Navigating the Latest Employment Law Developments: What Employers Need to Know

Puzzle pieces with workers on the piece

Five Ward and Smith attorneys offered timely updates on religious accommodations, professional licensing, pregnancy laws, remote work, and independent contractor rules during the firm’s recent annual Employment Law Symposium.

In a rapid-fire legal update session, they discussed a variety of developments related to employment law, including:

  • A new decision from the U.S. Supreme Court on religious accommodations
  • Liabilities related to hiring unlicensed professionals
  • Lawfully accommodating nursing mothers
  • Advantages and disadvantages of a remote workforce
  • Pending decision from DOL on independent contractor rules

Employers and Today's Religious Accommodations

Hayley Wells, an employment attorney, shared insights on a recent opinion by the Supreme Court regarding how employers should handle requests for religious accommodation. The opinion dealt with requests for religious accommodations under Title VII of the Civil Rights Act, which prohibits discrimination based on race, religion, color, sex, and national origin.

Title VII requires an employer to accommodate an employee’s religion unless the employer can demonstrate that doing so would constitute an undue hardship on the company.

“Until this year, what constituted an undue hardship was an exceedingly low hurdle to clear,” said Wells. All an employer had to do to deny an employee’s request in the past was to show it represented a de minimis burden or minimum amount of inconvenience for the organization.

The decision from 2023 related to a mail carrier who objected to delivering mail on Sundays because it conflicted with his sincerely held religious beliefs. Various accommodations were attempted, and some worked for a while, but ultimately, it became too difficult to accommodate the carrier’s request.

The carrier was subjected to progressive discipline for refusing to work on Sundays. He was eventually terminated and brought a lawsuit against the Postal Service.

This ultimately resulted in a Supreme Court decision holding that employers must demonstrate that providing an accommodation would present a substantial burden to the employer when considering the employer's business, taking into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, size, and operating cost of an employer. “The hurdle to clear with denying a request is now much higher,” explained Wells.

Now, it is more likely that religious accommodation requests will have to be granted. An uptick in requests is also expected as more employees begin to recognize it will be increasingly difficult for employers to issue a denial.

Engaging in an interactive process with the employee and documenting that process is advisable, said Wells. Questioning the sincerity of a religious belief would be inadvisable: “The courts are exceedingly reluctant to question religious beliefs, and the definition of religion is very broad under Title VII.”

Wells also provided an update on salary threshold requirements for employees falling under the Fair Labor Standards Act's white-collar exemption to the overtime requirement. A proposed rule that was recently proposed by the Department of Labor would increase the salary level for exempt employees, from $684 per week to $1,059 per week. The result of such a change would be that far more white-collar employees would be overtime-eligible.

A public comment period runs through November 7, 2023.

An Employer's View Toward Professional Licensing

James Wilson, co-chair of Ward and Smith’s professional licensing practice, covered a number of topics that employers should be aware of related to employee licenses. One is that an employer could be liable if an employee who is supposed to have a license harms someone on the job.

Insurance coverage can be jeopardized for a claim involving a negligent employee if that individual does not have a required license. Also, it will be difficult to collect on a lawsuit or receive payment for a service rendered by an unlicensed employee if one was required.

The trend is moving toward requiring more licenses. Generally, an employee has to hold a license in the area where they are performing the service rather than their physical location. Renewals can be another issue, as an expired license is essentially worthless.

Similarly, each profession is unique in terms of timing requirements, processes, and requirements. The maintenance of a license is usually straightforward, as most only require answering a few questions and paying a fee.

Actions from licensing boards can vary from administrative remedies to criminal prosecutions. In dealing with an investigation, Wilson advises employers to develop a procedure, call an attorney, be polite, ask questions, and comply with lawful demands.

Pregnant and Nursing Employee's Rights in the Workplace

Avery Locklear, a labor and employment attorney, shared information about the Pregnant Workers Fairness Act ("PWFA") and the PUMP for Nursing Mothers Act (the "PUMP Act").

The PUMP Act requires employers to provide nursing employees with adequate break time and a private space, other than a restroom, to express breast milk for up to one year after their child's birth. “There’s no limit on how many breaks an employee can take,” advised Locklear. Also, the duration of the breaks will vary according to factors related to the child as well as the nursing employee.

It is not a requirement to compensate the employees for breaks. However, if the employee is expected to perform job-related functions during the break, then the employee must be compensated for the break time. Further, when an employer provides a paid break, an employee who uses such break time to pump breast milk must be compensated in the same way that other employees are compensated for break time.  Smaller employers with less than 50 employees do not have to comply with the PUMP Act if they can prove that doing so constitutes an undue hardship.

