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Employment Law Worldview

The Wait Is Over: The Proposed FLSA Overtime Changes Are Out!

Posted in Legislation, Wage and Hour, Webinars

For those (like me!) anxiously awaiting the Department of Labor’s (DOL) proposed overhaul of the exemptions to the Fair Labor Standards Act (FLSA), the wait is over.  The proposed rule [pdf] is now available on the DOL’s website (although it has not yet been published in the Federal Register).  According to the DOL’s calculations, the proposed rule would result in 4.6 million currently exempt workers becoming entitled to minimum wage and overtime protection under the FLSA, with annualized direct employer costs totaling around $250 million per year and an annualized transfer of income from employers to employees (in the form of higher earnings) of around $1.2 billion.

A quick recap:  The FLSA requires employers to pay minimum wage and overtime pay (one and one‑half times the employee’s regular rate for hours worked over 40 in a workweek) to employees.  However, the FLSA provides a number of exemptions from the minimum wage and overtime pay requirements.  One set of exemptions referred to as the “white collar exemptions” provide that employees who are paid at least $455/week ($23,600/year) on a salary basis and whose primary duties consist of certain executive, administrative and/or professional duties, are exempt from the FLSA’s minimum wage and overtime requirements.  The regulations were last updated in 2004. 

As we previously reported here and here, last March, President Obama directed the Secretary of Labor to update, modernize and simplify the FLSA’s current white collar exemption standards.  Capping off a historic few weeks, President Obama announced that he will be unveiling the proposed changes in Wisconsin later this week.   

As expected, the proposed rule would more than double the salary basis for employees to qualify for the administrative, executive, professional and computer exemptions—raising the salary basis from $455/week ($23,600/year) to an amount “equal to the 40th percentile of earnings for full-time salaried workers” ($921/week ($47,892/year) in 2013; currently projected to be $970/week ($50,440/year) in 2016). The proposed rule also raises the salary basis for the highly-compensated employee exemption.  Previously, an employee who made at least $100,000 per year and performed at least one exempt duty would be exempt under the highly-compensated employee exemption.  Under the proposed rule, an employee must now receive a total annual compensation at the “annualized value of the 90th percentile of weekly wages of all full-time salaried employees” ($122,148/year in 2013) to qualify under the exemption.   

In addition, the proposed rule provides that the salary levels would automatically increase each year, “either by maintaining the levels at a fixed percentile of earnings or by updating the amounts based on changes in the [Consumer Price Index for All Urban Consumers].” The DOL is seeking comments regarding which methodology would be most appropriate. The rule change does not affect the exemption for outside sales employees, which remains the only white collar exemption that does not contain a salary basis component. 

While the increase in the salary basis was expected, in a somewhat unexpected twist, the proposed rule does not contain any changes to the current “primary duties” tests.  Instead, the DOL states that it is “considering revisions to the duties tests” and is thus soliciting comments on whether the current tests are working as expected, and whether a different test should be implemented.  Among the possible revisions noted is a division of labor test similar to what is used in California (which would require exempt employees to spend 50% of their time performing exempt duties), or a rule that would otherwise limit the amount of non-exempt work an exempt employee could perform.  Thus, it is possible the final rule could contain provisions modifying the current “primary duties” test in any number of ways—many of which would be costly to implement for employers, who have finally gotten used to the current “primary duties” test.  Given that the DOL has specifically requested comments on the issue, it is imperative that employers voice their concerns and/or suggestions regarding changes to the “primary duties” test during the public comment period. 

Finally, the DOL has requested comments from employers in the computer and information technology sectors as to whether changes should be made with respect to the types of positions and duties that should be included as examples of exempt positions/duties in computer-related fields. 

The experienced team of labor and employment attorneys at Squire Patton Boggs is at the forefront of the proposed rule changes.  On Tuesday, July 7, 2015 at 1:30 p.m. EST our veteran wage and hour guru Jill Kirila will be presenting a webinar for employers, detailing the proposed rule changes and discussing how Squire Patton Boggs can help employers voice their comments on the proposed rule to the Department of Labor and possibly influence the final rule.  To register click here.

