Bipartisan efforts led to the passage of a paid family and medical leave law, signed by Governor Inslee on July 6. Washington is one of only a handful of states to offer such a program. The paid leave will be funded through weekly paycheck contributions made by both employers and employees (similar to Social Security), and the program will be administered by the state.

Beginning in 2020, an eligible employee can take up to 12 weeks of paid family and medical leave, which can be used to care for a newborn or newly-adopted child, the employee’s own serious health condition, or to care for a family member with a serious health condition. The employee can also take paid leave to be with a family member injured in military service, or to deal with exigencies of military deployment. The employee will receive an additional 2 weeks for a complication related to pregnancy. The total combined paid leave an employee can take in a year (for family care and for care of him or herself) is 16 weeks, or 18 weeks if it includes a pregnancy-related complication.

Weekly leave benefits are calculated based on a percentage of the employee’s wages and the state’s weekly average wage (currently $1,082), though the maximum weekly amount is capped at $1,000 a week. Any employee who earns less than the state average would get 90 percent of his or her income per week. To qualify for paid leave under this program, employees must have worked (for any employer) at least 820 hours in the preceding 12 months.

The new paid leave program will be financed by a 0.4 percent deduction from pretax wages. Both employees and larger employers will make regular payroll contributions – 63 percent to be paid by employees, and 37 percent to be paid by employers with 50 or more employees. Employers with 50 or fewer employees are exempt from paying the employer share. Self-employed people and contract workers may opt in with a three year commitment, and will pay only the employee share of the premiums. Companies that already offer paid leave programs can opt out, so long as the benefits are at least equivalent to the state’s minimum requirements.

Employees and employers will begin paying into the state system as of January 1, 2019, but employees will not be able to take paid leave until January 2020.

For more information on Washington’s leave laws, please contact Foster Pepper’s Employment, Labor and Benefits group.

The past week involved a flurry of activity from the federal agencies responsible for promulgating and enforcing employment and labor rules. Click below for more information:

  • DOL issued the final version of its new overtime rule, raising the minimum salary threshold required for “white collar” exemptions to $47,476 per year, effective December 1, 2016.
  • EEOC issued final rules on employer wellness programs. For more in-depth coverage of this issue, read our blog post here.
  • OSHA issued a new final rule modernizing data collection by requiring employers to electronically submit information about injuries and illness.

Employers that need assistance navigating these new rules should contact Foster Pepper’s Employment, Labor and Benefits group.

Employer wellness programs are the latest subject of EEOC regulatory efforts. Last week, the Equal Employment Opportunity Commission (“EEOC”) issued final rules explaining how wellness programs must comply with the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”).  The new rules: (1) address the extent to which an employers may pay incentives or provide rewards to encourage participation in a wellness program that involves disability-related inquiries; and (2) clarify when a wellness program is “voluntary.”

Continue Reading EEOC Issues New Rules for Employer Wellness Programs

On Wednesday, May 11, 2016, President Obama signed the Defend Trade Secrets Act (“DTSA”) into law, a first step in creating federal oversight of trade secrets laws, which have been exclusively handled at the state level. The DTSA does not preempt existing state laws, but is an additional tool to protect employers with trade secrets related to products or services used in interstate or foreign commerce.

DTSA Protections

Employers threatened by trade secret misappropriation from competitors or employees can now:

  • File a civil action in Federal Court for trade secret misappropriation (the DTSA also includes potentially new protections for party filings and even court proceedings/rulings related to trade secrets to be sealed). This will also have the effect of allowing associated breach of contract and employment law claims to be heard in Federal Court;
  • Seek actual damages or restitution for unjust enforcement due to misappropriation of trade secrets;
  • Seek attorneys’ fees and exemplary damages of up to twice the amount of actual damages or restitution if the misappropriation is wilful and malicious (note that the DTSA also provides for attorneys’ fees to a defendant if claim is asserted in bad faith);
  • Obtain a full range of injunctive relief (note that the DTSA excludes injunctive relief restraining an employee from working for a competitor or relief that conflicts with state laws imposing restraints on trade);
  • In extraordinary circumstances, obtain a civil seizure order on an ex parte basis to prevent dissemination of a trade secret;
  • Obtain penalties for criminal violation of $5 million or three times the value of the misappropriated trade secrets;
  • Continue to obtain existing remedies under state trade secrets laws.

