Newsletter - AHEAD HUMAN RESOURCES, INC.

IMPORTANT CHANGES TO ENFORCEMENT OF I-9 VIOLATIONS

Fri, 17 Apr 2026 18:32:20 GMT

On March 16, 2026, ICE updated its Form I-9 Inspection fact sheet, effectively superseding prior guidance that had governed I-9 enforcement for nearly three decades.

Specifically, more than 10 error categories previously treated as correctable technical violations—eligible for the statutory 10-day cure period—are now reclassified as substantive violations subject to immediate fines of $288 to $2,861 per violation.

What Has Changed

The reclassification arrives against a backdrop of sharply elevated worksite enforcement activity. The rate of Notices of Inspection in 2025 was reported to be substantially higher than in prior years, and ICE has levied significant penalties across construction, staffing, hospitality, manufacturing, and retail.

In light of the above, it would be prudent for Employers to have an internal I-9 audit.

BONUS PAYMENTS AND OVERTIME

Thu, 15 Jan 2026 16:00:31 GMT

A recent Opinion Letter from the Department of Labor, “DOL,” serves as a good reminder that incentive bonus payment usually must be included in an employee’s regular rate used to calculate overtime.

The Opinion Letter dealt with an employer in the waste industry that paid drivers a bonus every pay period if certain safety and performance criteria (punctuality, attendance, and consistency in completing daily safety tasks) were met.

Not surprisingly, the DOL found that the bonus amounts should be included in the regular rate of pay for overtime calculation purposes, because the payments were incentives and Discretionary Bonuses.

Discretionary bonuses may be excluded from the regular rate of pay if: (1) the fact and amount of the payment are determined at the SOLE Discretion of the employer; (2) with the determination being made at or near the time of the period when the work was performed; and the payment must not be made pursuant to any prior contract, agreement, or promise causing the employee to expect such payments regularly. The payments in this case were made pursuant to a predetermined plan to incentivize work performance.

A true Discretionary bonus which can be excluded from overtime is quite unusual. Accordingly, most bonus payments must be included in overtime calculations.

NON-COMPETES REVISITED BY THE FTC

Tue, 28 Oct 2025 16:02:45 GMT

Non-Competes Revisited by the FTC

As employers will recall, a federal court struck down the Fair Trade Commission’s (FTC) proposed ban on employee non-compete agreements over a year ago. The FTC has since abandoned its effort to enforce a rule completely banning such agreements.

However, in September, the FTC surprised some by announcing that it intends to regulate the use of employee non-competes on a case-by-case basis. It seems that the FTC will consider whether the restrictions are “reasonable” by determining whether they are no greater than is necessary to protect the employer’s legitimate interests, balancing those interests against the hardship to the employee and public.

Some factors that are likely to be considered are:

The size of the company, both in terms of employees and business;
Whether the employer requires non-competes of all employees, or only those with job duties that might justify their use to protect the employer’s interests;
The scope of the geographic and time limitations contained in the non-competes.

This “reasonableness” determination is very similar to the analysis that many state courts use in determining whether to enforce a non-compete.

The FTC has announced its intention to put particular focus on employers in the healthcare space. However, all employers utilizing non-compete agreements should review the restrictions contained therein in an effort to determine that they appear reasonable under the above criteria.

AI CAN BE USEFUL...BUT BE CAREFUL USING IT TO SCREEN JOB APPLICANTS

Wed, 20 Aug 2025 14:28:43 GMT

AI can be useful, but...

Thousands of companies contract with Workday to provide AI-based applicant screening tools, which include personality and cognitive tests.

A lawsuit was filed in 2023 in federal court in CA by a man alleging that he applied for many jobs at companies that utilize Workday’s platform, and that he was rejected for all, with many rejection emails coming within an hour of his application, or in the middle of the night (indicating they were computer-generated). The lawsuit alleges that the algorithmic methods used by Workday’s system tends to screen out applicants over the age of 40, thereby illegally discriminating against them.

The Judge in the case has ruled that Workday, while not an employer, was an agent of its employer customers, and has conditionally certified a collective action of all applicants screened by the involved Workday systems since September, 2020. This could be millions of applicants. The Judge has also ordered Workday to produce a list of all customers who utilized the AI screening tools during that time period. It is important to note that none of Workday’s customers are defendants, yet, but it sure may be headed in that direction.

So, what are the take-aways for employers?

Have documented human oversight of hiring decisions.
If AI is used, make sure you understand the criteria it utilizes, and that it is based solely on the job requirements, and qualifications.
AI results should be reviewed, and overridden when appropriate.
Audit AI rankings to make sure there is no disparate impact on applicants in protected categories (age, disability, race, sex, etc.).

TAXES ON OVERTIME AND TIPS: THE IMPACT OF LAST WEEK'S FEDERAL LEGISLATION

Tue, 08 Jul 2025 13:46:57 GMT

THE IMPACT OF FEDERAL LEGISLATION

The federal law enacted last week provides some tax relief for employees who work overtime, and for those who receive tips. A summary is set forth below:

Overtime Deduction

An employee must receive OT pay as defined by the Fair Labor Standards Act (FLSA) (pay for hours worked beyond 40 in a workweek at a premium rate), and the deduction only applies to the premium portion of OT pay (the amount above the regular hourly rate).

The deduction applies only to overtime compensation that is “required” under the FLSA. The deduction does not apply to overtime premiums that are not “required” by the FLSA, but instead are paid pursuant to contract (including a collective bargaining agreement), company policy, or because they are required under state law only.

This is an above-the-line deduction, with the maximum deduction being $12,500 per year (up to $25,000 if married filing jointly). To be eligible for the full deduction, employees must earn $150,000 or less.

Employers must include the total amount of qualified overtime compensation as a separate line item on the Form W-2. This will require employers to keep a distinct record of the overtime premium compensation that is both (a) required under the FLSA and (b) in excess of the regular rate.

Tips Deduction

To qualify for the deduction, the tips must be received by an individual engaged in an occupation that customarily and regularly received tips on or before Dec. 31, 2024, such as servers, bartenders, hotel staff, hairstylists, etc.

