required to comply with the notice of rights requirement until the Labor Commissioner posts such form.

Protection for Patients from “Surprise” Medical Bills
Under medical plan policies issued, amended, or renewed on or after July 1, 2017, patients who receive care in in-network facilities will have to pay only in-network cost sharing.  A.B. 72 mandates that health plans pay non-contracting health care providers the plan’s average contracted rate or 125% of the Medicare rate, whichever is greater. The law also tightens requirements on health plans to offer adequate provider networks.

The law applies to non-emergency care, since emergency physicians in California already are barred from balance billing patients. The bill’s provisions do not apply to self-insured employer health plans, which are shielded from state regulations by the federal Employee Retirement Income Security Act.

Pasadena Minimum Wage Increase
Effective July 1, 2017, employers with 25 or more employees must pay at least the minimum wage rate of $12 per hour to Pasadena employees. For employers with fewer than 25 employees, the minimum wage will increase to $10.50 per hour.

Employees who are 14 to 17 years of age may be paid 85 percent of the applicable minimum wage, rounded to the nearest nickel, during the first 160 hours of employment. After 160 hours of employment, these employees must be paid the applicable minimum wage.

The ordinance requires employers to:

·         Provide new and current employees with written notice of their rights under the ordinance.

·         Post a notice, published by the city, regarding employee rights under the ordinance.

·         Maintain records for three years. These records must include the employee’s name, hours worked, and pay rate.

Click here for posting: Pasadena Minimum Wage Ordinance

Los Angeles Minimum Wage Increase
Effective July 1, 2017, the minimum wage for employers with more than 25 employees will increase to $12 per hour. The minimum wage for employers with 25 or fewer employees will increase to $10.50.

San Francisco Requires Employer-Paid Parental Leave
Effective July 1, 2017, employers in San Francisco with 35 or more employees will be required to provide six weeks of paid parental leave. Covered employers must pay eligible employees 45 percent of weekly gross wages, up to a maximum of $924 per week, for six weeks. This cap is based on the California Paid Family Leave program’s 55 percent wage replacement provision, which is capped at $1,129 per week.

To be eligible, employees (including part-time and temporary employees) must be employed for at least 180 days prior to the start of the leave, work at least eight hours per week in San Francisco, work at least 40 percent of their weekly hours in San Francisco, and be eligible for California Paid Family Leave for baby bonding.

To determine if an employee whose hours fluctuate from week to week meets these thresholds, employers must use a three-month look-back period (3 monthly, 6 biweekly or semi-monthly, or 12 weekly pay periods immediately preceding California PFL beginning). However, if an employee was on a paid or unpaid leave during a pay period, that period is excluded from the analysis, and the preceding period in which the paid or unpaid leave was not taken is included to determine coverage.

An employer can require employees to use up to two weeks of unused, accrued vacation to help meet the employer’s obligation under the ordinance. This vacation time can be counted toward the six-week paid parental leave period.

Covered employees are required to either provide a copy of the employee’s Notice of Computation of California PFL Benefits or other legally authorized statement, or provide written authorization for the state to disclose the weekly benefit amount to the employer.

Employers must post a notice informing employees of their rights under the ordinance at any workplace where a covered employee works.

State Employment Applications
Effective July 1, 2017, A.B 1820 requires the Department of Human Resources or the designated appointing power, whenever it receives an application for examination that was filed online, to do all of the following:

·         Provide the electronic communication address of the department or the designated appointing power to the applicant.

·         Contact the applicant using electronic communication instead of postal mail, unless the applicant specifically requests otherwise.

·         Inform the applicant that they will be provided with employment inquiry notifications and his or score and rank on the examination using electronic communication unless the applicant specifically requests to be notified using postal mail.

New Requirements When Using Criminal History Information
Effective July 1, 2017 the Department of Fair Employment and Housing (“DFEH”) issued updated regulations limiting the ability of employers to consider criminal history when making employment decisions.

The regulations prohibit employers from using criminal records and information in any employment decisions if such use would have an adverse impact on individuals in a legally protected class designated by the Fair Employment and Housing Act (“FEHA”), or the applicant or employee is able to demonstrate an effective and less discriminatory way of achieving the specific business necessity.

The employer must be able to demonstrate that its practice of considering criminal history is both job-related and consistent with business necessity. Even if the employer can meet these, the applicant or employee may still win against the employer by demonstrating a less discriminatory policy or practice.

California currently prohibits employers from considering or pursuing information about the following types of criminal records:

·         an arrest or a detention that did not result in a conviction;

·         certain marijuana infractions and misdemeanor convictions that are older than two years (see change below);

·         referral to or participation in any pre-trial or post-trial diversion program;

·         an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while a person was subject to the process and jurisdiction of a juvenile court; and

·         convictions that have been sealed, judicially dismissed, expunged or statutorily eradicated by law.

