2019 Labor and Employment Law Predictions
Get ready! 2019 is increasingly looking like an exciting year of updates regarding labor and employment law changes that will affect employers and human resource professionals throughout the country. Already the Social Security Administration has announced that it will begin issuing No Match Letters in the spring for employees whose names do not match their social security numbers, which will require companies to work with employees to solve this problem. Moreover, the new year has also started with a number of states that have begun their legislative agenda as new members of the legislature and new governors have taken office. Many states are looking to raise the minimum wage, add paid sick leave, or take other actions that will affect employers this year.
Here are 10 labor and employment law predictions that may also happen this year:
1. Sexual Harassment Lawsuits Will Increase
The #Metoo movement will continue to grow in 2019. The preliminary data from the Equal Employment Opportunity Commission (EEOC) showed that charges alleging sexual harassment increased by more than 12% from 2017 into 2018. Unfortunately, this is an issue that is not going away. My prediction is that there will be more of these charges and lawsuits going into this year.
There will also be several states enacting new laws to combat sexual harassment this year. California already has new requirements that just went into effect:
Starting in 2019, employers with five or more employees must provide two hours of training to supervisors and one hour to all other employees within six months of their hire (or promotion to supervisor) and every two years thereafter. Temporary and seasonal employees must be trained within their first 30 days or 100 hours, whichever comes first.
No company wants to be thought of as the company that allowed sexual harassment. Just look at what happened to former Top Chef star, Mike Isabella, and his restaurants:
In a Chapter 7 filing on Tuesday, which seeks to operate six restaurants through December 27 before closing them permanently, Isabella argues that the local and national media relentlessly threw shade on his business operations even after he agreed to a confidential settlement in May with former Isabella Eatery manager, Chloe Caras, who sued for “extraordinary sexual harassment.” Isabella, documents note, apologized publicly to a local TV reporter and implemented new “zero tolerance” sexual harassment policies at all of his restaurants. He was ready to “restore confidence in Mike Isabella and his restaurants.”
Isabella lost his restaurants after he was accused of sexual harassment. Granted, in this case the accusations were very serious and against the owner of the restaurant. However, this can happen to any business and can be caused by employees at any level of the business. There will be more lawsuits, and charges regarding sexual harassment in 2019 than there were in 2018.
2. The Supreme Court Will Take a Case to Decide Whether Sexual Orientation is Protected under Title VII
The Supreme Court is considering taking a case to determine whether Title VII protects employees from discrimination based on their sexual orientation. The issue hinges on whether “Because of … sex” includes sexual orientation or is limited to a person’s sex.
Currently there is a split among the Circuit Courts. The 2nd and 7th Circuit have found that Title VII prohibits sexual orientation-based discrimination and the 11th Circuit has found that sexual orientation is not protected under Title VII. In February 2019, the 5th Circuit joined the 11th Circuit in finding that sexual orientation is not protected under Title VII.
The Supreme Court will grant the writ of certiorari and they will review the case. If the Supreme Court decides to review the issue, then it will be one of the most important cases that the Court considers next term.
3. The Department of Labor Will Increase the Salary Threshold for the Overtime Rule
The Department of Labor (DOL) is still undergoing rulemaking to raise the salary threshold that is required to meet the overtime exemption, which allows companies to pay workers a salary and not have to pay employees overtime regardless of the number of hours that they work in a week. Currently, an employee must be paid at least $455 per week (which equals $23,660 annually) to meet the salary threshold. In 2016, the Obama administration raised the salary threshold to $913 a week (or $47,476 a year). A federal district judge eventually blocked that rule and questioned the DOL’s ability to set any salary requirement to be exempt from overtime.
The DOL will attempt to raise the threshold to around $30,000-$33,000 this year. The new salary threshold will be challenged again to determine whether the DOL even has the authority to set a salary threshold.
4. Paid Family Leave is Coming
Paid family leave is coming. This is a question of when and not if. I believe that it will be implemented either this year or next year. Here is what I said in an earlier post on my blog:
Various politicians have expressed their support for paid family leave. Ivanka Trump and The White House have discussed their support for family leave. Marco Rubio introduced a plan to allow new parents to delay taking their Social Security benefits in exchange for two months of paid parental benefits. The Democratic Party Platform also called for paid family leave.
One poll showed that 54% of Americans think the government should require all employers to provide 12 weeks of paid family and medical leave. Only 29% of the respondents disagreed and 17% were undecided. With as much support as there is for paid family leave, it seems certain that Congress and the President will eventually enact a paid family leave law.
5. The National Labor Relations Board Will Issue a Joint Employer Standard
In September, the National Labor Relations Board (NLRB) had issued a notice of proposed rulemaking to change the joint employer standard. The joint employer standard is important to determine whether companies are liable for violations of the law that are committed by staffing companies or franchises. For example, McDonalds has been combating a charge that it is a joint employer with its franchisees and is responsible for these small business owners firing employees that wanted higher wages.
Here is the release from the NLRB with the proposed rule:
Under the proposed rule, an employer may be found to be a joint-employer of another employer’s employees only if it possesses and exercises substantial, direct and immediate control over the essential terms and conditions of employment and has done so in a manner that is not limited and routine. Indirect influence and contractual reservations of authority would no longer be sufficient to establish a joint-employer relationship.
Unfortunately for the NLRB, the DC Circuit Court recently found that:
The question of whether there is a joint employment relationship under the National Labor Relations Act (NLRA) must be answered by applying the common law test for whether there exists an “agency” relationship. The Board has no special expertise relevant to defining the common law of agency. Therefore, according to the Court of Appeals, the Board is awarded no deference in this area. In other words, the Board does not have the right to define or redefine joint employment in a way that would be inconsistent with the common law meaning of “agency.”’