To be considered a “qualified tip,” the amount must: (a) be paid voluntarily without any consequence in the event of nonpayment; (b) not be the subject of negotiation; and (c) be determined by the payor. Thus, for example, a mandatory service charge imposed by the employer for a banquet will not qualify for the deduction, and neither will a required gratuity that a restaurant adds automatically to a bill for large parties. Failing to make this distinction may lead employees to claim deductions to which they are not entitled.

This is also an above-the-line deduction, with a cap of $25,000 per year. To be eligible for the full deduction, employees must earn $150,000 or less.

The act requires employers to include on Form W-2 the total amount of cash tips reported by the employee, as well as the employee’s qualifying occupation. For 2025, the act authorizes the reporting party to “approximate” the amount designated as cash tips pursuant to a “reasonable method” to be specified in a forthcoming regulation by the Treasury secretary.

EMPLOYEES ARE NOT ENTITLED TO TAKE FMLA LEAVE TO CARE FOR A SIBLING, RIGHT?

Thu, 06 Feb 2025 17:40:54 GMT

Well, maybe, if the Employer is located in
KY, MI, OH, or TN

The FMLA contains specific provisions allowing eligible employees to take leave “to care for the employee's spouse, son, daughter, or parent with a serious health condition.”

In December, the 6th Circuit Court of Appeals, which is the Federal Appellate Court for the above states, issued an opinion finding that an employee might be entitled to take FMLA leave to care for her sick sister.

The language of the FMLA is crystal clear as to family members for which an employee may take FMLA leave to care for. Notwithstanding that, the court found that the in loco parentis (in the place of a parent) language in the FMLA’s definition of ‘Parent” and “Son or Daughter” showed that “Congress sought to protect parental relationships, whether biological, legal, or their functional equivalents.”

So, the court sent the case back to the lower court to determine whether the employee in question had an “in loco parentis” relationship with her sister. If so, the employee would be entitled to FMLA leave to care for the sister.

This nonsensical interpretation of the FMLA by court leaves employers in the above states with great uncertainty as to what to do if an employee requests FMLA leave to care for a sibling. Under the court’s skewed reasoning, the employer would have to determine whether an employee requesting such leave actually stood in loco parentis with the sibling. An employer facing such a request should consult with an HR or legal professional.

Kentucky: A Unique Blend of Culture, History, and Natural Beauty

Fri, 31 Jan 2025 16:40:11 GMT

Kentucky, located in the southeastern United States, is a state renowned for its breathtaking mountainous landscapes, rich equestrian traditions, and the world-famous bourbon industry. Known affectionately as the "Horse State," Kentucky boasts a unique culture that harmoniously blends music, history, and timeless traditions.

Key Facts About Kentucky

Population : Approximately 4.5 million people (2023)
Official Language : English
Land Area : 104,659 km²
Currency : United States Dollar (USD)

10 Fun Facts About Kentucky

The Kentucky Derby : Held annually in Louisville, the Kentucky Derby is one of the most prestigious horse races in the world, attracting spectators from across the globe.
The Birthplace of Bourbon : With about 95% of the world's bourbon produced here, Kentucky is undeniably the epicenter of this iconic spirit.
Mammoth Cave National Park : Kentucky is home to Mammoth Cave, the longest-known cave system in the world, featuring over 426 miles (686 km) of explored underground passages.
Horse Capital of the World : Lexington, a vibrant city in Kentucky, is celebrated for its purebred horse breeding industry.
The Appalachian Mountains : Eastern Kentucky offers stunning views of the Appalachian Mountains, making it a prime destination for hiking and outdoor adventures.
Country Music Roots : Kentucky has given the world legendary country music icons, including Loretta Lynn and Bill Monroe, often referred to as the "Father of Bluegrass."
The Big Red Horse Sculpture : This iconic landmark in Lexington celebrates Kentucky's equestrian legacy and is a must-see for visitors.
Role in the Civil War : Due to its strategic location, Kentucky played a pivotal role during the American Civil War, serving as a border state with divided loyalties.
Kentucky Fried Chicken : The globally recognized fast-food chain KFC was founded in Corbin, Kentucky, by Colonel Harland Sanders.
The Kentucky Horse Park : This unique museum showcases the history of horses and their cultural and military significance, making it a paradise for horse enthusiasts.

A State of Heritage and Beauty

Kentucky’s allure lies in its ability to combine the charm of its natural landscapes with its cultural and historical significance. From the rolling hills of the Bluegrass region to the majestic Appalachian Mountains, Kentucky offers scenic beauty at every turn. The state’s thriving equestrian culture and bourbon industry reflect a rich heritage, while its contributions to music and art continue to shape its unique identity.

Whether you’re exploring the depths of Mammoth Cave, cheering on horses at the Kentucky Derby, or savoring a glass of world-class bourbon, Kentucky promises an experience like no other. It is a proud and distinctive part of the United States, offering something special for everyone to discover.

PRESIDENT TRUMP IS WASTING NO TIME IMPROVING THE LABOR AND EMPLOYMENT CLIMATE FOR EMPLOYERS

Wed, 22 Jan 2025 14:33:09 GMT

The President made two appointments on his first day in office that will level the playing field for Employers:

He named Andrea Lucas to be the Acting Chair of the EEOC. Ms. Lucas has been an EEOC Commissioner since being nominated by President Trump in 2020. Upon her recent appointment she stated “I look forward to restoring evenhanded enforcement of employment civil rights laws for all Americans. In recent years, this agency has remained silent in the face of multiple forms of widespread, overt discrimination. Consistent with the President’s Executive Orders and priorities, my priorities will include rooting out unlawful DEI-motivated race and sex discrimination; protecting American workers from anti-American national origin discrimination; defending the biological and binary reality of sex and related rights, including women’s rights to single sex spaces at work; protecting workers from religious bias and harassment, including antisemitism; and remedying other areas of recent under-enforcement.”
The President also named Marvin Kaplan as the Chairman of the NLRB. Mr. Kaplan has served on the Board since 2017. The President should have the opportunity to appoint two more pro-employer Board Members soon, resulting in a Republican majority, and will also surely replace the radical NLRB General Counsel very soon. This will allow the Board to undue the controversial pro-union positions and decisions delivered under the previous Administration.

