Expanded Overtime Protections for Workers

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Last year, the U.S. Department of Labor published a proposed rule expanding overtime protections to a wider population of employees.

Under existing Department of Labor rules, full-time salaried workers earning less than $35,568 annually, or $684 per week, are guaranteed overtime pay.  The proposed rule would increase the salary threshold to $55,000 annually, or $1,059 per week.

Department of Labor projections indicate that this change will create overtime protections for an additional 3.4 million employees.  The new rule also increases the minimum salary for the highly compensated employee exemption from $107,432 annually to $143,988 annually. 

This rule may be finalized as early as April and take effect as early as June.

Similar changes to overtimes rules and exemptions have already taken effect in the State of New York in recent months.

In December of 2023, the New York State Department of Labor increased the minimum salary thresholds for exempt executive and administrative employees in New York City and its surrounding counties to $62,400 annually, or $1,200 per week.  Throughout the rest of New York State, the salary threshold for this same population of employees increased to $1,124.20 per week, or approximately $58,458.40 per year.

These thresholds will continue to increase incrementally in 2025 and 2026.

Employers impacted by these changes should review their employee salaries and payroll practices to ensure compliance.

Now may be a good opportunity to compile a list of employees impacted by these changes and decide whether to raise their salaries to meet the new thresholds or convert them to non-exempt status.  This is only part one of an employer’s review.  Employers should also consider employees’ job duties and responsibilities to determine whether their current duties and responsibilities qualify for an exemption.

Adjustments to employee compensation and exempt status can impact a company’s budget, so consider including personnel from human resources, legal, and finance in these discussions.  

New Requirements Governing Employee Separation in New Jersey

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The New Jersey Unemployment Compensation Act has long required employers to provide instructions to their separated employees for filing unemployment benefits using a form widely known as the BC-10. Form BC-10 provides a separated employee with information needed to file for unemployment benefits, such as the legal name of the employer, its identification number, and address, the date of separation of the employee, and information pertaining to whether the separation is of a temporary or permanent nature.

New Jersey Governor Phil Murphy recently signed new legislation requiring employers to do more than simply hand over a Form BC-10 to their employees. Beginning on July 31 of last year, employers must satisfy some additional requirements.

For instance, employers are now required to submit a Form BC-10 to the New Jersey Department of Labor and Workforce Development (the “NJDOL”) at the same time they provide the form to their departing employee.

Separated employees must be given a Form BC-10 regardless of the reason for their departure. Therefore, employees who quit, are fired or are laid off must all be provided with Form BC-10s.
Additionally, the new legislation requires the Department of Labor to respond to initial benefits determinations within three (3) weeks of receipt of a claim. Thereafter, the claimant has twenty-one (21) days to appeal an initial determination. Employers have the shortest period of time, a total of seven (7) days, to appeal the Department’s determinations.

The new legislation also reduces the time employers have to respond to requests for missing information from the Department of Labor from ten (10) days to seven (7) days.

Employers must provide all forms to the Department of Labor in electronic format. If they have not already done so, employers should open an account on the Department of Labor’s website to submit responses to department requests.

Finally, penalties have also increased for employers who fail to issue a Form BC-10 or provide false information, these fines include a $500 per day fine or 25% of the amount of unemployment benefits whichever is greater.

Employers should be adapting their human resources practices and procedures to comply with these additional requirements and shortened timeframes and should consult with their attorneys for further assistance with compliance.

Regulation of AI Software in Hiring and Recruitment

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Recently, we have all heard the buzz about Artificial Intelligence (“AI”) and how it is impacting the workplace. Particularly concerning are new questions raised about the disparate impact AI software may have on the recruitment and hiring of job applicants.

Companies have begun utilizing AI software to assist them in hiring and recruitment by applying the software to complete initial screenings and information gathering on the applicant pool. This can save businesses a significant amount of man hours and is typically very successful in weeding out unqualified applicants. There are increasing concerns, however, that AI software screening may fail to consider diversity and may negatively impact minorities and individuals with disabilities.
In response to these concerns, New York City passed a law in April 2023 regulating automated decision tools or AI software by requiring “bias audits”. The bias audit assesses whether the tool in question negatively impacts applicants based on their race, gender, disability, and any other protected class. The law also requires companies using AI software in hiring and recruitment to disclose its use to candidates or employees who reside in the city.

The State of New Jersey is contemplating similar legislative action. Assemblywoman Sadaf Jaffer of Mercer County, New Jersey recently proposed bill A4909, with accompanying bill S1926 in the Senate, establishing guidelines for employers to follow in order to minimize the potential negative impacts of AI software in hiring and recruitment. One of the guidelines proposed is annual “bias auditing” designed to search for and identify any patterns of discrimination.