My prediction is that the NLRB moves forward with its rulemaking and ignores the decision of the DC Circuit. This will have a big impact on employers that use staffing companies because they will not (generally) be liable for violations that the staffing company commits against its employees unless the company exercises direct control over the employees rather than merely having the ability to direct the staffing company employees.
To clarify, it is basically the difference between a supervisor of a hotel telling the landscaping crew (that is employed by a staffing company) how to perform their jobs and exactly what needs to be done (direct control) versus the staffing company supervising, disciplining, and directing the employees with the supervisor or owner of the hotel merely having the authority to direct these landscaping employees (indirect control).
I know it is a bit convoluted, but it is incredibly important. Depending on how this decision turns out it could have a big impact on any company that franchises businesses. Yes, that means that it will impact every McDonalds and Chick-Fil-A owner.
6. Independent Contractor Issues Will Arise in Many States
Independent contractors are everywhere and the law concerning them is far from settled. My prediction is that more states will seek to limit the abilities of companies to use independent contractors especially when these contractors form a part of the company’s core business (think UBER drivers).
The California Supreme Court issued a landmark decision last year and the effects are still being felt. Below is the new test (called the ABC test) that the court implemented. For a worker to be an independent contractor the company must show:
1) that the company does not direct the worker in the performance of her job, 2) that the worker performs work outside the scope of the company’s typical business (such as a freelance artist who designs fliers for a moving company), and 3) that the worker has made the affirmative decision to go into business for herself, perhaps by incorporating or starting an LLC.
New Jersey and Massachusetts also use the ABC test to determine whether a worker is an independent contractor. Many of the companies that use independent contractors have a bad reputation and it is likely that more state supreme courts and possibly legislatures will adopt the ABC test. Regardless, it will get harder (at the state level) for companies to employ independent contractors.
7. More States will Protect Medical Marijuana Users from Discrimination
More states will change their stance on medical marijuana and whether employees that use it are protected from discrimination. Currently Connecticut, Massachusetts, Rhode Island, and 10 other states protect employee use of medical marijuana and prohibit employers from firing those employees for off duty medical marijuana use. In December, a Delaware judge allowed a case involving a medical marijuana user that was fired after failing a drug test to move forward.
We may not get a decision on this case this year, but it is likely that Delaware will protect medical marijuana users from discrimination based on their off duty medical marijuana use, and more states will follow suit.
Unfortunately for employers, there is not a good test that can measure impairment for marijuana, which is why more states protecting off-duty marijuana use will cause problems for employers. Until there is a test that can measure impairment, increased training will be critical so that supervisors can observe employees that appear to be impaired.
You can see my earlier post regarding addressing marijuana in the workplace here.
8. Notices of Inspection (I-9 Audits) Will Increase
There will be more Notices of Inspection (I-9 Audits) against businesses this year. As I said in a prior post about Notices of Inspection:
Immigration and Customs Enforcement (ICE) has increased the number of I-9 audits that it has conducted to around four times as many I-9 inspections (Notices of Inspection) in the first seven months of 2018 as it did in the prior fiscal year. ICE conducted 5,278 Notices of Inspection since January 2018.
Immigration enforcement is a priority for the Trump Administration.
9. The Supreme Court Will Take a Case Concerning Deferred Action for Childhood Arrivals (DACA) or a Deal Will be Reached to Allow DACA Recipients to Remain in the US
Either the Supreme Court will issue a decision about DACA or there will be new legislation that will solve the DACA issue. DACA holders will achieve some form of permanent or semi-permanent status that will allow them to remain in the US.
As I said in a prior post about DACA:
DACA protects certain people that were brought to the US as children from deportation and allows them to get a job or attend school. They cannot obtain permanent residency through the program but may obtain work authorization and continue to reside in the country. There are currently nearly 700,000 people that are in the DACA program. The program was slated to end before a judge ruled that the government must reinstate the program and accept applications again in August. Earlier today [(November 8)] the Ninth Circuit ruled that the Trump Administration cannot end the DACA program immediately. They found that California and the others challenging the Trump administration’s decision to end the program would succeed in their case against the administration.
The Trump Administration has already appealed the decision of the Ninth Circuit to the Supreme Court, but it decided not to take the case until the lower courts rule. This is an issue that will likely be decided within the next year or so through a bipartisan deal or through the Supreme Court.
10. The Spouses of H-1B Visa Holders Will Lose their Work Authorization While They Wait for a Green Card
H-1B spouses will lose their lawsuit to retain their work authorization while waiting for their green card.
There is currently a lawsuit about whether spouses on H-4 visas will be allowed to obtain work authorization while they wait for their green cards after their I-140 is approved. This is especially important to immigrants from India and China as they may wait years (sometimes even more than a decade) until they are able to get a green card after their spouse’s immigrant petition has been approved. I believe that they will eventually lose their lawsuit. Administrative agencies have a lot of authority to change their positions on regulations.
I do not believe that 2019 will be a year with as many changes in labor and employment law (at the federal level) as last year because Congress is split. However, many states will undoubtedly try to fill in the gap. The Supreme Court could also cause major changes in labor and employment law by reviewing whether sexual orientation is protected under Title VII.
To learn more about the changes to federal employment laws for this year, register for our free Labor Law and Compliance webinar, Employment Law Update for 2019 on Thursday, February 28 at 10:00am PT.Register Now
About the Author
Brett Holubeck, Attorney with Cruickshank & Alaniz L.L.P., supports clients facing investigations concerning wage and hours, discrimination, retaliation, and harassment changes by government agencies. He earned his J.D. from the University of Iota, Masters from University of Nevada, Las Vegas and his Bachelor of Arts from Ohio State.
Keep up with the latest labor and employment law insights in more articles like this one and subscribe to his Texas Labor Law Blog.