This article was written by   and originally posted to Kelley Drye’s Labor Days Blog.

As we close the books on 2019, and enter the new decade, New York employers should keep a list of all new legislation handy. Below is our brief summary of legislation effective 2020.

New York State Human Rights Law (NYSHRL)

In August 2019, Governor Cuomo signed groundbreaking legislation amending the NYSHRL, which we covered.  Several pieces of the law will become effective in the upcoming months, including the following:

  • January 1, 2020: Settlement agreements cannot bar individuals from speaking to an attorney, the New York State Division of Human Rights, the EEOC, local human rights commissions, or any other form of law enforcement.
  • February 8, 2020: NYSHRL will be applicable to employers of all sizes who do business in the state.
  • August 12, 2020: Statute of limitations for filing sexual harassment claims with the State Division of Human rights will be expanded from one to three years.

Additionally, employers should ensure they are in compliance with the 2019 changes to the NYSHRL and cognizant of new legal standards which became effective last year:

  • The “severe or pervasive” standard no longer applies to discriminatory and retaliatory harassment claims;
  • Employers can no longer rely on the Faragher-Ellerth defense to liability. In other words, if an employee fails to utilize the employer complaint procedure and fails to make an internal harassment complaint, the company may still be liable.
  • Employers are prohibited from mandating arbitration of all claims of discrimination (expansion from previous legislation, which prohibited mandatory arbitration of sexual harassment claims only);
  • Employers are prohibited from including non-disclosure provisions in settlement agreements for all claims of discrimination—not only sexual harassment claims—unless the condition of confidentiality is the plaintiff’s preference.

Further, employers should ensure they are up to date on the 2019 amendments which prohibit discrimination on the basis of:

  • Transgender status, gender identity and expression;
  • Hairstyle, including hair texture and protective hairstyles such as braids, twists, and locks;
  • Facial hair or religious attire.

New York City Human Rights Law

  • Effective January 11, 2020, the City law will apply to independent contractors. Further, the law applies to employers that maintain four or more employees, contractors, or freelancers at any time during the 12 months before the start of the discriminatory act.
  • The law was amended in late 2019 to prohibit retaliation against individuals requesting a reasonable accommodation.

Reproductive Rights

The NYSHRL was recently amended to prohibit employers from discriminating or retaliating against employees for reproductive health decisions, including but not limited to, “the decision to use or assess a particular drug, device or medical service.”  Under the new law, employers are specifically prohibited from:

  • Accessing an employee’s personal information regarding the employee’s or the employee’s dependent’s reproductive health decision making without the employee’s prior informed affirmative written consent;
  • Requiring an employee to sign a waiver or other document which purports to deny an employee the right to make their own reproductive health care decisions; or
  • Discriminating or taking any retaliatory personnel action against an employee with respect to compensation, terms, conditions, or privileges of employment because of or on the basis of the employee’s or dependent’s reproductive health decision making.

Effective January 7, 2020, employers must also issue a notice in their handbook of employees’ rights and remedies with respect to the new law.

New York City Pre-Employment Marijuana Testing

Effective May 10, 2020, many NYC employers will be prohibited from requiring prospective employees to take a marijuana or THC drug test as a condition of employment.

There are specific jobs excluded from the new law, including 1) safety and transportation related positions; 2) caregivers; 3) jobs where the drug testing is required by federal or state law, or required pursuant to a contract with the federal government; and 4) jobs in which a collective bargaining agreement requires drug testing.

New York City Salary History Ban

  • For NYC employers with more than 11 employees, the minimum wage will remain at $15.00.
  • For employers with 10 or fewer employees, minimum wage will increase from $13.50 to $15.00.
  • Minimum wage will increase to $13.00 for employees in Long Island and Westchester.

New York Paid Family Leave Benefits

NY PFL benefits will remain at 10 weeks of leave; however, the benefits will increase to 60% of the employee’s average weekly wage, and will be capped at a weekly amount of $840.70.

Fair Labor Standards Act

The salary threshold for an “exempt” employee under the FLSA executive, administrative, or professional exemption is now $648 per week, or $35,568 annually. This is increase to the previous threshold of $455 a week, or $23,660 annually. The “highly compensate employee” exemption also increased from $100,000 to $107,432 annually.

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In June 2019, the Illinois’ Cannabis Regulation and Tax Act (HR1438) (“Cannabis Act”) was signed into law, legalizing the use and possession of recreational cannabis for adults age 21 or older beginning January 1, 2020.  In a previous Labor Days blog post, we discussed the likely impact of this law on employers in Illinois.  In short, the Cannabis Act (1) permits employers to establish non-discriminatory, “reasonable zero tolerance or drug free workplace policies” that prohibit employees from using or being under the influence of cannabis at work, (2) allows employers to discipline employees for using or being under the influence of cannabis at work and for other violations of these “reasonable zero tolerance or drug free workplace policies,” and (3) insulates employers against liability for taking the aforementioned actions, as long as there existed a good faith basis for the employer to believe that the disciplined employee was under the influence of cannabis.  Cannabis Act at § 10-50.

