Washington Paid Sick Leave

Beginning in January 2018, Washington’s paid sick leave law will go into effect.  Under the new law, most employees will be entitled to accrue paid sick leave at the rate of 1 hour for every 40 hours worked, employees can use accrued paid sick leave after 90 days of employment, a maximum of 40 hours must be carried over from year to year, and sick leave can be used for an employee’s sickness or in connection with a family member’s illness.

The Washington Department of Labor & Industries is currently developing rules to implement and enforce the new law.  A summary can be found here:

http://www.lni.wa.gov/WorkplaceRights/LeaveBenefits/VacaySick/PaidSickLeave.asp

NEW FORM I-9

On July 17, 2017, U.S. Citizenship and Immigration Services issued a new Form I-9.  Employers can use the new form, or the form issued as of November 14, 2016, until September 17, 2017, thereafter, the new form must be used.  The new form does not contain significant material changes, although it does revise List C of acceptable documents to include birth certificates issued by the State Department.  For practical purposes, employers should begin using the new form as soon as possible (rather than risk using the old form and risk forgetting to switch on September 17th.

The revised Form I-9 can be found here: https://www.uscis.gov/i-9

 

Business Owner Gets 3 Years in Prison for Failure to Pay Employment Taxes

A business owner in Texas was sentenced to 3 years in prison, along with millions of dollars of restitution to the IRS for the failure to report and collect some, but not all, of his company’s employment taxes.  Accurate reporting and collection is crucial for compliance with employment tax law.  Not only substantial penalties and fees are at risk, but also jail time for some owners.

See the following DOJ news release for more  information: https://www.justice.gov/opa/pr/texas-business-owner-sentenced-prison-not-paying-approximately-18-million-employment-taxes

 

Oregon Passes “Predictive Scheduling” Law

Senate Bill 828, also called the “Fair Work Week Act”, passed the Oregon legislature last week and is expected to be signed by Governor Brown.  The law sets new scheduling standards for employers in the retail, hospitality, and food services industries that employ 500 or more employees worldwide.

Under the law, which will go into effect on July 1, 2018, covered employers will be required to:

  • Give new employees a written good faith estimate of the employee’s work schedule at the time of hire;
  • Provide employees with a written work schedule at least seven (7) days in advance (14 days starting in 2020);
  • Pay additional compensation for any violation of the advance notice requirement, to be calculated based on the type of schedule change; and
  • Provide a minimum of ten (10) hours of rest between shifts, or pay the employee time and a half.

In addition, the law imposes notice and record-keeping obligations on employers, and prohibits employers from retaliating against employees for expressing a scheduling preference.

Oregon will be the first state in the U.S. to enact predictive scheduling legislation.  Similar measures have been passed by large cities, including San Francisco and Seattle, whose law recently went into effect on July 1st.

Remember to Properly Report Wages for Unemployment Insurance Taxes

Summer is here and so is summer travel season. It’s also a good time for employers to verify that they are properly reporting wages for unemployment insurance taxes. Whether employees are working from another state while on vacation or working on a project outside of Oregon, employees may be performing services in multiple states.  When that happens, where should the wages be reported?  An employer cannot simply divide the reporting between the relevant states.  Rather, the reporting state is determined based on the application of four tests.  A description of each test and how to apply them can be found on the State of Oregon Employment Department website at http://www.oregon.gov/EMPLOY/Documents/uipub209.pdf

Complying with Oregon’s New Equal Pay Act

On June 1, 2017, Governor Brown signed Oregon House Bill 2005, the Oregon Equal Pay Act. Most of the provisions of the law go into effect as of January 1, 2019, which gives employers ample time to prepare to comply.

The new law makes it an unlawful employment practice for employers to:

  • Discriminate in any manner between employees on the basis of a protected class in the payment of wages or other compensation for work of comparable character.
  • Screen job applicants based on current or past compensation.
  • Determine compensation for a position based on current or past compensation of a prospective employee.
  • Seek the salary history of an applicant or employee from the applicant or employee or a current or former employer of the applicant or employee.

The law does not prohibit employers from considering the compensation of a current employee during a transfer, move, or hire of the employee to a new position with the same employer. And, after an employer makes an offer of employment that includes the amount of compensation, an employer can request written authorization from a prospective employee to confirm prior compensation. The law also allows employers to pay employees differently for similar work if the difference in compensation levels is based on a bona fide factor that is related to the position and is based on:

(a) A seniority system;
(b) A merit system;
(c) A system that measures earnings by quantity or quality of production,
including piece-rate work;
(d) Workplace locations;
(e) Travel, if travel is necessary and regular for the employee;
(f) Education;
(g) Training;
(h) Experience; or
(i) Any combination of the factors described in this subsection, if
the combination of factors accounts for the entire compensation differential.