NLRB’s Isolated Position on Class and Collective Action Waivers Takes Another Hit

Posted in Arbitration, Class Action, NLRB, Recent Cases

Fifth Circuit Rejects NLRB’s En Banc Hearing Request, Setting Up Likely Denial of Enforcement in Murphy Oil, USA 

In its 2012 decision in D.R. Horton, Inc., the National Labor Relations Board (NLRB) held that employers that require employees to agree to arbitrate employment-related claims, and to do so only on an individual basis, waiving the right to participate in class and collective action proceedings (in court or in arbitration), violate the guarantee in Section 7 of the National Labor Relations Act of employees’ right to engage in protected concerted activity for mutual aid or protection.  At bottom, the NLRB’s positon is that the right to engage in concerted activity, such as class action litigation, embedded the NLRA trumps the federal policy expressed in the Federal Arbitration Act favoring arbitration as a means to resolve disputes and requiring that arbitration agreements be enforced.

The NLRB’s position on class and collective waivers, however, has been soundly and repeatedly rejected by the federal and state courts.  Indeed, on appeal, the Fifth Circuit Court of Appeals denied enforcement of the Board’s decision in D.R. Horton (see our post here).

Most expected that the NLRB would appeal its defeat in D.R. Horton to the United States Supreme Court, which has over the past several terms addressed a number of arbitration-related cases (i.e., AT&T Mobility v. Concepcion; Oxford Health v. Sutter; Stolt-Nielsen v. Animalfeeds Int’l).  However, rather than seeking a the final word from the Supreme Court on the issue, the NLRB declined to seek review and instead issued a second decision, Murphy Oil USA, Inc., in which the NLRB attempted to rehabilitate D.R. Horton and address the shortcomings therein identified by many courts, including the Fifth Circuit (see our post here).

Predictably, after the NLRB found that it violated the law by implementing an arbitration agreement with a class and collective action waiver – which the Fifth Circuit (and other circuits) had held was lawful – Murphy Oil appealed the NLRB’s decision to, not surprisingly, the Fifth Circuit.

Under the principal of horizontal stare decisis, one panel of a circuit court of appeals may not overrule a prior panel’s decision.  Rather, any change to precedent from a prior panel decision must come as a result of a decision issued by all of the judges in the circuit through what is referred to as an en banc proceeding.  As the NLRB recognized that it could not win in Murphy Oil unless the Fifth Circuit decided to hear the matter en banc (that is, a panel in Murphy Oil could not find the class and collective action waiver in that case unlawful, as to do so would require that the panel effectively overrule the prior panel’s decision in D.R. Horton), it petitioned for the full court to hear the case.

On June 24, the Fifth Circuit denied the NLRB’s petition for hearing en banc.  In fact, it emphatically did so – no judge on the court even asked that the court be polled on whether to hear the case en banc.

What does this mean?  Practically speaking, it means that it should be a mere formality for the Fifth Circuit to grant review and deny enforcement of the Board’s Order in Murphy Oil, meaning that the NLRB will once again lose before that court.  Then it will be up to the NLRB – for the second time – to decide whether to seek Supreme Court review.  Hopefully, for the sake of everyone involved – employers and employees alike – it will do so this time, and thereby seek to resolve this issue, rather than continue to blindly charge employers with unfair labor practices based on a theory that has been rejected by every judge and court to have considered it.

NLRB Weakens Employers’ Ability to Conduct Effective Workplace Investigations

Posted in Confidentiality, Employment Policies, NLRB, Recent Cases

At some point – and often with considerable frequency – employers must conduct internal investigations related to possible employee misconduct.  Whether those investigations involve allegations of sexual harassment, hostile work environment, violation of drug or alcohol policies, theft, damage to equipment, or the like, maintaining confidentiality in the investigatory process is vital to ensuring the integrity and overall fairness of the investigation.  Thus, it is of little surprise that in the course of conducting workplace investigations, employers frequently instruct or request employees to maintain the confidentiality of the investigation, and that they should not, for example, discuss the investigation with coworkers while it is ongoing.  Such an instruction/request makes sense, as if employees share information while an investigation is being conducted, a host of problems can arise, from employees conforming their versions of events, to information being covered up and testimony being fabricated, to witnesses being threatened or intimidated.

