By Rachel H. Khedouri, Esq., Suzanne M. Cerra, Esq., and Punam P. Alam, Esq
Although COVID-19 and its fallout was still top of mind for employers and legislators alike, 2021 saw a return to focus on traditional employment law matters as well. The year has flown by, leaving a flurry of new and complex employment-related issues in its wake.
To help you get ready to hit the ground running in 2022, here are the Top 10 “How to’s” employers need to know:
1. How to prepare for “The Great Resignation”
The rate at which people changed jobs in 2021 is unprecedented and is expected to continue in 2022. In September 2021, a record-high 4.4 million Americans — that’s 3% of the workforce – quit their jobs. According to a recent study, 55% of individualsin the workforce say they are likely to look for new employment in the next 12 months. Businesses in certain industries, such as leisure and hospitality, tech, health care, and retail, are being impacted more than others, but Americans across the workforce have reevaluated their personal values during the pandemic and are making changes.
What can employers do? First, don’t panic! Then consider these steps:
- Take the time to measure where attrition is taking place, and why, before prescribing solutions. Take a concerted look at exit patterns: Who is leaving and why?
- Next, take targeted action to address those groups you have identified as most in need of help for retention. For example, are women leaving on a larger scale than men due to an inflexibility in your company’s shift structure? Then, focus your strategy on changing how scheduling works.
- Finally, remember that “this too shall pass” – experts anticipate people will increasingly enter the labor force as the end of unemployment insurance enhancements and government stimulus funds result in a decline in their personal savings, perhaps as early as the Spring of 2022.
2. How to think about remote work in a (maybe) post-pandemic society
Although we are clearly not out of the woods yet – particularly with the Omicron variant upon us – many companies are looking toward or in the midst of return-to–office initiatives. Employers should consider whether remote work (whether fully or on a hybrid basis) is here to stay. Even in a post-pandemic workplace, there are many recognized benefits to such arrangements, including positive impacts on recruiting and retention.
However, remote work also presents challenges, particularly the difficulties of maintaining company culture and onboarding and mentoring new employees without the daily in-person interactions previously considered essential to building relationships. Employers may wish to consider updating their handbooks to clearly delineate their remote work policy as well as make corresponding updates to other policies that recognize the “new normal” of remote work – such as more flexible use of PTO, travel-related issues, and guidelines for users of Zoom or Microsoft Teams.
3. How to avoid pitfalls in wage and hour and safety issues with a remote workforce
Those employers who do decide to continue to allow employees to work remotely should be mindful of potential landmines in the wage-and-hour and safety arenas.
- On the wage and hour front, employers may be legally obligated to reimburse remote employees for certain home office expenses. Under the Federal Fair Labor Standards Act, employers must reimburse employees for job-required expenses if their earnings would otherwise fall below the required minimum wage or overtime compensation levels. Some states may also require reimbursement. In California, for example, employers must pay for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of their duties; other states, including, Illinois, Iowa, Montana, New Hampshire, South Dakota, and Washington, also require certain expenses to be covered by the employer.
- Another major wage and hour concern for remote workers is making sure non-exempt employees are tracking their time and being properly paid for all hours worked – including any overtime. Timekeeping is harder to manage when employees are working remotely.
- Finally, employers must keep in mind that the responsibility to maintain a safe workplace applies even if the workplace is the employee’s home. Managers should be tracking work-related injuries and illnesses, regardless of the location where the injury occurs. The employer’s lack of control over the conditions of an employee’s home office does not provide a defense to OSHA violations or workers’ compensation claims arising from an injury or illness incurred when the employee was acting in the interest of the employer.
4. How to address DEI and social justice in the workplace
The events of the past two years – including both the COVID-19 pandemic and several racially charged events such as the murder of George Floyd and the killing and subsequent conviction of the men who killed Ahmaud Arbery – have expanded companies’ focus on Diversity, Equity and Inclusion (DEI) and social justice in the workplace.
It is anticipated that in 2022, employers will have an enhanced focus on hiring and retaining diverse talent. Particularly in light of the Great Resignation and trends toward the continuation of remote work (both discussed above), employers will have both the need and the opportunity to reach into a more diverse and geographically dispersed hiring pool. Employees and potential employees also will be expecting companies to incorporate workplace equity into their decision-making and policy-setting practices. In addition, employers will increasingly be expected to take a stand on social justice issues – including responding swiftly and definitively to employees caught engaging in conduct at odds with the company’s DEI philosophy.
5. How to approach grooming policies in light of the CROWN Act
New Jersey and New York employers are already familiar with a legislative trend that may soon reach the federal level. In 2019, the governors of both New Jersey and New York signed “Create a Respectful and Open Workplace for Natural Hair” (“CROWN”) legislation, which ties racial discrimination to hair discrimination. Under the CROWN Act, race is defined to include traits historically associated with race, including hair texture and protective hairstyles, such as braids, locks, and twists, traditionally worn primarily by people of African descent.