Continue Reading Defend Trade Secrets Act (DTSA) Signed Into Law: Federal Law Offers Greater Protections and New Obligations for Employers

Contributing Research by Dori Kojima

On July 15, 2015, the U.S. Department of Labor (DOL) released an Administrator’s Interpretation addressing how to determine whether a worker is an independent contractor or employee under the Fair Labor Standards Act (FLSA). The FLSA is the primary federal law regulating minimum wage and overtime pay. The Interpretation puts employers on notice that the DOL is increasing efforts to curtail the misclassification of workers.

The “Economic Realities” Test Under the FLSA

To determine whether a worker is an employee or independent contractor under the FLSA, courts apply the “economic realities” test. The test focuses on whether the worker is economically dependent on the company or in business for himself or herself. The “economic realities” test has six factors:

Continue Reading Department of Labor Targets Use of Independent Contractors

A class of employees is suing Kmart in a California state court for allegedly engaging in unfair business and employment practices in its use of payroll debit cards.
Payroll debit cards have become popular, especially in the retail and fast food industries.  Instead of a paycheck or direct deposit, the employer loads funds onto a debit card held by the employee.  The employee then uses the debit card to withdraw cash and pay bills.
In the California lawsuit, the plaintiffs claim (among other things) that
• Kmart earns interest on the payroll funds not withdrawn from the debit card, thereby using employee wages for investment purposes.
• Employees must pay fifty cents each time they make a withdrawal, thus depriving them of their full wages.
• Employees face other limitations, such as not being able to withdraw all their wages at the same time.
The lawsuit seeks various kinds of relief, including restitution and punitive damages.
We previously summarized the legal issues surrounding payroll debit cards here.  We identified two sources of law affecting payroll debit cards in Washington State.
First, we described a bulletin issued by the Consumer Financial Protection Bureau (CFPB) that applies the Electronic Fund Transfer Act and Regulation E to payroll debit card accounts.  Under that Bulletin, the CFPB announced that
• Employers may not require their employees to receive wages by payroll card, but must offer a substitute method, such as direct deposit or paper check.
• Employees must be informed of all fees, limitations on liability, and requirements related to making electronic fund transfers with the payroll card.
• The payroll card issuer must disclose specified information about the employee’s account balance and transaction history.
• Employees are entitled to limited liability protections for the unauthorized use of their payroll cards and designated rights to correct account errors.
Second, we noted that the rules in Washington State are less elaborate.  We reported, however, the Department of Labor & Industries agrees with the CFPB on one essential point: if there are fees for using payroll cards, the employer must provide an alternative that allows access to wages without any fees or costs.
For more information about payroll debit cards, please contact Foster Pepper’s Employment & Labor group or Financial Institutions group.

A class of employees is suing Kmart in a California state court for allegedly engaging in unfair business and employment practices in its use of payroll debit cards.

Payroll debit cards have become popular, especially in the retail and fast food industries. Instead of a paycheck or direct deposit, the employer loads funds onto a debit card held by the employee. The employee then uses the debit card to withdraw cash and pay bills.

In the California lawsuit, the plaintiffs claim (among other things) that

  • Kmart earns interest on the payroll funds not withdrawn from the debit card, thereby using employee wages for investment purposes.
  • Employees must pay fifty cents each time they make a withdrawal, thus depriving them of their full wages.
  • Employees face other limitations, such as not being able to withdraw all their wages at the same time.

Continue Reading Kmart Sued for Use of Payroll Debit Card System

Medical and recreational marijuana is legal in Washington and Colorado; however, the highest courts in both states have ruled that employers can still discharge employees for using it.

