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Employers Heed Caution: Pro-Employee Trends on the Rise

September 2021

Employers in New York, Connecticut, New Jersey and elsewhere should prepare themselves for new and ongoing pro-employee trends in employment law which may ultimately impact most private employers.  This includes new laws and policies on (i) joint employer risks; (ii) comparable worth/work and wage range disclosure; (iii) rehiring based on seniority for COVID-19 related separations; (iv) protections for employee’s “natural” hairstyle; (v) enhanced breastfeeding protections; and (vi) greater job protections for fast food workers.  While these legal trends do not impact all employers everywhere, they do impact some employers and indicate where the trends are headed. 

Broader Definitions for Joint Employers

As expected, earlier this summer the U.S. Department of Labor (the “DOL”) rescinded a Trump era final rule which narrowed the historical definition of  “joint employer” under the Fair Labor Standards Act (the “FLSA”).  By taking this action, the DOL has made it more likely employers will be classified as joint employers under the FLSA for the acts or omissions of another. Other government agencies, such as the NLRB, follow the same rule.  The rescission will take effect on September 28, 2021. 

Why Employers’ Should Care?

If a business is found to be a joint employer, each company is liable for statutory violations of the other. Common examples for joint employer allegations often occur with employees from staffing firms, subcontractors, franchises, or other affiliated companies. 

What Changes?

Under the Trump era rule, companies were considered joint employers only if they could hire and fire an employee, were able to substantially supervise and control an employee’s work schedule and conditions of employment, and if the company was able to set wages and method of payment for an employee and maintained employment records.

The Trump era rule also provided that certain factors should not be considered in a  joint employer analysis, including (i) businesses operating under a franchiser/franchisee business model; (ii) a franchisor providing a standardized employee handbook to a franchisee; (iii) permitting a business to operate its own facility on the other company’s property, and (iv) a business establishing minimum wage, and harassment-free and other workplace standards for another’s employees.  All this has been repealed.

Everything Old is New Again- Justification for the Change

Republican lawmakers and some legal scholars were in favor of the Trump era rule as its structure gave predictable standards and clarity for determining joint employer status.  With its rescission, they believe there will be a return to confusion and uncertainty for business owners.

However, in the end, the DOL believed that the now rescinded rule was contrary to the statutory language and the intent of Congress.  They also believed it improperly limited the factors administrative agencies and the courts have historically used, and it failed to consider the years of DOL’s guidance on the topic. By taking this action the DOL returns the standard to the pre-Trump rule era of the Obama Administration.

Wage Range Disclosure Laws

Equal wage for comparable work (worth) is not a new concept, but in recent years states have been hyper focused on making such a concept a reality.  These efforts are designed at closing the wage gap between men and women, and they are gaining support.  A growing trend in these efforts is the concept of wage transparency, including wage disclosure requirements.

Wage disclosure requirements obligate employers to do just that; disclose the wage ranges for vacant positions and for promotions.  Connecticut is the latest state to join this trend. 

Currently, California, Maryland and Washington all require employers to disclose certain wage data upon an employee’s or applicant’s request.  However, Connecticut and Colorado take the issue a step further by making it a proactive obligation of an employer to provide such information. While each state’s law is unique and has different disclosure requirements, all follow the same common theme.  An employer’s failure to comply with one of these laws could be met with significant liability, including court room litigation.

In Connecticut, employers must provide wage range information at the time an offer of employment is made or the applicant’s request for such information (whichever occurs first).  In addition, employers must provide employees with wage range information upon hire, a change in employee’s position, and upon the employee’s request for such information.  Colorado has implemented an even more robust disclosure requirement requiring employers to disclose the pay range in the job posting.

Ready, Set, Rehire- In Order of Seniority

Last month Connecticut joined a growing list of state and local governments, including New York City, requiring employers to recall  employees laid off due to the COVID-19 pandemic before hiring anyone else.  These employees must be recalled in order of seniority.  The Connecticut legislation was passed on July 13, 2021, with immediate effect and imposes rehiring obligations on hotels, lodging houses, food service contractors, and building services companies that have 15 or more employees in Connecticut.

Similar laws have already been enacted in California, Nevada and the cities of Baltimore, Minneapolis, New York, Philadelphia and Washington, DC.

It is important to note this new law does not apply to all Connecticut businesses and it only applies to employees that were terminated because of lack of business stemming from the pandemic or as a result of one of the state’s COVID-19 emergency orders.  It does not apply to former employees fired for cause.

The new bill also requires employers to notify former employees who were terminated between March 2020 and May 2022 of new job openings.  Workers who qualify are those who held the same or similar position prior to being laid off, as well as those who could perform the open position after receiving the same training that would be available to an entirely new employee.

Each eligible employee will have up to five days to accept or reject an offer before the employer may offer the position to the next most senior former employee.  If an employee fails to respond within the five-day period, the employer can consider the offer declined.

For employers who refuse to rehire a laid-off employee because they lack the qualifications of the new position and as result hire someone with no prior work history with the company, they will be obligated to send the former employee a written notice within 30 days detailing their decision.

Laws Regarding Employee “Natural” Hairstyles

New York, New Jersey and Connecticut now all have laws protecting employees’ right to maintain their “natural” hairstyle.  Connecticut joined its neighbors earlier this year when Governor Ned Lamont signed into law the CROWN Act, also known as “An Act Creating a Respectful and Open World for Natural Hair.” The new law bans discrimination in employment, public accommodations, and housing, as well as discrimination in credit practices, union membership, and with state agency practices.  The new bill protects people of color from discriminatory practices based upon their hair. It is not designed to protect Caucasian millennials who show up to work one day with purple hair!