KENTUCKY'S MEDICAL CANNABIS: A PRIMER FOR EMPLOYERS

Tue, 17 Dec 2024 17:12:21 GMT

As everyone is probably aware from the news media, Kentucky’s Medical Cannabis Program law takes effect January 1, 2025. Under the law, individuals with qualifying medical conditions may be prescribed cannabis by medical cannabis practitioners. Such individuals will receive a state issued identification card and are referred to as “cardholders” in the new law.

The good news for employers is that the new law really does not appear to change much, if anything, with regard to having a drug free workplace, and a policy for drug testing. The law specifically states that it does not require an employer to permit or accommodate the use, consumption, or possession of medicinal cannabis in the workplace. Further, the law provides that an employer may have policies restricting the use of medicinal cannabis by employees, including zero-tolerance drug policies.

The law does contain some language with respect to reasonable suspicion of impairment situations. It says that “Good faith determinations of impairment permitted under this paragraph shall include behavioral assessments of impairment and a secondary step of testing an employee who is a cardholder for the presence of cannabis by an established method.” A bit unclear, but the purpose of this provision would seem to be to require employers to perform a drug test, and not just rely on an employee’s behavior to determine impairment. This is in accord with a well written drug policy. We would recommend documenting in detail the observations of a supervisor that indicate impairment, as well as the drug test results.

FEDERAL COURT BLOCKS NEW OVERTIME REGULATION FROM TAKING EFFECT 1/1/25

Mon, 18 Nov 2024 17:00:10 GMT

On Nov. 15, 2024, a Federal District Court in Texas blocked on a nation-wide basis the latest effort by the U.S. Department of Labor (DOL) to increase the minimum salary executive, administrative, and professional employees must receive before they can be properly classified as exempt from overtime under the Fair Labor Standards Act (FLSA). The minimum would have increased to $59,000 on January 1. The Judge held that the rule “plainly exceeds” the DOL’s authority.

The DOL could choose to appeal the Judge’s decision to the U.S. Court of Appeals for the Fifth Circuit, but it would be well into 2025 before any such appeal would be decided. It is also likely that the incoming Trump administration will reverse or substantially revise the rule.

The ruling also found that the increase in the salary threshold to $44,000, which occurred on July 1, exceeded the DOL’s authority, so the required amount has actually reverted back to $35,000.

Employers should continue to monitor this situation. We will keep you advised. In the meantime, there are probably good reasons to use the $44,000 amount when making exemption determinations.

SO YOU THINK EMPLOYERS CAN NOW MAINTAIN NO-COMPETE AGREEMENTS WITH NO THREAT OF LEGAL CHALLENGE? BETTER HOLD THE PHONE...

Thu, 10 Oct 2024 18:50:07 GMT

As most know, in August a Texas federal court struck down the FTC’s proposed regulation banning employment non-competition agreements. However, on October 7, the NLRB’s General Counsel published a Memorandum reiterating, and further explaining, her position that most non-competition agreements violate the National Labor Relations Act, “NLRA.” This is a position that she originally announced in a May 23 Memorandum. She appears to have double-downed on this, possibly because of the FTC ruling. At any rate, employers should be aware that the NLRA applies to most private employers, whether they have a union-organized workplace or not.

Additionally, the General Counsel’s Memo states that “stay-or-pay” agreements are generally also illegal under the NLRA. These are any contracts under which an employee must pay their employer if they separate from employment, whether voluntarily or involuntarily, within a certain timeframe. Some examples are: training repayment agreement provisions or educational repayment contracts.

If an employer maintains unlawful stay-or-pay provisions or non-compete provisions, the NLRB is going to seek financial “make whole” remedies. In the case of a no-compete, this could include the difference between what the employee makes and what they could have made in another job. The Memo states “an employee must demonstrate that: (1) there was a vacancy available for a job with a better compensation package; (2) they were qualified for the job; and (3) they were discouraged from applying for or accepting the job because of the non-compete provision.” If these criteria are satisfied, the employer must compensate the employee for the difference (in terms of pay or benefits) between what they would have received and what they did receive during the same period. This could also be a remedy for a stay-or-pay agreement.

It must be noted that this General Counsel Memo does not have the force of law. However, it does set forth the enforcement position of the NLRA, meaning that NLRB Charges and investigations will likely follow. A court may eventually find that the General Counsel’s position is not in accord with the law, but it would be very expensive for an individual employer to litigate to that point.

Employers have 60 days to “cure” existing stay-or-pay provisions by unilaterally altering contract terms to conform to the General Counsel’s demands. Otherwise, they will be subject to prosecution. It appears to us that so altering the agreements would render them pretty much useless.

Employers should review any no-competes, or stay-or-pay agreements that they utilize, and determine if such agreements might violate the conditions set forth in the General Counsel’s Memo. If so, a decision will have to be made as to whether to continue to use the agreements. Employers should consult with labor counsel in making the decision whether to continue to use these agreements.

THE EEOC IS BUSY ENFORCING ITS NEWEST LAW (PWFA)

Tue, 01 Oct 2024 18:53:12 GMT

Employers should take note that the EEOC has filed at least 3 lawsuits in the past month related to the Pregnant Workers Fairness Act, PWFA, which took effect in June of last year. We believe these are the initial lawsuits filed by the EEOC, and most likely indicates that this is a new strategic point of emphasis for the EEOC.

What are the cases about?

In one case, a pregnant employee who worked on an assembly line requested an accommodation that would not require excessive bending or lying on her stomach. The employer placed her on leave without engaging in the interactive discussion process with her, which constituted a forced accommodation according to the lawsuit.

In another case, the employer refused to excuse an employee’s absences for pregnancy-related conditions and medical appointments and required her to work mandatory overtime despite knowing that her physician had restricted her from working over forty hours per week during her pregnancy. Because of her pregnancy-related absences, the company assessed attendance points against her and warned that she would be terminated if she acquired another point. As a result, the employee resigned to avoid termination and protect her pregnancy.