Under the PWFA, which went into effect in June of 2023, employers have to offer reasonable accommodations for a worker’s known limitations related to pregnancy, childbirth, or related medical conditions. Unless an employer can prove it would create an undue hardship, it is necessary to offer accommodations such as a closer parking space, flexible hours, a larger uniform, leave time, and/or lighter duties.

Additionally, the act spells out a number of prohibited activities, including denying an employment opportunity based on the need for reasonable accommodation, refusing a reasonable accommodation request with no explanation, and retaliating against the employee for reporting discrimination. 

Remote Employees: The Post-Pandemic Landscape

Justin Hill, a labor and employment attorney, noted that the pandemic profoundly impacted how employers do business. “The companies that were able to successfully navigate the challenges presented by the pandemic had to allow people to work remotely in order to stay afloat,” Hill said.

Many who resisted the idea of enabling a remote workforce recognized the advantages after seeing the results. Remote work opportunities tipped the work/life balance scale in favor of life for many employees. This led to an uptick in workforce morale and a stronger competitive advantage.

Being able to hire employees from across the country allows employers to dip into a deeper pool of qualified applicants. Aside from creating a competitive advantage in terms of recruiting high-caliber employees, remote work produced a range of unintended consequences.

Concerns over "quiet quitting" and a disengaged workforce topped the headlines as notable business leaders across the US advocated for a return to the office. This was at least partially motivated by the idea that building an effective corporate culture is more difficult without face-to-face interaction.

Without supervision, employees with a track record of only doing the bare minimum continued along that path. Navigating the myriad of laws and regulations that vary from state to state also presented a number of challenges for employers.

Overtime thresholds, vacation and sick leave requirements, minimum wages, and meal and break time requirements can sometimes differ significantly, even among cities within the same state. Employers must comply with state requirements for vacation time if it is being offered, although there are no general requirements to provide vacation time.

Various contribution methods for paying state family and medical leave premiums add to the complexity of a remote workforce. Further issues include pay transparency laws, the timing of background checks, and testing for controlled substances, as the legality of certain drugs varies from state to state.

“Quite a few of these laws have been impactful lately,” explained Hill, “and they basically say you can’t test for cannabinoids anymore because cannabis is legal here (in the state where the employee is located).” Note that cannabis is not legal for medical or recreational use in North Carolina. However, hiring remote employees in another state may subject employers to the laws of states that permit medical and recreational cannabis use.

Of course, when the DOT is involved, testing for marijuana is permissible as it is still illegal on the Federal level. The requirements for posted notices, discrimination laws, protected classes, and training mandates, specifically for sexual harassment, can also diverge across state borders.

Notably, having just one employee outside of the state where an employer does business can shift the entire landscape of employment law regulations.

New Independent Contractor Rules

X. Lightfoot, a labor and employment attorney, discussed an item with vast implications for companies with independent contractors, a proposed rule from the DOL that is set to be released in October of 2023.

“Unlike employees, independent contractors are not entitled to a number of employer-provided benefits such as health insurance and paid leave,” commented Lightfoot. Worker misclassification issues typically represent an easy win for employee-side attorneys.

A number of factors have traditionally been used to determine whether an individual is an employee or an independent contractor. Typically, if an individual had a substantial degree of control over the work and the chance to decide their own pace as well as the opportunity to earn a profit or experience a loss from the work, that person would be properly classified as an independent contractor.

Under the Biden administration, the DOL sought to delay and withdraw the implementation of the 2021 Final Rule on independent contractor status issued by the prior administration, which was intended to clarify the definition of "independent contractor" under the Fair Labor Standards Act ("FLSA"). The FLSA guarantees certain wage protections for covered, non-exempt employees, including a minimum wage for all hours worked and overtime compensation for any hours worked in excess of 40 hours per workweek.  These wage protections, however, do not apply to independent contractors.  The 2021 Final Rule was reinstated by a Federal district court. The DOL appealed that decision and proposed a "new" independent contractor rule that returns to the traditional multi-factor approach of the "economic reality" test in which no single factor is determinative of a worker's classification status, but all of the factors are considered in view of the economic reality of the worker's whole activity.

The significance of the issue is underscored by the fact that the DOL received 54,000 public comments on its "new" proposed rule. Ward and Smith will issue a prompt update on the matter when it is decided

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This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.

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