Compliance Corner [November 2024]
Your tax dollars at work: Compliance agencies are as active as ever – if not more so. Following are summaries of federal agency activities in November 2024:
Here is what is new in November
FMLA Claims Can Require Proof
Termination Survives ADA Test
Summary of DOL Violations and Settlements in October
Summary of EEOC Violations and Settlements in October
Amazon’s Mistreatment of a Deaf Employee
Additional Coverage Basis under Pregnant Workers Fairness Act (PWFA)
State Pay-Related Developments
Quick Takes
California 2025 Regulations
COVID Testing Back in the News
FMLA Claims Can Require Proof
A metropolitan bus driver in the Philadelphia area filed for FMLA because of migraine headaches, which had caused him to miss work, but he never obtained medical diagnosis of or treatment for the condition. He was terminated for accumulating too many points under an absentee tracking policy. Subsequently, he went to a doctor, obtained the diagnosis and requested FMLA leave; but that was denied, for which he sued the employer, claiming FMLA interference and retaliation. A jury divided on the issue, so the employer moved for “judgement as a matter of law.” That was upheld, and the employee also lost on appeal. Because his only visit to the doctor was to obtain FMLA paperwork, his headaches did not qualify as a chronic condition, negating any status as a chronic serious health condition. The appeals court pointed out that a chronic serious health condition requires at least two healthcare provider visits per year. They also noted that such conditions apply prospectively, not retroactively.
Termination Survives ADA Test
An HR Generalist at a bank who was on extended unpaid medical leave after bone biopsy surgery was terminated from that leave. She applied for ADA leave because for some reason she was not eligible for FMLA leave. Before her return, she was informed that her position had been eliminated, so she naturally sued, claiming the bank had violated the ADA. The termination was upheld at both trial and appeals levels because the bank provided a legitimate, non-discriminatory reason for eliminating her position: it was part of a restructuring program that was underway prior to her going on leave, and no one was hired to replace her because her duties were dispersed among existing employees.
Summary of DOL Violations and Settlements in October
FLSA
Actions against over 15 employers in 6 states, covering over 120 employees, costing over $110,00 – including $10,000 against a sawmill that endangered children at work. (They were working dangerous machinery late in the evening…. Nothing to see here!)
OSHA
Actions against 6 employers in 5 states, costing nearly $2 million to 6 employers
Davis-Bacon and Related Acts
Action against one employer in one state, costing $85,000 in back wages for 6 employees
Executive Order 11246
Actions against 2 employers in 2 states costing at least $310,000 covering an unstated number of employees for discriminatory practices
H-2A Visa Program
Action against one contractor for unstated amount for mistreatment and unsafe practices affecting unstated number of farm workers
Summary of EEOC Violations and Settlements in October
LAWSUITS
Too many to itemize: 43 lawsuits against at least that many employers in 14 states for literally all kinds of prohibited treatment of employees.
SETTLEMENTS
19 settlements in 12 states – again for a variety of infractions – for amounts totaling at least $470,000 plus conciliation of charges with any amount unstated.
Amazon’s Mistreatment of a Deaf Employee
Amazon was sued for failure to accommodate a deaf employee, but the treatment went beyond that. The employee requested a sign language interpreter; he was provided with another employee who was hearing-impaired who did not know sign language. HR did nothing when he reported receiving verbal abuse from another employee, and he was terminated based upon a false report of assaulting and threatening another employee. EEOC is handling his case.
Additional Coverage Basis under Pregnant Workers Fairness Act (PWFA)
EEOC has settled for $100,000 with a resort in Florida that denied a female employee time off to grieve for her stillborn child. This was determined to be a violation of both the Pregnancy Workers Fairness Act and the ADA. The child was stillborn in the woman’s fifth month; she submitted a doctor’s letter saying she would need about six weeks to recover; and she was terminated the day after the letter was submitted. The consent decree in the settlement mandates 3 years of semiannual reporting to the EEOC plus revision of all relevant policies and training of staff. The resort has since been commended for their compliance with the settlement.
State Pay-Related Developments
CALIFORNIA
Effective 1/1/2025, Exempt employees must be paid at least twice the hourly minimum wage, which will increase to $16.50/hour on that date. Thus, the minimum salary for general exemption will be $34,320.
However, computer software employees must be paid at the rate of $56.97 per hour (for all hours worked) or a monthly salary of $9,888.13, and an annual salary of $118,657.43.
