Issuing Paystubs Electronically

Most employers – we hope – are aware that employees must be furnished with a paystub with each paycheck, listing gross wages, deductions, and net wages.  In today’s world of electronic communication and mobile devices, many employers wish to provide paystubs in electronic form only, rather than in hard copy. While that is a reasonable idea, employers who make this choice must be careful to follow the proper procedures.

First, an employee must be given the option of receiving a hard copy paystub instead of an electronic copy, if preferred. Second, any employee who chooses to receive their paystubs electronically must be provided with the means to view and print out the paystub on work premises during working hours. Third, no charge may be assessed to the employee for printing the paystub, as that would constitute an unauthorized deduction from wages.

When an employee works from home, the above requirements can be more difficult to satisfy. An employer may wish to issue paystubs to remote employees via email, but that would require the employee to print out the paystub at home, using their own paper and ink. In other words, it would result in the employee incurring costs in connection with printing the paystub, which is not permissible. For that reason, it is advisable for employers to issue paper paystubs to employees who work remotely.

If done correctly, issuing paystubs electronically can be a convenient, inexpensive, and environmentally friendly method of communicating wage information with employees. If you have questions about the proper use of electronic paystubs, please contact PMP.



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The Truth About “Unpaid Internships”

As summer approaches, many employers are gearing up for their annual summer internship programs. Offering summer internships can be a useful way for employers to “try out” potential new employees. Internship programs are, however, fraught with legal pitfalls for employers. Any employer that is considering implementing an internship program must educate itself about the requirements applicable to interns under the law.

The problems for employers begin with a misunderstanding about what an “intern” is. Many employers seem to believe that a worker is an “intern” if he or she was hired for the summer (or other specific, short-term period) and lacks relevant work experience. The classic example of this category of workers is a college student who joins a company for the duration of his or her summer break.

Many employers mistakenly believe that if they label such workers as “interns,” they need not pay them. These employers reason that, in lieu of wages, interns benefit from gaining on-the-job experience and cultivating professional contacts.

But under the Fair Labor Standards Act, many – if not most – interns are employees under the law and, as such, are entitled to be paid at least the minimum wage. In limited circumstances, it may be permissible to treat a worker as an unpaid intern, but strict criteria must be met. These criteria are:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Based on the above list, it should be clear that most “internship” programs do not meet the criteria for an unpaid internship. That does not mean employers with such programs should cancel them. It simply means the interns must be paid and, further, must be treated like other employees in all respects. For example, interns should be provided with copies of the employee handbook and be invited (or required, as applicable) to participate in any sexual harassment or other training being offered to staff.

Internships can be a mutually rewarding experience for employer and intern alike, but must be handled appropriately and within the confines of applicable labor laws. If you have questions about laws and regulations applicable to your company’s interns, please do not hesitate to contact one of our experienced HR professionals.

 



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Five Foundation Documents Your Business Can’t Live Without

Written By Anthony Acampora, Partner, SilvermanAcampora LLP, www.silvermanacampora.com

Your business is like your house.  If your house has a weak foundation, you’re not replacing the roof until you fix that problem.  If your home’s foundation is rock solid, you can change the roof, and even add a floor, whenever you like.  It’s exactly the same for your business.

Every business needs a solid foundation.  At a minimum, your business needs the following five foundation documents: (1) a shareholders’ agreement for a corporation, a partnership agreement for a partnership, or an operating agreement for a limited liability company, (2) a checklist for corporate governance, (3) a written business plan, (4) a non-disclosure and confidentiality agreement, and (5) an employee handbook.

Shareholders’, Partnership, And Operating Agreements – For those business owners who are too lazy to put their business arrangements in writing, the New York State Legislature has graciously created the Business Corporation Law, the Partnership Law, and the Limited Liability Company Law.  Now, the Legislature doesn’t know you, it doesn’t know your business partners, and it certainly doesn’t know about your specific deals, agreements, or arrangements.  And, it doesn’t care.  The best that the Legislature could do was to create a baseline designed to prevent chaos among inattentive business owners when things inevitably go wrong.  However, with those general laws came a gift for engaged, active, and attentive business owners.  Almost all of the governing laws can be changed by a written agreement among the owners to accommodate their particular wishes.  So, a shareholders’, partnership, or operating agreement is essential for every business.  Those governance documents allow the owners to decide (a) how they will govern themselves, (b) how they will share profits and losses, (c) what their rights and obligations are to the business and to each other, and (d) perhaps most importantly, control their ability to transfer their equity in the business.  Absent those foundational documents, the Legislature has made those decisions for you.  I guarantee that, when your business hits the unavoidable “bump in the road”, you won’t like its choices.

