Articles Posted in Employment law

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Make Sure Non-Disclosure Agreements Don’t Stymie Whistleblowing

Small businesses who enter into non-disclosure agreements (NDAs) with employees need to ensure that those documents clearly delineate that they will not be used to discriminate against those who engage in “whistleblower” activity—or such employers could potentially face unpleasant regulatory consequences.

This was underscored in late July, when the federal Consumer Financial Protection Bureau (CFPB) issued a “reminder” that the Consumer Financial Protection Act establishing the agency bars employers from either firing or otherwise discriminating against employees who participate in whistleblower activity, assuming the business in question is regulated by the CFPB.

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Illinois Civil Rights Protection Goes High-Tech: Illinois Human Rights Act Expanded to Include AI Regulation

Illinois Human Rights Act Expanded to Include AI Regulation

Recently, Illinois Governor Pritzker signed H.B. 3773 into law, marking a significant expansion of the Illinois Human Rights Act to include specific regulations on the use of artificial intelligence (AI) in employment decisions. This move reflects the state’s ongoing commitment to civil rights protection, now extending into the realm of advanced technology.

What Does H.B. 3773 Mean for Your Business?

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Time to Review Severance Agreement

Employers who have not already done so should comprehensively review their past and present severance agreements to ensure that any non-disparagement and confidentiality clauses contained therein do not run afoul of the National Labor Relations Board’s ruling in a February 2023 case called McLaren Macomb, in which the NLRB significantly—and retroactively—restricted employers’ rights to include such clauses.

Referring to a provision of the National Labor Relations Act (NLRA) that protects employees’ rights to “engage in protected, concerted activities to address or improve working conditions,” the board wrote that: “a severance agreement is unlawful if its terms have a reasonable tendency to interfere with, or coerce employees in the exercise of their Section 7 rights.”

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Chicago Paid Leave Ordinance

Employers physically located within the City of Chicago need to be ready as of July 1 to implement the new Chicago Paid Leave and Paid Sick and Safe Leave Ordinance, which stipulates that covered employees can earn up to 40 hours of paid sick leave and 40 hours of other paid leave usable for any reasons per 12-month accrual period.

Covered employees are those who work at least 80 hours within a 120 day period. Immigration status is irrelevant. The benefit year can be defined the same for all employees or entirely individually, and can be tied to the calendar year, fiscal year, tax year, contract year or anniversary date of employment.

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Non-Competes Now a Nonstarter

This is really big news!

Businesses that have entered into non-compete agreements with current or recently departed employees will need to come up with other ways of achieving the investment-protecting goals those non-competes were designed to accomplish. That’s because the Federal Trade Commission has issued a final rule, which will take after 120 days after publication in the Federal Register, that invalidates current non-competes for most workers and bans new ones for all employees.

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Employee or Freelancer?

Is a person who works for your business financially dependent on you, or can they potentially independently profit based on their skill set? Will they be part of your company indefinitely? Do they perform a central, daily, integral role? Do you dictate when, where and how they work? Do you limit their ability to work for others? Can the person apply what they do to other endeavors, widening their market reach and leading to other revenue streams?

Small businesses and other employers will need ask themselves this set of questions and consider the “totality of the circumstances” in determining whether to classify people who work for them as employees or independent contractors, in a rule change published by the U.S. Department of Labor’s Wage and Hour Division on January 10, set to take effect March 11.

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Starting on January 1, 2024, most employers in the 5-300x251will be required to provide five days of paid leave for any reason. Thanks to an City Council ordinance passed earlier this month by a 36-12 vote, Chicago employers will have to double that amount, including five sick days and five vacation days, under one of the most sweeping employee leave laws in the U.S.

The ordinance, which new Mayor Brandon Johnson described as “a step towards equity in the workplace,” also mandates that when workers depart their positions, companies with more than 100 employees will have to pay out as many as seven days of unused time, while firms with 51 to 100 employees will need to do so over a two-year phase-in period. Small businesses with less than 50 employees do not need to worry about this provision.

Johnson and progressive allied on the City Council wanted a 15-day allotment originally, but business, retail and trade groups, who are still vehemently against the ordinance, pushed back vociferously. And they’re worried that violations could lead to lawsuits, an issue that the council plans to address through a possible amendment—tabled for now—that would provide businesses with a 30-day time frame to address an alleged violation first.

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Transit Benefits Required for Illinois Employers

Another wrinkle for employers in the Chicago area.

Businesses located in the six-county Chicago area near public transit routes operated by the Regional Transportation Authority (RTA) that have at least 50 employees will be required as of Jan. 1, 2024, to provide their full-time employees with pre-tax public transit benefits.

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Long-Term Temps to be Paid Like Employees

Both Illinois employers that contract with temporary labor service agencies, and those agencies themselves that do business in the state, should review staffing contracts and ensure compliance with relevant policies and procedures under amendments to the Illinois Day and Temporary Labor Services Act signed by Governor J.B. Pritzker, which took effect immediately.

The amendments to HB 2862 hold that temporary workers assigned to a third-party client for more than 90 days are entitled to wages and benefits—or the cash equivalent of benefits—equivalent to the lowest-paid employee at that client who performs the “same or substantially similar” work. If no such person exists, temp workers must be paid the same as the lowest-paid employee with the closest seniority level to the temp.

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Supreme Court Ruling on Religious Reasons

Small businesses and other employers are likely to find it more difficult to refuse requests for religious accommodations after the U.S. Supreme Court’s ruling in a recent case, Groff v. DeJoy, which concerned a postal worker who unsuccessfully requested to be off-the-clock every Sunday—when the post office still makes deliveries for Amazon—citing his Evangelical Christian faith.

Gerald Groff, a Pennsylvania man, nonetheless kept being put on the schedule for Sundays and disciplined for not working while his co-workers were stretched thin attempting to cover his routes. He resigned, sued, lost his case and lost again on appeal—but the Supreme Court’s unanimous ruling in June established a higher standard for employers who claimed they would face an “undue hardship” to make religious accommodations.

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