Physicians, on the other hand, must be paid a minimum of $103.78/hour = $215,862.00. Finally, “Ordinary” exempt employees (administrative/professional/executive) must be paid a weekly salary of $1,320 or an annual salary of at least $68,640.
Those are on top of a statewide increase in the minimum wage specifically for healthcare workers that went into effect October 16.
COLORADO
Incentive pay, credits, bonuses, etc. must now be included in the “base pay” to be used in determining non-exempt employees’ overtime rates, according to a decision by the Colorado Supreme Court. Examples include shift differentials, minimum wage tip credits, nondiscretionary bonuses, production bonuses, and commissions.
MAINE
Assessments and reporting for the Maine paid family and medical leave program begin 1/1/2025.
MICHIGAN
A double-barreled increase is coming to Michigan employers: an originally-scheduled increase on 1/1/2025 to $10.56/hour and a subsequent increase erroneously passed by the legislature but nixed temporarily by the state Supreme Court to 12.48/hour, effective 2/21/2025.
WASHINGTON
Minimum rates for exemption take effect on 1/1/2025 as follows:
$1332.80 per week or $69,305.60 per year for employers with 50 or fewer employees, or
$1499.50 per week or $77,968.80 per year for employers with more than 50 employees.
ADDITIONAL CHANGES
15 Cities in California and 10 jurisdictions in Washington State plus state increases in Connecticut, Montana, Nebraska, New Jersey, Ohio, South Dakota and Washington State itself will increase minimum wages effective January 1, 2025. Most require new posters as well.
Quick Takes
Denial of unreasonable leave request not discriminatory
A worker in New York wanted to take a month off for a religious retreat and sued when it was denied. The NY Unified Court System determined that granting that would have constituted a hardship for the employer, so the charge was denied.
Harassment of Transgender Worker Mis-handled
A restaurant chain in Michigan fired 4 workers after three of them harassed a transgender shift manager, including one employee who “deadnamed” the transgender person, revealing his birth name without permission. The chain fired all four after the transgender manager complained. EEOC has charged the chain with violating Title VII. The case is still pending, but it does not look good for the chain….
California 2025 Regulations
California has a plethora of new requirements with which employers will have to comply in 2025.
Ten new laws/rules/definitions:
Local jurisdictions can now enforce certain state non-discrimination laws
“Intersectional discrimination” – discrimination on a combination of factors instead of one protected characteristic – is now illegal in CA as well as in federal law. For example, an older woman – while not discriminated on the basis of age or of gender – might be able to claim disparate treatment because of the combined effects of age and gender.
More limits on employers’ requiring driver’s licenses, including having to verify that alternate transportation modes (e.g., bike, walking, etc.) would not fulfill the job requirements.
Expanded protection for victims of violence.
Written contracts for freelancers earning at least $250, plus record-keeping requirements.
Restrictions on “captive audience” meetings, such as might be held on a political or religious subject, or during a union drive.
Employees are NO LONGER REQUIRED to use accrued paid leave before receiving state paid family leave benefits.
Although “social compliance audits” are not mandated, any company that conducts one is required to post a detailed record of the findings on their website.
Employers are required to post employees’ rights and responsibilities under state whistleblower laws. The state has produced a poster for that, available at https://www.dir.ca.gov/dlse/WhistleblowersNotice.pdf.
CA Proposition 32, which was defeated, would have increased the state minimum wage from $16 to $17 for the rest of 2024 immediately, with a further increase to $18/hour on January 1, 2025. It would also have increased the state level for exemption from overtime pay to $68,640 on 1/1/2025 and index the minimum wage as well.
The California Privacy Protection Agency (CPPA) has proposed several new “significant privacy regulations” for adoption under the California Consumer Privacy Act (CCPA), if approved by the legislature, covering regulation of automated decision-making technologies (ADMT) and AI, plus risk assessments and cybersecurity audits. This would prescribe timing, methods and reporting methods. It would also add requirements for data brokers (including their registration fees) and data collection and disclosure processes. Of course, a raft of regulations accompanies the above. The proposals are now in a 45-day comment period, so there may be changes before the final versions are issued.
COVID Testing Back in the News
With the re-surfacing of COVID, the EEOC has ruled that mandatory testing for the presence of the COVID virus before allowing individuals to enter the workplace is permissible, but testing for antibodies is not. Based on FDA studies, serology (blood) tests are not a reliable indicator of the presence of the virus, and antibodies are not an indicator of the current presence of the virus. And finally,
The IRS has increased the annual cap for 401(k) plans to $23,500 for calendar 2025.