The regulations now expand this list to include any non-felony conviction for possession of marijuana that is older than two years.

New FAQs Regarding California Paid Sick Leave
The Division of Labor Standards Enforcement recently published an updated FAQ to address the California paid-sick-leave law which went into effect July 1, 2015. The FAQs can be accessed here: Paid Sick Leave FAQs

COLORADO
Wage Theft Transparency Act
Colorado’s wage law, signed on April 13, 2017, will now regard information about an employer’s violation of wage law as a public record that may be released to the public upon an open records request. The information may include any notice of citation or notice of assessment issued to an employer for a wage violation following exhaustion of all remedies, unless the information involves a trade secret. Before releasing the information, the Director of the Division of Labor Standards and Statistics will notify the employer of the potential release of the information. The employer then has 20 days to provide the Director with documentation demonstrating that the information is a trade secret. If the Director determines that the information, or any part of it, is a trade secret, it will be treated as confidential and will not be released. For purposes of this designation, a “trade secret” has the same meaning as set forth in Colorado’s Uniform Trade Secret Act.

Entities That May Provide Fingerprints for Background Checks
Under an amendment signed into law on April 24, 2017, third-party vendors who are approved by the Colorado Bureau of Investigation, may capture a person’s fingerprints electronically using the Live Scan equipment approved by the Bureau. This should make it easier to complete the onboarding process for new hires in jobs requiring fingerprint-based criminal checks, such as school personnel, child and elder care workers, private investigators, and others.

FLORIDA
Background Screening (“Ban the Box”)
Effective July 1, 2017, employers are prohibited from inquiring into an applicant’s criminal history prior to the applicant’s initial interview and prior to making a conditional offer of employment. Jobs where federal, state or local law require consideration of criminal history are excluded including law enforcement, criminal justice and volunteers.

Internship Tax Credit
Effective July 1, 2017, a tax credit of at least $2,000 will be provided to employers hiring degree-seeking students as interns.

Florida E-Verify
Effective July 1, 2017, employers are required to utilize Florida E-Verify. Failure to comply will result in the employer being placed on probation and having to file quarterly reports with the Department of Business and Professional Regulation for one year. Subsequent non-compliance will result in suspension of the company’s business license. The law also provides for suspension of licenses if it is discovered a business knowingly employed an unauthorized alien. Legal compliance with E-Verify creates a rebuttable belief that the employer did not knowingly employ an unauthorized alien.

GEORGIA
Kin Care Law
Effective July 1, 2017, employers with over 25 employees that offer paid sick leave will be required to allow their employees who work at least 30 hours per week to use up to five days of paid sick leave per year to care for their immediate family members. Immediate family members include children, spouse, parents, grandparents, grandchildren or any person identified as a dependent on the employee’s most recent tax return.

“Employee-owned” businesses, in which an employer offers an employee stock ownership plan, are exempt from these requirements.

ILLINOIS
Cook County Paid Sick Leave
Effective July 1, 2017, the “Earned Sick Leave” Ordinance mandates that employers in Cook County allow eligible employees to accrue up to 40 hours of paid sick leave in each 12-month period.

Employees are entitled to benefits if they work at least two hours for a covered employer while physically present within the geographic boundaries of the County in any two-week period; and work at least 80 hours for a covered employer in any 120-day period.

Employees will accrue one hour of paid sick leave for every 40 hours worked. For purposes of calculating accruals, it is assumed exempt employees work 40 hours per workweek, unless their normal workweek is less, in which case the accrual will be based upon the number of hours in their normal workweek. Accrual and usage of paid sick leave is capped at 40 hours for each 12-month period. Employees may carry over half of their unused paid sick leave (up to 20 hours) to the next 12-month period.

If an employer has a policy that grants employees PTO that meets the requirements of the new Ordinance, the employer is not required to provide additional paid leave.

Employers may require that employees provide up to seven days’ advance notice if the need for paid sick leave is foreseeable. If the need for leave is unforeseeable, employees must provide as much notice as is practical.

Unlike PTO and vacation pay, unused, accrued sick leave does not need not be paid out upon termination or separation of employment.

Employers must post notice of employees’ rights in a conspicuous place at each facility where any covered employee works that is located within the geographic boundaries of the County. Employers must provide employees written notice of their rights to Earned Sick Leave under the Ordinance. Click here for posting: Earned Sick Leave Notice

Cook County Minimum Wage
Effective July 1, 2017 the minimum wage increases to $10 per hour. In addition to raising the minimum wage, Cook County employers will also be required to comply with certain notice provisions. This includes posting a notice advising employees of their rights under the ordinance in a “conspicuous place” at each of the employer’s facilities within the geographic boundaries of Cook County, and providing employees a written notice stating the same with their first paycheck issued after July 1, 2017. Click here for posting: Minimum Wage Ordinance

Chicago Minimum Wage Increase
Effective July 1, 2017, the city minimum wage will increase to $11 per hour or the minimum wage set by the FLSA, whichever is greater.

