The PrestigePEO Perspective – August 2024

Open Enrollment can be daunting for small businesses, but with the proper support, it doesn’t have to be. This blog explores how partnering with PrestigePEO can simplify the Open Enrollment process, ensuring your team gets the employee benefits they deserve. Find out how we help small and medium-sized businesses navigate this crucial period and set your business up for success.

Running a business is tough, especially regarding managing HR, benefits, and compliance. Partnering with a PEO like PrestigePEO can lighten the load. Our guide explains why businesses choose PEOs to streamline operations, reduce costs, and stay compliant. Read more about how a PEO like Prestige can help your business thrive.

A recent decision by the Eleventh United States Circuit Court of Appeals may have implications on employers across the country, particularly those in the Eleventh Circuit states of Georgia, Florida and Alabama. This recent June 2024 court decision involved federal wage and hour violations and the court’s ruling that a mid-level manager could be held individually liable for these violations.

While the facts of this case were unique, involving a hotel establishment operated by an owner and his son, the key takeaways from the ruling are universally applicable to any management structure. In this case, a front desk clerk worked for a number of hotels across Alabama, which were all operated by the same owner. The clerk worked for the operation for approximately 10 years, averaging 62 hours per week and was paid monthly. A part of his compensation was onsite lodging at the hotel. The clerk eventually sued the company for wage and hour violations, alleging that he was not paid the federal minimum wage or required overtime premiums, pursuant to the Fair Labor Standards Act (FLSA).

The FLSA grants employees a private cause of action against employers for these types of wage and hour violations. Furthermore, the FLSA broadly defines the term “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee.” The hotel clerk sued the company as well as the owner and his son for these violations. The son argued that he was not in fact an “employer” for three reasons: he was not an owner, did not have any control or decision-making authority regarding the hotel clerk’s wages or compensation and did not exercise control over the finances of the hotel.

The court agreed with the hotel clerk, finding wage and hour violations and holding the hotel owner and his son individually liable, finding that they both met the definition of an “employer.” The court went on to find that the details of the son’s responsibilities did rise to the level of employer status even though he was not an owner or corporate officer. Rather, the son was found to have control over significant aspects of the company’s day to day functions, even as a mid-level manager.

Essential to understand from this ruling is that the court found that individual liability is not only limited to owners, executives or upper management but also extends to any position that exercises some direct responsibility for the supervision of other employees or control over significant aspects of the day-to-day functions or financial matters. This could include having influence over other employee’s salaries, controlling budgetary aspects of the company, or overseeing routine business operations. The court noted that the hotel owner and his son shared a unique relationship, the son in this matter was “not in the same position as the average middle manager” and that the son’s control was “both substantial and related to the company’s obligations” under the Fair Labor Standards Act.

All employers need to understand that supervisors and mid-level managers can be held individually liable for wage and hour violations, depending on their involvement in the operations of the business, and steps should be taken to ensure compliance with all FLSA regulations, to help reduce the risk of their management staff being held personally liable. Employers should educate their managers on the importance of following all required wage and hour laws. Predicating this education based on potential liability would generate additional support for compliance from their management teams. Employers should also work to encourage timely reporting of any discrepancies in paychecks from all employees and have steps in place to proactively address wage and hour concerns. With proper compliance procedures in place, employers could work to avoid allowing complaints to go unchecked or grow into more significant problems. Finally, all employers are encouraged to review pay practices regularly to ensure compliance with all wage and hour regulations.

Refrain from letting compliance challenges hold your business back. Contact PrestigePEO today to ensure your HR practices align with all federal and local regulations. Let’s work together to protect your business!

On June 27, 2024, the California Court of Appeals issued a decision in the case of Paleny v. Fireplace Products U.S., Inc., ruling that an employee who wanted to donate and freeze her eggs was not protected by the Pregnancy Statute.

Erika Paleny was an administrative assistant who worked at Fireplace Products U.S., Inc. in Sacramento, California between May 2018 through October 2019. On or around October 2018, she informed her manager that she would be undergoing an egg retrieval procedure for “donation” and “potential personal use.” According to Paleny, her employer had expressed strong dissatisfaction with Paleny taking time off to undergo the egg retrieval procedures and started to create a hostile working environment. A few months later, Ericka Paleny had advised her supervisor that she would have to start coming to work a little later in the day so that she could attend her scheduled retrieval procedures. After informing her supervisor about her latest schedule, she was terminated. Subsequently, Erika Paleny filed a claim with the Fair Employment and Housing Act (FEHA) claiming discrimination, harassment and retaliation due to disability and pregnancy, failure to accommodate and wrongful termination in violation of public policy.

A few years after Paleny was fired, a new law was enacted in California called the Contraceptive Equity Act of 2022. This new law included protection under FEHA such as “reproductive health decision-making” and different methods of obtaining contraception.

The Court decided that at the time Paleny had filed her claims, the egg retrieval procedure under FEHA did not amount to any medical condition related to pregnancy. The Court further reasoned that Paleny was undergoing an “elective medical procedure” without an underlying medical condition related to pregnancy. As a result, she did not have a “protected characteristic” under the FEHA.

