Bello Welsh LLP

CLIENT ALERT – Massachusetts High Court Clarifies Rule for Release of Wage Claims

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The Massachusetts Supreme Judicial Court recently clarified that a general release between an employer and employee will only be enforceable as to claims under the Massachusetts Payment of Wages Act if the agreement is stated in “clear and unmistakable terms” and is “plainly worded and understandable to the average individual.” An enforceable release also must specifically refer to the rights and claims under the Wage Act that the employee is waiving. While the Court held that general releases are ineffective to bar claims under the Wage Act, it failed to either provide illustrative, enforceable releases or define the phrase “clear and unmistakable terms.”

Bello Welsh LLP

CLIENT ALERT – New FCRA Forms Take Effect January 1, 2013

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Effective January 1, 2013 — and as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which transferred FCRA rulemaking authority from the Federal Trade Commission (FTC) to the newly created Consumer Financial Protection Bureau (CFPB) — employers must begin using new Fair Credit Reporting Act (FCRA) forms, including the Summary of Consumer Rights under the FCRA. While the substance of the Summary remains unchanged, the form now must state that the new CFPB, rather than the FTC, is the agency consumers should contact about their rights under the FCRA.

Bello Welsh LLP

CLIENT ALERT – New York Acts to Protect Employee Social Security Numbers

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To protect employee privacy, effective December 12, 2012 employers in New York will be prohibited from requiring employees to disclose social security numbers for employment or employment services/privileges. The new law further prohibits requiring disclosure of only a portion of a social security number, thereby ending the common practice of providing only the last four digits of the SSN.

Several exceptions exist, including where social security numbers are necessary under law (e.g., signing up for certain benefits; completing IRS W-4 forms) or where the employees consents to disclosure. While there is no private right of action under the new law, the New York Attorney General is empowered to impose penalties of up to $1,000 per employee.

Bello Welsh LLP

CLIENT ALERT – Massachusetts Enacts The Temporary Workers Right to Know Act

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Effective January 31, 2013, staffing agencies will be required to comply with a new law concerning their employees. The “Temporary Workers Right to Know Act” will 1) require staffing agencies to provide certain workers with information pertaining to the employer and type of work to be performed, 2) restrict the nature and amount of fees staffing agencies can charge workers, and 3) prohibit staffing agencies from engaging in fraudulent activities with respect to applicants and workers. Failure to comply may result in both civil and criminal penalties.

Bello Welsh LLP

CLIENT ALERT – New Hampshire Legislature Enacts Legislation Governing Employee Restrictive Covenants

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In what is the latest development in states taking an increasingly employee-protective stance on restrictive employment covenants, New Hampshire has enacted new legislation that threatens the validity of restrictive covenants. The new legislation requires employers to provide a copy of any non-compete or non-piracy agreement that is a condition of the employment agreement to an employee or potential employee before or at the time an offer of employment, or change in job classification, is made to the individual. The new law, which went into effect on July 14, 2012, provides that if such a contingent agreement is not provided to the employee or applicant before or at the time of the offer, the agreement will be considered “void and unenforceable.

Bello Welsh LLP

CLIENT ALERT – New California Legislation Takes Aim at Gender discrimination, Credit Checks by Employers, Pregnancy Leave Healthcare Coverage and Commission-Based Employment.

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Effective January 2012, California employers will be required to comply with new regulations relating to gender discrimination, credit checks, and pregnancy leave healthcare coverage. Additional changes will be made to Commission-based employment regulations in January 2013.

New Protection for Transgender Employees in California

Effective January 2012, the “Gender Nondiscrimination Act” will add “gender expression” and “gender identity” to the list of classes protected from discrimination in the workplace and in housing under California’s Fair Employment and Housing Act. The Act provides protection for transgender individuals who face discrimination for their behavior and/or appearance as they relate to sex and gender. It also requires employers to revise dress codes to accommodate transgender individuals.

California Prohibits the Use of Credit Checks for Employment Purposes

California joins six other states in restricting the use of credit checks for employment purposes. In most cases, employers will now be prohibited from using credit-related information — such as credit history, credit score, and credit records — when hiring new employees.

California Law Intended to Protect Employees’ Health Care Coverage During Pregnancy Leave

A new California law, which amends the California Pregnancy Discrimination Law, prohibits employers from refusing to pay group health plan coverage for female employees who take pregnancy or childbirth leave.

California Amends Commission-Based Employment Contract Requirements

Effective January 2013, in-state employers will have to abide by rules previously applicable only to out-of-state employers, requiring employers to create a written contract for all commission-based employees describing how commissions will be computed and paid. Once effective, the law will also require all employers to give a copy of the contract to each applicable employee, and obtain a signed receipt for the contract from each employee.

