Category: Employment Articles

Navigating the Intersection of Artificial Intelligence and Employment Law: An EEOC Reminder

Posted on by forework

Many employers, in the interest of efficiency, are beginning to incorporate artificial intelligence (“AI”) into their workplaces, and the Equal Employment Opportunity Commission (“EEOC”) has established that it will ensure that the incorporation of AI into the workplace does not violate federal employment laws. 

On August 9, 2023, a New York court filing revealed that a tutoring company that provides English-language tutoring services to students in China, iTutorGroup Inc. (the “Company”), agreed to pay $365,000 to settle claims that its use of an AI tool automatically rejected female applicants over 55 years of age, and male applicants over the age of 60.

The case, filed in 2022, was brought to the EEOC’s attention by an applicant who was rejected from a position with the Company, but later secured an interview by using a younger birthdate.  The EEOC filed a lawsuit against the Company on behalf of more than 200 applicants, alleging both age and gender discrimination.  The Company denied the allegations and continues to deny any wrongdoing.  Nonetheless, the Company settled the charges with the EEOC for a hefty price.

In addition to paying $365,000, in the settlement, the Company agreed to adopt anti-discrimination policies and conduct trainings.  The Company is also required to reconsider all applicants that were allegedly rejected because of their age.  With this settlement, the EEOC has set a precedent, and similar lawsuits will likely follow.

In addition to this groundbreaking settlement, the EEOC has shown a renewed interest in employment practices involving AI. As part of its Artificial Intelligence and Algorithmic Fairness Initiative, the EEOC issued a second technical assistance document (TAD) addressing AI use under Title VII of the Civil Rights Act of 1964 in May 2023.  Crucially, the document provides that employers cannot rely on a vendor’s assurances that its AI tool complies with federal employment laws, leaving the employer liable if the tool results in an adverse discriminatory impact.

As companies continue to incorporate AI at a rapid pace, and the technology continues to develop faster than any regulations, issues will continue to arise.  Plaintiffs’ employee firms may also pursue such cases, either individually or on a class action basis.

AI’s role in employment-related decisions offers both opportunities and challenges. While the use of automated decision-making tools can boost productivity, the iTutorGroup case serves as a stark reminder that employers must be vigilant in ensuring compliance with existing laws.

NLRB’s Decision Triggers Obligation to Once Again Review Your Employee Handbooks

Posted on by forework

The National Labor Relations Board (“NLRB”) has yet again issued new standards by which it will judge employers’ workplace rules (such as codes of conduct).  The NLRB’s new framework is relevant to companies because it limits their ability to discipline or terminate employees for, what the employer would ordinarily consider, infractions of reasonable workplace rules.  Here, we discuss what employers need to know.

On August 2, 2023, the NLRB issued a decision in Stericycle Inc., re-introducing an employee-friendly standard for evaluating workplace rules.  Under this new standard, an employer’s workplace rule will be found “presumptively unlawful” if it “chills” employees from engaging in protected conduct under Section 7 of the National Labor Relations Act (“NLRA”).  Protected conduct under the NLRA includes “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection,” as well as the right “to refrain from any or all such activities.”  Thus, any work policy or procedure will be reviewed by the NLRB through this new – employee friendly – lens and if the policy does not meet the legal requirements, the policy itself will be deemed void and any employment action taken per the policy may be rescinded by the NLRB, with penalties imposed against an employer. 

Prior to this decision, the NLRB had a more balanced approach for determining the lawfulness of workplace policies, taking into consideration employers’ legitimate justification for its policies.  Now, the employer’s policy and application of that policy  may have to give way to the NLRB’s interest in promoting employee speech and union organization efforts or other “concerted” activity that is not in the context of union organization.

The decision expressly overrules the Board’s previous, more employer friendly decisions. In doing so, it dismisses the categorization approach, instead requiring a case-by-case analysis from the employee’s perspective.  The decision is a clear signal that the Board is adopting a more employee-friendly interpretation, with an increased likelihood of challenges to established workplace rules.

As a result of these NLRB changes, employers should:

  1. Review Workplace Rules: Examine handbooks and policies for any provisions that might interact with Section 7 rights, such as personal conduct policies, non-disparagement provisions, social media policies, and confidentiality rules.
  2. Tailor Rules Narrowly: The decision imposes a heavy burden on employers to justify their workplace rules.  Employers should consider aligning rules closely with specific business needs and articulate the justification clearly in the policies.
  3. Consult Legal Counsel Before Taking Disciplinary Action: Engage with labor law counsel under attorney-client privilege prior to taking disciplinary action pursuant to workplace rules, to ensure that the action will not violate the new NLRB standards.
  4. Stay Informed: The NLRB made an explicit statement that Stericycle does not provide detailed guidance.  As such, further guidance may come through memorandums or subsequent decisions.