What Employers Should Know

The decision in the Paleny case signifies the importance of the timing of when an employee can bring claims, and the specific protections that are provided under FEHA. It is also important to note that FEHA now includes “reproductive health decision-making” as a protected category. Employers need to ensure that their polices are up to date and they can properly accommodate employees for time off requests for egg retrieval, egg donation, sperm donation and any other requests related to reproductive health decision making activities.

Ensure your business is fully compliant with the latest regulations. Reach out to PrestigePEO today for expert guidance and support. Let us help you safeguard your business and streamline your HR processes.

The New York City Council has recently proposed new legislation that would be the most stringent pay data reporting requirements in the nation. This regulation seeks to address wage disparities and promote fairness by providing detailed and frequent reporting of compensation data across various demographics. If this new bill were to pass, it would mandate that employers with twenty-five or more employees working either part-time or full time in any one of the five boroughs of New York City to submit comprehensive pay and demographic information to the New York City Department of Consumer and Workers Protection (DCWP) each year starting on February 1, 2025.

Key details of the Proposed Regulation:

• Detailed Pay Data Reporting: Employers would be required to provide comprehensive reports that include compensation ranges for different job titles. This data must reflect average salaries and the distribution of pay within roles and levels.
• Demographic Breakdown: These reports must include a detailed breakdown of pay by race, gender and ethnicity. This transparency will clarify potential pay gaps and ensure equitable compensation practices across multiple employee groups.
• Regular Updates: Pay data must be updated regularly. This ongoing reporting requirement will help track changes and ensure that compensation practices remain fair and aligned with current standards.
• Enforcement and Compliance: The New York City DCWP will oversee compliance through regular audits. Employers who fail to meet the reporting requirements could face substantial fines and other penalties, reinforcing the importance of adhering to these new standards.

Implications for Employers

The proposed regulations highlight the importance of remaining vigilant about pay practices and pay management. Employers should prepare by reviewing their pay practices, making sure they can report and explain their pay data correctly and figuring out how to fix any pay gaps they may find.

As New York City takes steps in progressing pay fairness by following the lead of states like California and Illinois, which already have pay data reporting requirements, it is likely that more states will follow with similar rules.

Stay ahead of the curve with New York City’s proposed pay data reporting requirements. Contact PrestigePEO today to get expert guidance on preparing for these changes and ensuring your business remains compliant. Let us help you navigate these new regulations with confidence.

On April 19, 2024, New York State made significant amendments to New York Labor Law Section 206-c, requiring employers to provide additional support to nursing employees. This new law introduces several critical changes that New York employers must be aware of, including mandating paid lactation breaks for employees, as reported in PrestigePEO May Insights (LINK- https://www.prestigepeo.com/perspective/perspective-may-2024/)

New York’s New Lactation Law 

The most significant update is the requirement for employers to provide 30-minute paid lactation breaks. This enhancement builds upon the previous law, which allowed for reasonable unpaid breaks. Now, employers must give 30-minute paid breaks. Employees must be permitted to use additional unpaid break time or mealtime if they need extra time for breast milk expression beyond the paid 30 minutes. The law applies to both in-person and remote workers.

The updated law specifies that employers must provide paid lactation breaks whenever the employee needs to express breastmilk. This provision is applicable for up to three years following the birth of the employee’s child.

The law reiterates the employer’s requirement to provide a private, non-bathroom space for lactation. Employers must ensure the employee’s privacy by providing a space that is shielded from view and free from intrusion. The space should also be near the employee’s work area and meet some other requirements specified in the law and New York Department of Labor Information for Employers (LINK- https://dol.ny.gov/system/files/documents/2024/06/p691-to-pump-breast-milk-at-work-information-for-employers.pdf), including a chair and small table or other flat surface, light, an electrical outlet (if the workplace has electricity), and access to a clean water supply. If there is a refrigerator in the workplace, employers must provide employees access to store their expressed milk. If the employer is unable to provide a dedicated lactation room, a temporarily vacant room may be used instead. As a last resort, employers may provide a fully enclosed cubicle with walls at least seven feet tall.

Employers must inform employees about their rights under this law by providing employees with the New York Department of Labor Policy on the Rights of Employees to Express Breastmilk in the Workplace (LINK- https://dol.ny.gov/system/files/documents/2024/06/p690-your-rights-as-an-employee-to-express-breast-milk-at-work-.pdf ) upon hiring, annually after that and when an employee returns to work following the birth of a child. Inform your employees about their rights under the new law by providing them with the Policy.

Practical Tips for Compliance

Private employers in New York may need to review and revise employee handbooks and policies to ensure compliance. All public and private employers in New York State, regardless of the size or nature of their business, must maintain a written policy outlining nursing employees’ rights, including their new entitlement to 30-minute paid breaks to express breastmilk. Employers should communicate policy or handbook updates to all employees.

Business locations should establish a designated lactation space that meets the law’s privacy requirements and ensure the space is easily accessible and comfortable for nursing employees. Human Resources departments and managerial staff should receive training on the new law to ensure they understand and can successfully implement the new requirements.

By accommodating nursing employees, updating policies, informing staff and encouraging a supportive workplace culture, you can ensure compliance while promoting a positive and productive work environment for all employees.

Reach out to PrestigePEO for expert advice on aligning with these upcoming regulations and ensuring your business stays compliant. We’re here to help you understand and quickly implement the necessary changes.