A Checklist for Corporate Governance – When was the last time that your business held an annual shareholders’ meeting, or a meeting of the board of directors?  Are there written authorizations or minutes for all of your key corporate agreements and transactions?  When was the last time that anyone in the company even looked at the stock record ledger?  Businesses can exist for decades without adhering to the best practices for corporate governance.  That is, until they face a major transaction or some legal challenge.  Failure to observe corporate formalities can cause delays in obtaining financing, interfere with a sale of the business, and, in the worst case, lead to personal liability for you, the business owner.  The best practices for corporate governance are designed to protect the company and the owners by documenting the processes by which major decisions are made and important transactions are concluded.  Those best practices insure that the owners treated the business as a separate legal entity and not simply as an extension of themselves.  A checklist prepared by an experienced corporate lawyer makes the process inexpensive and painless to follow.

A Written Business Plan – Some businesses operate under that Yogi Berra quote – “if you come to a fork in the road, take it.”  It might have worked for Yogi, but it won’t work for you.  A business plan may not be a legal document, but it’s going to be required by a bank or a buyer if you ever decide to seek financing or to sell your business. Your business plan can be one page or one hundred pages, as long as it provides clarity on your business’s opportunity and your roadmap to get there.  Without a real business plan, another Yogi quote will definitely apply to your company –  “if you don’t know where you’re going, you’ll end up someplace else.”

A Non-Disclosure and Confidentiality Agreement – Believe it or not, your business has secrets and those secrets deserve protection.  Maybe it’s a long cultivated customer list.  Maybe it’s financial records or pricing plans.  A non-disclosure agreement is the first step toward protecting that information.  It creates a confidential relationship with your contractors, business associates, and your employees that prevents them from disclosing what they saw when they got a peek at the Great and Powerful Oz behind the curtain.  A Non-Disclosure and Confidentiality Agreement – it’s simple, it’s painless, and it’s necessary.

An Employee Handbook – Speaking of employees, how do they know the rules unless you tell them?  How do you discipline someone for “stepping out of line” when you never actually pointed the line out to them?  An employee handbook is a crucial document that enables employers to set and to maintain the rules, regulations, and requirements of employment.  Without a well drafted employee handbook, and the human resources, procedures necessary to enforce ever changing labor laws, businesses are at risk from their employees and the Department of Labor.

Bonus Item – Every business with a website should have online terms of use and a privacy policy.  Those pages can limit your liability when there are errors in your own content, as well as in information contained in any hyperlinks from your website. Furthermore, like your employee handbook, your terms advise website visitors of any restrictions to their conduct on your site.  Similarly, if you gather information through your website, you are legally required to post a privacy policy that outlines how that information will or will not be used.



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Recent Court Decision Illustrates How Crucial Anti-Harassment Training Is

In a decision issued on April 27, 2017, the Second Circuit Court of Appeals interpreted the standard for establishing a “hostile work environment” claim more broadly than many HR professionals and employment lawyers would normally expect. Employers should be aware of the implications of this decision and understand how to avoid liability for hostile work environment.

Employees alleging discrimination under Title VII often claim that they were subjected to a “hostile work environment.” Generally, a hostile work environment under Title VII is created by offensive conduct, based on a person’s membership in a protected class (such as race or gender), that is severe or pervasive enough to alter the victim’s working environment. Over the years, there have been many court decisions discussing what constitutes a hostile work environment, and one often-repeated standard is that an “isolated incident” is generally not sufficient to establish a hostile work environment.