Despite these provisions, the Cannabis Act, as originally enacted, left employers with several unanswered questions.  One of the key questions was whether employers would face liability for adverse employment actions based solely on a positive marijuana test, including refusing to hire a job applicant who tests positive for marijuana use.  The challenge with testing employees and prospective employees for marijuana use is that under Illinois’s Right to Privacy in the Workplace Act, an employer may not discriminate against an individual who uses “lawful products off the premises of the employer during nonworking and non-call hours.”  820 ILCS 55/5(a).  Adding to the confusion is the fact that the Right to Privacy in the Workplace Act referred back to the Cannabis Act’s provisions allowing employers to enforce reasonable drug-free workplace provisions.

On November 14, 2019, the Illinois legislature passed an amendment to the Cannabis Act that clarifies much of the lingering uncertainty.  This amendment was signed into law by Governor Pritzker on December 4, 2019.  The amendment specifies that the Cannabis Act does not open employers up to liability for “actions taken pursuant to an employer’s reasonable workplace drug policy, including but not limited to subjecting an employee or applicant to reasonable drug and alcohol testing, reasonable and nondiscriminatory random drug testing, and discipline, termination of employment, or withdrawal of a job offer due to a failure of a drug test.”  SB1577 § 705-10(50)(e)(1).

This provision directly addresses whether employers can revoke employment offers from applicants who test positive for cannabis.  Under the Illinois Right to Privacy in the Workplace Act, 820 ILCS 55/5, it is unlawful for an employer “to refuse to hire or to discharge any individual … because the individual uses lawful products off the premises of the employer during nonworking hours.”  820 ILCS 55/5(a).  The passing of the Cannabis Act made recreational cannabis use legal in Illinois, and the law itself says that “lawful products” means “products that are legal under state law.”  Cannabis Act at § 900-50.  After an employee receives a job offer, any conduct he engages in prior to beginning his employment is technically “during nonworking hours,” and therefore it appeared that an employer may not withdraw an offer because of the use of “lawful products” during that time.

The November 14, 2019 amendment clarifies that an employer may retract a job offer based on an applicant’s cannabis use prior to beginning employment.  SB1577 § 705-10(50)(e)(1).  In other words, as amended, the Cannabis Act specifically allows employers who have offered an applicant a position conditioned on clean drug test to rescind that offer if the applicant subsequently tests positive for cannabis use.

In addition to this employer protection, employers remain able to discipline or terminate employees based on a “good faith belief” that the employee is under the influence of cannabis at work, which occurs when the employee “manifests specific, articulable symptoms while working that decrease or lessen the employee’s performance of the duties or tasks of the employee’s job position.”  Cannabis Act at § 10-50(d).  This good faith belief may serve as a basis for subjecting an employee to a “reasonable” drug test, thereby insulating the employer from liability for taking action against an employee who fails or refuses to take a drug test.  Cannabis Act at § 10-50(e).

There remains the possibility that an employee will challenge a disciplinary action by claiming that the employer lacked a good faith basis to believe that the employee was under the influence or that the employer’s policies are not reasonable.  Therefore, the amendment does not entirely limit employers’ exposure to potential lawsuits, but it helps to clarify how employers may address potential workplace impairment due to marijuana use.

In short, the protections afforded employers under the Cannabis Act, as amended, are not absolute, but do provide a defense.  Moreover, the recent amendments do not change the protections afforded employees under Illinois’s Compassionate Use of Medical Cannabis Program Act.  Employers in Illinois should consider both laws when drafting drug testing policies for their employees.  Specifically, the Cannabis Act, as amended, permits policies (1) requiring employees to refrain from using or being under the influence of cannabis at work, (2) requiring employees to submit to a drug test if they exhibit behaviors consistent with being under the influence of marijuana, and (3) requiring applicants to test negative for marijuana prior to beginning their employment.  As with any change in employment policies, it is important that a company clearly communicates how it addresses potential marijuana use, including drug testing, both for applicants and current employees and ensures that these policies are consistently enforced.  In addition, employers should be aware that drug testing requirements under the U.S. Department of Transportation regulations and Illinois’s Substance Abuse Prevention on Public Works Projects Act (820 ILCS 265) remains unaffected by the amended Cannabis Act.

It should be noted that there is also a practical hurdle to marijuana testing because the current testing methodologies cannot determine the specific time period when an individual last used marijuana.  The THC molecule (a common term for delta-9-tetrahydrocannabinol), which is the active ingredient in marijuana that cause the user’s “high,” will appear in urine tests for up to 30 days after use. Moreover, tests cannot determine the degree of impairment.  Therefore, a positive marijuana test does not indicate if the employee used or was under the influence of marijuana while on the employer’s premises.  Employers planning on using drug testing generally may want to consider excluding marijuana from the drug test panel administered and tracking the studies that are being performed on the efficacy of newly developed drug tests for marijuana use.

If you have questions about your policies regarding drug testing, please contact Kelley Drye’s Labor and Employment Team.