After passing the U.S. House of Representatives in the prior legislative session but failing to pass the Senate, CROWN Act legislation was reintroduced in Congress in March 2021. NFC is continuing to monitor the progress of this legislation. In the interim, employers should review their grooming and personal appearance standards to determine whether their policies present any concerns from a racial discrimination perspective.
6. How to respond to new (and somewhat vague) “hiring preferences” — NJ/CT
All employers should consider reviewing their hiring practices to make sure that they are up-to-date with applicable state and local laws. In particular, New Jersey and Connecticut employers should be mindful of new legislative mandates as follows:
New Jersey: Effective September 24, 2021, New Jersey employers with 50 or more employees are required to apply hiring preferences to employees who are injured at work and have reached maximum medical improvement (“MMI”) under New Jersey’s workers’ compensation law but are unable to return to the position they held prior to the injury. Although employers are not required to remove current employees from existing positions or to create new positions for the returning MMI employees, the new law does create an obligation on the employer to place the employee in an open position for which they are qualified.
Unfortunately for employers, the new law does not set a time limit on the preference or expressly define the type of preference that must be applied. Reasonable interpretations run the gamut from requiring employers to place previously injured employees automatically at the front of the line for open positions (regardless of whether there are other, better-qualified candidates) to serve as a tie-breaker between otherwise equally qualified candidates. Employers should carefully consider whether a hiring preference should apply before filling open positions when a previously injured employee is seeking to return to work.
Connecticut: In July of 2021, Connecticut enacted a hiring preference for open positions applicable to certain employees who were laid off due to lack of business or reduction or furlough of the employer’s workforce due to COVID-19. Under this law, employers have five days to provide notice of open positions to qualified employees who were employed for at least six months prior to March 2020. As in New Jersey, Connecticut employers are cautioned to keep this hiring preference in mind when filling open positions.
7. How to treat employees aged 70 or over – NJ
As of October 5, 2021, New Jersey employers are no longer permitted to choose not to hire or promote employees aged 70 or over solely on the basis of age. Going forward, employers should consider how the elimination of this exception to the age discrimination laws may impact their succession planning. In addition, any company policies that are contrary to the new law – for example, policies that prevent consideration of applicants aged 70 or over or preclude promotion opportunities for those employees – must be modified.
8. How to prepare for potential limitations on restrictive covenants
Pending federal and state legislation would impose significant restrictions on employers’ ability to impose non-compete and other restrictive covenants as a condition of employment. In 2021, the Biden administration announced its intent to take action at the federal level to promote competitiveness and outlined 72 initiatives, including encouraging the Federal Trade Commission to “ban or limit” non-compete agreements.
These initiatives would impact an estimated 36 to 60 million workers required to sign post-employment non-compete agreements. New Jersey legislators similarly are attempting to pass a bill to “curb” restrictive covenants in New Jersey. NFC will be closely watching any movement on this legislation prior to the close of the 2021 NJ legislative session on January 11, 2022.
9. How to determine whether a worker is an independent contractor
As was true in prior years, the classification of workers as employees or independent contractors continues to be in flux as we move into 2022. In 2021, the Biden administration withdrew the employer-friendly independent contractor test published at the end of the Trump presidency. No new test was put in place but, rather, the long-standing five-factor economic realities test continues to govern.
Under the five-factor test, it is much more difficult for employers to establish that a worker is an independent contractor. New Jersey similarly follows an employee-friendly test, known as the “ABC” test. Effective January 1, 2022, misclassification of employees to evade payment of insurance premiums is a violation of the New Jersey Insurance Fraud Act. Employers must continue to carefully apply applicable standards or face misclassification claims – frequently in the form of class actions.
10. How to comply with new Cannabis laws
Although the use of cannabis has been legalized both for medicinal and adult recreational use in many states, it remains unlawful under federal law. Moreover, employers may still establish drug-free workplace policies. The trend among employers seems to be moving toward removing cannabis from pre-employment drug testing panels but employers legally may still test for cannabis under limited circumstances (such as based on reasonable suspicion of usage while performing work responsibilities, as part of a pre-employment drug screening or regular screening of current employees or following a work-related accident under investigation) and may still take adverse action based on possession or use of cannabis during work hours or on the employer’s premises. In 2022, employers will need to navigate the balance between what employees are permitted to do outside of work and maintaining a safe workplace.
If you have any questions relating to this eAlert or need additional help getting your workplace ready for 2022, please reach out to the NFC Attorney with whom you typically work or call us at 973.665.9100.