State Law Round-Up: Paid Leave Proliferation (CT, ME, MA, NV, DC) and Minimum Wage Update! (US)

July 1 Minimum Wage Increases

A number of jurisdictions will see a minimum wage increase effective July 1, 2019; please find our updated minimum wage chart here.  In addition to those listed, Nevada just (on June 12, 2019) passed a law to raise the minimum wage to $12/hour by 2024. Continue Reading

England beats Germany on penalties in new holiday pay decision (UK)

Flowers –v- East of England Ambulance Services NHS Trust this month concerned a claim by a number of workers in the Trust ambulance service that their holiday pay should include an allowance in respect of overtime, both non-guaranteed and voluntary. For these purposes, voluntary overtime was work which the employee was under no obligation to do, and non-guaranteed was work which he did have to do but the employer was under no obligation to provide.

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The end of the Swedish Derogation – yes, but what does it all mean in practice? (UK)

One of the changes planned as part of the Government’s Good Work Plan is for the “Swedish derogation” within the Agency Worker Regulations 2010 to be abolished from April next year.   This is causing concern to a number of our clients who use a high volume of blue collar agency workers.    They are estimating that the cost of this change will run into millions.

What is the Swedish derogation?

  • The Swedish derogation is shorthand for a special type of employment contract provided for in Regulation 10 of the AWR.  Its official name is a “pay between assignments” contract because workers engaged on these contracts with a temporary worker agency (TWA) give up the right to pay parity with comparable permanent staff in return for a guarantee to receive a certain amount of pay when they have gaps between assignments.
  • This arrangement has been most commonly used where large numbers of blue collar workers are needed e.g. retail, manufacturing, etc.  According to the Government’s figures, 8-10% of UK agency workers are on Swedish derogation contracts, which means as many as 130,000 people.

Why is it being abolished?

  • The Taylor Review recommended that the derogation be repealed.   The underlying agenda for this is to encourage more employers to take on permanent employees, so providing some greater level of certainty and security to those individuals. It is absolutely not related in any way at all, no really, to the resulting increase in PAYE tax receipts for HM Treasury. The very idea.
  • The Agency Workers (Amendment) Regulations 2019 will come into force on 6 April 2020 and will remove the Swedish derogation provisions set out in Regulations 10 and 11 of the AWR from that date.

What does the removal of the Swedish derogation mean?

  • Abolition of the derogation means that all agency workers will be entitled to pay parity (see below).
  • By no later than 30 April 2020 TWAs must provide workers whose existing contracts contain a Swedish derogation provision with a written statement telling them that with effect from 6 April 2020, those provisions no longer apply. Agency workers can bring a claim in the Employment Tribunal where their TWA fails to provide that statement on time.
  • Workers asserting rights under the new Regulations will be protected from detriment and unfair dismissal.

What is pay parity?

  • An agency worker is entitled to the same basic working and employment conditions as direct recruits of the same business (including pay) once he/she has undertaken the same role with the same hirer for 12 continuous calendar weeks.
  • “Pay” includes any sum payable in connection with the agency worker’s employment, including certain bonus payments, holiday pay, overtime, shift allowances and unsociable hours premiums, but excludes company sick pay, maternity/paternity pay, adoption pay, pension contributions and redundancy pay.
  • It does not include bonuses which are not directly attributable to the amount or quality of the work done by a worker, and which are given to a worker for a reason other than his/her personal output, such as to encourage the worker’s loyalty or to reward the worker’s long-term service.

Why are clients worried?

  • If the client hires agency workers who are currently employed under Swedish derogation contracts, then these changes could have significant financial implications after the 12-week qualifying period because it will then have to pay the agency worker the same rate as direct recruits.
  • TWAs will also be concerned with the change, as many recruitment businesses supply on Swedish derogation contracts of employment because they have been required to supply on this basis by hirers. This mean they will have to re-visit client terms and pay rates, which will cause an administrative burden.
  • How much this impacts on each client will depend on how many agency workers they hire on Swedish derogation contracts, how long for and in what kind of roles. In particular, of course, the cost will depend on how great is the gap between what the client currently pays for those staff and what it will need to pay when they are entitled to the same rates as its comparable permanent staff.

