In March 2019, the Social Security Administration resumed issuance of Employer Correction Request Notices, commonly referred to as “Social Security No-Match Letters.”

The No-Match Letters are being sent to businesses throughout the country that are identified as having a name and Social Security Number (SSN) combination submitted on wage and tax statement (Form W-2) that do not match SSA records. Employers may recall receiving these notices until 2012 when the Obama administration suspended these communications.

Employers receiving No-Match Letters in 2019 must take proper steps in addressing the request. Most importantly, employers should not assume that a No-Match Letter is proof of an unauthorized or undocumented worker; likewise, an employer cannot use the letter alone as a basis to take adverse action against an employee.

Upon receipt of a No-Match Letter, an employer should take the following initial steps :

  • CHECK the reported no-match information against its personnel records.
  • If the reported discrepancy cannot be resolved, INFORM the employee of the letter and ask the employee to confirm his or her name/SSN.
  • If the discrepancy still exists, ADVISE the employee, in writing, to contact the SSA to correct and/or update his or her SSA records and give the employee a reasonable period of time to resolve it.
  • SUBMIT corrections to the SSA.
  • If the employee does not respond or act to resolve the issue, CONTACT immigration counsel to discuss next steps and document a continued proactive response.

An employer’s failure to address a No-Match Letter and/or failure to follow-up with an employee and their progress towards resolving the no-match could lead to a finding by ICE of constructive knowledge of employing unauthorized workers.

Additionally, it is worth noting during an ICE Form I-9 Audit, the Notice of Inspection usually requests employer records concerning receipt of No-Match Letters and evidence as to how the company responded to the letter(s).

The reintroduction of No-Match Letters is a reminder for employers across the country in all industries of the need to ensure accurate records for wage-reporting and Forms I-9.

If you have any questions or wish to discuss strategy and response to a No-Match Letter and proactive steps to remediate Forms I-9, contact Ali Brodie at 303.446.3846 or abrodie@foxrothschild.com or any member of Fox Rothschild’s Immigration Practice Group.

If you had asked me a few years ago about ADA accessibility lawsuits, I would have talked about the importance of ensuring your business’s seating, aisles, and restrooms complied with the ADA accessibility guidelines.  Although plaintiffs continue to file lawsuits alleging barriers to physical accessibility, over the past two years, a new type of accessibility lawsuit has become very common.  Rather than focusing on physical barriers, more and more lawsuits are now being filed by visually-impaired plaintiffs alleging that the websites of businesses are inaccessible and violate Title III of the ADA.  These lawsuits typically allege that the visually-impaired plaintiff visited the website of a business and was unable to access all of the businesses products and services.  Because visually-impaired individuals often rely on screen-reading softwarePhoto: web accessibility online on internet website computer for handicap people with disabilities to access websites, if websites are not properly formatted in a way that allows the software to decipher the information, visually-impaired individuals may be unable to fully access the website.

California has been disproportionally hit with these website accessibility lawsuits, largely because of the Unruh Civil Rights Act (UCRA).  Although a plaintiff suing under Title III of the ADA is usually only entitled to equitable relief and attorney’s fees, under California’s UCRA, a plaintiff who establishes a violation of the ADA is also entitled to recover the greater of their actual damages or statutory damages equal to $4,000.

Perhaps it should come as no surprise that these claims have begun to spill over to the employment world.  The newest wrinkle we have seen involves visually-impaired job applicants who target employers that use online application portals which the applicants claim contain accessibility barriers.  These applicants have begun filing lawsuits alleging that these alleged barriers prevent them from equal access to apply for employment.  Rather than filing claims under Title III of the ADA (which applies to places of public accommodations), applicants sue under Title I of the ADA (which prohibits employers from discriminating against qualified disabled employees and job applicants.)  Not surprisingly, plaintiffs in California are also bringing claims alleging violations of the UCRA and the Fair Employment and Housing Act (FEHA) under similar legal theories.

While it is too soon to determine how receptive California courts will be to claims of employment discrimination based on allegedly inaccessible online application websites, we strongly recommend that employers and businesses regularly evaluate and update their websites to ensure they are accessible and comply with the Web Content Accessibility Guidelines (WCAG)  2.0 or 2.1, the current gold standards for ADA compliance.  A quick reference guide to the WCAG guidelines is available here: https://www.w3.org/WAI/WCAG21/quickref/   Remember, the best and only way to safeguard against a website accessibility lawsuit is to ensure your website is and remains accessible.