Most recently, in Coats v. Dish Network, LLC, the Colorado Supreme Court ruled that Dish Network properly discharged an employee for failing a drug test. At the time of his discharge, Brandon Coats (who suffers from quadriplegia), held a valid Colorado license to consume marijuana for medical purposes. As a result of Coats’ positive test for marijuana, Dish discharged him for violating its zero tolerance drug policy. Coats did not use marijuana on Dish’s premises, he did not use it during working hours, nor was he under its influence while at work. Instead, Coats’ urine test detected traces of THC metabolites, the chemical residue of THC, which is the active ingredient in marijuana. These metabolites can remain in the body anywhere from several days to several weeks after last consuming marijuana.

Continue Reading Colorado Supreme Court Upholds Employer’s Right to Discharge Employee for Marijuana Use

On December 11, 2014, the National Labor Relations Board (NLRB) issued a decision with major implications for employers that gives employees access to company email systems. While most employee handbooks prohibit personal use of company resources, employers commonly allow minor use of company email, such as employees selling Girl Scout cookies and charity raffle tickets or communicating about upcoming parties or events.

In Purple Communications, Inc. & Communication Workers of America, AFL-CIO, the NLRB acknowledged that workplace email has expanded to become a natural gathering place where employees communicate, and the agency declared that uneven enforcement of email policies that distinguish between union communications and other personal communications, violates the requirement that employers not discriminate against union-related activities. The NLRB therefore ruled that many employees have a statutory right to use company email to discuss a range of workplace issues, so long as they do it on their own time and do not hurt productivity or office discipline. As such, employers may no longer ban employees from using the company’s email system for union-related communications during non-work times.

Continue Reading NLRB: Employers Cannot Ban Employees From Using Company’s Email System for Union-Related Communications

We previously addressed the issue of whether an intern is entitled to be paid for time spent with a for-profit enterprise.  We reviewed the Department of Labor’s six-factor test:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Continue Reading Paralegal Students Must Be Paid for Practical Job Experience at Law Firms

‘Tis the season for workplace holiday parties. Holiday parties can be a fun way to build camaraderie and boost company morale for the upcoming year, but they are also fertile ground for HR woes. Enjoy the festivities without the negative consequences by following these simple tips. 

  1. Spirit of the Season. Alcohol is the most common concern at company holiday parties. Alcohol-fueled corporate functions may result in accidents and sexual harassment complaints, but may also give rise to “social host” or “dram shop” liability, where an employer could be responsible for injuries caused by intoxicated individuals who were over-served at the company event. To avoid these risks, some employers decline to serve alcohol at all, especially if the event takes place during a work day. Other employers hold holiday events at a restaurant or other off-site location. If you do choose to serve alcohol on your premises, it is a good idea to hire professional servers, limit drinks with the use of drink tickets, and stop serving alcohol at least an hour prior to the end of the party. Moreover, when serving alcohol, be sure to serve plenty of non-alcoholic beverages and filling foods. Additionally, provide taxi vouchers and have sober HR managers or executives make sure those who are leaving are in shape to drive safely. Communicate to employees beforehand about transportation options and encourage them to plan ahead. 
  2. Comfort and Joy. Speaking of alcohol, high spirits (and lots of eggnog) can bring out the best and worst in employees. Intoxicated employees might become overly friendly or overly hostile. Some employees might engage in activities or show up in apparel that makes others feel uncomfortable. Warn employees that sexual harassment will not be tolerated or excused. Also, steer clear of holiday décor, like mistletoe, that may encourage unprofessional behavior.
  3. Voluntary Cheer. Inform employees that attendance at holiday events is voluntary. If holiday events are required, non-exempt employees might claim the right to be paid for the time. A good practice is to disassociate holiday functions from employee jobs by holding parties outside of normal business hours, and refrain from distributing bonuses or performance awards or conducting other business-oriented activities during the festivities. To avoid claims of religious bias, stay away from any references to religious holidays such as Christmas, Hanukkah or Kwanza. 
  4. Celebration Expectations. When sending out announcements or initiations to the holiday party, a brief rundown of the rules of the road can avoid confrontations at the event.

Happy Holidays to all of our clients and friends! 

If you have any questions regarding company-sponsored holiday parties, or any other employment law issues, please contact Foster Pepper’s Employment and Labor Relations Group.