In the third case, a specialty medical practice did not allow a medical assistant to sit, take breaks, or work part-time as her physician had advised to protect her health and safety during the final trimester of her high-risk pregnancy. Instead, the practice forced her to take unpaid leave and refused to guarantee she would have breaks to express breastmilk. When she would not return to work without those guaranteed breaks, her employment was terminated.

What should employers do?

They should review their accommodations policies to ensure that that they include requests related to pregnancy, childbirth, and related medical conditions. This may also include creating or revising interactive process paperwork that should be used to review requests for accommodations, and engage in the required interactive process. By doing so, the risk of failing to engage in the interactive process with pregnant employees who are in need of an accommodation can be reduced, and there will be documentation of the process itself.

The EEOC has provided examples of possible reasonable accommodations:

Frequent breaks;
Sitting or standing;
Schedule changes, part-time work, and paid and unpaid leave;
Telework;
Parking;
Light duty;
Making existing facilities accessible or modifying the work environment;
Job restructuring;
Temporarily suspending one or more essential function;
Acquiring or modifying equipment, uniforms, or devices; and
Adjusting or modifying examinations or policies.

The analysis to consider whether an accommodation request is an undue hardship is whether it causes significant difficulty or expense for the employer’s operations. Under the PWFA, employers must conduct an individualized assessment when determining whether an accommodation will impose an undue burden. If you believe a request constitutes an undue hardship, you should review the matter thoroughly with your HR advisor.

FTC'S NON-COMPETE RULE STRUCK DOWN

Wed, 21 Aug 2024 18:55:02 GMT

Yesterday, a Texas federal court struck down the FTC’s proposed ban on non-competition agreements on a nationwide basis , meaning employers will not have to comply with the proposed Rule, and can continue to maintain non-competes as their state laws allow. While there is a slim chance the Rule could be resurrected by a federal appeals court in the future, that is doubtful at best.

In case you missed it, here is information regarding the now invalid Rule from our April 24 Newsletter on this topic:

The Fair Trade Commission, FTC, issued a final Rule that would have prohibited employers from utilizing non-compete agreements with almost all employees. Specifically, under the Rule, employers would have no longer been able to:

Enter into non-compete agreements with employees; or
Enforce existing non-compete agreements, unless they are with “Senior Executives,” defined as those earning more than $151,164 annually, with policy making responsibilities.

Additionally, before the effective date of the Rule, employers would have been required to provide an explicit Notice to employees and former employees that their non-compete agreements were no longer enforceable.

Final Regulations That Make it Harder for Businesses to do Business

Tue, 23 Apr 2024 20:50:24 GMT

NUMBER 1:

he Department of Labor, DOL, issued a final rule raising the salary that an employee must be paid to be Exempt from overtime pay, “OT” under the so-called white-collar Exemptions: Executive; Professional; Administrative; and Computer Employees. On July 1, 2024, the minimum salary to qualify for these Exemptions will jump from $684 per week ($35,568 annually) to $844 per week ($43,888 annually). Then, it will increase to $1,128 per week ($58,656 annually) on January 1, 2025. Please remember that there are other requirements which must be met to properly classify an employee as Exempt, i.e. be paid on a Salary Basis; and perform specific duties.

The objective and effect of these changes is to make more employees eligible for OT pay, which will obviously make it more costly for many employers to do business. The DOL estimates that these changes will impact 4 million employees.

So, what should employers do now?

Create a list of Exempt employees who earn less than the new required salary amounts, and decide whether to increase their salary or convert them to Non-Exempt. The number of hours over 40 an employee works (potential OT hours) should be considered in measuring the financial impact of this decision. Additionally, the affect on employee morale must be considered. For example, a supervisor converted from Exempt to Non-Exempt may be demoralized by having to clock in and out with subordinates.
Communicate changes to Exempt status, or compensation, individually (if possible). An increase in pay to comply with the new levels will obviously be a positive conversation, while those with employees who are reclassified will be more challenging, and should include information about tracking time worked more closely (lunch breaks, after hours communications, etc.). Employees who are reclassified can be told that such is being done to comply with the federal government’s new wage and hour rules.

* Legal challenges to the new rules are likely, however, prudent employers should begin planning for them to take effect as scheduled, as there is no certainty as to the outcome of those challenges. We will provide updates.

NUMBER 2:

The Fair Trade Commission, FTC, issued a final rule that will prohibit employers from utilizing non-compete agreements with almost all employees. Specifically, under the rule, employers will no longer be able to:

Enter into non-compete agreements with employees; or
Enforce existing non-compete agreements, unless they are with “Senior Executives,” defined as those earning more than $151,164 annually, with policy making responsibilities.

Additionally, before the effective date of the rule, employers will be required to provide an explicit Notice to employees and former employees that their non-compete agreements are no longer enforceable.

Important notes:

The rule can’t take effect until August 22 (120 days after it was published in the Federal Register).
The rule includes model language for the Notice.
The rule does Not ban other restrictive agreements, such as: customer non-solicitation agreements; confidentiality agreements; non-disclosure agreements; and employee non-solicitation agreements.
Lawsuits challenging the new rule have already been filed, and more will follow. What will happen with those is anybody’s guess.

So, what should employers do now?

Develop a Game Plan in light of the new rule. Outside counsel may be utilized to develop a comprehensive plan to protect company interests and information. This can be through the use of the other types of restrictive agreements, as well as Trade Secret protection.
Put together a list of employees who would be required to receive Notice under the new rule.
Monitor the court cases.

Pregnant Workers Fairness Act “PWFA” Final Rules

Tue, 16 Apr 2024 20:46:43 GMT

As you may recall, we sent out an AHEAD Newsletter last May regarding the Pregnant Workers Fairness Act “PWFA,” which went into effect last June 27.