I attended a seminar at my firm last week that set forth the next big thing in California — the California Consumer Privacy Act (CCPA).  It is California’s version of the European Union’s General Data Protection Regulation (GDPR).

If you haven’t heard of it (or focused on it), the CCPA is a broad-based law protecting information that identifies California residents (both consumers and employees).  The law includes detailed disclosure requirements, provides individuals with extensive rights to control how their personal information is used, imposes statutory fines and creates a private right of action.  It is expected to dramatically alter the way U.S.-based companies process data.

While the CCPA won’t go into effect until 2020, it has a “12 month look back” which requires companies to be able to provide information to consumers about information collected or disclosed in the immediately preceding 12 months.  While changes to the CCPA are expected, smart companies are in the planning stages now.

Check out this terrific summary of the law by my partners Elizabeth Litten and Mark McCreary, as well as this alert from my partner, Odia Kagan, outlining the top five steps to start taking now to prepare for the CCPA.

The phrase “no good deed goes unpunished” applies in many contexts, including California employment law. Here are six ways that employers get into trouble by trying to do favors for their workers.

  1. Treating an employee as an independent contractor. Some workers want you to treat them as independent contractors so they aren’t subject to withholding. But even if they agree to it in writing, that doesn’t protect you from liability. First, if the workers change their minds and bring wage claims, you can be on the hook for a variety of penalties. These include penalties for not having issued proper wage statements, not providing meal and rest breaks, and not properly tracking the employees’ hours. In addition, the Employment Development Department, Franchise Tax Board, Internal Revenue Service, and others can pursue you for not properly withholding and paying payroll taxes.
  2. Paying employees in cash. Sometimes an employee may ask you to pay them under the table. Like paying them as contractors, you won’t have the pay records you’re required to maintain and the agencies that collect payroll taxes can come after you. You’re basically defrauding the government. They don’t like that and they’ll punish you if they find out.
  3. Allowing star employees flexibility to break the rules. It’s tempting to give top performers leeway when it comes to attendance, standards of behavior, and work rules generally. Don’t do it. Others can characterize it as favoritism, or even discrimination. It also makes it harder to hold other employees accountable for breaking those rules.
  4. Giving a terminated employee a glowing reference. Maybe you feel bad about firing someone and giving them a glowing reference eases your guilt. However, if the employee challenges the termination in court or arbitration, expect to get grilled on the conflict between the employee who was so bad you had to fire them and the employee described in your glowing reference letter. While you’re at it, you should also anticipate getting grilled on your demonstrated willingness to make false statements. Also, if their next employer relies to its detriment on untrue statements you made in the reference, it can sue you for fraud.
  5. Giving positive evaluations to underperformers. Don’t get me started! I’ve ranted about this enough, including here and here.
  6. Not terminating employees who deserve to be. No one likes firing people. But sometimes it’s necessary. If you retain employees who misbehave or consistently fail to meet performance standards, you get punished in two ways. First, it becomes harder to terminate that person later on. Second, it becomes harder to terminate others for similar shortcomings. Both problems arise because you’ve set a precedent of what you’ll tolerate.

On the other hand, if you weren’t willing to tolerate a certain level of punishment, why are you employing people in California to begin with?

I just returned (and yes, detoxed) from the Cornell HR in Hospitality Conference in Las Vegas.

I presented on wage-and-hour issues at the FLSA Unconference, and participated in a roundtable where attendees were able to “ask the attorney” all of their burning legal questions.  I also attended a bunch of terrific sessions to gain insight into the most salient topics facing hospitality employers in 2019.