 

This article was originally posted to Kelley Drye’s Labor Days Blog.

On Wednesday, December 4th, Barbara Hoey, Co-Chair of Kelley Drye’s Labor and Employment Practice and David Frulla, Chair of the firm’s Campaign Finance and Political Law Practice hosted a one hour webinar focused on best practices of handling all aspects of politics in the workplace. They reviewed federal and state rules regarding employees’ political activity and speech in the workplace, and compliance issues related to federal campaign finance laws when a company or its executives engage in political activity. Additional topics covered include:

  • Political statements on social media,
  • When talking politics can turn into discrimination and harassment,
  • Corporate partisan and non-partisan political communications,
  • Employee volunteer activity, and
  • Do’s and don’ts for executive fundraising.

To view a recording of the webinar, click here.

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The labor movement sent a powerful and potentially revolutionary signal to the tech industry this past week on September 24: contract employees of HCL Technologies, working under a renewable contract with Google, voted to unionize for better salaries, benefits, and working conditions. Nearly 80 contract HCL employees stationed in Google’s Pittsburgh office joined the United Steelworkers trade union, which represents more than 850,000 American employees across various industries. Significantly, this marked the first time contract tech workers have unionized in the United States in an industry that is almost entirely non-union.

The vote for union representation strikes at the heart of the business model used by companies like HCL, a multinational Indian IT services company. Although the HCL employees who have been contracted out to Pittsburgh work alongside Google employees in similar positions, they contend that they receive less favorable benefits and less compensation for their work than do those employed directly by Google. This is often the case for contract workers, who are heavily utilized in the technology industry thanks to the lower costs of employing them. But these same contract employees have historically been less inclined to unionize, fearing that their employers will respond by declining to renew their contracts when the time comes. Indeed, some HCL Technologies employees expressed this exact concern, recognizing the possibility that Google would decline to renew its contact with HCL as a result of Tuesday’s vote.

Other hurdles to unionization have traditionally existed with regards to employment in the technology sector. There has historically been an inclination to associate unions with blue-collar work; well-paid engineers may not think they would derive any additional benefits from joining a union. Similarly, in a world of tech startups, employees may not view management as strict authority figures against whom they should engage in the often adversarial process of negotiating for better pay, benefits and working conditions. All of these factors have formed a headwind against the unionization of tech, since tech companies unaccustomed to unionization efforts may not hesitate to show hostility towards, or even penalize, employees for trying to unionize.

But the direct unionization of HCL’s tech workers was perhaps not entirely unpredictable or without an overall context in which unions have gained footholds among tech giants. Despite a historical lack of interest in unionization, unions have taken aim at their employers, but just with other kinds of workers, even before Tuesday’s vote. Security guards and bus drivers employed by large tech companies like Google and Facebook are now unionized; employees at Amazon and Salesforce campaigned for changes in their working conditions. And Google employees staged a 20,000-person walkout in 2018 to protest unfavorable company policies. Each of these signals a new level of union activism in the technology sector, and each has helped pave the way for employees like those at HCL Technologies to advocate for better wages and working conditions.

Whether the HCL employees’ recent vote to bring in a union is an aberration or, rather, an indication of a real trend has yet to be seen. But multinational tech companies whose labor models are built on the low costs of contract workers should take note: nothing in federal labor law prevents employee unionization, as HCL learned.  Tech employers would do well to consider how attractive a target they may be for unionization and address employee concerns well before a petition for a union election is filed with the National Labor Relations Board.

Kelley Drye’s labor and employment group regularly counsels employers across industries and has deep experience in working within the tech industry. We would be pleased to provide more information about unionization issues.

 

This article was originally written by  and posted to Kelley Drye’s Labor Days Blog.

A Los Angeles jury awarded a black former UCLA phlebotomist nearly $1.6 million in damages for being subjected to racial harassment by co-workers. Birden v. The Regents of the University of California, No. BC6681389 (Los Angeles Superior Court May 30, 2017).

Birden, who worked at UCLA as a per diem phlebotomist for approximately one year, alleged that she was subjected to racial slurs and disparaging remarks by Latino co-workers who referred to her as “lazy,” a “dark woman,” and used the “N” word in her presence. Birden claims that she reported the harassment to her supervisors but the school did not take action.

In his opening statement at trial, the attorney for the UC Board of Regents described one of Birden’s co-workers as a “good guy,” claimed “[h]e wasn’t doing it to try to offend somebody” with the use of the “N” word and argued that Birden was fired because of a clear pattern of performance issues. Birden’s counsel argued that Birden had no disciplinary history and offered testimony of Birden’s strong work ethic.

Ultimately, the jury agreed that Birden was subjected to severe and pervasive harassment by her co-workers due to her race and awarded Birden (1) $500,000 for past emotional distress and mental harm, (2) $800,000 for future emotional distress and mental harm, (3) more than $190,000 for past economic loss and (4) more than $86,000 for future economic loss. However, the jury did reject Birden’s claim that she was terminated because of her race.

What Lessons Can Be Learned From This Case?

