Year in Review: Employment law changes for employers in 2008
January, 2009
Contributors: Krista Hardwick, Pam Salgado, Jocelynne McAdory, Shauna Correia and Rich Dreitzer
2008 marked several significant changes to federal and state laws affecting employers. The following are key changes that happened in 2008 and what employers need to do to follow these new laws:
Federal Law
Changes to the Americans with Disabilities Act. The ADA Amendments Act (ADAAA) became effective on January 1, 2009. It specifically overturns a number of United States Supreme Court decisions interpreting the ADA which were favorable to employers. Among other things, the ADAAA expands the conditions that may constitute a disability and also makes it easier for an individual to meet the definition of a person "regarded as" having a disability. Employers should update their disability accommodation policies and train HR staff on these changes.
New Family and Medical Leave Act Regulations. The new FMLA regulations go into effect on January 16, 2009. They contain significant changes to the Act; changes that are so compelling, they will be the topic of their own e-Alert to be released next week. FMLA policies should be updated to reflect the changes.
Extended protected family medical leave for families of service members. The 2008 National Defense Authorization Act contains a significant amendment to the Family Medical Leave Act by providing additional protected leave for family members of members of the Armed Forces. FMLA policies should be updated to reflect these changes.
Constitution limits pre-employment drug testing by public employers. The Ninth Circuit ruled that a public employer may not require applicants to pass a pre-employment drug test unless the employer has a "special need" for the test. The ruling does not apply to private employers. Public employers should revise their drug testing policies.
Employee Privacy Rights. The Ninth Circuit ruled that an employer violated an employee's privacy rights by reviewing (without his consent) the text messages he sent and received on a company provided pager. This case demonstrates that, without an express text-messaging policy, employers run the risk of violating an employee's right to privacy if they review the employee's text messages without consent. Employee handbooks should contain such a policy.
Mileage Rates. Beginning July 1, 2008, the IRS rate for deductibility of business-related auto expenses – which most employers use when reimbursing employees –increased from 50.5 cents per mile to 58.5 cents per mile. Effective January 1, 2009, however, the mileage rate decreased to 55 cents per mile. Employers should ensure they are paying the current mileage rate.
Oregon
Rest Breaks. Oregon courts ruled that employees are precluded from filing wage claims against their employers as a result of missed rest breaks. However, the Bureau of Labor and Industries (BOLI) is authorized to assess civil penalties up to $1,000 per violation against non-complying employers. BOLI may also seek criminal prosecution because violating BOLI's rest break regulations is a misdemeanor in Oregon. For these reasons, it is critical for employers to be vigilant about requiring employees to take all required rest and meal breaks. If an employee fails or refuses to do so, employers should take appropriate disciplinary measures.
Same-sex domestic partners are now entitled to the equivalent rights. Insurance policies issued or delivered in Oregon must treat same-sex domestic partnerships like marriages, and same-sex domestic partners like spouses. Insurers may not require greater proof of the existence of a same-sex domestic partnership than they require of the existence of a marriage. Employers should review their employment policies and benefits plans to ascertain compliance with this changing area of the law.
Medical Marijuana Accommodation. In the case of Emerald Steel Fabricators v. BOLI, the Oregon Court of Appeals affirmed the Oregon Bureau of Labor and Industries' requirement that employers accommodate medical marijuana use. Employers should ensure that their drug policies are in compliance with this ruling.
Minimum Wage Increase. Oregon's minimum wage increased from $7.95 per hour to $8.40 per hour, effective January 1, 2009.
Washington
New Domestic Violence Leave. Washington requires that "reasonable" unpaid leave be provided to all employees for time needed to deal with domestic violence against the employee or a family member. Employers should update their leave policies and train HR personnel on this newly added category of required leave.
New Leave for Military Families. Spouses of military personnel may take 15 days of unpaid leave before deployment or while his or her spouse is on leave. Employers should review their employment policies to determine if an update is needed.
Increased Military Leave for Public Employees. Public employees may take up to 21 days of paid military leave, an increase from the 15 days of leave to which public employees were previously entitled. Public employers should review their employment policies to determine if an update is needed.
Leave requests require careful scrutiny for "public policy" implications. The Washington State Supreme Court case of Danny v. Laidlaw serves as a reminder that even in the absence of a specific statute, leave requests should be scrutinized carefully.
Minimum Wage Increase. Washington's minimum wage increased on January 1, 2009 to $8.55 per hour. Workers age 14 or 15 may be paid 85 percent of the minimum wage, which is $7.27 per hour.