Here are some take-aways that I found particularly meaningful (and helpful), so I thought I would share:

  • Recruiting and retention are big issues everywhere; one progressive company markets to prospective employees by sending them brand-based messages and gifts periodically (such as a donation to an environmental cause on their behalf in celebration of Earth Day)
  • Another innovative company has the following questions on its career page: Don’t see a position you are interested in? We always want to meet new talent. Contact us at XXX to let us know why we should meet.
  • We used to tell employees in harassment prevention training that there is no such thing as “free speech” at work; well that also works as way to address polarizing political discourse
  • In this day of cell phone recordings, managers and employees often suspect they are being secretly recorded; a good way to address that at a meeting is to say “I am not recording this conversation, are you?” – if the employee lies and records anyway, at least you have them on tape lying
  • Just because you may not have a “light duty” program for workers’ compensation, doesn’t mean that you get out of your duty to engage in the interactive process
  • Use your guest WiFi password as an opportunity to reinforce your brand; for example, our firm’s entertainment group is branded as “Entertainment Law. Coast to Coast” – so a password could be “coasttocoast”
  • Sexual harassment settlements are no longer tax deductible; but one option is to apportion part of the settlement to harassment based claims and deduct the rest

Next year the Conference is in Miami (April 26-29th).  Hope to see you there!

In a world of instant gratification, double tapping, and asking Siri for the answers to your burning questions, the concept of an annual performance review is pretty much as “over” as MySpace. Would you wait a calendar year before telling your surgeon they botched a recent procedure? Or a year to complain about bad service in a restaurant? Of course not.

And yet, the most common complaint I hear from entrepreneurs is that they just don’t have time for performance reviews. Sigh…if only they could press the “like” button and move on. Create + Cultivate, an online platform for female entrepreneurs, asked me for advice on effective performance evaluations which you can read more about here.

Do you remember all of the hoopla back in 2016 when the Department of Labor published new overtime rules, and then at the last minute, after everyone did audits (and many reclassified), the rule was halted?  We wrote about it here.

Now the Department of Labor has proposed a new set of rules, setting the minimum salary threshold for white-collar exemptions at $35,308 (up from $23,660).  The new rules do not include many of the more controversial elements, including automatic increases, regional salary levels, or changes to the duties tests.  Here is a helpful alert that summarizes the new rules.

Despite what will like be a lot of press, these federal changes won’t have any effect on employers in California employers who already need to pay twice the state’s minimum wage to satisfy the requirements for exempt status.  With a minimum wage of $12 an hour (for employer’s with 26 or more employees), that is $49,920 in 2019.  And that amount goes up as the minimum wage increases a dollar a year until it hits $15 for all employers in January 1, 2023; at that time the minimum salary level for exempt status in California will be $62,400.

Even though many cities have their own minimum wages, it is still the state’s minimum wage that triggers the minimum salary threshold.

The highly compensated exemption threshold also went up from $100,000 to $147,414, but that doesn’t apply in California either.

Bottomline, since California’s minimum wage is already so much higher than the federal minimum wage, these proposed DOL changes won’t impact the golden state.

The Federal Motor Carrier Safety Administration (FMCSA) recently announced that it was exercising its authority under federal law to rule that California’s meal and rest break laws are preempted and cannot be enforced against interstate motor carriers. The FMCSA’s ruling was in response to a petition filed by the American Trucking Associations (ATA) and the Specialized Carriers and Rigging Association (SC&RA).  A big win for the trucking industry, this decision helps define regulatory standards for interstate carriers.

California state laws require employers to provide breaks for their employees for meals and rest. Employees working more than five hours in a day are entitled to receive a 30 minute meal break and, if work extends beyond 10 hours a day, they must receive an additional 30 minute break. Further, every four hours the employee must receive a 15 minute break. For years, interstate motor carriers have argued that these laws, as well as other similar state laws, should not be enforced against them because they are governed by separate hours of service regulations set by the FMCSA.

The ATA and SC&RA first fought the state laws in court, arguing that the provisions of the FAAAA, 49 USC 14501(c), which generally preempts state laws that regulate the routes, prices and services of motor carriers. These cases failed in the Ninth Circuit. See, e.g., Dilts v. Penske Logistics, LLC. The carriers advanced their arguments to Congress, supporting a bill that would have expressly confirmed that California’s laws are preempted. This bill passed in the House but failed in the Senate. Finally, the ATA and SC&RA petitioned FMCSA to use its authority under 49 U.S.C. 31141 to find that the state laws are preempted because they (1) have no safety benefit; (2) are incompatible with federal regulations; or (3) would cause an unreasonable burden on interstate commerce.