Hindsight is always 20/20, single-plaintiff verdicts like this one remind employers to focus on cultivating a respectful and inclusive work culture for employees at all levels because non-supervisory employees have the power to do as much damage as management.

How do you focus on cultivating a respectful work culture? Here are some tips:

  • There is no such thing as too much training, but the training must be effective. We find the most effective training focuses on work culture instead of formulaic legal tests (e.g., what constitutes severe or pervasive). If you find yourself analyzing whether a conduct is severe or pervasive, it is inevitably too late.
  • Anti-harassment policy – having one is never the problem (you should have one). The problem arises when employees either do not receive the policy or forget it exists because it is buried in a handbook. Typically, it is the latter. Employers can change this by reminding employees of anti-harassment policies on an annual basis. This reminder also provides employers with the opportunity to re-emphasize that the company does not tolerate harassment and employees should not be afraid to raise or report concerns.

To learn more, join partners Barbara Hoey and Mark Konkel on a Lexology hosted webinar, entitled “The New Sexual Revolution: Radical Changes to US Harassment Laws” on September 24, 2019. For more information and to register, click here.

This article was edited by Barbara E. Hoey, Mark A. Konkel, and Matthew C. Luzadder and originally posted to Kelley Drye’s Labor Days Blog.

The Departments of Labor, Health and Human Services and Treasury recently issued joint final regulations expanding the availability of health reimbursement arrangements (“HRAs”) by introducing two new types of HRAs – Individual Coverage HRAs and Excepted Benefit HRAs. The following is a brief overview of the requirements employers must satisfy in order to offer HRA coverage to their employees, and employees’ dependents, under one of these new arrangements.

Background

HRAs constitute group health plans that are subject to various Affordable Care Act (“ACA”) rules. The ACA rules include prohibitions on capping or requiring cost-sharing for certain benefits (the “Market Reforms”).

Under prior guidance, in order to comply with or avoid the Market Reforms, HRAs generally had to be integrated with other qualifying group health plan coverage or limit the scope of reimbursable expenses to benefits excepted from compliance (e.g., limited scope dental or vision coverage). The new regulations make it easier for employers to offer HRA coverage by providing two new options that do not require integration with a group health plan or limiting the scope of reimbursable expenses.

Individual Coverage HRAs

Under the new regulations, in order to comply with the Market Reforms, an employer may integrate an HRA with qualifying individual health plan coverage or Medicare (an “Individual Coverage HRA”), if certain conditions are satisfied. This is a departure from prior guidance, which prohibited the integration of HRAs with non-group health plans.

In addition, an offer of an Individual Coverage HRA will count as an offer of qualifying coverage for purposes of the employer mandate under ACA. An employer may still be liable, however, for penalties under ACA if employer contributions to the Individual Coverage HRA are insufficient to satisfy affordability requirements.

In order to establish an Individual Coverage HRA, the following conditions must be satisfied:

  • The HRA must require that all HRA participants, and their dependents, be enrolled in qualifying individual health plan coverage or Medicare coverage for each month the individuals are covered by the HRA.
  • The employer must verify that all HRA participants, and their dependents, are enrolled in qualifying individual health plan coverage or Medicare coverage during the plan year.
  • The employer cannot offer the HRA coverage to a class of employees (e.g., full-time employees, part-time employees, seasonal employees, etc.) who are also eligible for coverage under the employer’s traditional group health plan (i.e., a non-account based group health plan that is not limited to providing excepted benefits).
  • The employer must offer the HRA coverage on the same terms to all employees within a class, subject to certain exceptions.
  • The employer must provide employees with an opportunity to opt-out of the HRA coverage and waive future reimbursement from the HRA at least annually.
  • The employer must provide eligible participants with a notice regarding how the offer of HRA coverage, or enrollment in HRA coverage, affects their ability to claim a premium tax credit on the health insurance marketplace (the “Notice”).

If an employer wants to offer an Individual Coverage HRA, they will need to provide the Notice to each eligible participant at least 90 days before the beginning of each plan year, or for individuals not eligible to participate at the beginning of the plan year, no later than the date the participant is first eligible to participate in the HRA.

To read the full advisory on the Kelley Drye website, click here.

This article was written by Mark A. Konkel & Diana R. Hamar and originally posted to Kelley Drye’s Labor Days blog.

Governor Cuomo signed the groundbreaking harassment legislation that we previously covered here on August 12, 2019. The law profoundly alters the landscape of harassment claims in New York and how employers should be prepared to handle them. Key provisions include eliminating the “severe or pervasive” standard for discriminatory and retaliatory harassment cases, prohibiting mandatory arbitration for all discrimination claims (not just sexual harassment), and banning non-disclosure agreements for all discrimination claims.

These various provisions have different effective dates. While employers should keep an eye on all effective dates, employers should take care to review the provisions that are effective immediately or within the next sixty days:

Effective Immediately

  • The law expands the definition of “employer” to include all employers within New York State, regardless of size. The law previously applied only to employers with four or more employees.