In addition, the minimum wage for tipped employees will be adjusted annually based on the rate of inflation (capped at 2.5 percent).

MARYLAND
Increase of Minimum Wage
Effective July 1, 2017, the minimum wage in Maryland will increase to $9.25 per hour. For tipped employees, if they do not receive suf?cient tips in the work week to at least achieve the minimum wage for all hours worked that week, the employer must make up the difference.
Employers in Maryland should ensure they post the current minimum wage information. Click here for the posting: MD Minimum Wage Poster

MINNESOTA
Minneapolis Requires Sick Leave
Effective July 1, 2017, the Minneapolis Sick and Safe Time Ordinance requires employers with at least six employees, regardless of their location, to provide paid sick leave to employees who work in the City of Minneapolis. Employers with fewer than six employees must provide unpaid sick leave.

Covered employees must be granted sick time at the rate of one hour for every 30 hours worked. Employers may cap the accrual of paid sick time to 48 hours in one calendar or fiscal year and limit to 80 hours the amount of sick leave an employee may have available for use.

Employers may choose to allow employees to accrue sick time each pay period or to provide a lump sum of sick and safe time at the beginning of the accrual year, also known as frontloading. Employers that choose to frontload must provide employees with at least 48 leave hours to use during the first year following the initial 90 days of employment, and at least 80 leave hours beginning each subsequent year.

New employees begin to accrue paid sick leave time at the commencement of their employment, but cannot use their paid sick time until 90 calendar days after the start of their employment.

Employers are not required to pay out unused time upon termination of employment. However, if the employee is rehired within 90 days of separation, previously accrued and unused sick time must be reinstated.

Employers who provide their employees sick time under a paid time off policy or other paid leave policy that meets or exceeds the minimum requirements of the Ordinance are not required to provide additional sick time.  New employers in their first year of business, other than “chain establishments,” can provide unpaid sick leave rather than paid leave.

The Ordinance requires employers to include a notice of employee rights under the Ordinance in their handbook and to display a poster prepared by the Minneapolis Department of Civil Rights in a conspicuous place and accessible to all employees. Click here for the required poster: Sick and Safe Time Ordinance.

Employers must maintain records for each employee showing the accrued sick time and the used sick time for each day of the workweek.

NEW MEXICO
Data Breach Notification Act
Effective June 16, 2017, New Mexico’s data breach notification law requires that individuals be notified of security breaches of information involving personal identifying information.

Under New Mexico’s Data Breach Notification Act, Personal Identifying Information (“PII”) refers an individual’s first name or first initial and last name in combination with one or more of the following unencrypted or otherwise readable data elements:

·         Social Security number

·         driver’s license number

·         government-issued identification number

·         account number, credit card number, or debit card number in combination with any required security code, access code, or password that would permit access to a person’s financial account

·         biometric data such as a record of fingerprints, voice print, iris or retina patterns, facial characteristics or hand geometry

Records containing PII must be properly disposed when the records are no longer reasonably needed for business purposes.

In the event of a breach, each affected individual must be notified within 45 calendar days following discovery of the breach. If a breach affects more than 1,000 New Mexico residents, notification must be provided to the New Mexico Attorney General and the major consumer reporting agencies within 45 calendar days following discovery of the breach.

NEW YORK
Commercial Crime Coverage Cannot be Denied Due to Prior Criminal Conviction
Effective July 1, 2017, insurance companies are required to provide “Commercial Crime Coverage” to employers who have prior knowledge of an employee’s prior criminal conviction. “Commercial Crime Coverage” is defined as coverage under a policy of commercial risk insurance that provides burglary and theft insurance or fidelity insurance.

The new law also forbids discriminating based upon a conviction for a previous criminal offense, unless there is a direct relationship between the criminal offense and the employment sought. The Correction Law specifies eight factors, including the public policy of the state, when analyzing whether there is a “direct relationship.”

A “direct relationship” under the new regulation is determined by the following:

·         The state public policy encouraging the employment of persons previously convicted of one or more criminal offenses;

·         The specific duties and responsibilities necessarily related to the employment sought or held by the person;

·         The bearing, if any, the criminal offense(s) will have on the person’s fitness or ability to perform one or more such duties or responsibilities;

·         The amount of time that elapsed since the criminal offense(s);

·         The age of the person at the time of the criminal offense(s);

·         The seriousness of the criminal offense(s);

·         Any information produced by the person, or on his or her behalf, regarding rehabilitation and good conduct; and

·         The legitimate interest of the employer in protecting property and the safety and welfare of specific individuals or the general public.