The NLRB’s recent decisions, particularly in Stericycle, signify a clear shift towards a more employee-centric legal framework.  Employers must navigate this carefully, seek legal guidance as necessary, and ensure that their policies are crafted with precision and clarity.

Employers, You can Continue to use Outdated FMLA Forms

Posted on by forework

June 30, 2023, has come and gone, but the Family and Medical Leave Act (FMLA) forms with that expired date can still be used, according to the U.S. Department of Labor (DOL).

Under the FMLA, eligible employees of covered employers may take unpaid, job-protected leave for specified family and medical reasons, such as pregnancy, chronic health conditions or the care of a family member with a serious health condition.  Employers use the forms to comply with the notice requirements under the Act and to request medical certification from an employee’s health care provider.  The five optional-use forms from the DOL are still applicable, regardless of the expiration date, the DOL noted on its website.

“The content of the information contained within the optional-use DOL form is still applicable, regardless of the expiration date,” said Edwin Nieves, a DOL spokesman. “The expiration date on the DOL forms is related to the collection of information as required by the Office of Management and Budget, and not relevant to the content of the required information.” The DOL is mandated to review the forms and notices every three years.

Employers are not required to use the DOL’s forms, which are only model versions. They may use their own forms if they provide the same basic notice information and require only the same basic certification information.   “Employers must accept a complete and sufficient certification” of the employee’s need for FMLA leave, “regardless of the format,” the DOL said. The employer cannot refuse:

  • A fax or copy of the certification.
  • A certification that is not completed on the employer’s standard company form.
  • Any other record of the medical documentation, such as a communication on the letterhead of the health care provider.

“The employer cannot reject a certification,” the DOL noted, “that contains all the information needed to determine if the leave is FMLA-qualifying.”

Unemployment Rate Edges Lower, NY Employers Receive Additional UI Tax Charges

Posted on by forework

According to the Society for Human Resources Management, U.S. employers added 209,000 new jobs in June, below economists’ expectations for the month, and unemployment rate fell to 3.6 percent.

In New York, New York employers have been receiving letters from the Unemployment Insurance Board which demand additional payments for the “IAS Surcharge.” As a reminder, the surcharge is intended to replenish the State’s UI fund, and make up for the fact that the New York State Department of Labor entirely depleted the UI fund by paying out so many benefits during the pandemic. (As we had written on other occasions, the State’s Comptroller found that the Department of Labor errors caused the State to pay out “an estimated billions of dollars” in UI benefits.) The State’s website explains the reasons for the IAS Surcharge that employers will have to pay this year, and potentially for many years to come:

“In March 2020, the federal government passed the CARES Act, creating several pandemic unemployment programs to support out-of-work Americans impacted by the COVID-19 pandemic. As New York State hit unemployment levels not seen since the Great Depression, the Department of Labor would go on to pay more than $105 billion dollars in unemployment and pandemic unemployment benefits between March 2020 and September 2021. As a result of this unexpected emergency, the Unemployment Insurance (UI) Trust Fund was depleted. Like dozens of states around the country, New York State borrowed funds from the federal government to maintain UI and pandemic benefits while the pandemic programs were in effect.

During periods in which there is an outstanding federal loan, New York State law requires contributing employers to pay an annual Interest Assessment Surcharge, or IAS. Beginning in June 2023, employers who make unemployment insurance contributions will be notified of the 2023 IAS amount due. Payment of the IAS is due within 30 days of the date of this notice. Unless the Federal government chooses to abate all or part of the interest incurred or the principal balance amount is repaid with no more interest accrued, businesses will be required to make annual IAS payments until all interest has been fully paid off.”

Attorneys for Fired Worker Claim Text Message was Timely Notice of Need for Leave

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Counsel for a former Pennsylvania juvenile probation officer who alleged that the state fired her in violation of the ADA and FMLA for not giving enough notice of her leave to undergo IVF told the Third Circuit that texting her supervisor a few days prior to the treatment was adequate notice for her employer to accommodate her leave.  The employee had found out on June 5, 2017, that her embryo transfer would take place five days later.  She texted her supervisor the same day and requested leave the following day.  The employer fired the employee after she took the leave.  The employee then sued, alleging that the employer was required to provide the leave for the employee’s IVF embryo transfer, in accordance with the FMLA and ADA.