Employees can seek redress for violations by filing a claim with BOLI or a lawsuit. Amounts owed to an employee because of the failure of the employer to comply with the new law are unpaid wages. The statute of limitations for equal pay claims is one year. But, for purposes of the statute of limitations, a compensation practice that is unlawful occurs each time compensation is paid pursuant to a discriminatory compensation decision or other practice.

Damages can include up to two years of back-pay plus pay for the period that the employee (or BOLI) is challenging the unlawful pay practice. In addition, punitive damages may be awarded if there is clear and convincing evidence that the employer engaged in fraud or acted with malice or willful and wanton misconduct, or the employer was previously found to have violated the statute. Employers can avoid an award of compensatory and punitive damages showing that an “Equal Pay Analysis” was performed within the three years prior to the claim. An “Equal Pay Analysis” means an “evaluation process to assess and correct wage disparities among employees who perform work of comparable character.”

Employers must also post a notice of the new law (which BOLI will make available).

To prepare to comply with the law, employers should, at a minimum:

  • Notify and train employees who conduct interviews regarding the statute’s prohibitions on questions/screening based on compensation
  • Review and update job descriptions, seniority and merit systems, and rationales for compensation of employees or categories of employees
  • Conduct an analysis of wages paid to employees with comparable jobs that is reasonable in detail and scope, looks at different protected classes, and if disparities are found, take steps to eliminate the differentials.

If you have any questions, would like additional information about the new law, would like help drafting a policy, or need advice on how to prepare your organization for compliance, please contact a member of Sussman Shank’s Employment Group.

Oregon Minimum Wage Goes Up July 1, 2017

As a result of legislation passed in 2016, minimum wage in Oregon goes up on July 1, 2017. For employers in the Portland Metro Area, minimum wage will increase to $11.25 per hour.  Employers in nonurban counties (listed below) must increase minimum wage to $10.00 per hour.  Employers outside the Portland Metro Area and not located in a nonurban county must pay minimum wage of $10.25 beginning July 1st.

As a reminder, the nonurban counties defined in the statute are: Baker; Coos; Crook; Curry; Douglas; Gilliam; Grant; Harney; Jefferson; Klamath; Lake; Malheur; Morrow; Sherman; Umatilla; Union; Wallowa; Wheeler.

To determine whether an employer is located in the Portland Metro Area go to: http://www.oregonmetro.gov/library/urban-growth-boundary/lookup

A link to BOLI’s minimum wage poster for 2017 is here: http://www.oregon.gov/boli/WHD/pages/minimum_wage_posters.aspx

 

 

 

Voiding Oregon Non-Competition Agreements

Oregon law provides that a non-competition agreement will be voidable if it does not comply with the statutory requirements for such agreements in ORS 643.295. In 2015, the Oregon Court of Appeals addressed, for the first time, what an employee must do to void a non-competition agreement.  Bernard v. S.B., Inc., 270 Ore. App. 710, 350 P.3d 460, review denied, 358 Ore. 69, 363 P.3d 500 (2015). In Bernard, the Court of Appeals held that the employee had not taken steps to void the agreement, and thus it remained valid.

On March 30, 2017, the Oregon District Court provided additional guidance on this issue. In Brinton Business Ventures, Inc. v. Searle, the departing employee, Mr. Searle, argued that his non-competition agreement was void because he did not receive two-week’s advance notice of the restriction in a written offer of employment.  However, Mr. Searle did not take any affirmative steps to void his non-competition agreement until five months after he resigned his employment (to start a competing business), when he received a demand letter from his former employer.  The District Court found, based on Bernard, that ORS 653.295 requires an employee to void a non-competition agreement prior their former employer’s efforts to enforce the agreement.  Accordingly, the District Court concluded that Mr. Searle did not void the agreement. Brinton Bus. Ventures, Inc. v. Searle, No. 3:16-cv-02279-HZ, 2017 U.S. Dist. LEXIS 47732, at *11 (D. Or. Mar. 30, 2017)

The take-away from these cases is: (i) if you are an employee with a non-compete that is voidable because your employer did not comply with ORS 653.295, you need to affirmatively notify your employer that the agreement is void on or about the time you resign or are terminated; or (ii) if you are an employer who happens to have a voidable agreement with an employee, you may be able to escape a challenge to enforcement if your departing employee does not take steps to timely void the agreement.

DOL Withdraws Guidance on Joint Employment and Independent Contractors

This morning, the DOL withdrew the agency’s 2015 and 2016 informal guidance on joint employment and independent contractors.  The DOL announcement says:  “Removal of the two administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act or Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the Department’s long-standing regulations and case law.   The Department will continue to fully and fairly enforce all laws within its jurisdiction including the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.”

Later commentary will provide more insight.  But, at first glance, this appears to signal a move away from the Obama administration’s efforts to expand liability for related entities with respect to employee wage claims and re-classify contractors as employees.

https://www.dol.gov/newsroom/releases/opa/opa20170607