Yet the Second Circuit held in Daniel v. T&M Protection Resources LLC that the plaintiff’s supervisor’s use of a racial epithet was “by itself, sufficiently severe to constitute an actionable hostile work environment within the meaning of Title VII.” The supervisor had called the plaintiff a “f- – ing n – – – – r.”

In other words, a one-time remark by a single “bad apple” could be the basis for an employer to be held liable under Title VII for hostile work environment, if it is severe enough. This means that anti-discrimination and anti-harassment training for employees and managers is more important than ever. Having your employees and management undergo such training on a regular basis can go a long way toward reducing the likelihood that an employee will “go rogue” and engage in conduct for which the company could be held liable.

In addition, anti-discrimination and anti-harassment training can help an employer establish that it did everything possible to disseminate its harassment and discrimination policy to its staff. Other helpful steps include posting the policy on bulletin boards, including it in a well-written, regularly updated employee handbook, and distributing it during the on-boarding process (and having new hires sign an acknowledgement of receipt). Taking these steps can reduce the potential for an employer to be held liable for discrimination/harassment.

If your employees and managers have not completed training in 2016, you should make it a priority in 2017 to diminish the company’s exposure to expensive litigation.

If you have questions about this issue, or would like to inquire about updating your policy or scheduling training sessions, please contact one of PMP’s experienced HR professionals.

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Should you have any questions about this matter, please do not hesitate to contact PMP. Please keep in mind that in addition to our staff of seasoned HR professionals, we also have experienced employment attorneys on-site to address any questions you may have regarding legal compliance.  Contact us at 800-921-2195 or 516-921-3400. You can also visit our website http://www.pmphr.com/ or e-mail us at info@pmpHR.com.

 



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Federal Contractors – No time for Complacency

In April, President Trump proposed a budget proposal that included a possible 21 percent cut for the DOL budget. Some federal contractors may be interpreting that to mean that the OFCCP will be less active during the Trump administration, given likely budget constraints. But that is not necessarily accurate. In all likelihood, the OFCCP will continue doing what it is supposed to be doing – auditing federal contractors. A smaller budget is not going to stop the OFCCP from investigating complaints.  True, a new director for the OFCCP has not been named yet and it may have been a slow start for audits in 2017, but Secretary of Labor R. Alexander Acosta has just been sworn in, so things may gear up fast now.

It may have gone unnoticed that, in spite of not having a Director at the OFCCP since November of 2016 when Patricia Shiu stepped down, the OFCCP has continued to close cases with large settlements since their fiscal year began in October.  Here are just a few:

  • 4/25/2017 – Palantir Technologies will pay $1,659,434 in back wages and other monetary relief for allegations of hiring discrimination against Asian applicants in the hiring and selection process for engineering positions.
  • 3/27/2017 – American Ordnance of Iowa has agreed to pay two former security officers a total of $50,000 in back pay and other damages for alleged failure to accommodate them as required by Section 503 and ADA.
  • 1/1/2017 – LexisNexis Risk Solutions will pay over $1.2 million in back pay and provide additional relief to 211 employees to resolve allegations of systemic pay discrimination against women at its facilities in Alpharetta, GA and Boca Raton, FL.

So, to any federal contractors out there who are thinking they can slack off:  think again.  As a federal contractor you are still obligated to update your affirmative action plans yearly among other things.  Additionally, you should:

  • Review and analyze your data to assure that you can defend any results that are + or – 2-standard deviation;
  • Assure that you can prove that you have listed every job (with a few exceptions) with appropriate Employment Service Delivery System (ESDS) (where the job is located) along with organizations that work with Veterans, Individuals with Disabilities, Women and Minority;
  • Compensation analysis is still a very hot topic with the OFCCP and DOL (see LexisNexis case above) – when was the last time you conducted a pay equity analysis? You should also review your policies and procedures for starting salary, bonuses, overtime allocation and how location may affect pay;
  • Train your hiring team to follow good practices in the number of applicants reviewed, how applicants are rejected or moved forward in the hiring process, and how applicants are interviewed and selected for hire, promotion and for termination.

Remember that the burden is on you, the contractor, to defend your outreach, selection for interview, hire, compensation, promotion and termination.  You are non-compliant unless you can prove – through your own record-keeping – that your company’s personnel decisions were made in a non-discriminatory fashion.