Effective October 11, 2019

  • The “severe or pervasive” standard that courts have applied for thirty years is eliminated. The new standard is that an “unlawful discriminatory practice” will be found where the harassment “subject[s] an individual to inferior terms, conditions or privileges of employment” because of the individual’s membership in a protected class. In practical terms, this means that any unwelcome treatment on the basis of a protected characteristic, regardless of its severity, may provide an employee with a legal claim against his/her employer.
  • Employers cannot rely upon the Faragher-Ellerth defense to avoid liability.
  • The statute of limitations for filing sexual harassment claims with the New York State Division of Human Rights is expanded from one to three years.
  • The law prohibits mandatory arbitration for all types of discrimination claims, not just claims involving sexual harassment.

With these significant changes, employers should review everything that might be impacted by the new law, and remember, employers can never offer too much training. Work with counsel to develop a holistic approach. A piecemeal strategy will not work with this new law due to the myriad of significant changes. Get it wrong and open the floodgates to a new set of claims in uncharted territory.

To learn more, join partners Barbara Hoey and Mark Konkel on a Lexology hosted webinar, entitled “The New Sexual Revolution: Radical Changes to US Harassment Laws” on September 24, 2019. For more information and to register, click here.

This article was written by Barbara E. Hoey & Diana R. Hamar, and originally posted to Kelley Drye’s Labor Days Blog.

With the crowd’s chant of “equal pay” echoing at the Women’s World Cup soccer match and again as the champions float down the Canyon of Heroes, the issue of pay equality continues to be in the spotlight, and the New York legislature has jumped onto this moving train.

In addition to passing a powerhouse bill that strengthens protections for workers who claim workplace harassment, New York recently passed two pay equity bills that expand protections for current employees and job applicants.

Now, more than ever, employers in New York State should pay close attention to this rapidly changing legal landscape.

From “Equal Pay for Equal Work” to “Equal Pay for Substantially Similar Work”

The first pay equity bill implements a new standard for assessing pay discrimination claims under the New York Labor Law and expands protections to employees of all protected categories, not simply gender. The implications of the new legislation are best understood by comparing it to the existing law.

The Old Laws – Under existing federal (29 U.S.C. § 206(d)) and state law (New York Labor Law § 194), employers must pay men and women “equal pay for equal work,” defined as requiring equal skill, effort and responsibility performed under similar working conditions.  This seemingly simple standard was often difficult to define in real life, because, well, it’s just never comparing apples to apples. Courts and employers often struggle with these concepts.

The New Law – First, the comparison is no longer just men and women–the law now applies to any employee who falls into any one of the protected categories under the New York State Human Rights Law (NYSHRL), including age, race, creed, color, national origin, sexual orientation, gender identity or expression, military status, disability, predisposing genetic characteristics, familial status, marital status or domestic violence victim status. Thus, this new pay equity legislation reaches far beyond gender equality and creates a new claim for any employee who falls into any of these (many) protected categories.

Second, the new law provides an alternative standard to establish pay discrimination.  Before the new law passed, employees had to prove they did not receive equal pay for “equal work.” Now however, employees can succeed on the merits if they do not receive equal pay for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” The new legislation is significant because it lowers an employee’s burden to establish pay discrimination by allowing employees to compare themselves to employees who share substantially similar, but not “equal,” job responsibilities. In effect, an employee does not need to identify a “comparator” who performs essentially the same work to establish a claim.

While the new law is expansive, it does not amend the affirmative defenses available to employers to justify pay differentials, such as a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or a bona fide factor other than sex, such as education, training, or experience.

New equal pay law will be effective on October 8, 2019.

Salary History Ban Applies Statewide

Following in the footsteps of local municipalities including New York City, Suffolk County, and Westchester County, the New York State legislature passed a bill prohibiting employers from inquiring or relying upon the salary history of a job applicant in determining whether to extend a job offer and in setting an applicant’s salary.  An employer is also prohibited from retaliating against an applicant who refuses to disclose salary history information.

Unlike New York City’s salary history ban law, which only applies to prospective employees, this new legislation also applies to current employees who are seeking internal transfers or promotions.  Upon enactment, employers in New York State are now prohibited from requesting or relying upon a current employee’s salary or salary history in determining whether to interview the current employee for a different position, determining whether to extend a current employee an offer for a different position or promotion, or in setting the current employee’s salary if transferred or promoted.

The new legislation does not prohibit an applicant or current employee from voluntarily, “and without prompting,” disclosing or verifying salary history, including for the purposes of negotiating wages or salary.  Further, if an applicant or current employee responds to an offer of employment or promotion by disclosing wage or salary history to negotiate a higher offer, an employer may confirm wage or salary history at such time.

The salary history law becomes effective on January 6, 2020.

