Save Money for New Year’s Gym Memberships: 3 Ways to Reduce Exposure to Expensive Labor & Employment Lawsuits

By: Philip Giorlando and Fred Preis

As the new year kicks off, businesses are setting goals and individuals are contemplating new fitness resolutions. While the focus is often on personal well-being, it's equally important for employers to consider the health of their organizations, especially when it comes to potential lawsuits in the realm of labor and employment law. Here are three proactive strategies to help businesses save money for New Year’s resolutions by reducing exposure to expensive legal battles.

Prioritize Clear Employee Handbook & Personnel Policies

With ever-changing Federal, State, and local laws, handbooks and personnel policies should be reviewed for compliance with all applicable laws—no small feat, especially for multi-state employers and/or those with remote employees. Drug testing and leaves of absence are especially tricky in light of new State laws on marijuana use and leaves of absence for sickness and pregnancy. And to keep up with changes coming from the Federal and State level, employers should revisit their social media, dress code, and grooming policies—to name a few.

Ensure Leave Policies Comply with the FMLA

Employers have multiple obligations and responsibilities under the FMLA, as well as some rights and options to manage their workforce effectively. Employers must post a notice explaining the FMLA in a conspicuous place where employees can see it, and include information about the FMLA in their employee handbook or other written policies. Employers must also provide a written notice to each employee who requests or takes FMLA leave, outlining their specific rights and obligations. Employers should have their managers and supervisors trained so they can know how to recognize when an employee may be eligible for FMLA leave, how to respond to leave requests, how to document and track leave usage, and how to avoid interfering with or retaliating against employees who exercise their FMLA rights. Employers should stay in touch with their employees on leave to monitor the employee’s status and expected return date, as well as to provide any updates on their benefits, pay, or job. Employers should also inform them of any changes in their position or duties that may affect their reinstatement rights. However, employers should not contact them excessively or for reasons unrelated to their leave, as this may be seen as interference or harassment.

Ensure Background Check Policies & Procedures Are Compliant

Employers conducting background checks—or those who use third-party providers to conduct such checks for them—also face challenges. The Federal Fair Credit Reporting Act imposes strict notice and disclosure requirements on employers conducting background checks, and there are stiff penalties for violations of the law (up to $1,000), as well as exposure for class action lawsuits—Fair Credit Reporting Act violations tend to be Company-wide, leading to class action lawsuits and hundreds of thousands of dollars in damages.

Some States and localities mandate additional requirements on employers’ use of background checks that go beyond the Federal requirements and impose added penalties.

Employers who outsource this work to third-party providers should remember they are not immune from liability and may be held ultimately responsible for any violations of Federal, State, and local background check laws by their provider.

Conclusion

As businesses set priorities for the new year, prioritizing preventive maintenance measures is a great way to start 2024 on the right foot. A proactive approach not only safeguards the organization but also contributes to creating a workplace environment that is legally resilient and supportive of both employers and employees. Employers implementing the above steps bring their business one step closer to elite legal shape.

Please feel free to contact us if you want assistance with these projects with the protection of attorney-client privilege.

Navigating the Workforce Frontier: Labor and Employment Implications of the White House Executive Order on AI

By: Alexandra C. Hains

On October 30, 2023, the White House issued a comprehensive Executive Order addressing the development and use of artificial intelligence (AI). The Order acknowledges the potential benefits and risks associated with AI, emphasizing its dual nature—both promising and perilous. The Order’s focus on AI competitiveness and workforce development carries significant implications for the job market, employee rights, and the evolving nature of work in the age of AI.

As a directive from the President to the Executive Branch, the Executive Order does not directly impact private-sector businesses. However, it serves as a significant indicator of the government's stance on AI-related issues and sets the stage for potential legislative and regulatory developments.

Notably, the Order addresses concerns about AI's impact on the workplace, including increased workplace surveillance, bias, and job discrimination, signaling the need for responsible innovation and training in AI tool development. Sections 7.1 and 7.3 of the Order specifically address concerns about discrimination in the workplace. Section 7.1 directs the Assistant Attorney General for the Department of Justice, Civil Rights Division, to coordinate with other Federal civil rights offices to discuss how to “prevent and address discrimination in the use of automated systems, including algorithmic discrimination.” Section 7.3 directs the Secretary of Labor to publish guidance for federal contractors “regarding non-discrimination in hiring involving AI and other technology-based hiring systems.”

The reference to workplace concerns suggests an awareness of potential effects on employment and labor practices. As employers increasingly implement and rely on AI tools and strategies, especially in tasks like drafting job descriptions, screening applicants, and identifying key job functions, there is a pressing need for vigilance. Employers must not only incorporate these technologies responsibly but also ensure that the predictive outcomes generated are both legitimate and free from bias. As regulatory scrutiny is sure to increase on the private sector, it is imperative for employers to actively conduct thorough due diligence to verify the effectiveness of AI tools.

Weeding Out: A Year in the Weeds

By: Kayla M. Jacob

Tis the season for a little reflection! While a new year is great for new beginnings, it is also a wonderful time to dust off the lessons of the past and ensure the pearls of wisdom from prior years are carried forward. In preparation for a great 2024, we rewind the pages of our Weeding Out series to reflect on issues employers may still wish to consider regarding marijuana at work.