As every good scout learns – “Be Prepared.”   It’s a good motto that can work for you, too!

To discss your company’s compliance matters, update your AAP or assure that your analyses are done correctly, please contact PMP’s Affirmative Action Compliance Department.  PMP is proud of its exceptional record of successfully closed OFCCP audits.   We can help with any compliance challenge you may have!

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Should you have any questions about this matter, please do not hesitate to contact PMP. Please keep in mind that in addition to our staff of seasoned HR professionals, we also have experienced employment attorneys on-site to address any questions you may have regarding legal compliance.  Contact us at 800-921-2195 or 516-921-3400. You can also visit our website http://www.pmphr.com/ or e-mail us at info@pmpHR.com.



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Effective Date of the New York State Paid Family Leave Act Looms Ever Closer

As many New York employers are already aware, last year New York State enacted a comprehensive paid family leave law. The New York Paid Family Leave Act (NYPFLA) will go into effect on January 1, 2018. As of that date, employees in New York will be eligible for wage replacement during leaves of absence taken to bond with a new child, to care for a close relative with a serious health condition, or to handle certain situations arising from a family member’s call to active military duty.

While January 1, 2018 may still seem like a long way off, employers should take full advantage of the time remaining to prepare for compliance. To assist in this preparation, we have collected our responses to the most frequently asked questions we have received from clients regarding the NYPFLA.

What employers are covered under the law?

The NYPFLA’s requirements will apply to all employers with one or more employees in New York.

What employees are eligible to take paid leave?

Any full-time employee who has been on the job for 26 consecutive weeks is eligible. Part-time employees (employees working fewer than 5 days per week) become eligible for leave on their 175th day of work.

For what purposes can an employee use paid leave?

Employees may use the leave as maternity/paternity leave – i.e., to bond with the employee’s child during the first twelve months after the child’s birth or the first twelve months after the placement of a child for adoption or foster care with the employee. The leave can also be used to participate in providing care, including physical or psychological care, for a family member of the employee due to a serious health condition of the family member. In addition, the leave can be used because of any qualifying exigency arising out of the fact that the employee’s spouse, domestic partner, child, or parent is on active military duty (or has been notified of any impending call or order to active duty).

How much leave is an eligible employee entitled to?

Starting January 1, 2018, employees will be permitted up to eight weeks of leave. Starting January 1, 2019, that amount will increase to 10 weeks, and as of January 1, 2012, it will increase to 12 weeks.

Do employees receive their full salaries during a leave?

No, employees are entitled only to partial wage replacement, the amount of which will increase over a period of several years after the law’s effective date. On January 1, 2018, employees on leave will be entitled to wage replacement equal to 50 percent of their weekly wage or, if less, 50 percent of the state average weekly wage (currently the state  average weekly wage is $1,296). That percentage will increase annually for three years as follows: 55 percent in 2019, 60 percent in 2020, and 67 percent in 2021.

Are employers expected to pay foot the bill for this paid leave?

Employers will not be required to pay wage replacement to employees on leave out of their own pockets. Rather, the payments will be funded via small paycheck deductions applied to the wages of all New York workers.

On June 1, 2017, the New York State Superintendent of Financial Services has published the maximum employee contribution amount.  It is 0.126% of an employee’s weekly wage up to and not to exceed the statewide average weekly wage.

The NY State average weekly wage for 2016 is $1,305.92.

The maximum employee contribution amount is the lesser of:

0.126% x $1,305.92 = $1.65 per weekly paycheck, OR

.0126% x the employee’s weekly  paycheck

Employers are to begin collecting the weekly employee contribution on July 1, 2017.

How is the NYPFLA different from the Family and Medical Leave Act (FMLA)?

The most obvious difference is that leave under the NYPFLA is paid, while FMLA leave is unpaid. But there are numerous other differences, including the following examples:  NYPLA applies to all New York employers, even those who are not covered under FMLA due to having fewer than 50 employees within 75 miles of a work site. FMLA provides twelve weeks of leave, while NYPLA will not provide twelve weeks until January 2021. Of course, these are only a few of the many differences between the two laws. Generally speaking, employers should be aware that the two laws are not interchangeable, and what applies under one may not be applicable under the other.