As a refresher, the law:

Covers employers with 15 or more employees. Protects employees and applicants who have limitations related to pregnancy, childbirth, or related medical conditions.
Like the ADA, employers are required to provide reasonable accommodations, absent undue hardship. However, under the PWFA, such accommodation must be granted for “physical or mental conditions” related to pregnancy, childbirth, or related medical condition,” which is a lesser standard than the required “physical or mental impairment” under the ADA.Another major distinction between the ADA and the PWFA is the definition of a “qualified individual.” Under the ADA an individual must be able to perform the essential functions of the job with or without reasonable accommodation. Additionally, eliminating an essential job function is not a reasonable accommodation. However, under the PWFA, an individual is still considered “qualified” if the inability to perform an essential function is for a temporary period, and can be reasonably accommodated.
Specifically requires employers to engage in the interactive process with employees requesting a reasonable accommodation related to pregnancy, childbirth, or a related medical condition.
Prohibits employers from denying an employment opportunity, or taking an adverse employment action, based on the need for a reasonable accommodation to the known limitations related to pregnancy, childbirth, or a related condition.
Prohibits employers from requiring employees to take leave if another reasonable accommodation could be provided. So, granting leave is a last resort, unless of course the employee prefers that as the reasonable accommodation.
Prohibits employers from retaliating against anyone who complains about a violation of the PWFA, or participates in an investigation, hearing, or proceeding related to the same. Also prohibited is coercing, threatening, intimidating, or interfering with anyone’s rights under the PWFA

Two days ago, the EEOC released its final rules (regs) regarding how it interprets and will enforce the law. The regs are over 400 pages, so set forth below is an attempt to summarize some of the important points:

The final regs contain a very broad definition of “Pregnancy, Child Birth or Related Medical Condition,” which in addition to the normal pregnancy related conditions includes: fertility treatment; and termination of pregnancy (miscarriage or abortion).
The definition of those deemed “Qualified” is also very broad. As with the ADA, someone is Qualified if she can perform the essential functions of the job, with or without reasonable accommodation. However, under the PWFA, someone is also qualified if the inability to perform the essential functions is TEMPORARY, and will be able to be performed IN THE NEAR FUTURE (generally 40 weeks).
The regs include a list of possible accommodations, including: Job restructuring; Schedule changes, part-time work, and paid and unpaid leave; Frequent breaks; Acquiring or modifying equipment, uniforms, or devices; Making existing facilities accessible or modifying the work environment; Allowing sitting or standing (and providing means to do so); Light duty; Telework or remote work; Providing a reserved parking space; Temporarily suspending one or more essential function; and Adjusting or modifying workplace policies.This list is not exhaustive. The EEOC and courts may consider other accommodations to be “reasonable,” so employers will want to work with the employee during the interactive process to review these options but to also identify other possible accommodations.
The regs attempt to clarify when an accommodation request can be denied, which is only if it would impose an Undue Hardship on business operations. Generally, an accommodation would create an Undue Hardship if it would cause significant difficulty or expense. The following factors may be considered when considering whether temporarily suspending an essential job function would be an Undue Hardship: The length of time the employee or applicant will be unable to perform the essential function; whether there is work for the employee or applicant to accomplish; the nature of the essential function, including its frequency; whether you have provided other employees or applicants in similar positions who are unable to perform essential functions with temporary suspension of those functions and other duties; whether there are other employees, temporary employees, or third parties who can perform or be temporarily hired to perform the essential function in question, if needed; and whether the essential function can be postponed or remain unperformed for any length of time and, if so, for how long.

The final rules (regs) will take effect 60 days after they are published in the Federal Register. The effective date is anticipated to be around June 18. However, there is a chance that their implementation may be delayed by litigation.

The bottom line is that covered employers will need to carefully consider accommodation requests by employees covered by this law, with an understanding that the accommodation responsibility is much broader than that under the ADA.

Employers with Timekeeping Rounding Policies May Want to Rethink Them

Wed, 21 Feb 2024 20:43:18 GMT

A recent case from the Eighth Federal Circuit Court raises an issue about a longstanding common practice of some employers use of rounding policies when tracking hours worked by employees. In the case, the employer used an automated timekeeping system which rounded to the next quarter hour when an employee clocked in within 6 minutes of the scheduled shift start time, or out within 6 minutes of the scheduled end time. For example, an employee who clocked in at 7:55 for a scheduled 8:00 shift would not be paid for the 5 minutes before 8:00, because the clock would round up to 8:00. An employee clocking out at 3:55 for a scheduled 4:00 end time would be paid for the 5 minutes of unworked time before 4:00, because the clock would round to 4:00.

The Fair Labor Standards Act, “FLSA,” is the federal law governing the payment of wages to employees. When it was enacted, 86 years ago, employers obviously did not have the technology available today to track employee work hours. Back then, it would have been very complex to calculate each employee’s hours worked on a minute-by-minute basis. Accordingly, rounding polices were common, and are specifically allowed by FLSA regulations. However, the regulations state that such polices will “presumably average out over time so that employees are fully compensated.”

Unfortunately for the employer in the recent case, experts determined that the rounding policy resulted in lost time for two-thirds of the employees over all of the 2-6 year periods examined, and they lost more time than the one-third of employees who benefited from the policy.

The court found that the rounding policy was not in compliance with the FLSA regulation because, rather than “averaging out” so that employees were fully compensated, it resulted in a clear trend of under compensation for the employees.

The court specifically noted that automated, electronic timing and accounting systems (such as the one involved in this case) record exact punch in and out times, and there therefore are no administrative hassles with capturing an employee’s exact work time. “This is not like the old days of punch cards and hand arithmetic.”

So, employers using automated systems and a rounding policy to pay hourly employees should probably give a great deal of thought to retiring the rounding policy and paying actual clock in and out times to avoid claims by employees that they have not been paid for all time worked. The employees in the case discussed herein are looking for over $2,000,000 in damages, plus attorney fees.

Our HR experts assist our clients with all wage and hour issues such as this.

Biden’s DOL Issues New Rule Making It More Difficult for Businesses to Classify Individuals as Independent Contractors for Wage and Hour Law Purposes

Tue, 09 Jan 2024 20:40:41 GMT

The Department of Labor, “DOL,” yesterday (1/9/24) issued a new Rule which will make it more difficult for businesses to classify individuals as Independent Contractors, “IC,” under federal wage and hour law. The new Rule specifically rescinded a Rule that had been in place since 2021, which made it easier for businesses to classify individuals as IC.