Employers may be required to maintain adequate records to demonstrate that they conducted an accurate analysis of the above factors.

OREGON
Regional Minimum Wage Increases
Effective July 1, 2017, minimum wage rates will be based on the part of the state in which they are located. Minimum wage will be $11.25 for employees within Portland’s Urban Growth boundary, including parts of Multnomah, Washington, and Clackamas Counties. Minimum wage will be $10.00 for employees in frontier counties, including Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa and Wheeler Counties. Minimum wage will be $10.25 for employees in remaining areas of Oregon, including Eugene, Salem, Bend, Medford, Springfield, Corvallis, and Albany.

UTAH
Utah Payment of Wages Act Amendment

The Utah Payment of Wages Act was recently amended to add a penalty for failure to pay final wages to an involuntarily terminated employee within 24 hours of the termination. The amendment provides for a penalty of up to 60 days’ worth of additional wages for failure to pay any wages due, should the employee provide a demand in writing.

VERMONT
“Ban the Box” Legislation Restricts Inquiries of Criminal Background

Effective July 1, 2017, Vermont’s new “ban the box” legislation (H-261) restricts employers from inquiring about a job applicant’s criminal background on an initial employment application.

Prohibited “criminal history record information” requests include arrests, convictions or sentences, on the initial employment application form, unless the individual is applying for a position for which state or federal law creates a mandatory or presumptive disqualification for employment, based on convictions for certain offenses, or the employer is subject to an obligation imposed by state or federal law not to employ an individual convicted of certain offenses.

Employers may still question applicants about their prior criminal records during a job interview or once the applicant has been deemed otherwise qualified for the position.

WASHINGTON
Secure Scheduling Ordinance Final Rules Published

Final Rules regarding the Seattle Secure Scheduling Ordinance, which changes how covered employers schedule workers, were recently published. The ordinance is effective July 1, 2017. However, that date is considered a “soft launch” with focus on education and support. No fines or penalties will be assessed for non-compliance until after December 31, 2017.

Under the ordinance, employees who are jointly employed by two or more employers, including but not limited to employees employed by a covered employer and a temporary service provider, staffing agency, contractor, subcontractor, or other employer, shall be considered a “new employee” upon starting each distinct assignment. Each employer shall be individually and jointly responsible for providing a good faith estimate at the beginning of each distinct assignment. Many of the notice requirements under the law do not apply to employees who are jointly covered and are not on the employer’s payroll.

Before hiring new employees from an external applicant pool or subcontractors, including hiring through the use of temporary services or staffing agencies, the employer must offer additional hours of work to existing employees when those hours become available at their place of work as defined by the employers usual and customary business practice.

Employers who need assistance with the Secure Scheduling ordinance or any other City of Seattle labor standards law may call 206-684-4500 or email laborstandards@seattle.gov.

WEST VIRGINIA
West Virginia Legalizes Medical Marijuana
Effective July 5, 2017, the West Virginia Medical Cannabis Act legalizes the use, possession and distribution of marijuana to treat serious medical conditions and provides employees with protection from discrimination based on the employee’s certification for use of medical marijuana.

The Medical Cannabis Act will decriminalize the use and possession of medical marijuana for patients suffering from 15 serious medical conditions including: cancer, HIV or AIDS, amyotrophic lateral sclerosis (Lou Gehrig’s disease), Parkinson’s disease, multiple sclerosis, spinal nerve damage, epilepsy, neuropathies, Huntington’s disease, Crohn’s disease, post-traumatic stress disorder, intractable seizures, sickle cell anemia, severe chronic or intractable pain, and terminal illness.

The act provides employment protections against discharge, threat, refusal to hire or other discrimination or retaliation for employees who become certified to use medical marijuana. However, employers are not required to make accommodations for the use of medical marijuana on employer property. The act also does not limit an employer’s ability to discipline an employee for being under the influence of marijuana (medical or otherwise) in the workplace or while working “when the employee’s conduct falls below the standard of care normally accepted for that position.”

Safer Workplace Act Expands Drug and Alcohol Testing Rights of Employers
Effective July 7, 2017, the West Virginia Safer Workplace Act changes current West Virginia law to grant employers significantly more leeway than is presently available to test current and prospective employees for the presence of drugs or alcohol as a condition of continued employment or hire.

The Safer Workplace Act permits employers to require mandatory drug and alcohol testing, not only of applicants, but of current employees in a wide variety of circumstances as a condition of continued employment. If an employer receives a drug test result indicating a violation of the employer’s written policy, or if an employee refuses to take the test, the employer may discipline the employee, up to and including termination.

In addition, as long as an employer adheres to the accuracy and fairness safeguards outlined in the act, the employer qualifies for immunity from certain legal claims stemming from its good-faith actions based on the results of a drug or alcohol test.