Provisions of Final Tip Pool Rule Effective November 23, 2021

The U.S. Department of Labor’s latest final tip pool rule provisions will take effect on November 23, 2021. For further discussion on other provisions of the final rule that were implemented in April 2021, please see Lake Effect’s prior blog on this topic.

The following provisions of the final tip pool rule will take effect on November 23, 2021:

  • Managers and supervisors may keep tips they receive for services provided “solely” by the manager or supervisor and “directly” to customers. This clarification to the traditional prohibition on managers and supervisors receiving tips in a tip pool or tip sharing arrangement recognizes the reality that managers and supervisors are often called upon to perform tipped duties in the course of their workday. This means, for example, when a bar manager is working as a bartender to fill in for an absent bartender or during a slow shift, the bar manager may keep tips received directly from patrons at the bar. Similarly, when a salon manager receives tips from a client for a haircut done by the salon manager, the salon manager may keep the tips.
  • Managers and supervisors may contribute some of their tips received from their “sole” and “direct” work into mandatory tip pools or sharing, but they may not receive any tips from a tip pooling or tip sharing arrangement. Further, an employer may require (or may allow) managers and supervisors to contribute part of their “sole” and “direct” tips into tip pooling or sharing arrangements, but, again, managers and supervisors may not keep or receive employees’ tips, or other managers’ and supervisors’ tips, in any arrangement.
  • Employers may face fines up to $1,100 for each instance that the Department of Labor finds an employer took an employee’s tips, regardless of whether the violation was repeated or willful. This now encompasses employer behavior that is in “reckless disregard” of the FLSA regulations and situations when an employer should have explored if its behavior was compliant but failed to do so.

Lake Effect is here to answer your questions about federal and state wage and hour laws that impact employers across all industries. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please watch our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Dane County Face Covering Emergency Order #3

Public Health Madison & Dane County has issued Face Covering Emergency Order #3. The new order is effective October 8, 2021. The only change from the previous order (see Lake Effect’s summary of the previous orders here) is to extend the face covering requirements through November 5, 2021.

Lake Effect is here to answer your questions about how local and state public health orders apply to employers. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

IL Passes Law Restricting Non-Competes and Non-Solicitation Agreements

On August 13, 2021 Illinois Governor Pritzker signed into law broad restrictions on employee non-competes and non-solicitation agreements. The non-solicit restrictions apply to employer’s customers, as well as other employees.

The new law applies to agreements executed with an employee on or after January 1, 2022. As of that date, the law bans:

  • Non-competes with employees earning $75,000 or less
    • The income threshold increases by $5000 every five years until it reaches $90,000
  • Non-solicitation agreements with employees earning $45,000 or less
    • The income threshold increases by $2500 every five years until it reaches $52,500
  • Non-competes and non-solicitation agreements with an employee who is terminated, laid off, or furloughed due to COVID-19 or “circumstances that are similar to the COVID-19 pandemic”
    • However, a non-compete will be enforceable if the employer includes in the agreement payment to the employee covering the employee’s salary from the date of termination through the period of enforcement minus compensation earned from subsequent employment during that period

In addition, an enforceable non-compete or non-solicitation agreement must:

  • Include a provision advising the employee to consult with an attorney before signing
  • Provide the employee at least 14 days to review the agreement before signing it
  • Offer “professional or financial benefits” or two years of employment as consideration for signing the agreement
    • “Professional or financial benefits” are not defined in the statute but generally include benefits such as a bonus or promotion

Illinois’ new law is part of a national trend to more tightly regulate  the circumstances under which employers can restrict an employee’s  post-termination activities. California bans all non-competes, with limited exceptions, and tightly restricts non-solicitation agreements. Nevada recently enacted legislation banning non-competes with hourly workers. Under Washington law, non-competes are enforceable only if, among other things, the employee earns more than $100,000 per year (adjusted annually). Washington D.C.’s law banning non-competes for virtually all employees will likely become effective some time in 2022. President Biden’s recent Executive Order charging the Federal Trade Commission to explore options to limit the “unfair use” of non-competes also reflects this growing opposition towards these types of agreements.

Employers should work closely with employment law counsel to review  applicable state laws on non-competes and non-solicitation agreements, especially for remote employees working outside of Wisconsin. An advance review may enhance the effectiveness and enforceability of your agreements. See our previous blog on other state law considerations with remote workers.