1. What Is The New Rule?

The new Rule will utilize a “totality of the circumstances” analysis to determine whether an individual is an employee or IC. The six factors set forth in the new Rule are:

The worker’s opportunity for profit or loss depending on managerial skill;
The relative amount of investment made by the worker in comparison to investments made by the potential employer;
The permanency of the worker’s relationship with the potential employer;
The nature and degree of the potential employer’s control;
The extent to which the work performed is an integral part of the potential employer’s business; and
Whether the worker uses specialized skills indicative of business-like initiative.

The new Rule also states that none of the above factors should be given weight over another, and that additional factors may also be considered if they are relevant to the overall question of economic dependence. The DOL has stated that additional guidance will be forthcoming.

2. What Is The Likely Impact of the Rule?

Businesses that utilize IC could face liability for unpaid wages (minimum wage and overtime) if an individual classified as an IC is determined to in fact be an employee, which is more likely under the new Rule. Such liability could include: liquidated damages (double backpay); civil money penalties; and attorney fees. This potential liability would of course be increased if an employer utilizes large numbers of IC, which could involve class or collective action lawsuits.

3. What Should An Employer Do?

The Rule takes effect March 11. Employers should do an audit of any IC that it currently uses to attempt to determine how the individual(s) would be classified under the new Rule, and make any necessary classification changes.

The new Rule will likely face legal challenges, but Employers can’t rely on that, and should make any necessary changes to comply.

AHEAD can assist in navigating this new potential minefield. We will provide more information as it becomes available. Feel free to contact us with questions.

The EEOC Increased the Number of Lawsuits it Filed Against Employers in 2023

Thu, 23 Nov 2023 20:38:03 GMT

The EEOC’s enforcement statistics for 2023 show that the agency filed 143 discrimination lawsuits, an increase of more than 50% from 2022. A recent SHRM article included the following information regarding the suits:

13 of the suits were based on Age Discrimination;

43 of the suits included hostile workplace environment (27 based on sex or sexual orientation and 15 based on race or national origin); and 48 were based on Disability.

Employers in the Hospitality, Health Care, and Retail industries were the most favored targets of the lawsuits. It should be noted that the EEOC does not only go after large Employers, as 6 of the suits involved small Employers.

To avoid charges of discrimination, Employers should carefully evaluate all adverse employment actions, and consistently apply policies in a uniform manner. Applicants with a disability should all be carefully considered, with hiring decisions being based on the qualification and ability to perform the job, with or without reasonable accommodation. AHEAD can help you with compliance!

Newsletter October 2023

Sun, 29 Oct 2023 20:35:19 GMT

DO I NEED TO CHANGE MY WORK RULES?

Employer Rules after Stericycle

If you have not heard, employers probably need to review their rules and policies because of an August
2 decision of the National Labor Relations Board, “NLRB.” Recall that the NLRB enforces the National
Labor Relations Act, which applies to almost all private (non-government) employers, whether or not
their workplace has been organized by a union.

The case that was decided involved a company, Stericycle, which maintained certain work rules
regarding:

 Personal phone use;
 Taking pictures or recordings at the workplace;
 Prohibiting conduct which could harm the reputation of the employer;
 Conflicts of interest; and
 Confidentiality requirements in retaliation cases.

The NLRB used this case to overturn the prior standards that were in place for determining the legality
of employer work rules. The new test it announced is that if an employee could reasonably interpret an
employer rule to restrict or prohibit Section 7 activity the rule is presumptively unlawful. The NLRB went
on in whimsical fashion to state that was the case even if a rule could be reasonably interpreted not to
restrict Section 7 rights, and even if the employer did not intend for its rule to restrict Section 7 rights.
An employer supposedly can rebut this presumption by proving that the challenged rule advances a
legitimate and substantial business interest and that the employer is unable to advance the interest with
a more narrowly tailored rule. Good luck with that!

So, what does this mean for employers? It means that if the NLRB somehow gets an employer’s rule in
front of it that it does not like, the employer will lose and be found to have committed an Unfair Labor
Practice. This is so whether or not the rule has ever been enforced. Mere maintenance of the rule is
enough.

While it is impossible to imagine all of the types of rules that the NLRB might find objectionable, the
following broad categories are most likely included:

 Any rule involving restrictions on an employee’s use of their personal cell phone.
 Any rule banning employees from taking pictures, or making recordings.
 Any rule prohibiting an employee from making adverse statements about a supervisor or the
company.
 Restrictions on what an employee may post on social media.
 Rules requiring confidentiality.
 Rules regulating conduct towards other employees.
 Rules restricting the use of company logos, copyrights, or trademarks.
 Rules relating to restrictions on leaving work.
 Conflict of interest rules.

For an employer with a workforce that is already represented by a union, the finding of merely
maintaining an unlawful rule might not result in anything more than having to cease maintaining the
rule and posting a Notice. However, for an employer with a workforce that is going through a union
organizing campaign, it is possible that the finding that a rule is an unfair labor practice could, at least in
theory, potentially overturn the results of a union election won by the employer, and lead to an NLRB
order to recognize the union as the bargaining representative in spite of the election results.

Accordingly, employers (especially with an unorganized workforce) should review their work rules and
ask if each rule is necessary, and whether the rule could be written more narrowly.

This ridiculous new standard is the result of the current presidential administration. It is similar to the
attack on employer rules that occurred under the Obama administration, but frankly, this new standard
is even more employer adverse. There will be legal challenges, but they will take years, so we are stuck
with this for the foreseeable future.

Newsletter September 2023 Update

Fri, 29 Sep 2023 20:27:21 GMT

THE NLRB CONTINUES TO ERODE THE RIGHTS OF EMPLOYERS

At the end of last month, the NLRB issued a Rule that will require union elections to be held on the “earliest date practicable” after a Direction of Election is issued. Prior to this, it was at least 20 days following the Direction of an Election.

