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The 411 on Employment Background Checks in Stock and Asset Transactions

Employment background checks help employers hire individuals with integrity whom they can trust, and who do not present a risk to the business, other employees, or the customers and clients that the business serves. Buyers in transactions may view target businesses that run background checks as lower risk for employee performance and retention issues. Background checks also constitute an important area for employment diligence in transactions because an employer or background check vendor’s failure to follow the hypertechnical disclosure and authorization requirements of the Fair Credit Reporting Act (FCRA) and other applicable state and local laws risks potentially material class action exposure and $1,000 penalties per violation. This article explores mitigation strategies that buyers may use in due diligence to identify and valuate potential FCRA exposure.

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Colorado Continues to Whittle Away at Non-Compete Agreements

Effective August 10, 2022, Colorado’s laws governing restrictive covenants were amended to provide additional limitations and hurdles for employers who seek non-compete and non-solicit agreements with their employees, including compensation thresholds and notice requirements. The new law also sets forth steep penalties for any violations. This article provides the details of these new restrictions.

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HR Might Be on the Front Line in the Battle Against Monkeypox Misinformation

More employers are beginning to take notice of Monkeypox and how it might impact their workplaces. In this HR Brew articleMcDermott Partner Michelle Strowhiro said employers need to present information from a factual basis to dispel rumors that might circulate in the workforce.

“To the extent that employees are…creating a hostile environment, it’s incumbent on employers to take proactive action to stop that,” Strowhiro said.

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What You Should Be Telling Workers About Monkeypox

What should employers be telling workers about monkeypox? In this Fortune article, McDermott Partner Michelle Strowhiro said the first thing is to make sure workers properly understand the signs and symptoms of the viral disease.

“Now’s the time to evolve [your] COVID-19 policy into a greater safety policy that includes monkeypox, and covers the symptoms of monkeypox and protocols of what to do if you have symptoms or test positive,” Strowhiro said.

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Seattle Payroll Expense Tax Upheld by State Appellate Court

Last month, the Washington Court of Appeals affirmed a lower court’s decision to dismiss a challenge to the recently enacted payroll expense tax in Seattle, WA. Seattle Metro. Chamber of Commerce v. City of Seattle, No. 82830-4-I, 2022 WL 2206828 (Wash. Ct. App. June 21, 2022).

The tax, which went into effect on January 1, 2021, applies to entities “engaging in business within Seattle” and is measured using the business’s “payroll expense” (defined as “compensation paid in Seattle to employees,” including wages, commissions, salaries, stock, grants, gifts, bonuses and stipends). The tax only applies to businesses with a payroll expense of more than $7 million in the prior calendar year, and compensation is considered “paid in Seattle” if the employee works more than 50% of the time in the city.

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What Employers Should Do Now That Roe Has Fallen

The monumental decision by the Supreme Court of the United States in Dobbs v. Jackson Women’s Health Organization to overturn Roe v. Wade presents significant challenges for employers and health plans. According to this Law360 article, employers should begin reviewing state laws, evaluating internal company policies, gauging employee reactions and preparing for legal challenges. McDermott’s Sarah Raaii called the Supreme Court’s decision “an administrative and potentially employee relations nightmare for employers.”

“It creates a lot of challenges for employers who just want to do right by their employees and continue offering these abortion benefits that they have historically done in the past,” Raaii said.

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Safe Harbor Issued for Reporting Healthcare Prices Under Transparency Rules

The US Departments of Labor, Health and Human Services, and the Treasury recently released Frequently Asked Questions (FAQs) regarding the implementation of certain reporting provisions of the Affordable Care Act (ACA). The FAQs were released to provide clarity on the required drug price disclosures identified in the Transparency in Coverage final rule (the Rule) issued on October 29, 2020. As described in this SHRM article, employers are responsible for making sure that these disclosures are ready and available.

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‘Unprecedented Interest’ in Employer-Covered Abortion Travel

If the US Supreme Court overturns Roe v. Wade (as suggested by a leaked draft on May 2), employers who want to provide abortion coverage to employees and their families could encounter serious challenges. In this Bloomberg Law article, McDermott’s Sarah G. Raaii noted that employers that provide travel expenses for abortions might encounter resistance from state laws like a Texas statue that permits citizens to sue abortion providers for abortions performed around six weeks.

“If a state wants to interpret this very broadly—and it seems that some of them have indicated that they do—to really just punish anyone involved even peripherally with providing abortion in the states, employers could potentially be at risk.” Raaii said.

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The Challenges and Opportunities of Hybrid Work

What are some of the challenges and opportunities of hybrid work arrangements? In this Lexology GTDT Market Intelligence article, McDermott Partner Carole Spink offers insight about tracking remote work, navigating local rules, and protecting confidential and propriety information.

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