SubscribeAs summer approaches and the clocks are set forward, April marks an increase in the National Minimum Wage, compensation for unfair dismissal and other payments required by UK employment laws.
Labor
Illinois’ New Paid Leave Law: What Employers Need to Know
The Paid Leave for All Workers Act (PLAWA) was signed into law by Governor J.B. Pritzker on March 13, 2023, ensuring that all workers in Illinois receive 40 hours of paid time off annually for any purpose. The law will become effective on January 1, 2024, requiring employers to utilize the remaining months of 2023 to ensure they are equipped to comply with the new legislation.
Illinois has joined Maine and Nevada as the third state to implement such a measure.
The Latest Court Ruling’s Impact On H-1B Spouses and Immigration
A federal judge recently ruled in favor of a Department of Homeland Security regulation that permits the spouses of H-1B visa holders to work. According to this Forbes article, McDermott Partner Paul Hughes drafted the amicus brief for more than 40 companies and organizations.
“This decision confirms that tens of thousands of H-4 employees—highly skilled and critical members of their teams—are lawfully employed,” said Hughes. “The court’s correct analysis follows decades of consistent practice and recognition that the Executive may determine categories of visa holders eligible for employment.”
Stryking Noncompete Preliminary Injunction
The US Court of Appeals for the Sixth Circuit recently upheld a district court’s grant of a preliminary injunction restricting a former employee from working for conflicting organizations or communicating with a competitor’s counsel. Stryker Emp. Co., LLC v. Abbas, Case No. 22-1563 (6th Cir. Feb. 16, 2023) (Clay, Bush, JJ.; Sutton, C.J.) The Court found that the preliminary injunction was an appropriate measure to protect the plaintiff’s confidential information that was consistent with the employee’s noncompete agreement.
A Win for Employers: Ninth Circuit Holds That California AB 51 Prohibiting Mandatory Arbitration Is Pre-empted by the Federal Arbitration Act
On February 15, 2023, employers in California regained the ability to enforce mandatory arbitration as the US Court of Appeals for the Ninth Circuit ruled that Assembly Bill 51 (AB 51), which prohibited “forced arbitration” as a condition of employment, was pre-empted by the Federal Arbitration Act (FAA).
After years of litigation, the Ninth Circuit’s ruling upholds a federal district court’s preliminary injunction that temporarily blocked California from enforcing AB 51 and all but guarantees that AB 51 will never be enforceable. While California could seek review from the Ninth Circuit (en banc) or the Supreme Court of the United States, given the Supreme Court’s line of cases upholding FAA pre-emption, we think this decision will stand.
That said, US President Joe Biden’s Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (HR 4445) must not be ignored. Employers may include sexual harassment and sexual assault claims in a voluntary arbitration agreement, but an employee may choose to file these particular claims in court.
New Jersey Healthcare Transactions Now Face Onerous Employment Requirements
As of November 16, 2022, New Jersey Senate Bill No. 315 (S-315) has come into effect. The bill introduces fresh employment protections for qualifying employees of select private healthcare organizations that experience a “change in control.” The legislation mandates several obligations, such as giving prior notice, extending job offers to eligible employees, and providing improved job security against termination for a minimum of four months post-transaction. To avoid employment-related lawsuits and penalties, healthcare employers and investors in New Jersey must ensure compliance with these regulations.
The Bosses May Be Back in Charge (but Not as Much as They Think)
CEOs may think they are fully in control of their workforces, but this belief may be more of an illusion than reality. In this Forbes article, McDermott Partner Michael Peregrine says certain pandemic-era changes to their authority may be more lasting than they realize–especially as it relates to their dynamic with the board of directors.
NLRB Attacks Non-Disparagement and Confidentiality Clauses in Employee Releases, Severance Agreements
Employers, especially in the context of workforce reductions, may provide departing employees with severance agreements in exchange for a release. Those agreements often include non-disparagement clauses and confidentiality clauses regarding the terms and the amount of the agreement. On February 21, 2023, in McLaren Macomb, the National Labor Relations Board held that such clauses infringe on employees’ rights under the National Labor Relations Act. Importantly, McLaren applies to both unionized and non-unionized workplaces alike.
Insights and Challenges for the Executive Compensation Committee
The board’s executive compensation committee is the focus point for many of the extraordinary financial, economic and operating challenges currently facing healthcare organizations. Executive compensation increases are impacted by both an inflationary economy and significant revenue downturn. In addition, the US Department of Justice has identified executive compensation as an important conduit through by which corporate compliance incentives and deterrence can be implemented. Furthermore, executive recruitment and retention amidst the “Great Resignation” remains a key compensation concern.
These and similar issues have become important agenda items for the board’s executive compensation Committee. Michael Peregrine is joined by industry experts Tim Cotter and Ralph DeJong for the first in a two-part conversation about the impact of the developments on the compensation committee, including:
- Key topics for briefing the board’s compensation committee.
- Increasing communication between the compensation committee and the C-Suite.
- Addressing pressures felt by executive committee members.
- Insights from the Sullivan Cotter compensation data survey.
- Projections for the impact of inflation on next year’s salary increases.
- Expectations for future CEO salary increases and organization departures.
- The segmenting approach to leadership plans.
- Coordination with the Audit & Compliance Committee on compensation incentives
Return to Work | Managing Your Workforce During Periods of Uncertainty
How can employers manage their workforces during periods of economic uncertainty? In this McDermott webinar, Lindsay Ditlow, Cristell Fortune, Abigail Kagan and Marjorie Soto Garcia offer perspective on the following topics:
- Communicating the transition
- The impact on contractual and other obligations
- WARN Act, furloughs, layoffs and salary reductions
- Strategies for unionized workforces