The purpose of this Rule is to make it easier for a union to win an election to obtain the right to represent the employees of an employer. Employers will now have almost no time to educate employees in a campaign against the union. Unions normally lose some support during such campaigns.

THAT’S NOT ALL:

In a departure from 50 years of settled law, the NLRB announced in a case decision, Cemex, that an employer may not refuse to bargain with a union that claims to have the support of a majority of employees. Such support is almost always shown through signed union authorization cards.

After the Cemex decision, an employer faced with a union demand for recognition really has only 2 choices: bargain with the union (accepting it as the employee’s representative); or file a petition with the NLRB requesting a union election.

WAIT, STILL MORE:

In Cemex, the NLRB also changed over 50 years of law as to when it would issue a Remedial Bargaining Order. A Remedial Bargaining Order sets aside the results of a union election won by an employer, and requires the employer to bargain with the union. In the past these were very rarely issued, and only in instances where the employer engaged in outrageous and pervasive unfair labor practices before an election.

Under Cemex, the NLRB will issue a Remedial Bargaining Order if an employer commits “any unfair labor practice sufficient to set aside an election” between the filing of a petition for an election and the election. Too early to say what type of unfair labor practice will meet the new criteria, but you can bet it won’t take much.

In summary, the NLRB is doing everything it can to set the table for unions to organize as many workplaces as possible. The courts may reign in some of these renegade actions, but only time will tell, and in the meantime, employers are stuck with them.

Newsletter September 2023

Fri, 01 Sep 2023 20:29:27 GMT

U.S. DOL PROPOSES RULE TO INCREASE EXEMPT EMPLOYEES’ MINIMUM SALARY LEVEL

In case you missed it, on August 30, 2023, the US Department of Labor (DOL) issued its long-awaited proposed Rule to increase the salary threshold required for employees to be exempt from overtime under the Fair Labor Standards Act (FLSA). To satisfy the requirements for the executive, administrative or professional (EAP) exemption, employees must meet certain tests regarding job duties and generally must be paid on a salary basis in an amount that is at least the amount specified in the DOL regulations. Under the DOL’s proposed Rule, the salary level required for the EAP exemptions would increase from the current salary of $35,568 annually ($684/week) to $55,068 annually ($1,059/week). Such a Rule would dramatically increase the number of employees who would have to be paid OT.

The proposed Rule may be changed based on comments from the public, but we would rather doubt it. There will almost certainly be legal challenges to the Rule. Prior legal challenges to overtime Rules issued by the DOL have met with some success in the courts, but the outcome would be far from certain.

We will keep you updated.

Newsletter August 2023

Mon, 03 Jul 2023 20:31:51 GMT

THE SUPREME COURT MUDDIES THE WATER ON RELIGIOUS ACCOMODATION

With some of the other Supreme Court decisions recently handed down, employers may have missed the Groff v. DeJoy case. In Groff, the Court essentially changed the standard for employers when dealing with employee requests for reasonable accommodation for religious beliefs. Unfortunately, they increased the burden for an employer to show that a requested accommodation would be an undue hardship.

Under federal law (Title VII) an employer with 15 employees is required to provide reasonable accommodation to an employee when a work requirement conflicts with the employee’s sincerely held religious belief, unless the accommodation would create an undue hardship to the employer’s business.

Since a previous Supreme Court case in 1977, an employer has been able to show that a requested accommodation would be an undue burden if it would require more than a de minimis cost. In Groff, the Court changed the standard, requiring an employer to accommodate an employee’s religious practice as long as the proposed accommodation does not create “substantial increased costs in relation to the conduct of the company’s particular business.”

The facts in the 1977 case, and Groff, dealt with an employee requesting to not have to work on their weekly day of religious observance. The specific factual issue in Groff was whether exempting an employee from Sunday work — requiring his co-workers to pick up the slack — constituted an undue hardship. The Groff court noted that “an accommodation’s effect on co-workers may have ramifications for the conduct of the employer’s business, but a court cannot stop its analysis without examining whether that further logical step is shown in a particular case.” Clarifying this point, the court noted that companies must explore other available options, and that “[f]aced with an accommodation request like Groff’s, it would not be enough for an employer to conclude that forcing other employees to work overtime would constitute an undue hardship. Consideration of other options, such as voluntary shift swapping, would also be necessary.”

Further, the court stated that “a hardship that is attributable to employee animosity to a particular religion, to religion in general, or to the very notion of accommodating religious practice cannot be considered ‘undue,’” meaning that even a co-worker’s objection to having to change their schedule to accommodate another employee is likely not enough.

So, an employer faced with a request for religious accommodation must now give much more thought to each such request. While the Court did not go so far as to raise the standard to that of an accommodation request under the ADA, a prudent employer should now take similar steps when evaluating a religious accommodation request. We can assist with that.

Newsletter June 2023

Thu, 08 Jun 2023 20:23:10 GMT

NLRB GENERAL COUNSEL ISSUES MEMORANDUM ANNOUNCING HER POSITION THAT NONCOMPETE AGREEMENTS VIOLATE THE NATIONAL LABOR RELATIONS ACT

On May 31, the General Counsel for the NLRB issued a Memorandum detailing her position that noncompete agreements between an employer and employee generally violate the National Labor Relations Act, “NLRA.”

Under Section 7 of the NLRA, employees have the right to engage in protected and concerted activities related to their employment, such as: the right to join a union; and work with coworkers to discuss and attempt to better working conditions.

The General Counsel reaches the conclusion in the Memo that noncompetes are by their nature overbroad, and “reasonably tend to chill employees in the exercise of Section 7 rights when the provisions could reasonably be construed by employees to deny them the ability to quit or change jobs by cutting off their access to other employment opportunities that they are qualified for based on their experience, aptitudes, and preferences as to type and location of work.”

Employers should note that the NLRA covers most private-sector non-supervisory employees, even those not represented by a union, making the Memo noteworthy even to employers without a unionized workforce.

The Memo itself does not have the force of law, but it is a clear indication that the NLRB will take this position in subsequent cases.