What should employers do now?

Make sure your payroll service is ready to make the proper deduction from employee paychecks effective July 1, 2017 and that these funds are submitted to your carrier for NY State Disability Insurance.

Communicate with your employees about this benefit and its effect on employee paychecks.

 

Note: Currently, regulations issued under the new law are still in their proposed –i.e., not final — form. When the final rules have been issued, PMP will, if needed, supplement this article to account for any changes in the final rules.

As New York State employers gear up to comply with the NYPFLA by January 1, 2018, PMP is here to answer any questions you may have about the new law.

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Should you have any questions about this matter, please do not hesitate to contact PMP. Please keep in mind that in addition to our staff of seasoned HR professionals, we also have experienced employment attorneys on-site to address any questions you may have regarding legal compliance.  Contact us at 800-921-2195 or 516-921-3400. You can also visit our website http://www.pmphr.com/ or e-mail us at info@pmpHR.com.



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Expected Changes to Workplace Laws Under President Trump – Part II

In Part I of this series, we examined expected changes at the U.S. Department of Labor under President Trump’s presidency.  In Part II, we will take a look at changes already made, and others expected to come, at the Equal Employment Opportunity Commission (EEOC) and National Labor Relations Board (NLRB).  Under a Trump administration we are likely to see significant shifts in these agencies from Obama-era policies and regulations.  A more employer-friendly shift is expected, though not all Obama administration policies and rulings are expected to be wiped away.

Equal Employment Opportunity Commission (EEOC)

On January 25, 2017, President Trump appointed Victoria Lipnic as acting chair of the EEOC.  Lipnic was previously a Commissioner of the EEOC.  While a Commissioner, Lipnic voted against the EEOC’s July 2015 decision that sexual orientation discrimination is gender discrimination prohibited by Title VII.  In addition to appointing Lipnic, Trump can fill another vacant commissioner position.  But for now, the Democrat-appointed commissioners outnumber Republican-appointed commissioners.  Trump will have the opportunity to nominate the EEOC’s new general counsel.

President Trump has stated a desire to focus on job growth, which is something Lipnic will make a focal point for the EEOC.  Recently, Lipnic stated, “it is a new day and to the extent [we can] help foster employment opportunity and economic growth . . . that is something we will be focused on.”  Consistent with President Trump’s beliefs, Lipnic has said the EEOC will be mindful of ways to refocus regulations so as to foster job growth.

However, this is not to say the EEOC will forego its enforcement activities.  The EEOC, under Lipnic, is likely to pay attention to employer responsibilities in joint employment, independent contractors, and the gig economy.  Equal pay issues are also likely to be a focus of the EEOC going forward.  In the past, the EEOC has filed few equal pay cases but Lipnic considers this a “priority.”  In addition, since 2017 is the Age Discrimination in Employment Act’s 50th anniversary, Lipnic has stated that age claims will see an increased focus by the EEOC.

National Labor Relations Board (NLRB)

On January 26, 2017, President Trump appointed Philip Miscimarra as acting chairman of the NLRB, taking over from Democrat Mark Gaston Pearce.  Miscimarra is presently the sole Republican member of the Board.  However, the NLRB has 2 vacant seats, both of which President Trump is likely to fill with Republican appointments.  Trump will also appoint a new NLRB General Counsel in November 2017, when the current term of Richard Griffin, Jr. expires.

During the Obama administration, the NLRB issued far-reaching decisions and rules most of which were not employer friendly.  Most notable among these decisions was the NLRB’s controversial joint employer standard in Browning-Ferris Industries of California, Inc.  That 2015 decision broadened the joint employer standard to encompass relationships where the potential joint employer has the ability to control employees’ terms and conditions of employment even if such control is never exercised.  That decision could be reversed by a Trump-appointed NLRB as Miscimarra opposed the ruling.

Other NLRB rulings that may be reversed include those: limiting employers’ ability to prohibit employee use of social media to air workplace grievances; striking down employer handbook policies as overly broad because of perceived “chilling effects on concerted activity”; favoring “micro units” which consist of small numbers of employees as proper bargaining units; and the enactment of the quickie election rules which significantly cut the time for employers to combat union election campaigns.

