Highlights of New and Recent Employment Laws
Thursday, November 7, 2019
Posted by: Emily Steinmetz
Koehler | Dinkel LLC Presents:
HOT TOPICS TO BE AWARE OF AS WE ENTER 2020
I. Recreational Marijuana
On June 30, 2019, Governor JB Pritzker signed into law the Cannabis Regulation and Tax Act (“CRTA”) which legalizes recreational marijuana beginning in January 1, 2020. Under this new law, an Illinois resident, over the age of 21, can possess and privately use limited quantities of marijuana. 410 ILCS 705 et seq.
Although recreational marijuana will be legal, the Section 10-50 of CRTA allows employers to adopt reasonable zero tolerance or drug free workplace policies, so long as the policies are applied in a nondiscriminatory manner. Additionally, employers are not required to permit an employee to be under the influence or use marijuana in the workplace, while performing job duties, or while on call—as defined by the CRTA. Employees may be subject to disciplinary action up to and including termination of employment for violations of an employer’s drug policies. So long as the determination is made in good faith, employers may discipline or terminate employment based on a reasonable suspicion that the employee is impaired in the workplace or while performing job duties based on traditional symptoms of marijuana impairment.
While under the new law an employer may be shielded from liability for subjecting an employee to reasonable marijuana drug testing under the employer’s workplace drug testing policy, this drug testing must be based on the employer’s good faith belief that an employee used or possessed marijuana in the employer’s workplace; while performing the employee’s job duties; or while on call in violation of the employer’s polices. The statute does not extend the “good faith belief” to drug testing an applicant; thus, the CRTA does not expressly provide for nor does it provide any employer protections for pre-employment testing. Further, based on the protections provided to employees under the Illinois Right to Privacy in the Workplace Act, prohibiting adverse actions based on the use of lawful products (defined as lawful under state law), it is a violation of the Right to Privacy in the Workplace Act to discipline or terminate based on the lawful use of marijuana (when such use is outside of the workplace).
However, it is clear under Section 10-50(g) that the CRTA does not interfere with any federal, state, or local restrictions on employment under the Federal Department of Transportation regulations or impact an employer’s ability to comply with federal or State law. Therefore, under 10-50(g) an employer could drug test an applicant for marijuana to comply with such laws.
II. Illinois Equal Pay Act
On July 31, 2019, Illinois Governor J.B. Pritzker signed into law House Bill 834, amending the Illinois Equal Pay Act (“IEPA”), 820 ILCS 112 et seq. In general, the law prohibits employers from inquiring into a job applicant’s salary history. The law took effect only two months after signing, on September 29, 2019.
The amendment to the IEPA has three main parts:
(1) Prohibits employers from inquiring as to an applicant’s salary history:
• Employers cannot screen job applicants based on current or prior salary history.
• Employers cannot request or require applicants to disclose salary or compensation history.
• Employers cannot solicit salary history from an applicant’s former employer.
(2) Bans employers from asking or requiring employees to keep pay information confidential:
• Employers can still prohibit human resources, supervisors or any other employees with access to other employee’s wages or salary from disclosing without prior consent.
(3) Changes the way equal pay claims are evaluated and defended:
• Amends the statue from “equal” to employers may not pay differently for work on jobs, the performance of which requires “substantially similar” skill, effort and responsibility.
• Amends employer defenses to additionally show that a pay differential is based on a factor that: (A) is not based on or derived from a differential in compensation based on race or sex; (B) is job related with respect to the position and consistent with a business necessity; and (c) accounts for the differential
Additionally, employees can bring a private cause of action for violations under the IEPA. Employers who violate the IEPA are subject to up to $10,000 in special damages; (2) compensatory damages, to the extent they exceed an award of special damages; and (3) payment of attorneys’ fees and costs.
What employers need to do now regarding this change to the IEPA:
Review their current job applications to ensure they do not solicit information about prior wages, salary, or compensation. (Similar to removing the box regarding criminal histories).
Train all individuals who are involved in the recruiting process to ensure that during interviews they do not inquire about prior salary or compensation history.
Review their salary and/or compensation structures to determine and evaluate reasons for pay differentials to ensure compliance with the IEPA.
III. Reimbursement of Employee Expenses under the Illinois Wage Payment and Collection Act
As of January 1, 2019, employers are required to “reimburse an employee for all necessary expenditures or losses incurred by the employee within the employee’s scope of employment and directly related to services performed for the employer.” 820 ILCS 115/9.5. Under this amendment, an employee has 30 calendar days after incurring the expense to submit it to the employer with supporting documentation. An employee is not entitled to reimbursement if the employer has an established written expense reimbursement policy and the employee failed to comply with the policy.
Although this statute was effective for almost a year, the question remains as to what expenditures are covered under this statute, as the statute does not define the term “expenditures”. In today’s reliance on laptops, internet and cell phones, the question arises as to whether cellphone and internet use on a non-company device is an expenditure under this statute? California has a similar wage statute, and at least one court in California has ruled that cell phone and internet use is a covered expense.
It is important to review and update your Company’s business travel and expense reimbursement policies and consider what types of expenses may fall within the scope of this law.
IV. Workplace Transparency Act
On August 9, 2019, Governor Pritzker signed into law the Workplace Transparency Act (“WTA”), which will take effect on January 1, 2020. This new law also amends other laws including the Illinois Human Rights Act, Uniform Arbitration Act, and the Victims’ Economic Security and Safety Act. All employers with 1 or more employees in Illinois will be required to comply with the Workplace Transparency Act and its requirements.
Some highlights of the new law include:
• Mandating annual sexual harassment training for all employees and reporting requirements
• Expanding of the scope of harassment outside of the workplace and to non-employees
• Limiting the use of non-disclosure, non-disparagement, and arbitration clauses
• Expanding the scope of the Victims’ Economic Safety and Security Act (VESSA) to cover instances of sexual harassment
What employers need to do now regarding the WTA:
• Plan for conducting anti-harassment training annually, beginning in 2020.
• Prepare and/or update anti-discrimination and harassment policies to include the expanded definitions of harassment.
• Review employment agreements, severance agreements, settlement agreements, and/or arbitration clauses with counsel regarding enforceability given the changes in the laws (in Illinois and in other states).
• Update VESSA leave policy.
V. Exempt Status Salary-Basis Increase
On Tuesday, September 24, 2019, the U.S. Department of Labor announced a final rule, which increases the salary basis threshold necessary to maintain exempt status for executive, administrative, and/or professional employees from the Fair Labor Standards Act’s minimum wage and overtime pay requirements. The final rule is effective on January 1, 2020.
The U.S. Department of Labor updated both the minimum weekly standard salary level and the total annual compensation requirement for “highly compensated employees.” The final rule provides for the following changes:
• The “standard salary level” is increased from the current level of $455 per week ($23,000 per year) to $684 per week ($35,568);
• The total annual compensation requirement for “highly compensated employees” is increased from the current level of $100,000 per year to $107,432 per year; and
• The new rule also allows employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the standard salary level.
Employers should review the salary levels of their current salaried exempt employees and determine whether increases to their compensation structures are necessary in light of the increase in the minimum standard salary level. This is also a good time to re-evaluate the salaried employees’ duties and job descriptions to solidify exempt status.