Workforce Issues to Focus On in 2020
The start of a new year is always a good time for a business to take stock of past practices and future actions, including around workforce compliance issues. In 2020, we believe the following 10 issues will impact U.S. employers from an immigration, pre-employment background screening, and general employment compliance
1. Immigration – Worksite Enforcement
Worksite enforcement actions by U.S. Immigration and Customs Enforcement (ICE) will continue to increase as they have over the past two years. Meaning, employers will continue to face heightened scrutiny from ICE into their hiring practices and compliance with paperwork requirements related to the employment eligibility verification form (the “Form I-9”). ICE has the authority to begin an investigation into a company’s compliance with the Form I-9 requirements to determine whether the company is hiring and maintaining a legal workforce and properly completing the Form I-9. The Immigration Reform and Control Act of 1986 (IRCA) requires all U.S. employers to complete and maintain a Form I-9 for all new hires, and the form must be completed within three (3) business days of hire. Employers who do not comply with workforce immigration laws are subject to civil and criminal penalties, both for hiring and/or maintaining undocumented workers and also paperwork violations related to the Form I-9.
2. Immigration – H-1B Online Registration for “Cap Cases”
Starting in 2020, the way in which employers’ petition for H-1B workers subject to the H-1B cap will change. H-1B workers are professional workers seeking employment in a “specialty occupation,” meaning an occupation requiring at least a bachelor’s degree or higher to fulfill the job duties. Instead of filing the H-1B petition in its entirety on April 1st (as has been the case the past few years), U.S. Citizenship and Immigration Services (USCIS) will require employers (or their authorized representative) submit an online registration through myUSCIS and then wait to see if their case is selected through the random lottery. USCIS will accept online registrations from March 1 to March 20. Assuming USCIS receives sufficient registrations to meet the statutory caps of 20,000 (for master’s degrees and higher) and 65,000 (for bachelor’s degrees) they will close the registration, conduct the random lottery, and alert employers whether or not their case(s) has been selected. Once selected, employers will have 90 days to submit an H-1B petition with USCIS for the selected worker.
3. Background Screening – Litigation Avoidance
Pre-employment background checks conducted by employers show no signs of slowing in 2020, and employers are considering continuous monitoring as well as greater checks of job candidates’ social media. While such checks are permissible, attention to compliance is critical as pre-employment background checks are the subject of federal, state and local laws and guidance. If using the services of a background screening company, the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.) (FCRA) applies. Employers must follow certain steps to ensure compliance with the FCRA and avoid litigation. The FCRA requires that employers provide job candidates with a clear and conspicuous disclosure, in a stand-alone document, advising the job candidate that a background check will be conducted. The candidate must provide their consent. If a background check is returned from the background screening provider and the report contains adverse information which may affect a candidate’s hiring, employers must follow the adverse action process. This process requires that employers provide the affected job candidate with a copy of the report and a disclosure called “A Summary of Your Rights Under the Fair Credit Reporting Act.” The candidate must be afforded at least five (5) business days to review the report for any inaccuracy or incomplete information. If, after that, an employer determines they are not going to hire the candidate they must follow the “adverse action process,” which requires that the candidate receive a letter with specific language about their rights pursuant to the FCRA. And this is just the tip of the iceberg as employers need to be aware of the EEOC’s guidance on the use of criminal history in employment screening, fair chance hiring laws (aka “ban the box”) as well as state restrictions on the use of credit history in employment screening.
4. Data Privacy – California Privacy Protection Act
The California Consumer Privacy Act (CCPA) is effective as of January 1, 2020. At a high level, the CCPA gives California residents, with certain exceptions, new rights to know what types of personal information a business collects about them, information about the business’s data collection practices, the ability to request access to and deletion of personal information the business maintains about them, and, if applicable, the ability to request that a business not sell personal information about the individual. The law also affects service providers to businesses and certain third parties that receive personal information from a business. While implementing regulations proposed by the California Attorney General have not yet been finalized, enforcement nevertheless is scheduled to begin July 1, 2020 and organizations subject to the law should be working on their compliance program (if that work has not already been completed). Compliance is accomplished, in part, through (i) review and revisions to organizations’ online privacy policies and privacy notices generally; (ii) having in place processes to accept California consumers’ access and deletion requests; and (iii) having processes in place to allow California consumers the ability to opt-out of the sale of their personal information for at least twelve months. It is important to note that there are certain exemptions and exceptions to application of the CCPA. One is that workforce data is, by and large, not covered for a period of one-year, until 2021. Two, personal information related to pre-employment background checks covered by the FCRA and when such personal information is collected and used for a permissible purpose such as employment screening, is exempt from the CCPA.