At the other end of the spectrum, the National Labor Relations Act provides that employees have the right to engage in protected, concerted activity for mutual aid or protection.  This right has been deemed to include the right to discuss disciplinary matters, including investigations, involving themselves and coworkers.  This creates an obvious tension between an employer’s interest in ensuring that its investigation is not corrupted or otherwise interfered with, and employees’ right to discuss the investigation among themselves.

In 2012, the National Labor Relations Board held in Banner Estrella that a balance must be struck between these competing interests.  The Board in that case held that striking this balance required that an employer be prohibited from issuing a blanket confidentiality instruction or request in connection with a workplace investigation, and instead that an employer demonstrate that any request for confidentiality that would interfere with employees’ rights to discuss an investigation be supported by evidence demonstrating that the employer had an objective, legitimate business reason for imposing a confidentiality requirement (or even making a request for confidentiality), such as the need to protect witnesses, that evidence was in danger of being destroyed or testimony being fabricated, or the need to prevent a cover up.

The effect of the Board’s 2012 Banner Estrella decision, however, was short-lived, as it was vacated as a result of the U.S. Supreme Court’s decision in Noel Canning (see our prior blog post here).  Thus, the case returned to a new NLRB panel to reconsider and redecide the issue.

On June 26, a Board majority (Members Hirozawa and McFerran, with Member Miscimarra dissenting) once again found the employer’s blanket confidentiality requirement in Banner Estrella to be unlawful, for largely the same reasons as the Board’s original decision.  In its 2015 decision, the Board adhered to its previously-expressed position that an employer commits an unfair labor practice by imposing a blanket confidentiality requirement that employees not discuss workplace investigations with coworkers, and that individual confidentiality instructions or requests are unlawful unless the employer can demonstrate that it has an “objectively reasonable basis for seeking confidentiality” during the particular investigation at issue.

Regrettably, the decision offers no more guidance to employers.  To be sure, all investigations benefit from and are enhanced by confidentiality.  It is difficult to imagine a scenario in which if employees are allowed to freely discuss an ongoing investigation, the fairness and accuracy of that investigation is not compromised to some degree.  The Board’s Banner Estrella decision nonetheless places the burden on the employer to demonstrate why a confidentiality instruction was legitimate and appropriate, rather than taking the position that requiring confidentiality is presumptively appropriate, and thus requiring that an employee prove why they should be permitted to undermine an investigation by disregarding a confidentiality instruction.

The takeaway here is two-fold.   First, employers should use caution when investigating workplace issues not to issue a confidentiality instruction unless the circumstances warrant.  Second, any written policies maintained by employers regarding investigations or confidentiality more generally should be reviewed to assess whether they contain a blanket confidentiality requirement in investigatory matters that the NLRB may conclude violates Banner Estrella.

Supreme Court Extends Same-Sex Marriage Rights to All 50 States

Posted in Recent Cases

On the anniversary of two other decisions supporting same-sex rights (Lawrence [pdf] and Windsor [pdf]), the U.S. Supreme Court ruled on Friday, June 26 that same-sex marriage is a fundamental right nationwide.  The Court held the Fourteenth Amendment to the Constitution requires a state to issue marriage licenses to same-sex couples and to recognize same-sex marriages performed out-of-state.  The 5-4 decision [pdf], styled Obergefell v. Hodges, will be among the most monumental in our lifetimes, eviscerating existing state bans on same-sex marriage, whether imposed by prior judicial decision or legislative action.