Lake Effect is here to answer your state and federal employment law and HR questions related to these and other employment agreements. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Updated OSHA Guidance to Continue Workplace Health and Safety Measures

On August 13, 2021, the Occupational Safety and Health Administration (OSHA) updated its guidance for all employers to reflect the CDC’s July 27, 2021 recommendations on masks and testing for fully-vaccinated individuals. As with the prior guidance on COVID-19, this updated OSHA guidance is not a standard or regulation and creates no new legal obligations. However, the guidance is likely to be relied on to measure employer compliance with OSHA’s “General Duty Clause.” That clause requires employers to provide a workplace free from recognized hazards that cause or are likely to cause death or serious harm.

To reduce the risk of spreading COVID-19 among employees, especially the Delta variant, OSHA recommends that employers:

  • Require all employees, including those who are fully vaccinated, to wear a face covering, or other appropriate PPE, when indoors with other people in areas of substantial or high transmission.
  • Encourage or require all customers, visitors, and guests to wear face coverings when indoors in areas of substantial or high transmission.
  • Adopt policies that require employees to get vaccinated or, if they remain unvaccinated, get regularly tested for COVID-19 plus continue wearing a face covering and physical distancing.
  • Require fully vaccinated employees who have been exposed to COVID-19 to be tested three to five days after exposure and wear a face mask when indoors for 14 days unless they test negative.

The above precautions are in addition to measures included in OSHA’s previous guidance. See Lake Effect’s blog on OSHA’s guidance for employers.

Employers should work closely with legal counsel and HR to implement an updated COVID-19 workplace program consistent with this new OSHA guidance and any applicable local guidance and orders. Lake Effect is here to help you through this process.

We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Dane County Face Covering Emergency Order

Public Health Madison & Dane County (PHMDC) has issued a new Public Health Order, effective August 19, 2021 through September 16, 2021. The new order requires individuals to wear face masks indoors, employers to develop a policy providing and requiring face masks, and organizations to post a sign mandating face masks indoors.

To address the rise in positive COVID cases, individuals age two years and older must wear face masks when in an enclosed space in Dane County with people outside their household, including while using public transportation. PHMDC defines a face covering as:

a piece of cloth or other material that is worn to cover the nose and mouth completely. A face covering must be secured to the head with ties, ear loops, or elastic bands that go behind the head and must fit snuggly but comfortably against the side of the face. Cloth face coverings must be made with two or more layers of breathable fabric that is tightly woven (i.e., fabrics that do not let light pass through when held up to a light source). A face covering does not include bandanas, single layer neck gaiters, face shields, goggles, scarves, ski masks, balaclavas, shirt or sweater collars pulled up over the mouth and nose, or masks with slits, exhalation valves, or punctures. 

Limited exceptions to the mask requirement are allowed when an individual is eating and drinking, undergoing a service requires temporary removal of the mask (e.g. dental services), communicating with someone who is deaf or hard of hearing and who cannot communicate with a mask, swimming, following safety or security guidelines that require removal of the mask, and other similar circumstances. In addition, individuals with medical or mental health conditions that prevent them from wearing face masks are exempt from the requirement. When addressing such exemptions, employers should put in place other safety precautions to protect the health and safety of employees, customers, and other members of the public .

Employers must develop a written protective measure policy and procedure that provides employees with face masks and requires face masks indoors to comply with the order.

Employers must also post in visible locations signs requiring masks indoors. Employers may use PHMDC’s sign or develop their own.

Lake Effect is here to answer your questions about how local and state public health orders apply to employers. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Increased Fines for Not Posting Employment Posters

The federal government recently increased the fines employers may face for violating federal employment law posting requirements. Going forward, the potential posting fines are:

  • Family and Medical Leave Act – $178
  • Job Safety and Health: It’s the Law – $13,653
  • Employee Polygraph Protection Act – $21,663
  • EEO is the Law – $576

Employers should also be aware that each state has its own poster requirements, most of which impose fees for failing to comply. It is important for employers to maintain an effective strategy for staying informed about the applicable local, state, and federal posting requirements. Contact your partners at Lake Effect with questions about obtaining and updating required employment posters.