On December 21, 2018, the FMCSA announced that it would grant the petition and find the meal and rest break laws preempted. The agency concluded that the laws met all three criteria— they had no safety benefit, were incompatible with federal regulations and caused an unreasonable burden on interstate commerce. The FMCSA’s action was a big win for the ATA and SC&RA, who, in addition to filing the petition that led to the agency’s action, also lobbied extensively for it to be granted. With California’s meal and rest break laws preempted, carriers now have one standard to comply with: federal hours of service. Additionally, carriers are freed from the extensive damages they have faced in cases such as Dilts, in which class action plaintiff attorneys have collected for alleged violation of the now-preempted labor laws.

Unsurprisingly, not everyone is happy with the FMCSA’s decision. The Teamsters Union has already filed suit to block its implementation, arguing that the agency’s findings are arbitrary and not supported by facts. The Teamsters specifically characterized FMCSA’s finding that California’s laws have no safety benefit as “ludicrous.” Notably, the union’s suit is filed in the same court—the Ninth Circuit—that previously ruled in Dilts that federal law did not preempt the state laws. However, that decision was on a blank slate, while the new ruling by the FMCSA must be upheld unless deemed entirely unreasonable.

If they can keep it, the FMCSA’s decision is undoubtedly a win for carriers and another recognition that transportation is a national industry that should not be subject to a patchwork of inconsistent state laws and regulations.

What is considered “work time” that requires pay?  Well, that definition keeps on getting broader for California employers.

  • Can you let individuals “volunteer” and provide comps/trade for their time?  No.
  • Can you let non-exempt employees check emails at night or on weekends and assume that the time is so small it is not compensable?  No.
  • Can you require a non-exempt employee to wait around at home and check in throughout the day to determine when/if needed at work (i.e. be engaged to wait)?  No.

And now per a new California Supreme Court case (Ward v. Tilly’s), can a California employer require an employee to call-in two hours before a shift, yet only pay that employee if actually required to come into work?  Also, no.

If you are a California based retailer, spa, salon, or restaurant that relies on an on-call system to adjust your California workforce based on last minute fluctuating operational needs, then think again.  Based on this ruling, your on-call policy is likely creating unnecessary risk.

The Court found that an on-call employee really isn’t free from work if required to call-in and then report in as needed.  In fact, such a call-in responsibility really requires that employee to keep the day free.  The employee can’t make plans, go to the beach or a movie, commit to another job, or secure child care.  And in the opinion of the Court, that isn’t particularly fair.

So what can you do if you are a California business that relies on an on-call workforce?

  • You can still have on-call employees, you just can’t discipline them for not calling or not showing up when needed (not very helpful, I know); or
  • You can still have on-call employees, but make the call-in time more than 2 hours before the shift (but note, with predictive scheduling laws in some cities, and more pending in the state legislature, how much on-call time is okay is still an open question); or
  • Ask for volunteers for any last minute extra shifts; or
  • Keep a list of employees who want extra shifts, and notify them when you need people last minute; or
  • Post open shifts and invite employees to sign up for them (and you can even put limits on taking extra shifts if it triggers overtime); or
  • Have employees show up, and if you don’t need them, send them home after 2-4 hours (but beware of strict reporting time pay requirements).

Was this case over-reaching by California courts?  According to the dissenting judge, this was an issue for the legislature, not the courts.  Maybe the legislature will take this issue up, or impose even more restrictions for on-call shifts with more predictive scheduling laws.  In the meantime, the lesson:  If you schedule on-call (especially in retail in California), beware.

Join Ali Brodie, co-chair of Fox Rothschild’s Immigration practice, for an overview of immigration and workplace compliance, including Form I-9 and government inspections.

Tuesday, March 5, 2019 | 8:30 – 10 am
Fox Rothschild LLP
345 California St.
Suite 2200
San Francisco, CA 94104

Agenda:
8:30 am         Registration & Breakfast
9 am              Presentation

Topics:

  • Specifics about executing the I-9 under current rules
  • Documenting employees without violating anti-discrimination laws
  • Identifying and reviewing documents for authenticity
  • Auditing and correcting I-9 forms
  • Navigating pitfalls in the process
  • Understanding the penalties for noncompliance, including simple clerical errors
  • Handling the receipt of Social Security no-match letters
  • Best practices for developing a company-wide compliance program
  • Live Q&A

HRCI credits are pending.

Register here by March 1

Questions? Contact 1.877.778.7369 or events@foxrothschild.com.