Takeaway for Employers

While we fantasize that management and HR employees read this blog for fun, we surmise that our readers are primarily focused on one thing: should you change existing internal policies and practices in light of this new legislation and if so, how?  Our answer is yes, and we suggest employers consider the following:

  • Engage in a privileged pay equity audit and broaden the lens in which employees are typically grouped for comparison. Employers should look beyond job title, and instead focus on grouping employees who perform similar job functions and tasks since minor differences will no longer justify pay differentials.
  • On that same vein, when employers group employees for comparison, employers can no longer compare employees only by gender but must assess and compare employees of all protected characteristics under the NYSHRL.  This is not a simple task and we recommend employers engage outside counsel, particularly to keep the audit privileged.
  • Although job descriptions are not outcome determinative, job descriptions should be revised to ensure they reflect the actual responsibilities, skills, and effort required of the position to comply with the new legal standard.
  • Last, but certainly not least, we recommend that HR and management take a second look at internal hiring and promotion practices due to the new salary history ban legislation. We recommend employers assess internal transfer applications, form interview questions, or anything related to the internal hiring and transfer process. Specifically, employers should take care to ensure that internal applications do not request salary history or wage information and that model interview questions for internal hiring are devoid of any inquiries regarding the same.

Navigating this new legislation is tough-with amorphous standards, employers are often left guessing how new laws will be enforced in the real world.  Regulations have not been issued yet, leaving pay equity a hot legal topic. Join Kelley Drye on September 17, 2019, as we tackle this rapidly changing landscape in a webinar entitled, The “Year of the Woman” – Pay Equity and Gender Equality Legislation and Litigation. This webinar is part of WORKing Lunch, a larger educational series hosted by Kelly Drye’s Labor and Employment group. To view webinars programs and date click here. To register for one or more webinar in this series please email marketing@kelleydrye.com.

This article was written by Constantine (Dino) Koutsoubas, Jennifer Fischer, and Matthew C. Luzadder and originally posted to Kelley Drye’s Labor Days Blog.

On June 25, 2019, Governor Jay B. Pritzker signed the Cannabis Regulation and Tax Act (HR1438) (“Cannabis Act”) into law. When the law goes into effect on January 1, 2020, Illinois will be the second largest state (after California) to allow the use and possession of recreational cannabis for all citizens over age 21. Notably, Illinois is the first state to legalize recreational cannabis use through legislative action, rather than ballot initiative.

Businesses in Illinois should have one simple question in mind: what can we do about drug testing now that employees have the right to use cannabis under state law? Can these employers still prohibit their employees from using cannabis when they are at work? Can these employers still prohibit their employees from partaking in cannabis when they are not at work?

The answer is, of course, it depends. Unfortunately, the Cannabis Act provides conflicting language on precisely what employers can do in terms of drug testing for employees.

What Employers Can Do

● Employers May Restrict Being Under the Influence of Cannabis During Working Hours

First, employers are allowed to restrict employees from being “under the influence of or use cannabis in the employer’s workplace or while performing the employee’s job duties or while on call.” Cannabis Act at § 10-50(b). Illinois employers may need to amend existing policies to expressly state that the use of cannabis will not be tolerated on premises and that employees are not to be under the influence of cannabis during working hours. Specifically, Section 10-50(e) protects employers for actions founded on an employer’s “good faith belief that an employee used or possessed cannabis in the employer’s workplace or while performing the employee’s job duties.”  Workplace possession of paraphernalia, however, is not explicitly discussed.

● Federally Regulated Employers May Continue Their Zero-Tolerance Policies

Second, as with Illinois’ medical cannabis law, an employer may continue any testing program that federal, state, or local restrictions require. For instance, companies that must comply with Department of Transportation regulations to maintain a drug testing program—airlines, trucking companies, rail companies, etc.—may maintain those policies as it pertains to cannabis. Id. at § 10-50(g) Similarly, organizations may keep their existing policies in place if changing those policies would jeopardize federal contracts or federal grants. Id. These federally regulated employers should update their policies to note that they will continue to test for cannabis despite its legal status in Illinois.

● Employers may adopt “Reasonable” Zero Tolerance Policies

On the one hand, Section 10-50(a) of the bill states that employers are allowed to adopt “reasonable zero tolerance or drug free workplace policies, or employment policies concerning drug testing, smoking, consumption, storage or use of cannabis in the workplace or while on-call provided that the policy is applied in a nondiscriminatory manner.” (emphasis added). Furthermore, Section 10-50(c) allows employers to discipline or terminate employees who violate those policies. These sections would tend to indicate that an employer could maintain a policy of random drug screening for cannabis in certain situations similar to those for federally regulated companies. But courts may have to decide what is a “reasonable” zero tolerance or drug free workplace policy in a particular instance.

● Employers May Use “Good Faith” To Determine Drug Use At Work

Section 10-50(d) notes that “[a]n employer may consider an employee to be impaired or under the influence of cannabis if the employer has a good faith belief that an employee manifests specific, articulable symptoms while working that decrease or lessen the employee’s performance of the duties or tasks of the employee’s job position….” Moreover, while Section 10-50(e) of the Act provides immunity to an employer if it takes an action against any employee, including testing that employee under a policy, or takes action against an employee for refusing testing, the action must be “based on the employer’s good faith belief that an employee used or possessed cannabis in the employer’s workplace or while performing the employee’s job duties or while on call in violation of the employer’s employment policies.” These provisions of the Cannabis Act indicate that an employer should meet a “probable cause” or reasonable suspicion-like standard before requesting (or acting on) a drug test for cannabis. A positive test, in itself, is unlikely to be sufficient to shield the employer from liability if the test administration lacked a good faith basis.

