Compliance Corner [July 2024]
Here is what is new in July
New paid time off for Chicago employees
New exempt salary level is in effect, but stay tuned...
OFCCP publishes latest corporate scheduling announcement list
Pay transparency requirements growing
California employees get some relief from PAGA
PDA and PWFA interrelationship
Self-certification of SDVOSB companies ending
and some quick compliance notes
New Paid Time Off Benefit for Chicago Employees
Effective July 1, 2024 (i.e., now), most employees in Chicago are eligible to accrue and use up to 40 hours of paid leave plus 40 hours of paid sick leave in a 12-month period. According to Cooley, “Any employee who works at least 80 hours for an employer within any 120-day period while physically present within the geographic boundaries of Chicago is eligible for paid time off benefits under the ordinance.” Independent contractors are NOT covered. Compensated time is used to calculate benefit eligibility, meaning unpaid commuting time, for example, is not counted. Accrual is at the rate of 1 hour for every 35 worked within the City of Chicago.
Employers may front-load either 40 hours of paid leave or 40 hours of paid sick leave or both. If employers do not front-load leave, employees may carry over up to 16 hours of accrued but unused paid leave and up to 80 hours of paid sick leave. Each type of leave is tallied separately. Employees must use either type of leave in 2-hour increments unless the employer allows them to use smaller increments.
New Exempt Salary Level Is in Effect, but Stay Tuned …
For the time being, the new minimum salary levels for exemption imposed by the DOL are in effect, but at least one lawsuit (only in the state of Texas) has prevailed – at least temporarily – and more are awaiting adjudication, so this issue is far from settled. At present, however, compliance is the order of the day.
OFCCP Publishes Latest Corporate Scheduling Announcement List
In late June, OFCCP issued its latest Corporate Scheduling Announcement List (CSAL) for federal supply and service contractors to be audited. According to Berkshire, “This list includes 500 federal contractors and subcontractors who have been selected for various compliance reviews. These reviews may involve Establishment Reviews, Corporate Management Compliance Evaluations, Functional Affirmative Action Program Reviews, or University Reviews. The CSAL serves as a courtesy notification, providing these establishments with an early alert to prepare for upcoming audits.” This is an advance notice that should not be ignored, especially since the rules regarding “establishments” have been updated.
Pay Transparency Requirements Growing
States that currently have some kind of pay transparency requirements on the books include Colorado, New York, California, Connecticut, Nevada, Rhode Island, and Washington State. Among these, pay rates must either be disclosed up front (e.g., in job listings in Colorado) or upon request. Maryland, Illinois, Minnesota and Vermont all have similar regulations pending, and ten other states are considering doing the same. Bottom line: If it is not currently required where you are doing business, it’s coming.
California Employers Get Some Relief from PAGA
According to Clark Hill, the “Private Attorneys General Act” (PAGA) for employers in CA is finally being reined in to some extent. Previously, the law had few restrictions on what a person could sue for – including injuries or losses that that particular individual did not even suffer, and penalties were based on the number of pay periods involved in the infraction – regardless of the frequency of pay (i.e., weekly vs. biweekly/semi-monthly), which led to double penalties for employers with weekly payrolls. Both of those faults have been corrected, and caps have been placed on awards against employers who take “reasonable steps” to correct problems. Additional fixes have been implemented as well, much to the relief of companies with employees in California.
PDA & PWFA Interrelationship
The Pregnancy Discrimination Act (PDA [not the other definition]) prohibits discrimination against pregnant employees, but it does not specifically require reasonable accommodations. To fill that gap, the “Pregnant Worker Fairness Act” (PWFA) was enacted. A “reasonable accommodation” is defined as any modification or adjustment to the pregnant employee’s job or work environment that enables her to perform the essential functions of her job. While the ADA allows an exception to accommodation that would “impose undue hardship,” under the PWFA, it is allowed only if it would cause “significant difficulty or expense” to the employer. Suffice it to say that between the PWFA, PDA and FMLA, there is much to take into consideration.
Self-Certification of SDVOSB Companies Ending
The Small Business Administration (SBA) issued a final rule on June 6 that will eliminate the ability of Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) to self-certify their status for eligibility. Unless it is withdrawn, the rule will become effective on August 5, 2024. Effective dates for implementation stages are the following:
October 1,2024: Certification by “Veteran Small Business Certification Program (VetCert) required for all prime contracts and subcontracts in order to count for participation goals.
December 22, 2024: Final date for self-certification application by SDVOSBs for work on non-participation goal contracts.
December 23, 2024 and following. No self-certification available unless an application with either the SBA or VetCert has been filed.
Quick Compliance Notes:
Response required: An employer’s self-insured health plan and their TPA were hit with a penalty of over $32,000 for failing to provide requested healthcare information to a plan participant.
The construction industry, because of the nature/structure of its projects, has sometimes been prone to harassment. The EEOC has now issued a new guide providing recommended practices to prevent that from happening. The guide is available online at the EEOC website.
Multi-jurisdictional employers, (i.e., those with employees in more than one state or municipality) are advised to pay close attention to the requirements regarding paid leave programs that they provide, because those requirements can vary; and not complying can be costly. Examples include notice requirements, minimum benefit levels, different eligibility requirements, etc. 21 states and over 25 municipalities around the country have their own stipulations.