In court, the employee argued that the laws were silent on how far in advance someone has to request Family and Medical Leave Act and Americans with Disabilities Act leave.  The employee’s attorneys argued that she did not know when her embryo transfer would occur and, thus, the employee was unable to inform the department of her procedure until it was actually scheduled.  The Third Circuit pushed back on the employee’s position, asking the employee whether she could have at least provided notice to her employer that she was undergoing IVF and would need to take leave at some point in time that was unknown.   The attorney for the state argued that even though the employee’s procedure date was a “moving target,” she knew it would happen and should have notified her employer.

Employers dealing with employee leave issues for any disability or medical reasons should tread carefully.  The employer in this case might ultimately prevail; that is to be determined.  However, the cost and time lost defending the lawsuit are reasons enough to diligently examine all options before terminating an employee who had requested leave due to the medical reasons.  Such terminations are almost always “high risk” terminations and need to be carefully considered before execution. 

Reminder: I-9 Flexibilities End on July 31, 2023

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As a reminder, the U.S. Department of Homeland Security (DHS) and Immigration Customs and Enforcement (ICE) has announced that employers will be required to comply with all I-9 requirements by July 31, 2023, irrespective of the temporary regulatory waivers from compliance that were permitted during COVID.  In effect, all employees onboarded using remote verification must have in-person physical verification of their identity and employment eligibility documentation used for their Form I-9 by August 30, 2023.

Employers that onboarded employees “remotely” since the COVID pandemic began must catch up by August 30 and complete physical re-verification of these individuals employment authorization documents.   For employers that have remote employees, there is no prohibition on utilizing a designated represtnative or agent of the employer for purposes of completing Section 2 of the I-9 Form.  The designated representative may be an adult family member, friend, notary public (but not one who is being paid to perform this service), or other designated person to act as an agent.  Ultimately, however, the employer bears responsibility for any errors in this process, so employers should exercise some diligence in selecting a designated representative. 

When the physical reverification is conducted, the designated representative or company official must review the documentation. If the same employer representative reviewed the documents virtually and in person, one should note “COVID-19 Documents – physically examined on (date) by (name)” in the Form I-9, Section 2 “Additional Information” field. However, if the employer representative who virtually verified the documents will not be the same as the person physically examining the Employment Authorization and identification documentation, one needs to complete a new Section 2 of the Form I-9 and attach it to the old Form I-9.

Employers, You can Continue to use Outdated FMLA Forms

Posted on by forework

June 30, 2023, has come and gone, but the Family and Medical Leave Act (FMLA) forms with that expired date can still be used, according to the U.S. Department of Labor (DOL).

Under the FMLA, eligible employees of covered employers may take unpaid, job-protected leave for specified family and medical reasons, such as pregnancy, chronic health conditions or the care of a family member with a serious health condition.  Employers use the forms to comply with the notice requirements under the Act and to request medical certification from an employee’s health care provider.  The five optional-use forms from the DOL are still applicable, regardless of the expiration date, the DOL noted on its website.

“The content of the information contained within the optional-use DOL form is still applicable, regardless of the expiration date,” said Edwin Nieves, a DOL spokesman. “The expiration date on the DOL forms is related to the collection of information as required by the Office of Management and Budget, and not relevant to the content of the required information.” The DOL is mandated to review the forms and notices every three years.

Employers are not required to use the DOL’s forms, which are only model versions. They may use their own forms if they provide the same basic notice information and require only the same basic certification information.   “Employers must accept a complete and sufficient certification” of the employee’s need for FMLA leave, “regardless of the format,” the DOL said. The employer cannot refuse:

  • A fax or copy of the certification.
  • A certification that is not completed on the employer’s standard company form.
  • Any other record of the medical documentation, such as a communication on the letterhead of the health care provider.

“The employer cannot reject a certification,” the DOL noted, “that contains all the information needed to determine if the leave is FMLA-qualifying.”

Unemployment Rate Edges Lower, NY Employers Receive Additional UI Tax Charges

Posted on by forework

According to the Society for Human Resources Management, U.S. employers added 209,000 new jobs in June, below economists’ expectations for the month, and unemployment rate fell to 3.6 percent.