Impact on the Illinois Right to Privacy in the Workplace Act

The Cannabis Act’s amendments to the Illinois Right to Privacy in the Workplace Act, 820 ILCS 55/5, and their subsequent impact, are not clear. The existing statute reads, “it shall be unlawful for an employer to refuse to hire or to discharge any individual … because the individual uses lawful products off the premises of the employer during nonworking hours.” 820 ILCS 55/5(a). The Cannabis Act, however, confirms that “lawful products” means “products that are legal under state law,” which must be read to explicitly include cannabis given this context. Cannabis Act at § 900-50. Compare to Coats v. Dish Network, L.L.C., 303 P.3d 147, 150–51 (Colo. App. 2013) (holding that that “lawful activity” under a similar statute did not include medical marijuana because medical marijuana use was prohibited by federal law.)

But, at the very beginning of the amendment to the Right to Privacy in the Workplace Act, the Cannabis Act adds an explicit reference to Section 10-50 of the Cannabis Act in its initial exclusionary clause:

“Except as otherwise specifically provided by law, including Section 10-50 of the Cannabis Regulation and Tax Act … it shall be unlawful for an employer to refuse to hire or to discharge any individual … because the individual uses lawful products off the premises of the employer during nonworking and non-call hours.” (additions boldeded).

Arguably, the inclusion of this amendment effectively removes the Cannabis Act from being included in the Illinois Right to Privacy in the Workplace Act, though it is not clear that this was the intention of the General Assembly.

In the end, it is unclear what, if anything, the changes to the Illinois Right to Privacy in the Workplace Act mean in the context of Section 10-50 of the Cannabis Act. At the very least, Section 10-50 of the Cannabis Act seems to trump the Illinois Right to Privacy in the Workplace Act to the extent there is a conflict.

Reasonable Drug Testing Policies 

Under 10-50(a), an employer is allowed to have “reasonable” drug testing policies, but affected employees will surely test those policies in court if the policies seek to regulate an employee’s legal cannabis usage.

A zero-tolerance testing policy against cannabis might be reasonable for workplace settings where life and limb might be at risk (i.e. construction sites, manufacturing involving heavy equipment, hospitals). In those situations, the risk of death or serious bodily harm due to impaired employees might justify a proactive testing program—particularly if the outward symptoms of impairment may not present themselves until it is too late.

On the other hand, it may not be reasonable to have a zero-tolerance testing program in an office or retail setting. A consulting firm, for instance, might have a hard time convincing a judge that it has an interest in prohibiting cannabis usage outside of its offices.

Changes in Testing Methodologies May Change The Landscape

The answers might become clearer as drug-testing methodologies improve. The active component of cannabis that leads to impaired judgment is delta-9-tetrahydrocannabinol (“delta-9-THC”). Once it is in the blood, delta-9-THC has a half-life of less than 30 minutes in the blood. Indeed, because of this, delta-9-THC is undetectable in urine. That is why most tests look for the metabolites of delta-9-THC—the chemicals that the body converts delta-9-THC to in order to remove it from the body. Detection of these metabolites occur for up to 30 days post cannabis usage.

The current tests are not precise enough to fit into the legal framework of the Cannabis Act. This is because, by their very nature, they necessarily will capture legal cannabis usage in Illinois. If future tests were to focus simply on delta-9-THC as opposed to metabolites, drug testing will be able to accurately capture an employee being under the influence of cannabis while at work or on a call, rather than his or her legal use of cannabis during non-business hours.

Until there is a delta-9-THC test that can be quickly administered, non-federally regulated employers should be cautious about maintaining a cannabis testing protocol for their employees.

Suggested Policy Revisions

Employers who implement drug testing to employees or job applicants should to re-visit their drug testing policies to make sure they are in conformance with the Cannabis Act. Here is what the policy can require:

● employees cannot come to work under the influence of cannabis;
● employees cannot use cannabis products during work hours; and
● the employee to submit to a drug test if the employee exhibits behaviors consistent with being under the influence of cannabis.

To the extent an employer wishes to continue their zero-tolerance approach under current testing methodologies, they should be prepared to provide a reasonable justification for that approach.

Employers should also ensure that if comprehensive drug testing is done, the testing is either not testing to cannabis, since it could result in a false positive for an employee’s legal use of cannabis outside of working hours, or the testing is designed to detect recent cannabis usage, once the testing methodologies have advanced.

If you have questions about your policies regarding drug testing, please contact Kelley Drye’s Labor and Employment Team.

This article was written by Nicholas J. Kromka, Jennie Woltz, and Mark A. Konkel, and originally posted to Kelley Drye’s Labor Days Blog.