It may take a few years before decisions like those mentioned above are reversed.  However, we expect the NLRB to curtail its activity in the non-union sector where it has been focusing on employer actions that chill concerted activity.

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Should you have any questions about this matter, please do not hesitate to contact PMP. Please keep in mind that in addition to our staff of seasoned HR professionals, we also have experienced employment attorneys on-site to address any questions you may have regarding legal compliance.  Contact us at 800-921-2195 or 516-921-3400. You can also visit our website http://www.pmphr.com/ or e-mail us at info@pmpHR.com.

This article is intended for general information only and should not be construed as legal advice.



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The Evolving Legal Landscape of Discrimination on the Basis of Sexual Orientation

In the United States, federal and state laws differ with respect to whether they explicitly prohibit discrimination in employment on the basis of sexual orientation. The state of New York has prohibited discrimination based on sexual orientation since 2003. But the federal law governing employment discrimination, Title VII of the Civil Rights Act of 1964, does not list sexual orientation as a protected class. This means that it is difficult for a plaintiff-employee to bring a claim under federal law arguing he or she was the victim of employment discrimination on the basis of being gay.

In March, the Second Circuit Court of Appeals addressed this issue in a case brought by a gay man who alleged that his supervisor had harassed him based on his sexual orientation and “effeminacy.” The plaintiff alleged that the harassment violated Title VII because it constituted discrimination based on sex, in that it resulted from gender stereotyping. In other words, he argued that the true reason his boss had harassed him was that he (the plaintiff) did not conform to his boss’s notions of how a man should be – e.g., masculine rather than effeminate, macho rather than submissive, etc. The court held that, because the plaintiff claimed that his supervisor perceived him as effeminate and submissive and harassed him for those reasons, his claim came within Title VII’s prohibition against sex discrimination.

Cases like this one, in which federal courts interpret Title VII in connection with sexual orientation discrimination, are notable since in many states there are no laws prohibiting discrimination on the basis of sexual orientation. In those states, plaintiff-employees claiming this type of discrimination have no alternative but to try to frame their case in terms that would implicate Title VII – even when this exercise feels like trying to fit a square peg into a round hole.

Employers in New York with four or more employees are bound by the state law mentioned above, and thus prohibited from discriminating based on sexual orientation.  A number of other states have similar laws, but they vary widely in scope and application. In all states, however, refraining from discrimination based on sexual orientation is, at the very least, the best practice. Employers should be proactive in diminishing their exposure to litigation by scheduling anti-harassment and anti-discrimination training for all supervisors and managers on a regular basis.  Companies should also have a well-written, zero tolerance policy in both their handbook and on company bulletin boards.

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PMP will continue to monitor this rapidly changing legal landscape. Should you have any questions about sexual orientation discrimination, please do not hesitate to contact one of our HR professionals. Please keep in mind that in addition to our staff of seasoned HR professionals, we also have experienced employment attorneys on-site to address any questions you may have regarding legal compliance.  Contact us at 800-921-2195 or 516-921-3400. You can also visit our website http://www.pmphr.com/ or e-mail us at info@pmpHR.com.



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New York State New Direct Deposit Rules Cancelled…For Now

For now New York State regulations which would have imposed new notice and consent standards for paying employees’ wages via direct deposit have been revoked. The regulations, which were set to go into effect March 7, 2017, were found to exceed the authority of the Department of Labor and were invalidated on that basis. The DOL has 60 days to appeal the determination.

Stay tuned for more info…



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Salary History Inquiries Now Prohibited in Philadelphia

Employers who do business in Philadelphia, take note! It is now illegal to ask job candidates in Philadelphia about their salary history. This means you cannot ask an applicant about his salary at his current job or past jobs. Many employers routinely seek this information from job seekers to help them determine what salary to offer the candidate. Opponents of this practice say it perpetuates a cycle of lower pay for women and minorities. Philadelphia follows Massachusetts in banning salary inquiries; last year Massachusetts became the first state to pass such a law.

The Philadelphia ban will become effective May 23, 2017.



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