In New York, New York employers have been receiving letters from the Unemployment Insurance Board which demand additional payments for the “IAS Surcharge.” As a reminder, the surcharge is intended to replenish the State’s UI fund, and make up for the fact that the New York State Department of Labor entirely depleted the UI fund by paying out so many benefits during the pandemic. (As we had written on other occasions, the State’s Comptroller found that the Department of Labor errors caused the State to pay out “an estimated billions of dollars” in UI benefits.) The State’s website explains the reasons for the IAS Surcharge that employers will have to pay this year, and potentially for many years to come:

“In March 2020, the federal government passed the CARES Act, creating several pandemic unemployment programs to support out-of-work Americans impacted by the COVID-19 pandemic. As New York State hit unemployment levels not seen since the Great Depression, the Department of Labor would go on to pay more than $105 billion dollars in unemployment and pandemic unemployment benefits between March 2020 and September 2021. As a result of this unexpected emergency, the Unemployment Insurance (UI) Trust Fund was depleted. Like dozens of states around the country, New York State borrowed funds from the federal government to maintain UI and pandemic benefits while the pandemic programs were in effect.

During periods in which there is an outstanding federal loan, New York State law requires contributing employers to pay an annual Interest Assessment Surcharge, or IAS. Beginning in June 2023, employers who make unemployment insurance contributions will be notified of the 2023 IAS amount due. Payment of the IAS is due within 30 days of the date of this notice. Unless the Federal government chooses to abate all or part of the interest incurred or the principal balance amount is repaid with no more interest accrued, businesses will be required to make annual IAS payments until all interest has been fully paid off.”

US DOL Tip Credit Rule Stays, Says a Federal Judge

Posted on by forework

The U.S. Department of Labor’s rule limiting subminimum-wage payments to tip-earning workers is permissible under federal labor law, a Texas federal judge ruled on Thursday, declining restaurant industry groups’ competing bid for a win and renewed request to block the law. The rule, which took effect in December 2021, allows employers to pay tipped wages for no more than 30 consecutive minutes when a tipped worker is engaged in a nontip-producing task and also disallows tipped wages if a worker spends more than 20% of their workweek on tip-supporting work.  The law also requires employers to pay full minimum wage, not a tipped wage, for nontipped duties like maintenance work, and put time limits on when employers can pay workers subminimum wages when they are engaged in side work that does not produce tips, such as a bartender preparing garnishes or a server cleaning the dining room. 

Restaurant and other industry groups sued to block this rule, arguing that the Department misconstrued the FLSA in promulgating the rule.  However, the judge agreed with the U.S. Department of Labor, finding that the Department’s rule was a “permissible construction” of the tip credit statute, which allows employers to pay workers subminimum wage based on the expectation they will make up the earnings in tips.  The restaurant association is likely to appeal the court’s decision.  In the meantime, employers are expected to adhere to the Department’s rule. 

Food Delivery Giants Seek to Block NYC Wage Law for Delivery Workers

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Food delivery giants DoorDash and Grubhub asked a New York state court to block implementation of a New York City rule that would raise wages for delivery workers, arguing that the regulatory process was flawed.  The rule at issue would compel delivery companies to either pay workers $20 per hour they spend logged into food-delivery apps or $33 per hour spent making deliveries. The rule, which is set to take effect July 12, is the result of the New York City Council’s 2021 passage of Local Law 115, which authorized the City’s Department of Consumer and Worker Protection (“DCWP”) Bureau to study the pay and working conditions of food delivery workers and issue new minimum pay rules for the industry.

Grubhub and DoorDash accused the DCWP of neither studying the issue accurately nor applying its learnings fairly. The companies said that the rule was largely built on survey data of delivery workers that was subjective and biased.  “DCWP merely swept aside all criticism of the surveys claiming without citation to any authority … that it had ‘reviewed the methodological critiques provided in comments but was not persuaded that the survey is inappropriate,” the companies said. “These conclusory statements do nothing to remedy any … systemic methodological failures.”

The companies also criticized the City’s decision to exempt companies like Instacart that primarily service grocery and convenience stores, rather than restaurants, from the new wage rule. Local Law 115 directed the DCWP to study the working conditions of all food delivery workers, the companies said, not to target specific firms or subindustries for reform.

The companies also said that the rule’s goal of compensating workers for all time spent on call, not just time spent delivering food, was irrational. In contrast to employees, who, under the Fair Labor Standards Act, are entitled to pay while waiting for work assignments, the companies said app-based delivery workers are free to work for competitors, complete personal chores or just hang out between deliveries.

“App-based workers choose to log in to petitioners’ systems entirely on their own; they are not under the platform’s control; and they have independent authority to accept, deny, or ignore offers … as they please,” the companies said. “DCWP’s attempt to analogize its rule to FLSA requirements is irrational.” The companies asked the court to immediately block the city from enforcing its wage rule, as well as completely vacate and annul it.