Also like the New York City law, A4909 obligates employers to notify candidates within 30 days that a) the company uses automated software; 2) the company is subject to bias auditing; and 3) that the company used this automated software to assess the characteristics and qualifications of potential job candidates. Non-compliance with the New Jersey law could result in fines that start at $500.00 for the first violation and $1,500 for subsequent violations.

Employers should consult with their attorneys before implementation of AI software in the workplace, particularly in the area of hiring and recruitment. It is unclear at this time how results of bias audits could be used as evidence in employment law court actions against an employer.

Considering Growing Your Business in California? Be Aware of the Yelp Law

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Positive business reviews on search engines such as google and yelp are something that every business strives to receive.  Too many negative reviews, on the other hand, may cause business to suffer and adversely impact profits.  How does a business control the negative reviews?  Some businesses have tried to safeguard the flow of negative reviews by providing non-disparagement clauses within either their form contracts or their online terms and conditions. 

In January of 2023, California passed legislation codified at California Civil Code section 1670.8, known as the Yelp law, prohibiting businesses from using non-disparagement clauses in contracts for the sale or lease of consumer goods or services. 

Section 1670.8(a) provides:

  1. A contract or proposed contract for the sale or lease of consumer goods or services may not include a provision waiving the consumer’s right to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services.
  2. It shall be unlawful to threaten or to seek to enforce a provision made unlawful under this section, or to otherwise penalize a consumer for making any statement protected under this section.
  3. Any waiver of the provisions of this section is contrary to public policy, and is void and unenforceable. 

Any person who violates the Yelp law faces a civil penalty of up to $2,500 for the first violation and $5,000 for each subsequent violation. In addition, a consumer or public prosecutor can recover a penalty of up to $10,000 for any willful, intentional, or reckless violation.

California’s law is based on the Federal Consumer Review Fairness Act, or CRFA, which makes it illegal to include language in form contracts that restrict an individual’s right to publish a review or make statements about good, services, or the conduct of a seller.

The Yelp law aims to protect customers from restrictions to their freedom of speech that are typically hidden in form contracts by invalidating any non-disparagement clauses.  Despite these limitations, companies are not without protection.  Businesses can still take legal action against online reviewers that are fake and/or customers who post content that is considered defamatory (either libel or slander), false and misleading content, content that is unrelated to the goods and services rendered, or any other content that is illegal and warrants removal.

 It is important to note Section 1670.8 applies to any company or persons conducting business in the State of California.  Therefore, companies should review form contracts, online terms and conditions pertaining to non-disparagement and consider either removing it in its entirety or consider language excluding the State of California. 

Consider consulting with legal counsel to ensure that your company practices and policies are in compliance with your state laws related to online reviews. 

Unionization and Workers’ Rights in 2024

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As has already been discussed in this blog, 2023 saw a record-breaking amount of union activity across the United States.  Strikes by large, high-profile unions representing the United Auto Workers, UPS workers, the teamsters, and writers and actors as well as smaller, lower-profile unions all resulted in gains for workers.

One would think that these wins would translate into an increase in the percentage of unionized workers in the United States, but studies are not yet showing that increase.  In fact, overall union membership dropped in 2023 from 10.1% to 10%.  See https://www.jacksonlewis.com/insights/top-five-labor-law-developments-january-2024. 

Experts suggest a large influx of workers into the economy increased the overall worker population and diluted any specific increases in a unionized workforce.  To the extent there are gains in union membership, these gains are more likely to be in workers of color under the age of 45.

It may be that the impact of 2023 union successes hasn’t revealed itself yet.  Further, there were several rulings by the National Labor Relations Board in 2023 that should create a more favorable environment for union organizing and recruitment.  The impact of these rulings may start to be felt this coming year.

Overall, employers should anticipate continued strong union activity across the country and pay attention to their workforce.  Now may be a good time to consult with legal counsel about how employers can legally respond to unionization efforts should they arise.

The rights of temporary workers in New Jersey also took center stage in 2023 with the passage of the New Jersey Temporary Worker Bill of Rights.  In 2024, New Jersey temporary help service firms await greater clarity from the State on the implementation of the new law.

Temporary help service firms and their clients should monitor the development of regulations issued by the State that will interpret and clarify provisions of the law.  They should also watch for updates on the remaining provisions of the law that have not yet gone into effect, particularly provisions regarding temporary help service firm registration.

Stay tuned.     

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