Authoring the majority opinion, Justice Anthony Kennedy concluded that the Due Process and Equal Protection Clauses of the Fourteenth Amendment protect a same‑sex couple’s right to marry.  Justice Kennedy, along with Justices Breyer, Ginsburg, Kagan, and Sotomayor, determined that the right to marry is an “interest[ ] of the person so fundamental that the State must accord [it] its respect.”  Finding the concepts of marriage, and, indeed, liberty, have changed (and will continue to change) over time, the majority articulated four principles demonstrating why marriage has become a fundamental constitutional right applying with equal force to same-sex couples:

  1. The right to personal choice regarding marriage is inherent in the concept of individual autonomy, as noted in a prior marriage case, Loving v. Virginia.
  2. The right to marry is fundamental because “it supports a two-person union unlike any other in its importance to the committed individuals.”
  3. Marriage promotes stability and family life, while protecting children of same-sex couples against uncertainty and the “stigma of knowing their families are somehow lesser.”
  4. Marriage is a “keystone” of America’s social order, as shown by “the constellation of benefits that the States have linked to marriage.”

The fourth principle connects the constitutional issue of same-sex marriage to employment law.  As Justice Kennedy points out, marital status affects access to many governmental programs, including workers’ compensation benefits and health insurance.  Commentators are already pointing out that “the 77 percent of companies currently offering same-sex healthcare coverage should be able to streamline their benefits administration, while those not currently offering coverage to same-sex employees may have to make changes to do so.”  Furthermore, Family and Medical Leave Act benefits will likely now apply to all couples, regardless of state of residence.

Although the Court’s decision did not specifically address any employment-related issues, now that same-sex marriage has been ruled lawful, employers would be well‑served to review their policies – particularly with respect to benefits and leaves of absence – to ensure that they reflect this new reality.

Jury Penalizes Employer for Testing Employees’ DNA

Posted in Employment Policies, GINA, Recent Cases

In what appears to be the first jury verdict under the Genetic Information Nondiscrimination Act of 2008 (“GINA”), an Atlanta, Georgia area employer has been found liable for compensatory and punitive damages to two of its employees in a case whose facts read like a bad movie script.

The employer operates a warehouse that distributes food to grocery stores.  In 2012, it discovered that someone had left feces on its warehouse floor and (sickeningly) on top of canned goods.  According to the plaintiffs’ complaint, the employer conducted a “months-long” investigation into the identity of the culprit before management called each plaintiff into a manager’s office and requested that they provided a saliva sample for DNA comparison purposes.  The plaintiffs gave the samples, but they alleged that they were never informed of the rights and protections afforded by GINA.  They sought compensatory damages for emotional pain and suffering as well as punitive damages.

GINA prohibits employers from “request[ing], requir[ing], or purchas[ing] genetic information with respect to an employee or a family member of the employee” except in limited circumstances, such as for an employer-offered health and wellness program or for genetic monitoring of the biological effects of toxic substances in the workplace.  GINA also outlaws adverse employment actions based upon an employee’s genetic information.  According to Congress, “[b]ecause some genetic traits are most prevalent in particular groups, members of a particular group may be stigmatized or discriminated against as a result of that genetic information.”  GINA is the government’s solution to that problem.

The plaintiffs may have been “relieved” when their DNA tests proved, as they maintained all along, that they were not in fact the “devious defecators” – a term coined by the federal judge who oversaw the trial of the case.  Now, however, they must be overjoyed after the jury returned a verdict for almost $500,000 in compensatory damages and a whopping $1.75 million in punitive damages to be shared by both employees.  Although the jury’s damage award may be found to exceed statutory punitive damages caps and ultimately reduced, the verdict sends a clear message to employers to never collect, and indeed to not even ask for, what might be considered genetic information without first consulting with counsel.

And no, the jury did not determine who soiled the warehouse floor.

NI Court of Appeal thickens UK holiday pay plot

Posted in Holiday Pay, Recent Cases, Welfare

The Northern Ireland Court of Appeal has today added its small contribution to the debate around the inclusion of overtime earnings in holiday pay.  The direction it has taken in Patterson –v- Castlereagh Borough Council is logical up to a point, but of terrifyingly little practical assistance to employers looking for some, indeed any, reliable steer on what to do in these cases.

