This year brought substantial progress in the way of slightly fewer positive COVID-19 cases and/or transmissions and increased vaccinations. Consequently, in the employment world many of you reopened your offices and invited employees, some thrilled and others reluctant, to return to in-person work. Though the return has restored some sense of normalcy, there are still issues that remain in flux and continue to demand flexibility and meticulous attention to the myriad of federal, state, and local developments in employment law that impact your workplace. So, before we all sit down at the table and fill our plates and bellies to overflowing as we start the 2022 holiday season, we can once again find some bright shining blessings as we review the year. We are grateful to have survived many of the repercussions from the COVID-19 global pandemic, including supply chain disruptions and embarrassing Zoom fails. We are hopeful for economic stability and a highly satisfied, productive workforce. We are also grateful for the following legal stuff:
1. The Great Resignation Appears to Be Slowing Down
The U.S. Bureau of Labor Statistics reported that beginning in March 2021 and carrying over into 2022, the rate of job quitting in the U.S. reached highs not seen since the bureau began measuring job openings and turnover in December 2000. The phenomenon has been dubbed the “Great Resignation” (coined by Texas A&M University professor Anthony Klotz) and has been marked by a dramatic rise in the national quit rate that the bureau defines as: (a) terminations of employment initiated by the employee (excluding employees who retire or leave the labor market, and those who simply transfer to another location for work); (b) failure to report to work after being hired; or (c) 3 unauthorized absences from work if at the end of the month the employee was absent for more than seven consecutive days. Forbes reported that by the end of 2021, 47.8 million people left their jobs for other positions as compared to 37.7 million people who quit in 2017.
Though the trend began in 2021 has continued into 2022, and is projected to continue into 2023, the rate of job quitting appears to be slowing. The number of quits has declined month over month for the past six months. Nevertheless, the number of workers leaving their jobs – whether due to residual effects of the pandemic, taking a better job or position, choosing an opportunity for remote work or a hybrid schedule, higher pay, and better benefits, or just seeking a different life experience – is still very high historically speaking. Thus, companies are finding themselves competing for the best and brightest talent and are using creative ways to attract and retain a high-performing workforce.
Although the Great Resignation is not strictly an employment law topic, several legal issues are often at the center of poor retention. Many of the experts monitoring the trend and surveying sample populations across varying industries have advised employers who want to combat the trend to foster connections through active engagement, implementing remote and/or hybrid work schedules, allowing employees reasonable time off to prevent burnout, beefing up fringe benefit offerings and cultivating company culture. You have some tools at your fingertips to limit the impact of the Great Resignation on your workforce and that’s something to be grateful for.
2. Employers Are Subject to Fewer Vaccine Mandates and Can Independently Choose How to Handle the Issue
Over the course of 2021, your HR departments likely suffered whiplash from all the changing vaccine rules and mandates emanating from the federal, state, and local government. Some of you developed policies requiring employees to get a COVID-19 vaccination, only to have your state or local government ban vaccine requirements. Keeping up with the conflicting guidelines proved frustrating for you and your workers.
So, we are thankful that as of now you are free to independently choose whether to require vaccines or boosters among your employees and applicants (of course keeping in mind accommodations for disabilities or religious beliefs), as many of the federal mandates have either been lifted or enjoined and state and local guidelines have followed suit. We all remember the late 2021 OSHA emergency temporary standard that would have required all businesses with more than 100 workers to institute a “vaccination or test weekly” program with few exceptions. In January 2022, the U.S. Supreme Court said not so fast, ruling that the rule exceeded OSHA’s rulemaking power. OSHA subsequently withdrew the emergency temporary standard in January 2022.
Similarly, in late 2021, President Biden issued an Executive Order that required federal contractors and subcontractors to mandate that employees obtain COVID-19 vaccinations. Litigation ensued, and several attorney generals filed lawsuits alleging the federal contractor vaccine mandate exceeded the president’s statutory power over the procurement process. One federal district judge in Georgia issued an injunction preventing the federal government from enforcing the federal contractor vaccine mandate nationwide. Though the injunction was later narrowed to apply only to the plaintiffs in that case, since the injunction the federal government has not taken any action or expressed any intent to enforce the federal contractor mandate and, in fact, updated its guidance to instruct government agencies to pause on requiring, requesting or collecting documentation of vaccination status and asking about the vaccination status of on-site contractors, employees, and visitors.
Much of the state and local guidance on these issues has followed the federal lead. So, while you should certainly continue to protect workers and maintain a policy that allows sick workers to stay home and instructs them whom to inform of illness, you now have the freedom to decide whether your policies will include mandatory vaccinations or not. And that certainty and independence is definitely something to be grateful for.
3. Clarification on Misclassification Based on the DOL’s Proposed Rule Regarding Independent Contractor v. Employee Status
The DOL announced on October 11, 2022, the publication of a proposed rule that would rescind the earlier rule adopted by the Trump administration and replace it with a new analysis for determining employee or independent contractor status under the FLSA. Under the proposed rule, the DOL intends to provide guidance that is more aligned with circuit case law and useful to employers when determining employee versus independent contractor status to decrease the occurrences of employee misclassification. The DOL identified six factors (which courts have examined for decades) that should be considered when determining the relationship of the parties. While the final rule may differ somewhat from the proposed rule published, nevertheless, you should expect the final rule will limit the circumstances in which an individual or entity can be properly classified as an independent contractor, and you can get a head start on reviewing your practices to ensure compliance.
4. Safe Harbors for Voluntary Pay Equity Audits
As more and more states roll out pay equality statutes, we are hearing more discussion and receiving more questions about these issues. For many of you aiming to close the pay gap between men and women, a first step is to conduct a pay equity audit, under legal privilege, and resolve to fix any issues identified immediately and earnestly. In the past, companies may have been reluctant to voluntarily engage in pay equity audits because many felt like doing so was asking for claims or inviting problems. More recently, there has been a slight shift in perspective either because the company wants to take advantage of the safe harbors offered under some state laws, limit risks of liability and ensure legal compliance, respond to demands from stakeholders or employees themselves for a pay “gap” analysis, or because of a desire to ensure you are compensating employees equitably because of values or retention. Whatever the reason, there are more safe harbors available for conducting pay audits, and we expect to see more of these provisions with the rising number of states passing their own pay equity laws. California, New York, and New Jersey, have each enacted comprehensive pay equality statutes covering all protected classes of employees, but Rhode Island, Massachusetts, Colorado, and Oregon have each included unique safe-harbor provisions for employers who proactively assess and address their pay gaps. Massachusetts provides potential relief from liability and liquidated damages for employers who perform voluntary self-audits, while Rhode Island, Oregon and Colorado offer more limited relief from compensatory, punitive, or liquidated damages.
These safe harbors, and those to come, can provide an effective defense to liability and/or damages in pay equity litigation – and that’s something to be grateful for. But before you launch a formal audit, we recommend that you consult counsel, obtain buy-in from internal leadership, and be prepared to fix any issues identified.
5. Updates to the EEOC’s Mandatory Posting Requirements
Last month, the EEOC released an updated version of the “Know Your Rights” poster. The EEOC explained the updated poster uses straightforward language and formatting to make it easier to read and understand, clarifies that sex discrimination incudes discrimination based on pregnancy and related conditions, sexual orientation, and gender identity, adds a QR code for digital access to the “how to file a charge of discrimination” webpage, and provides information about equal pay discrimination for federal contractors.