February 1-4, 2021
Federal Court Decision On WARN Act And COVID-19 Could Signal Problems For Larger Employers (US)
Court says COVID-19 is not a “natural disaster” for purposes of WARN Act; refuses to dismiss case on grounds that layoffs precipitated by COVID-19 were “unforeseeable business circumstances.”
No employer has escaped the impact of COVID-19. Although some have managed to weather the pandemic, others have been financially devastated by widespread shutdown orders and other impacts of the public health emergency, requiring them either to close, or to significantly reduce the size of their workforce.
Under the federal Worker Adjustment and Retraining Notification Act (“WARN Act”), employers with 100 or more employees must provide advance notice to employees when either permanently closing a location, or when implementing mass layoffs. More specifically, under the WARN Act, covered employers must provide at least 60 days advance written notice of a closing or mass layoff affecting 50 or more employees at a single site of employment (and for layoffs, the number of employees laid off is at least 1/3 of the workforce), unless the employer can show that an affirmative defenses applies. The WARN Act provides several defenses to this notice requirement, including when closings or layoffs occur due to “unforeseeable business circumstances” or “natural disasters.” Continue Reading
Representative’s reprimand for clear misconduct unlawful, says EAT (UK)
The Employment Appeal Tribunal has recently handed down a judgment which serves as a useful reminder for employers of the risks of taking disciplinary action against union representatives for behaviour which may look like misconduct but which actually constitutes union activity.
By way of background, section 146(1)(b) of the Trade Union and Labour Relations (Consolidation) Act 1992 provides that a worker has the right not to be subjected to any detriment by his employer for the sole or main purpose of preventing or deterring him from, or penalising him for, taking part in union activities.
Dynamex is Retroactive Says the California Supreme Court – The Independent Contractor Law Now Looks Back and Forward (US)
The range of employers who may be liable for the misclassification of workers just got bigger. On January 14, 2021, the California Supreme Court decided that the decision in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 (Dynamex) applies retroactively to all non-final cases that predate the April 2018 Dynamex decision.
Dynamex established the three-factor “ABC test” to determine whether a worker is an employee or independent contractor for claims arising under California’s Wage Orders. The “ABC test” is onerous for employers because a worker is presumed to be an employee unless the employer can prove all of the following: Continue Reading
Proposals to amend working time protections denied – “public unconvinced” shock (UK)
On Friday last week the Financial Times reported on proposals from the Business Department to “rip up worker protections” under the current Working Time Regulations. But simultaneously on BBC News online, look, it’s the Business Secretary himself denying on twitter any notion that his department is planning to dilute UK workers’ rights. The very idea. Instead any changes will “protect and enhance workers’ rights going forward“.
A glance at the responses to the Secretary’s tweet reveals an overwhelming tidal wave of public scepticism about this, a clear win on credibility for the FT over the government. One principal cause of that is obviously that if any changes to the Working Time Regulations were protective or augmentative in their effect, there has never been anything in our membership of the EU stopping us making them. “Leaving the EU allows us to continue to be a standard-setter“, the Business Department is reported as saying, seemingly without any of the embarrassment which should properly accompany that proposition. The other principal cause of that public derision around government integrity, according to the Business Secretary’s twitter feed? Basically, the whole of the last 12 months.
US Department of Labor Releases Final Rule Clarifying Standard for Independent Contractor Versus Employee Determination Under FLSA (US)
On January 6, 2021, the Department of Labor (“DOL”) announced a final rule clarifying the standard under the Fair Labor Standards Act (“FLSA”) for determining whether a worker is an independent contractor versus an employee. This distinction in critical under the FLSA, as employers must comply with its minimum wage and overtime requirements for employees, but not independent contractors. The regulatory guidance outlined in the final rule regarding independent contractor status is generally applicable across all industries, replaces all previous DOL interpretations of independent contractor status under the FLSA, and is intended to be the governing interpretation for this analysis going forward. The DOL published the final rule in the Federal Register on January 7, 2021, and the effective date of the rule is March 8, 2021. Continue Reading
DHS Doubles Down On H-1Bs: Publishes Rule Implementing Wage-Based Changes to the Annual H-1B Lottery (US)
The Department of Homeland Security (DHS) published a Final Rule, which, if left intact, will implement major changes to the H-1B visa program. The new rule would do away with the random lottery system currently used to issue the annual quota of 85,000 new H-1B visas and replace it with a selection system weighted to favor petitions with higher salary offers for the sponsored H-1B worker.
This Final Rule, entitled Modification of Registration Requirement for Petitioners Seeking To File Cap-Subject H-1B Petitions, was published on January 8, 2021 and takes effect 60 days later on March 9, 2021. Despite receiving almost 1500 comments, DHS declined to change the regulatory text proposed in the Notice of Proposed Rulemaking (NPRM) published on November 2, 2020. We summarized the NPRM in a previous post. Continue Reading
Stimulus Bill Extends the Availability of Student Loan Forgiveness (US)
Section 2206 of the CARES Act allowed an exclusion of up to $5,250 from an employee’s gross income, if an employer paid principal or interest on an employee’s “Qualified Education Loan”.
Section 2206 of the CARES Act was only designed to be in effect for calendar year 2020. However, The Consolidated Appropriations Act, 2021 (the “CAA”) extends this provision of the law through December 31, 2025.
This provision of the CAA is in Section 120 of Division EE, called “The Taxpayer Certainty and Disaster Tax Relief Act of 2020”.
It does not appear that during 2020, many employers decided to provide student loan forgiveness as an employee benefit. Given the pandemic, that is certainly understandable. However, going forward, it might be something that employers might find more attractive as a recruiting or retention tool. Thus, the following is a brief refresher on this benefit. Continue Reading
Qualified Disaster Tax Relief – Retirement Plans and Employee Retention Credits (US)
Besides the COVID-19 pandemic, 2020 has also had its share of other disasters, including hurricanes, floods and fires.
The Consolidated Appropriations Act, 2021 (the “CAA”) has provisions that are designed to provide tax relief for individuals and employers who have been adversely affected by one of the numerous federally declared “Qualified Disasters”.
These provisions of the CAA are found in Sections 301 through 306 of Title III, of Division EE, which is called “The Taxpayer Certainty and Disaster Relief Act of 2020” (the “2020 Tax Relief Act”).
In this blog post, we will focus on Sections 301 through 303 of the 2020 Tax Relief Act, which address (i) tax-qualified retirement plans, and (ii) employee retention tax credits for employers. Continue Reading
Stimulus Bill Extends the Availability of Employee Retention Credits (US)
The Consolidated Appropriations Act, 2021 (the “CAA”) extends through June 30, 2021, the Employee Retention Credit provisions of Section 2301 of the CARES Act. It also favorably modifies the rules for claiming the Employee Retention Credits.
These changes are generally effective as of January 1, 2021. These provisions of the CAA are found in Sections 206 and 207 of Division EE, called “The Taxpayer Certainty and Disaster Relief Act of 2020”. Continue Reading