5. Employment – Classifying Independent Contractors
Expect continued uncertainty regarding independent contractor classification. The passage of California’s AB 5 (which makes it more difficult to classify a worker as an independent contractor in California) will continue to spur litigation and affect employers both inside and outside of California. There is still no single test an employer can use to evaluate whether a worker is properly classified as an independent contractor or an employee, and we expect that ongoing developments in California will not make the process any clearer.
6. Employment – Arbitration Agreements
In another California development that will likely have repercussions nationwide, we are monitoring the progress of California’s AB 51, which was scheduled to take effect on January 1, 2020, but is presently stayed as a result of ongoing litigation. If it takes effect, the California law will prevent employers from attempting to impose mandatory employment arbitration agreements. Use of such agreements is widespread and they are generally enforceable in court. Moreover, in mid-December of 2019, the EEOC rescinded its 1997 policy statement that had objected to mandatory arbitration agreements in the workplace, signaling its shift on the issue in light of federal law recognizing the use of arbitration agreements in employment.
7. Background Screening – DOT Commercial Drivers
Any workforce that includes drivers who operate commercial motor vehicles subject to commercial driver’s license (CDL) requirements on public roads are subject to Department of Transportation (DOT) drug and alcohol testing. Starting January 6, 2020, employers, or their designated consortium/third-party administrator, must conduct queries on current and prospective employees through the Federal Motor Carrier Safety Administration’s (FMCSA) Drug and Alcohol Clearinghouse (the “Clearinghouse”) prior to hiring the employee for a position requiring him/her to perform safety-sensitive functions, such as operating a commercial motor vehicle. Employers must also query the Clearinghouse annually for all currently employed CDL drivers. In addition, FMSCA-regulated employers must report to the Clearinghouse information related to violations of the drug and alcohol regulations in 49 Code of Federal Regulations, parts 40 and 382 by current and prospective employees. For the next three years, DOT-regulated employers are required to conduct both electronic queries in the Clearinghouse and traditional manual inquiries with previous employers to meet the three-year time-frame. This will be required until January 6, 2023, at which point a query of the Clearinghouse will satisfy this requirement.
8. Employment – Overtime Rule in Effect
The long-awaited final overtime rule was issued by the Department of Labor (DOL) in September of 2019 and went into effect on January 1, 2020. The rule increases the minimum salary threshold (or standard salary level), for the executive, administrative, and professional (EAP) exemptions from $455 a week (equivalent to $23,660 annually) to $684 a week (equivalent to $35,568 annually). Under the final rule, employers can also use nondiscretionary bonuses and incentive payments, including commissions that are paid at least annually, to satisfy up to 10% of the required salary level for EAP exempt employees. For the highly compensated employee (HCE) exemption, the rule increases the minimum annual compensation from $100,000 to $107,432, including at least $684 a week paid on a salary or fee basis.
9. Employment – Perks are In: DOL Final Rule on Regular Rate of Pay
As of January 15, 2020, employers are also able to offer perks and benefits to employees without having to adjust the employee’s regular rate of pay. The new DOL rule specifically allows employers to exclude from the regular rate of pay things like parking benefits, wellness programs, gym access, tuition benefits, unused leave, certain bonuses, and more.
10. Employment – Sexual Harassment Prevention and Investigations
In the wake of the #MeToo movement, states and municipal legislatures (as well as employees) are increasing their focus on sexual harassment prevention and related discrimination concerns. Now is a good time to review your employee handbook and evaluate whether to include any new or expanded anti-harassment policies, as well as think about whether to implement training efforts or other measures. In addition, you may consider how to handle investigations of employee complaints. The NLRB recently
approved employer policies requiring confidentiality of internal investigations, and it is likely that employer policies regarding the handling of workplace investigations will come under additional scrutiny.