How can we help?

  • We are recruitment sector specialists, acting for clients over the full length of the recruitment supply chain. We understand how the sector works as well as the language and practices used.
  • We were heavily involved in the Government’s consultation on the AWR when they were first implemented, working closely with both the CBI and REC. We therefore have an in-depth knowledge of the AWR.
  • We are continually and actively advising clients in relation to this area.  This includes providing training to ensure that HR, legal and operational teams understand the implications of the change.   We are also advising end-user clients on potential options in relation to reducing the financial impact of this change.

Illinois and City of Chicago Poised to Implement New Laws Addressing Changes in the Workplace – Signs of Things to Come? (US)

Illinois Restricts Use of Artificial Intelligence in Hiring

On May 29, 2019, the Illinois Legislature unanimously passed the Artificial Intelligence Video Interview Act, which, not surprisingly, addresses how employers use artificial intelligence to analyze job applicant video interviews to determine the applicant’s fitness for the position.  Under the new law (assuming it is signed by the Governor, as anticipated), before requesting an applicant submit to a video interview, employers will be required to:

  • notify applicants for positions based in Illinois that it plans to have their video interview analyzed electronically;
  • explain how the artificial intelligence analysis technology works and what general characteristics it will use to evaluate candidates; and
  • obtain the applicant’s consent to these procedures (note: consent does not have to be in writing). Continue Reading

Extension of IR35 to the private sector, Part 11 – paying the price (UK)

It is only a slight over-simplification to say that one key difference between an employee and a contractor is that an employee gets paid by time and a contractor by output. There are obvious exceptions, such as piece-rate or commission-based employees on the one hand, and contractors who sell their services by volume rather than product on the other, but so far as wild generalisations go, that one is pretty tame.

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U.S. Supreme Court Relaxes Procedural Path for Title VII Litigants, Ruling EEOC Charge-Filing Process Not Jurisdictional

On January 23, 2019, we reported that the Supreme Court had agreed to review a decision from the Fifth Circuit Court of Appeals, Ft. Bend County v. Davis, which would answer conclusively whether the pre-filing administrative exhaustion requirement is jurisdictional (meaning that failure to fully exhaust administrative remedies would bar litigation) or non-jurisdictional and thus subject to waiver. The Supreme Court issued its decision on June 3, 2019 and ruled that administrative exhaustion is non-jurisdictional and subject to waiver. Continue Reading

NLRB Announces New Rulemaking Priorities (US)

As a part of the Unified Agenda of Regulatory and Deregulatory Actions (“Unified Agenda”) issued Wednesday, May 22, 2019, the National Labor Relations Board (“NLRB”) announced its regulatory road map, indicating three areas of the National Labor Relations Act (“NLRA”) under which the agency intends to develop new or modified rules:

  • access to an employer’s private property;
  • standards to determine when students who perform work at a private college or university in connection with their studies are “employees” within Section 2(3) of the NLRA; and
  • representation election regulations, including the Board’s current procedures for blocking an election petition after the filing of an unfair labor practices charge, voluntary recognition, and the formation of Section 9(a) bargaining relationships in the construction industry.

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Later knowledge taints earlier dismissal – employers’ duties in appeals (UK)

You are hearing the appeal of an employee with less than two years’ service dismissed on the grounds of admitted poor conduct. What can possibly go wrong? Certainly not the seeming afterthought on the employee’s part, not mentioned at the dismissal stage, that her conduct might in part be explained by a depressive condition of which you had no knowledge. Besides, some of the conduct cannot be caused by the alleged disability and in the circumstances (the end of probation) that would be enough for you to act upon anyway. As we say, nothing can go wrong.

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