California
Release of Wage Payments. Labor Code § 206.5, which prohibits employers from requiring employees to execute releases of wage claims unless the wages have been paid, has been amended. The term "execution of a release" is now defined to include situations where an employer knowingly requires an employee to execute a false statement of hours worked. Employers should ensure any releases comply with the new law.
Non-Solicitation Agreements. The California Supreme Court held in Edwards v. Arthur Anderson LLP that both non-compete and the non-solicitation of clients provisions in a contract between the parties are unenforceable, unless they are necessary to protect trade secrets. Employers can no longer rely on the federal Ninth Circuit cases which had opined that California law would allow a non-solicitation provision so long as it imposed only a "narrow restraint," and particularly multi-state employers based outside of California, should carefully review their CA employment agreements for compliance.
New paycheck rule for temporary workers. Effective Jan. 1, 2009, a new law requires employers to pay temporary employees at least weekly, regardless of when their temporary assignment ends. Labor Code § 201.3 now requires employers to pay wages for work performed during a calendar week no later than the regular company payday of the next calendar week. Employers of temporary staff should alert payroll departments/third party payroll companies of the change.
New Disability Access Bill aimed to curtail unwarranted litigation. A landmark disability access bill, SB 1608, adds new provisions to California's disability access laws likely to benefit employers and landlords. The law went into effect Jan. 1, 2009, with some provisions delayed until July 1, 2009. No action is required at this time.
No texting while driving. California drivers are now banned from reading, writing or sending a text message while driving as of Jan. 1, 2009. Employers should consider adding a "no text messaging" policy for employees driving company vehicles or conducting company business in personal vehicles.
California overtime laws may apply to Nonresident Employees. The 9th Circuit Court of Appeals in Sullivan v. Oracle Corporation (Nov. 6, 2008) held that California's overtime laws may apply to nonresident employees working temporarily in the state. Multi-state employers should ensure proper timesheet recording and update policy manuals.
Salary requirement added to computer professional OT exemption. Labor Code § 515.5 was amended effective September 23, 2008, adding an annual income restriction of $75,000 to the overtime exemption for salaried computer software professionals. The previous exemption contained only hourly and monthly income restrictions. Employers of salaried computer software professionals should analyze whether any employees fall within the new restriction and update policy manuals.
Nevada
Employees must exhaust administrative remedies under Collective Bargaining Agreements. In Baldonado v. Wynn Las Vegas, LLC, a group of at-will employees at the Wynn casino filed suit to challenge their employer's policies concerning tip sharing as having an adverse effect upon their income. The court held that the employees failed to exhaust the administrative remedies available to them under their collective bargaining agreement and rejected the employees' argument that a private cause of action for enforcement of Nevada's labor laws may arise by implication. Employers defending claims brought by their employees should always consider whether the claimants have exhausted any administrative options open to them, and use their failure to do so as a viable defense strategy.
Employee suicide may be compensable. In Vredenburg v. Sedgwick CMS, the Nevada Supreme Court ruled that an employee's suicide stemming from pain experienced as a result of an industrial injury could be treated as a non-willful death and compensated accordingly, provided that a sufficient causal connection is proven between the injury and the subsequent suicide. Employers should be mindful of the emotional toll that a workplace injury can take upon an employee and have mechanisms in place to address the mental and physical problems that are faced by those injured at work.
Arbitration. In Whitemaine v. Aniskovich, an employee had separate employment contracts with her employer as well as its parent company, though only one contract contained a provision entitling the employee to arbitration of workplace disputes. Here, an employee sought and obtained arbitration pursuant to a contract of employment with their local employer. This employee later obtained an arbitration award in their favor. The employer subsequently challenged the validity of this award, arguing that another, separate employment contract between the employee and the employer's parent company contained no entitlement to arbitration. The District Court ultimately held that because the agreement between the employee and the parent company contained an integration clause, the text of the other agreement (which entitled the employee to arbitration) was to be incorporated by reference. The Nevada Supreme Court later upheld the District Court's holding in this matter. Employers should strive to ensure consistency between multiple employment contracts at different levels of an organization. Employers should also remember that contractual language which is contained within a parent company's employment agreement can be construed to bind the company at the local level.
Public Employee Health Trusts. In Public Employee Benefits Program v. Las Vegas Metropolitan Police Department, the Nevada Supreme Court ruled that the health trusts through which Nevada's public employee retirees received medical benefits prior to retirement were deemed to be "health care programs" subject to the same regulation as any similar private sector program. Thus, local government employers were required to subsidize this program in the same manner as their private sector counterparts. Employers should be aware of the broadened definition of "health care programs" in Nevada and the additional funding implications which arise as a result.
If you would like more information about any of the new laws or assistance with other employment-related matters, please contact a member of Bullivant's experienced employment law team.