The Memo constitutes the latest attack by the current administration on enforcement of noncompetes across the United States and follows the Federal Trade Commission’s Proposed Rule issued on Jan. 5, 2023, which, if made final would invalidate nearly all noncompetes in the employment context.

The Memo does not necessarily require employers to take any immediate action. However, considering the increased scrutiny, employers utilizing noncompetes should review their use to make sure that they protect legitimate competitive business interests, which would probably only involve positions with access to sensitive business information. They also should be limited in duration and geographical scope.

It should be noted that the FTC’s and NLRB’s novel positions on these matters will undoubtedly be subjected to review by the courts.

Newsletter March 2023

Thu, 16 Mar 2023 20:20:12 GMT

AN EMPLOYER FACED WITH A UNION ORGANIZING DRIVE SHOULD NOT TAKE THE DEPARTMENT OF LABOR’S RECENT ADVICE

On February 24, the DOL published a Blog entitled “Research Snapshot: Why More Employers are Voluntarily Recognizing Unions,” in which we think it is fair to say that the DOL takes the position that employers should voluntarily recognize a union if presented with Union Authorization Cards signed by a majority of employees, rather than exercising the statutory right to a secret ballot election. It is far beyond the scope of this article to fully explain and address the union organizing and election process, but we wanted to provide our view on some of the contents of the DOL publication.

The Blog includes the following excerpts, with our associated underlined response:
“Workers today want to join unions.” – In Q1-Q3 of FY 2022 the number of Union Decertification Petitions was up 42% from the same period in FY 2021. Decertification is the process through which employees can petition for an election to get rid of a union in their workplace. Interesting that the DOL does not take the position that unions should voluntarily go away if the petition is signed by a majority of the employees. At any rate, it is clear that many workers with a union do not want to be in a union.

“Voluntary recognition means that workers not only benefit from a simpler and fairer process for forming a union, but also that businesses can avoid fighting costly anti-union campaigns against workers.” – Voluntary recognition by an employer may be “simpler” for the union, but what can be more fair than allowing workers to participate in a secret ballot election? The fact of the matter is that it can be very easy for a union to obtain Authorization Cards from employees. The union can promise anything, and often do not tell the truth when soliciting these Cards. Further, employees are sometimes coerced into signing a Card. Additionally, the election process allows an employer time to educate employees about unions, including the fact that they are businesses whose principal source of revenue comes from collecting union dues from the wages of hard-working employees. During this education process, unions often lose the support of employees.

The bottom-line is that our advice is that an employer faced with a union claiming that it has the support of a majority of employees should always require that the employees be allowed to exercise their right to an election.

Newsletter February 2023

Mon, 30 Jan 2023 17:48:37 GMT

NEW FEDERAL LAW PROTECTIONS FOR PREGNANT AND NURSING EMPLOYEES

The recently enacted 4,155 page Omnibus Spending bill included the Pregnant Workers Fairness Act “PWFA,” which expands workplace protections to pregnant workers, and the Providing Urgent Maternal Protections for Nursing Mothers Act, “PUMP” Act.

“PWFA” – Provisions Related To Pregnant Employees:

Covers employers with 15 or more employees, and goes into effect June 27.

Like the ADA, employers are required to provide reasonable accommodations, absent undue hardship. However, under the PWFA, such accommodation must be granted for “physical or mental conditions” related to pregnancy, childbirth, or related medical condition,” which is a lesser standard than the required “physical or mental impairment” under the ADA.

Another major distinction between the ADA and the PWFA is the definition of a “qualified individual.” Under the ADA an individual must be able to perform the essential functions of the job with or without reasonable accommodation. Additionally, eliminating an essential job function is not a reasonable accommodation.

However, under the PWFA, an individual is still considered “qualified” if the inability to perform an essential function is for a temporary period, and can be reasonably accommodated.

Specifically requires employers to engage in the interactive process with employees requesting a reasonable accommodation related to pregnancy, childbirth, or a related medical condition.

Prohibits employers from denying an employment opportunity, or taking an adverse employment action, based on the need for a reasonable accommodation to the known limitations related to pregnancy, childbirth, or a related condition.

Prohibits employers from requiring employees to take leave if another reasonable accommodation could be provided. So, granting leave is a last resort, unless of course the employee prefers that as the reasonable accommodation.

Prohibits employers from retaliating against anyone who complains about a violation of the PWFA, or participates in an investigation, hearing, or proceeding related to the same. Also prohibited is coercing, threatening, intimidating, or interfering with anyone’s rights under the PWFA.

The bottom-line here is that employers are now required to provide reasonable accommodations to pregnant employees. Previously this was only required in certain circumstances under the ADA, or Title VII. Further, the duty to do so goes beyond similar duties under the ADA. Much litigation will no doubt be created by this Act. Employers need to carefully consider the treatment of pregnant employees in all aspects of employment. Some states, such as Kentucky, also have employment laws protecting pregnant employees. These laws must also be considered, as they may provide greater protections.

“PUMP” Act – Provisions related to Nursing Mothers:

Expanded to exempt employees an employer’s obligation under the Fair Labor Standards Act to provide employees with reasonable break time to express breast milk. This previously applied only to non-exempt employees.

Newsletter January 2023

Mon, 23 Jan 2023 17:38:01 GMT

Federal Trade Commission Issues Proposed Rule to Ban Non-Competes

On January 5, the FTC issued a proposed rule which would prohibit employers from entering into non-compete agreements with employees. The rule would also require employers to rescind all existing non-compete agreements and to provide notice to the employee that the non-compete clause is no longer in effect.

Take note that it appears the FTC would broadly construe the rule, as it also prohibits “de facto” non-compete clauses, giving the example of training agreements that require an employee to remain employed for a specified period or repay the cost of the training.

The FTC is taking the position that employers use of non-competes is a form of unfair competition, because they prevent employees from leaving jobs and decrease competition in the workforce.

At this point, the rule is only proposed, and the public has 180 days to comment. There should be plenty of public comments on this from businesses. Litigation is sure to follow if the FTC issues a final rule. It is quite unclear as to whether the FTC has the legal authority to issue such a rule.