Ah, summer: less-demanding schedules, lighter workloads, and a more relaxed work wardrobe. In keeping with the professional reputation of lawyers as killjoys, however, we recommend that HR professionals act more like Aesop’s ants—using the summer to prepare for fall—than the grasshopper, who was so busy partying that he failed to prepare at all. So listen, Grasshopper: savvy HR leaders know to use their summer downtime to set themselves up for success when we all go “back to school.”

Here are seven suggestions of what New York HR professionals can get ahead of over the summer:

1. Coordinate Sexual Harassment Prevention Training – Under New York State law, all employers must provide annual sexual harassment prevention training that satisfies the State’s training requirements by October 9, 2019 (NYC has its own requirements, as we describe here). An employer can satisfy these requirements by either adopting the State’s model training documents or by providing live or interactive online/video training which meets or exceeds the State’s minimum standards. With a mid-fall deadline quickly approaching, summer is the perfect time to think about, and possibly complete, your workforce’s first annual training.

2. Ensure Compliance with Sick and Safe Leave Law Requirements – Both New York City and Westchester County have recently adopted new laws and requirements for paid sick and safe leave, and the Westchester law has approaching deadlines. For instance, the new Westchester County, New York Sick Leave Law requires employers to provide employees a copy of the law and a notice of how the law applies to them, either when an employee starts at the organization, or by July 9, 2019, whichever is later. Westchester employers must also post the law and a poster in a place accessible to all employees (the law and its requirements can be found here).

Employers who have employees in both NYC and Westchester must be careful to note some key differences between the New York City and the Westchester laws. For example, employees under New York City law accrue safe leave based on hours worked, whereas employees under Westchester County’s new Safe Time Leave Law do not accrue leave, but are instead entitled to take a specific amount of protected, paid leave. The safe leave provision in Westchester is also in addition to the sick leave provision, whereas in NYC the two are combined. Given the new requirements and recent changes, this summer is an ideal time to get a handle on the state of the law that applies to your organization, and to make sure your notice and posting procedures are compliant, that your payroll systems are accruing/deducting sick and safe leave banks correctly, and that your HR departments are poised to handle requests for these kinds of leaves in the right way. You may also need to consider training for your supervisors who are often your first line of defense when fielding employee requests for leave.

3. Implement Changes Based on Paid Family Leave Law – You readied your workforce for New York Paid Family Leave when it first started in January 2018, and so you know that each year until at least 2021, each January will bring a slightly new coverage and payment scheme.  Currently, as of January 1, 2019, under the New York State Paid Family Leave Law, eligible employees can take up to 10 weeks of paid leave. Additionally, employees taking paid leave this year receive 55% of their average weekly wage, capped at the current statewide average weekly wage of $1,357.11, with a maximum weekly benefit of $746.41. Employees contribute 0.153% of their gross wages each pay period to Paid Family Leave this year. In January 2020, employees will still be eligible for 10 weeks of paid leave, but will instead receive 60% of their average weekly wage.

Given these changes, summer is a good time to update any Paid Family Leave forms distributed by your organization to reflect the increased number of weeks of paid leave employees can take and what their rights and responsibilities are with respect to taking paid leave. Managers (and staff) should be reminded or notified about the increase in benefits that is coming soon, and how that will affect their paychecks. Likewise, you should consider using this summer to work with payroll personnel to ensure employee contributions are being properly deducted from employees’ wages.

4. Review Employee Handbooks – Reviewing your organization’s policies and procedures annually is always best practice. Take advantage of the summer to make sure your organization’s policies are complete, up to date and well-drafted. Once reviewed, you still need approval from key figures and stakeholders to implement any policy changes. You may find decision-makers more willing to come to the table during the summer months when work demands tend to be lighter and the work environment is more relaxed.

5. Address Compensation Program – Since many salary surveys are published in the spring, summer is a good time for salary benchmarking activities. Use the summer (and any available summer interns you may have!) to collect and analyze the appropriate data to determine the proper market comparisons for your organization’s job listings. You do not want to find out too late that the reason a position is not filled is because the salary posted on the job listing is below market. Also consider reviewing current job descriptions during this time to ensure accuracy with tasks actually performed, and to double-check exemption categories. Taking time to address any pay equity issues you discover when assessing your compensation program is also a good idea.

6. Plan Employee Engagement Events – Summer is an excellent time to start planning and booking engagement events and activities for the upcoming winter, spring and summer. Booking now guarantees your desired venues are reserved well before they become unavailable. The summer’s warm-weather also makes it a great time to get employees outside. Try to coordinate a few outdoor outings this summer to generate employee satisfaction and inspire workplace commitment.

7. Recruit for the Upcoming Fall – Slower summertime business means there is room for other initiatives like recruitment. Many businesses also find themselves with higher-than-normal resignation rates in the summer, as members of their workforce return to school in the fall. With September recruiting around the corner, now is an opportune time to start reviewing applications and conducting interviews to fill open positions, or to plan to fill positions that will open in the fall.

So make your summer work for you. Better to move the HR ball forward methodically now than frantically later. You’ll thank us in September.