Bello Welsh LLP

CLIENT ALERT – Gender Identity Now a Protected Category under Massachusetts Employment Discrimination Law

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Effective July 1, 2012, gender identity will become a protected category under Massachusetts employment discrimination and other civil rights laws. The new legislation amends existing state anti-discrimination statutes to prohibit discrimination based on gender identity, defined as an individual’s gender-related identity, appearance, or behavior, which may be different from that traditionally associated with the individual’s physiology or assigned sex at birth. Gender-related identity may be shown by providing evidence such as medical history, care or treatment of the gender-related identity, consistent and uniform assertion of the gender-related identity or any other evidence that the gender-related identity is sincerely held as part of a person’s core identity. The law prohibits individuals from asserting gender-related identity for any improper purpose.

Bello Welsh LLP

CLIENT ALERT – New California Legislation Aimed at Employee Misclassification and Wage Theft

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Effective January 1, 2012 California employers will be required to comply with new requirements relating to employees and independent contractors.

California law will now impose strict penalties for employers with workers in California found willfully to have misclassified workers as independent contractors. The so-called “Job Killer Act” will levy heavy fines on employers for voluntary and knowing misclassification: penalties will range from $5,000 to $10,000 for the first violation and up to $25,000 for subsequent violations. An employer found to have violated the Act may also be ordered to post, on its website or in another prominent location, a notice relating to the violation. Additionally, the Act prohibits charging a misclassified worker a fee or making deductions from his/her compensation for any purpose arising from the individual’s engagement where such deductions would have been prohibited under the existing California Labor Code if the individual had not been misclassified.

California has also passed the Wage Theft Prevention Act of 2011 (“WTPA”), which requires private employers to provide each new non-exempt employee with a written notice at the time of hiring, in the language the employer normally uses to communicate employment related information, containing information regarding the employee’s pay rate, overtime rate and regular payday, and the employer’s name and contact information, among other specified items. The WTPA also provides for increased penalties for certain minimum wage violations, repeat violations, and failure to comply with final court judgments or Commissioner orders.

Both of these recently enacted statutes follow nation-wide trends of stepped-up enforcement of independent contractor classification and wage payment requirements. California employers in particular should be prepared for increased scrutiny in these and other areas of employment laws, and should take steps to ensure compliance with these statutes before they become effective on January 1, 2012.

Bello Welsh LLP

CLIENT ALERT – DOL, IRS, and 7 States Coordinate Efforts to Reduce Employee Misclassification

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On September 19, 2011 the United States Department of Labor (DOL) and Internal Revenue Service (IRS) signed a memorandum of understanding to increase the agencies’ coordination in their efforts to curtail employee misclassification. Seven states–Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah, and Washington–have already signed cooperation agreements with the DOL and IRS to combat employee misclassification. Four more states–Hawaii, Illinois, Montana, and New York–are expected to sign similar agreements in the near future. Government agencies at all levels are cracking down on misclassification in response to substantial losses in tax revenues related to what they view as a pervasive practice of misclassifying employees as independent contractors.

Under the new cooperation agreements, states will share information with the DOL and IRS if an employer fails to remit unemployment insurance or workers’ compensation premiums on behalf of employees found to be inappropriately classified as independent contractors. This information will be used by the DOL to audit the employer for federal wage-hour violations and by the IRS to seek unpaid taxes and associated penalties. Employers who benefit from using independent contractors are now vulnerable to a three-pronged strike for a single misclassification violation. Employers are advised to familiarize themselves with the factors the DOL, the IRS, and state enforcement agencies use to determine whether a worker is an independent contractor or an employee to avoid steep misclassification penalties.

Bello Welsh LLP

CLIENT ALERT – New Quarterly Wage and New Hire Reporting Requirements for New York Employers

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Effective July 15, 2011, New York employers will be required to report to the State Directory of New Hires whether dependent health insurance benefits are made available to their employees. The Low Income Support Obligation and Performance Improvement Act of 2009 (the “Act”) applies to all New York employers and adds to their existing reporting obligations with respect to quarterly wage, new hire, and rehire reporting. For quarterly wage reporting purposes, employers must now use the updated Form NYS-45; for new hire and rehire reporting, employers must now use either the updated Form IT-2104 or updated Form IT-2104-E, depending upon employee status. The Act requires only that an employer report the availability of dependent health insurance benefits–it does not require their provision to employees. As was the case before these changes, employers must submit reports to the State Director of New Hires within twenty (20) calendar days of the employer’s hiring or re-hiring of the employee. Employers are advised to coordinate with their payroll provider and review existing payroll information to determine which persons are considered employees for reporting purposes.