Overview of the Weeding Out Series

The Weeding Out series was created to unravel the implications of ever-changing marijuana laws on the modern workplace. This comprehensive series delves into a wide range of topics, covering workplace policy considerations, legislative updates, and providing insights on how employers can best navigate the legal quagmire surrounding marijuana. So far, this series has covered the following topics:

Discrimination Against State Employees in Louisiana

Louisiana permits the use of marijuana for therapeutic purposes when recommended by a clinician to treat certain debilitating medical conditions. However, until August 2022, no law restricted an employer's right to discipline employees for marijuana use, even when used in accordance with the State's therapeutic marijuana law.

As of August 1, 2022, Louisiana prohibits State employers from taking an adverse employment action against individuals who use marijuana for therapeutic use in accordance with the State’s therapeutic marijuana use law based solely on a positive drug test for marijuana. This anti-discrimination law does not apply to private employers.

More information on the scope of the anti-discrimination law can be found here.

Drug Testing Woes

While the new year may bring about a calendar change, it will likely not change the complexities faced by employers in adopting workplace drug testing policies amid the changing landscape of marijuana legalization. Several factors are important for employers to consider when drafting drug testing policies, including state and local laws, industry regulations, the duty to provide a safe work environment, potential discrimination in drug testing policies, and the impact of the tight labor market.

Drug Testing Woes for Unionized Workplaces

Additional considerations are a must for employers of unionized workplaces attempting to adopt a drug testing policy, including policies on marijuana use. For a unionized workplace, negotiations may be key to not letting drug testing programs go up in smoke. Employers of unionized workplaces must be sure to utilize and take advantage of the collective bargaining process to negotiate effective drug testing programs. When in doubt, employers should consult legal counsel to determine to what extent negotiations are required prior to implementing a drug testing policy.

Once Budding Legislation

Louisiana’s 2023 Regular Legislative Session did not go as planned for certain marijuana bills.

House Bill 24 unsuccessfully attempted to declassify marijuana from Louisiana’s controlled dangerous substances schedule and to further decriminalize marijuana. The Bill was involuntarily deferred by a majority vote of the committee, which effectively killed House Bill 24.

House Bill 351 also died in committee. The Bill was introduced to prohibit the disqualification from unemployment or workers’ compensation benefits based solely on an employee’s use of marijuana for therapeutic purposes in accordance with Louisiana law. As the Bill did not pass, Louisiana employees still use marijuana at their own risk.

Marijuana as Doping for Student-Athlete Employees

With the growing momentum of considering student-athletes as employees, collegiate sports programs should begin considering how to address marijuana drug testing for these potential student-athlete- employees. Drug testing as an employer will inevitably look different than drug testing under NCAA rules and regulations. Collegiate sports programs may have to revise their playbook to ensure that drug testing policies and procedures are lawful should student-athletes become employees.

Getting More in the Weeds

The Weeding Out series will continue to track key legislation and policy changes that impact the implementation of drug-free workplace policies. The series will also continue to explore various hot topics regarding marijuana. For now, a moment of reflection is a great way to start the new year in high hopes of implementing effective policies and minimizing liability in 2024.

New Year's Resolutions: Don't Fail A DOL Audit

By: Philip Girolando and Fred Preis

As we usher in a new year, businesses and employers are contemplating resolutions to enhance their operations and stay on the right side of the law. In the realm of labor and employment, one crucial commitment stands out: ensuring compliance with Federal Wage and Hour laws. Earlier in 2023, the DOL requested an increased budget in 2024 to hire more investigators and conduct more investigations for wage and hour violations, and with the current White House Administration’s position on such issues, employers should expect 2024 to be a year for increased DOL investigations in all areas and industries. A New Year’s resolution to avoid failing a DOL audit is essential for maintaining a healthy and legally sound workplace.

How to protect yourself?

A key preventive maintenance element is to have an internal wage and hour audit of your employees conducted under attorney-client privilege protection. This allows you to discover any discrepancies in wages and overtime and confirm that the business follows all of the necessary laws, before a DOL investigator comes knocking.

To properly protect your business from the fines and penalties that come from a DOL Audit, there are several items that your business can review to decrease the odds that an investigator will find a violation:

Employee Classifications:

Are your exempt employees properly classified as exempt? There are many different exemptions that can apply, but the proper application of these exemptions can be complicated, especially in the “gray” areas of many job positions. The most common exemptions are the White-Collar exemptions for Executive, Administrative, and Professional employees. A common challenge for businesses is the administrative exemption (Hint: having “administrative” in the job title is not enough).

Your business should analyze the written job descriptions of all of your exempt employees and compare them to the duties each employee actually performs. Have the duties changed? Do they supervise more or less employees? Do you have a written job description at all? These changes need to be considered before an investigator appears at your door.

Pay Practices:

Are you properly calculating applicable bonuses into your employees’ regular rate for overtime? Does your business require deductions from paychecks for uniforms or other costs? Are your employees taking the exact same lunch break every day because of automation in the time-keeping system? These are major red flags that the Department of Labor will identify and inspect, and so need to be reviewed internally to ensure compliance.

Required Documents:

Is your business maintaining the necessary documents? For example, payroll records must be retained for at least 3 years, while timekeeping records and records of deductions or additions to wages must be retained for at least 2 years. The business’s recordkeeping practices should be carefully audited and any changes should be considered in advance of any DOL audit, which can happen at any time.

Conclusion:

As businesses consider the opportunities of a new year, employers should make a resolution to prioritize Federal Wage and Hour compliance. Fostering a workplace environment that respects the rights and well-being of employees not only ensures legal compliance but also contributes to the overall success and sustainability of businesses. By seeking guidance and establishing a preventive maintenance program, employers can confidently navigate the intricate landscape of Federal Wage and Hour Laws, minimizing the risk of failing a DOL audit and the expensive penalties that come with such a result.