Lake Effect is here to answer your questions about your posting requirements and other employment law and HR compliance matters. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

HR Reporting Updates

There have been two important employer reporting updates for Human Resource practitioners.

First, the Equal Employment Opportunity Commission (EEOC) announced an extension of the deadline for submission of 2019 and 2020 EEO-1 Component 1 Data Collection to Monday, August 23, 2021. Please see Lake Effect’s prior blog on EEO-1 reporting requirements for more information.

Second, the Social Security Administration announced that it is discontinuing Employer Correction Request Notices (EDCOR), also known as “Social Security No Match Letters.” Their stated rationale for this change is “to focus on making it a better, easier, more convenient experience for employers to report wages electronically.” Please see Lake Effect’s prior blog on Social Security No Match Letters for more information.

Lake Effect is here to answer your questions about employer reporting requirements. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please watch our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Wisconsin Communities’ Face Covering Requirements Expiring

Outagamie County, Dane County, and the city of Milwaukee have joined the growing list of communities across the country that are lifting their mask and other COVID-related public health orders. Outagamie County lifted its face mask requirements on May 13, 2021. Public Health Madison & Dane County (PHMDC) announced on May 18, 2021 that its public health orders and mask requirements will expire on June 2. On the same day, Mayor Tom Barrett announced that the City of Milwaukee will lift its public health orders and mask requirements on June 1.

These announcements follow the guidance released by the Center for Disease Control (CDC) that fully vaccinated individuals can safely stop wearing masks outdoors and in most public indoor settings. The federal Occupational Safety & Health Administration (OSHA) has indicated that it will release updated workplace safety requirements for employers based on CDC’s guidance. We will keep you informed with updates from OSHA.

Without a mask mandate, employers have several options. Employers may lift all mask requirements; require masks only for individuals who are not fully vaccinated; or require masks for all employees, customers, clients, and/or others on-site. As employers grapple with the best decision for their organization, they should work with HR professionals and employment attorneys to address issues such as:

  • What is your organizational culture?
  • How do your employees feel about returning to the workplace with or without masks?
  • Are you requiring vaccines?
    • If so, have you set up a legally compliant infrastructure to address, among many other things, reasonable accommodations for disabilities and sincerely held religious beliefs, confidentiality, and consistency among your workforce?
    • If you have employees in multiple states, have you checked the laws, including local or state health orders, to ensure vaccinations can be required?
  • If you will allow vaccinated employees to work without masks, are you asking for proof of vaccination or relying on an attestation from employees?
    • Have you set up a legally compliant process for checking vaccination status?
  • If you will not require masks at all, have you adopted cleaning and hygiene protocols to ensure you can satisfy your duty to provide a safe workplace for your employees?

Lake Effect is here to collaborate with you on questions about workplace safety, employees returning to work, and employee vaccinations.

DOL Withdraws Final Rule on Independent Contractor Status under FLSA

On May 5, 2021, the Department of Labor (“DOL”) announced a new final rule withdrawing the “Independent Contractor Status Under the Fair Labor Standards Act” final rule (Independent Contractor Rule) that had been published on January 7, 2021, to take effect on March 8, 2021. Of note, the DOL is not issuing new federal guidance on independent contractor status with this new rule. The DOL indicated that the January 2021 rule “is inconsistent with the FLSA’s text and purpose, and would have a confusing and disruptive effect on workers and businesses alike. . . .” The new Rule will be published on May 6, 2021.

Employers should keep in mind that many states, including Wisconsin, have adopted their own tests for independent contractor status. These state laws can vary widely from state-to-state, and even within a state, depending upon the issue being addressed (i.e., unemployment eligibility, wage and hour, tax liability). Lake Effect continues to monitor federal and state laws and guidance relating to independent contractor status, and we will keep you apprised of developments in this area.

Lake Effect is here to answer your questions about independent contractors, FLSA, and labor laws. We continue to monitor important legal and HR developments, as well as COVID-related updates from federal, state, and local authorities. Please keep watching our blogs and emails for these important updates, as well as discussions of how compliance meets culture. To dive into these issues, contact us at info@le-hrlaw.com or 1-844-333-5253.

Lake Effect HR & Law, LLC
(844) 333-5253 (LAKE)
info@le-hrlaw.com

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