A couple of points to make first:-

(i)         decisions of the Northern Ireland Court of Appeal are not strictly binding in England and Wales, but will often be persuasive;

(ii)        the case concerned voluntary overtime, i.e. overtime which the employer has no obligation to offer, nor the employee any obligation to perform.  This took it a step onwards from Bear Scotland, as that case dealt with non-guaranteed overtime – extra work which the employer is not obliged to offer but which the employee is obliged to perform if it did.

The NICA reiterated the basic principle behind all the holiday pay cases, commission and overtime – that a worker should not have any disincentive placed in his path that may lead to his not taking his holidays – and moved from there to the superficially very simple proposition that if that worker “comes to expect a certain level of pay as normal then he should receive that during his holiday period”.

Whether that “normal” level of pay includes guaranteed, non-guaranteed or voluntary overtime is irrelevant, said the NICA.  The issue is the amount of his normal pay, not the detail of its composition.

If that is right then at least one aspect of the holiday pay debate is greatly simplified for employers.  You can look simply at overall earnings and need not get embroiled in ascertaining the precise contractual nature of each bit of overtime worked.  But (in holiday cases there is always a but) we are left still with the overriding question – how do you calculate an employee’s “normal level of pay”?   The NICA suggested that this was strictly a decision of fact to be made by the employer (and prospectively then the Employment Tribunal) in relation to each individual.  It referred to a spectrum of overtime arrangements running from someone who “has to, and does, work a certain number of hours overtime” to a person who works “occasional voluntary overtime“.  The former’s overtime should be included and the latter’s probably not.  “In between”, it said with the jauntiness which comes with knowing that it won’t actually have to make any decisions, “lie the myriad patterns of working some overtime, whether or not in accordance with a contractual obligation to work, but not routinely involving the same amount of overtime actually worked”.  That is of course the area where the debate has been all along.

To assist, the NICA suggested that assessing “normal earnings” from a variable level implied the use of some form of reference period to produce an average.  However, an averaging process would include account of the occasional overtime which the Court had just suggested could be excluded.  Moreover, it could produce a different number from that which the employee actually expected, being on the Court’s own account the basic test of disincentive from taking holidays.

In the end the NICA sent the case back to the Tribunal to assess the overtime worked “within a suitable reference period”.  This decision therefore leaves unaddressed both the length of the reference period and the question of where the employer should draw the line in assessing normality.  On a strict reading, some of its employees may have their overtime included in holiday pay while others doing exactly the same job on the same contractual terms might not.  Add to that the probability that employees could drift between those two populations more or less at will, and it is little wonder that the Court described its own “normal pay” approach as “smacking more of theory than reality in most cases.

However, if this decision does no more than reduce the need to consider different treatments of different sorts of overtime in the calculation of holiday pay, then it will still be a small step forwards for employers.

Paid Sick Leave Now Required by Four States… More to Come?

Posted in Employment Policies

As noted by our post earlier this week, California’s paid sick leave requirement under the Healthy Workplace Act begins on July 1, 2015.  Not to be outdone, California’s neighbor to the north also recently passed legislation requiring paid sick leave.  This was signed into law by Oregon’s democratic governor on June 22, 2015.

Under Oregon’s new law, which goes into effect at the beginning of 2016, most private employers with 10 or more employees will be required to provide their employees with up to 40 hours of paid sick leave per year to care for themselves or family members.  Employers with fewer than 10 employees will also be required to provide employees with up to 40 hours of sick leave, but it can be unpaid.

By passing this law, Oregon became the fourth state to require paid sick leave, joining Connecticut, Massachusetts and California.  The question being asked by employers across the country is whether this trend will continue to spread.  If recent speeches by President Obama and presidential hopeful Hillary Clinton are any indication, the conversation is certainly likely to continue—however, the extent to which we see this change occur at the local, state and/or national level is yet to be determined.  Stay tuned!