The practical impact of the legislation is to expand the legal definition of the word “race” to now include the concept of ethnic traits which are “historically associated with race, including, but not limited to, hair texture and protective hairstyles.” Similar to other state laws, the bill protects various hairstyles including “wigs, headwraps and hairstyles such as individual braids, cornrows, locs, twists, Bantu knots, afros and afro puffs.”

What does this law mean for Employers? 

We see the greatest impact of these types of legislation on service sector employers, such as restaurants, banks, and various retail establishments, where staff appearance can be an important part of corporate image. We see a more limited impact on general corporate and professional services employers as less emphasis is placed on a standardized personal appearance.  Of course, there remain corporate cultures that still implicitly like a certain “look” for their employees; if that is you, this law could be a problem for your company.   

Enhanced Breastfeeding Laws in the Workplace

Another growing trend in workplace accommodations is enhanced breastfeeding arrangements.  For example,  effective October 1, 2021, Connecticut’s “An Act Concerning Breastfeeding in the Workplace” will go into effect.  This new legislation expands employers’ obligations to accommodate lactating and breastfeeding employees.  While Connecticut’s law may be one of the newest, it is just one among many states and the federal government to enhance such laws.  

The new legislation amends and expands existing Connecticut law, which provides employees’ the right to breastfeed and express milk at work during their meal and break periods.  The existing statute, like those in many states, requires employers to take reasonable efforts to make available a “room or other location” for employees to breastfeed or otherwise  express breast milk in private.  However, the amendment to the existing law sets forth additional requirements for the “room or other location” including that the room:

  • Be free from intrusion and shielded from the public while the employee expresses breast milk;
  • Include or be situated near a refrigerator or employee-provided portable cold storage device in which the employee can store breast milk; and
  • Have access to an electrical outlet.

Only Connecticut employers who can show an “undue hardship” are able to opt out of complying with these new requirements.  For the purposes of the amendment, an “undue hardship” is defined as “any action that requires significant difficulty or expense when considered in relation to facts such as the size of the business, its financial resources and the nature and structure of its operation.”  While it is true that claims of “undue hardship” will need to be looked at on a case-by-case basis, it seems that an average employer will be hard pressed to convince the state that compliance will cause it an undue hardship.

We recommend employers inside and outside of Connecticut take this time to review their policies and procedures regarding lactation room accommodations in light of their specific state laws knowing that the trend is to consistently improve these rights.  Also remember, even if there are no relevant state laws covering your employees, federal law also requires lactation accommodations. 

Greater Job Protections for Fast Food Workers

Earlier this year, New York City Mayor Bill de Blasio signed legislation which expands the city’s 2017 Fair Work Week Law (the “Act”) as it relates to fast food employees.  De Blasio’s actions effectively put an end to at-will employment for fast food employees in New York City. The new law went into effect on the 4th of July and makes New York City the first jurisdiction in the country to create job protection for a specific segment of an industry (i.e., fast food workers) within the restaurant industry. Although the new law has now gone into effect, many legal scholars believe it will be subject to challenge based on federal preemption.  (Preemption is the concept that state laws cannot narrow rights granted under a federal law, including an employer’s right to fire an employee at will.)  If the law stands after preemptive challenge, the Act could be a flashpoint for similar legislation across the country, and not just in the fast-food industry, but for other industries, too.

What this means for Employers?

The new law prohibits fast food employers from discharging employees without “just cause,” mandates a progressive discipline process, and implements seniority requirements.  Outside of a probationary period, which is not to exceed 30 days from the first day worked, the new law prohibits terminating or substantially reducing a fast-food worker’s hours without “just cause.”

The Act also requires employers to implement “progressive discipline” for poor performance and misconduct, subject to exceptions for gross misconduct and egregious acts.  In order to be in compliance, employers must establish and distribute a compliant progressive discipline policy.

Bona Fide Economic Reasons – A Justification for a Lay Off

Under the Act, employers may lay off employees based on a “bona fide economic reason.”  Any layoff based on economic reasons must be done in reverse order of seniority and the employer must make reasonable efforts to reinstate those impacted employees “before the fast-food employer may offer or distribute shifts to other employees or hire any new fast food employees.”

Preemption and Other Potential Legal Challenges

As mentioned above, the new law could face legal challenges based on preemption and how it has targeted one specific industry- fast food.  By essentially abolishing the “at-will” employment status of fast-food workers, the law takes direct aim at the National Labor Relations Act (the “NLRA”) preemption principles.  The federal nature of the NLRA generally preempts state and local laws that look to control employment practices protected by the NLRA.

Additionally, the new law’s targeting of the fast-food industry could present equal protection challenges under the U.S. Constitution.  The law creates a more onerous law for fast food employers compared to other employers, without a rational basis for doing so.

To Conclude

Since the beginning of this year, with the departure of President Trump and the Democrats essentially in control of both houses, there has been a growing pro-employee agenda coming out of Washington, DC.  This trend can further be seen at the state level.  The above summary was not intended to provide readers with a comprehensive synopsis of all the new laws and trends impacting employers; rather, it illustrates some trends we have noticed that employers should know.  We anticipate these trends will continue for the foreseeable future and we encourage employers to steady themselves in anticipation.