In Sickness And In Health – Paid Sick Leave Comes to California Effective July 1, 2015

Posted in Employment Policies

Do you have at least one employee working in the State of California?  If you answered “yes,” then you are a covered employer under California’s new Healthy Workplaces, Healthy Families Act of 2014 codified by Assembly Bill 1522 (the “Healthy Workplace Act”).

The right to accrue and take leave under the Healthy Workplace Act begins one week from today on July 1, 2015, six months after the January 1, 2015 effective date of the Act.  The rationale behind the delayed effective date – besides staying consistent with California’s long-standing tradition of creating mass confusion – was to require employers to provide their employees with the notice required by California Labor Code § 2810.5(h) as well as an opportunity to update employee handbooks and policies before the effective date of the accrual period.

The Healthy Workplace Act requires that employers provide paid sick leave to any employee who, on or after July 1, 2015, works in California for 30 or more days within a year from the commencement of his or her employment.  Employees begin accruing sick leave after 30 days of employment and can begin using paid sick leave after they have worked for the employer for 90 days.  Under the new law, California employees accrue paid sick days at a minimum rate of one hour per every thirty hours worked.  Employees who are considered exempt under one of the Industrial Welfare Commission’s wage orders are presumed to work 40 hours per workweek, unless the employee’s normal workweek is less than 40 hours.  Yes, you read that right.  Just like Disneyland’s famous all-inclusive weekend packages, the definition of “employee” under the Healthy Workplace Act is also all-inclusive of exempt and non-exempt employees alike, as well as part-time, seasonal, and temporary employees as long as the employee meets the minimum work requirements.  Everyone gets in on the party.

Although the Act is exceedingly broad on who is entitled to paid sick leave, it does permit employers to cap an employee’s use of paid sick leave to 24 hours during each year of employment or calendar year.  For those of you following along with a greater math pedigree than me, you’re saying to yourself, “wait a minute, that means that employees can accrue more sick leave than they can use.”  And right you are.  The new law accounts for this by allowing employees to carry over accrued but unused, time from year to year.  The right to carry-over also means the employee continues to accrue time even after exhausting the maximum amount of sick leave entitlement within a given year.  Nonetheless, employers may choose to cap an employee’s annual accrual of paid sick leave to 48 hours per year.

What if you are an employer who has PTO policies (which cover absences due to illness) already in place that are more generous to establishing a healthy workplace than what is required by California’s Healthy Workplace Act?  Fear not.  The Act provides an exception for employers who meet each of the minimum use, accrual, and carry-over requirements.  The Act also excludes employees covered by valid collective bargaining agreements (that is, union-represented employees) so long as certain conditions are met.

Employers should utilize the last week before the law goes into effect to confirm with their payroll department (or outside payroll processing vendors) that their sick leave accrual and use policies will be accurately reported on pay stubs (to avoid claims under a separate California law that imposes liability for incorrect pay statements).  Employers also should take this time to ensure that their employee handbooks contain the new California paid sick leave requirements as well as get on the same page with their human resources representatives regarding use of sick leave.

Employment Tribunals apply some Gas to stayed holiday pay claims

Posted in Employment Tribunal, Holiday Pay

Are you sick of speculation about where the wheel will stop spinning on holiday pay? Just want to be given a safe position and stick with it? Do you have any commission or overtime claims against you stayed by the Tribunal pending a definitive steer from case law or legislators? Steps to provide some clarity may be on the horizon at last. Following the news of British Gas’ decision to appeal against the Employment Tribunal’s decision in Lock Holiday Pay in the UK, many employers assumed that the Employment Tribunals would simply continue to stay those cases already filed to allow the appeal to run its course. What would be the point of deciding cases where the fundamental principles on which they are based are still being resolved in the higher courts? However, whilst this is generally the approach being taken north of the border, the English ET system appears to be managing things differently. In relation to cases dealing only with the impact of overtime earnings on holiday pay, it is now listing cases for preliminary hearings, at which the stays are being recalled and a set of orders issued. Whilst those Orders vary to some extent between the different Regional Offices, in essence they seem to require:

  • the claimants to provide further particulars of their cases (e.g. which holiday days are being claimed for, when they were taken, when they were paid, and what elements of pay were not included that should have been).  The idea of this is to begin to flush out the claims that are clearly out of time or where there is a clear 3 month break;
  • the claimants to create a schedule of this detail based upon the pay-slips and holiday records in their possession, and send this to the respondent lawyers within c.6 weeks; and
  • the employer to verify this data and populate any areas of the schedule where information is missing, within 6 weeks of receipt. The employer also has the opportunity at the same time to provide an updated response, e.g. elaborating on and providing substance to any arguments that the claims are out of time or where there is a clear 3 month break in the series of deductions or where it contends that there was no loss of earnings caused by the holiday absence.

The English Tribunals are then listing a further preliminary hearing during the Autumn to enable the parties to update the Tribunal regarding the progress made and to decide on next steps, by which time (we hope!), it will at least be clearer when the appeal in Lock will be heard.   It is likely that this will not be the last preliminary hearing since there are bound to be further arguments as to reference periods, proof of loss and (maybe most problematic of all) a retrospective determination of which of those days claimed for was the Working Time Directive minimum and which is the Working Time Regulations or contractual excess over that. That question affects both the size of the claim and the 3 month break question and in the great majority of cases there will be no evidence at all to assist. Watch this space! Although at first sight, the lifting of the stays may seem premature, there is actually some benefit to it. For example, it may allow the parties to get a clearer idea of the potential liability, without involving a significant amount of work for the employer in preparing for a full hearing. It may be that in some cases both sides will recognise that the work this requires is disproportionate to the amount at stake and choose instead to reach the resolution between them that Acas recommends. The only downside could be where a claimant does not have the information the Tribunal has asked him to provide – in which case it is inevitably the employer which will have to “fill the gaps”. The other key driver for the Tribunals’ decision appears to be the desire to proactively manage these cases over a period of time rather than face an immediate colossal backlog once the outcome of Lock is known. Bearing that in mind, it seems likely that a further stay will be granted once these initial case management Orders have been complied with. Squire Patton Boggs has a Holiday Pay Task Force comprising experts from each of UK offices. If you have any questions relating to holiday pay or need help with any current or pending claims, please contact:

Charles Frost, Birmingham – charles.frost@squirepb.com

David Whincup, London – david.whincup@squirepb.com

Andrew Stones, Leeds – andrew.stones@squirepb.com

Alison Treliving, Manchester – alison.treliving@squirepb.com

Rich investors set to boost innovation capital in Australia

Posted in Immigration

The Government recently announced a new three-part complying investment framework for the Significant Investor Visa (SIV) and Premium Investor Visa (PIV) programme.

These visas offer pathways to permanent residency, subject to significant, complying investments being made in Australia by the applicants.

From 1 July 2015, new SIV applicants will be required to invest at least $5 million in complying investments, which must now include:

  •  at least $500,000 in eligible Australian venture capital or growth private equity fund(s) investing in start-up and small private companies. The Government expects to increase this to $1 million for new applications within two years as the market responds;
  • at least $1.5 million in an eligible managed fund(s) or Listed Investment Companies (LICs) that invest in emerging companies listed on the Australian Securities Exchange (ASX); and
  • a ‘balancing investment’ of up to $3 million in managed fund(s) or LICs that invest in a combination of eligible assets that include other ASX listed companies, eligible corporate bonds or notes, annuities and real property (subject to a 10% limit on residential real estate).

Minister for Trade and Investment Andrew Robb said the previous SIV framework set the bar too low, with investment largely directed into passive investments such as government bonds and residential real estate schemes, which already attract large capital flows.

The Government also intends to introduce a new PIV from 1 July 2015 targeting talented entrepreneurs and innovators with a minimum $15 million to invest. It will be available at the invitation of the Australian Government only.

The changes to SIV and the introduction of a PIV are part of a suite of Government policy initiatives under the Industry Innovation and Competitiveness Agenda, which aims to promote investment, innovation and commercialisation of Australian ideas, research and development which are critical to our economic future.